US sanctions threat hangs over Iraq’s Al-Rafidain Bank
Shafaq News/ Iraq’s state-ownedAl-Rafidain Bank faces the risk of US Treasury sanctions if it fails to addressregulatory concerns, Iraqi lawmaker Ikhlas Al-Dulaimi warned on Saturday.
Al-Dulaimi, deputy head of theparliamentary finance committee, told Shafaq News that Al-Rafidain operatesunder US Treasury regulations through agreements with Iraq’s central bank andan international firm overseeing the financial sector. She said the firm hadflagged violations in the bank’s operations, prompting a contract with aforeign company to enhance compliance.
"Failure to correct theseinfractions could result in US sanctions, affecting Al-Rafidain and otherprivate banks," she cautioned.
On January 30, 2025, US RepublicanCongressman Joe Wilson accused the bank of facilitating money laundering forIran and its allies. In a post on X, he wrote, " Under Biden and McGurk, the US treasury and Federal Reserve allowedRafidain Bank, the largest in Iraq, to become the money laundering machine forthe Iranian regime and its puppets to obtain US$. This bank must be sanctioned."
The US has since imposed sanctionson several Iraqi banks and is moving to restrict the use of electronic paymentcards abroad.
Experts warn that such measurescould deepen Iraq’s dollar shortage, drive up exchange rates, and furtherisolate the country from the global financial system. A worst-case scenario,they say, would see widespread disruptions affecting salary payments and keydevelopment projects.
