US grants Iraq 120-day waiver to pay Iran for electricity

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US Secretary of State Antony Blinken on Tuesday signed a new national security waiver letting Iraq pay Iran for electricity that for the first time allows such payments to go to accounts at non-Iraqi banks, a US official told Reuters.

The official, who spoke on condition of anonymity, said the US hoped the 120-day national security waiver would help stop Iran pressuring Iraq for access to the money, which previously could only be deposited into restricted accounts in Iraq.

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Tehran has pushed Baghdad to secure US permission to release the funds by cutting Iranian natural gas exports to Iraq, limiting Iraq’s ability to generate power and forcing unpopular electricity cuts during Iraq’s sweltering summer.

Under US sanctions, Iraqi payments for Iranian electricity can only be released from the restricted accounts in Iraq - with US permission - for Iran to buy humanitarian goods.

The new waiver will allow Iraq to deposit its payments for Iranian electricity into restricted accounts at banks outside Iraq. For Iran to access those funds still requires US permission and they can only be spent for humanitarian purposes.

The US official said Washington hoped the new waiver would ease Iranian pressure on Iraq to access the money, in effect by transferring this pressure from Iraqi authorities to the nations where the third-party banks are located.

“We have to help the Iraqis with this perennial pressure from the Iranians to access the money,” said the US official, saying Washington had expanded the waiver at Baghdad’s request.

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