Two American diplomats have revealed that the US administration is preparing to impose “comprehensive, phased sanctions” on Iraqi individuals and entities linked to government institutions, political factions, and armed groups.
Speculation in Baghdad has been mounting over Washington’s new approach since US President Donald Trump returned to the White House and vowed to escalate pressure on Iran’s regional influence.
A US diplomat, speaking anonymously to Asharq Al-Awsat, stated that a series of economic sanctions will be imposed on Iraqi groups under National Security Presidential Memorandum NSPM-2. Trump signed the directive on February 4, 2025, as part of his strategy to exert “maximum pressure on Iran and counter its malign influence.”
The diplomat confirmed that the sanctions will target individuals and entities accused of facilitating illicit trade, financial dealings, and resource transfers benefiting Iran. These could include government institutions, political organizations, or armed factions. The measures will extend to seemingly minor commercial activities, with US agencies monitoring a vast network of Iran-linked operations in Iraq. Even checkpoints controlled by Iranian-backed militias for tax collection could fall under sanction, the diplomat warned.
Crucially, the sanctions will not consider the official affiliations of those targeted—whether they operate under government cover, the Popular Mobilization Forces (PMF), or other armed factions. Washington’s approach, the diplomat said, aligns strictly with the parameters outlined in Trump’s directive.
One of the measures under review is reducing Iraq’s monthly cash transfers from its account at the US Federal Reserve, ensuring funds are only allocated for essential national needs and preventing any surplus from reaching Iranian-linked entities. However, the diplomat emphasized that this option depends on Baghdad’s adherence to financial reforms.
A second US diplomat, recently returned from Baghdad, stressed that the sanctions are not intended to destabilize Iraq’s political system but rather to dismantle Tehran’s economic influence. He expressed hope that the measures would empower Iraqis to assert greater independence in governance, though he acknowledged the risk of intensified power struggles among Iranian-linked factions as their financial resources dry up.
Iraqi officials have not responded to Asharq Al-Awsat’s requests for comment. The timing of the sanctions remains unclear, and some analysts believe Washington’s threats could be part of a broader strategy to pressure Iran into negotiations or push Iraqi leaders toward sweeping political changes.
Aqil Abbas, an expert on US affairs, warned that the planned sanctions are “serious” and could only be averted if Iran agrees to a diplomatic settlement, relinquishing both its nuclear ambitions and regional influence. “At best, the Trump administration seeks Iran’s voluntary withdrawal from its regional project,” he concluded.
