Iraq Bans 8 Banks From Dollar Trade To Curb Smuggling To Iran
To get in line with US measures to crack down on currency smuggling to Iran, Iraq has banned eight local commercial banks from engaging in US dollar transactions.
To get in line with US measures to crack down on currency smuggling to Iran, Iraq has banned eight local commercial banks from engaging in US dollar transactions.
The banks are banned from accessing the Iraqi central bank's daily dollar auction, a main source of hard currency in the import-dependent country that has become a focal point of a US crackdown.
The measure was taken to reduce fraud, money laundering and other illegal uses of the US currency days after a visit by a top US Treasury official. The measures are in line with US regulations aimed at curbing the illegal siphoning of dollars to Iran and applying pressure on Tehran along with US sanctions imposed over its nuclear program and other disputes.
As an ally to both the United States and Iran, Iraq -- holding over $100 billion in reserves in the US -- heavily depends on Washington's goodwill to ensure access to its oil revenues that are kept in US banks.
Citing an Iraqi central bank document verified by an official at the bank, Reuters said the banned banks are Ahsur International Bank for Investment; Investment Bank of Iraq; Union Bank of Iraq; Kurdistan International Islamic Bank for Investment and Development; Al Huda Bank; Al Janoob Islamic Bank for Investment and Finance; Arabia Islamic Bank and Hammurabi Commercial Bank.
A US Treasury spokesman said, "We commend the continued steps taken by the Central Bank of Iraq to protect the Iraqi financial system from abuse, which has led to legitimate Iraqi banks achieving international connectivity through correspondent banking relationships.”
The measures to restrict Iran's access to US dollars come amid high tensions between Washington and Tehran after three US soldiers were killed on January 28 by a drome attack launched by Iranian proxy militias operating in Iraq.
In July 2023, Iraq banned 14 banks from conducting dollar transactions as part of a wider crackdown on dollar smuggling to Iran via the Iraqi banking system. The decision came after a request from Washington, according to Iraqi and US officials. The targeted banks were mostly small institutions, even by Iraqi standards. Some of these banks have ties to influential Iraqis, who are known for financial connections to Iran, or have heavy involvement in dollar transactions. The sanctions, along with previous ones on eight banks, left nearly a third of Iraq's 72 banks blacklisted, two Iraqi central bank officials said.
Last week, the US Treasury Department's top sanctions official, Brian Nelson, met top Iraqi officials in Baghdad, and discussed how to protect the Iraqi and international financial system from criminal, corrupt and terrorist actors, a tacit reference to the Islamic Republic.
During the visit, the Treasury announced action against Al-Huda Bank, saying it was involved in diverting billions of US dollars to Iranian-backed militia groups.
Reuters quoted an unnamed Treasury official as saying that Washington expected Iraq to do more to help counter Iran-backed armed groups operating out of Iraq after the killing of three US soldiers in Jordan, which has prompted US-led military strikes against Iran-linked targets in Iraq, Syria and Yemen.
Iran International revealed in May, that an aide to former IRGC’s Quds force commander Qasem Soleimani is a key figure in money laundering for Tehran. Earlier in 2023, Iran International also reported some details about the inner workings of a Quds force unit tasked with smuggling money from Iraq to Iran, demonstrating that the Islamic Republic’s embassy in Iraq is also involved in the money laundering operations aimed at funneling revenues from oil and gas exports back to Iran.
This financial network is bypassing the US sanctions at the cost of the Iraqi economy. An informed source in Baghdad told Iran International late in December that Washington has received reports Iraq is still conducting trade with Iran using US dollars despite sanctions.
The United States has insisted that oil-rich Iraq, the OPEC group's second-largest producer, moves towards self-sufficiency in energy and power generation, and has put pressure on Baghdad to stem the flow of dollars into neighboring Iran.
The Iraqi dinar went into a tailspin against the dollar after the New York Federal Reserve imposed tighter controls on international dollar transactions by commercial Iraqi banks in November 2022 to halt the illegal siphoning of dollars to Iran.
