US extends sanctions waiver allowing Iraq to buy electricity from Iran

WASHINGTON (AP) — The Biden administration has extended by four months a sanctions waiver that will allow Iraq to continue to purchase electricity from Iran and gives Iran limited access to the proceeds to buy humanitarian goods.

Secretary of State Antony Blinken signed the 120-day waiver extension and it was transmitted to Congress on Tuesday, U.S. 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 U.S. 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.