Financial Crime World

IRAQ: US Treasury Identifies Al-Huda Bank as Key Money Laundering Channel for Terrorist Financing

The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has identified Al- Huda Bank, an Iraqi bank with ties to Iran, as a foreign financial institution of primary money laundering concern.

Background

Al-Huda Bank has been exploited by Iranian-backed terrorist organizations, including the Islamic Revolutionary Guard Corps (IRGC) and IRGC-Quds Force, to raise and move funds for illicit activities. The bank’s chairman has also been accused of complicity in money laundering operations through front companies that conceal the true nature of transactions.

Proposed Action

FinCEN proposes imposing special measure five on Al-Huda Bank, which would effectively sever it from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining correspondent accounts for or on behalf of the bank.

  • This action is part of a broader effort by the U.S. government to disrupt funding for Iran-aligned terrorist groups.
  • In recent months, the Office of Foreign Assets Control (OFAC) has imposed sanctions on several individuals and entities affiliated with Kata’ib Hizballah and Asa’ib Ahl al-Haq.

Quote from FinCEN Director

“Al-Huda Bank has been used as a significant conduit for the financing of foreign terrorist organizations,” said FinCEN Director Andrea Gacki. “We will continue to leverage our authorities to target terrorist financing while supporting legitimate use of the international financial system.”

Designation by OFAC

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has also designated Hamad al-Moussawi, the owner and chairman of Al-Huda Bank, for providing financial support to the IRGC-QF.

Authority

FinCEN’s action is authorized under Section 311 of the USA PATRIOT Act, which allows the Secretary of the Treasury to require domestic financial institutions and agencies to take special measures to prevent direct or indirect access to the U.S. financial system for foreign financial institutions found to be of primary money laundering concern.

Public Comment Period

The public has until [date] to comment on the proposed rulemaking. Written comments may be submitted within 30 days of publication of the NPRM in the Federal Register.