Iraq has been helping Iran get around economic sanctions imposed on Tehran because of its nuclear program, The New York Times reported. Involved is a network of financial institutions and oil-smuggling operations that, according American and Iraqi experts and government officials, has provided Iran with a crucial flow of money at a time when sanctions are squeezing its economy.

The Obama administration wants to avoid a public showdown with the Iraqi government just eight months after the last American troops withdrew from Baghdad. Yet the administration has held private talks with Iraqi officials to complain about specific instances of financial and logistical ties between the countries—although they do not regard all trade between them as illegal. The Times reported that Iraqi government officials are turning a blind eye to the large financial flows, smuggling and other trade with Iran. Furthermore, some government officials close to Iraqi Prime Minister Nuri Kamal al-Maliki are directly profiting from the activities.

READ MORE: NBC NEWS