Insights from the Central Bank of Iraq’s Advisory Network
A prominent banking advisor with ties to the Central Bank of Iraq has clarified that rumors surrounding the punishment of five Iraqi banks are unfounded and potentially misleading.
According to informed sources, there were claims that five Iraqi banks would face restrictions regarding dollar transactions.
Dr. Samir Nasiri, an advisor to the Iraqi Private Banks Association, refuted these claims, emphasizing that the Central Bank’s recent statement regarding developments with the US Treasury does not indicate any penalties.
“The statement was issued with the knowledge and supervision of both the Central Bank of Iraq and the US Treasury, highlighting improvements in the mechanisms for managing dollar distribution and curbing smuggling,” Dr. Nasiri stated.
His comments were made on Monday, February 17, 2024, during a presentation led by Mohammed Sheikh.
Dr. Nasiri elaborated, “Any punitive measures taken by the US Treasury or any relevant institution regarding an Iraqi bank will be communicated formally through direct instructions from the Central Bank of Iraq to halt all transactions involving that entity.”
“The majority of the five banks alleged to have been fined are not involved with the Central Bank’s transactions,” he added. “The circulating names seem to have been fabricated to confuse the public and destabilize the market.”
Furthermore, Dr. Nasiri mentioned that as of January 1, the electronic platform for transactions concluded its operations, which will now transition to international accounts established with foreign banks.
“Reports of five banks being fined lack verifiable sources, and the total number of banks that have faced penalties reportedly stands at $37,” he noted.
Dr. Nasiri reassured that banking operations are progressing steadily, in line with US Treasury regulations, and asserted that “no bank has faced penalties from the US Treasury.” He emphasized that safeguarding Iraqi institutions remains a priority for both the Central Bank and the government.
Currently, 28 banks have been sanctioned regarding dollar transactions. Additionally, four other banks have incurred penalties from the Office of Foreign Assets Control (OFAC).
Dr. Nasiri commented, “These sanctions stem from mere suspicions lodged by the US Treasury. Presently, international auditing firms such as Oliver Wayman and K2 are actively reviewing both historic and contemporary transactions of these banks.”
“To date, no violations against the guidelines for transferring dollars to countries on the US sanctions list have been substantiated,” he confirmed.
“The Central Bank, along with the Iraqi government and even the banks under scrutiny, are making considerable efforts to demonstrate compliance with international standards to the US Treasury,” he remarked.
“Notably, none of the sanctioned banks are on the list of entities permitted access to dollar transactions,” he clarified.
“The banks eligible for dollar remittance entail those collaborating with international banks, of which eight focus on dollar transactions and 14 handle other currencies,” he added.
On the topic of the Kurdistan Regional Government (KRG) providing access to official exchange rates for businesspersons, Dr. Nasiri noted, “The official dollar rate—fixed at 132,000 dinars—is available for businessmen across all provinces, including the Kurdistan Region.”
He concluded by stating, “All officially registered businessmen can take advantage of the dollar at the sanctioned rate. However, those lacking registration and official accounts who resort to the parallel market will not have access to this rate.”
