Financial Crime World

Iraq Cracks Down on Financial Crime: Defining the Enemy and Imposing Punitive Measures

The Growing Concern of Financial Crime in Iraq

As Iraq continues to navigate the aftermath of decades of conflict, financial crime has emerged as a significant concern for the country’s authorities. To combat this growing threat, the Central Bank of Iraq (CBI) has implemented a series of measures aimed at preventing money laundering and financing terrorism.

Punitive Measures Against Financial Crime

According to Article 9 of the Money Laundering Law of 2004, individuals and entities found guilty of managing or attempting to manage financial transactions with the intention of supporting or financing illegal activities will face severe penalties. These include:

  • Fines: up to 40 million Iraqi dinars
  • Imprisonment: up to four years
  • Both: fines and imprisonment

Additionally, those responsible for concealing the location, source, ownership, or control of proceeds from illegal activities will also be subject to fines and imprisonment.

Holding Financial Institutions Accountable

The CBI has introduced measures to hold financial institutions accountable for violating anti-money laundering laws. This includes:

  • Issuing orders to cease activity
  • Assessing monetary penalties
  • Publishing enforcement actions
  • Withdrawing authorization to act as a financial institution

Combating Money Laundering and Terrorist Financing

To combat money laundering, the Money Laundering Reporting Office (MLRO) was established in accordance with Article 12 of the Law. The MLRO is responsible for collecting, processing, analyzing, and disseminating financial transactions subject to financial control and reporting.

The CBI and MLRO have also established cooperation with foreign authorities responsible for supervising financial institutions or markets, as well as with international organizations dealing with preventing money laundering and financing terrorism.

Reporting Requirements

The CBI has introduced regulations requiring individuals and entities to report the transfer of currency or other monetary instruments exceeding 15 million Iraqi dinars from within Iraq to outside Iraq or vice versa. This includes providing information on:

  • Origin
  • Destination
  • Route
  • Amount
  • Kind of monetary instruments transported

By implementing these measures, the CBI and MLRO are taking significant steps towards mitigating financial crime in Iraq and ensuring greater transparency in transactions.