By Anas al-Bar | 2026-10-31

Iraqi-US financial reforms are exerting immense pressure to sever the symbiotic support networks between the Islamic Republic and its regional proxies.

Iraqi groups loyal to the Iranian regime currently face catastrophic difficulties securing funds for the Islamic Revolutionary Guard Corps (IRGC).

They are already grappling with a severe financial crunch, driven by a dwindling supply of American dollars.

A series of rigorous oversight measures, implemented by Baghdad in partnership with Washington, has substantially curtailed these illicit flows.

These groups previously exploited Iraq's banking sector as a critical resource, relying on networks of currency exchange firms and speculators.

Entities frequently exploited dollar exchange rate disparities between official banking channels and the chaotic parallel market to illicitly gain wealth.

They purchased prepaid debit cards, loaded them with dinars, and withdrew US dollars abroad at the lower official rate.

These illicit dollars were smuggled back into Iraq, sold at black-market prices, and generated millions in net profit.

Additionally, they siphoned funds by collecting thousands of fraudulent government salaries issued under fictitious names.

Militias also submitted forged import invoices for non-existent goods, effectively draining liquidity from the Central Bank with impunity.

Systematic reforms dismantle militant financing

"Iraq’s coordinated efforts with the United States have crippled these sophisticated, manipulative financial practices," Strategy expert Tariq al-Shammari told Al-Fassel.

"These measures successfully blocked thousands of fraudulent payment cards and closed the accounts of thousands of shell companies," he added.

The US Department of Treasury has aggressively blacklisted Iraqi exchange companies and banks directly involved in financing these armed factions.

US support has dramatically improved the banking sector's ability to audit transactions and ensure transparency.

"Iran and its proxies must not be permitted to steal Iraqi funds to sow chaos across the region," al-Shammari said.

Securing Iraq’s fragile economic future

Political researcher Abdul Qader al-Nayel stressed the urgent need for stringent measures to protect the economy from militant exploitation.

"It is essential to completely cut off funding for these proxies and firmly confront dollar smuggling into Iran," he told Al-Fassel.

Iraq will no longer function as a primary economic lifeline for the Iranian regime’s hostile regional agenda.

Al-Nayel argued that securing the borders and dismantling corruption networks are critical steps for maintaining Iraq's financial independence.

Iraq must reclaim its economic sovereignty to prevent its wealth from fueling violence and conflict throughout the wider Middle East.