In a recent development, the United States has taken action to restrict 14 Iraqi banks from conducting dollar transactions, according to a report by the Wall Street Journal. Citing U.S. officials, the ban was jointly imposed by the Treasury Department and the Federal Reserve Bank of New York as part of a broader crackdown on the illicit movement of U.S. currency to Iran.

The move comes after the United States discovered evidence indicating that these Iraqi banks were involved in money laundering and fraudulent activities, with some of the transactions possibly benefiting individuals under international sanctions. This has raised concerns that Iran, a country facing severe U.S. sanctions, could indirectly benefit from the flow of funds through these banks.

A senior U.S. official was quoted by the Journal as saying, "We have strong reason to suspect that at least some of these laundered funds could end up going to benefit either designated individuals or individuals who could be designated. And of course, the primary sanctions risk in Iraq relates to Iran."

The list of banks subjected to the ban includes Al Mustashar Islamic Bank, Erbil Bank, World Islamic Bank, and Zain Iraq Islamic Bank, among others. However, Iraq's private banks association did not immediately respond to the news report's request for comment.

Both the Iraqi government and the U.S. authorities, including the Treasury Department and the New York Fed, have yet to release any official statements regarding the matter.

The situation is linked to Iran's ongoing struggle to access billions of dollars in assets held in various countries due to U.S.-led sanctions. As part of its efforts to exert pressure on Iraq and support its push for self-sufficiency, the United States has been urging the oil-rich nation, which is the second-largest producer within the OPEC group, to curb the flow of dollars to neighboring Iran.

As the situation unfolds, further details are likely to emerge regarding the extent of the financial activities and the impact on both the Iraqi banking sector and Iran's financial situation.