Washington sets strict conditions for lifting restrictions on Iraqi banks
Independent/- Informed sources revealed that the US restrictions imposed on a number of Iraqi banks dealing in dollars are still in place, and that what has been circulated in the media regarding their complete lifting on seven banks does not reflect the nature of the understandings that took place between Baghdad and Washington.
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Sources told Al-Mustaqilla that meetings held by Iraqi officials with the US Treasury Department in Washington discussed setting a gradual path that would allow restricted banks to return to dealing with the international financial system, but did not result in an immediate decision to restore those banks’ access to the dollar.
The US Treasury Department confirmed, according to a report published by The National newspaper, that none of the sanctioned Iraqi banks have yet regained the ability to conduct foreign currency transactions, contrary to what was understood from Iraqi statements that spoke of the return of seven banks to the international financial system.
The sources explained that the talks focused on the future of the banking sector and the regulation of foreign transfers, amid American concerns about money laundering, financing of armed groups, and the use of Iraqi channels to transfer funds to entities or countries subject to sanctions.
Two-stage return
According to the path discussed by the US Treasury, the restricted bank, after completing the first phase of the reform program and meeting compliance and governance requirements, can gradually return to correspondent banking channels in currencies other than the dollar.
This step does not mean lifting restrictions completely, as returning to dealing in dollars requires completing a second phase that includes passing the reform and licensing process, providing an acceptable audit from an independent party on compliance systems, attracting a qualified investor, and meeting international standards for shareholder suitability and banking management.
The sources said that allowing transactions in euros, UAE dirhams, or Chinese yuan does not in itself constitute a lifting of the US embargo, as a number of Iraqi banks have already conducted transfers in these currencies, while access to the dollar and major correspondent banks remains the most important test for the bank's return to the global financial system.
In a statement issued after U.S. Treasury Secretary Scott Bisent met with Iraqi Prime Minister Ali al-Zaidi in Washington, the Treasury Department said the two sides affirmed continued cooperation between the Treasury, the Iraqi government, and the Central Bank of Iraq to combat illicit financing and strengthen Iraq’s financial sector.
The restrictions do not apply to the entire sector.
The US restrictions do not target the entire Iraqi banking sector, but rather focus on banks whose transactions or compliance systems have raised concerns related to sources of funds, end beneficiaries, and foreign transfers.
The Central Bank of Iraq had said in February that banks on the restricted list could not participate in the foreign currency sale window or deal in dollars directly or indirectly until the banking reform process was completed.
The bank explained that the restrictions do not prevent international auditing firms from reviewing the work of those banks and helping them meet compliance requirements, indicating that the potential return is linked to the results of the reform and audit and is not a general political decision.
Over the past years, the central bank has tightened procedures for foreign transfers, expanded end-user verification, and required banks to implement stricter anti-money laundering and counter-terrorism financing systems.
Restructuring the sector
There are about 81 banks and banking institutions operating in Iraq, including eight government banks, 24 local commercial banks, 31 local Islamic banks, and 16 foreign banks, in addition to two representative offices of two foreign banks, according to a recent statistic reported by the Eco Iraq Observatory.
Despite the large number of banks, the sector's contribution to financing economic activity remains limited, and small banks face challenges related to capital, liquidity, technology, and the ability to establish relationships with correspondent banks.
The sources said the reform program could lead to the merger of small banks, the entry of new investors, or the exit of institutions that cannot meet licensing and compliance requirements, as part of redrawing the Iraqi banking map.
Reducing the number of banks does not necessarily mean a shrinking of the sector, as mergers, capital increases, and improved supervision can produce larger institutions that are better able to finance the economy and compete regionally.
Confidence of correspondent banks
Gradually lifting restrictions on banks that pass the audit could lead to expanding their relationships with correspondent banks, facilitating trade and import financing, reducing transfer costs, and improving the investment climate.
But restoring these relationships will depend on the central bank’s ability to implement reforms uniformly, prevent political interference in the work of banks, pursue suspicious transfers, and ensure knowledge of the sources of funds and the beneficiaries thereof.
The data indicates that talk of an immediate and comprehensive lifting of restrictions on seven banks was premature, while the actual development lies in setting a conditional and gradual path back to the international financial system, which some banks may succeed in passing through, while other banks may be forced to merge or leave the market.
Al-Halbousi receives the US Chargé d'Affaires and emphasizes the importance of the economic partnership with Washington.
The head of the Progress Party, Mohammed al-Halbousi, discussed today, Sunday (July 26, 2026), with the US Chargé d'Affaires, Joshua Harris, the political developments and the economic partnership, and explained that the meeting addressed the results of the Prime Minister’s visit to Washington and the regional and international challenges.
The media office of the Progress Party, as reported by Network 964, stated that Al-Halbousi “received today, Sunday, the Chargé d'Affaires of the US Embassy in Iraq, Mr. Joshua Harris.”
He added that “the meeting addressed the political situation in the country, and supported the recent visit of the Prime Minister to the United States of America, which contributed to launching a comprehensive and diversified economic partnership that supports the Iraqi economy and expands investment opportunities.”
He added that “the meeting discussed developments in regional and international affairs, the challenges facing the region, and a number of topics of common interest.”
