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U.S. Issues New 120-Day Waiver Letting Iraq Pay Iran for Electricity

Power poles and power lines are pictured in Basra, Iraq August 20, 2021. REUTERS
Power poles and power lines are pictured in Basra, Iraq August 20, 2021. REUTERS

The United States on Tuesday moved to let Iraq pay Iran for electricity via non-Iraqi banks, a U.S. official said, a step Washington hopes may keep Tehran from forcing unpopular power cuts during the sweltering Iraqi summer.

Secretary of State Antony Blinken signed a 120-day national security waiver allowing Iraq - heavily dependent on Iranian electricity - to deposit such payments into non-Iraqi banks in third countries instead of into restricted accounts in Iraq, said the official who spoke on condition of anonymity.

Monies put into the non-Iraqi accounts, like those deposited into Iraqi banks, will also be restricted, still requiring U.S. permission for Iran to get access to them and only for spending on humanitarian goods.

Tehran has in the past pushed Baghdad to secure U.S. permission to release such funds by cutting Iranian natural gas exports to Iraq, limiting Iraq's ability to generate power and forcing deeply unpopular electricity cuts.

The latest waiver was expanded to permit payments to banks outside Iraq at the request of the Iraqi government, apparently in the hopes that this might transfer some of the pressure that Iran has exerted on Baghdad to other countries.

Related Story: U.S. Confirms Transfer of $2.7 Billion Debt Funds from Iraq to Iran

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