On January 29, 2024, FinCEN issued a finding and notice of proposed rulemaking that identifies Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing, as a foreign financial institution of primary money laundering concern. Along with its finding, FinCEN proposed imposing a special measure that would sever 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.
Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said the following in a statement:
“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 money for illicit activity. By identifying Al-Huda Bank as a key money laundering channel for destabilizing terrorist activity by Iran, proposing a special measure that will sever its correspondent banking access, and imposing sanctions on their CEO, we can protect the Iraqi financial system and its legitimate businesses, as well as the international financial system, from abuse by Iran and other illicit actors.”
According to FinCEN Al-Huda Bank has exploited its access to U.S. dollars to support designated foreign terrorist organizations (FTOs). FinCEN also said that the chairman of Al-Huda Bank is involved 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.
FinCEN has proposed a rule that would impose special measure five, which would prohibit domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank.
Read FinCEN’s press release here.
The Proposed Rule can be found here.