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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Iraq's "King of the Dollar" to the forefront and money smuggling under the American microscope

    Rocky
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    Iraq's "King of the Dollar" to the forefront and money smuggling under the American microscope Empty Iraq's "King of the Dollar" to the forefront and money smuggling under the American microscope

    Post by Rocky Tue 10 Sep 2024, 7:23 am

    [size=32]Iraq's "King of the Dollar" to the forefront and money smuggling under the American microscope
    [/size]

    Washington accuses the Iranian regime of using Baghdad as a means to obtain "greenbacks" and circumvent sanctions

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     Tuesday 10 September 2024 12:40
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    The headquarters of the Central Bank of Iraq in Baghdad (AFP)

    summary


    The campaign against Iraqi banks began in late 2022 after more than a decade of American inaction, even after the Pentagon inspector general warned since 2012 of potential fraud of up to $800 million a week. The lack of oversight has revived smuggling, and produced figures described locally as “corruption whales” protected by influential parties.
    It has become almost routine these days for Iraqis to learn about the details of corruption operations with figures equivalent to the budgets of countries, as billions of dollars have been swallowed and disappeared in corruption deals, while the "heroes" of these operations are released, including those who appear on television and continue their lives as wealthy people. As for the missing money, it remains like a difficult puzzle that [You must be registered and logged in to see this link.] discuss to decipher its codes without clear answers. In fact, the three authorities in Iraq avoid discussing its details and how the prosecution of the accused has evaporated.
    Today, Iraqis have returned to talking about "Ali Ghulam" after the Wall Street Journal stirred up the stagnant waters in his case and conducted an interview with him. Ali Ghulam, the suspected director of four Iraqi banks, was arrested on November 18, 2022, upon his arrival at Baghdad airport under Article 456 of the Iraqi Penal Code, which stipulates the punishment of “imprisonment for anyone who receives or transfers possession of movable property owned by others to himself or to another person.”
    However, his arrest did not last long, as he was released on bail. His release was described as the fastest, and became a subject of controversy on social media, with some calling, in a sarcastic manner, for it to be registered in the Guinness Book of World Records as “the shortest detention in history.”
    "King of Dollar"
    At Washington’s request, the Iraqi Central Bank decided to ban 20 banks from conducting dollar transactions as part of a campaign to prevent the smuggling of the “greenback” through [You must be registered and logged in to see this link.] through illegal transfers to Iran and armed groups in its orbit. The banks owned by Ali Ghulam were among the banks subject to sanctions.
    The Wall Street Journal described Ali Ghulam as the undisputed “king of the dollar” in Iraq for nearly a decade, as his three banks in Baghdad transferred tens of billions of dollars during that period out of the country, ostensibly to buy auto parts, furniture and other imports. He was one of the largest operators in a temporary banking system established nearly two decades ago in the shadow of the American military presence, which gave the US Federal Reserve (the US central bank) a major role in processing Iraq’s international transactions.
    Untraceable funds
    On May 22, 2003, former US President George W. Bush issued an executive order to protect the Development Fund for Iraq, in which oil sales revenues were deposited, in order to protect them from any legal prosecution. Since then, oil revenues from Iraq's oil sales have been transferred to the Federal Reserve, and then transferred to the Iraqi Central Bank account after a request from the Iraqi Ministry of Finance is sent, clarifying where the money will be spent. These requests are audited by the Federal Reserve. However, US reports revealed that the Federal Reserve's process of transferring oil revenues from Baghdad lacked basic guarantees to combat money laundering, which led to illegal financial transfers that funded armed groups for years, as banks exploited their access to dollars to finance suspicious activities.
    According to the Wall Street Journal, Ali Ghulam's banks were among more than 20 Iraqi banks involved in transferring dollars to Iran and its militia allies, using "front companies" and forged payment receipts to circumvent sanctions that prevent Iran from dealing within the global financial system. According to American officials, 80 percent of the dollar transfers flowing through Iraqi banks on some days, exceeding $250 million, were untraceable, and some of that money went secretly to Iran’s Revolutionary Guard and anti-American militias supported by the Quds Force.
    American inaction has revived smuggling
    The campaign against Iraqi banks began in late 2022 after more than a decade of American inaction, even after the Pentagon Inspector General warned in 2012 of potential fraud of up to $800 million per week. The lack of oversight has revived smuggling, and produced figures described locally as “corruption whales” protected by influential parties, including Ali Ghulam, who has become known as an Iraqi businessman who owns the “Ishtar Gate” electronic payment company, and the director of four Iraqi banks: “Al-Ansari Bank,” “Al-Qabd Bank,” “Asia Iraq Islamic Bank,” and “Middle East Islamic Bank.” Local sources say that he was born in 1982 and was a “flour worker” who carried goods and merchandise in the Shorja market in central Baghdad. He later became fourth in the list of the 20 richest Iraqis in 2024.
    Ali Ghulam founded a group of exchange companies, and his entry into the currency auction field was simple at first. In 2016, by a decision of the Governor [You must be registered and logged in to see this link.] every exchange office with a capital of more than 200 billion Iraqi dinars was converted into a bank. The exchange offices owned by Ghulam were transformed into banks that still exist today, and their names are known as “Al-Qabed” and “Asharq Al-Awsat.” His company, “Ishtar Gate,” received $600 million after the Iraqi judiciary obliged the “Rafidain State Bank” to pay $600 million to “Ishtar Gate for Electronic Payment Systems and Services” as a penalty for not implementing a previous contract between the two parties. The matter sparked widespread controversy and uproar. How could a company that obtained a license in 2020 and has a capital of less than $7 million receive compensation worth $600 million?
    Ali Ghulam now resides in London after he was, according to the Wall Street Journal, “running an empire that handled the largest share of dollars transferred outside Iraq, and on some days it reached 20 percent of wire transfers.”
    In his interview with the Wall Street Journal, Gholam denied that his banks knowingly sent money to the Quds Force or the Iranian government, saying, “The Americans have nothing against me. I have nothing to do with money laundering or Iran.”
    The newspaper wrote that “Gholam lives in a $40 million home, recently renovated with gleaming marble floors, a basement swimming pool and a parrot cage. After a walk, he often drives to his favorite London restaurants in his Rolls-Royce SUV.”


