FinCEN Al-Huda Bank AML Concern


On Jan. 29, FinCEN found Iraqi bank to be of primary AML concern.


  • FinCEN, US Treasury issued finding, notice of proposed rulemaking (NPRM) identifying Al-Huda Bank as foreign financial institution of primary money laundering concern.
  • Concurrently, OFAC designated Al-Huda Bank's owner Hamad al-Moussawi, #199453.
  • Background
  • Al-Huda Bank and its foreign sponsors, including Iran and proxy groups, divert funds that could otherwise support legitimate business and economic aspirations of Iraqis.
  • Has exploited its access to US dollars to support designated FTOs including the IRGC, as well as Iran-aligned Iraqi militia groups like Kata’ib Hizballah and Asa’ib Ahl al-Haq.
  • Chairman of Al-Huda Bank is complicit in Al-Huda Bank’s illicit financial activities including money laundering through front companies, enabling financing of terrorism.
  • FinCEN Finding, NPRM
  • Issued finding that identifies Iraqi Al-Huda Bank as serving as a conduit for terrorist financing, as foreign financial institution of primary money laundering concern.
  • Proposed a rule that would sever the bank from US financial system by prohibiting US financial institutions from maintaining a correspondent account for Al-Huda Bank.
  • FinCEN is taking action pursuant to section 311 of USA PATRIOT Act (31 USC 5318A).
  • Section 311 actions alert the financial sector to foreign institutions, such as Al-Huda Bank, and through the rulemaking process, prevent access to the US financial system.
  • Consultation
  • Comments on NPRM may be submitted within 30 days of publication in federal register
  • Jan. 31, 2024 FinCEN Fed Reg Proposal
  • On Jan. 31, 2024, FinCEN published proposal in federal register, comment Mar 1, 2024
  • Jun. 2024 FinCEN Final Rule
  • On Jun. 26, 2024, FinCEN issued final rule that prohibits domestic financial institutions from opening or maintaining a correspondent account for/on behalf of Al-Huda Bank.
  • Financial institutions required to take reasonable steps not to process transactions for correspondent account of a foreign banking institution if transaction involves Al-Huda.
  • Also required to apply special due diligence to their foreign correspondent accounts.
  • Final rule will become effective 30 days after pending publication in federal register.
  • Jul. 2024 FinCEN Fed Reg Final Rule
  • On Jul. 3, 2024, FinCEN published final rule in federal register, effective Aug. 2, 2024.

Regulators FinCEN; US Treasury
Entity Types B/D; Bank; BS; Corp; IA; Ins; Inv Co; MSB
Reference FinCEN: 89 FR 55051, 7/3/2024; PR, RF, 6/26/2024; 89 FR 6074, 1/31/2024; PR, NPRM, 1/29/2024; US Treasury: PR, 1/29/2024; RIN 1506-AB65; Citation: 31 USC 5318A;
Functions AML; Anti-Bribery; Compliance; Financial; Legal; Operations; Reporting; Sanctions
Countries Iran, Republic of; Iraq, Republic of; United States of America; Cross-Border
Category
State
Products Banking; Deposits; Fund Mgt; Insurance; Loan; Payments; Securities
Regions Am
Rule Type Final
Rule Date 1/29/2024
Effective Date 8/2/2024
Rule Id 199452
Linked to Rule :199453
Reg. Last Update 7/3/2024
Report Section AML & Enforcement

Last substantive update on 07/07/2024