“The funds have been deposited into an account at the Trade Bank of Iraq (TBI) and will be utilized for the purchase of goods that are not subject to US sanctions,” Yahya al-Ishaq, Chairman of the Iran-Iraq Joint Chamber of Commerce, was quoted as saying on 3 July.
“Consequently, Iraq is no longer hindered in settling its debt arrears or conducting financial transactions with Iran,” he added.
As a result of US sanctions on Iranian energy, Iraq’s debts to the Islamic Republic – the leading source of the country’s gas supply – have been frozen for years.
Iraq had only been allowed to receive Iranian energy imports via waivers that extended up to 120 days, a policy implemented by former US president Donald Trump and kept in place by Joe Biden. The sanctions greatly hindered Iraq’s ability to make debt payments.
The US recently issued sanctions waivers to allow Baghdad to release frozen funds.
Last month, Ishaq announced that Iraq had released $2.76 billion worth of Iranian funds in gas export money owed by Baghdad.
Two weeks later, it was announced that the gas debt had been settled, but unspecified issues remained in transferring the funds from the TBI.
The release of the funds comes as Tehran has been involved in Omani-mediated talks with Washington over the possibility of reviving the 2015 nuclear agreement.
As part of these efforts, Iran’s Deputy Foreign Minister Ali Bagheri Kani met with EU mediator Enrique Mora in Doha on 22 June to discuss potential sanctions relief.
While it is unclear what progress has been made in recent nuclear talks, Tehran has repeatedly stressed its willingness to continue dialogue and cooperation.