Iraq has taken decisive action. On December 3, 2025, the Iraqi government officially froze the bank accounts of several Iran-backed militias. These groups include Lebanese Hezbollah, Yemen’s Houthis, and multiple Iraqi factions under the Popular Mobilization Forces (PMF).
The order came directly from Prime Minister Mohammed Shia al-Sudani. Authorities acted swiftly to block millions of dollars that flow through Iraqi financial channels.
Why Iraq Acted Now
First international pressure played a major role. The United States intensified sanctions on Iranian networks after recent attacks on shipping in the Red Sea and strikes on U.S. bases. Additionally Iraq wants to protect its own banking system from secondary sanctions.
Moreover Baghdad seeks greater independence from Tehran. Freezing these assets sends a clear message. Iraq will no longer serve as a financial highway for Iran’s regional proxies.
Groups Hit Hardest
Lebanese Hezbollah lost access to several accounts that funded operations inside Iraq. Similarly the Houthis saw funds frozen that previously supported missile purchases.
Key Iraqi militias such as Kataib Hezbollah, Asaib Ahl al-Haq, and Harakat al-Nujaba also faced immediate restrictions. Consequently these groups now struggle to pay fighters and buy weapons.
Immediate Reactions
Iranian officials condemned the move as “treason.” In addition, the U.S. State Department welcomed the decision and promised continued support. Within Iraq, some PMF leaders threatened protests, yet most units stayed quiet under government pressure.
What Happens Next
Analysts expect more freezes in the coming weeks. Iraq plans to audit dozens of additional accounts linked to Iranian entities. Furthermore the Central Bank will tighten rules on dollar transfers to Lebanon and Yemen.
In conclusion, this step marks a turning point. Iraq actively distances itself from Iran’s shadow network and moves closer to Arab and Western partners.
