US threatens Iraq with crippling sanctions if it demands that US troops withdraw

Iraqi officials warn that the country would face almost immediate economic collapse should US President Trump impose sanctions on Iraq and freeze oil revenues because Iraq demanded US troops leave.

In early January the Iraqi parliament voted 170 to 0 to expel all foreign troops.

Trump's response

Trump said that Iraq could be hit with massive sanctions and also the freezing of Iraq's New York Federal Reserve bank account where all Iraq's oil revenue is deposited.

Joe Kaeser, the chief executive of the German firm Siemens noted: "The US threat of sanctions against Iraq following the recent escalation in tensions between Washington and Tehran "was not helpful", said Siemens chief executive Joe Kaeser, who affirmed the company's commitment towards power rehabilitation in the war-torn country."We need to deal with what we need to deal with. I think putting sanctions on something just because you don't get your will is maybe also not always helpful," he told The National in an interview in Abu Dhabi."

Siemens has a $15 billion electricity development contract with Iraq. There is a risk for the company along with all others working in Iraq that US sanctions and freezing of revenues could leave Iraq with no money to pay contractors working for the government.

Oil revenue is almost all of Iraq's budget

Oil revenues are 90 percent of the Iraqi government so freezing these funds would be even more disastrous for the Iraqi economy than even severe sanctions.

A recent article says of the account: " That account holds substantially all oil trade revenue, and that is a substantial part of Iraq’s government’s entire revenue. The US is now threatening to block Iraqi access to this account, and with it virtually their entire treasury, if they expel US troops. The US froze this account very briefly in 2015 and it did major damage to the Iraqi economy, causing a panic. This freeze is a threat of a more permanent type, and would all but bankrupt Iraq overnight."

Iraqi bank officials said they doubted that the US would freeze the US Federal Reserve account as it would result in a permanent break in US-Iraqi relations. However, the US has done it before and Trump seems anxious to ensure that the US military stays in Iraq in spite of his presidential campaign promise that the would withdraw US troops from foreign wars.. But now he is threatening economic ruin on Iraq that is requesting US troops to withdraw. Trump is not even willing to discuss the issue with Iraq.

The US can hardly claim that it respected the sovereignty or Iraq when it refuses to even discuss with the Iraqis a mechanism to carry out the Iraqi parliament demand that their troops withdraw from Iraq. Earlier, a letter indicating that the US would withdraw from Iraq was said to be a draft only that was unsigned even though it was received by Iraqi authorities with a signature.

Previously published in the Digital Journal

Initial agreement reached on withdrawal of U.S. troops from Iraq

This is from Monsters and Critics.
In the debates between McCain and Obama it seems to be assumed that it is the U.S. that decides when it will withdraw not the Iraqis! This status of forces agreement does not get very much press in the U.S. It remains to be seen whether the draft mentioned in the article will pass must in the Iraqi parliament Nothing is said about the status of contractors with respect to Iraqi law or the status of U.S. troops either. The agreement probably refers only to combat troops not support troops.

From Monsters and Critics.com
Middle East NewsInitial agreement reached on withdrawal of US troops from IraqBy DPAAug 4, 2008, 9:04 GMT
Cairo - Iraqi and US teams negotiating a controversial security pact have reached an initial agreement that states that US troops will withdraw from Iraq between 2010 and 2011, the pro- government Iraqi Al-Sabah newspaper reported Monday.
The newspaper reported that 'the Iraqi and American technical teams have already reported the outcome of their negotiations to their political leaders during the past days.'
The paper also reported that ongoing negotiations between both parties is nearing an end, allowing the signing of a 'memorandum of understanding' very soon.
The paper quoted anonymous Iraqi sources as saying that 'there is a great development in the talks and we reached an initial bilateral agreement for the pullout of US troops by 2010 and 2011.'
The US and Iraq have been negotiating the security pact, also called the Status of Forces Agreement (SOFA), since March.
The long term agreement would lay down the legal basis for a continued US military presence in Iraq after a UN mandate expires in December.
However, after months of disputes and criticism, the United States and Iraq are working on a short-term 'memorandum of understanding' instead.
Several Iraqi politicians and lawmakers are against the mandate, saying it will violate the country's sovereignty.
The most vocal of critics is radical Shiite cleric Moqtada al- Sadr, who strongly opposes the US presence in Iraq. He called on Iraqis to unite and stand up against the accord by all means possible.
Iran also opposes any deal between Baghdad and Washington which extends the presence of US troops in the neighbouring country.
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