WASHINGTON DC (Kurdistan 24) - On Wednesday, the US Treasury Department announced that it was sanctioning the Baghdad-based South Wealth Resources Company (SWRC), as well as two Iraqi nationals associated with it.
The Treasury Department’s announcement explained that SWRC, which is also known as Manabea Tharwat al-Janoob General Trading Company, “trafficked hundreds of millions of dollars’ worth of weapons” to Iraqi militias supported by the Quds Force of Iran’s Islamic Revolutionary Guard Corps (IRGC-QF.)
In addition, SWRC “covertly facilitated the IRGC-QF’s access to the Iraqi financial system to evade sanctions,” it explained.
Treasury targets IRGC-Quds Force financial conduit in Iraq for trafficking weapons worth hundreds of millions of dollars https://t.co/qxYhAQpWaB— Treasury Department (@USTreasury) June 12, 2019
Given Iran’s considerable influence in Iraq, knowledgable observers have long been concerned that Tehran was using Iraqi banks and companies as channels to evade the ever-toughening US sanctions.
Indeed, Treasury Secretary Steven Mnuchin warned, “The Iraqi financial sector and the broader international financial system must harden their defenses against the continued deceptive tactics emanating from Tehran in order to avoid complicity in the IRGC’s ongoing sanctions evasion schemes and other malign activities.”
The State Department welcomed the Treasury action. Spokesperson Morgan Ortagus noted that Secretary of State Mike Pompeo included in his twelve requirements for lifting sanctions, which he articulated last year, that Iran “respect the sovereignty of the Iraqi government and permit the disarming, demobilization and reintegration of undisciplined armed groups in Iraq.”
Many of the Iraqi militias known as the Popular Mobilization Forces (PMF) would fit that description.
As Treasury explained, Abu Mahdi al-Muhandis, deputy head of the PMF and close to Qasim Soleimani, commander of the IRGC-QF, has “enriched” himself on SWRC’s dealings, receiving large commissions from the weapons trade.
Muhandis has a decades-long relationship with Iran’s revolutionary government. In 1983, the US and French embassies in Kuwait were bombed in an Iranian-sponsored terrorist assault. A Kuwaiti court subsequently convicted Muhandis in absentia for his role in the attacks.
Read More: US slams Qasim Soleimani’s role in Iraq
The two Iraqis whom the US designated on Wednesday as involved with SWRC’s illicit activities were named as Makki Kazim Al Asadi and Muhammed Husayn al-Hasani. They facilitated the IRGC-QF arms shipments and financial operations via SWRC, Treasury stated.
Asadi “acted as an intermediary” for the Quds Force activity, while Hasani “is the authorized agent and representative of SWRC, which he registered in Iraq in 2013,” the Treasury announcement explained.
The US has only rarely sanctioned Iraqi companies for their ties to Iran and Iran’s sanctions evasion. After 2011, when Barack Obama pulled US troops out of Iraq, he did not want to acknowledge that Iranian influence was growing there and that it was detrimental to US interests.
That would have required the Obama administration to acknowledge it had made a mistake in withdrawing from Iraq in the first place. Moreover, Obama sought to reach an understanding with Iran on its nuclear program, which he did in 2015.
Somewhat strangely, the policy of accommodating Iran in Iraq did not change in the first year of the Trump administration, although the new administration took a much tougher position, overall, on Iran.
Only after Pompeo replaced Rex Tillerson as Secretary of State and Amb. John Bolton replaced H. R. McMaster as National Security Adviser in April 2018 did the US begin to take on the challenge of Iran’s role in Iraq.
Last May, shortly after the US withdrew from the Iranian nuclear deal, the Treasury Department sanctioned Iraq’s Al-Bilad Islamic Bank for Investment and Finance. Iraq’s Central Bank then cut ties with it.
Editing by Nadia Riva