US affirms Iraq must abide by Iran sanctions

As US economic pressure builds on Tehran, State Department Deputy Spokesperson Robert Palladino affirmed that Iraq must continue to adhere to the US sanctions on Iran.

WASHINGTON DC (Kurdistan24) – As US economic pressure builds on Tehran, State Department Deputy Spokesperson Robert Palladino affirmed that Iraq must continue to adhere to the US sanctions on Iran.

“The United States will aggressively enforce its sanctions authorities, and entities that continue to engage in sanctionable activity involving Iran will be exposed to United States sanctions,” Palladino said on Thursday, as he replied to a question from Kurdistan 24.

However, Palladino sought to portray the US enforcement in Iraq of those sanctions as more of a cooperative, rather than antagonistic, effort.

While affirming that US sanctions on Iran did apply to Baghdad, he added, “We’re continuing to work with Iraq at the same time to increase its energy independence” and expand “the use of Iraq’s own natural resources,” while “diversifying energy imports.”

Iraq is heavily dependent on Iran to meet its energy needs, particularly for electricity. Electricity shortages in southern Iraq last summer led to widespread protests against Baghdad and focused popular attention on what was deemed an ineffectual and corrupt government.

Since re-imposing sanctions on Iran in November, Washington has given Iraq successive 45-day waivers to import electricity from Iran. The most recent such waiver was granted on March 20. Iraq’s electricity infrastructure is in bad shape, and it is difficult to imagine those waivers ending any time soon, particularly with another summer approaching, even as Palladino laid out the longer-term goal of Iraqi energy independence.

The Treasury Department plays a major role in US sanctions policy. On Tuesday, it announced sanctions against 25 individuals and entities in the UAE, Turkey, and Iran for their role as front companies for the Iranian military, including the Islamic Revolutionary Guard Corps (IRGC.) The scheme allowed the Iranian military to covertly acquire large sums of hard currency.

Ansar Bank is an Iranian bank under the control of the IRGC, the Treasury Department explained. Using Ansar Bank, the IRGC ran a “vast network” through which it exchanged “devalued Iranian rial for dollars and euros.” Indeed, the bank was used by the IRGC Quds Force for multiple purposes, including “to pay the salaries of its foreign fighters, particularly those based in Syria.”

Brian Hook, the State Department’s Special Representative for Iran, explained that Tehran was able to secure $800 million in hard currency over the past year and a half using the Ansar network and its related front companies.

Eight countries, among them Turkey, currently have waivers to import Iranian oil. They will expire on May 2. Hook stated that he did not anticipate that the US would grant new waivers as it intends to cut off all of Iran’s oil exports. However that is a decision that Pompeo will make along with President Donald Trump, Hook said.

The US has taken specific aim at Iran’s oil trade with Syria—what the Treasury Department’s Under Secretary for Terrorism and Financial Intelligence, Sigal Mandelker, called “an oil for terror scheme,” in which Iran exported oil to Syria “in return for hundreds of millions of dollars” for its “terror proxy groups, including Hezbollah, Hamas and the Quds Force.”

“Iran has been unable to deliver oil to Syria since January 2,” The Wall Street Journal reported last week. A key step in the US effort was its success in pressing Egypt to block Iranian oil shipments to Syria traversing the Suez Canal.

Consequently, Syria is suffering “fuel shortages and skyrocketing energy prices,” the Journal said, as it noted that the measure serves two US goals: weakening the regime of Bashar al-Assad, as well as undermining Iranian influence in Damascus.

In restricting Iranian trade through the Suez Canal, there could also be an impact in Lebanon, which Secretary of State Mike Pompeo visited last week and where he strongly criticized Hezbollah, which has become a major force in Lebanese politics.

“You’ve got to go back decades when the last secretary of state was prepared to do that,” Pompeo said on Thursday in Washington at the National Review Institute.

However, the US pressure on Iran—whether in regard to its transportation routes or its oil and finance sectors—makes Iraq all that more important to Tehran.

Iranian President Hassan Rouhani paid a three-day visit to Baghdad earlier this month, and his large delegation included a substantial economic contingent.

Iraq is “another channel for Iran to bypass America’s unjust sanctions,” a senior official accompanying the Iranian President said. “This trip will provide opportunities for Iran’s economy.”

Before leaving Iran, Rouhani explained that his country was “very much interested” in expanding ties with Iraq, “particularly our transport cooperation.”

In Baghdad, Rouhani signed an agreement on the construction of a railway from the Iranian border town of Salamcheh to the Iraqi port city of Basra. When completed, it will provide Iran access to Iraq’s transportation routes to Syria and Lebanon—the so-called “land-bridge” to the Mediterranean.

If the US is concerned about such prospects, however, that is not yet evident in the public statements of US officials.

Editing by Nadia Riva