US probes Baghdad bank over deposits tied to oil smuggling

Shafaq News – Baghdad

The US Treasury Department launched inquiries into deposits linked to Iraqi oil-smuggling networks after identifying suspicious transactions inside the Bank of Baghdad, the Eco Iraq Observatory said on Thursday.

According to the watchdog, the Central Bank of Iraq received an official email from the Treasury’s Office of Foreign Assets Control (OFAC) requesting information about funds allegedly deposited by individuals wanted for oil-smuggling offenses. The communication, it said, indicates that internal actors at the bank may have facilitated the deposits and helped obscure their origins.

Such inquiries typically trigger a formal review that requires summoning the bank’s authorized director—alongside the US-contracted auditing firm overseeing dollar operations—to examine transfer routes and verify the source of the suspicious funds, the observatory noted.

Eco Iraq warned that any indication from the US Treasury implicating bank personnel or management represents a serious red flag regarding weak compliance systems and gaps in internal financial oversight.

The watchdog stressed that Iraqi banks dealing in US dollars must meet the highest anti–money laundering and counter-terrorism financing standards, adding that cases involving oil-smuggling proceeds are “particularly sensitive” for Washington, which maintains strict scrutiny over illicit finance tied to Iraqi crude..