On January 29, 2024, the US Department of the Treasury announced that it identified Al-Huda Bank, an Iraqi bank, as a foreign financial institution of primary money laundering concern in order to protect the Iraqi financial system from abuse by illicit actors. According to the Department, Al-Huda Bank was identified for exploiting its access to US currency by handling financial transactions for Foreign Terrorist Organizations such as Iran’s Islamic Revolutionary Guard Corps Qods Force (“IRGC-QF”) and the Iran-aligned Iraqi militia group Kata’ib Hizballah. The Department reported that these actions threaten the stability of Iraq because it diverts funds that could otherwise be used to provide economic support to the people of Iraq and legitimate businesses in Iraq. As a result, the Financial Crimes Enforcement Network (“FinCEN”) issued a finding and notice of proposed rulemaking (“NPRM”) identifying the bank under section 311 of the USA PATRIOT Act and issuing a proposed a rule that would prohibit domestic financial institutions and agencies from opening or maintaining correspondent accounts for or on behalf of Al-Huda Bank.
In addition, the Office of Foreign Assets Control designated Hamad al-Moussawi, the owner and president of Al-Huda Bank’s board of directors, for maintaining relationships with and laundering funds for the IRGC-QF and Kata’ib Hizballah. Since its inception, the bank has allegedly used forged documents to transfer at least $6 billion out of Iraq. Al-Moussawi was designated pursuant to Executive Order 13224, as amended, for providing material assistance to the IRGC-QF. As a result of this designation, all property and interests in property of the designated person within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving a designated person. Entities owned 50 percent or more by one or more blocked persons are also blocked.