In this handout photo released by the Iraqi prime minister's office, Prime Minister Mohammed Shia al-Sudani center attends a signing ceremony for the security agreement between the Secretary of Iran's Supreme National Security Council Ali Shamkhani and Iraq's National Security Advisor Qasim al-Araji right in Baghdad on March 19, 2023. A top Iranian official said that Iran and Iraq have agreed on new mechanisms that allow the former to use its frozen oil and electricity exports money in the latter's banks, as well as in the latter's banks, according to official news agency IRNA on Monday.
Secretary of Iran's Supreme National Security Council SNSC Ali Shamkhani made a statement to the IRNA after his Sunday visit to Iraq.
The new mechanisms will allow Iran to use its arrears, currently frozen in Iraqi banks due to US sanctions, to purchase essential goods, according to Shamkhani.
He stressed that these mechanisms, along with the agreements reached with the United Arab Emirates UAE during his Thursday trip to Abu Dhabi on facilitating bilateral trade through the UAE's national currency dirham, will help improve the Iranian foreign currency market.
Shamkhani said that the trip to Iraq was in line with the Iranian government's efforts to improve relations with neighbors, and that the previous visits to China and the UAE by him and his team led to significant achievements.
He noted that solutions were worked out in talks with high-ranking Iraqi officials during the visit to Iraq to remove obstacles in order to promote all-out cooperation.
During his trip, the two countries also signed an agreement on security cooperation to protect their common border.
Iraq has been granted special waivers from the US sanctions on Iran to be able to import natural gas and electricity from its eastern neighbor. The sanctions, which are also targeting Iran's banking relations with the rest of the world, have made it hard for Baghdad to pay for its energy imports from the country.
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The governor of the Iranian central bank put the value of Iran's frozen money at Iraqi banks at $10 billion in early January, according to Iran's Tejarat News website.