Iraq Fears Expansion of US Sanctions List

Kataib Hezbollah fighters during a parade in Baghdad, September 2024 (File/Reuters)
Kataib Hezbollah fighters during a parade in Baghdad, September 2024 (File/Reuters)
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Iraq Fears Expansion of US Sanctions List

Kataib Hezbollah fighters during a parade in Baghdad, September 2024 (File/Reuters)
Kataib Hezbollah fighters during a parade in Baghdad, September 2024 (File/Reuters)

As Iraq’s government led by Prime Minister Mohammed Shia al-Sudani works to deepen economic and investment cooperation with the United States, including opening the country’s market to major American firms, Washington announced a new round of sanctions targeting Iraqi officials, businessmen, and companies linked to the Popular Mobilization Forces (PMF).

An Iraqi politician described the move as “a negative shift and a strong point of pressure” in the US position toward Baghdad.

The US State Department said Thursday that Washington is sanctioning Kataib Hezbollah and Asaib Ahl al-Haq for assisting the Iranian regime in “evading US sanctions, smuggling weapons, and engaging in widespread corruption in Iraq.”

An Iraqi official told Asharq Al-Awsat that the sanctions “likely mark the beginning of a wider wave that may include additional figures and entities in the coming phase.”

The official, who requested anonymity, said the measures imposed by the US Treasury “clearly indicate a negative turn in the relationship between the Trump administration and the Iraqi government.”

He noted that this comes just as a new phase of cooperation has begun between Baghdad and Washington, following a US-backed oil and political agreement between Baghdad and Erbil.

“Through these sanctions, Washington is putting pressure on Baghdad to move against groups it sees as threats, which it continues to link to Iran,” the official added.

“What’s notable here is that Washington has started to differentiate between the Iraqi state and the parallel actors within its political and security landscape.”

He warned that “the timing of this escalation is particularly sensitive, as Iraqi political factions are busy preparing for next year’s parliamentary elections, where Shiite blocs are vying for the premiership.”

Sanctions Linked to Iran

In a statement Thursday, the US Treasury Department said: “Today, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking action against individuals and companies that assist the Iranian regime in evading US sanctions, smuggling weapons, and engaging in widespread corruption in Iraq.”

“The Iranian regime relies on various Iraqi militia proxies, including US-sanctioned foreign terrorist organization Kataib Hezbollah, to penetrate Iraq’s security forces and economy.”

“These Iran-backed groups are not only responsible for the deaths of US personnel but also conduct attacks against US interests and those of our allies across the Middle East.”

“The militias actively undermine the Iraqi economy, monopolizing resources through graft and corruption, and hinder the formation of a functioning Iraqi government that would make the region safer.”

“The targets today include bankers abusing the Iraqi economy to launder money for Iran and a terrorist front company that provides support and services to Iraqi militia groups.”

The Treasury is also taking action against Iraq-based Iranian Revolutionary Guard Corps (IRGC) assets that operate a source network that gathers information, including on US forces, it said.

Among those sanctioned were Iraqi Olympic Committee President Aqeel Meften and his brother, the first time a senior Iraqi government official of ministerial rank has been targeted.

The Treasury said they “own and manage an IRGC-QF-associated Iraqi commercial bank,” accusing it of laundering proceeds of corruption for political parties.

“For decades, the Meften brothers have laundered tens of millions of dollars for Iran, and smuggled oil and drugs and abused Aqeel Meften’s position as president of Iraq’s National Olympic Committee to engage in corruption,” the statement said.

Front Companies

The Treasury said Kataib Hezbollah, one of the most powerful PMF factions, established Muhandis General Company for Construction, Engineering, Mechanical, Agricultural, and Industrial Contracting as an economic front for its operations.

The company, led by Kataib Hezbollah commander Abd al-Aziz Malluh Mirjirash al Muhammadawi (Abu Fadak), allegedly used government contracts to transfer funds from state institutions to shell companies, including Baladna Agricultural Investments, to finance militia activity and weapons smuggling in coordination with the IRGC.

