Financial Crime World

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Iraq’s Anti-Money Laundering Laws: A Comprehensive Framework to Combat Financial Crime

Iraq has taken a significant step towards combating financial crime by enacting a comprehensive Anti-Money Launderling and Countering Terrorist Financing Law No. 39 of 2015. This legislation aims to prevent, detect, and punish money laundering and terrorist financing activities in the country.

Key Requirements for Financial Institutions and DNFBPs

The law sets out key requirements for financial institutions, non-financial businesses, professions, and designated non-financial businesses and professions (DNFBPs) to adhere to. These requirements include:

  • Customer Due Diligence: Financial institutions and DNFBPs must complete customer due diligence processes when establishing a business connection or completing a transaction that exceeds a specific level.
  • Know Your Customer (KYC) Rules: Covered entities must verify the identification of non-account holders who conduct a transaction or series of transactions worth at least five million Iraqi dinars (approximately $4,250). Beneficial owners must also be recognized when creating an account and transacting more than 10 million Iraqi dinars (roughly $8,500).
  • Suspicious Transaction Reporting: Entities subject to the AMLA must notify suspicious transactions to Iraq’s financial intelligence unit (FIU) of suspicious transactions and wait for instruction before proceeding with the transaction. Suspicious transaction reports (STRs) must be completed for any transactions involving funds derived from illegal activities or money laundering, intended for the financing of crime (including terrorism), or over which a criminal organization has disposal power.
  • Record-keeping: Financial institutions and DNFBPs must preserve accurate and full records of their transactions and client interactions. These documents must be preserved for at least five years.
  • Internal Controls and Policies: To achieve compliance with AML rules, financial institutions and DNFBPs must adopt internal controls and policies, including policies and processes for identifying, reporting, and managing money laundering and terrorism financing threats.
  • Training: Financial institutions and DNFBPs are expected to conduct AML training for their personnel in order to ensure that they are aware of the dangers of money laundering and terrorism financing, as well as how to detect and report suspicious activity.

Office of Combating Money Laundering and Terrorist Financing

The Office of Combating Money Launderling and Terrorist 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, acquiring, or investigating reports or information from reporting organizations concerning operations suspected of including original criminal proceeds, money laundering, or terrorism funding.

Compliance Program

Financial institutions in Iraq, as well as certain non-financial businesses and professions, must have a compliance program in place to ensure adherence to the AML/CFT law. The program should include:

  • Information exchange on money laundering and terrorism financing with appropriate authorities
  • Participation in international organizations and conferences
  • Creating a database for the AML/CFT office
  • Organizing training sessions
  • Providing technical guidance
  • Notifications to regulatory authorities

Failure to Comply

Failure to comply with these requirements may result in hefty penalties; therefore, compliance must be taken seriously. With Sanction Scanner solutions, you can ensure that your firm is in compliance with Iraq’s anti-money laundering legislation.

Remember, compliance is key!