The US Department of the Treasury has filed sanctions against Elaf Islamic Bank, of Baghdad, for significant transactions with the sanctioned Export Development Bank of Iran. The bank, formerly known as Barakaat Bank for Investment & Funding, is not to be confused with other Middle Eastern financial institutions of similar name.
Treasury's announcement, which was made pursuant to the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (CISADA), stated that the bank had "significant financial transactions and provided significant financial services for a designated Iranian bank." Export Development Bank was sanctioned by the US in 2008, and by the EU in 2010.
Elaf Islamic Bank's SWIFT/BIC is ELAF IQ BA. It is now denied access to the US financial system, and all banks that have corespondent or payable-through accounts for Elaf must close them by 10 August.
I humbly suggest that you take this regulatory action as a wake-up call regarding Iraqi banks.
(1)You really need to conduct an on-site inspection before engaging in any major relationship with a financial institution whose principal office is located in Iraq.
(2) Who are its correspondent banks, and are any of them in Iran, Syria or Cuba ?
(3) What are the backgrounds of its senior leadership ?
(4) Is is possible there are Iranian stockholders of the bank ? This is the case with some.
(5) Is the bank funneling US Dollar notes, in bulk, to any jurisdiction that would bother US regulators ?
(6) How was the initial capitalisation of the bank accomplished ? Source of Funds, please.
If you cannot get satisfactory answers to these questions, do not engage with the bank.
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