By Jana Choukeir
BAGHDAD, Dec 4 (Reuters) - Iraq will remove Lebanon's Hezbollah and Yemen's Houthis from an asset-freeze list, officials said on Thursday, after the Iran-aligned groups were mistakenly included in an earlier government publication, prompting confusion and criticism.
The Justice Ministry's official gazette last month published a list of groups and entities whose funds would be blocked, naming both militant groups, a move that would likely have been welcomed in Washington and increased pressure on Tehran.
A letter from the acting deputy governor of the Central Bank asked the Committee for the Freezing of Terrorists’ Funds to delete the clause containing the names, two bank sources told Reuters.
Prime Minister Mohammed Shia al-Sudani said Iraq had approved freezing only the assets of entities and individuals linked to Islamic State and al Qaeda jihadists, in response to a request from Malaysia.
'HOLD ACCOUNTABLE THOSE RESPONSIBLE'
He said he had ordered an urgent investigation into the mistake "to hold accountable those responsible".
Sudani added that Iraq's political and humanitarian positions on "the aggression on our people in Lebanon or in Palestine" were "principled and not subject to exaggeration".
Hussain Mouanes, a lawmaker representing a bloc affiliated with Iraq's Kataeb Hezbollah, criticised the government on Thursday for what he called "irresponsible" conduct.
He accused the government of being a "subordinate authority that lacks the dignity to represent its people or defend Iraq's sovereignty".
The Iraqi committee said the November 17 publication had been intended to cover only individuals and entities linked to Islamic State and al Qaeda, in line with U.N. Security Council Resolution 1373.
Several unrelated groups were included because the list was released before final revisions were completed, it said, adding that the corrected version would appear in the official gazette.
Hezbollah and the Houthis did not immediately respond to requests for comment.
U.S. DRIVE TO CURB IRANIAN INFLUENCE
The United States has long sought to reduce Iran's influence in Iraq and other countries in the Middle East where Tehran has allies as part of its so-called Axis of Resistance, which has taken a battering by Israel since the war in Gaza erupted in 2023.
Iran views its neighbour and ally Iraq as vital to keeping its economy afloat amidst international sanctions. But Baghdad, a partner to both the U.S. and Iran, is wary of being caught in the crosshairs of U.S. President Donald Trump's policy to squeeze Tehran.
The Islamic Republic wields hefty military, political and economic influence in Iraq through its powerful Shi'ite militias and the political parties it backs in Baghdad. But Iran has been weakened over the past year by Israel's heavy blows to Tehran's militia proxies, raising its susceptibility to U.S. pressure.
(Reporting by Jana Choukeir in Dubai, Muayad Hameed in Baghdad; additional reporting by Maya Gebeily in Beirut and Mohammed Ghobari in Aden; writing by Maha El Dahan; editing by Michael Georgy, Sharon Singleton and Mark Heinrich)