The sanctions also hit security figures running espionage networks for the IRGC inside Iraq. According to the statement, commanders from Kataib Hezbollah and the IRGC coordinated operations targeting US interests in Iraq earlier this year.

Those named included Kataib Hezbollah commander in Baghdad Hasan Qahtan Al-Sa’idi, accused of managing a network collecting intelligence on US troops in cooperation with IRGC officers. The network allegedly also involved his son, Muhammad Qahtan Al-Sa’idi, and Haytham Sabih Sa’id, both accused of gathering intelligence for Iran.

“The United States is pursuing maximum pressure on Iran. We are targeting the IRGC-Qods Force, which supports Iran’s regional terrorist partners and proxies, and two Iraq-based groups, Kataib Hezbollah and Asaib Ahl al-Haq. These militias actively undermine Iraq’s sovereignty, weaken Iraq’s economy, and conduct attacks against US personnel and interests across the Middle East,” Deputy State Department spokesman Tommy Pigott wrote on X.

In a related post on X, Republican Congressman Joe Wilson urged the Trump administration to also sanction the Badr Organization, its leader Hadi al-Amiri, and Iraq’s state-run Rafidain Bank, saying Iraq must be freed from Iran’s grip.

Mounting Pressure

The Iraqi Olympic Committee downplayed the sanctions, saying in a statement that “some television channels and social media platforms circulated false and fabricated reports about the committee’s president, Aqeel Meften, in an attempt to sow confusion and discredit the committee’s financial and sporting integrity.”

It said the allegations “have no basis in fact” and were part of “malicious campaigns aimed at undermining the committee’s transparent and balanced institutional work.”

Dr. Ihsan al-Shammari, head of the Iraqi Political Thinking Center in Baghdad, told Asharq Al-Awsat that “these sanctions reflect a policy adopted by the Trump administration to first weaken the financial networks of armed groups, and second, to send a clear message that Washington will not tolerate their growing influence within Iraq’s state institutions.”

He said the measures are based on an executive order issued by Trump reinstating the “maximum pressure” campaign against Iran, adding: “Iraq has effectively become part of that campaign.”

“What we’re seeing is a new approach in US-Iraq relations that may not stop at economic pressure, but could eventually include military options against armed factions,” al-Shammari warned. “The danger here lies in the fact that, for the first time, these sanctions have targeted government officials and state-linked companies, including the Muhandis Company affiliated with the Popular Mobilization Forces.”



Lebanon Starts Technical Response Process to US Treasury Demands

Lebanese President Joseph Aoun meets US Treasury delegation at Baabda Palace, Beirut (AFP)
Lebanese President Joseph Aoun meets US Treasury delegation at Baabda Palace, Beirut (AFP)
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Lebanon Starts Technical Response Process to US Treasury Demands

Lebanese President Joseph Aoun meets US Treasury delegation at Baabda Palace, Beirut (AFP)
Lebanese President Joseph Aoun meets US Treasury delegation at Baabda Palace, Beirut (AFP)

Lebanon has swiftly initiated a legal and procedural compliance process in response to what officials described as “very serious” US demands to curb terrorism financing, after a visiting US Treasury delegation delivered the requests to political and monetary authorities earlier this week along with warnings of possible sanctions.

The measures, which come with defined deadlines, explicitly target the drying up of Hezbollah’s funding channels and those of its affiliated organizations.

On Friday, the Central Bank of Lebanon (Banque du Liban) took what it described as “the first step in a series of precautionary measures aimed at strengthening the compliance environment within the financial sector,” amid speculation over the direction of government and ministerial steps in the same area.

Observers note that these moves extend beyond technical considerations and touch on the politically sensitive issue of controlling weapons exclusively.

The central bank’s initiative includes “applying precautionary measures to all nonbank financial institutions licensed by Banque du Liban, including money transfer companies, exchange houses, and other entities handling cash transactions in foreign currencies to and from Lebanon.”

