Washington cut off the flow of cash to Iraq, fearing the dollar leak to Iran or Daash

05/11/2015 11:58

BAGHDAD / Obelisk: Emily Glaser wrote in New York, and Nour Malas in Baghdad, and John Hazeinrat in the newspaper "These Wall Street Journal," a report from the translation and editing statement Center for Studies and Planning, that Washington cut off the flow of cash to Iraq, fearing the dollar leak to Daash, It was denied by the Iraqi Central Bank this week, according to the statement center.

The center said at the beginning of his comment on the report, "the statement noted that the center would like some information in this article has been denied by the Central Bank of Iraq this week."

The report, which re-published "obelisk", while retaining the terminology says as received from the source: Officials at the Federal Reserve Bank and the Treasury Department are concerned about the flow of billions of dollars from Iraq to Iran's beleaguered banks, and possibly to the militants of the "Islamic state".

US and Iraqi officials familiar stated that the Fed and the US Department of the Treasury temporarily stopped the flow of billions of dollars to the Central Bank of Iraq this summer, due to growing fears that the currency intervention to Iraq, are being smuggled in the end to Iranian banks, and perhaps even to the militants of state regulation Islamic. The aim of this step, which has not been published in the past to stop the cash shipments that pushed the financial system in Iraq to the brink of crisis, and I pointed to a changing moments in efforts to avoid the dollar flow to the United States' enemies.

This position also cast Bdilalh on one of the most important aspects of the fight a long-term United States against terrorism, as US military officials express concern that the US arms up to their enemies, the finance officials the process of global track to prevent the dollar in the hands of the enemies they can use to fund their own activities . After the Iraqi officials agreed this summer to tighten restrictions on the distribution of the US dollar by the Central Bank of Iraq, the dollar resumed its flow again under the supervision of the best of the past, according to US and Iraqi officials and people familiar with.

However, the spread of the organization of the Islamic state has sparked fears of American officials about the possibility of exploiting hard currency from the dollar by the terrorists. This extremist group controls about a third of the area of ​​the country, including Mosul, which is the second largest city in Iraq, you get a well-funded through the collection of taxes, and the sale of oil, and other activities. Finance Minister Hoshyar Zebari said that the Iraqi authorities have taken a number of measures to stop the flow of dollars to the organization of the Islamic state, but he acknowledged the difficulty of it because of rampant corruption and the nature of the cash-based economy.

The roots of the problem go back to last December, when officials called on the Fed and the Treasury Department to hold a secret meeting in a hotel room in Istanbul with Iraqi officials. He said some of the people who attended the meeting that the Americans have suffered the horror of the vast amount of dollar shipments that are pumped into Iraq, and the lack of clarity where she ended up.

The US dollar has become, since the overthrow of Saddam Hussein's regime, the US and assistance in the establishment of the Central Bank of Iraq in 2004, the main currency in the country because so much of the economy depends on the operations of this criticism. When Iraq needs more paper currency, being pulled money out of the country at the expense of the Federal Reserve Bank, which is funded by oil reserves, and are flown to Baghdad.

According to data collected by the Iraqi parliament, and seen by The Wall Street Journal, that the amounts deposited in the high, where the annual flow of the US dollar increased in 2014 and that it comes from the Federal Reserve Bank of New York, to Iraq by 13.66 billion dollars, more than three times The $ 3.85 billion in 2012. This increase does not suit the slowdown that has plagued the Iraqi economy in recent times, and this is what US officials raised doubts that those dollars are being stored rather than generalized.

US officials and other individuals and states on the lookout Boukfalla things, it was hard to tell it exactly, even the near past, the Fed officials in New York who supervise only the flow of funds, receive monthly reports scattered in Arabic and English, which is about tables Excel data format, and digital documents is subject to the survey, in addition to some printed reports, including written notes handwritten. US officials have insisted in the Istanbul meeting, to tighten controls and the exchange of information on how the dollar which is distributed to financial firms in Iraq, according to US and Iraqi officials. And began the Iraqi Central Bank officials have already, in the month of January, post more information about it.

And works dollar distribution system in Iraq, according to foreign central banks managed to keep the dollar mechanism, and that it can call the Federal Reserve Bank for the distribution of currency. The new paper currency transfer of $ 100 bills flown to Baghdad after being withdrawn from the Fed in East Rutherford, New Jersey. Then going on in Baghdad, he transferred to the Central Bank of Iraq, where they are sold in the daily auction to the Iraqi financial companies that buy the dollar in Iraqi dinars, which is the currency of the country which are used on a large scale. US concerns have focused, early, to about 2,000 financial company called it banking companies, and participate actively in the currency auction at the Central Bank.

