Iraq News Now

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Iraqi Foreign Minister Fuad Hussein is visiting Washington this week to discuss with U.S. officials the country’s faltering currency and a new money-tracking program aimed at cracking down on money laundering.

In an interview with VOA’s Kurdish Service, Hussein discussed his country’s strategic relations with the United States, the presence of foreign troops in Iraq, and Iran's influence in the country, among other issues.

Hussein said his team discussed the sharp decline of Iraq’s currency against the U.S. dollar, an issue that has been tied to Iranian money laundering.

"The Central Bank of Iraq has taken a number of measures that appear in this regard, and I think the currency rate is slowly stabilizing,” he said.

Hussein, who previously served as minister of finance, said a system has been set up in which the United States and Iraq can monitor where money goes.

"Under the new system, it will be more difficult for dollars to move without the knowledge of the Iraqi government and the U.S. Treasury," he said, adding that “a mechanism has been put in place to regulate the outflow of dollars” from Iraq.

U.S. officials recently met with Iraqi officials in what they called an attempt to discuss “reforms” in Iraq’s banking sector and “a mutual commitment to anti-money laundering and countering the financing of terrorism.”

Brian E. Nelson, undersecretary of the U.S. Treasury for terrorism and financial intelligence, met with Central Bank of Iraq Governor Ali al-Allaq in Istanbul earlier this month.

In a statement, the Treasury Department said Nelson praised Iraq’s “steadfast dedication” to improving its compliance with international standards “and offered continued cooperation in modernizing the banking sector.”

Following a meeting last week with Hussein, U.S. Secretary of State Antony Blinken vowed to work with Iraqi officials “to strengthen Iraq’s economy, its integration, reintegration in the region in ways that make a material difference in the lives of the Iraqi people.”

This interview has been edited for clarity and brevity.

VOA: One of the main purposes of your visit to Washington is discussing the rate of the Iraqi dinar against the dollar. Have you reached any conclusions?

Fuad Hussein, Iraq's foreign minister: Our main reason for coming here is to strengthen ties, especially in the fields of finance and economy, and one of these issues is related to the currency. I think the discussions we had with the U.S. Treasury and the Federal Reserve have reached a good conclusion. The Central Bank of Iraq has taken a number of measures that appear to have support, and I think the currency issue is slowly stabilizing.

VOA: One of the concerns of the United States is that dollars do not go from Iraq to the countries in the region, especially Iran. What steps has the Iraqi government taken to prevent this money from going to Iran?

Hussein: Iraqi society buys everything from abroad, from agricultural materials to food and medicines, and industrial goods. If you look at Iraq's trade or its trade balance with other countries, you will see that everything comes from abroad. The Iraqi market and the Iraqi government spend a lot of dollars on this. So, the dollar going abroad is fine if it is related to trade. And in fact, most of this is related to trade. However, there was no mechanism on how the dollar would be issued from the central bank, who would receive it from the Iraqi market and how it would go abroad. Now, a mechanism has been established to regulate the movement of the dollar. This mechanism slowly controls the outflow of dollars through smuggling or for other purposes.

VOA: With Iran's obvious influence in Iraq, can this method prevent dollars from entering Iran through Iraq?

Hussein: We have not come to say that the dollar should not enter this country or that. We have come here to regulate the situation of the dollar in the Iraqi market. When it is regulated in the Iraqi market, this means that dealing with the U.S. dollar will be normal. Some of the dollars that went to some countries in the past were actually our problem — a problem related to the system in Iraq. But with this new system, it will be more difficult for dollars to go elsewhere without the knowledge of the Iraqi government and U.S. Treasury. With this system of the central bank, the entire U.S. Treasury and the Federal Reserve are allowed to monitor it.

VOA: Did the Americans make demands of you, or did you make any demands of them?

Hussein: We met many officials of this country. They discussed many issues, ranging from politics and the economy to oil, gas, electricity and the investment of U.S. companies in Iraq. They had some comments about their Iraqi policy, and we have reached an agreement on most of the issues that were raised. They support us, and we understand some areas of their policy. In the currency field, there is a good understanding by the Americans of the policy pursued by the Central Bank of Iraq.

VOA: What are some of the other issues that you have not agreed on?

Hussein: We have not come here to agree on everything. They have their own policies. For example, they have their own policy towards Russia, and they have their own policy towards Iran. For us, Iran is a neighboring country, and we treat it differently. This is a reality.

VOA: Baghdad and Washington have a strategic partnership. But some Iraqi factions have been demanding that foreign troops withdraw from Iraq. Does that include U.S. forces?

Hussein: U.S. forces that are still in Iraq obviously need to stay there for Iraq’s security and military interests. But let me make something clear: These are not combat forces. Based on a mutual agreement, these American troops advise and train the Iraqi army and the [Kurdish] peshmerga forces. They have also been helping us with intelligence sharing, especially with regards to ISIS [Islamic State] terrorists.

This story originated in VOA’s Kurdish Service.