Washington, Aug 21 (IANS): The US government has called on Iraq to close the "loopholes" in preventing Iran from skirting its sanctions through financial and logistical ties shared by the two neighbours.

"Whenever we have detected successful efforts by Iran to abuse Iraqi territory to circumvent sanctions, we have been clear and forthright with the Iraqis in trying to work through the issues," Xinhua quoted US State Department spokeswoman Victoria Nuland as saying at a briefing.

Noting that there is an "open channel" for Washington to bring its concerns on the issue to Baghdad, Nuland admitted: "But this is something we all have to continue to work on."

Officials in the Obama administration have been long complaining privately that some institutions in Iraq are helping Iran skirt economic sanctions imposed on Tehran because of its disputed nuclear programme.

The alleged help is deemed crucial to Iran whose economy is being squeezed by US-led sanctions.