Iraq has taken a powerful step by adding Lebanon’s Hezbollah and Yemen’s Houthi movement (Ansarallah) to its terrorism-finance blacklist. This move, published in the country’s Official Gazette on November 17, 2025, requires all Iraqi banks and financial institutions to immediately freeze any assets connected to these groups.
The decision applies to all movable and immovable property, and it prohibits any direct or indirect financial transactions with the listed organizations. It follows Iraq’s Anti-Money Laundering and Counter-Terrorism Financing Law of 2015, the Freezing of Terrorist Funds Bylaw of 2023, and UN sanctions that target groups such as ISIS and al-Qaeda.
This measure is part of Iraq’s effort to align its financial system with international standards, especially the Financial Action Task Force (FATF). All updates to the blacklist will be officially shared through the government gazette and the Anti-Money Laundering Office’s website.
A senior government official noted that the move reflects Iraq’s intent to strengthen oversight and ensure the country’s financial sector is protected from international exposure.
Iraq’s Neutrality and Regional Ties
For more than 20 years, Iraq has maintained a neutral stance toward conflicts in Yemen and Lebanon, as well as broader confrontations involving Iran-aligned networks, sometimes called the “Axis of Resistance”. This network includes Hezbollah, the Houthis, Palestinian militant groups, and pro-Iran forces in Syria.
However, behind the scenes, some powerful Iraqi factions developed close links with Hezbollah and the Houthis. These connections included political coordination, media messaging, logistical support, and financial aid. Reports indicate that the Houthis even maintained a coordination office in Baghdad to strengthen ties with Iraqi groups, although this activity decreased under international pressure.
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The recent Gaza conflict highlighted these connections. Some Iraqi armed groups and the Houthis announced joint drone and missile operations, while others launched public fundraising campaigns in support of the Houthis. These activities showed an informal alliance stretching from Baghdad to Sanaa and Beirut.
Hezbollah’s influence in Iraq remains extensive, with Iraqi factions often citing the Lebanese group as a model for organization and operations. Investigations by the US Treasury have also reported that Iraqi business networks may have channeled Iranian oil revenues—sold as Iraqi crude—to support Hezbollah and the Iranian Revolutionary Guard. These findings led to international sanctions on companies and businessmen connected to these networks.
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The listing has drawn some criticism. Mustafa Sanad, a lawmaker-elect and former MP, posted that Iraq’s classification of the Houthis and Hezbollah as terrorist organizations is shocking, especially when compared to global events, noting that Trump is being nominated for a Nobel Peace Prize. Such comments reflect the ongoing political debate within Iraq over the country’s traditional neutrality and international alignment.
Legal and International Implications
The blacklisting of Hezbollah and the Houthis is part of Iraq’s broader strategy to protect its financial system from international risks. By complying with UN sanctions frameworks, Iraq ensures that its banks and financial institutions do not face penalties for handling funds linked to groups involved in terrorism or armed conflict.
The new measures also reinforce Iraq’s position within global counterterrorism standards. All financial institutions in Iraq must identify, freeze, and report any assets related to these groups, ensuring that Iraq’s financial sector remains in line with international requirements.
This is considered one of Iraq’s most comprehensive steps in recent years to control terrorism financing and prevent its financial networks from being exploited by regional armed groups.