Shafaq News
The US Envoy Mark Savaya’s
announcement of a comprehensive audit of payments and financial transactions,
coupled with potential sanctions targeting “malicious networks,” has sparked
widespread political and legal controversy across Iraq amid escalating US
pressure over suspicious financial activities and fiscal integrity.
This dispute unfolds as Iraq
ranks 140th out of 180 countries on Transparency International’s 2024
Corruption Perceptions Index, amid repeated US accusations of smuggling and
money laundering networks linked to armed factions and Iran.
While Washington frames its
actions as a defense of the international financial system and anti-terrorism
financing, Iraq remains polarized. Some condemn these measures as infringements
on national sovereignty, while others interpret them as external pressure
triggered by persistent domestic failures to curb corruption.
Escalating Sanctions
The sanctions campaign mainly
dates back to 2018, targeting Iraqi banks, money transfer companies, investment
and tourism firms, aviation sectors, political figures, and armed faction
leaders.
Since October 2023, escalating
tensions between Iran and its regional allies versus Israel, backed by the
United States, have driven a marked intensification of US sanctions targeting
Iraqi individuals and entities accused of advancing Iran’s regional agenda. The
Office of Foreign Assets Control (OFAC) began by sanctioning senior Kataib
Hezbollah commanders and intelligence operatives, including Hasan and Muhammad
Qahtan Al-Sa’idi and Haytham Sabih Said, for their support of Iran’s IRGC-Quds
Force.
By January 2024, sanctions
expanded to Iraq’s aviation sector, blacklisting Fly Baghdad and its CEO,
Basheer Abdulkadhim Al-Shabbani, for facilitating the transport of personnel
and equipment for Iran-aligned groups.
The campaign widened further
in 2025, targeting financial and commercial elites such as Ali Mohammed Ghulam
Hussein Al-Anssari and banking executives Ali and Aqeel Meften Khafeef
Al-Baidani for laundering funds and sustaining “militia” financing channels.
Treasury officials also dismantled a major oil-smuggling operation led by
Iraqi-British businessman Salim Ahmed Said, accused of disguising Iranian crude
as Iraqi oil to funnel revenue to Tehran. Additionally, OFAC sanctioned
Al-Muhandis General Company and Baladna Agricultural Investments, identifying
them as fronts diverting state contracts and commercial profits to Iran-backed
factions deeply embedded in Iraq’s political economy.
Sovereignty at Stake
Hassan Fadam, senior official
from Iran-aligned Wisdom Movement (Al-Hikma) led by Ammar Al-Hakim, asserts
Iraq is a sovereign state with institutions actively combating corruption and
striving to control its sources and channels, acknowledging that government
efforts are “clear,” despite enforcement weaknesses.
In remarks to Shafaq News,
Fadam rejects any external interference, framing enforcement weaknesses as an
internal Iraqi issue.
He urged Iraq to leverage
foreign intelligence on illicit funds but criticized international cooperation,
especially from the US, as inadequate. “The US can identify and freeze much of
the embezzled money, but has withheld sufficient cooperation.” He insisted that
foreign involvement should be confined to “tracking suspects, arresting them,
repatriating them to Iraq, and returning stolen funds,” deeming this the sole
acceptable framework for anti-corruption collaboration.
Earlier, Savaya revealed
discussions with the US Treasury and the Office of Foreign Assets Control
focused on reforming Iraq’s public and private banking sectors, emphasizing
enhanced financial governance, compliance, and institutional accountability.
Both sides agreed to conduct
an exhaustive review of suspicious payments and financial operations involving
Iraqi institutions, companies, and individuals linked to smuggling, money
laundering, fraudulent contracts, and terrorism financing. They also mapped out
forthcoming sanctions targeting entities and “malign” networks undermining
financial integrity and state authority.
Read more: Sovereignty strain: US sanctions trigger Iraq’s liquidity nightmare
Legal Backlash
Salih Al-Shadhar, professor of
international relations, condemns any foreign intervention, regional or
international, as blatant interference in sovereign affairs. He also
underscores that Iraqi law and international norms “prohibit imposing external
will,” even by major powers like the US.
In an interview with Shafaq
News, Al-Shadhar brands Savaya’s actions and similar interventions as
guardianships imposed by global agendas, adding that they are “illegal under
international law.”
Nonetheless, he concedes that
internal abuses and misappropriation of authority and public funds since 2003
have “dragged Iraq into regional and international suspicion,” partially
rationalizing these interventions in some circles. Al-Shadhar insists the
solution lies not in succumbing to foreign guardianship but in resolving Iraq’s
economic crises and forming a government capable of managing economic,
security, and regional challenges to restore trust domestically and
internationally.
Security Perspective
Security and military expert
Sarmad Al-Bayati attributed the “intervention” to Savaya’s direct mandate from
the US president, arguing that “it is inevitable Savaya receives intelligence
on corruption, dollar smuggling, and economic turmoil afflicting Iraq.”
Speaking to our agency,
Al-Bayati condemned the intervention as “unacceptable in principle” but
acknowledged another dimension: Iraq operates in US dollars, with oil revenues
held in the US Federal Reserve, entitling Washington to monitor dollar flows, particularly
those heading to sanctioned states.
“The intervention may appear
justifiable if genuinely aimed at combating corruption and safeguarding Iraq’s
funds rather than exerting political pressure,” he noted, stressing the dual
nature of the issue, one concerns sovereignty, the other Washington’s interest
in preventing abuse of its currency and Iraqi resources.
Written and edited by Shafaq
News staff.
