ERBIL, Kurdistan Region of Iraq - The US Treasury Department on Thursday announced the imposition of sanctions on entities and individuals that support Kataib Hezbollah, a pro-Iran Iraqi militia, which they accuse of "fuelling Iran’s destabilizing influence in the Middle East."

The sanctions package, which also targets Lebanese Hezbollah, comes as part of Operation Economic Outcast, a US initiative launched by Treasury Secretary Scott Bessent in August that seeks to target third parties facilitiating Iranian oil exports and the country's shadow economy in a bid to ramp up pressure on Tehran.

"Spread across Iraq, Lebanon, the United Arab Emirates, and Turkey, 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," the Treasury said in a statement.

Kataib Hezbollah (KH) is "the most influential faction within Iraq’s militia-dominated Popular Mobilization Forces (PMF)," the statement continued. "KH members occupy key leadership positions within the PMF’s governing body, the Popular Mobilization Commission (PMC), including positions that oversee the PMF’s intelligence, missiles, anti-armor, and special forces directorates."

"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."

The Treasury declared that sanctions would target "senior KH Commander" Ali Hasan Farhan al-Lami and three members of the faction: Hussein Ahmed Hussein al-Dhuhaibawi, Mohamed Ameen Fadhil Ali al-Shaikhli, and Karrar Mohammed Qasim al-Hraishawi.

"Since February 2026, KH and the other Iranian-aligned militia groups in Iraq have conducted hundreds of attacks against US and Coalition forces in Iraq and across the region."

Designated as a terror organization by Washington since 2009, Kataib Hezbollah has served as a bulwark of Iranian influence on Iraq, playing a pivotal support role for Tehran under the wider regional proxy structure known as the "Axis of Resistance."

Unlike some factions that have agreed to divorce themselves from the PMF and submit to Baghdad's authority, the pro-Iran group has rebuffed the September 30 disarmament deadline set by Iraqi Prime Minister Ali al-Zaidi, with a senior official in June saying that "resistance factions will not hand over a single bullet or gun."