Under the curbs that took effect in January 2023, Iraqi banks were obligated to use an online platform to disclose their transaction details.
Over the past decade, several concerning issues have plagued Iran's public education system, attracting significant attention.
Mass recruitment of clerics in public schools, significant dropouts even in elementary and middle schools, and a sharp drop in the quality of public education. In its latest recruitment process, the Ministry of Education hired 3500 seminary students and clerics without any training. Already, tens of thousands of seminary students and clerics were employed in this ministry.
According to Shahla Kazmipour, a demographer in Iran, 30 percent of male teenagers aged 15 to 18 have dropped out of schools and only half school-aged male teenagers are enrolled.
A report on students' average grades from 2019 to 2023 showed a decline in the GPA across all fields, particularly in experimental sciences, mathematics, physics, and Islamic knowledge. This drop in educational quality has been a consistent trend over the past 45 years.
Of course, this drop is not limited to this time period. Iran's public education has experienced a continuous decline in scores in the last 45 years despite the lowering of standards. How can we explain this drop during the Islamic Republic era?
Three fundamental reasons
The three main and fundamental reasons for this decline are 1) the sharp decrease in per capita investment and spending in public education year by year, 2) an increasing class divide in society has led to children from the ruling class attending private schools, leaving public education with fewer resources and less competition. 3) widespread poverty and high unemployment rates have strained family resources, making it difficult for many households to invest in their children's education.
The Ministry of Education had 971,000 staff and 38,000 retirees in 2023. The budget of this ministry was about 2.7 trillion rials or about $4 billion. Considering the population of 16,700,000 students in the country, the budget per student was about 12.4 million tomans, which was $250 per capita per year. In comparison, European countries, the US, and Canada allocated between $8,000 and $20,000 per student in 2019.
Furthermore, income inequality has widened in Iran, with public schools providing low-quality education for low-income families. Over 70% of top-ranking students in university entrance exams come from non-government schools, which only account for 13% of students.
Despite the government's denial of poverty statistics, approximately 90% of Iranians receive living subsidies, indicating widespread economic challenges. Moreover, unemployment affects about 53% of Iranians aged 15 to 65, rendering the official unemployment rate of 7.6% questionable. In such circumstances, families often reduce family sizes or cut "non-essential" expenses, including education.
Four security-political concerns
Instead of addressing the underlying causes of decline in the education system, the authorities have been inserting clerics and Basij members into the school staff based on four false perceptions: 1) brainwashing instead of civil education, 2) ideological and political indoctrination instead of teaching sciences and skills, 3) preventing student protests by having loyal people in the schools’ staff and supervisors, and 4) keeping the clerics and Basij members loyal by giving them public jobs.
This totalitarian approach can hardly succeed in Iran for the resistance of families against the indoctrination of the clerics’ lifestyle and ideas. Parents and students alike have access to the Internet as a window to alternative lifestyles, and flaws in the ideological and political programs of the government.
The Shiite clerics’ main agenda in Iran has been to reverse the modernization of the Pahlavi era in all aspects of governance. This agenda is gradually returning Iran’s public education to the 19th century Qajar era, similar to the judicial and legislative systems of the Islamic Republic. With the current trend, Iran's public schools could become the madrasas of the Qajar era in the next decade.
“Given the catalogue of malign and illegal activities committed by the Islamic Republic of Iran on Canadian soil, it would be naïve to believe that the Iranian regime has any compunction to shape public opinion in Canada,” Ali Ehsassi said in his letter, calling for soliciting testimony and relevant documentation from Iranian-Canadians and others with a substantial interest in the proceedings.
In a formal letter addressed to Commissioner Marie-Josee Hogue, who oversees Canada’s Foreign Interference Commission, Ehsassi demanded that Iran be included within the ambit of her inquiry.
Officially called the "Public Inquiry into Foreign Interference in Federal Electoral Processes and Democratic Institutions," the inquiry was established by the government of Canada in September 2023 focusing on the interference by China, Russia and other foreign actors on the 2019 and 2021 federal elections. Its first public hearing has been underway since late January and its interim report should be submitted by February 29.
