Iraq may show how U.S. can squeeze Iran's trade partners

The U.S. Treasury Department is considering sanctions against Iraqi banks that have facilitated transactions with Iran, a move that could signal a new strategy to pressure Tehran by targeting its financial enablers in neighboring countries. Officials are weighing whether to impose penalties on as many as three Iraqi banks accused of helping Iran circumvent U.S. sanctions. This potential action comes as the Biden administration seeks to increase economic pressure on Iran, particularly in response to its nuclear program and support for regional proxies. The administration has previously sanctioned numerous Iranian individuals and entities, but the focus on third-country financial institutions represents a potential escalation. The outcome in Iraq could serve as a blueprint for how the U.S. might approach similar situations with other countries that maintain trade ties with Iran.