On January 29, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a finding and notice of proposed rulemaking (NPRM) designating Al-Huda Bank, an Iraqi institution, as a primary money laundering concern due to its role as a conduit for terrorist financing.

FinCEN is issuing a notice of proposed rulemaking (NPRM), pursuant to section 311 of the USA PATRIOT Act, that proposes prohibiting the opening or maintaining of a correspondent account in the United States for, or on behalf of, Al-Huda Bank, a foreign financial institution based in Iraq found to be of primary money laundering concern.

Al-Huda Bank is a commercial bank based in Baghdad, Iraq, with branches in Baghdad, Karbala, and Nasiriyah, regulated by the CBI, having no international subsidiaries or branches.

The violations leading to the notice encompasses:

1.  Al-Huda Bank has exploited its access to U.S. dollars to support designated foreign terrorist organizations (FTOs), including IRGC, IRGC–QF, KH, and AAH.
2. The chairman of Al-Huda Bank engages in money laundering through front companies, concealing the true nature of transactions and parties involved, facilitating terrorism financing.
3. Al-Huda Bank strategically exploits the CBI dollar auction, a process crucial to Iraq’s economy, to support designated FTOs.
4. FinCEN assesses a high risk of Al-Huda Bank exploiting USD correspondent relationships for money laundering and terrorist financing.

FinCEN recommends preventing financial institutions from opening/maintaining correspondent accounts for Al-Huda Bank.