On June 26, 2024, FinCEN issued a final rule under the USA PATRIOT Act Section 311 that severs Al-Huda Bank from the United States financial system by prohibiting domestic financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of Al-Huda Bank, an Iraqi bank that serves as a conduit for terrorist financing. Al-Huda Bank is a foreign financial institution based in Iraq found to be of primary money laundering concern.
In a statement, Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson said that the final rule ensures both the integrity of the Iraqi and international financial systems. Pursuant to this final rule, covered financial institutions are now prohibited from opening or maintaining correspondent accounts for or on behalf of Al-Huda Bank, and are required to take reasonable steps not to process transactions for the correspondent account of a foreign banking institution in the United States if such a transaction involves Al-Huda Bank. The final rule also requires covered financial institutions to apply special due diligence to their foreign correspondent accounts that is reasonably designed to guard against their use to process transactions involving Al-Huda Bank.
Read FinCEN’s press release here.
The final rule can be found here.