US officials believe that many of those Iraqi companies with links to al Islamic state, and there are deep concerns that they have from those that banking companies are being used as conduits for the supply of hard currency extremist organization. While the United States is almost lose control once and for all, in what, on the dollar, which sends to the outside stage, the Fed may prevent from sending money to the parties to the bank knows it will be distributed to US adversaries.

According to a spokeswoman for the Fed said that "the bank seeks to harmonize need other countries to gain access to their deposits from the US dollar banknotes body for legitimate purposes." She added that "there are a number of central banks all over the world, including the Central Bank of Iraq, it has accounts at the Federal Reserve Bank in New York, and sometimes you drag the currency of their accounts. And works Fed, in introducing this service, with the Treasury to ensure the central bank's commitment to the laws that prohibit dealing with foreign regulations that have financial penalties, and terrorists and international drug traffickers. The Fed has increased, in response to requests from a larger than usual on the currency and the evolution of the security situation, to intensify its supervision and control over heading to Iraq currency shipments. It has been suspended Send currency shipments for a temporary period this year, where the Treasury and the Fed is working with the Iraqi Central Bank to strengthen the control that was exercised in this area. "

Some Iraqi officials who have similar concerns, said that corruption and graft is such a big problem for years, which explains why US officials have now raised only currency that need to be quick to address the issue. US officials said that the situation in Iraq has evolved over the past few years, and they gave him more attention, while demand for the dollar increased. Iraqi officials have said, working in the framework of an agreement to expand the exchange of information, US counterparts that the three Iranian banks, economic sanctions, the Islamic Bank of regional cooperation, Bank Melli and Bank Parsian've got at least millions of dollars through currency auction. And operate these banks, like the rest of the other Iranian banks, under international sanctions, was not allowed to legally Fed, to pump shipments of the dollar and he knows where to accrue.

As US officials and persons mentioned aware of the issue that it was the US officials at the time, concerns that the organization of the Islamic state has been able to access some of the currency sources difficult than the dollar through auction, with Iraqi officials expressed their belief that the money has certainly gone to state regulation Islamic through this auction. This is in addition to that of banking companies in the city of Kirkuk, which is controlled by the Kurds, which is outside the control of the organization of the Islamic state, but it is close to the confrontation with the extremist organization lines, it is, according to Iraqi officials, among the most active places for the transfer of the dollar to the territory controlled by the organization of the Islamic state and the armed men who stole earlier, in 2014, about $ 100 million from the Central Bank of Iraq in Mosul, according to a person familiar with the theft.

Based on the new information, the US officials by sending a written request through the month of July to the effect that Iraqi officials must isolate Iranian banks, and transferred separately to Iraqi officials information that the Fed will not agree to exchange requests until the general situation is improving. The US decision has been handed over to the Central Bank of Iraq at a time when Iraq is almost depleted stocks of currency from the Central Bank of Iraq. And wounded many Iraqis panicked after this decision that the impact on the exchange rate volatility, which began more than usual. Governor of the Central Bank of Iraq did not respond to requests for comment on the matter.

A number of US officials, including Daniel Glaser, assistant secretary for terrorist financing at the Ministry of the Treasury for Terrorism and Financial Intelligence Office, have gone to Baghdad in July, to discuss possible solutions. Iraqi officials have agreed, including the Governor of the Central Bank of Iraq on the Keywords in a meeting held in the dining room at the US embassy, ​​on the delivery of packets of data to the Federal Reserve Bank, which Sicharkha with US intelligence agencies, and they later hired Ernst & Young Inc., a One of the accounts of American companies, to monitor the operations of the auction.

The Fed and the Federal Reserve in New York has sent about $ 500 million on the sixth of June, just days before the announcement of the Central Bank of Iraq that the stock of the dollar may be running out. The Bank also sent more weeks after the dollar since that time. Glaser said in an interview, that "from the perspective of the fight against terrorism, it is not in our interest that there be an economic crisis in Iraq because of the lack of the US dollar." The problem has not been fully resolved, in the second of December, the Treasury Department hosted a secret meeting in Washington focused on the Iraqi banking companies that may have links to al Islamic state, according to people familiar with the mysteries of the meeting.

He said one of these people that two of those banking companies owned by the Iraqis to have political links, though US officials have discussed the best way to convince others of Iraqi officials to end those relationships.

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