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[size=36]The United States: The agreement to swap Iraqi oil for Iranian gas violates sanctions[/size]
political | 09:32 - 07/15/2023
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BAGHDAD - Mawazine News
Three former US officials said that bartering Iranian natural gas for Iraqi oil under the agreement announced by Iraqi Prime Minister Mohammed Shia al-Sudani earlier this week would constitute a violation of US sanctions imposed on Tehran unless the United States issued an exception allowing it.
Al-Sudani said on Tuesday that Iraq would start bartering crude oil for Iranian gas to end repeated delays in payments due to Tehran because of the need to obtain US approval for such transactions.
Al-Sudani added that Iran had cut its gas exports to Iraq by more than half until the first of July due to Baghdad's inability to obtain US approval to pay dues, but Tehran agreed to resume pumping gas exports in exchange for crude oil.
Few details were announced about the possible barter agreement that would contribute to defusing a political problem faced by Al-Sudani due to power outages during the sweltering summer in Iraq, when temperatures exceed 50 degrees Celsius.
But three former US officials said the quid pro quo would likely run counter to US sanctions.
"Making this kind of trade-off with Iran would be a violation of US sanctions unless a US national security exception is issued," said Richard Goldberg of the Foundation for Defense of Democracies think tank.
"This would be prohibited by the Iran Freedom and Nuclear Non-Proliferation Act, which prohibits any energy-related transactions with Iran," said Goldberg, who served on the National Security Council staff under former US President Donald Trump's administration.
A US State Department official said Secretary of State Antony Blinken issued an exception on March 21 for a period of 120 days allowing Iraq to pay Iran only for electricity imports, not for natural gas used to generate electricity in Iraq.
"The March 2023 exception granted by the foreign minister allows Iraq to buy electricity from Iran. Nothing else," the official added, on condition of anonymity. The State Department announced the exception on March 31.
There is speculation that the exception may be modified to allow barter, a matter the official refused to discuss.
"We are not in a position to review any future decisions related to the exception. We have no comment at this time regarding reports regarding barter arrangements between Iraq and Iran," the official said.
The Iraqi Embassy in Washington did not immediately respond to a request for comment.
Former US officials said the Treasury Department, which oversees most US sanctions against Iran, defines the term "transaction" broadly, possibly including barter.
"What's important here is whether the transaction is 'impact'. It doesn't matter if it's going to be in one currency or another or if ... it's a swap," said a former senior Treasury official, speaking on condition of anonymity.
The former official added that this may provide "enough room for maneuver ... for the United States to turn a blind eye, but it is a political decision, not a legal issue."
And he added, "From a purely legal point of view, it (the barter) definitely violates US sanctions." Ended 29 / H
Three former US officials said that bartering Iranian natural gas for Iraqi oil under the agreement announced by Iraqi Prime Minister Mohammed Shia al-Sudani earlier this week would constitute a violation of US sanctions imposed on Tehran unless the United States issued an exception allowing it.
Al-Sudani said on Tuesday that Iraq would start bartering crude oil for Iranian gas to end repeated delays in payments due to Tehran because of the need to obtain US approval for such transactions.
Al-Sudani added that Iran had cut its gas exports to Iraq by more than half until the first of July due to Baghdad's inability to obtain US approval to pay dues, but Tehran agreed to resume pumping gas exports in exchange for crude oil.
Few details were announced about the possible barter agreement that would contribute to defusing a political problem faced by Al-Sudani due to power outages during the sweltering summer in Iraq, when temperatures exceed 50 degrees Celsius.
But three former US officials said the quid pro quo would likely run counter to US sanctions.
"Making this kind of trade-off with Iran would be a violation of US sanctions unless a US national security exception is issued," said Richard Goldberg of the Foundation for Defense of Democracies think tank.
"This would be prohibited by the Iran Freedom and Nuclear Non-Proliferation Act, which prohibits any energy-related transactions with Iran," said Goldberg, who served on the National Security Council staff under former US President Donald Trump's administration.
A US State Department official said Secretary of State Antony Blinken issued an exception on March 21 for a period of 120 days allowing Iraq to pay Iran only for electricity imports, not for natural gas used to generate electricity in Iraq.
"The March 2023 exception granted by the foreign minister allows Iraq to buy electricity from Iran. Nothing else," the official added, on condition of anonymity. The State Department announced the exception on March 31.
There is speculation that the exception may be modified to allow barter, a matter the official refused to discuss.
"We are not in a position to review any future decisions related to the exception. We have no comment at this time regarding reports regarding barter arrangements between Iraq and Iran," the official said.
The Iraqi Embassy in Washington did not immediately respond to a request for comment.
Former US officials said the Treasury Department, which oversees most US sanctions against Iran, defines the term "transaction" broadly, possibly including barter.
"What's important here is whether the transaction is 'impact'. It doesn't matter if it's going to be in one currency or another or if ... it's a swap," said a former senior Treasury official, speaking on condition of anonymity.
The former official added that this may provide "enough room for maneuver ... for the United States to turn a blind eye, but it is a political decision, not a legal issue."
And he added, "From a purely legal point of view, it (the barter) definitely violates US sanctions." Ended 29 / H
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