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Baghdad says U.S. Iran sanctions a problem for Iraq

By Agence France-Presse
Thursday, February 2, 2012 16:19 EDT
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Iraqi Government Spokesman Ali al-Dabbagh via AFP
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BAGHDAD — American sanctions on Iran pose difficulties for Iraq because of its close economic ties with the Islamic republic, so Baghdad plans to seek a waiver from the US, the government spokesman told AFP.

The United States, European Union and others have ramped up sanctions to target Iran’s oil industry and central bank in an effort to pressure Tehran over its nuclear programme, which the West suspects is part of a secret drive to build an atomic bomb.

Iran insists its nuclear project is peaceful and has threatened retaliation over the fresh sanctions, including possibly disrupting shipping through the strategic Strait of Hormuz, a Gulf chokepoint for global oil shipments.

“We have a huge relation financially between the private sectors” of “Iraq and Iran, as Iran is the main supplier for many of the foodstuff and the other commodities here in Iraq,” spokesman Ali al-Dabbagh said in an interview in Baghdad’s heavily fortified Green Zone.

Trade between Iraq and Iran is in the billions of dollars and also includes Iraqi government purchases, Dabbagh said, noting that Iranian exports to Iraq range from electricity and fuel to food and various other commodities.

“It is not possible for Iraq to follow such sanctions,” Dabbagh said. “We are looking for our own interests.”

“In a few days we are going to submit a request to the United States to exempt us.”

The US embassy in Baghdad on Thursday declined to comment on the issue, as it had not received a request from Iraq.

Dabbagh said that Baghdad wants “to follow the international regulations” and had abided by other sanctions on Iran, but that new restrictions on dealing with the Iranian central bank — which he said is involved in trade transactions — were especially problematic.

“We cannot stop our trade relation with Iran,” he said, and as Iraq has some $60 billion in reserves in the United States, “any penalties (are) going to affect us.”

Iraq and Iran fought a bloody war from 1980 to 1988, but relations between the two countries have warmed considerably since the 2003 US-led invasion that toppled Saddam Hussein.

Dabbagh also said that Iraq is concerned about tension between the US and Iran, and noted that it would be among the most affected countries if the Straight of Hormuz was shut to shipments of crude.

“We are worried, definitely, from the situation and the tension… between Iran and the United States,” Dabbagh said.

“Unfortunately, Iraq till now did not build up the infrastructure which could diversify the export of oil. Till now the pipeline with Syria is not operative, the pipeline with Turkey is still in (a) low capacity,” he said.

Most of Iraq’s oil exports therefore pass through the Strait of Hormuz. Oil sales account for the vast majority of Iraq’s government income and around two thirds of gross domestic product.

“Definitely, we urge both Iran and the United States to… solve the problems in a good way,” Dabbagh said.

Agence France-Presse
Agence France-Presse
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