On Tuesday, November 14, the Biden administration extended the exemption from sanctions for Iraq to pay its debt to Iran for another 120 days. This exemption allows the Iraqi government to deposit part of its debt into an account in Oman. Currently, about $10 billion is available in an account named after Iran in an Iraqi bank. This money has been used to purchase natural gas and electricity from Iran. The last extension was granted by the Biden administration in late July of this year for another 120 days, during which nearly $3 billion was transferred to an account named after Iran in Oman by various European broker banks. However, the Biden administration stipulated that this money has limited uses: purchasing humanitarian items for the people of Iran and goods not subject to sanctions. This time will also be similar as it is fundamentally the U.S. policy in this regard. The Biden administration stated that it would monitor all purchasing items. In fact, without the seller's approval by the U.S., no transaction could take place. Matthew Miller, spokesperson for the U.S. State Department, referenced in a press conference on Tuesday that these exemptions have been granted to Iraq since 2018 during the Trump administration to enable the country to pay for natural gas and electricity imported from Iran. According to senior U.S. State Department officials, the goal is to gradually reduce Iraq's dependence on energy supply. However, until that time, if Baghdad needs it, it can obtain it from Iran, and the exemption allows money to be transferred abroad so that the Islamic Republic does not pressure the Iraqi government for access to it. The usual duration of the exemption is 120 days. During Donald Trump's presidency, the U.S. government reduced the duration of this exemption to exert pressure on Iran. The Trump administration used this tactic to pressure Mustafa Kadhimi's government in Iraq to reduce the influence of Iran-backed militias. During Trump's presidency, several countries, including Iraq and South Korea, were able to meet their energy needs from Iran on the condition that the money was deposited into an account within that country and Iran would only purchase its needs from that country using that money. Gita Arian, senior reporter for the Persian section of Voice of America, has mainly focused on foreign policy news. She began her journalism career in 1987 with work in radio and joined Voice of America in 2004.
Iraq's Sanction Exemption for Debt Payment to Iran Extended
The Biden administration has extended Iraq's exemption from sanctions for another 120 days to allow it to pay its debt to Iran, which is approximately $10 billion. This exemption is part of a broader U.S. strategy to monitor and limit Iran's access to funds while gradually reducing Iraq's energy dependence on Iran. This matters as it reflects ongoing U.S. efforts to manage Iranian influence in the region.
👥 Key Players
📰 What Happened
The Biden administration extended Iraq's exemption from U.S. sanctions for another 120 days, allowing Iraq to pay its debt to Iran for energy imports. The funds are restricted to humanitarian purchases and non-sanctioned goods.
- The exemption allows Iraq to deposit debt payments into an account in Oman.
- The U.S. monitors the use of these funds to ensure compliance with sanctions.
💡 Why It Matters
📚 Background
U.S. sanctions on Iran are part of a broader strategy to limit its nuclear ambitions and regional influence. Iraq's energy dependence on Iran complicates its position.
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