Financial Crime World

IRAQ: AML Guidelines for Small Businesses - What You Need to Know

Introduction

In an effort to combat money laundering and terrorist financing, the Iraqi government has put in place a comprehensive framework of Anti-Money Laundering (AML) regulations. As part of this effort, small businesses operating in Iraq must adhere to strict guidelines to ensure compliance.

What are AML Regulations?

According to the Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015, all financial institutions, non-financial businesses, professions, and designated non-financial businesses and professions (DNFBPs) are required to implement AML measures. These measures include:

  • Customer Due Diligence (CDD): Financial institutions and DNFBPs must conduct thorough CDD on clients, including verifying their identities and the purpose of the business relationship or transaction.
  • Know Your Customer (KYC) Rules: Covered entities must verify the identity of non-account holders conducting transactions worth at least 5 million Iraqi dinars (approximately $4,250). Beneficial owners must also be identified when creating an account or transacting more than 10 million Iraqi dinars (roughly $8,500).
  • Suspicious Transaction Reporting: Entities subject to AML regulations must report suspicious transactions to Iraq’s Financial Intelligence Unit (FIU) and freeze the relevant funds until guidance is obtained.
  • Record-keeping: Financial institutions and DNFBPs must maintain accurate and complete records of their transactions and client interactions for at least five years.
  • Internal Controls and Policies: Companies must adopt internal controls and policies to identify, report, and manage money laundering and terrorism financing threats.
  • Training: Financial institutions and DNFBPs are required to provide training to their personnel on AML and CTF regulations to ensure they can detect and report suspicious activity.

Role of the Office of Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT)

The Office of AML/CFT plays a crucial role in enforcing AML regulations. The office:

  • Receives reports
  • Analyzes information
  • Suspends financial transactions if necessary
  • Transmits communications to initiate legal action

Compliance Program

Financial institutions and DNFBPs must have a compliance program in place to ensure they are meeting their AML obligations. This includes:

  • Exchanging information with authorities
  • Participating in international organizations
  • Creating a database for the AML/CFT office
  • Providing training to staff

Consequences of Non-Compliance

Failure to comply with these regulations can result in severe penalties, making it essential for small businesses operating in Iraq to prioritize compliance.

Conclusion

With Sanction Scanner’s solutions, you can ensure your business is meeting its AML obligations and avoid potential fines.