Iraq’s economy is so closely linked to Iran that Baghdad is going to ask Washington for permission to ignore some U.S. sanctions on its neighbor, Iraqi government and central bank officials said.
U.S. President Donald Trump withdrew the United States from an international deal aimed at limiting Iran’s nuclear program earlier this year and reimposed trade sanctions.
Washington has said there will be consequences for countries that do not respect the sanctions.
Baghdad is in a difficult position. Iraq imports crucial supplies from ally Iran but its other major ally is the United States, which provides security assistance and training.
The request would mark an important change in political tactics for Iraqi Prime Minister Haider al-Abadi. He initially said Baghdad would respect all the U.S. sanctions but faced heavy criticism from rivals.
The officials told Reuters a delegation will travel to Washington to ask for exemptions in applying the sanctions. They did not say when that trip would take place.
“The government plans to ask Washington for a waiver. It’s going to happen soon,” one central bank official said.
An official in Abadi’s office declined to comment.
An official in the U.S. State Department said it was discussing Iran policy with its partners around the world.
“We have given the same message to all countries around the world that the President has said, the United States is fully committed to enforcing all of our sanctions,” the official said.
“Iraq is a friend and important partner of the U.S and we are we are committed to ensuring Iraqi stability and prosperity.”
Iraqi officials fear shortages of key items if Baghdad complies with all the sanctions. This could lead to political turmoil at a delicate time in Iraqi politics.
Iraq imports a wide range of goods from Iran including food, agricultural products, home appliances, air conditioners and spare car parts. The goods element of Iranian imports to Iraq was about $6 billion for the 12 months ending March 2018, about 15 percent of Iraq’s total imports for 2017.
There are also energy contracts between the two countries contributing to a volume of trade of $12 billion last year.
The officials said they were asking each ministry to put together a list of imports that are essential for Iraq’s economy. Those items will make up the request for exemptions.
The U.S. sanctions that came into effect earlier this month target Iran’s trade in gold and other precious metals, its purchases of U.S. dollars and its car industry. Other sanctions will come into force in November.