The U.S. State Department has told Blackwater Worldwide, the private security firm whose guards are accused of killing Iraqi civilians while protecting U.S. diplomats, that it will not renew its contract in Iraq.
The move was not a surprise following Iraq's decision to deny a license to Blackwater, which drew intense criticism after its guards opened fire in Baghdad traffic in 2007, killing at least 14 unarmed Iraqi civilians.
One Blackwater guard has pleaded guilty in U.S. court to voluntary manslaughter and attempt to commit manslaughter over that incident, while five others are awaiting trial next year on manslaughter and other charges. The firm denies wrongdoing.
"The department notified Blackwater in writing on Jan. 29 that we do not plan to renew the company's existing contract for protective security details in Iraq," said State Department spokesman Richard Aker.
Blackwater spokeswoman Anne Tyrrell was unable to confirm the State Department decision. "We understand that the State Department is exploring its options, and we are awaiting direction from our customer," she said.
It is unclear when the U.S. decision will take effect. A U.S. official who spoke on condition that he not be named said the U.S. and Iraqi governments were discussing a transition period during which Blackwater's work in Iraq will phase out.
The official said Blackwater will continue to work for the U.S. government elsewhere in the world.
Blackwater employs hundreds of heavily armed guards with a fleet of armored vehicles and helicopters to protect U.S. diplomats in Iraq under a State Department contract. It boasts that no American has been killed while under its protection.
The presence of security contractors, often as heavily armed as the military itself, has been a signature feature of the war in Iraq since the U.S.-led invasion in March 2003 ordered by then President George W. Bush, a Republican.
Before taking office as president on Jan. 20, Democrat Barack Obama said he wanted U.S. combat forces out of Iraq within 16 months of starting his term. Obama has advocated sending more American troops to Afghanistan, where U.S.-led forces are fighting a resurgent Taliban.
The U.S. occupation authorities had granted contractors immunity from Iraqi law, an edict that remained in place until the beginning of this year.
Blackwater was a target of Iraqi anger even before the 2007 shooting because of its size, high profile and aggressive posture on the streets.
Iraq's Prime Minister Nuri al-Maliki branded the 2007 shooting incident a "massacre" and complained when the State Department subsequently renewed Blackwater's contract.