Financial Crime World

Iraq Toughens Anti-Money Laundering Rules to Combat Terrorism Financing

In an effort to combat money laundering and terrorist financing, Iraq has strengthened its anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. The country’s AML/CTF framework, established by Law No. 39 of 2015, aims to deter, detect, and punish money laundering and terrorist funding.

Key Requirements

The following key requirements apply to financial institutions, non-financial businesses, professions, and designated non-financial businesses and professions (DNFBPs):

  • Customer Due Diligence: Complete customer due diligence processes when establishing a business connection or completing transactions exceeding specific levels.
  • Know Your Customer (KYC): Verify the identification of non-account holders conducting transactions worth at least five million Iraqi dinars ($4,250) and recognize beneficial owners when creating accounts and transacting more than 10 million Iraqi dinars ($8,500).
  • Suspicious Transaction Reporting: Report suspicious transactions to Iraq’s financial intelligence unit (FIU) and freeze funds until guidance is obtained.
  • Record-Keeping: Maintain accurate records of transactions and client interactions, preserve documents for at least five years, and adopt internal controls and policies.
  • Training: Conduct AML training for personnel and ensure compliance with regulations.

Financial Institutions and DNFBPs

Financial institutions and DNFBPs are required to:

  • Establish a compliance program to achieve AML goals
  • Maintain accurate records of transactions and client interactions
  • Preserve documents for at least five years
  • Adopt internal controls and policies
  • Conduct AML training for personnel

The Office of Combating Money Laundering and Terrorism Financing

The Office of Combating Money Laundering and Terrorism Financing (Money Laundering Reporting Office) was established within the Central Bank of Iraq in 2007 and reconfigured in 2015 with complete independence. The office’s main responsibilities include:

  • Receiving and investigating reports
  • Analyzing information
  • Suspending financial transactions
  • Transmitting communications to initiate legal action

Penalties for Non-Compliance

Failure to comply with AML regulations can result in hefty penalties. To ensure compliance, firms should prioritize customer due diligence, record-keeping, and suspicious transaction reporting.

Sanction Scanner Solutions

Sanction Scanner solutions can help businesses ensure compliance with Iraq’s anti-money laundering legislation by providing:

  • Information exchange
  • Participation in international organizations
  • Creating a database
  • Organizing training sessions