IRAQIS HAVE FOUND A WAY TO DEFRAUD THE LARGEST AMERICAN BANK THAT MONITORS THE DOLLAR!

IRAQIS HAVE FOUND A WAY TO DEFRAUD THE LARGEST AMERICAN BANK THAT MONITORS THE DOLLAR!

Doubts about Morgan and Citibank’s actions

Economist Ahmed Hedhal revealed the latest techniques of the “financial fraud community” in Iraq to circumvent US restrictions imposed to prevent dollar smuggling. Previously, they relied mainly on “fake invoices” to obtain dollars (such as claiming to buy thousands of tons of nabak, for example). 

However, the new restrictions at the beginning of 2025 forced traders to prove that they were “buying something real.” The Central Bank of Iraq decided to absolve itself of responsibility for the matter, leaving the task to the Iraqi trader, whose receipts must convince the American bank that he is carrying out a legitimate import operation.

 However, expert Ahmed Hedhal points out that specialized companies have emerged in Dubai, Turkey, or Jordan, and are now able to “arrange the required invoices” officially and with real goods, without raising the suspicion of the American giants “JP Morgan” and “Citibank.” However, those who benefit from this process will inflate the size of the invoice.

For example, an invoice can be passed to import 1.5 tons of gold, while only one ton will reach the border crossing. In return, the full amount will be transferred to the issuing party with the price difference, and no American bank will ultimately be able to He identifies the true quantities entering the country. The economic expert adds that the truth can only be ascertained by adopting the ASYCUDA automation system at the border, which allows funds to be transferred to the supposed seller only after digital verification of the quantities entering and their conformity with the requested dollar amount.

Dr. Ahmed Hedhal, economic expert, to 964 Network:

After the implementation of the electronic platform system to control imports and foreign remittances, many banks, companies, and importing entities took advantage of the exchange rate gap at the time through inflated invoices that did not match the actual volume of imports and domestic demand for goods and services. This led to the hoarding of dollars abroad. With 60% of small traders not having bank accounts or official company accounts, they began to rely on the parallel dollar market to cover their imports. The parallel market relies primarily on the reverse movement of dollars hoarded abroad, estimated at $10 billion annually.

Even with the shift to a foreign correspondent banking system, the phenomenon of fake invoices may have ended, but inflated invoices continue. There are companies in the UAE, Turkey, Jordan, and elsewhere that are able to arrange all the official paperwork at home (importer) and abroad (exporter), and through them the transfer is passed without being detected by JPMorgan, for example. What matters to the American bank is that the transfer does not reach sanctioned parties. As for the issue of discovering the extent of tampering with the quantity of imported goods, that is the responsibility of the Iraqi Customs Authority, which is the weakest link in this context.

For example, an invoice for the purchase of 1.5 tons of gold from Dubai can be processed normally through correspondent banks and also through JPMorgan Chase, in a legal and official manner. However, only one ton will actually enter Iraq, while the entire amount will be transferred to Dubai. Here, the trader or company benefits from the difference in quantity, currency, and crafting price, as he may sell this quantity of gold back to Türkiye.

In this way, these people manage to accumulate dollars abroad and then sell them domestically or on the parallel market via electronic payment card transfers to cover imports for traders who do not have approved bank accounts with correspondent banks or who wish to cover their trade with sanctioned parties.

Customs automation, known as the ASYCUDA system, would reduce inflated invoices because it would prevent the invoice amount from being transferred until it arrives at the border port and after verifying the volume of goods entering Iraq. However, the problem will remain if this system is not implemented at Kurdistan’s ports because it would deprive them of the non-oil revenues they collect through their own customs.