ERBIL, Kurdistan Region of Iraq – Iraqi customs authorities said on Sunday they foiled an attempt to smuggle $226,000 through Kirkuk International Airport, as authorities continue efforts to curb illicit currency transfers fueled by the gap between Iraq's official and parallel exchange rates.

The cash was “found in the possession of a traveler at the Kirkuk Airport Customs Center during inspection procedures in the departure hall, in violation of Central Bank of Iraq [CBI] instructions,” according to a statement from the customs authority.

The attempted smuggling comes amid persistent efforts by Iraqi authorities to crack down on currency smuggling and exploitation of the gap between the Central Bank of Iraq's official exchange rate and the higher rate in the parallel market.

For years, individuals and companies have taken advantage of the discrepancy by using multiple bank-issued payment cards to exchange Iraqi dinars for US dollars abroad at the CBI's official rate of 1,320 dinars per dollar before returning to Iraq and selling the currency on the parallel market for a profit. The black-market exchange rate currently stands at around 1,530 dinars per dollar.

In October, CBI issued a new set of measures to tackle the prevalence of foreign currency smuggling and money laundering, which were set to take effect starting in November and included forcing businesspeople to submit detailed receipts of purchases made abroad before the transfer of money outside of Iraq. 

The customs authority said the seizure is part of ongoing efforts and “strict measures to combat smuggling attempts and protect the national economy,” adding that legal proceedings have been initiated against the suspect.

Iraqi authorities intensified efforts to restrict money laundering and the smuggling of funds out of the country after the US Department of the Treasury announced the imposition of sanctions on three Iraqi bank executives in October, accusing them of laundering money for Iran's Islamic Revolutionary Guard Corps (IRGC) and Iran-backed armed groups in Iraq.