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Elaf Islamic Bank

Elaf Islamic Bank

Industry: 
Banking
Country: 
Iraq
Contact Information: 
Sources: 

"When President Obama announced last month that he was barring a Baghdad bank from any dealings with the American banking system, it was a rare acknowledgment of a delicate problem facing the administration in a country that American troops just left: for months, Iraq has been helping Iran skirt economic sanctions imposed on Tehran because of its nuclear program. The little-known bank singled out by the United States, the Elaf Islamic Bank, is only part of a network of financial institutions and oil-smuggling operations that, according to current and former American and Iraqi government officials and experts on the Iraqi banking sector, has provided Iran with a crucial flow of dollars at a time when sanctions are squeezing its economy . . . In announcing that he was 'cutting off' Elaf Islamic Bank, Mr. Obama said it had 'facilitated transactions worth millions of dollars on behalf of Iranian banks that are subject to sanctions for their links to Iran’s illicit proliferation activities.' But the treatment the bank has received in Baghdad since it was named by Mr. Obama suggests that the Iraqi government is not only allowing companies and individuals to circumvent the sanctions but also not enforcing penalties for noncompliance.Iraqi banking experts said last week that the bank was still allowed to participate in the Iraq Central Bank’s daily auction at which commercial banks can sell Iraqi dinars and buy United States dollars. These auctions are a crucial pathway for Iranian access to the international financial system. Western officials say that Iran seeks to bolster its reserves of dollars to stabilize its exchange rates and pay for imports . . . Mudher Salih, the central bank governor, said in an interview that Elaf Islamic Bank was being allowed back into the auction because Elaf officials had denied any wrongdoing. 'Elaf Bank is attending the auctions, and they are telling us that they didn’t violate the law, and saying that they didn’t deal with any Iranian institutes,' Mr. Salih said." (New York Times, "U.S. Says Iraqis Are Helping Iran to Skirt Sanctions," 8/18/12)

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"US President Barack Obama on Tuesday imposed new economic sanctions on Iran's oil export sector and on a pair of Chinese and Iraqi banks accused of doing business with Tehran. Obama said the new measures underlined the United States' determination to force Tehran "to meet its international obligations" in nuclear negotiations, according to a statement released by the White House. The US president accused the Bank of Kunlun and the Elaf Islamic Bank in Iraq of arranging transactions worth millions of dollars with Iranian banks already under sanctions because of alleged links to Tehran's weapons programme." (AFP, "China hits back at new US sanctions over Iran," 8/1/12)

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