Treasury Imposes Financial Restrictions on Iraqi Bank for Terrorism Financing
The Treasury Department’s Financial Crimes Enforcement Network will soon issue a final rule designating Iraqi-based Al-Huda Bank a foreign financial institution of primary money laundering concern, which “severs” the bank from the U.S. financial system. The rule, which finalizes a proposed rule FinCEN issued in January (see 2401290025), prohibits U.S. banks from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank, which FinCEN said is a "conduit" for terrorist financing. The rule takes effect 30 days after it's published in the Federal Register.
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The bank has “exploited its access to U.S. dollars” to support designated foreign terrorist organizations, including Iran’s Islamic Revolutionary Guard Corps and the IRGC-Quds Force, along with Iran-linked Iraqi militias Kata’ib Hizballah and Asa’ib Ahl al-Haq, FinCEN said June 26. The agency also said Al-Huda Bank’s chairman is “complicit in Al-Huda Bank’s illicit financial activities, including money laundering through front companies that conceal the true nature of and parties involved in illicit transactions, ultimately enabling the financing of terrorism.”
The bank has “no direct U.S. correspondent banking relationships,” but FinCEN said it interacts with six foreign banks that have correspondent accounts with U.S. banks.