Iraq’s state-owned Al-Rafidain Bank risks 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, stated that Al-Rafidain operates under US Treasury regulations through agreements with Iraq’s central bank and an international firm overseeing the sector. The firm identified violations in the bank’s operations, prompting a contract with a foreign company to improve compliance.
“Failure to correct these violations could lead to US sanctions, affecting Al-Rafidain and other private banks,” Al-Dulaimi said.
On January 30, 2025, US Congressman Joe Wilson accused the bank of facilitating money laundering for Iran. Wilson claimed the bank helped Iran and its allies acquire US dollars, calling for sanctions on Al-Rafidain.
The US has already sanctioned multiple Iraqi banks and is imposing stricter controls on electronic payment cards abroad.
Experts warn these measures could exacerbate Iraq’s dollar shortage, raise exchange rates, and isolate the country from the global financial system. In the worst-case scenario, salary payments and vital development projects could be disrupted.