US imposes sanctions on Iraqi bank and chairman for role in terrorist financing

WASHINGTON, D.C. — In a move to combat terrorist financing, the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) have designated and sanctioned an Iraqi bank, Al-Huda Bank, and its chairman, Hamad al-Moussawi. The actions come as part of ongoing efforts to curb the flow of funds to foreign terrorist organizations.

According to a press release issued by FinCEN on Monday, the agency alleges that Al-Huda Bank and its foreign sponsors have played a pivotal role in “fueling violence that threatens the lives of US and Iraqi citizens” while diverting funds that could otherwise support legitimate businesses.

FinCEN accused the bank of leveraging its access to US dollars to support several foreign terrorist organizations, including Iran’s Islamic Revolutionary Guard Corps (IRGC) Quds Force, as well as Iran-aligned Iraqi militias. The proposed rulemaking aims to sever the bank’s ties with the US financial system by prohibiting US-based financial institutions from opening or maintaining a correspondent account on its behalf.

“Since its inception, Al-Huda Bank has used forged documents to execute at least $6 billion in wire transfers out of Iraq,” OFAC stated.

FinCEN further alleges that the bank facilitated access to the US financial system for entities known to use fraudulent documentation, fake deposits, identity documents of the deceased, fake companies, and counterfeit Iraq dinar. This provided opportunities to obscure the identities of transaction counterparties in correspondent banking relationships.

These actions against Al-Huda Bank and its chairman follow last week’s sanctions imposed by OFAC on the Iraqi airline Fly Baghdad and its CEO Basheer Abdulkadhim Alwan al-Shabbani. The airline was accused of delivering weapons and personnel to Iran’s Quds Force and its proxy groups in Iraq, Syria, and Lebanon.