The United States imposed sanctions on networks that it said support Iran-backed terrorist groups Kataib Hezbollah and Lebanese Hezbollah, expanding a broader economic campaign to disrupt Tehran’s regional proxy network and cut off its sources of funding.
The Treasury Department’s Office of Foreign Assets Control (OFAC) said on Thursday that the measures target companies and individuals operating in Iraq, Lebanon, the United Arab Emirates, and Turkey that support the groups by providing financial, logistical, procurement, and sanctions-evasion support.
OFAC said the groups fuel Iran’s destabilizing influence in the Middle East, endanger U.S. and partner forces, and facilitate extensive sanctions evasion schemes.
“Today’s targets underscore the global reach of the Iranian regime’s illicit networks and the serious threat posed by the terrorist proxy organizations that operate on its behalf,” it said.
Both Iraq-based Kataib Hezbollah (KH) and Lebanese Hezbollah have been designated as terrorist organizations under U.S. legislation. The office said Kataib Hezbollah is the most influential faction within Iraq’s Popular Mobilization Forces (PMF), an umbrella organization of paramilitary forces that are part of the Iraqi government’s security apparatus.
“Through this influence, KH is a major beneficiary of the more than $2.6 billion in annual Iraqi government funding allocated to the PMF, and they instead siphon the Iraqi people’s wealth to support the Iranian regime, increase their luxurious life styles, and support their own terrorist efforts,” OFAC said.
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Among those sanctioned were four members of Kataib Hezbollah, a senior official within the Popular Mobilization Commission, the Iraqi government body that oversees the PMF, and a UAE-based Iraqi businessman and his company.
The department also announced sanctions against Abbas Jawad Kadhim Al-Tameemi, whom it described as a senior official within the PMC, alleging he facilitated military procurement benefiting Iran’s Islamic Revolutionary Guard Corps.
The Treasury said the company supplied the PMC with goods and services, including military-application equipment. A representative of an Iraqi PMC-affiliated procurement company and its representative were sanctioned for allegedly helping acquire defense-related equipment for the PMC and Iran-linked networks.
Financial Channels Targeted
The Treasury sanctioned people and companies it said helped move money from Iran to Lebanese Hezbollah, including money exchangers, financial facilitators, and businesses involved in gold trading and currency exchange. It also targeted two Iraqi businessmen and a Dubai-based company accused of helping transfer funds from Iraq to Iran.
Separately, OFAC announced a $1.43 million civil settlement with an individual accused of violating U.S. sanctions by providing consulting services to an Iranian software company and conducting other Iran-related financial transactions.
A flag of Iraq-based Kataib Hezbollah flutters against the backdrop of people taking a swing ride at an amusement park during Eid al-Fitr celebrations in Baghdad on March 21, 2026. Ahmad Al-Rubaye/AFP via Getty Images
The latest measures follow another round of U.S. sanctions announced earlier this week and targeting Iran’s aviation sector.
Sanctions Implications
The sanctions are part of the Trump administration’s “Operation Economic Outcast,” an initiative aimed at isolating Iran economically and increasing pressure on its regional allies.
U.S. Treasury Secretary Scott Bessent said the operation targets those who “continue to stand with the failing Iranian regime.”
“Whether they finance terror, launder money, or help Iran evade sanctions, we will find them, cut them off from the U.S. financial system, and dismantle the networks keeping the regime afloat,” Bessent said.
Under the measures, property and interests in property belonging to designated individuals and entities that are subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from conducting transactions with them unless authorized by OFAC.
The Treasury warned that foreign financial institutions could face secondary sanctions if they knowingly conduct significant transactions involving sanctioned persons.
The department said it would continue pursuing sanctions enforcement as part of the operation and encouraged members of the public to report suspected sanctions violations through the Treasury’s whistleblower program.
