FinCEN seeks to sever ties between Iraqi bank, U.S. financial institutions

The Financial Crimes Enforcement Network today issued a finding concluding that the Iraqi-based Al-Huda Bank is a foreign financial institution of primary money laundering concern. FinCEN said the bank serves as a conduit for terrorist financing and proposed imposing a special measure that, if adopted, would sever the bank from the U.S. financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank.

Al-Huda Bank has exploited its access to U.S. dollars to support designated foreign terrorist organizations in Iran and Iraq, FinCEN said in a statement. The bank also provides access to the U.S. financial system to actors known to use fraudulent documentation, fake deposits, identity documents of the deceased, fake companies and counterfeit Iraq dinar, providing opportunities to obscure the identities of the transaction counterparties to correspondent banking relationship providers, the agency added.

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