Iran's Central Bank says Iraq banking barriers removed

Shafaq News- Tehran

Obstacles to banking transactions between Iran and Iraq have been removed, and Tehran expects to access funds held in Iraq within weeks, Iran's central bank governor said in remarks carried by Iran's Mehr news agency.

Abdolnaser Hemmati, Governor of the Central Bank of Iran, said the groundwork had been laid for Iran to draw on those resources following recent talks with Iraqi officials.

A central outcome of his recent visit to Baghdad, Hemmati said, was an agreement by Iraqi Prime Minister Ali al-Zaidi to issue guarantees to Iranian contractors backed by Iranian assets held in Iraqi banks, with executive orders issued to that end.

Iran holds an estimated $10-11 billion in funds and energy receivables in Iraq, mainly payments for gas and electricity that Baghdad deposits into restricted accounts because US sanctions limit dollar and euro transfers to Iranian institutions.

Hemmati added that the implementation of the Iran-US asset-release memorandum depends on approval from Iran's leadership, and that the government and the Supreme National Security Council, Iran's top security body, insist economic decisions rest on national interest and require that approval.

Iraq depends on Iranian gas and electricity and pays for them into restricted accounts under US sanctions rules, leaving Tehran unable to move much of the money. A separate memorandum between Iran and the United States on unfreezing Iranian assets has not led to any funds being released.

Hemmati said that asset-release memorandum, though drawn up to serve Iran's interests, remains on hold pending a decision from the country's leadership.

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