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Iraq Checks Iran Banks Seeking License

BAGHDAD -- Iraqi authorities say they are investigating whether two Iranian commercial banks that want to do business in Iraq are covered by UN Security Council sanctions, RFE/RL's Radio Free Iraq reports.

Mudhhir Muhammad Salih, a member of the Iraqi Central Bank's advisory panel, told RFE/RL that the bank has approached the Foreign Ministry and the cabinet to check if the latest round of UN sanctions against Iran also target Iran's Karafarin and Parsian banks, as the two have applied for licenses to open branches in Iraq.

Salih said allowing the two Iranian financial institutions to set up shop in Iraq was out of the question without official approval from the government. He added that the Central Bank's board of directors, which grants banking licenses, is still waiting for clear-cut instructions in this regard.

The UN Security Council in June imposed a fourth round of sanctions on Iran over its disputed nuclear program.

The resolution says countries should prohibit in their territories the opening of new branches, subsidiaries, or representative offices of Iranian banks if they believe such financial activities could contribute to Iran's proliferation-sensitive nuclear activities or the development of nuclear weapon-delivery systems.

Fadhil Muhammad Jawad, a legal adviser to the government, told RFE/RL that if verification showed the two Iranian banks in question were covered by the UN sanctions, "Iraq will of course comply."

Osama Murtadha, a professor of international relations at Baghdad's Mustansiriya University, says that even if the two Iranian banks are denied a license, trade relations between Iraq and Iran are too extensive to be affected.

The Iraqi Central Bank announced this month that it was talking with seven foreign banks interested in doing business in Iraq, including some from Iran and Lebanon.