Financial Crime World

Iraq’s Central Bank Cracks Down on Financial Institutions with Stricter Compliance Procedures

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In a bid to curb financial crimes, the Central Bank of Iraq has introduced stricter compliance procedures for banks operating in the country. The new regulations aim to prevent money laundering, terrorist financing, and proliferation of weapons of mass destruction.

Compliance Measures

To ensure compliance with these regulations, Elaf Islamic Bank, one of Iraq’s leading financial institutions, has taken proactive steps. The bank has revamped its compliance department, which is responsible for:

  • Monitoring and assessing the effectiveness of anti-money laundering and combating terrorism financing policies
  • Identifying and escalating suspicious activities to management and regulatory bodies

KYC Policies

The compliance team at Elaf Islamic Bank ensures that all basic banking practices are strictly followed, including:

  • Know your customer (KYC) policies: enabling customer due diligence and classification based on risk profile
  • Monitoring transactions for suspicious activity

Regular Updates and Training

In addition to its proactive measures, the bank regularly updates its procedures and processes to incorporate changes in regulatory guidelines. Employees receive specific training on compliance issues to equip them with skills to:

  • Identify suspicious transactions
  • Prevent non-compliance

Independent Audits

Elaf Islamic Bank conducts quarterly and yearly independent audits to ensure that its business operations comply with Central Bank of Iraq and international regulatory bodies’ rules on anti-money laundering, combating financial terrorism, and non-proliferation of weapons of mass destruction.

Compliance Policy

The bank’s compliance policy requires its operations to be carried out in conformity with:

  • The highest ethical standards
  • Applicable laws and regulations of Iraq
  • International best practices

Additionally, the policy mandates compliance with internal policies, standards, guidelines, and procedures approved by the Board from time to time.

FATCA Compliance

In a significant development, Elaf Islamic Bank has declared itself “FATCA compliant” under the Model 2 IGA status. The bank has been assigned a Global Intermediary Identification Number (GIIN) by the Internal Revenue Service (IRS), which is L7VZ9D.99999.SL.368.

This compliance with Foreign Account Tax Compliance Act (FATCA) regulations will enable Elaf Islamic Bank to continue operating in Iraq while adhering to international standards on tax transparency and information exchange.