Tehran Seeks to Consolidate Its Influence in Iraq

Iran still seeks to project power in the Middle East — not only by arming proxies and smuggling oil but also by shaping regional parliaments and policies.

Ali Larijani, secretary of Iran’s new Supreme National Security Council — the regime’s highest national security body — arrived in Baghdad on August 11 to sign a security agreement with Iraqi National Security Adviser Qasim al-Araji. However, Larijani is also seeking to rally support for legislation to codify the independent position of the Popular Mobilization Forces (PMF) in Iraq. The PMF is formally part of Iraq’s security apparatus, yet it comprises militias that operate with significant autonomy, many acting at Tehran’s behest.

Larijani’s visit follows multiple trips by Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF) commander Esmail Ghaani aimed at cementing Tehran’s influence in the country.

Iran Considers the PMF Vital to Maintaining Its Power in Iraq

The PMF advances the Islamic Republic’s agenda in Iraq through political interference. For example, its parliamentary allies secured increased financial allocations for Iran-backed fighters in the 2023 federal budget. Likewise, in July 2025, PMF militia Kataib Hezbollah, a U.S.-designated terrorist organization, opened fire on the Ministry of Agriculture to block a leadership transition.

The PMF also uses attacks on U.S. personnel to deter potential U.S. strikes on Iran, such as the January 2024 drone strike on Tower 22 in Jordan that killed three servicemen. Similarly, the militias’ territory functions as a key corridor for transferring weapons to other Iranian proxies.

PMF factions launder state salaries through prepaid cards for ghost members, exploiting currency exchange arbitrage to generate hundreds of millions of dollars annually for Iran’s network. They control lucrative oil fields and fund their activities through smuggling that diverts much of Iraq’s oil revenues. In July 2025, the U.S. Treasury sanctioned a network that disguised Iranian oil as Iraqi, thereby enriching the IRGC-QF.

Law Would Enshrine PMF as an Independent Force in Iraq

The Iraqi parliament has revived deliberations on a law, first introduced in March 2025 but later put on hold, that would cement the PMF as an autonomous security institution. The proposed law would grant the forces financial independence, delineate an organizational structure for the PMF, and elevate the group’s chairman to the level of minister. It also specifies the group’s security and national defense mission. The existing authorizing legislation for the PMF is brief and vague, enabling the militias to operate with independence. However, it leaves the door open to reform by a willing government.

Codifying the PMF’s institutional structure and funding pursuant to the proposed law would preclude future disarmament of the PMF or its integration into the Iraqi military — measures aimed at limiting Iranian influence — unless the parliament passes more legislation.

Legislation Faces Internal and External Opposition

The Iraqi parliament has previously withdrawn the law over domestic disagreements. Members of the Shiite governing coalition disagreed over the inclusion of a mandatory retirement age, which opponents considered a vehicle to force out PMF leaders, including the current head, Falih al-Fayyadh. In addition, Sunni and Kurdish blocs have protested the legislation over concerns that the PMF’s constituent militias backed by Iran operate outside of Baghdad’s directives.

Echoing Sunni and Kurdish warnings, U.S. Secretary of State Marco Rubio voiced concern that the legislation under consideration would “institutionalize Iranian influence and armed terrorist groups undermining Iraq’s sovereignty.”

Washington Should Weigh Sanctions to Block PMF’s Formal Entrenchment

America should sanction PMF leadership and financial offices for providing material and financial support to designated member militias who receive funding and supplies through membership in the PMF. Washington should also sanction financial institutions that cooperate with the PMF in supporting Iran-backed foreign terrorist organizations (FTOs).

Most importantly, if the PMF is enshrined in Iraq’s security landscape, the United States should reevaluate its Foreign Military Financing for Iraq, which has totaled $1.25 billion over the past decade, to ensure that Washington is not enabling Iraqi leaders to arm and support Iran-backed terrorists.

Bridget Toomey and Janatan Sayeh are research analysts at the Foundation for Defense of Democracies. For more analysis from the authors and FDD, please subscribe HERE. Follow Bridget and Janatan on X @BridgetKToomey and @JanatanSayeh. Follow FDD on X @FDD and @FDD_Iran. FDD is a Washington, DC-based, nonpartisan research institute focusing on foreign policy and national security.