Text of the US Treasury’s decision to impose sanctions on Al-Huda Bank of Iraq
The US Treasury Department announced on Monday that it had imposed sanctions on Al-Huda Bank of Iraq and its owner, on charges related to money laundering and financing of the Iranian Revolutionary Guard and armed groups.
FinCEN identifies Al-Huda Bank as a major money laundering concern because it acts as a conduit for terrorist financing by Iran.
OFAC imposes sanctions on the bank owner.
Washington Today, the US Treasury Department uses powerful tools to protect the Iraqi and international financial system from abuse by terrorist financiers, fraudsters, and money launderers. The Treasury Department issues a Finding and Notice of Proposed Rulemaking (NPRM) designating Al-Huda Bank, an Iraqi bank operating as a terrorist financing conduit, as a Foreign Financial Institution of Major Concern for Money Laundering. Along with its findings, the Financial Crimes Enforcement Network (FinCEN) proposed a rule that would separate the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al Huda Bank. In addition, the Office of Foreign Assets Control (OFAC) imposes sanctions on the bank owner.
Al-Huda Bank and its foreign sponsors, including Iran and its proxy groups, transfer funds that can support the legitimate businesses and economic aspirations of the Iraqi people. These bad actors are fueling violence that threatens the stability of Iraq and the lives of American and Iraqi citizens alike. The Treasury Department remains committed to its long-term joint work with the Government of Iraq to strengthen the Iraqi economy and protect the U.S. and Iraqi financial systems from abuse.
The Under Secretary of the Treasury for Terrorism and Financial Intelligence said: “Iraq has made significant progress in rooting out illicit activity from its financial system, but unscrupulous actors continue to seek to take advantage of the Iraqi economy to raise and move funds to conduct illicit activities.” Brian E. Nelson. “By identifying Al-Huda Bank as a major money laundering conduit for destabilizing Iran’s terrorist activity, proposing a special measure that would cut off access to correspondent banking, and imposing sanctions on its owner, we can help protect the Iraqi financial system and its legitimate institutions. companies, as well as the international financial system, from abuses by Iran and other illicit actors.
Andrea Jacki, Director of the Financial Crimes Enforcement Network, said, “The evidence available to the Financial Crimes Enforcement Network showed that Al-Huda Bank served as an important channel for financing foreign terrorist organizations.” He added: “We will continue to utilize the full range of Treasury powers to target terrorist financing, while at the same time supporting the legitimate use of the international financial system.”
Last week, OFAC designated the Iraqi airline FlyBaghdad and its CEO for providing assistance to the Iranian Revolutionary Guard Corps-Qods Force (IRGC-QF) and its regional groups by transporting fighters and weapons. OFAC also designated three Kataib Hezbollah leaders and supporters and a company that served as a cover for Kataib Hezbollah to move and launder funds. On November 17, OFAC designated six individuals affiliated with Kataib Hezbollah following the group’s attacks against US personnel and partners in Iraq and Syria.
Al-Huda Bank discoveries
As explained in the finding, Al-Huda Bank has for years exploited its access to US dollars to support designated foreign terrorist organizations including the Iranian Revolutionary Guard, as well as Iraqi militia groups allied with Iran including Kataib Hezbollah and Asaib Ahl al-Haq. The Board of Directors of Al Huda Bank is complicit in the illicit financial activities of Al Huda Bank including money laundering through front companies that conceal the true nature of the parties involved in the illicit transactions, ultimately enabling the financing of terrorism.
Since its establishment, Al-Huda Bank has been controlled and operated by the IRGC and the IRGC-QF. After establishing the bank, the head of Al-Huda Bank began money laundering operations on behalf of the Quds Force of the Iranian Revolutionary Guard and Kataib Hezbollah. Additionally, Al-Huda Bank provides access to the U.S. financial system to known actors using fraudulent documents, fake deposits, deceased identity documents, fake companies, and counterfeit Iraqi dinars, providing opportunities to conceal the identities of transaction counterparties to reporters. Banking relationship providers. It should be noted that the Chairman of the Board of Directors of Al-Huda Bank is also the owner of the bank and Chairman of its Board of Directors.
To protect US banks from Al Huda Bank’s illicit activities, FinCEN is taking this action in accordance with Section 311 of the USA Patriot Act. Section 311 actions alert the US financial sector to foreign institutions, such as Al Huda Bank, that pose a primary money laundering concern and, through the general rulemaking process, prevent direct and indirect access to the US financial system.
The proposed fifth special measure would prohibit domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of this foreign financial institution.
The full NPRM as submitted to the Federal Register is available here. Written comments on the NPRM may be submitted within 30 days of publication of the NPRM in the Federal Register.
OFAC sanctions
Today, OFAC designated Ahmed al-Moussawi, owner and chairman of Al-Huda Bank of Iraq, for his support of the IRGC-QF, including by supporting its militia groups in Iraq. Al-Huda Bank has exploited its access to the US dollar to support foreign terrorist groups, including the Iranian Revolutionary Guard-Qods Force and Kataib Hezbollah. Today’s actions underscore the IRGC-QF’s abuse of the Iraqi banking sector to access the US dollar and the international financial system.
Al-Moussawi maintains ties with the Quds Force of the Iranian Revolutionary Guard and Kataib Hezbollah and launders money for them. He received directives from the Quds Force of the Iranian Revolutionary Guard to establish Al-Huda Bank to conduct money laundering operations for the benefit of Kataib Hezbollah, which has a prominent role in laundering money for the Quds Force of the Iranian Revolutionary Guard. Al-Moussawi used unaffiliated individuals in part to carry out the purchase of US dollars during currency auctions conducted by the Central Bank of Iraq using their identity documents to circumvent restrictions on currency purchases. Since its founding, Al-Huda Bank has used forged documents to execute at least $6 billion in wire transfers outside Iraq.
Hamad al-Moussawi is being designated under Executive Order 13224, as amended, for providing material assistance, sponsorship, or provision of financial, material, or technological support, goods, or services to the IRGC-QF.
Effects of sanctions
As a result of today’s OFAC action, all property and interests in property of the above persons that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, in general, any entities owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more of the blocked persons are also blocked. Unless permitted by a general or specific license issued by OFAC, or exempt, OFAC regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests On the property of specified or prohibited persons.
In addition, non-U.S. financial institutions and other persons who engage in certain transactions or activities with sanctioned entities and individuals may expose themselves to sanctions or be subject to enforcement actions. The prohibition includes making any contribution or providing money, goods or services by, to or for the benefit of any specified person, or receiving any contribution or providing money, goods or services from any such person.
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