Financial Crime World

Iraq Enacts Stringent Measures to Combat Financial Crime

Strengthening Anti-Money Laundering and Countering Terrorist Financing Framework

Iraq has recently enacted a comprehensive framework for identifying, detecting, and punishing financial crimes such as money laundering and terrorist financing through the Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015.

Key Requirements Under the Law

  • Financial institutions and non-financial businesses and professions (DNFBPs) must implement customer due diligence measures, including:
    • Verifying clients’ identities
    • Verifying the purpose of transactions exceeding a certain threshold
    • Identifying non-account holders conducting transactions worth at least five million Iraqi dinars
  • Suspicious Transaction Reporting: entities must notify Iraq’s financial intelligence unit (FIU) of suspicious transactions and freeze relevant funds until further guidance is obtained
  • Record-keeping: entities must preserve accurate and full records of transactions and client interactions for at least five years

Compliance Obligations

  • Financial institutions and DNFBPs are required to have a compliance program in place, which includes:
    • Facilitating information exchange on money laundering and terrorism financing with government authorities
    • Participating in international organizations and conferences
    • Creating a database for AML/ CFT analysis
    • Providing training sessions for staff

Consequences of Non-Compliance

Failure to comply with these requirements can result in hefty penalties, emphasizing the importance of ensuring that financial institutions and DNFBPs take compliance seriously.

Supporting Compliance Efforts

Sanction Scanner solutions can help businesses ensure they are meeting their obligations under Iraq’s anti-money laundering legislation. By providing a comprehensive range of tools and services, Sanction Scanner can assist organizations in navigating the complexities of AML/ CFT regulations and maintaining compliance with changing requirements.

The Office of Combating Money Laundering and Terrorism Financing

Established within the Central Bank of Iraq in 2007, this office plays a key role in enforcing AML/CFT regulations. Its responsibilities include:

  • Receiving and investigating reports of suspected criminal proceeds, money laundering, or terrorist financing
  • Communicating with reporting organizations to gather additional information