Washington Cracks Down on Iran-Linked Money Laundering and Arms Smuggling in Iraq

“Today’s sanctions target individuals and entities that exploit Iraq’s economy to fund Iran’s destabilizing activities across the region,” the statement read.

The logo of the U.S. Department of the Treasury. (Photo: Designed by Kurdistan24)
The logo of the U.S. Department of the Treasury. (Photo: Designed by Kurdistan24)

ERBIL (Kurdistan24) – The U.S. Department of the Treasury announced on Thursday new sanctions targeting individuals and companies accused of helping the Iranian regime evade sanctions, smuggle weapons, and engage in corruption within Iraq.

According to the statement, the Treasury’s Office of Foreign Assets Control (OFAC) took action against networks that assist Iran’s Islamic Revolutionary Guard Corps (IRGC) and its affiliated “militias,” including Kata’ib Hizballah — a U.S.-designated foreign terrorist organization.

The Department said these Iran-backed groups have been instrumental in undermining Iraq’s security and economy by infiltrating state institutions, monopolizing resources through corruption, and obstructing efforts to build a stable and functional Iraqi government.

“Today’s sanctions target individuals and entities that exploit Iraq’s economy to fund Iran’s destabilizing activities across the region,” the statement read. “These militias are responsible for attacks on U.S. personnel and interests, as well as those of our regional allies.”

The new measures include restrictions on bankers accused of laundering money for Iran and a front company allegedly providing logistical support to armed groups operating in Iraq. The Treasury has also designated IRGC-linked operatives based in Iraq who are involved in intelligence gathering, including U.S. forces stationed in the region.

The U.S. government emphasized that these actions are part of ongoing efforts to disrupt financial and logistical networks that sustain Iran-backed armed groups and to protect Iraq’s sovereignty and economic stability.

The latest round of sanctions follows a series of U.S. measures in recent years aimed at curbing Iran’s influence in Iraq and the broader Middle East. Washington has long accused Tehran of using proxy groups, such as Kata’ib Hizballah, Asa’ib Ahl al-Haq, and other factions within the Popular Mobilization Forces (PMF), to expand its regional reach and challenge U.S. interests.

These groups have been implicated in numerous attacks against U.S. and coalition forces, as well as in corruption schemes that divert public resources away from Iraq’s reconstruction and essential services. 

Since 2018, Washington has intensified its efforts to target financial networks that facilitate Tehran’s access to global markets through neighboring countries, particularly Iraq. The latest designations underscore the Trump administration’s ongoing commitment to countering Iran’s destabilizing activities while supporting Iraq’s long-term stability and independence.

 
 
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