Financial Crime World

Iraq Takes Tough Stance on Money Laundering and Terrorism Financing

New Regulations to Combat Financial Crimes

Baghdad, Iraq - The Iraqi government has taken a significant step towards combating money laundering and terrorism financing by implementing new regulations for financial institutions and designated non-financial businesses and professions (DNFBPs).

Requirements for Financial Institutions and DNFBPs

  • Conduct thorough customer due diligence (CDD) procedures to identify and verify the identity of customers and beneficial owners.
  • Delay verification of customer identity until after the establishment of a business relationship.
  • Maintain records of customer transactions for at least five years and provide these records to competent authorities in a timely manner.

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Programs

  • Establish and implement AML/CFT programs, including policies, procedures, systems, and internal controls to mitigate identified risks.
  • Provide ongoing training for employees.
  • Establish an independent audit function to assess the effectiveness of their AML/CFT programs.

Prohibitions and Reporting Requirements

  • Prohibit financial institutions and DNFBPs from opening or maintaining anonymous accounts or accounts under fictitious names.
  • Report any suspicious transaction to the AML/CFT Office immediately.
  • Provide information and documents requested by the Office in a timely manner.
  • Submit records to courts and other competent authorities when required.

Terrorist Funds Freezing Committee

  • Established under Article 15 of the regulations, responsible for freezing the funds of terrorists or other assets of persons designated by the UN Sanctions Committee.
  • Consists of representatives from various government ministries and agencies, as well as the AML/CFT Office Director General and the Deputy Governor of the Central Bank of Iraq.

Goal of the Regulations

The implementation of these regulations is aimed at preventing money laundering and terrorism financing in Iraq and bringing financial institutions and DNFBPs into compliance with international standards.