Iraq briefly blacklists Hezbollah & Houthis before reneging under Iranian pressure

The Iraqi government designated the Iran-backed Lebanese Hezbollah and Yemeni Houthis as terror groups before walking back the designation within several hours on Thursday.

The Official Gazette of the Iraqi Justice Ministry published a document, dated to Nov. 18, listing the two terror groups among organizations suspected of terrorism and financing extremism and freezing their assets.

The move was most likely carried out under heavy pressure from Washington, as the Iraqi government is seen as close to the Iranian regime.

Iran controls and funds several Iraqi Shiite terror groups, some of whom have been partially integrated into the state’s official military command structure.

However, the designation apparently led to immediate pressure from Iran, as the Iraqi central bank within several hours stated it “did not approve the freezing of those entities' funds, which was apparently published in error,” and asked the government to walk back the designation.

Prime Minister Mohammed Shia Al Sudani’s office said he ordered an inquiry into the matter to hold responsible “those who caused the error contained in the decision of the Committee for Freezing Terrorist Funds.”

Sudani’s statement added that freezing the funds was intended only for organizations tied to ISIS and Al Qaeda. “Our government will not compromise its stance when it comes to Lebanon and the Palestinians,” he added.

The chaotic actions of the Iraqi government highlight the intense power struggle over Iraq between the U.S. and the Iranian regime.

Sudani is currently seeking a second term in office after narrowly winning elections in November, but is facing accusations by Tehran-allied groups that he is too friendly to the U.S.

The Trump administration has been working to impose sanctions and disrupt funding for Hezbollah and the Houthis, which are part of the Iranian network of terror groups that stretches across the Middle East.

With the loss of Syria, Iraq has become a central node for funding and weapon smuggling actions across the Iranian network.

An unnamed Iraqi politician told the Emirati news outlet The National that the terror designation was taken back after pressure by Iran-linked political factions.

“Everything in Iraq has a political motive behind it, even though the decision has been issued and printed by the official Gazette means it is an official government stance,” he said.

He also added that the move had signaled that “Iraq is siding with Israel. We can say this is a form of a political conflict especially as the government is being formed.”

The politician was referring to a recent message conveyed to Iraq by U.S. Special Envoy Tom Barrack, who had warned that Israel might strike the Iran-backed terror groups in Iraq if they were to support Hezbollah in a new escalation in Lebanon, as they have done in the past.

Kurdish-Iraqi journalist Barzan Sadiq commented that “This rapid reversal exposes the deep divide inside Iraq’s institutions, between those trying to meet international financial obligations (U.S.) and political forces aligned with regional power centers (Iran).”

“Iran’s influence in Iraq runs far deeper than that of the US, which is why the government shifted so quickly. Today’s scene shows how decisions in Baghdad can be undone the moment they touch the interests of Iran-backed groups and political parties,” Sadiq wrote on 𝕏.

In August of this year, the U.S. pressured the Iraqi government into withdrawing a law that would have further formalized the integration the Iran-linked Popular Mobilization Forces (PMF) into the regular military.

Last week’s drone attack on a large gas field in the Kurdistan Region of northern Iraq was most likely carried out by PMF-affiliated militias, according to media reports.

It came shortly after U.S. officials visited the Kurdistan Regional Government’s Electricity Minister and just days ahead of an opening ceremony for the new U.S. consulate in the Kurdish capital of Erbil.