The victory of the Islamic Revolution of Iran in 1979 and its revisionist nature quickly placed the revolution under sanctions imposed by major global powers. The rise of Donald Trump as President of the United States further intensified the nature of U.S. sanctions against Iran. During this period, the Trump administration utilized all available sanction tools to punish and weaken Iran’s power. Iraq, due to its bilateral economic and political interactions with Iran, emerged as a key player in mitigating the pressure of these sanctions, thereby facing accusations from the U.S. administration. The present study aims to investigate the role and position of Iraq in the U.S. financial sanctions policy against Iran. The main research question is: Why has Iraq become the new focal point of U.S. sanctions policies against Iran? The research hypothesis suggests that the U.S.'s influence over Iraq’s political and economic institutions has enabled the implementation of sanctions against Iran by controlling Iraq’s economic system. The findings of the study reveal that U.S. control over Iraq’s economic institutions, particularly its banking system, has created barriers to currency exchanges between Iran and Iraq. This control, coupled with the maintenance of sanctions on Iran, contributes to the erosion of Iran’s regional capabilities. Such measures aim to limit Iran’s access to financial resources and eliminate its presence in Iraq’s markets. This study adopts a descriptive-analytical methodology and relies on library resources and various documents for its analysis.