Financial Crime World

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US Treasury Takes Aim at Al-Huda Bank Over Money Laundering Concerns

The US Department of the Treasury has announced a series of measures aimed at curbing money laundering and terrorist financing in Iraq, with a focus on Al-Huda Bank.

Key Findings

According to a finding issued by the Financial Crimes Enforcement Network (FinCEN), Al-Huda Bank has exploited its access to US dollars to support designated foreign terrorist organizations, including:

  • Iran’s Islamic Revolutionary Guard Corps (IRGC)
  • Kata’ib Hizballah

The bank’s chairman, Hamad al-Moussawi, is also being sanctioned for his role in facilitating money laundering operations on behalf of the IRGC.

Proposed Rule

The Treasury Department has proposed a rule that would sever Al-Huda Bank from the US financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of the bank. This move aims to prevent direct and indirect access to the US financial system by entities deemed to be of primary money laundering concern.

Sanctions Against Al-Moussawi and Al-Huda Bank

The sanctions against al-Moussawi and Al-Huda Bank are part of a broader effort to combat illicit activity in Iraq’s financial sector, which has been linked to Iran’s IRGC and other terrorist groups. The move is seen as a significant step in protecting the Iraqi economy from abuse by these actors.

International Cooperation

The Treasury Department has called on other countries to take similar action against Al-Huda Bank and its officials, emphasizing the need for international cooperation in combating global terrorist financing and money laundering threats.

“The United States will continue to work with our international partners to disrupt and dismantle the financial networks that support terrorism and money laundering,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “We urge all countries to take similar action against Al-Huda Bank and its officials, and to strengthen their own anti-money laundering and counter-terrorist financing regimes.”

OFAC has also designated several other entities and individuals linked to the IRGC and Kata’ib Hizballah, including a network of companies involved in providing financial services to the group. These designations aim to disrupt the financial networks that support terrorism and money laundering in Iraq, and to prevent terrorist organizations from accessing the global financial system.

Quotes

  • “Iraq has made significant progress in rooting out corruption and improving its banking system,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.
  • “The United States will continue to work with our international partners to disrupt and dismantle the financial networks that support terrorism and money laundering,” said Nelson.

Action Items

  • The sanctions against Al-Huda Bank and al-Moussawi are being implemented under Executive Order 13224, which targets individuals and entities involved in supporting terrorist activities.
  • All property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.
  • Non-U.S. financial institutions and other persons that engage in certain transactions or activities with sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action.