Iraq Pays Its $10 Billion Debt to Iran

Iranian officials finally completed and confirmed the long-awaited payment of nearly $10 billion in debt from Iraq to Iran.

The funds were quickly deposited into an account with the Trade Bank of Iraq (TBI), allowing the country to make purchases not subject to U.S. sanctions and settle its debt arrears with Tehran. A monumental achievement, this transaction will free up over $10 billion worth of energy debts that had been frozen for years and provide much-needed financial relief to both sides. Chairman of Iran-Iraq Joint Chamber of Commerce Yahya Al-e Es’haq declared the news on Monday, noting that the outstanding debt was primarily for imports of natural gas and electricity.

The US imposed its banking sanctions on Iran, like an iron fist choking off the flow of money, blocking Iraq from accessing the much-needed funds. But Al-e Es’haq showed defiance, voicing Tehran's determination to increase trade with Iraq no matter what. He predicted that bilateral commerce could swell to $20 billion, a twofold surge from its current level -- though it would require the active participation of the private sector for alternative exports beyond gas, electricity, and engineering services. Unbowed, he declared that even the harshest sanctions could not prevent Iran and Iraq from reaching their economic potential.