OFAC designates Iraq's International Development Bank in Iran shadow-banking sweep

The US Treasury on 15 October designated the International Development Bank for Investment and Finance (IDB), a Baghdad lender, under Executive Order 13902 as part of Operation Economic Outcast, saying the bank provides US dollar access and financial facilitation for Iran, according to its press release. The Office of Foreign Assets Control (OFAC) issued General License FF with the listing, authorising transactions "ordinarily incident and necessary to the wind down" of dealings with the bank until 12:01 a.m. Eastern Daylight Time on 30 October, the licence says.

What Treasury alleges

Treasury says the bank maintains ties to Iranian government entities and Iran-aligned militia groups, was founded by Iranian companies and receives capital from Bank Melli, which closed in Iraq under US sanctions. It adds that the bank reportedly sends profits to Iran in US dollars monthly. The release gives no dollar amount for the bank's activity. Treasury Secretary Scott Bessent said: "The noose is tightening around Iran's economy, and not even Iran's so-called allies can save it."

OFAC's listing gives the bank's address as Arasat Avenue, Karrada, Baghdad, its SWIFT code as IDBQIQBA and its establishment date as 11 January 2011, and tags it under the IRAN-EO13902 programme. It records the alternative name Iraq Development Bank and no linked parties. The documents reviewed record no statement from the bank or from Iraqi authorities.

The wider action

OFAC's page lists 16 individuals and 11 entities added to the Specially Designated Nationals list on 15 October. Treasury says the networks moved "hundreds of millions" of dollars through shell companies and foreign-exchange specialists across the Middle East and Asia, per the release. The entities include two Iranian offshore banks, Jazireh International Bank Company, affiliated with Bank Mellat, and Chabahar International Bank Overseas Company, affiliated with Bank Shahr. They also include Elitesphere Trading Co., Limited of Hong Kong, which Treasury says was used to move funds through a broker network, and four Iranian exchange houses.

Treasury names Sayyed Ruhollah Razavi, an Iranian national based in Dubai, as a top oil intermediary who sells Iranian oil and repatriates the revenue. Razavi controls Farzanegan Energy Pars Company, which Treasury says is developing a gas condensate refinery in Bushehr Province. It says Najafzadeh Exchange processed transactions worth hundreds of millions of dollars for Iranian financial institutions, and that Sadegh Bavi, owner of Bavi and Partners Exchange Company, is a Dominican and Iranian facilitator for the IRGC Qods Force and a money launderer. Seven employees of a Shahr Bank affiliate were also designated for acting on its behalf. The State Department separately designated Banco Internacional de Comercio S.A. (BICSA) of Havana under a Cuba-related order, for operating in the financial services sector of the Cuban economy, according to the same release and OFAC's page; the release adds that BICSA has provided services to the designated Iran-based Karafarin Bank since at least 2022. A FinCEN alert on Iranian abuse of religious charity networks was issued the same day, the Treasury said.

Consequences for banks

Treasury's release says foreign financial institutions that knowingly conduct or facilitate significant transactions for designated persons risk losing or being restricted from US correspondent or payable-through accounts. OFAC's alert of 5 October warned that foreign financial institutions transacting with sanctioned Iranian financial institutions "could be targeted at any time without advance notification". It cited Banque Misr UAE, Golden Global Bank in Türkiye and VTB Bank as examples of conduct that drew action.

Iraq is one of 22 jurisdictions on the Financial Action Task Force's list of jurisdictions under increased monitoring, updated on 19 June, according to the FATF page. That page carries no Iraq-specific wording.

• The expiry of General License FF at 12:01 a.m. EDT on 30 October, after which dealings with the bank are no longer authorised for wind-down, per the licence.
• Further actions under Operation Economic Outcast, which the 5 October alert says was announced on 24 August.
• Any response from the bank or the Iraqi authorities, none of which appears in the Treasury or OFAC documents.

Correction, 24 October 2026: An earlier version said BICSA was designated for serving an Iranian bank. It was designated for operating in the financial services sector of the Cuban economy; the Treasury release adds that it has provided services to Iran's Karafarin Bank since at least 2022.