Why Did Iraqi PM al-Sudani Designate Then Remove Hezbollah and Houthis From Terror List?
Iranian legal expert Ali al-Tamimi: "Any decision published in the Official Gazette has passed through several bodies before publication ... the government may have backtracked on it out of fear or in response to public pressure."
Iraqi circles are abuzz with controversy following the decision to place Lebanon’s Hezbollah and Yemen’s Houthi movement on the “Terrorist Assets Freeze” list—a move that was reversed just hours later.
The incident, on Dec. 4, sparked widespread debate within Iraq’s political landscape, given its timing and its impact on the current government’s relationship with pro-Iranian forces, as well as on Prime Minister Mohammed Shia al-Sudani’s standing in the process of selecting the next prime minister.
The Iraqi decision was published in the official gazette, Al-Waqai’ Al-Iraqiya, and carried legal weight. Still, government officials later declared it an “unintentional error” that had been published before revision, amid a state of political confusion whose full implications remain unclear.
The decision, circulated on Dec. 4, had been published in the Iraqi Official Gazette on Nov. 17, 2025. Decision No. 61, issued by the Committee for Freezing Terrorist Funds on Oct. 28, 2025, stipulates the “freezing of terrorist funds” for 24 entities designated as terrorist organizations. Among them are Hezbollah in Lebanon, charged with “participating in a terrorist act,” and the Houthis (also known as Ansar Allah) in Yemen, also charged with “participating in a terrorist act.”
Based on this decision, a committee affiliated with the Central Bank of Iraq took legal measures to freeze the funds of the Lebanese Hezbollah and the Houthis in Iraq, only for the decision to be later reversed, with the statement that it was done “without verification” and was “an unintentional mistake.”
The Central Bank later announced that it had taken its measures based on “the decision published in the Official Gazette,” and that it was only implementing the law. All measures will be reversed before a decision is issued to remove the Lebanese Hezbollah and the Houthis from the sanctions.
Al-Sudani has ordered an investigation into the inclusion of the two armed groups on terrorism lists published in the Iraqi Official Gazette, and their inclusion in the asset freeze imposed on individuals and entities linked to al-Qaida and the Islamic State (ISIS). He described the inclusion as an error.
The Iraqi prime minister’s official X account published a statement that read: “Prime Minister Mohammed Shia al-Sudani has directed an urgent investigation to determine responsibility and hold accountable those responsible for the error in Decision No. 61 of 2025 of the Committee for Freezing Terrorist Funds, published in the Iraqi Official Gazette, Issue No. 4848, on Nov. 17, 2025. The decision contained inaccurate information, as the Iraqi side’s agreement to freeze funds, at the request of the Malaysian side, was limited to listing entities and individuals linked to the terrorist organizations ISIS and al-Qaida.”
The statement explained that the government’s stance on the conflicts in Lebanon and Palestine is rooted in principle, not political dealmaking, and reflects the collective will of Iraq’s diverse population. It stressed that Iraq supports the right of “brotherly peoples” to freedom and dignity in their own lands and rejects any attempt by “opportunists and bankrupt individuals” to distort that position.
“The government affirms that its political and humanitarian positions regarding the aggression against our people in Lebanon or Palestine are principled positions that are not subject to bargaining,” the statement said, adding that Baghdad has consistently backed the historical rights of those under occupation and condemned aggression, genocide, forced displacement, and other abuses ignored by the international community.
The Iraqi Committee for Freezing Terrorist Funds issued a statement saying that what was published was “before revision and will be corrected.”
“The committee received the list from the United Nations, but the Iraqi side’s approval was limited to including entities and individuals linked exclusively to ISIS and al-Qaida,” it continued. “The remaining names were not officially approved, and therefore the list was published in its entirety without noting the need to remove Hezbollah and the Houthi movement.”
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Ali al-Tamimi, an Iraqi legal expert, told The Media Line, “The truth is that any decision published in the Official Gazette has passed through several bodies before publication. Therefore, such a decision might not actually be wrong, but the government may have backtracked on it out of fear or in response to public pressure.”
He continued, “According to Iraqi law, decisions can be reversed or corrected. This requires republishing the corrected decision in the next issue of the Official Gazette. However, the reality is that the decision certainly passed through at least five bodies before being published in the Official Gazette.”
Al-Ahed TV, an Iraqi television channel affiliated with Qais Khazali, the leader of the Iranian-backed Asaib Ahl al-Haq militia, which is on the US sanctions list, published the names and photos of Iraqi officials, claiming they were responsible for publishing the decision to designate Hezbollah and the Houthis as terrorist organizations in the Official Gazette.
In a televised report, the channel stated that certain individuals were responsible for publishing and making the decision, and called for them to be held accountable.