Experts: Completing the reform of the banking system in Iraq could take years
A report by The National news website discussed the banking reform measures that the Central Bank of Iraq must take, according to a roadmap set by the US Treasury Department, in order for restricted Iraqi banks to return to the international financial system and deal in dollars. Experts and analysts predicted that this process could take years and would be a test of Iraq’s ability to enforce the rule of law, and that any bank that does not meet international standards of suitability and integrity and complete the reform process will not be able to conduct transactions in US dollars.
Banking reforms in Iraq are likely to take much longer than Iraqi Prime Minister Ali al-Zaidi indicated after his first visit to Washington last week.
For years, dozens of Iraqi banks have been denied access to US dollars due to concerns about sanctions evasion, money laundering, and illicit financing. Because Iraq's oil export revenues are held at the Federal Reserve Bank of New York, Washington retains significant leverage over Iraqi financial policy.
The report noted that al-Zaidi is seeking to reshape Iraqi-American relations to focus on investment and trade cooperation. During his visit to Washington last week, he reiterated his commitment to disarming Iranian-backed militias and secured $60 billion in trade deals at a business summit that brought together Iraqi and American companies.
These efforts appeared to bear fruit on Saturday when Baghdad announced that the Central Bank of Iraq had reached an agreement to reintegrate seven restricted Iraqi banks into the US dollar system.
However, the US Treasury Department's Office of Terrorism and Financial Intelligence later clarified that "none of the sanctioned banks have regained access to foreign exchange transactions."
Victoria Taylor, director of the Iraq Initiative at the Atlantic Council in Washington, said, “This is the first time the U.S. Treasury Department has responded so clearly to a strong signal from the Iraqi government, in an effort to enable banks to regain access to the dollar.”
Taylor added that the Treasury Department, for the first time, has laid out a detailed roadmap outlining how these restricted banks can rejoin the international financial system.
She explained, “This meeting was significant because it established a path whereby the Treasury Department reviews the steps taken by the banks and then grants them something akin to a certificate of approval, which will give international banks, such as Citibank and JPMorgan Chase, the confidence to establish correspondent banking relationships with them.”
The reform process has two phases
. In the first phase, the Central Bank of Iraq must complete the initial part of the banking reform program. Once a bank under restrictions demonstrates its commitment to the required compliance and governance standards, it can be reintegrated into correspondent banking channels in currencies other than the US dollar.
The Treasury Department stated that the first phase of the reform program is scheduled for completion by the summer of 2026.
The second phase includes several requirements, such as completing the reform process and relicensing the bank, passing an independent audit of its compliance functions, attracting a qualified investor, and meeting international fit and proper standards.
Only after fulfilling these conditions will the Iraqi bank be able to conduct transactions in US dollars.
Taylor stated, "Some of these banks may never reach the required level."
The report also noted that the Treasury Department reiterated that the United States "will not tolerate the misuse of Iraqi banks by Iranian-backed armed groups and will take independent action as necessary to target this activity."
A test of the Iraqi state's capabilities
: Iraqi researcher and analyst Hiba Abdul Wahab said that this process will be a test of Iraq's ability to enforce the rule of law.
She added that Baghdad has already developed reform plans, but the real challenge lies in their implementation, especially when reforms affect the interests of politically influential groups.
Abdul Wahab said, "That's why I believe this process will take years, not months, and its success will depend not only on issuing new regulations but also on the Iraqi state's ability to implement them consistently and impartially."
She added that despite al-Zaidi's concessions regarding armed factions, concerns about corruption and Iranian-linked networks remain.
She continued, "The Iraqi government must convince the United States and international financial institutions that these reforms are genuine and sustainable."
During his visit to Washington, al-Zaidi also met with US Treasury Secretary Scott Bisent, who reiterated the importance of countering Iranian influence, combating illicit financing, and strengthening the Iraqi banking sector.
The U.S. Treasury Department said in a statement: “The Secretary also affirmed the Treasury Department’s support for the Iraqi government’s efforts to achieve prosperity and freedom for the Iraqi people, and reiterated his commitment to continued cooperation to advance shared U.S. and Iraqi security and economic interests.”
The Dollar's Journey from "Manhattan" to "Al-Rashid": A Reading into the Secrets of Monetary Dependence and the Future of "Iraq 2"
Iraq is a major economic paradox; while it sits atop the world’s fourth-largest oil reserves, it finds itself shackled by a series of monetary crises that raise a pressing sovereign question: Why are our wealth deposited in the US Federal Reserve Bank of New York instead of our national treasuries? And why does every Iraqi dollar pass through US scrutiny before finding its way to Baghdad?
In this analytical reading, we delve into the profound facts presented by Dr. Mazhar Muhammad Saleh, the financial advisor to the Prime Minister and the foremost authority on Iraqi monetary policies, to reveal how the “American treasury” is managed, and what are the costs of “systemic waste” that devour the development budget.
First: “Iraq 2” – New York as a bank for global operations
The journey toward monetary dependency began with UN Security Council Resolution 1483 in May 2003, which established the Development Fund for Iraq (DFI). The choice of the New York branch of the Federal Reserve was not only political, but also because it serves as the "International Operations Bank," managing international liquidity. Today, this fund has legally been transformed into the "Iraq 2" account.
