Iraqi airline Fly Baghdad has denounced Iran-linked sanctions imposed by the United States on the company and its CEO, saying that the measures lack any substantial or moral evidence.

The US Office of Foreign Assets Control (OFAC) has sanctioned Iraq's Fly Baghdad and its Chief Executive Officer and owner, Basheer Al-Shabbani, for allegedly "providing assistance" to Iran's Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and its proxy groups in Iraq, Syria, and Lebanon. The airline denied being involved in any illegal activities.

Following the designations by OFAC, Iraq's Central Bank announced that all accounts belonging to the airline in the country have now been frozen. 

According to a statement released by the airline, they are prepared to pursue legal avenues to seek both material and moral compensation.

The company rebuked the sanctions, claiming they are "not based on any material or moral evidence."

"It is clear that the decision was based on misleading and unreal information that cannot stand up to the law," Fly Baghdad said.

The Treasury Department slapped a slew of sanctions on Fly Baghdad and its Executive Director, alleging their involvement in supporting Iranian groups.

In response to the sanctions, US Ambassador to Baghdad Alina Romanowski commented on Iran's alleged use of Fly Baghdad for illicit smuggling operations.

The US placed sanctions on several other companies in relation to the Hamas-Israel conflict triggered by Hamas' October 7 attacks, which killed 1,200 Israelis.

Since then, more than 25,000 Palestinians have died in Gaza as a result of Israel’s retaliatory bombing campaign on the strip.

The US Treasury said it had imposed sanctions on Hamas-affiliated financial networks in Gaza and financial facilitators that have played key roles in transferring funds from Iran’s al Quds (Jerusalem) Forces to Hamas.

Washington alleges that funds have been transferred via cryptocurrency exchanges. However, details on which platforms were used remain unclear.