ERBIL, Kurdistan Region of Iraq – Iraqi Prime Minister Mohammed Shia al-Sudani on Saturday directed the formation of a higher national committee to formulate a report on the US Treasury Department’s sanctions on the Muhandis General Company and other entities with perceived links to pro-Iran Iraqi groups.

The US Department of the Treasury on Thursday announced the imposition of sanctions on the Muhandis General Company and three Iraqi bank executives, accusing them of laundering money for Iran's Islamic Revolutionary Guard Corps (IRGC) and Iran-backed militias in Iraq, including Kataib Hezbollah and Asaib Ahl al-Haq, in extension of the country’s “maximum pressure” campaign on Iran.

“The Muhandis General Company is controlled by Popular Mobilization Commission Chief of Staff and U.S.-designated Kata’ib Hizballah leader Abd al-Aziz Malluh Mirjirash al Muhammadawi (Abu Fadak),” the US Treasury Department said in a statement. “Muhandis General Company, under the control of Kata’ib Hizballah, uses a sub-contracting method to divert funds from Iraqi government contracts.”

“The Prime Minister [Sudani] has directed the formation of a supreme national committee, comprising representatives from the Ministry of Finance, the Federal Board of Supreme Audit, the Integrity Commission, and the Central Bank, to review the relevant case and submit its report and recommendations within 30 days,” the premier's spokesperson Bassem al-Awadi said in a statement released Saturday.

The premier emphasized the importance of continuing the company’s services to “not impact the rights of citizens or workers,” Awadi continued.

The spokesperson stated that “the Government of Iraq views this unilateral measure as extremely unfortunate and incompatible” with the “spirit of friendship and mutual respect” that characterized the two countries’ bilateral ties.

Awadi claimed that taking such measures without prior consultation with the Iraqi government “constitutes a negative precedent” in how allied nations engage with one another.

“Iraq calls on its international partners, foremost among them the United States of America, to cooperate in exchanging technical and banking information,” he added.

Aqeel Meften Khafeef Al Baidani, president of Iraq’s National Olympic Committee, was one of the individuals affected by the sanctions due to his alleged ties with the IRGC. The committee quickly denied the US allegations against its president on Thursday, calling reports about his involvement in corruption “false and fabricated.”

The committee stated that the claims were part of “malicious campaigns” intended to harm its reputation and vowed to take legal action.

The action marks a continuation of Washington's efforts to hamper Tehran's influence in Iraq and across the Middle East.

On September 17, the US State Department designated four Iran-backed Iraqi armed groups as Foreign Terrorist Organizations (FTOs): Harakat al-Nujaba, Kataib Sayyid al-Shuhada, Harakat Ansar Allah al-Awfiya, and Kataib al-Imam Ali. Kataib Hezbollah has been designated since 2009, and Asaib Ahl al-Haq since 2020.

Iraq has long struggled to balance ties with the two rival countries, Iran and the US. While the US remains an important financial partner, Iraq is heavily under Iran’s influence due to allied militias and deep-rooted diplomatic and economic relations.