For many years, this account served as a source for paying the $52.4 billion in Kuwait war reparations, which officially ended in 2021, but it remained a crucial financial buffer. Here, a technical distinction must be made between two types of accounts: the "Oil Receipts Account," into which export revenues are deposited, and the Central Bank's "Foreign Reserves Account," where "monetary sterilization" operations are carried out by absorbing Iraqi dinars and injecting dollars to finance trade.
“The US Presidential Executive Order (EO 13303) provides unique legal immunity for Iraqi funds against any legal action or seizures by international and private creditors. It is an international umbrella of protection that ensures the continuity of cash flows, but in essence it entrenches a monetary dependency that makes the US Federal Reserve the primary overseer of liquidity.”
Second: The “petrodollar” trap and compliance with the “SWIFT” system
Iraq technically belongs to the “dollar zone,” and is part of the “petrodollar” system that serves the American financial empire. The decision to price oil in dollars is not merely a technical choice; it is a cornerstone of stabilizing global demand for the greenback.
The idea of a “monetary rebellion” or breaking free from the dollar’s dominance clashes with the reality of “institutional compliance.” The financial world today is governed by the SWIFT system and transparency rules, and any attempt to circumvent the dollar would mean isolation from financing imports, which are vital to the daily lives of Iraqi citizens.
Third: “The Cost of Iraq” and Systemic Corruption
Dr. Mazhar revealed a shocking concept known as the “Cost of Iraq,” an undeclared tax that consumes between 40% and 45% of the value of any project implemented in the country. This waste is not merely individual theft, but rather “systemic corruption” where poor planning combines with extortion and exorbitant insurance costs.
• Feasibility crisis: A startling fact indicates that 90% of projects in Iraq lack genuine economic or technical feasibility studies, turning the investment budget into “wasteful economics”.
• Waste as an alternative to corruption: Dr. Mazhar believes that “waste economics” is the most dangerous face of corruption, where the efficiency of institutions declines and the costs of stalled projects multiply due to conflicting decisions.
“We are not just fighting bribery; we are facing a system of waste resulting from the low efficiency of institutions. Transforming the economy from a ‘waste economy’ to an ‘efficiency economy’ is the real battle to restore the state.”
Fourth: The battle over “white markets” and the restructuring of banks
The Iraqi banking sector recently witnessed the suspension of 28 banks from dealing in US dollars. It is important to distinguish between these banks and those sanctioned by OFAC for financial crimes; rather, they were suspended due to institutional non-compliance with international money transfer standards.
Today, the global firm Oliver Wyman is leading a reform plan to ensure "international compliance," which includes:
1. Mergers: Creating robust, competitive banking entities instead of “front” banks.
2. Capital adequacy: Raising the minimum capital requirement for banks to 400 billion Iraqi dinars as a condition for survival.
3. Strategic Partner: Connecting local banks with international correspondents to ensure transparency and a complete transition from the “grey market” to the “white market”.
Fifth: “Economic Geography” and the Challenge of the Strait of Hormuz
For years, Iraq has been held captive by geopolitics, but the new vision prioritizes geoeconomics. Tensions in the Strait of Hormuz have exposed the fragility of relying on a single waterway; direct oil losses (loss of volume, not price) are estimated at around $39 billion since last February, while macroeconomic losses reach $45 billion, according to Dr. Mazhar's "non-orthodox estimates."
The lost “opportunity cost” of relying on a threatened waterway for exports makes diversifying export routes (such as the Banias pipeline and the Turkish pipeline) an existential necessity, not merely a strategic option. The “collapse in volumes” that Iraq is currently facing is more dangerous than the collapse in prices because it strikes at the very heart of the state’s financial capacity.
Summary:
Trust as a "tangible asset" that generates wealth
The crisis in Iraq is not a lack of resources, but rather a deep “trust gap.” As Dr. Mazhar describes it, “trust is an intangible asset”; if it is present and the working environment is improved, it immediately transforms into tangible assets and productive wealth.
The institutional reforms Iraq is currently undertaking, from the Higher Investment Council to the program and performance budget, are an attempt to curb systemic corruption. But the question remains: Will Iraq succeed in transforming trust into a national currency stronger than the dollar that resides in Manhattan, New York? It is a battle to restore the state's efficiency, a battle in which Iraq will not accept compromise.
(End)
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Following security guarantees, Dana Gas restarts the Kormor gas field.
Dana Gas announced on Monday the gradual resumption of operations at the Kormor gas field in the Kurdistan Region, following an assessment of the security situation and receipt of official guarantees from the regional and federal governments.
The company said in a statement received by Al-Sa’a Network that “it was decided, after assessing the security situation and receiving official and clear guarantees from the highest levels in the Kurdistan Regional Government and the Iraqi Federal Government, to raise the level of production in the Kormor gas field cautiously and gradually.”
In mid-July, the UAE-based Dana Gas announced the temporary suspension of its operations at the main production facilities in the Kormor gas field in Sulaymaniyah Governorate, after receiving security threats, before deciding to gradually resume operations after obtaining security guarantees from the relevant authorities.
Why is the "Asycuda" system controversial in Iraq? An advisor reveals the reasons.
