US extends sanctions waiver to Iraq for buying electricity from Iran

The Biden administration has extended a sanctions waiver by four months that will allow Iraq to continue purchase of electricity from Iran, giving Iran limited access to the proceeds to buy humanitarian goods.
The Secretary of State, Antony Blinken signed the 120-day waiver extension and it was transmitted to Congress on Tuesday, US officials said. The move is likely to draw criticism from Iran hawks on Capitol Hill and elsewhere who believe the extension will reward Iran at a time when it is coming under increasing pressure to end its support for proxy groups, including Hamas, that are destabilizing the Middle East.
There is roughly $10 billion in Iraqi payments for Iranian electricity currently being held in escrow accounts in Iraq, and the waiver will allow Baghdad to maintain its energy imports without fear of US penalties for violating sanctions on Iran.
It will also keep in place a provision—included in the last 120-day waiver—under which portions of the electricity proceeds can be transferred to accounts in Oman and then converted to euros or other widely traded currencies for Iran to buy non-sanctioned products.
The officials, who spoke on condition of anonymity to discuss the decision-making process, said Blinken signed the waiver mainly because the administration doesn’t want to cut Iraq off from a critical source of energy.
But, they said the administration is confident Iran will not be able to use any of the money for nefarious purposes. They said a rigorous vetting process is in place to ensure that the cash can only be used for food, medicine, medical equipment and agricultural goods.
Blinken visited Baghdad on 5 November and met with Iraqi Prime Minister Mohammed Shia al-Sudani during the course of a Middle East trip focused on the Israel-Hamas war and efforts to prevent it from spreading into a broader regional conflict.