The US will increase scrutiny of financial transactions in Iraq for links to the funding of "terrorist activities" and implement sanctions, its envoy to Iraq, Mark Savaya, said on Thursday.
Mr Savaya announced the move in a post on X after meeting US Treasury officials and its Office for the Control of Foreign Assets, which oversees enforcement of economic and trade sanctions imposed by Washington.
He said the meeting addressed "key challenges and reform opportunities" in Iraq's private and state-owned banks, with a focus on strengthening financial governance, compliance and institutional accountability.
Mr Savaya said: "We agreed to conduct a comprehensive review of suspected payment records and financial transactions involving institutions, companies and individuals in Iraq linked to smuggling, money laundering, and fraudulent financial contracts and projects that finance and enable terrorist activities."
The talks also covered the “next steps related to forthcoming sanctions targeting malign actors and networks that undermine financial integrity and state authority”, he added.
Washington has imposed sanctions on several banks and individuals in recent months, accusing them of laundering money for Iran-backed Iraqi militias and the Islamic Revolutionary Guard Corps.
Among those to be hit with the punitive measures are three Iraqi bankers accused of using their positions to “generate revenue and launder money” for the IRGC and the powerful Iran-aligned armed groups Kataib Hezbollah and Asaib Ahl Al Haq.
Washington has been increasing pressure on Baghdad to rein in Tehran's influence and bring weapons held by armed groups under state control, with Mr Savaya having issued strong statements directed at Iraq's armed factions since he was appointed in October.
Iran-backed groups in the country have criticised calls for their disarmament, stating their right to resistance remains as long as foreign forces are present in Iraq.
Baghdad maintains close ties with Washington and Tehran, hosting US troops at military bases while sustaining deep security and trade links with Iran.
The US wants to curtail the influence of Iraqi militias to limit Iran’s reach, while Tehran views those same groups as a strategic buffer against pressure from Washington and Israel.
