Shafaq News
The US Envoy Mark Savaya’sannouncement of a comprehensive audit of payments and financial transactions,coupled with potential sanctions targeting “malicious networks,” has sparkedwidespread political and legal controversy across Iraq amid escalating USpressure over suspicious financial activities and fiscal integrity.
This dispute unfolds as Iraqranks 140th out of 180 countries on Transparency International’s 2024Corruption Perceptions Index, amid repeated US accusations of smuggling andmoney laundering networks linked to armed factions and Iran.
While Washington frames itsactions as a defense of the international financial system and anti-terrorismfinancing, Iraq remains polarized. Some condemn these measures as infringementson national sovereignty, while others interpret them as external pressuretriggered by persistent domestic failures to curb corruption.
Escalating Sanctions
The sanctions campaign mainlydates back to 2018, targeting Iraqi banks, money transfer companies, investmentand tourism firms, aviation sectors, political figures, and armed factionleaders.
Since October 2023, escalatingtensions between Iran and its regional allies versus Israel, backed by theUnited States, have driven a marked intensification of US sanctions targetingIraqi individuals and entities accused of advancing Iran’s regional agenda. TheOffice of Foreign Assets Control (OFAC) began by sanctioning senior KataibHezbollah commanders and intelligence operatives, including Hasan and MuhammadQahtan Al-Sa’idi and Haytham Sabih Said, for their support of Iran’s IRGC-QudsForce.
By January 2024, sanctionsexpanded to Iraq’s aviation sector, blacklisting Fly Baghdad and its CEO,Basheer Abdulkadhim Al-Shabbani, for facilitating the transport of personneland equipment for Iran-aligned groups.
The campaign widened furtherin 2025, targeting financial and commercial elites such as Ali Mohammed GhulamHussein Al-Anssari and banking executives Ali and Aqeel Meften KhafeefAl-Baidani for laundering funds and sustaining “militia” financing channels. Treasury officials also dismantled a major oil-smuggling operation led byIraqi-British businessman Salim Ahmed Said, accused of disguising Iranian crudeas Iraqi oil to funnel revenue to Tehran. Additionally, OFAC sanctionedAl-Muhandis General Company and Baladna Agricultural Investments, identifyingthem as fronts diverting state contracts and commercial profits to Iran-backedfactions deeply embedded in Iraq’s political economy.
Sovereignty at Stake
Hassan Fadam, senior officialfrom Iran-aligned Wisdom Movement (Al-Hikma) led by Ammar Al-Hakim, assertsIraq is a sovereign state with institutions actively combating corruption andstriving to control its sources and channels, acknowledging that governmentefforts are “clear,” despite enforcement weaknesses.
In remarks to Shafaq News,Fadam rejects any external interference, framing enforcement weaknesses as aninternal Iraqi issue.
He urged Iraq to leverageforeign intelligence on illicit funds but criticized international cooperation,especially from the US, as inadequate. “The US can identify and freeze much ofthe embezzled money, but has withheld sufficient cooperation.” He insisted thatforeign involvement should be confined to “tracking suspects, arresting them,repatriating them to Iraq, and returning stolen funds,” deeming this the soleacceptable framework for anti-corruption collaboration.
Earlier, Savaya revealeddiscussions with the US Treasury and the Office of Foreign Assets Controlfocused on reforming Iraq’s public and private banking sectors, emphasizingenhanced financial governance, compliance, and institutional accountability.
Both sides agreed to conductan exhaustive review of suspicious payments and financial operations involvingIraqi institutions, companies, and individuals linked to smuggling, moneylaundering, fraudulent contracts, and terrorism financing. They also mapped outforthcoming sanctions targeting entities and “malign” networks underminingfinancial integrity and state authority.
: Sovereignty strain: US sanctions trigger Iraq's liquidity nightmare
Legal Backlash
Salih Al-Shadhar, professor ofinternational relations, condemns any foreign intervention, regional orinternational, as blatant interference in sovereign affairs. He alsounderscores that Iraqi law and international norms “prohibit imposing externalwill,” even by major powers like the US.
In an interview with ShafaqNews, Al-Shadhar brands Savaya’s actions and similar interventions asguardianships imposed by global agendas, adding that they are “illegal underinternational law.”
Nonetheless, he concedes thatinternal abuses and misappropriation of authority and public funds since 2003have “dragged Iraq into regional and international suspicion,” partiallyrationalizing these interventions in some circles. Al-Shadhar insists thesolution lies not in succumbing to foreign guardianship but in resolving Iraq’seconomic crises and forming a government capable of managing economic,security, and regional challenges to restore trust domestically andinternationally.
Security Perspective
Security and military expertSarmad Al-Bayati attributed the “intervention” to Savaya’s direct mandate fromthe US president, arguing that “it is inevitable Savaya receives intelligenceon corruption, dollar smuggling, and economic turmoil afflicting Iraq.”
Speaking to our agency,Al-Bayati condemned the intervention as “unacceptable in principle” butacknowledged another dimension: Iraq operates in US dollars, with oil revenuesheld in the US Federal Reserve, entitling Washington to monitor dollar flows, particularlythose heading to sanctioned states.
“The intervention may appearjustifiable if genuinely aimed at combating corruption and safeguarding Iraq’sfunds rather than exerting political pressure,” he noted, stressing the dualnature of the issue, one concerns sovereignty, the other Washington’s interestin preventing abuse of its currency and Iraqi resources.
Written and edited by ShafaqNews staff.
