A study published by the Centre for Finance and Security at the Royal United Services Institute (RUSI) in London highlighted concerns regarding the potential exploitation of informal financial channels and hawala networks in Iraq to circumvent international sanctions.
RUSI observed that heightened regional economic constraints create incentives to utilize Iraq’s cash ecosystem as an alternative conduit, placing the Central Bank of Iraq and commercial lenders under strict international and regulatory scrutiny.
The report argued that avoiding punitive US restrictions on dollar transactions requires comprehensive digitization, automated banking protocols, and rigorous compliance standards. Additionally, the institute called on international financial institutions to provide technical assistance to Baghdad rather than relying solely on coercive measures that risk currency volatility and erode citizen purchasing power.
Source: https://www.rusi.org/explore-our-research/research-groups/centre-for-finance-and-security
