Financial Crime World

Iraqi Financial Crimes: Definition and Punishment

The Iraqi government has taken significant steps to combat financial crimes by defining what constitutes money laundering and introducing punitive measures against those found guilty.

Definition of Money Laundering

According to Article 2 of Iraq’s Money Laundering Law of 2004, anyone who manages or tries to manage financial transactions with the intention of using them for illegal activities is subject to legal accountability. This includes individuals responsible for transferring or sending cash and financial means to entities or persons knowing that it will be used to support or finance illegal activities.

Punitive Measures

The law also states that those who attempt to conceal the location, source, ownership or control of the proceeds of illegal activities can face:

  • Fines of up to 40 million Iraqi dinars
  • A prison sentence of four years

Additionally, individuals found guilty of providing financial support to terrorist groups or working on the shipment of armed conflict can be fined 20 million Iraqi dinars or sentenced to two years in prison.

Central Bank’s Role

The Central Bank of Iraq has been granted the right to conduct audits of financial institutions it is responsible for, monitoring for any suspicious financial activity that may be subject to money laundering or financial crime. The bank can take a range of punitive measures against institutions found guilty of violating anti-money laundering laws, including:

  • Issuing an order to cease activity
  • Assessing monetary penalties
  • Publishing the results of enforcement actions
  • Withdrawing authorization to act as a financial institution

Money Laundering Reporting Office

The Money Launderling Reporting Office was established in accordance with Article 12 of the Law to collect, process, analyze and disseminate financial transactions subject to financial control and reporting. The office is independent in its operations and has its own duties and responsibilities, including:

  • Participating in implementing Iraqi policy on preventing money laundering, financing of crime and terrorism
  • Requesting foreign authorities for information and documents required for the performance of their duties
  • Sharing information and documents with foreign authorities that provide reciprocal services

Reporting Requirements

According to Article 21 of the Law, individuals are required to report the transportation of currency or other monetary instruments greater than 15 million Iraqi dinars from or to Iraq. The report must include:

  • Information on the legal capacity in which the person filing the report is acting
  • The origin and destination of the currency and/or monetary instruments
  • Additional details

Conclusion

The Iraqi government’s efforts to combat financial crimes are seen as crucial in maintaining economic stability and security in the country. With the definition of money laundering and introduction of punitive measures, Iraq has taken significant steps towards addressing this global concern.