US Sanctions Iraqi Bank Over Alleged Financial Links to Iran

ERBIL (Kurdistan24) – The U.S. Department of the Treasury on Thursday sanctioned Iraq-based International Development Bank (IDB), accusing it of facilitating Iran’s access to the international financial system and maintaining ties with Iranian government entities and Iran-aligned militia groups in Iraq.

The designation is part of Operation Economic Outcast, a U.S. campaign aimed at cutting off Iran’s financial networks and limiting its ability to fund its military and regional allies.

According to the Treasury Department, IDB has used Iranian capital to conduct business and allegedly transferred profits back to Iran in U.S. dollars. The department also accused the bank of exploiting Iraq’s former U.S. dollar wire auction system to facilitate financial transactions for Iran.

The Treasury said IDB was initially established by Iranian companies to support Iran’s economy and provide it with access to U.S. dollars. It also alleged that the bank received capital from the now-closed Bank Melli branch in Iraq following U.S. sanctions against the Iranian lender.

“The noose is tightening around Iran’s economy, and not even Iran’s so-called allies can save it,” U.S. Treasury Secretary Scott Bessent said, vowing to continue targeting financial channels that support Iran’s military and allied groups.

In a related move, the U.S. State Department designated Cuba-based Banco Internacional de Comercio S.A. (BICSA), citing its provision of services to Iran’s sanctioned Karafarin Bank since at least 2022.

The Treasury said the measures also target Iran-linked shadow banking networks, offshore institutions, and front companies allegedly used to evade sanctions, move funds internationally, and finance military activities.

Washington announced Operation Economic Outcast on August 24, warning that entities facilitating money laundering or sanctions evasion on Iran’s behalf risk losing access to the U.S. financial system.