Sen. Menendez knocks Iraq for failing to comply with Iran sanctions

Sen. Robert Menendez (D-N.J.) sent a letter Tuesday to Iraq’s Prime Minister Nouri al-Maliki urging him to take steps to ensure that Iraqi entities are abiding by U.S. and international sanctions on Iran.

“I write to express my growing concern about reports of Iraqi entities engaging in activities that may financially benefit Iranian nuclear proliferation efforts,” the letter stated. “The threat posed by a nuclear Iran is a threat to global peace and security, as well as to the political and security interests of Iraq. Our commitment to deter this threat must be mutual and sustained.”

Menendez’s letter came after reports that Iraqi entities had breached sanctions on engaging in financial transactions with designated Iranian entities and with respect to Iranian petroleum exports.

The United States has increased sanctions on Iranian banks and oil trades this year as a way to negatively affect Iran’s finances and discourage them from developing nuclear weapons. Iran says their nuclear program is for energy purposes. 

Menendez said an Iraqi bank recently found to have violated both U.N. sanctions and even tougher U.S. sanctions highlights activity between Iran and Iraq that is troubling. Elaf Islamic Bank of Iraq was barred from U.S. banking transactions last month after it was found to have broken U.S. sanctions.

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“The recent sanctioning of Elaf Islamic Bank for knowingly facilitating significant transactions with Iran and providing significant financial services for designated Iranian banks that support Iran’s proliferation activities is illustrative of the problem,” Menendez wrote to al-Maliki. “Moreover, the sanctions appear to have been undermined by a lack of oversight by your government and by the Central Bank of Iraq, which has allowed Elaf Islamic Bank to continue participating in its daily auction to buy U.S. dollars.”

Menendez pointed to news reports that this wasn’t just one transaction. 

“What is even more concerning is that Elaf Islamic Bank’s activities do not constitute an isolated incident, but are, as the New York Times recently reported, ‘part of a network of financial institutions and oil-smuggling operations that ... ha[ve] provided Iran with a crucial flow of dollars ...’ and which have knowingly allowed Iran access to international financial markets and needed hard-currency resources,” the letter stated.

“It should be in everyone’s interest — including Iraq’s — to ensure that the sanctions work and that Iran never has the resources to advance its nuclear weapons program,” Menendez wrote. “I urge you to work within your government to enhance compliance with U.S. and international sanction.”

Under the Iran Sanctions, Accountability and Human Rights Act, the U.S. government can exempt some institutions and countries from the sanctions if their economic ties were particularly strong with Iran. But Iraq doesn’t have a formal waiver from the sanctions on Iran. Iraq insists that even without a waiver their actions still haven’t violated the sanctions.

Nonetheless, the Iraqi government has pushed back against the U.S. finding that Elaf Islamic Bank violated the sanctions. 

“Iraq is not involved in any practices violating international laws,” al-Maliki's media adviser, Ali al-Moussawi, told Reuters. “Iraq has been allowed to deal with Iran as have many other countries.”