Closing Hezbollah’s Financial Loopholes

This initiative aligns with information obtained by Asharq Al-Awsat from meetings held by the US Treasury delegation with Lebanon’s presidential, ministerial, parliamentary, and central bank authorities.

The meetings emphasized the need for strict measures to close loopholes used to channel funding to Hezbollah and its institutions, and to curb unregulated methods exploited by the group.

These include money transfer and exchange companies, illicit trade operations, many conducted in cash, gold, and some using cryptocurrencies, according to the delegation.

John Hurley, the Undersecretary of the Treasury for Terrorism and Financial Intelligence (TFI), spoke to journalists during a limited meeting at the US Embassy in Beirut.

Sources indicate that the next steps by the central bank will focus on promoting electronic payments in retail sectors, whether through cards, smartphones, or online internal and international transfers connected to secure banking networks.

These systems are subject to standard “know your customer” (KYC) requirements, helping control cash flow by regulating dollar liquidity, including part of the cash distributed monthly by the central bank for public sector salaries and banks’ contributions to depositor allocations, as per circulars.

Domestic Political Dimension

Financial sources familiar with the move said the measures were designed to avoid domestic political fallout and to prevent provoking the concerned political party. The steps are framed strictly as part of Lebanon’s effort to be removed from the Financial Action Task Force (FATF) “grey list.”

The central bank noted that “inclusion on this list indicates gaps in combating illicit financial transactions, triggering tighter international scrutiny and lowering confidence among global financial institutions.”

In a clarification responding indirectly to the Treasury delegation’s request for tighter controls over cash moving outside traditional banking channels, the central bank said the protective measures aim to “prevent the transfer of illicit or illegally obtained funds through these institutions, by imposing stricter compliance requirements and enhanced due diligence on all legal and natural persons involved in cash transactions, including ultimate beneficiaries.”

Additional Precautionary Measures

The central bank indicated that further steps will impose additional precautionary measures on commercial banks, aiming to “establish multiple layers of controls and checkpoints to detect, contain, and prevent illicit funds from circulating through the banking system and the broader financial sector.”

Lebanese Justice Minister Adel Nassar met with the US Treasury delegation in Beirut.

The Banking Control Commission will oversee the implementation of these measures and ensure all banks and nonbank financial institutions comply, taking corrective action as needed.

Under the central bank’s basic decision attached to Circular No. 3, nonbank financial institutions are now required to collect detailed client and transaction information for all operations of $1,000 and above, and to update KYC records according to attached templates for natural and legal persons as well as ultimate economic beneficiaries.

The circular mandates that institutions submit the required data to the central bank in encrypted form within two business days of the transaction.

Deadlines for implementing new procedures include adopting templates for cash transactions and new clients by the beginning of next month, with full compliance for existing clients within six months of the circular’s issuance.

The central bank warned that violations would expose institutions to sanctions under Article 208 of the Lebanese Code of Money and Credit, ranging from warnings to license revocation, in addition to fines and criminal penalties.


Saudi Signals on Lifting Export Ban Revive Hopes for Lebanese Farmers

Saudi Signals on Lifting Export Ban Revive Hopes for Lebanese Farmers
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Saudi Signals on Lifting Export Ban Revive Hopes for Lebanese Farmers

Saudi Signals on Lifting Export Ban Revive Hopes for Lebanese Farmers

Indications that Saudi Arabia is moving to lift its ban on agricultural imports from Lebanon and bolster trade with Beirut have rekindled hopes for new opportunities, particularly in the farming sector that has suffocated in recent years after drug smuggling networks exploited it to traffic narcotics.

Tony Tohme, head of the Economic Committee at the Chamber of Commerce, Industry, and Agriculture in Zahle and the Bekaa, said the expected Saudi move to end the ban on Lebanese agricultural exports “marks a highly significant development and a major boost for the Lebanese economy.”