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    Militia penetration of the banking sector
    “Realizing the enormous profits that could be made by exploiting Iraq’s dollar-based financial system, powerful Iraqi militias began expanding their influence within the sector and taking control of private banks,” the Wall Street Journal reported. “To do so, they appointed loyalists to senior positions within private banks or bought large stakes in them, giving them direct control over financial activities. Through this control, the militias entered the field of transferring money abroad illegally and exploiting loopholes in it.”
    The militias relied on forged invoices to import non-existent goods, which enabled them to transfer large sums of dollars out of Iraq. The invoices often referred to the import of goods such as “furniture,” “electrical appliances,” or “auto parts,” but in reality there were no actual goods to justify these transfers. These invoices were submitted as part of the international transfer system, with limited information about the ultimate beneficiary and no supporting documents such as bills of lading or certificates of origin, making it difficult to track the money.
    Once transferred abroad, the money often reached the United Arab Emirates, where it was withdrawn in cash or transferred through informal financial networks known as hawala. The hawala system relies on personal trust and family or tribal connections to move money, and is not subject to strict financial oversight. Operating in the shadows with no government oversight, the system allowed militias to move money quickly and cheaply while minimizing the risk of detection of illicit activities.
    According to U.S. officials, some of this money ended up in the hands of the Revolutionary Guard and its Quds Force, and was used to support Iran’s allies and fund its military and political activities in the region.
    US measures to stop money flow
    The United States began a crackdown on Iraqi banks involved in money transfers to Iran in late 2022, after more than a decade of inaction, despite warnings from the Pentagon inspector general since 2012 about potential fraud of up to $800 million per week. While the United States has imposed temporary restrictions on the flow of funds to Iraq over the years, it feared that imposing strict or permanent controls would plunge Iraq into economic chaos and delay its fight against the Islamic State.
    The United States has banned more than two dozen Iraqi banks from conducting dollar transactions, and since late 2022, under pressure from the Iraqi central bank, it has imposed strict new rules requiring banks to disclose the ultimate beneficiaries of money transfers. At the same time, the Federal Reserve has begun closely monitoring money transfers from official Iraqi accounts, rejecting any that do not comply with international standards for money transfers.
    Impact of US sanctions and measures
    As a result of these measures, illicit financial transactions have been greatly reduced, although U.S. officials say Iran still seeks to use Iraq as a source of dollars. The U.S. Treasury Department also noted that the system was “valuable to U.S. national security” because it allowed Iraq to continue international trade in a high-risk environment, including during the war against ISIS.
    Future changes in the Iraqi financial system
    In response to these measures, the Central Bank of Iraq announced plans to abandon the current system for transferring dollars abroad by the end of the year. “The previous system allowed for some exploitation, such as transactions involving fictitious exporters,” Central Bank Governor Ali Mohsen al-Alaq told the official news agency in August. “Iraq is working to establish direct relationships between Iraqi banks and correspondent banks, bypassing the need to implement through the Central Bank or the US Federal Reserve,” he added.
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