Financial Crime World

Iraq Removed from EU’s High-Risk Money Laundering List

A Major Step Forward for Financial Cooperation and Investment

The European Union has officially removed Iraq from its list of countries deemed to be high-risk for money laundering, marking a significant milestone for the war-torn nation. The decision was announced earlier this month during a meeting between EU Ambassador Ville Varjola and Iraqi Prime Minister Mustafa al-Kadhimi in Baghdad.

Background

Iraq had been listed by the EU as having strategic deficiencies in anti-money laundering (AML) and combating the financing of terrorism (CFT) since 2016. The list has undergone regular changes over the years, with several countries being added or removed depending on their progress in implementing AML/CFT regulations.

The Decision

Varjola hailed the move as a major step forward for financial cooperation and investment between the two countries, but did not provide any specific reasons for the change. Al-Kadhimi welcomed the decision, crediting it to Iraq’s diplomatic efforts and vowing to continue working towards achieving the country’s desired status.

Global Consensus

The removal of Iraq from the EU’s high-risk list comes as the country slowly inches closer to forming a new government following its general election last October. It also marks a significant shift for Iraq, which had remained on the list despite efforts by the government and international organizations to address AML/CFT concerns.

  • The Paris-based Financial Action Task Force (FATF) removed Iraq from its grey list in 2018.
  • The United States has also removed Iraq from its list of high-risk jurisdictions for money laundering.
  • The United Kingdom, which was previously part of the EU, maintains its own list of countries deemed to be high-risk for money laundering and had also removed Iraq from its list earlier this year.

Implications

The removal of Iraq from the EU’s high-risk list is expected to have significant implications for the country’s financial sector, with potential benefits including:

  • Increased investment
  • Improved relations with international partners