Media reports and sources have suggested that an Iraqi bank holding billions of dollars of Iranian funds has been allowed for the first time in years to process transactions involving the funds after gaining a waiver from US sanctions against Tehran.

A report by Al Jazeera Arabic on Friday cited a senior Iraqi government advisor as saying that the US government had allowed the use of a part of the Iranian funds in the Trade Bank of Iraq (TBI) for the purpose of financing purchases of humanitarian and non-military goods.

In his interview with the Qatari-based TV station, Mazhar Muhammad Salih, the economic advisor to the Iraqi prime minister, would not elaborate on further details including how the funds will be released.

A senior Iranian businessman involved in the Iran-Iraq trade also confirmed the reports in a tweet in Friday. Seyyed Hamid Hosseini, a leading member of Iran-Iraq Joint Chamber of Commerce, cited statements by “reliable sources” in Iraq showing that the TBI had processed “several transactions” involving the Iranian funds.

 

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However, Iran’s minister of finance Farhad Dejpassand made no mention of any such transactions while speaking to reporters on Saturday.

“We hope these funds will be spent on facilitating economic activities,” said Dejpassand, adding that more information on the issue will be published by the Central Bank of Iran (CBI) in the next few days.

The issue of funds was also raised during a Saturday phone call between Iranian President Hassan Rouhani and Iraqi Prime Minister Mustafa al-Kadhimi, according to a report on the website of Rouhani’s office.

Estimates suggest Iraq owes Iran $4-5 billion in unpaid dues over imports of natural gas and electricity. The two countries have negotiated on several occasions on how they can transfer the funds, including during a last week meeting between CBI and TBI chiefs in Tehran.