Nabil Al-Khafaji, advisor to the head of the Baghdad Chamber of Commerce, revealed the reasons for the controversy surrounding the "ASYCUDA" system adopted in customs procedures, considering that the main problem lies in the difficulty of modifying data after it has been entered, despite the possibility of developing a more efficient local system.
Al-Khafaji said during a televised interview followed by Al-Sa’a Network that Iraq possesses the competencies and technical capabilities that qualify it to establish a better customs system, indicating that the ASYCUDA system is old and it is difficult to make modifications to it after the data has been recorded.
He added that "many developed countries do not adopt this system," noting that "Iraq was able to develop a local system that links all financial benefits and procedures more efficiently."
He explained that "the problem does not lie in entering the data, but in the mechanism for modifying it after it has been recorded," noting that "any error in the shipment information or the goods code (HS Code) becomes complicated to correct within the system."
Al-Khafaji explained that “errors are often caused by the data submitted by the source or exporting company, but the ASYCUDA mechanism makes dealing with these errors more difficult, which is reflected in the speed of completing customs transactions.”
The Foreign Minister and the US Chargé d'Affaires discuss ways to implement the memoranda of understanding signed between Baghdad and Washington.
Foreign Minister Fuad Hussein met with the Chargé d'Affaires of the US Embassy in Iraq, Joshua Harris, in Baghdad on Monday to discuss ways to implement the memoranda of understanding signed between Baghdad and Washington.
A statement from the Ministry of Foreign Affairs, reported by Al-Mirbad, indicated that "Foreign Minister Fuad Hussein received the Chargé d'Affaires of the US Embassy in Iraq, Joshua Harris, in Baghdad."
The statement added that "the meeting reviewed the results of the Iraqi delegation's visit, headed by the Prime Minister, to Washington, D.C., and assessed its outcomes, particularly the memoranda of understanding signed between the two sides, and ways to follow up on their implementation to enhance bilateral cooperation in various fields."
The statement continued, "The meeting also addressed the results of the Prime Minister's visit and the accompanying delegation to the Islamic Republic of Iran."
The statement concluded by noting that "the two sides discussed the course of Iraqi relations with both the Republic of Turkey and the Kingdom of Saudi Arabia, and the ongoing preparations for upcoming official visits, which will contribute to strengthening regional cooperation and developing bilateral partnerships."
The statement affirmed that "the two sides exchanged views on developments in the region, particularly those related to maritime security in the Strait of Hormuz, emphasizing the importance of avoiding escalation and maintaining regional security and stability."
The statement concluded by noting that "the meeting addressed the economic repercussions of regional developments and their potential impact on oil markets and the financial situation in Iraq."
The US Treasury removes 84 names and entities, including some linked to Iraq, from sanctions list.
AnnouncedDepartment of the TreasuryThe United States removed 84 individuals and entities, including some linked to Iraq, from its sanctions lists, which contain more than 17,000 names, as part of efforts to streamline sanctions programs and make things easier for banks.
An official saidDepartment of the TreasuryThe goal is "to ensure that the Department's sanctions remain effective, precise, and focused, and to eliminate unnecessary excesses left over from previous administrations," he said, noting that the number of names on the sanctions lists in 2024 exceeded 3,000, compared to only 880 in 2017. He added, "Sanctions are not meant to be an indefinite tool."
Bisent repeatedly emphasized the readinessPresident Donald Trump's administrationTo impose sanctions on the two largest oil companies inRussiaRosneft and Lukoil, a move they avoidedPresidential Administrationthe previousJoe BidenFearing a further rise in oil prices,
the second batch of delistings from the "Specially Designated Nationals and Blocked Persons List" includes 36 deceased individuals and their associated listings, 33 Iraq-linked entities that were first listed in 1991 or 1992, and seven obsolete targets related to smuggling.drugsinColombiaThe Treasury Department also added eight names of drug kingpins whose activities have been neutralized.
The Treasury’s Office of Foreign Assets Control (OFAC) updated the data of 22 individuals and entities to add or clarify key identifying information.
The Treasury Department stated that each removal from the list is subject to a review by other agencies to ensure it does not harm U.S. foreign policy or interests.National securityShe noted that names could be reinstated if necessary.
"Al-Maalomah" reveals the name of the candidate for the position of Minister of Defense in Al-Zaidi's government
Ahmed Abdul Sattar, a member of the United Anbar Alliance, revealed on Sunday the name of the Sunni forces' nominee for the Ministry of Defense in Prime Minister Ali al-Zaidi's government.
Abdul Sattar told Al-Maalomah News Agency that "the Sunni National Council held a meeting with Sunni leaders to reach a unified position on selecting a consensus candidate for the Ministry of Defense," explaining that "the consensus settled on nominating former Minister of Industry Khalid Battal al-Jughaifi for the ministerial post."
He added that "the vote on al-Jughaifi is scheduled to take place during the upcoming parliamentary session on the 15th of next month," noting that "Mohammed al-Halbousi, head of the Progress Alliance, received a delegation from the Badr parliamentary bloc and informed them of the selection of al-Jughaifi as the nominee for the Ministry of Defense."
He clarified that "the Sunni forces intend to inform the Coordination Framework forces and the Kurdish parties of the nominee in the coming period, with the name to be officially announced during the session to vote on the vacant ministerial portfolios in al-Zaidi's government."
