US Treasury sanctions Iraq’s International Development Bank over alleged Iran links

The US Treasury sanctioned Iraq’s International Development Bank (IDB) on Friday, accusing the Baghdad-based lender of giving Iran access to USD, maintaining ties with Iranian state entities and Iran-aligned armed groups in Iraq, and misusing the now-defunct Central Bank of Iraq’s (CBI) USD wire auction system. The Treasury’s OFAC, the office that handles US sanctions enforcement, gave until 30 October for the wind-down of transactions involving IDB and any entity it owns 50% or more.

The bank rejected the allegations the following day, saying in a statement (pdf) that it is ready to cooperate with the CBI and the US Treasury through official channels. The bank also said it’s working with the CBI to ensure daily operations continuity and liquidity availability and protect depositors’ rights.

The IDB was one of 10 entities and 16 individuals designated in the latest round of Washington’s Operation Economic Outcast, the Iran sanctions campaign it launched on 24 August. Other names with regional links in the package include Dubai-based oil trustee Sayyed Ruhollah Razavi and two of his companies; the rest are Iranian entities.

About the IDB: The bank boasts a network of 24 branches in Iraq, a representative office in Beirut, and paid-in capital of IQD 400 bn (c. USD 305 mn) following a 2024 rights issue, 24 branches, and a representative office in Beirut, according to the bank’s website. It is also the only Iraqi bank licensed onshore by the UAE Central Bank, with a wholesale branch in Dubai. The Al Khalaf family holds 67.75%, with the remainder traded on the Iraq Stock Exchange under the ticker BIDB.