Iraqi Banks Move Closer to Resuming Dollar Operations After Sanctions
New developments suggest that Iraqi banks previously sanctioned by the United States are moving closer to restoring their dollar operations, following coordinated efforts with the Central Bank of Iraq and tangible progress toward meeting international compliance standards.
Sources indicate a preliminary, conditional US approval for a gradual return once requirements are fulfilled.
According to the sources, around seven Iraqi banks are currently undergoing a comprehensive assessment to verify adherence to global compliance rules, banking reform plans, and anti-money laundering and counter-terrorism financing measures.
The process is being monitored jointly by the US Treasury and the Central Bank of Iraq, with oversight from a specialized firm.
The evaluation phase is expected to continue through 2026, with compliance reviews completed during this period.
If conditions are met, the affected Iraqi banks could resume normal foreign currency operations—particularly dollar transactions—by early 2027.
In previous rounds, the US Treasury imposed sanctions on Iraqi banks, companies, and individuals over allegations of corruption and illicit activities, including oil and arms smuggling, as part of broader efforts to safeguard the international financial system.
This reform trajectory aligns with Iraq’s push to strengthen confidence in its banking sector, improve the business environment, and ensure stable financial flows, supporting economic activity and reintegration of qualified banks into the global financial system.