He told Asharq Al-Awsat that the step is “a positive measure that has long been awaited and one we have worked for through long and continuous meetings, because it reopens the largest and most important market for Lebanese agricultural production.”

Tohme stressed that “Lebanon paid a heavy economic price because of the ban,” noting that the Bekaa, which makes up 43 percent of the country’s territory, “was directly affected because thousands of families rely on agriculture as their main source of income.” He added, “The entire economic cycle is disrupted when the agricultural sector declines.”

Losses Worth millions

Before 2021, agricultural exports to the kingdom ranged between 40 million and 50 million dollars a year. These exports were part of wider economic activities that were also hit by the ban, including land transport linked to shipments to Gulf countries. Lebanon’s trade deficit reached nearly 885 million dollars in 2024, according to estimates by the ministries of industry and agriculture and the chambers of commerce.

Land and sea shipping

Tohme said the ban not only blocked the entry of goods into Saudi Arabia, “but also barred Lebanese trucks from transiting Saudi territory toward other Gulf markets.”

Exporters were therefore forced to rely on costly sea freight, which he said was unsuitable for fresh produce that loses quality during long transport times and arrives in bulk, causing sharp price drops.

He said lifting the ban “will not only revive Lebanese vegetables and fruits but will also restore balance to the land transport sector, especially refrigerated trucks, which collapsed entirely after the ban and the halt of overland passage through Saudi Arabia.”

“We hope the decision will be issued soon as indicated by recent signals,” he said, adding that the step “will have positive repercussions on the entire Lebanese economy and will restore vitality to a whole sector that thousands of Lebanese depend on.”

He added, “We are fully prepared to cooperate to ensure the quality of exports and protect the reputation of Lebanese agriculture.”

Market reopening brings farmers back to life

In a related context, Ibrahim Tarshishi, head of the National Farmers’ Union, said Saudi Arabia’s announcement of its readiness to reopen its markets “brought hope back to the agricultural sector after three and a half years of losses.”

He told Asharq Al-Awsat that farmers received the news “with immense joy and great longing for the return of normal relations with the kingdom.”

Tarshishi said Lebanon previously exported “between 500,000 and 550,000 tons a year” before the figure dropped to “between 200,000 and 300,000 tons” after the ban, a loss of more than 50 percent of export volume.

He said the kingdom “has historically been the primary market for Lebanese agricultural products,” noting that “entire crops stopped being planted because they were destined for Arab markets, such as lettuce which cannot withstand sea transport.”

Tarshishi said lifting the ban “is not merely an economic measure but a key to a comprehensive solution,” adding that it “signals a restoration of confidence in the Lebanese state and in the security agencies that uprooted the dealers and smugglers who harmed Lebanon and its relations with its Arab brothers.”

He said, “When the kingdom opens its doors, other Arab doors open with it. This Saudi initiative is a step of a thousand miles, one that we hope will restore relations to their highest levels for the benefit of Lebanon, the agricultural sector and all Lebanese.”


Gaza War Becomes Cash Surge for US Weapons Makers

An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)
An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)
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Gaza War Becomes Cash Surge for US Weapons Makers

An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)
An Israeli F-16 carrying air-to-air missiles and extra fuel tanks takes off from an air base (Israel Defense Forces)

Israel’s war in Gaza, which erupted in October 2023, has become one of the most profitable conflicts for major US defense contractors.

As Gaza was being devastated and hundreds of thousands of civilians faced death and starvation, weapons factories across several US states were running at full capacity to meet Israel’s expanding military demands, generating more than 32 billion dollars in sales in just two years, according to a Wall Street Journal analysis based on US State Department data.

After the Hamas attack on southern Israel on October 7, 2023, and the large-scale Israeli military campaign that followed, Washington moved quickly to open an unprecedented weapons pipeline that included precision-guided munitions, long-range missiles, fighter jets and field equipment.

