Fourteen Iraqi private banks sanctioned by the United States over allegedly helping siphon US dollars to Iran said Wednesday they were ready to face audits.

US financial authorities last week barred 14 Iraqi banks from conducting dollar transactions as part of a wider crackdown on dollar smuggling to Iran via the Iraqi banking system, Iraqi central bank officials have said.

The sanctioned banks have asked for assistance from the government. Iraqi central bank (CBI) Governor Ali al-Allaq said on Wednesday the institution was following up on the issue and he had no indication the US would sanction more Iraqi banks.

He also noted that other banks were able to cover the market's needs for dollar transactions, with the 14 sanctioned banks representing just 8% of external transfers.

Allaq said the transactions tied to the sanctions took place in 2022, before the CBI enforced tighter regulations on dollar transfers.

Those measures are in line with US regulations aimed at curbing the illegal siphoning of dollars to Iran and applying pressure on Tehran along with US sanctions imposed over its nuclear program and other disputes.

Haider al-Shamma, speaking on behalf of the 14 sanctioned banks, said on Wednesday the sanctions could further weaken Iraq's currency.

The latest US sanctions, along with previous ones on eight banks, have left nearly a third of Iraq's 72 banks blacklisted, two Iraqi central bank officials said.

"Forcing sanctions on a third of the Iraqi private banks from conducting dollar transactions will have negative consequences not only on the value of the Iraqi dinar, but it will have a very big impact on foreign investments," al-Shamma said.

"Our banks have nothing to do with political tensions but are independent financial institutions."

(Report by Reuters)