New Bill Halts All U.S. Aid to Iraq Until Iran-Backed Militias Are Dismantled and Sanctions Hit Top Officials

This bill, officially titled the "Free Iraq from Iran Act," is a major foreign policy play that essentially puts the U.S. government on a war footing against Iranian influence in Iraq. It mandates a complete overhaul of how the U.S. deals with Baghdad, focusing on cutting off funding, imposing sanctions, and forcing the Iraqi government to dismantle specific paramilitary groups.

The All-or-Nothing Security Aid Ban

For anyone following U.S. foreign aid, this is the biggest shift: The bill imposes an absolute prohibition on all U.S. security assistance to the Iraqi Federal Government (SEC. 6). That means no federal department, including Defense and State, can spend any money on security aid for Iraq. This ban stays in place unless the U.S. President can certify three things: first, that Iraq has completely stopped supporting Iran-backed militias; second, that those militias have been visibly kicked out of Iraq’s security forces; and third, that lifting the ban is good for U.S. national security. If you’re a U.S. military contractor or part of a security assistance program, this means your work in Iraq is on pause until Baghdad meets some very difficult conditions.

FTO Designation for Key Iraqi Forces

Within 90 days of enactment, the Secretary of State is required to designate ten specific Iraqi militias—including the powerful Popular Mobilization Forces (PMF) and the Badr Corps—as Foreign Terrorist Organizations (FTOs) (SEC. 4). The PMF, while originally a militia, is partially integrated into Iraq’s official security structure, meaning this designation effectively labels a part of the Iraqi state as a terrorist group. The bill also mandates that no federal money can go to support these designated groups or any of their members (SEC. 5). This is a massive financial and political blow that could seriously destabilize Iraq’s internal security structure, potentially creating a vacuum that other groups could exploit.

Sanctions Hit Specific Iraqi Leaders

This legislation doesn't just target groups; it targets specific people. The Treasury Secretary is required to identify and immediately impose sanctions on individuals and entities that facilitate Iran's influence in Iraq (SEC. 7). Crucially, the bill names specific high-profile figures who must be sanctioned, including former Iraqi Prime Minister Nouri al-Maliki, Badr Corps leader Hadi al-Ameri, and the President of the Iraqi Federal Supreme Court, Jassem Abboud. This is a direct intervention into Iraqi domestic politics, sending a clear message that the U.S. is willing to use financial penalties against top Iraqi officials who are perceived as aligning with Tehran.

Cutting the Energy Lifeline

The bill also takes aim at a crucial economic link between Iraq and Iran: energy. It mandates sanctions to block the Iraqi government and private Iraqi companies from importing Liquefied Natural Gas (LNG) from Iran (SEC. 8). For Iraq, which still relies heavily on Iranian energy for its power grid, cutting off this supply could lead to significant energy shortages and instability. While the goal is to cut off revenue to Iran, the immediate impact on ordinary Iraqis could be felt through increased power outages and economic strain.

What This Means for the Strategy

To coordinate all these actions, the State Department, Treasury, and the U.S. Agency for Global Media (USAGM) must develop a detailed, unclassified strategy within 180 days (SEC. 3). This strategy must include plans to dismantle the militias, condition security aid, and ramp up U.S. media broadcasting in Iraq to expose the corruption and human rights abuses committed by Iran and its proxies. For Iraqi civil society and independent journalists, this provision offers a clear mandate for U.S. support, including intelligence assistance to counter Iranian disinformation campaigns. However, the overall strategy relies heavily on punitive measures—cutting aid and imposing sanctions—which could create significant friction with the very government the U.S. is supposedly trying to support.