He noted that "the forces within the Coordination Framework had demanded that their Sunni counterparts nominate their candidate for the position of Minister of Defense."
Trump: We gave negotiations with Iran one last chance... and the military option is on the table if talks fail.
US President Donald Trump confirmed today that the United States is conducting what he described as "deep" talks with Iran, stressing that his country will return to carrying out a large-scale military operation if diplomatic efforts fail.
Trump told Israel's Channel 12 that he responded to mediators' request to give negotiations with Iran a chance, explaining that he decided to freeze military attacks in response to mediation efforts.
He added that the window of opportunity for a breakthrough in the negotiations is short, stressing that he will not give the talks much time.
He noted that the mediating countries had asked Washington not to carry out military operations, pointing out his belief that the Iranian side wanted to reach an agreement, but at the same time he stressed the readiness of the United States to carry out strong military action if the negotiations failed.
this isn't the first time this has happened either
The "Islamic Resistance in Iraq" denies bombing Saudi Arabia and vows a "harsh" response.
The "Islamic Resistance in Iraq" denied responsibility on Monday evening for the bombing of Saudi facilities, while threatening a "harsh" response if the Kingdom of Saudi Arabia takes any action.
The resistance said in a statement received by Shafaq News Agency: “While the Saudi regime continues to throw accusations towards Iraq, claiming that it is the source of the bombing of its oil facilities in the Eastern Province and Riyadh, this claim only increases our certainty that hostility towards Iraq and its people is an inherent characteristic of this regime.”
She emphasized: “We in the Islamic Resistance are issuing a clear warning to the Saudi regime, declaring that any foolish Saudi action will be met with a harsh response that will make them bite their fingers in regret.”
The Saudi Ministry of Defense announced earlier on Monday that it had intercepted and destroyed a number of drones that it said had been launched from Iraqi territory and had attempted to target oil facilities in the Eastern Province and Riyadh.
Masrour Barzani: The drones that targeted Erbil were launched from Mosul
Kurdistan
Kurdistan Regional Government Prime Minister Masrour Barzani affirmed on Monday (July 27, 2026) that Iraq is facing a severe economic crisis that has significantly impacted all citizens, including those in the Kurdistan Region. He reiterated his government's support for the measures taken by the federal government in Baghdad, headed by Ali al-Zaidi, to overcome this phase.
Speaking at a press conference covered by Baghdad Today, Barzani stated, "The current tensions and problems affecting the entire region have impacted everyone." He emphasized that "the Kurdistan Region is not immune to this crisis," and affirmed "full support for resolving all disputes and crises peacefully, and avoiding war or violence."
Barzani expressed his "full understanding of the difficult living conditions that citizens are going through, thanking the people of the Kurdistan Region for their resilience and understanding of the challenges," stressing that "the government will spare no effort to overcome this crisis as it has overcome greater crises in the past, and assuring everyone that the situation is moving towards a solution."
Regarding relations with Baghdad, Barzani reiterated "support for the new government headed by Ali al-Zaidi and its policies aimed at improving the economic situation, combating corruption, and proceeding with reform programs."
Barzani attributed the rise in gasoline prices to "the prevailing tensions in the region," revealing a crisis in the oil file by saying that "the Iraqi government does not give the Kurdistan Region its share of the budget allocated for oil extraction, which places the cost of extraction on the shoulders of companies in the region."
He explained that "the region's share, according to the population ratio, amounts to more than 126,000 barrels," stressing that "the amount of oil allocated to the region for local needs is insufficient," while noting "at the same time the continuation of coordination with Dana Gas Company to address the gas shortage crisis and work to increase production."
On the security front, the head of the regional government revealed the "source of some of the recent attacks," confirming that "some of the drones that targeted Erbil came from Mosul," stressing at the end of his speech that "the region has overcome greater security and economic crises in the past and will overcome this crisis as well."
I can't remember if I sent you these or not they seem to be talking about JPM organ now like all the time
What prompted the American company JPMorgan to operate in Iraq?
Political analyst Alaa al-Aqabi stated on Sunday that the agreement with JPMorgan Chase includes allocating the proceeds from the sale of 500,000 barrels of oil per day to finance projects within Iraq, denying that this constitutes a free concession of Iraqi oil .
Al-Aqabi said in a televised interview followed by Al-Sa’a Network that “the opening of JPMorgan Chase Bank in Iraq aims to finance American projects and companies operating in the country, especially after a number of European banks refrained from working in the Iraqi market .”
He added that "the agreement includes the sale of 500,000 barrels of oil per day, with the proceeds to be deposited through JPMorgan Chase to finance the agreed-upon projects, and not the transfer of oil or its revenues to the United States for free ."
He explained that "some critics described the agreement as an occupation or colonialism, but that is not true, because the money will go back to finance projects inside Iraq ."
He pointed out that "these quantities are not counted within Iraq's quota in OPEC, which gives Baghdad an opportunity to increase its oil exports without affecting its official quota, according to him ."
Al-Aqabi stressed that “Iraq needs international banking guarantees to attract investments and finance projects, given the continued reluctance of a
number of European banks to enter the Iraqi market
JPMorgan: El Niño and rising energy prices
threaten to increase global inflation
JPMorgan Chase has warned that the convergence of the El Niño climate phenomenon and rising energy prices could increase global inflation by approximately 0.3 percentage points in 2027, with even greater repercussions for emerging markets.