While Israel typically receives around 3.3 billion dollars in annual military assistance, that figure doubled in 2024 to 6.8 billion dollars in direct funding, not including non-cash support such as logistics, training and intelligence coordination.

A US State Department spokesperson said the Trump administration remains committed to Israel’s right to defend itself, adding that Washington is currently leading a regional effort to end the war through lasting security arrangements.

But despite talk of a “possible end” to the conflict, Pentagon data show that weapons production lines in US factories have not slowed and that supply contracts run through 2029, meaning arms deliveries to Israel will continue even after the fighting stops.

Who is benefiting most?

Boeing sits at the top of the list of beneficiaries after securing a 18.8 billion dollar deal to sell upgraded F-15 fighter jets to Israel, with delivery expected in four years.

The company also won an additional 7.9 billion dollars in contracts to supply Tel Aviv with guided bombs and associated weapons systems. These deals alone represent a major leap compared with Israel’s previous commitments to Boeing, which totaled less than 10 billion dollars over an entire decade.

Northrop Grumman, Lockheed Martin and General Dynamics secured specialized contracts for fighter jet spare parts, precision missiles and 120-millimeter tank rounds used in Merkava tanks.

Caterpillar benefited from soaring demand for its armored D9 bulldozers, widely deployed by the Israeli military to destroy homes and infrastructure in the enclave.

According to the US Defense Security Cooperation Agency, most of the deals are concentrated in aerial munitions and attack aircraft, while ground systems such as tanks and armored vehicles represent a far smaller share of total sales.

War as an economic opportunity

The conflict has not only been a military campaign, it also served as an economic boost for the US defense sector, which in recent years struggled with supply chain disruptions and labor strikes.

Boeing said in its 2024 annual report that its defense division saw strong demand from governments prioritizing security and defense technology amid rising threats.

Lockheed Martin reported a 13 percent increase in missile division revenues, reaching 12.7 billion dollars in a single year.

Oshkosh, which produces tactical military vehicles, said Israel’s orders saved a production line that was close to shutting down last year. Italy’s Leonardo Group, whose US unit sells military trailers to Israel, said in its latest financial report that the continuation of the conflicts in Ukraine and Israel ensures stable international sales for 2025.

The cost of war and who pays the price

Although the billions flowing through arms deals reflect a boom for the US defense industry, the humanitarian and political dimensions of the conflict have fueled debate in the United States and abroad.

The war has killed more than 68,000 people, including about 18,000 children, according to the Gaza Health Ministry. Israel has not released any official figures on the number of Hamas fighters killed.

As Washington funds a significant share of these sales with US taxpayer money, some Western financial institutions have started taking protest measures.

Three Norwegian funds withdrew investments from companies such as Caterpillar, Oshkosh and Palantir over the use of their products in Gaza. The Dutch pension fund sold its 448 million dollar stake in Caterpillar for the same reasons.

In Europe, Germany announced in August 2025 a halt to all arms export licenses to Israel for use in Gaza. US technology companies also faced internal pressure, prompting Microsoft to restrict the Israeli Defense Ministry’s access to some of its cloud services.

Artificial intelligence on the battlefield

Alongside conventional weapons, the war created a wider arena for cooperation on artificial intelligence and digital surveillance. Palantir, owned by conservative billionaire Peter Thiel, entered a partnership with the Israeli Defense Ministry in early 2024. After criticism that its tools were being used in airstrikes, CEO Alex Karp responded by saying that most of those killed “were terrorists,” in his words.

Israel also signed pre-war agreements with Google, Amazon and Microsoft for advanced cloud computing services, and all three companies have faced growing employee protests calling for an end to military cooperation.

In an unusual twist, some of the same US firms supplying Israel with weapons also participate in humanitarian relief programs for Gaza.

The US State Department allocated 30 million dollars to the Gaza Humanitarian Foundation, overseen by former Trump adviser Johnnie Moore, to coordinate aid distribution in the enclave.

The foundation hired American security contractors to protect its operations amid chaos and allegations of poor organization.