Expressing concern about “the rather inconclusive public commentary that has surrounded the specific scope of the inquiry,” Ehsasi strongly urged Hogue “to consider examining and assessing any nefarious activities attributable to the Islamic Republic of Iran in Canada that may have impacted our political processes or democratic foundations.”
He mentioned the inclusion of India in the inquiry as a precedent for expanding its scope, saying that the inquiry requested that the Federal Government collect and produce all classified information that may be within its possession that relate to the alleged interference by India. He suggested that she do the same about Iran.
Representing Willowdale in Toronto, Ehsassi highlighted the presence of a sizable Iranian-Canadian community in his federal riding. He emphasized the need to examine the Iranian regime's potential involvement in Canada's political landscape, citing concerns about cyberattacks, money laundering operations, and various attempts to influence elections.
In 2021, two Iranians were charged for cyber disinformation and a threat campaign designed to influence the 2020 US presidential election. Mohammad Hossein Muousakazemi (27) and Sajjad Kashian (24) illicitly acquired confidential US voter information through a breach of at least one state election website. Subsequently, they sent threatening email messages to instill fear and disrupt voters. Additionally, the perpetrators produced and circulated a deceptive video, spreading disinformation about alleged vulnerabilities in election infrastructure. They also made attempts to access several states' voting-related websites.
“Any familiarity with the intentions and capabilities of the Islamic Republic confirms that it retains a keen interest in furthering its perceived objectives in Canada, albeit by clandestine and surreptitious means," he said. “Apart from being able to draw on various individuals linked to it that reside in Canada, the Iranian Government is believed to rely on a number of organizations and foundations to assist it in sowing division, slandering individuals, silencing its critics, or holding sway over our elections.”
Ehsasi also pointed to Tehran’s efforts to harass and target people throughout North America, saying that “in recent years numerous plots by the Iranian regime to assassinate individuals in North America have been foiled.”
Just last month, US prosecutors accused an Iranian drug lord of recruiting two Canadian Hells Angels to assassinate Iranian defectors in Maryland as attacks on dissidents abroad continue. A federal indictment accused Naji Sharifi Zindashti of leading a network that has perpetrated the killings, tortures and kidnappings of Iranian dissidents around the world on the orders of Iran’s Ministry of Intelligence and Security.
In his letter, he referenced warnings from Jody Thomas, former National Security Adviser to Prime Minister Trudeau, and Richard Fadden, former Canadian Security Intelligence Service director, who cautioned against ignoring potential interference by Iran. “The Public Inquiry will prove unable to detect, deter or encounter the full breadth of threats posed to Canada by foreign regimes without an examination of the Islamic Republic of Iran.”
Ehsasi concluded by urging the commission not to turn a blind eye to the Iranian regime's malign intent and activities on Canadian soil, emphasizing that failure to do so might cast doubt on the overall efficacy of the inquiry's findings and “embolden the Iranian regime to attempt to influence Canada’s elections in the future.”
A report by Canada’s Global News in November cited Canadian-Iranians, legal experts, and security and intelligence sources as concurring that Canada has an especially big problem with hundreds, maybe thousands, of potentially dangerous regime-connected officials on Canadian soil.
Earlier this week, Canada’s refugee board ruled that former Iranian government official Majid Iranmanesh cannot stay in the country because of his high-level connections to the regime. Iranmanesh is one of nine alleged senior members of the Iranian regime who face possible deportation. The Canada Border Services Agency has said it was investigating 141 such cases. Thirty-eight have been closed without action.
According to Canada-based activist Hamed Esmaeilion who lost his daughter and wife in the shooting down of Flight PS752 by Iran’s Revolutionary Guard in 2020, said, “Islamic Republic agents are everywhere in this country. Everywhere.”
He is one of many Iranians in the diaspora calling on Western governments to designate the IRGC.