In a report released Friday, the bank indicated that the probability of the current El Niño developing into a very strong or super-strong wave is 81% by the end of the year, while the probability of it persisting into next year is 97%.
The report explained that a super El Niño event could be among the strongest climatic phenomena in recent decades, increasing the risk of disruptions to food production and global supply chains. The bank estimated that the phenomenon alone could raise global food inflation by about 0.7 percentage points at its peak, with the greatest impact appearing four to eight months after the onset of the climatic shock.
He added that rising energy prices linked to the war on Iran, and the resulting increase in the costs of diesel, fertilizers and food packaging, could amplify the impact of El Niño, raising pressure on global food prices to between 1.3 and 1.5 percentage points.
Bank analysts said that a rise in food price inflation to around 5% during the first half of 2027 could increase global inflation by 0.6 percentage points and slow the expected pace of its decline during the coming year.
The report predicted that emerging markets in Asia and Latin America would bear the brunt of the impact, due to the high share of food in consumer spending and agriculture's heavy reliance on climatic conditions.
The bank identified India, Indonesia, Brazil and Colombia as among the countries most vulnerable, noting that Taiwan and South Korea could also be under food price pressure.
In contrast, the direct effects of El Niño will be less severe in Europe and advanced economies, where energy prices are likely to be the main driver behind any rise in food prices.
Despite the risks, the bank noted that current conditions are better than in previous El Niño periods, thanks to adequate global grain stocks, relatively good rice stock levels in Asia, and currently low food inflation. However, it warned that continued high energy prices coupled with a strong El Niño could lead to significant increases in global food prices.
Did Baghdad hand over the “secret code” for smuggled dollars in exchange for lifting sanctions on banks?
How did the “Washington deal” dismantle the artificial intelligence algorithms used by commercial companies and exchange offices to finance and launder money for ideologically driven factions in Iraq?
Iraqis Against Corruption
Baghdad / Green Zone / Corridors of the General Offices of the Prime Minister's Office…
While government circles in Baghdad celebrated the US Treasury Department's decision to lift sanctions on seven Iraqi banks, describing it as a "technical achievement for the compliance system," the behind-the-scenes details of Prime Minister Ali Faleh al-Zaidi's recent visit to Washington revealed intelligence and technological dimensions that go beyond the traditional accounting audits commonly understood by the public. Most of the data and indicators obtained by the organization in recent hours from several high-ranking officials, and through documented information whispered behind closed doors at the Prime Minister's office—though not yet reported in any media outlet, whether print, audio, or visual—suggest that the financial breakthrough was not merely the result of a political settlement, but rather a "technological and informational quid pro quo." In this deal, Baghdad handed over the keys to the "digital system algorithms" used by pro-Iranian factions to circumvent US sanctions, in exchange for maintaining fragile internal balances that would avert an inevitable armed conflict.
This investigative journalism report focuses on five key areas to unravel the "smoke" of technological and political algorithms surrounding the transnational money laundering and corruption case in Iraq, through:
First: The counter-revolution... Artificial intelligence in the service of "shadow network financing":
According to cross-referenced technical information, the period between 2017 and 2026 witnessed a radical shift in money laundering and smuggling mechanisms in Iraq. Following the tightening of restrictions on the federal electronic platform, the “loyalist factions,” after the widespread use of artificial intelligence technologies, resorted to employing their advanced technologies (Generative AI & Machine Learning) and by utilizing some outstanding university seniors specializing in this field to create a system that circumvents oversight. This mechanism consisted of:
(*) Generating AI-Generated Invoices: Using algorithms to create thousands of fake import documents and commercial invoices that appear 100% genuine, successfully bypassing traditional visual and regulatory auditing systems. (*) Dynamic Financial Engineering: Using AI models to design complex remittance routes that change automatically every few hours through networks of shell companies in multiple countries, to prevent US algorithms from detecting any recurring financial patterns (pattern recognition).
(*) Simulating the Federal Reserve’s behavior: Feeding special systems with data on past U.S. sanctions to anticipate and preemptively avoid the Treasury Department’s next regulatory move.
Second: The “Southern Islamic Bank for Investment and Finance” complex as a testing ground:
In this complex technological landscape, the “South Islamic Bank”—historically owned and previously managed by the family of current Prime Minister Ali al-Zaidi—was not just an ordinary bank on the sanctions list. Our investigations and previous conversations with several esteemed officials close to the political establishment in Baghdad’s Green Zone indicate that the bank, given its influence, served as one of the financial channels through which most of these complex digital transactions were tested and processed, leading to its blacklisting in 2024 due to “high-risk red flags.”
Third: The Great Bargain in Washington (July 2026):
The in-depth reading and analysis by the organization's technical investigative team, stemming from Prime Minister Ali al-Zaidi's meeting with the US Treasury Secretary, focuses on the nature of the "price" demanded by Washington. The United States is well aware that dismantling the AI-based smuggling network cannot be achieved through traditional accounting methods, but rather by obtaining "raw data" and source code for the transactions that took place.
