The U.S. Treasury Department recently sanctioned an Iraqi company for helping Iran break sanctions, smuggling weapons to its allies in Iraq, and for funneling money to Abu Mahdi al-Muhandis the deputy commander of the Hashd al-Shaabi who is on America’s terrorist list.
On June 12 the U.S. put sanctions on Iraq’s South Wealth Resources Company and its two owners. It accused the business of helping the Iranian Revolutionary Guards Quds Force avoid sanctions, and smuggling weapons to pro-Iran groups within Iraq. The company also profited Abu Mahdi al-Muhandis who is the deputy commander of the Hashd al-Shaabi and a confidant of the Quds Force commander General Qasim Suleimani. Muhandis was put on the U.S. terrorist list back in 2009 for targeting U.S. Coalition and Iraqi forces.
Iran has used Iraq as an outlet to avoid U.S. sanctions since the Obama administration first implemented them. Iraq-Iran trade stands at $12 billion almost all of which is Iranian goods going to Iraq. Much more importantly Iran has taken part in the Iraq Central Bank’s dollar auctions which allows it access to foreign currency, which is important to buy goods from developed countries.
Finally, Iraq has doled out millions of dollars to its allies in Iraq and armed them as well since 2003. Muhandis has worked with Iran since the 1980s when he was convicted in absentia for bombing the U.S. and French embassies in Kuwait for the Dawa Party aided by Tehran, was then a Badr Brigade member and helped lead Kataib Hezbollah, which was a pro-Iran militia that carried out attacks upon American forces before they withdrew in 2011. Kataib Hezbollah like Muhandis joined the Hashd in 2014 to fight the Islamic State.
Iran likely has many other front companies like South Wealth Resources Company it uses to carry out these tasks in Iraq. Since the Iranian Revolutionary Guard is not only a military force but controls large sectors of the Iranian economy it has many assets to use to achieve its goals.
Al Aalem, “Washington bans Iraqi company that contributed to the enriching of Abu Mahdi al-Muhandis,” 6/12/19
Filkins, Dexter, “What We Left Behind,” New Yorker, 4/28/14
Radio Free Europe/Radio Liberty, “U.S. Sanctions Iraq-Based Company Affiliated With IRGC,” 6/12/19
Strouse, Thomas, “Kata’ib Hezbollah and the Intricate Web of Iranian Military Involvement in Iraq,” Terrorism Monitor, Jamestown Foundation, 3/4/10
Turak, Natasha, “Iran just struck a hoard of deals with Iraq, and Washington isn’t happy,” CNBC, 3/20/19
U.S. Department of the Treasury, “Treasury Designates Individual, Entity Posing Threat to Stability in Iraq,” 7/2/09
- “Treasury Targets IRGC-Qods Force Financial Conduit in Iraq for Trafficking Weapons Worth Hundreds of Millions,” 6/12/19