US sanctions Cuban, Iraqi banks over ties to Iran

The U.S. government has imposed sanctions on a Cuban state-owned bank and an Iraqi bank, accusing both of aiding Iran's access to the global financial system. Secretary of State Marco Rubio designated Cuba’s Banco Internacional de Comercio S.A., known as BICSA, stating it has provided services since at least 2022 to Iran’s Karafarin Bank. The U.S. had previously sanctioned Karafarin in 2020. Separately, the Treasury Department designated Iraq’s International Development Bank for Investment and Finance, alleging it facilitated transactions for Iran and granted it access to U.S. dollars. Treasury also targeted two Iranian banks operating in free trade zones. These actions are part of Operation Economic Outcast, a campaign launched by Treasury Secretary Scott Bessent in August to sever Iran’s access to international finance. Rubio stated that Cuba has long been permitted to function as an outpost for "malign actors and terror groups," including Iran. He emphasized that the administration would not accept a hostile foreign presence within 100 miles of U.S. territory. The designation freezes any BICSA assets under U.S. jurisdiction, and foreign banks and companies dealing with it face potential secondary sanctions. The State Department did not specify the nature of services BICSA provided to Karafarin. This marks the third major Cuban bank targeted by the U.S. this year, following sanctions on Banco Financiero Internacional in June and Banco Exterior de Cuba in September. Cuban Foreign Minister Bruno Rodríguez criticized the U.S. for pressuring countries to alter their voting positions against the U.S. embargo at the UN General Assembly on October 28. Meanwhile, the Treasury Department’s actions against Iranian financial networks align with broader efforts to restrict Iran’s access to international finance. Rubio reiterated the administration’s commitment to identifying and dismantling Cuba’s financial and security ties with Iran and other perceived adversaries. The sanctions prohibit any BICSA assets in the U.S. or controlled by U.S. citizens, while also warning foreign entities that certain dealings with sanctioned parties could lead to further sanctions. An executive order permits penalties against foreign individuals operating in Cuba’s financial, energy, defense, mining, or security sectors. Karafarin, listed on the Treasury’s Specially Designated Nationals list, faces restricted access to the global financial system, making any financial support from Havana particularly valuable. Historically, Cuba and Iran have maintained close relations, rooted in mutual opposition to the U.S. Fidel Castro visited Tehran in 2001 and supported Iran’s nuclear program. In 2006, Cuba was among only three nations, along with Syria and Venezuela, to oppose referring Iran’s nuclear file to the U.N. Security Council. A July State Department report identified Iran as one of Cuba’s primary strategic partners, accusing Havana of offering intelligence, political, and strategic backing to Tehran and its proxies. Following the U.S.-Israel conflict with Iran in February, Cuba condemned the attacks as violations of international law. After the death of Supreme Leader Ali Khamenei, Cuban leader Miguel Díaz-Canel expressed condolences and reaffirmed Cuba’s solidarity with Iran. The recent sanctions reflect ongoing tensions between the U.S. and Cuba, with the latter viewing the measures as part of a broader effort to isolate and penalize its government.