BAGHDAD (Dispatches) -- The United States has warned Iraq it could be designated a state sponsor of terrorism and face sanctions unless Baghdad disarms resistance groups by June 2027.
U.S. Chargé d’Affaires Steven Fagin delivered the warning in recent meetings with Iraqi government and political figures, citing a lack of tangible progress and a reported attempted drone attack on the U.S. Embassy in Baghdad, according to political sources cited by Shafaq News. 
The message: if Iraq fails to bring weapons outside state control under government authority by June 30, 2027, Washington will treat Baghdad as a terrorism sponsor and impose sanctions.
The deadline was set by Prime Minister Ali al-Zaidi, who has held separate talks with faction leaders resisting disarmament. 
Several factions, including Kataib Hezbollah, Harakat al-Nujaba and Kataib Sayyid al-Shuhada, have publicly refused to surrender their weapons, saying they will only do so under conditions including the full withdrawal of U.S. forces and stronger Iraqi air-defense capabilities.
Critics of the U.S. pressure say it inverts the reality on the ground. The factions Washington now seeks to disarm were the most potent forces against Daesh, which has shown signs of resurgence in recent weeks. 
Between late September and mid-October, six Daesh terrorist operations were recorded in Iraq, five of them in Kirkuk and Hawija, according to the Hammurabi Center for Studies. 
Security committee officials in Kirkuk confirmed three attacks against security forces in a single week, saying the strikes bore the fingerprints of Daesh cells attempting to reorganize.
The financial dimension of the pressure is equally contentious. Under arrangements dating to the 2003 invasion, Iraq’s oil revenues—more than 90 percent of state income—are deposited in Federal Reserve accounts in New York, and Baghdad must request cash shipments to access its own money. 
Washington suspended shipments for roughly four months in 2026, including a $500 million tranche, before resuming them in early July after what observers described as signs of political compliance. 
Reports indicate the United States has continued releasing funds in capped tranches, using access to Iraq’s own oil wealth as leverage to extract concessions on disarmament.
The arrangement has drawn sharp criticism inside Iraq. Officials and commentators describe it as financial coercion dressed up as oversight, noting that the suspensions did not freeze “foreign aid” but Iraq’s own property. 
The timing of the resumption, linked to concessions on the factions file, reinforced perceptions that Washington is using the country’s oil money as a weapon.
Against this backdrop, al-Zaidi’s position has come under scrutiny. Political sources and Iraqi observers describe the prime minister as a product of this coercive dynamic—installed and constrained by a framework in which U.S. financial leverage and security demands shape the parameters of Iraqi decision-making. 
His decision to set the June 2027 deadline, and his hesitation to sign off on a draft agreement with the factions that his own negotiating committee had reached, have been attributed by some Iraqi lawmakers to fear of American displeasure.