Compliance Regulations for Iraqi Fintech Companies
As the fintech industry continues to grow in Iraq, companies operating in this sector must be aware of the strict compliance regulations they are required to adhere to. The country’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws are designed to prevent, detect, and punish money laundering and terrorist funding.
Understanding AML and CTF Laws in Iraq
The Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015 is the primary legislative framework for AML and CTF in Iraq. This law establishes a comprehensive framework for preventing, detecting, and punishing money laundering and terrorist financing in the country.
Key Requirements for Iraqi Fintech Companies
Iraqi fintech companies are subject to various key requirements, including:
- Customer Due Diligence: Financial institutions and designated non-financial businesses and professions (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): 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.
- Suspicious Transaction Reporting: Entities subject to the AMLA must notify suspicious transactions to Iraq’s financial intelligence unit (FIU) and wait for instruction before proceeding with the transaction.
- Record-Keeping: Financial institutions and DNFBPs must preserve accurate and full records of their transactions and client interactions.
The Role of the Office of Anti-Money Laundering and Counter-Terrorism Financing
The Office of Combating Money Laundering and Terrorism Financing (Money Laundering Reporting Office) is responsible for receiving, acquiring, or investigating reports or information from reporting organizations concerning operations suspected of including original criminal proceeds, money laundering, or terrorism funding.
Compliance Programs for Iraqi Fintech Companies
Iraqi fintech companies are required to have a compliance program in place, which should include:
- Information Exchange: Information exchange on money laundering and terrorism financing with appropriate authorities in government departments and the public sector.
- International Cooperation: Participation in international organizations and conferences dealing with money laundering and terrorism funding.
- Database Creation: Creating a database for the AML/CFT office to use as a national center for analyzing and sharing information regarding suspected money laundering or terrorist financing.
Consequences of Non-Compliance
Failure to comply with these requirements can result in heavy penalties, therefore, Iraqi fintech companies must take compliance seriously and adopt the necessary measures to ensure they are in compliance with all applicable laws and regulations.