Baghdad is resolute to preserve its trade and energy ties with Tehran with a plan to deposit several billions of US dollars in an account in an Iraqi bank to pay for imports of energy from Iran, said Secretary of Iran-Iraq Joint Chamber of Commerce Seyed Hamid Hosseini.
Hosseini said on Sunday that $4-5 billion will be deposited to the special account in the Trade Bank of Iraq (TBI) to settle Iraq’s debts to Iran, including those related to the imports of electricity and gas over the past years, based on a recent agreement between governments of the two neighboring countries.
He added that authorities from the two countries had agreed to use the account as a special financial instrument to evade US sanctions on Iran and allow Tehran to pay for imports of non-sanction goods through the account.
“Unfortunately, in practice ... this mechanism hit a snag and became entangled in administrative bureaucracy,” he said, adding that American bank JPMorgan Chase, which controls shares in the TBI, has been stonewalling Iran’s access to the account.
Hosseini said businessmen and private sector activists had currently no major problems doing trade between Iran and Iraq, adding that the TBI mechanism had been expected to accommodate government-to-government transactions between the two countries.
Iran is still the number one supplier of natural gas and electricity to Iraq despite growing pressure from the US which seeks to cut the exports to zero.
Baghdad has secured rounds of waivers from US sanctions, insisting that it has no alternative to replace energy imports from Iran.
Last month, Hosseini had said that Tehran will raise $5 billion revenues for its gas and electricity exports to neighboring Iraq by the end of the current local calendar year on March 20, 2020.
Iran exports non-oil commodities such as cement as well as gas and electricity to Iraq. In the year between March 2018 to March 2019, Iran exported close to $9 billion of products to Iraq registering 37 percent growth compared to the preceding year.
The two countries' officials have set the target of $20 billion per year for Iran-Iraq trade