Financial Crime World

BANKING INDUSTRY RESPONSE TO FINANCIAL CRIME IN IRAQ

U.S. Treasury Takes Action Against Terrorist Financiers in Iraq

The United States Department of the Treasury has taken significant steps to safeguard the Iraqi and international financial systems from abuse by terrorist financiers, fraudsters, and money launderers.

Key Actions Taken

  • Designation of Al-Huda Bank: The Financial Crimes Enforcement Network (FinCEN) has identified Al-Huda Bank as a foreign financial institution of primary money laundering concern. As a result, domestic financial institutions and agencies will be prohibited from opening or maintaining correspondent accounts for or on behalf of the bank.
  • Sanctions Against Hamad al-Moussawi: The Office of Foreign Assets Control (OFAC) has imposed sanctions on Al-Huda Bank’s owner, Hamad al-Moussawi, for his support to the IRGC-QF, including through support for its proxy militia groups in Iraq.

Reasons Behind the Actions

  • Exploitation of US Dollars: Treasury officials say that Al-Huda Bank has exploited its access to US dollars to support designated Foreign Terrorist Organizations (FTOs), including the IRGC, as well as Iran-aligned Iraqi militia groups.
  • Complicity in Illicit Financial Activities: The bank’s chairman is complicit in the bank’s illicit financial activities, including money laundering through front companies that conceal the true nature of and parties involved in illicit transactions.

Response from Treasury Secretary Steven T. Mnuchin

“We will continue to leverage the power of sanctions to disrupt and dismantle terrorist financing networks. The IRGC-QF’s abuse of the Iraqi banking sector to gain access to US dollars and the international financial system is a threat to global stability, and we will not tolerate it.”

Public Comment Period

The proposed rulemaking is available for public comment until 30 days after publication in the Federal Register.

Designation as Specially Designated National (SDN)

The designation of Al-Moussawi as an SDN under Executive Order 13224, as amended, is effective immediately. As a result, all property and interests in property of Al-Moussawi that are in the United States or in the possession or control of US persons are blocked.

Commitment to Disrupting Terrorist Financing Networks

The Treasury Department says that its actions demonstrate its commitment to disrupting and dismantling terrorist financing networks and will continue to take steps to protect the global financial system from abuse.