Our investigative approach suggests that the Iraqi delegation provided detailed statements and transfers, supported by technical data on the accounts and companies that used this software. This "information handover" granted the US Treasury and the Federal Reserve the ability to:
(*) Understand the workings of the factions' algorithms and feed them into US systems to thwart them in the future.
(*) Uncover the true identities of the commercial companies and exchange offices, in addition to the names and job titles of the party and movement leaders behind these encrypted accounts.
Fourth: (K2 Integrity) The institutional framework for data legitimization:
Under the guise of “technical auditing and record cleansing,” independent international financial investigation firms like K2 Integrity provided the appropriate legal and diplomatic framework. The involvement of these reputable firms allowed for the extraction and examination of complex financial data under the pretext of “building compliance systems and Know Your Customer (KYC) standards.” This facilitated the legitimate transfer of the “technological black box” of the transnational pro-Iranian factions to Washington, in exchange for granting Al-Zaydi’s family bank and six other banks financial absolution.
Fifth: “Operation Dawn” and the paradox of corruption protected by uncontrolled and illegal weapons:
Herein lies the fundamental and pivotal contradiction in Iraqi government policy. We still see quite clearly that the "Dawn Charge" campaign, led by Prime Minister Ali al-Zaidi and targeting "low-level employees" and executives, was nothing more than a show of force for media consumption and to alleviate international pressure.
The digital and political reality confirms that the "big fish"—the leaders of the ruling parties and the heads of armed factions—continue to enjoy the utmost security and safety in their fortified palaces. The Integrity Commission and the Iraqi judiciary constantly clash with a "balance of terror." Any legal authority approaching the gates of these palaces means entering the abyss of civil war, given the military arsenal these entities possess through their armed factions.
Therefore, the "financial and technological bargain" in Washington appears to be the prime minister's secret, alternative weapon. Instead of direct military confrontation with the factions in Baghdad, the US Treasury provided them with data and algorithms to dry up their external dollar funding sources, thus weakening them economically behind the scenes. Meanwhile, internal campaigns continue to target low-level employees as scapegoats to project an image of “reform.”
Between a government narrative insisting on purely technical compliance and our analytical data on money laundering using artificial intelligence techniques—which we have tried to highlight as much as possible—a silent technological algorithm war is revealed. What remains certain is that the battle for the dollar in Iraq has moved into the digital age. If Washington has lifted the sanctions on the “South Bank,” the coming days and the extent of the economic paralysis or lull that may afflict the shadow financing networks of the ideologically driven factions will prove whether America has indeed obtained the “secret code” for the smuggled dollars as the price for rehabilitating the family-run bank and averting an armed conflict in Baghdad.
We will keep you updated on the latest developments as they reach us from our various sources within the Green Zone and those close to the events!
Together, hand in hand, against financial, administrative, and political corruption in Iraq!
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Iraqis Against Corruption Organization
Tehran: We are still exchanging messages with America and mediators.
Iranian Foreign Ministry spokesman Ismail Baghaei confirmed that the United States and Iran are still exchanging messages through intermediaries, but that Tehran's priority is defending its sovereignty.
In an interview with the Austrian channel ORF, Baghaei stated that the recent US military attacks represent a continuation of the war that began on February 28th, asserting that Washington bears responsibility for undermining the diplomatic process.
He added that the United States has effectively violated all the provisions of the Memorandum of Understanding, destroyed the conducive environment for dialogue, and betrayed diplomacy for the third time in a row, indicating that these developments have weakened the chances of resuming negotiations between the two sides.
The Iranian spokesman emphasized that his country cannot allow the Strait of Hormuz to fall once again into the hands of aggressors to harm its national security, stressing that protecting Iranian sovereignty is a top priority at this stage.
maybe a link to the pdf direct
The Second Generation of Banking Reform in Iraq: From Compliance to Development.
To continue reading, please click on the following link:
Dr. Mazhar, The Second Generation of Banking Reform in Iraq: From Compliance to Development.
Dr. Mudher Mohammed Salih
Banking reform in Iraq today represents a pivotal path in the country's economic transformation. It is no longer limited to addressing regulatory imbalances or regulating the flow of external transfers; rather, it has evolved into a project to rebuild the banking sector's function and its role within the national economy. Thus, the concept of "second-generation banking reform" emerges, signifying a transition from a phase of stabilization and enhanced compliance to a phase of building a modern banking sector capable of financing development and achieving sustainable integration into the global financial system.
This concept is not intended to stand apart from core official reform programs; instead, it characterizes an advanced stage of the banking reform process itself. It embodies the fundamental shift from corrective reforms to structural reforms—moving from addressing imbalances and restoring confidence to building the banking sector's institutional and financial capacities.
The first generation of reform focused on restoring monetary stability, strengthening compliance with anti-money laundering and counter-terrorism financing standards, regulating external transfers, and rebuilding relationships with global correspondent banks—all of which contributed to safeguarding the financial system and bolstering confidence in it. The second phase focuses on transforming these achievements into a sustainable institutional foundation, enabling Iraqi banks to become active partners in economic development and capable of mobilizing savings to finance investment and production.
