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Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) Regulations

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Article 12: Financial Institutions’ AML/CFT Obligations

Financial institutions and designated non-financial businesses and professions are required to establish and implement effective Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) programs.

Program Requirements

• Conduct a risk assessment for money laundering and terrorism financing.
• Establish policies, procedures, systems, and internal controls to mitigate identified risks.
• Implement integrity standards when selecting employees.
• Provide ongoing training for officers and employees to identify suspicious transactions and behavior.
• Have an independent audit function to assess the effectiveness of policies and procedures.

Article 13: Application of AML/CFT Obligations Abroad

Financial institutions operating in Iraq must apply AML/CFT obligations to their branches and majority-owned subsidiaries abroad, unless these provisions contradict local laws.

Notification Requirements

If financial institutions encounter AML/CFT laws that prohibit implementation, they must notify the supervisory authority.

Article 14: Establishment of an Administrative Department for AML/CFT

Financial institutions are required to establish a special administrative department for combating money laundering and terrorism financing to follow up on the implementation of AML/CFT provisions.

Article 15: Terrorist Funds Freezing Committee

A Terrorist Funds Freezing Committee will be formed at the Secretariat of the Bank to freeze funds of terrorists or other assets designated by:

• The UN Sanctions Committee.
• Local authorities.
• Other countries, based on UNSC resolutions.

Committee Composition

The committee consists of representatives from various government ministries and agencies.