Al-Huda Bank, an Iraqi bank that facilitates the funding of terrorism, was designated as a foreign financial institution of major money laundering concern by the US Treasury Department on Monday.
Additionally, a finding and regulation were released by the Financial Crimes Enforcement Network (FinCEN) that would prevent domestic financial institutions and agencies from creating or maintaining a correspondent account for or on behalf of Al-Huda Bank, therefore cutting off the bank from the American financial system.
In addition, the Office of Foreign Assets Control (OFAC) may impose fines on the bank’s owner.
In a statement, the US Treasury Department said that Al-Huda Bank and its foreign backers, including Iran and its agents, embezzle funds intended to assist legal trade and the aspirations of the Iraqi people to achieve economic independence.
Under Secretary for Terrorism and Financial Intelligence at the US Department of the Treasury Brian Nelson stated that although Iraq has made great strides in eliminating illicit activity from its financial system, dishonest actors still try to use the country’s economy to raise and transfer funds for illegal activity.
Nelson, who met with top Iraqi authorities on Monday, described Al-Huda Bank as a vital conduit for Iran’s money laundering efforts to undermine terrorist activities. He also suggested a unique step that would cut off the bank’s correspondent banking access and place sanctions on the bank’s owner.
