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A mechanism to settle Iraq's debts .. Is Iran's trade under US control?

2019-10-06T14:43:34.187Z



Jazeera Net-Tehran

Iranian circles warned of the repercussions of the financial mechanism to pay the sale of gas and electricity to Iraq, and described the acceptance of the restrictions as a bow to US sanctions, while others called for the establishment of joint industrial cities to export Iranian goods to other countries.

Eight months after the Central Bank of Iran and its Iraqi counterpart signed an agreement to launch a financial mechanism to repay debts owed to Tehran, economic crises stemming from US sanctions continue to hamper the work of Iraqi institutions with Iranian parties.

While the Iraqi side announced that the activity of this mechanism will be by depositing the government of Baghdad equivalent of Iranian receivables in the Trade Bank of Iraq in Iraqi dinars, Iranian circles warned that the Iraqi bank is one of the most Iraqi banks to implement the US sanctions, as well as that the Iraqi side still refuses to withdraw Tehran That money from his bank.

The Iranian newspaper "Ibtikar", the Persian-speaking, quoted a senior Iraqi official - anonymity - that Iran is not entitled to withdraw its dues from the Trade Bank of Iraq, but will be allowed only to buy goods not covered by the sanctions, such as food and medicine, from outside Iraq.

Observers suggested the establishment of a branch of an Iranian bank in Iraq instead of the Trade Bank of Iraq (Getty Images)

Negative repercussions
For his part, warned political scientist Mehdi Mazhar, the negative repercussions of the work of the mechanism on economic relations between Iran and Iraq, describing the acceptance of the restrictions and not allow Iran to withdraw its funds as a bow to US sanctions.

He pointed out that the relationship of the Bank of Iraq with US banking institutions, is a pressure card, however, the US administration will exploit for the benefit of its policies, which means increased US dominance over Iraqi-Iranian trade.

According to Mazhar, the "Iraqi Instex" mechanism (similar to the European Instex mechanism to support trade with Iran away from US sanctions) chooses Iran between the accumulation of its dues due to the continued supply of electricity and gas to the Iraqi government in the Trade Bank of Iraq, or the loss of the energy market to its western neighbor if it decided Reduce its exports of electricity and gas to Iraq.

Observers in Iran suggest the establishment of a branch of an Iranian bank in Iraq to replace the Trade Bank of Iraq, to ​​prevent the arrival of bilateral trade data to America and prevent it from controlling the economic cooperation between Tehran and Baghdad, and there are those who see an Iraqi bank that is not subject to US sanctions an appropriate option To do the job.

In the context, the President of the National Bank of Iranian banks and Rosh Perwizian, last week, that an Iranian bank has obtained permission from the Central Bank of Iraq to establish seven branches in Iraq, and that this step came to support Iranian exports to Iraq.

The Iranian official announced the readiness of banks and private financial institutions in his country to provide the necessary financing for the export of technical and engineering services to Iraq.

Iraqi Ambassador in Iran revealed the continuation of negotiations between the Central Bank of Iraq and its Iranian counterpart until a solution is reached (Iranian press)

Complexity and interference
On the other hand, the economic researcher Mehdi Azraqi that the bank "JP Morgan" the US oversees all transactions of the Trade Bank of Iraq as the founding body, which will open the door wide for US intervention even on the purchase of goods not covered by the sanctions.

According to economic observers, the Iranian government has tried to find mechanisms for financial exchange with some countries that want to cooperate with them, such as the European mechanism "Instex", before confirming the feasibility of the latter.

Azraqi expressed his belief that the Tehran government increased trade cooperation with Baghdad complicated by accepting the restrictions of the mechanism without taking the repercussions and threats of its work, pointing out that Iran was getting its dues from Iraq after a period of delay without the United States any way to monitor it.

Ongoing negotiations
On the other hand, the Iraqi ambassador to Tehran Saad Jawad Qandil, revealed the continuation of negotiations between the Central Bank of Iraq and his Iranian counterpart to reach a solution to pay the Iranian dues, stressing that the so-called Iraqi Instex is only one of the proposals to pay the debt.

The Iraqi diplomat said that the aim of the mechanism is to develop solutions for the receipt of Iran's rights from debt, but in the form of humanitarian materials to be dealt with legally within the US sanctions and exemptions in the humanitarian field.

The ambassador said in a press statement, that there are mechanisms proposed to pay Iranian export funds such as dealing with non-dollar and dealing in the Iraqi currency, but did not announce officially, stressing that Iraq continues to request gas and electricity from Iran.

Some circles fear Iran will lose its energy market to neighboring Iraq

Joint industrial cities
As revealed Iranian Oil Minister Begin Zanganeh, that the dues of his country due to the export of electricity and gas to Iraq amounted to two billion dollars.

Critics described the Iraqi Instex mechanism as useless, given that the volume of Iranian imports from Iraq is very small compared to its exports.

In a move that could raise Iranian imports through Iraq as well as open a door to circumvent U.S. sanctions, the head of the Iranian-Iraqi Joint Chamber of Commerce Hamid Hosseini urged the Iraqi and Iranian sides to establish joint industrial border cities, to enhance bilateral economic cooperation and provide the necessary ground for exporting Iranian goods to other countries.

Iraq is Iran 's second trade partner after China, with the volume of trade between the two countries currently $ 10 billion annually, while Tehran is looking to raise the volume of trade with Iraq to twenty billion during the next stage.

Source: aljazeera

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