Stringent US Moves against Money Flows from Iraq to Iran

A currency exchange shop in central Baghdad (AP)
A currency exchange shop in central Baghdad (AP)
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Stringent US Moves against Money Flows from Iraq to Iran

A currency exchange shop in central Baghdad (AP)
A currency exchange shop in central Baghdad (AP)

The decline in the value of Iraq’s national currency and the rise in the prices of foodstuffs and imported goods can be traced back to remarkable change in the policy adopted by the US Treasury and the Federal Reserve Bank of New York.

Both bodies have had a policy shift to curb money laundering and the illegal appropriation of dollars by Iraqi commercial banks for the benefit of Iran and other countries subject to sanctions in the Middle East.

The New York Fed began enforcing tighter controls on international dollar transactions by commercial Iraqi banks in November in a move to curtail money laundering and the illegal siphoning of dollars to Iran and other heavily sanctioned Middle East countries, US and Iraqi officials said according to the Wall Street Journal.

Iraqi banks had operated under less stringent rules since shortly after the 2003 US invasion.

It is time for Iraq’s banking system to comply with global money-transfer practices, the officials added.

Since the procedures went into effect, 80% or more of Iraq’s daily dollar wire transfers, which previously totaled over $250 million some days, have been blocked because of insufficient information about the funds’ destinations or other errors, according to US and Iraqi officials and official Iraqi government data.

Under the new procedures, Iraqi banks must submit dollar transfers on a new online platform with the central bank, which are then reviewed by the Fed.

The system is aimed at curtailing use of Iraq’s banking system to smuggle dollars to Tehran, Damascus and money laundering havens across the Middle East, US officials said.

Another US official said the measures would limit “the ability of malign actors to use the Iraqi banking system.”

US officials have pressed Iraq for years to strengthen its banking controls. In 2015, the Federal Reserve and Treasury Department temporarily shut off the flow of billions of dollars to Iraq’s central bank over concerns that the currency was ending up at Iranian banks and possibly being funneled to ISIS militants, officials said at the time.



French Citizen Returns Home after Iran Prison Ordeal

Arnaud was greeted by Foreign Minister Stephane Sejourne. POOL/AFP
Arnaud was greeted by Foreign Minister Stephane Sejourne. POOL/AFP
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French Citizen Returns Home after Iran Prison Ordeal

Arnaud was greeted by Foreign Minister Stephane Sejourne. POOL/AFP
Arnaud was greeted by Foreign Minister Stephane Sejourne. POOL/AFP

Frenchman Louis Arnaud returned to Paris on Thursday after his release from an over 20-month prison ordeal in Iran, but a dozen Europeans are still detained in the Islamic republic.
Activists and some Western governments, including France, accuse Iran of exercising a strategy of taking foreign nationals as hostages aimed at extracting concessions from the West, said AFP.
Arnaud, who was held in Iran from September 2022 and sentenced last year to five years in jail on national security charges, was described by his family as a traveler who wanted to see the world and was innocent of all charges.
Emerging from a small plane at Le Bourget airport outside Paris, a visibly tired but smiling Arnaud shook hands with Foreign Minister Stephane Sejourne before embracing his parents, according to images aired on television.
Arnaud, 36, linked arms with his relatives as they entered a private room at the airport out of view of the cameras.
"I am very glad to welcome one of our hostages who was indeed held arbitrarily in Iran," Sejourne said.
"Our diplomatic service is still at work" to free three other French citizens: Jacques Paris, Cecile Kohler and a man named only as Olivier held in Iranian jails, he added.
In a statement after his release, Arnaud's mother Sylvie said "we have been waiting for our son to return for almost 21 months. A wait that should never have existed."
"Our thoughts are with those who are still waiting for the return of their loved ones and we will remain at their side until they can experience this same happiness," she added.
The circumstances of Arnaud's freeing were not immediately clear. Announcing his release on X late Wednesday, President Emmanuel Macron made a point of thanking our "Omani friends and all those who worked towards this happy outcome."
Oman has frequently in the past worked as a mediator between Iran and the West in such situations. A diplomatic source told AFP he had been flown back to Paris via Oman.
'Dreamt of visiting'
Arnaud set off in July 2022 on a round-the-world trip that led him to Iran.
It was "a country he had long dreamt of visiting for the richness of its history and its welcoming people," Sylvie Arnaud said several months ago.
But he was arrested in September 2022 with other Europeans accused of joining demonstrations over the death of Mahsa Amini, a 22-year-old Iranian Kurd who died after her arrest by the morality police in Tehran for allegedly breaching Iran's strict dress code for women.
While Arnaud's traveling companions were soon released, he was kept in prison before his November sentencing on charges of making propaganda against the regime and harming Iranian state security.
Frenchman Benjamin Briere and French-Irish dual national Bernard Phelan were freed by Iran in May 2023 for "humanitarian reasons".
Both had been severely weakened by a hunger strike.
Besides the three French still in prison, Tehran is holding nationals and dual nationals from European countries including Britain, Germany and Sweden.
Two of them -- German Jamshid Sharmahd and Swede Ahmadreza Djalali -- risk execution after being sentenced to death on charges their families say are utterly false.
Also held is Swedish EU diplomat Johan Floderus whom prosecutors want sentenced to death on spying charges his family strongly rejects.
Activists say Swedish nationals have been especially targeted over the life sentence given in Sweden to former Iranian prison official Hamid Noury for his role in mass executions in Iran in 1988.
According to Washington, the release of the five US citizens in September last year means there are no more US nationals detained in Iran.