FinCEN Issues Final Rule Against Iraq-Based Al-Huda Bank to Combat Terrorist Financing Today, June 26, 2012, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury issued a final rule in accordance with section 311 of the USA PATRIOT Act (section 311). This rule prohibits domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank, an Iraqi bank that serves as
Under Secretary of the Depository for Psychological oppression and Monetary Insight Brian E. Nelson said:
“We remain focused on preventing Iran and its proxies from utilizing these gaps to facilitate their destabilizing terrorist activities, even as Iraq continues to make progress in its efforts to address illicit finance-related vulnerabilities in its financial system.”
“The present last rule cuts off this critical channel for tax evasion and psychological militant funding, guaranteeing both the honesty of the Iraqi and global monetary frameworks as well as the proceeded with improvement of genuine business and exchange.”
Al-Huda Bank was identified by FinCEN as a foreign financial institution of primary concern for money laundering on January 31, 2024, in a finding and notice of proposed rulemaking (NPRM). Al-Huda Bank supported Iran’s Islamic Revolutionary Guard Corps (IRGC) and IRGC-Quds Force, as well as Iran-aligned Iraqi militias Kata’ib Hizballah and Asa’ib Ahl al-Haq, for years by taking advantage of its access to U.S. dollars, according to the finding.
Besides, the director of Al-Huda Bank is complicit in Al-Huda Bank’s unlawful monetary exercises, including illegal tax avoidance through front organizations that disguise the real essence of and parties engaged with illegal exchanges, eventually empowering the supporting of psychological oppression.
FinCEN is making this segment 311 move to safeguard the US monetary framework from Al-Huda Bank’s illegal action. Covered financial institutions are now required to take reasonable steps not to process transactions for the correspondent account of a foreign banking institution in the United States if such a transaction involves Al-Huda Bank, preventing Al-Huda Bank from having indirect access to the United States financial system as a result of this final rule. Covered financial institutions are also prohibited from opening or maintaining correspondent accounts for or on behalf of Al-Huda Bank.
In addition, covered financial institutions are required by this final rule to perform additional due diligence on their foreign correspondent accounts that is reasonably designed to prevent their use to process Al-Huda Bank-related transactions.
