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Newspaper policy : Iran's allies in Iraq are determined to secure "organized smuggling"[/size]
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3 hours ago
Newspaper policy : Iran's allies in Iraq are determined to secure "organized smuggling"[/size]
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3 hours ago
The dispute between the Iraqi political parties widened on the government's position on US sanctions, as a source in the central bank revealed a close delegation to Washington for exemptions from some sanctions on Iran, according to Al-Arab newspaper.
The prime minister's refusal to confirm the news, issued by the central bank, headed by Ali al-Maliki, a member of the Nuri al-Maliki faction of the Dawa Party, known for his loyalty to Iran, shows that US sanctions have become a hot front between the political parties as they race to form a new government.
Political parties opposed to Iranian influence support Iraq's compliance with US sanctions, while Iran's voices warn of the dangers of Iraq's compliance with those sanctions.
Washington says countries that do not respect sanctions will face significant consequences after the first phase of sanctions is launched on Aug. 7 and the second phase is about to begin on Nov. 5.
The impact of the sanctions is limited to preventing the circulation of the dollar, gold and car trade because the sanctions do not include the export of consumer goods and Iranian foodstuffs that dominate the Iraqi market, but the suspension of trading in dollars can confuse most commercial activities.
Observers say that Iran's followers in Iraq are trying to collect the dollar from Iraqi markets by any means and that it reached the circulation of counterfeit Iraqi currency printed in Iran.
It seems that Iraq will have difficulties adapting to the sanctions because it imports a lot of goods from Iran without giving them anything. It will be difficult for Baghdad to anger Washington, its main ally, providing military support and assistance and overseeing security training.
There is still uncertainty surrounding a request for exemption from sanctions after Prime Minister Haider al-Abbadi initially announced that Baghdad would abide by all US sanctions, but relaxed his position after being sharply criticized by his opponents, who owe allegiance to Tehran.
"The government is planning to ask for an exemption from Washington," a central bank official said, adding that a delegation would travel to Washington for the purpose, but did not say when the visit would take place, while an official in Abadi's office declined to comment.
Iraqi officials fear a shortage of basic goods if Baghdad commits all sanctions. This could lead to unrest at a very delicate time in Iraq's political arena.
Iraq imports a wide range of goods from Iran, including food, agricultural products, household appliances, air conditioners and auto parts, which last year amounted to more than $ 6 billion, or 15 percent of Iraq's total imports.
There are also energy contracts between the two countries contributing to trade, which amounted to 12 billion dollars last year. Iraqi officials say they have asked each ministry to compile a list of imports necessary to apply for exemptions.
Abadi stressed that Iraq would respect the sanctions on dollar transactions, which will be the most difficult for companies and block energy deals and large trade agreements, because it means preventing banks and the Iraqi government from paying dollars to the Iranian authorities.
The central bank has instructed banks to abide by the ban on dollar trading, but said it would allow euro-denominated transactions.
Analysts say all countries opposed to US sanctions, including France, Britain and Germany, find it difficult to persuade their companies to continue to deal with Iran, although it is making great efforts to maintain trade with Iran.
In particular, sanctions affect companies operating in the United States. US President Donald Trump said those conducting activities in Iran would not be able to carry out activities in the United States.
But a Western diplomat in Baghdad stressed that most private companies in Iraq would not be relatively affected by the sanctions because they "have no US investment, do not deal with the dollar and can continue to deal with Iran without problems."
An Iraqi Ministry of Commerce official said energy, construction and government-run vehicles and the public sector would be more vulnerable.
"We rely mainly on Iran as a source of building materials, cars and spare parts, because of low prices and ease of shipping through many of the border crossing points," he said.
Iraqi traders are likely to continue their dealings with the Iranians, despite Baghdad's pledge to comply with sanctions because of falling commodity prices as a result of the fall in the Iranian riyal.
"It is impossible for the government to prevent the flow of Iranian primary goods through a common border of more than 1,300 km," said an economist and a member of the Iraqi Businessmen's Union, Antoine.
He said Iran would use every option available to maintain export flows, including helping allied armed groups to secure what could be called "organized smuggling".
Abadi leads a fragile caretaker government as political parties seek to negotiate a new government coalition after the May elections. Abadi is trying to stay as a consensus prime minister after he has struck a balance between US and Iranian interests.
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