Iraq reportedly places Hezbollah on banking sanctions list

The Iraqi government has reportedly placed Lebanon's Hezbollah on its banking sanctions list targeting terrorism financing and money laundering, according to an Iraqi Finance Ministry document obtained by Qatari newspaper Al-Araby Al-Jadeed.

The document states that the measure was taken in line with US sanctions on Hezbollah and was based on two official communications from the US State Department and Treasury Department. The reported move comes shortly after Iraqi Prime Minister Mohammed Shia al-Sudani visited Washington, where he met with US President Trump.

If implemented, the designation would require Iraqi financial institutions to enforce restrictions on transactions involving Hezbollah, marking a significant step for Baghdad, whose political landscape includes influential Iran-backed factions with longstanding ties to the Lebanese group.

The reported decision follows an earlier attempt by Iraq to crack down on Iran-aligned organizations. In December, Baghdad designated several groups, including Hezbollah and Yemen's Houthi movement, as terrorist organizations, a move that would have frozen their assets and financial activities.

However, Iraqi authorities later reversed the decision after facing strong criticism from pro-Iranian political factions and armed groups, highlighting the delicate balance Baghdad has sought to maintain between its strategic partnership with the United States and the domestic influence of Tehran-backed actors.

The latest reported banking sanctions suggest renewed efforts by the Iraqi government to align its financial system with international counterterrorism financing standards while responding to US pressure to curb the financial activities of Iranian-backed organizations operating across the region.