Financial expert traces source of seized new Iraqi banknotes

Shafaq News- Baghdad

Photographs and videos of newly issued Iraqi dinars and US dollars seized during Iraq's latest anti-corruption campaign have sparked questions about the source of the cash, prompting a former Central Bank of Iraq (CBI) official to explain that such banknotes can enter corruption cases through normal circulation channels rather than directly from the central bank.

Mahmoud Dagher, a financial expert and former CBI director, told Shafaq News on Wednesday that newly printed banknotes routinely enter the market through commercial banks, which receive fresh currency from the CBI and distribute it to customers through regular withdrawals.

“Individuals, companies, government institutions, and other account holders obtain those banknotes when accessing funds from their accounts,” he added, arguing that once the money leaves the banking system, it becomes part of the broader cash economy and may pass through numerous hands.

Estimating that nearly 95 trillion Iraqi dinars (about $72.5B) are currently circulating outside the banking sector, he noted that the sheer volume of cash moving through the economy makes it possible for banknotes to end up in corrupt transactions.

“Cash-based dealings are a key factor in many corruption cases,” he remarked, stressing that electronic payments offer greater transparency because they leave records that can be tracked and reviewed by authorities.

Last week, under a directive from Iraqi Prime Minister Ali al-Zaidi, Iraq launched the nationwide “Dawn Crackdown” anti-corruption campaign, which has so far targeted political officials, lawmakers, business figures, and suspected networks accused in public funds cases. A source familiar informed Shafaq News that the campaign led to 67 detainees within its first 24 hours, while another source indicated that the initial phase targets more than 200 figures as part of a broader six-month effort to combat corruption and recover public funds.

Integrity Commission Chairman Mohammed Ali al-Lami pointed to the arrest of senior suspects and the recovery of billions of dinars for the state treasury as evidence of close coordination between oversight institutions and the judiciary.

During a meeting with Bassem al-Badri, the newly appointed chief of the National Security Service, al-Lami underlined the role of recent operations in curbing cases of extortion and coercion that citizens may encounter while seeking public services or completing official procedures.

For his part, al-Badri affirmed the Agency's readiness to deepen cooperation with the Integrity Commission, describing the recent arrests as a contribution to protecting citizens from corruption-related crimes and strengthening confidence in state institutions.

Read more: Iraq detains top officials in anti-corruption sweep: What we know so far