US sanctions threat hangs over Iraq’s Al-Rafidain Bank
Shafaq News/ Iraq’s state-owned Al-Rafidain Bank faces the risk of US Treasury sanctions if it fails to address regulatory concerns, Iraqi lawmaker Ikhlas Al-Dulaimi warned on Saturday.
Al-Dulaimi, deputy head of the parliamentary finance committee, told Shafaq News that Al-Rafidain operates under US Treasury regulations through agreements with Iraq’s central bank and an international firm overseeing the financial sector. She said the firm had flagged violations in the bank’s operations, prompting a contract with a foreign company to enhance compliance.
"Failure to correct these infractions could result in US sanctions, affecting Al-Rafidain and other private banks," she cautioned.
On January 30, 2025, US Republican Congressman Joe Wilson accused the bank of facilitating money laundering for Iran and its allies. In a post on X, he wrote, " Under Biden and McGurk, the US treasury and Federal Reserve allowed Rafidain Bank, the largest in Iraq, to become the money laundering machine for the Iranian regime and its puppets to obtain US$. This bank must be sanctioned."
The US has since imposed sanctions on several Iraqi banks and is moving to restrict the use of electronic payment cards abroad.
Experts warn that such measures could deepen Iraq’s dollar shortage, drive up exchange rates, and further isolate the country from the global financial system. A worst-case scenario, they say, would see widespread disruptions affecting salary payments and key development projects.
