Iraq Tightens Grip on Anti-Money Laundering and Counter-Terrorism Financing Compliance
In a bid to strengthen its fight against financial crimes, the Iraqi government has implemented a raft of regulations aimed at preventing money laundering and terrorist financing in the country.
Comprehensive Legislation: The Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015
At the heart of Iraq’s anti-money laundering (AML) and counter-terrorism financing (CTF) framework is the Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015. This comprehensive legislation establishes a robust framework for detecting, preventing, and punishing financial crimes in Iraq.
Key Requirements for Iraqi Financial Institutions and Businesses
Iraqi financial institutions and businesses are required to adhere to several key AML regulations, including:
- Customer Due Diligence: Financial institutions must complete customer due diligence processes when establishing a business relationship or conducting transactions above a certain threshold.
- Know Your Customer (KYC) Rules: Covered entities must verify the identity of non-account holders who conduct transactions worth at least five million Iraqi dinars (approximately $4,250).
- Suspicious Transaction Reporting: Entities subject to AML regulations must notify suspicious transactions to Iraq’s financial intelligence unit and freeze relevant funds until guidance is obtained.
- Record-Keeping: Financial institutions and businesses must maintain accurate records of transactions and client interactions for at least five years.
Internal Controls and Policies
To ensure compliance with AML regulations, Iraqi financial institutions and businesses must adopt internal controls and policies, including:
- AML Training: Personnel must undergo regular training to detect and report suspicious activity.
- Internal Controls: Financial institutions and businesses must implement robust internal controls to prevent financial crimes.
Supervision and Enforcement
The Office of Combating Money Laundering and Terrorism Financing (Money Laundering Reporting Office) is responsible for supervising AML/CTF compliance in Iraq. The office receives, analyzes, and investigates reports of suspected money laundering or terrorist financing activities.
Financial institutions and businesses that fail to comply with AML regulations may face severe penalties, including fines and reputational damage. Therefore, it is essential for Iraqi financial institutions and businesses to prioritize AML compliance to avoid such consequences.