ERBIL, Kurdistan Region of Iraq - There are no new sanctions against Iraqi banks, the Iraqi central bank chief said on Tuesday, adding that there are currently 20 banks in the country that conduct direct money transfer operations with international corresponding banks.

Addressing a recent meetings with the US Federal Reserve and the US Department of Treasury, Ali al-Alaq said that the meeting “were very positive.”

“Today, there are 20 Iraqi banks practicing direct transfer operations with international corresponding banks in eight foreign currencies,” Alaq said.

A report by Reuters last month said that the Iraqi central bank would be banning five local banks from engaging in US dollar transactions. The report said that the move came following meetings in Dubai between the central bank and the US.

Last year, Iraq banned another eight local commercial banks from engaging in US dollar transactions.

With Donald Trump back in the White House, concerns are mounting among Iraqi officials and financial experts that sanctions on Iraq’s banking system could trigger economic instability.

A recent White House memo emphasized stricter measures against Iran, which has fueled calls within the US political establishment to sever financial support for Iraqi entities suspected of transferring funds to Iran and impose sanctions on key institutions. Rafidain Bank has been singled out due to allegations that it enables money transfers to Iran and Iran-backed armed groups.

Trump signed a national security presidential memorandum early February, restoring his maximum pressure policy on Iran and detailing a series of new economic measures against the Islamic republic. 

The memo directed US agencies to strengthen financial restrictions by maintaining countermeasures within the Financial Action Task Force (FATF), tightening regulations on revenue channels, and increasing compliance requirements for financial institutions dealing with Iran.

The document explicitly called for preventing Iran from using Iraq’s financial system to evade or circumvent US sanctions. It also directed US authorities to ensure that Gulf nations are not used as transshipment points for sanction evasion, signaling a broader crackdown on illicit financial flows in the region.

However, Alas on Tuesday ensured that there are no new sanctions against Iraqi banks.

“There are no new sanctions or changes, but on the contrary, there is praise and appreciation from international bodies, especially with regard to the mechanism for selling cash dollars,” Alaq said.