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Official says Iraq released funds, Iran to import food, medicine

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
National flags of Iran and Iraq

Iraq has released Iran’s funds blocked at Trade Bank of Iraq (TBI) for the import of food and medical items by the Islamic Republic, an Iranian official says.

In a letter addressed to all associations of food, pharmaceutical and health industries, Homa Alvandi, caretaker of the Office of Food and Pharmaceutical Industries at the Iranian Ministry of Industry, Mine and Trade referred to the capacity created for the use of Iran's foreign exchange resources at TBI.

She asked the associations to announce their proposed import items and specify their urgency.

The exact amount of the Iraqi debt is not known. In the past, Iranian officials have said between $6 billion and $7 billion of Iranian funds are held in the Arab country.

Iraq owes the money to Iran for importing gas and electricity, which has continued despite illegal US sanctions, but Tehran has been unable to obtain its assets frozen in Iraqi banks under US pressure.

Iraq has paid some of its debts over the years, but US sanctions and economic troubles in the Arab country have made the transfer of money much slower than Iran expected.

Iran gets paid partly in cash, but it mostly receives goods from Iraq to cover the debt.

The country imports a wide range of goods from Iran, including food, agricultural products, home appliances, air conditioners and car parts.

Meanwhile, South Korea's official news agency Yonhap said Saturday the country plans to hold working-level consultations with Iran next month in Seoul to discuss ways to untangle yearslong disputes over Tehran's assets frozen under US sanctions. 

Bilateral relations remain frayed over $7 billion in Iranian funds locked in two Korean banks under US sanctions, which were reimposed after former President Donald Trump in 2018 withdrew from a 2015 nuclear deal.

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