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Treasury Targets Iraqi Bank Accused of Facilitating Terrorist Financing

The United States Department of the Treasury has taken action to protect the Iraqi and international financial systems from abuse by terrorist financiers and money launderers. The treasury department has identified Al-Huda Bank as a primary money laundering concern, accused of serving as a conduit for terrorist financing.

Sanctions Imposed on Al-Huda Bank

The Financial Crimes Enforcement Network (FinCEN) has proposed a rule that would sever Al-Huda Bank’s correspondent banking access, effectively blocking the bank from accessing the US financial system. Additionally, the Office of Foreign Assets Control (OFAC) has imposed sanctions on the bank’s owner, Hamad al-Moussawi.

Accusations Against Al-Huda Bank

Al-Huda Bank is accused of exploiting its access to US dollars to support designated foreign terrorist organizations, including Iran’s Islamic Revolutionary Guard Corps (IRGC) and Kata’ib Hizballah. The bank’s chairman is also complicit in money laundering operations for the IRGC and Kata’ib Hizballah.

  • Al-Huda Bank has used forged documents to execute at least $6 billion in wire transfers out of Iraq.
  • Hamad al-Moussawi, the bank’s owner, has been accused of supporting the IRGC-QF through money laundering operations and has maintained relationships with the group.

Consequences of Sanctions

As a result of these sanctions, all property and interests in property of the designated individuals are blocked, and US persons are prohibited from engaging in transactions that involve any property or interests in property of the sanctioned parties. Non-US financial institutions and other persons that engage in certain transactions or activities with sanctioned entities and individuals may also be subject to sanctions.

Goal of Sanctions

The Treasury Department’s actions aim to disrupt the IRGC-QF’s abuse of the Iraqi banking sector to gain access to US dollars and the international financial system. The ultimate goal of these sanctions is not to punish, but to bring about a positive change in behavior.