The Iraqi banking sector has recently witnessed significant developments in its reintegration into the global financial system. A key milestone was the re-authorization of seven private banks to conduct US dollar transactions—specifically for opening letters of credit and financing foreign trade—following their fulfillment of compliance requirements and the strengthening of regulatory controls. This step serves as a significant indicator of growing international confidence in the Iraqi banking sector; it also promises to expand official channels for external financing, reduce reliance on the parallel foreign currency market, support exchange rate stability, and bolster confidence in private banks.
pg 2
These developments have unfolded within the broader context of reform efforts aimed at rebuilding the relationship between Iraqi banks and the global financial system. A roadmap for enhancing compliance and governance—developed through collaboration between the Central Bank of Iraq, international advisory firms, and Iraqi banks—has contributed to raising adherence to global standards, strengthening anti-money laundering and counter-terrorism financing systems, and improving prospects for re-establishing relationships with international correspondent banks.
However, sustaining this transformation requires a shift from corrective measures to structural reforms. Compliance should not remain merely a response to external requirements; rather, it must evolve into a deeply ingrained corporate culture within banks, supported by effective internal control systems, independent governance, and risk management capabilities capable of identifying and addressing vulnerabilities before they escalate into crises. This highlights the importance of shifting the philosophy of banking supervision from a rule-based approach to a risk-based approach. Modern supervision does not merely verify compliance with regulations; it assesses a bank's capacity to manage risks related to capital, liquidity, credit, compliance, and governance.
Consequently, the optimal approach to addressing banking crises should not rely on expanding regulatory receivership or direct intervention. Instead, it should focus on establishing a preventive supervisory framework capable of identifying vulnerabilities at an early stage. Resorting to receivership remains an exceptional measure reserved for cases of fundamental failure—such as capital erosion or a decline in capital to levels that threaten the bank's soundness—in accordance with the provisions of Banking Law No. 94 of 2004.
Experience in Iraq over recent years has shown that the expansion of certain credit initiatives—while important for supporting economic activity—has at times led to a blurring of lines between developmental and supervisory roles, creating a hybrid supervisory model that mixes direct intervention with institutional oversight. Furthermore, certain cases have revealed capital deficiencies, governance shortcomings, and rent-seeking practices linked to foreign currency. These issues underscore the need to reorder reform priorities toward strengthening financial solvency, enhancing risk management efficiency, and linking financing to genuine productive activity.
pg3
These developments have unfolded within the broader context of reform efforts aimed at rebuilding the relationship between Iraqi banks and the global financial system. A roadmap for enhancing compliance and governance—developed through collaboration between the Central Bank of Iraq, international advisory firms, and Iraqi banks—has contributed to raising adherence to global standards, strengthening anti-money laundering and counter-terrorism financing systems, and improving prospects for re-establishing relationships with international correspondent banks.
However, sustaining this transformation requires a shift from corrective measures to structural reforms. Compliance should not remain merely a response to external requirements; rather, it must evolve into a deeply ingrained corporate culture within banks, supported by effective internal control systems, independent governance, and risk management capabilities capable of identifying and addressing vulnerabilities before they escalate into crises. This highlights the importance of shifting the philosophy of banking supervision from a rule-based approach to a risk-based approach. Modern supervision does not merely verify compliance with regulations; it assesses a bank's capacity to manage risks related to capital, liquidity, credit, compliance, and governance.
Consequently, the optimal approach to addressing banking crises should not rely on expanding regulatory receivership or direct intervention. Instead, it should focus on establishing a preventive supervisory framework capable of identifying vulnerabilities at an early stage. Resorting to receivership remains an exceptional measure reserved for cases of fundamental failure—such as capital erosion or a decline in capital to levels that threaten the bank's soundness—in accordance with the provisions of Banking Law No. 94 of 2004.
Experience in Iraq over recent years has shown that the expansion of certain credit initiatives—while important for supporting economic activity—has at times led to a blurring of lines between developmental and supervisory roles, creating a hybrid supervisory model that mixes direct intervention with institutional oversight. Furthermore, certain cases have revealed capital deficiencies, governance shortcomings, and rent-seeking practices linked to foreign currency. These issues underscore the need to reorder reform priorities toward strengthening financial solvency, enhancing risk management efficiency, and linking financing to genuine productive activity.
pg4
The second generation of banking reform signifies a shift from compliance to development, from crisis management to institution-building, and from merely protecting the financial system to leveraging it in the service of the national economy. It represents a fundamental shift in the reform philosophy itself: moving from traditional oversight to smart, risk-based supervision; from trade finance to development finance; and from regulatory reform to full integration into the global financial system. Ultimately, the future of Iraq’s banking sector hinges on the ability of both the state and the banks to translate renewed international confidence into tangible investments, monetary stability, and sustainable economic growth—thereby transforming the banking sector into a driver of economic development and a catalyst for building a more diversified, competitive economy that directly benefits the Iraqi people.
About the Author: Dr. Mazhar Mohammed Salih is an economic researcher, academic, and advisor to the Iraqi Prime Minister.
About the Network:
The Iraqi Economists Network aims to establish an economic reference point in Iraq that prioritizes the economy over politics. It seeks to disseminate economic knowledge among the political class and the general public, adopting a scientific economic discourse. The Network strives to secure an influential position that enables it to convey its message to political decision-makers and shape economic policy decisions.
Note:
- The views expressed in this publication do not necessarily reflect the views or positions of the Network; rather, they represent the opinion of the author.
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