US Says Oman Will Be Conduit In Iraqi Debt Payments To Iran
Oman will be the third country that will hold part of the funds Iraq owes Iran, which should be used for non-sanctionable goods, the US State Department said Monday.
Oman will be the third country that will hold part of the funds Iraq owes Iran, which should be used for non-sanctionable goods, the US State Department said Monday.
Last month, the United States issued a sanctions’ waiver allowing Baghdad to pay over $2.7 billion of the $11 billion it owes Tehran for importing electricity and natural gas. Last week, Washington announced a change in the method of disbursing the funds, by transferring the money to third-country banks and then allowing purchases of goods such as food and medicine.
State Department spokesperson Matt Miller in his Monday briefing announced that the third country selected for the new payment method is Oman. “As we’ve said for some time, we thought it was important to get this money out of Iraq, because it is a source of leverage that Iran uses against its neighbor,” he said, without elaborating.
Late last year, the Biden administration started to tighten controls over dollar transactions by Iraqi banks, seeing evidence that there were banking violations potentially enabling Iran to illegally acquire US dollars. In February this year news emerged that Washington further tightened regulations over dollar transfers to and from Iraqi banks.
The leverage the US has in this matter is that Iraqi oil export proceeds are cleared by its banking system. Iraqi requests for cash dollar shipments and banking transfers are scrutinized by US federal agencies to make sure that illicit activities are prevented.
Since the Trump administration exited the 2015 JCPOA nuclear deal and imposed banking sanctions on Iran, it has periodically issued waivers allowing Iraq to make funds available to Iran for purchase of non-sanctionable goods, but to control all the transactions and Iranian attempts to syphon money out of Iraq has been hard.
Whether shifting the funds to Oman will ensure a tighter control over the process is yet to be seen. Clearly, Iran’s attempts to pressure all parties involved in slackening controls will continue. It is not clear if the change is not the result of an Iranian plan to gradually weaken the impact of US banking sanctions on its dealings with Iraq. Iran’s next move could be to further pressure Iraq to ask the United States to lift restrictions on how the funds are disbursed, enabling Tehran to withdraw cash dollars. The current Iraqi government has closer ties with Tehran than its predecessor.
State Department’s Miller, however, insisted that all funds “will still be subject to the same restrictions as when the money was held in accounts in Iraq, meaning that the money can only be used for non-sanctionable activities such as humanitarian assistance, and that all the transactions need to be approved by the United States Treasury Department in advance.”
There have also been multiple media reports that Washington and Tehran have been negotiating over the release of four American held hostage in Iran in exchange for $7 billion frozen by South Korean banks due to US sanctions. The decision to shift Iraqi funds to Oman could also be related to these secret talks.
Miller was asked Monday about the prisoners, but he refused to provide details.
“It’s obviously a very sensitive matter with respect to these detainees,” he said.
But critics who are suspicious of the Biden administration’s secret dealings with Tehran are wary of attempts to give financial rewards to the Islamic Republic in return for the hostages or a limited nuclear understanding, that has been reported by the media.
Iranian Foreign Ministry spokesman Nasser Kanaanisaid Monday, “We want governments of countries in which such shameful insults occur to prevent the repetition of such disgraceful actions and to strongly deal with the perpetrators."
Two men publicly burned the Quran outside Stockholm's central mosque late in June -- on the first day of Islamic festivities of Eid al-Adha -- an act approved by a Swedish court. Some 200 onlookers witnessed one of the two protesters tearing up pages of a copy of the Quran and wiping his shoes with it before putting bacon in it and setting the book on fire, while the other spoke into a megaphone.
The incident involved Salwan Momika, an Iraqi immigrant, who repeated the act once again last week, this time in front of the Iraqi embassy in Stockholm. Also on Friday, members of the far-right nationalist group "Danske Patrioter (Danish Patriots)" burned a copy of the Quran in front of Iraq's Embassy in Copenhagen, Denmark.
In an effort to garner support from believers of other religions, Kanaani said that “insulting celestial sanctities and Abrahamic religions is unacceptable and cannot be justified by any means.”
According to Kanaani, Iran has taken several measures to hold Sweden responsible for the 'sacrilege,' including summoning Swedish Ambassador to Tehran Mattias Lentz two times in the past few weeks, sending out a note of protest to Stockholm, and writing a letter to United Nations Secretary-General António Guterres.
Iran’s Foreign Minister Hossein Amir-Abdollahianalso held a conversation with the Secretary-General of the Organization of Islamic Cooperation in this regard. Iran has also announced that it will refrain from accepting the new Swedish ambassador and has no plans to send a new ambassador to the country.
He also reiterated the call on Stockholm to hand over the individuals behind the burning of the Quran to Islamic countries. “No country can, based on its own laws, infringe upon the values of others, as it would be a clear violation of the rights of other nations.”
Urging collective action by Islamic countries, Kanaani added, “We believe that Islamic countries must seriously utilize their capacities. It is the request of Islamic countries that actions be taken against criminals.”
He was echoing remarks by Iran's ruler Ali Khamenei, who demanded harsh punishment for the perpetrators, saying that Sweden should hand over the individuals involved to a Muslim country. In the case of some Muslim states, the punishment would be execution.
Following the incident, Hassan Nasrallah, the leader of the Lebanese Hezbollah militant group, called on all Arab and Muslim countries to expel the Swedish ambassadors from their respective nations and recall their own ambassadors from Sweden, echoing the actions taken by the Iraqi government.
The tensions escalated further when hundreds of supporters of Moqtada al-Sadr, a radical Iraqi Shia cleric, attacked the Swedish embassy in Baghdad, setting it on fire. A few days later, Baghdad expelled the Swedish envoy from the country.
Iran’s Revolutionary Guard Commander Hossein Salami has also threatened attacks against those responsible for the incident in their own country, saying that those who burn or desecrate the Quran will not enjoy security.
“We will not allow those who insult the Quran to have security. If someone wants to play with our Quran and religion, we will play with all his world,” Salami threatened. He went on to say, “Sooner or later the vengeful hand of “mujaheds” will reach politicians and stage managers behind this sort of crimes, and we will render the highest punishment to the perpetrator.”
In the late 1980s, Iran’s then-ruler Ayatollah Khomeini issued a Fatwa for the killing of British author Salman Rushdie for his book, Satanic Verses, seen by some Muslims as insulting to Prophet Muhammed. Iran also announced a reward for Rushdie’s killing.
