A document from the Iraqi Central Bank, verified by two bank officials, reveals that it has revoked the operating license of Iran's largest bank in Iraq, the Milli Bank, due to international sanctions and the bank's limited operations in Iraq. The document states, "In light of the losses incurred by your branch in Iraq, your limited activities, and your inability to implement or expand banking activities… and your inclusion in international sanctions, your license has been revoked."
In 2018, the U.S. Treasury Department imposed sanctions on Milli Bank, claiming that the Iranian Revolutionary Guard uses it to "distribute funds to armed Shiite groups in Iraq, and the presence of Milli Bank in Iraq is part of this scheme."
Iraq, considered a rare ally of both the U.S. and Iran, and holding reserves exceeding $100 billion in the U.S., heavily relies on Washington's goodwill to ensure that it does not face disruptions in accessing its oil revenues and funds.
Although the Iraqi government was formed in October 2022 by Iraqi Shiite parties and armed factions closely linked to Iran, it is closely cooperating with Washington to take measures aimed at curtailing Iranian financial activities in Iraq and modernizing the financial system. Iraq has barred eight local commercial banks from conducting transactions in U.S. dollars and has taken actions to limit fraud, money laundering, and other illegal uses of U.S. currency, a move welcomed by the U.S. Treasury Department.
