US blocks $500m cash shipment to Iraq over pro-Iran attacks

WASHINGTON, Apr 22 (AFP): The United States blocked a plane carrying nearly $500 million in banknotes from delivering the cash to Iraq, US media reported on Tuesday, piling pressure on Baghdad to fight Iran-backed militant groups.

The Wall Street Journal reported that Washington has suspended cash shipments to Iraq and frozen funding for security programs following attacks on US interests in the country by groups showing solidarity with Iran.

Iraq has long walked a tightrope between the competing influences of its allies, neighbouring Iran and the United States.

However, Iraqi leaders have struggled to maintain that delicate balance as war engulfs the Middle East.

The US State Department said this month it had summoned Iraq's ambassador to Washington to express "strong condemnation" of attacks by pro-Iran groups on US interests, "including the April 8 ambush of US diplomats in Baghdad".

The Wall Street Journal reported that the US Treasury Department blocked a shipment of nearly $500 million in cash from Iraqi oil sales, quoting US and Iraqi officials.

AFP has contacted the Treasury Department for comment.

The United States has leverage over Iraq because the country's oil export revenue is largely held at the Federal Reserve Bank in New York, under an arrangement reached after the 2003 US invasion that toppled Saddam Hussein.