Financial Crime World

Iran-Backed Militias in Iraq Wield Growing Political Power

As the Islamic State (ISIS) has been pushed back, Iranian-backed militias in Iraq have consolidated their gains on the battlefield, translating their military prowess into political influence and criminal enterprises. These groups, backed by Tehran’s support, have entrenched themselves within the Iraqi government, either through electoral victories or by infiltrating public agencies.

Criminal Networks Thrive

  • The country’s criminal networks are diverse, comprising old and new players, including militias that leverage existing networks to further their illicit activities.
  • Tribal structures have become increasingly intertwined with criminal organizations, acting as gatekeepers at key border points exploited by traffickers.
  • These tribal criminal networks capitalize on porous desert borders, weak border control, and corrupt officials.

Money Laundering and Financial Flows

  • Iraq is highly vulnerable to money laundering, lacking a structured banking system and effective anti-money laundering mechanisms.
  • Criminal syndicates take advantage of lax law enforcement and the country’s cash-based economy, allowing illicit funds to flow easily in and out of the country.
  • Despite efforts to implement international laws and conventions, progress has been slow.

Economic and Financial Challenges

  • Iraq’s economic and financial environment remains fragile, with oil exports dominating the economy.
  • The government faces pressure to increase production and public revenue, but ongoing inflation, unemployment, and stagnant wages strain the country’s economic regulatory capacity.
  • Capital flight poses a major challenge, exacerbating the unemployment crisis and affecting high debt volumes and low business volumes.

Civil Society and Social Protection

  • Victim and witness support services in Iraq are limited, with significant deficiencies persisting despite government efforts to identify and assist human trafficking victims.
  • The healthcare system is overburdened, unable to provide adequate support for substance abuse, which has increased among the Iraqi population.
  • Welfare shelters for female victims exist mainly in Baghdad but operate underground with minimal resources due to lack of state recognition and support.

Activists Face Harassment and Intimidation

  • Iraqi civil society is active, but faces significant challenges due to a lack of transparency regarding public information.
  • Activists, journalists, and lawyers who criticize the government continue to be harassed, kidnapped, attacked, or murdered.
  • A proposed cybercrime law could further tighten governmental control over online activities.

As Iran’s influence in Iraq grows, concerns about the country’s stability and security have intensified. The international community must remain vigilant in monitoring the situation and supporting efforts to combat organized crime and promote transparency and accountability within Iraqi institutions.