Iraqi Sudani Admits Fraudulent Currency Transfers, Blames His Predecessor |

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BAGHDAD-

Iraqi Prime Minister Mohammed Shiaa al-Sudani has launched a bitter attack on the policies of former Prime Minister Mustafa Al-Kadhimi and deposed Central Bank Governor Mustafa Ghaleb Mukheef, holding them responsible for the rise in the dollar’s value skyrocketed in the exchange market, saying the previous government had not sufficiently prepared banks and merchants to use the international electronic bank transfer system known as SWIFT for monitoring fraudulent transfers of US dollars from Iraq.

Sudani avoided the story of the coordination framework, which had accused the United States and the SWIFT system of causing the rise in the value of the dollar. Instead, he attempted to provide more objective explanations for the sudden rise in the dollar. But by evading his responsibilities and blaming his predecessor, he lacked credibility, especially since the decline of the Iraqi dinar began last November when he was already at the head of the government.

Iraqi experts do not rule out the possibility that pro-Iranian financial operators in Iraq have bypassed the formal banking system to smuggle huge amounts of US currency from the country to Iran while benefiting from the cover of the Shiite pro-Iranian political coalition of the coordination framework. .

Iraq’s prime minister said on Tuesday that new banking regulations exposed fraudulent dollar transactions made from his country, as the new checks coincided with a decline in the value of the local currency.

Iraq has made efforts in recent months to bring its banking system into line with the SWIFT system.

Referring to the new controls, Sudani welcomed “a real reform of the banking system”, but denounced “falsified invoices, money leaving fraudulently”, in particular as foreign currency payments for imports.

“It’s a reality,” he said in an interview on state television.

The adoption of the SWIFT system was supposed to enable greater transparency, combat money laundering and help enforce international sanctions, such as those against Iran and Russia.

An adviser to Sudani had said that since mid-November, Iraqi banks wanting to access dollar reserves stored in the United States had to make transfers using the electronic system.

The US Federal Reserve will then review the requests and block them if it finds them suspicious.

According to the adviser, the Fed had so far rejected 80% of transfer requests due to concerns from the end recipients of the funds.

Before the introduction of the new regulations, “we were selling $200 million or $300 million a day,” Sudani said.

“Now the central bank is providing $30 million, $40 million, $50 million,” he said, asking, “What did we import in a single day for $300 million ?”

Sudani shone partial spotlight on the fraudulent operation but refrained from revealing the identity of the ultimate beneficiaries.

“There are products that entered (Iraq) at prices that make no sense. Obviously the objective was to withdraw foreign currency from Iraq,” he said. “This must stop.”

The money may have been routed to the autonomous province of Iraqi Kurdistan “and from there to neighboring countries”, Sudani said, without specifying whether he was referring to Turkey, Iran or torn Syria. by war.

He said the new controls had been planned for two years, under an agreement between Iraq’s central bank and US financial authorities, and lamented previous failures to put them in place.

Iraq, which is trying to overcome four decades of war and turmoil, is plagued by rampant corruption exploited by Iran to impose its economic and political hegemony over Iraq, analysts say.

The official exchange rate is set by the government at 1,470 dinars to the dollar, but the currency was trading at around 1,680 on Tuesday in unofficial markets amid a shortage of dollars.

This decline has sparked sporadic protests from Iraqis worried about their purchasing power.

Foreign Minister Fuad Hussein and the new central bank chief will be part of a delegation to Washington on Feb. 7 to discuss the new mechanism and the exchange rate fluctuation, Sudani said.

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