Among the most prominent names were Nizar Nasser Hassio, director general of the Anti-Money Laundering and Counter-Terrorist Financing Office at the Central Bank and vice chairman of the Committee for Freezing Terrorist Funds, and Tariq Jassim Hussein, representative of the Iraqi National Intelligence Service and a member of the Committee for Freezing Terrorist Funds. The channel also published the names of five other officials representing the Ministries of Finance, Interior, and Justice, as well as the Central Bank of Iraq.
The publication of these names, positions, and photos sparked outrage among the Iraqi public, who considered it incitement to kill or harm these individuals and viewed the disclosure of their names as a crime.
The decision to designate Hezbollah and the Houthi movement as terrorist organizations in Iraq will significantly impact the formation of the next Iraqi government. Following the October elections, a marathon is underway to form a government and select a new prime minister.
This process is unfolding amid rivalry among the entities operating under the ruling coalition’s umbrella—a group of pro-Iranian Shia parties—and a political struggle driven by the current, highly popular Prime Minister al-Sudani, whose efforts run counter to the wishes of coalition leader and former Prime Minister Nouri al-Maliki, who is seeking to remove him.
Those loyal to Iran believe that al-Sudani’s government committed a grave error and that he should not be reappointed as prime minister. Meanwhile, those opposed to Iran argue that the Iraqi government must take such steps to free Iraq from Iranian influence.
Muwaffaq al-Khattab, an Iraqi political analyst, believes that the current government is “in a dire predicament.”
He told The Media Line, “It seems the caretaker government headed by Mohammed Shia al-Sudani is in serious trouble after the decision was published in the Official Gazette and made public to the Iraqi, Arab, and international communities. This decision froze the funds of both Hezbollah and the Houthis, designating them as terrorist entities.”
The Central Bank of Iraq’s justification, through its circular, of an oversight and ambiguity, is laughable
Al-Khattab argued that the Central Bank’s explanation did little to clarify what happened. In his view, “The Central Bank of Iraq’s justification, through its circular, of an oversight and ambiguity, is laughable.” He said this was not an accidental publication that officials were trying to correct, but rather a calculated move by al-Sudani and his allies to test reactions across the political spectrum. According to al-Khattab, it was meant to signal a possible shift away from Iran and suggest “a willingness to jump ship by appeasing the American side to secure a second term.”
He went on to say that the strategy quickly faltered. “It appears that the Iranian grip remains firm,” and the United States was still not ready to re-engage in what he described as the instability created by previous administrations. The situation escalated beyond what al-Sudani anticipated. “The conflict has now taken a different turn, reaching a point of no return,” al-Khattab said, adding that this is what pushed the prime minister to retreat from the decision before events “spiraled out of control,” particularly after it became clear he would receive no meaningful backing from the United States or the West for such a risky move.
It appears that the Iranian grip remains firm. …The conflict has now taken a different turn, reaching a point of no return.
Omar al-Janabi, an Iraqi political analyst, told The Media Line, “What happened was a trap set by former Prime Minister Nouri al-Maliki and the Coordination Framework. It’s well known that many positions in the Ministries of Justice, Interior, and others are affiliated with the Coordination Framework and include figures from within it. Therefore, such a decision could not have been made without their knowledge.”
He argued that the move was designed to undercut al-Sudani’s standing among Shia voters. “This blow dealt by Nouri al-Maliki to Mohammed Shia al-Sudani is intended to reduce his popularity among the Shia community,” al-Janabi said, adding that al-Sudani would never have taken such a step before securing his election or confirmation for a second term. He described the episode as “a political game, especially given the large number of supporters al-Sudani has in the Iraqi street.”
This blow dealt by Nouri al-Maliki to Mohammed Shia al-Sudani is intended to reduce his popularity among the Shia community
Al-Janabi went on to say that the prime minister now faces a no-win scenario. According to him, “There will be no room for Mohammed Shia al-Sudani after this blow, which has put him in a predicament.” If al-Sudani upholds the decision, he risks losing Shia support and potentially endangering his own safety. But if he reverses course, he said, the United States and Arab governments will view him as too weak to confront Iraq’s militias. In his words, al-Sudani is “in a very difficult situation.”
Aqeel al-Fatlawi, spokesman for the State of Law Coalition, the bloc to which former Iraqi Prime Minister Nouri al-Maliki belongs, tweeted on his official X account, “Mohammed Shia al-Sudani has been removed from all the Coordination Framework groups on WhatsApp.”
He continued, “The game is over, and there will be no second term,” indicating that al-Sudani will not be reelected as prime minister, despite his coalition winning the most votes in last month’s parliamentary elections.
Shia militias in Iraq have issued numerous death threats against al-Sudani, declaring that they “will not remain silent about this crime against the resistance.”
Unlike other Iraqi politicians, al-Sudani does not own or lead any militia or armed wing in Iraq. This means that his personal security and safety are solely the responsibility of government forces and the Iraqi army while he is in office. If he does not secure a second term, al-Sudani will lose all security provided to the prime minister and will have to rely on the lower levels of protection afforded to members of parliament.
