The Iraqi Central Bank issues “reform packages” to deter dollar smuggling, and observers: it faces great challenges

Reports And AnalyticsThe Rise In Dollar PricesCentral Bank Of Iraq

2023-02-04 13:17ShareFont

Shafaq News / Dollar smuggling operations outside Iraq have increased during the past months in various ways, due to the “lack” of control measures by the Central Bank, according to the opinion of the Parliamentary Integrity Committee, while specialists believe that the packages launched recently by the Central Bank will “cut off the roots of crimes that violate security.” the national economy.

The word smuggling denotes “operations against law and public order, which are among the criminal offenses that are strictly governed by the law and within economic crimes,” according to Mazhar Muhammad Salih, Advisor to the Prime Minister for Financial Affairs.

Salih told Shafaq News agency, “The economic freedom that the country provides in dealing with foreign transfers naturally is sufficient to reduce resorting to economic crimes represented by the illegal depletion of funds.”

wider freedom

The advisor to the prime minister for financial affairs pointed out that “the coming days in Iraq will witness greater freedom for external transfer or transfer of foreign currency with flexible, transparent and courtly tools and means at the same time, and through the Iraqi banking system.”

And Saleh continued, “The first soft procedural package launched by the Central Bank of Iraq is nothing but an expression of facilitating the legitimate and legal transfer of funds outside the country, which will cut off the tracks of crimes that undermine national economic security.”

Yesterday, Friday, the Central Bank of Iraq issued the second package of facilities to meet the demand for the dollar, on both sides of cash and foreign transfers.

On Monday, January 19, the Central Bank announced the first package of decisions that would return the foreign currency market to its normal position after the rise in it.

The price of the dollar against the dinar rose in an unprecedented way recently, due to the measures imposed by the United States of America to limit currency smuggling from Iraq.

The beginning of smuggling

Currency smuggling began with the “currency auction, which was a means of smuggling and money laundering,” according to a member of the Parliamentary Integrity Committee, Bassem Khashan, adding, “Now it seems that restrictions on smuggling have become tight, so these results appeared.”

Khashan explained in an interview with Shafaq News agency, “The Central Bank’s control over the work of government and private banks was non-existent, as (banks) had absolute control due to the lack of control measures over them.”

Multiple methods

Ahmed Eid, a researcher in economic affairs, says that “dollar smuggling abroad has increased in recent months after the US Federal Reserve imposed sanctions on banks that were facilitating money laundering operations.”

During his interview with Shafaq News agency, Eid said, “Smuggling amounts increased by withdrawing hard currency from secondary sales outlets and exchange shops through agents working for Iran.”

The economic affairs researcher added, “The stages of smuggling hard currency were not limited to Iran only, but there are influential people who have interests in other countries where money laundering operations are conducted, through the purchase of real estate or the opening of investments.”

Eid added, “The phenomenon of smuggling hard currency is increasing in various ways, including importing goods with invoices containing fake goods, or through forged invoices in which prices are inflated at large levels.”

pressures and challenges

In turn, the security expert, Alaa al-Nashu’, says, “The Iraqi government without US restrictions cannot limit currency smuggling, for many reasons, including subordination to the authority of the state coalition, especially those loyal to Iran, who have been proven to be the ones smuggling currency to the latter.”

Al-Nashu’ explained to Shafaq News agency, “Al-Sudani does not have the decisive decision on this issue, and is exposed to Iranian pressures and American restrictions that work to ensure its interests by activating the Federal Reserve’s decisions to reduce the volume of sales to the Central Bank in currency auctions.”

And the Central Bank of Iraq announced on Friday that the US Treasury has expressed its readiness for the necessary flexibility to achieve “common goals”, and the agreement to continue coordination and cooperation during the meetings to be held in Washington, DC, before the middle of this month.

Money laundering penalty

The Anti-Money Laundering and Terrorism Financing Law No. 39 of 2015, in Articles 36, 37, 39, 40, 41, 42, 43, 44 and 46, punishes money laundering and smuggling crimes or affecting the local currency, according to legal expert Haider Al-Soufi.

Al-Sufi explained to Shafaq News agency, “The punishment (imprisonment and fine) varies according to the type and article of each crime in Iraqi law, some of which reach life imprisonment.”

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