Financial Crime World

Iraq’s AML/CFT Regulations Under Global Scrutiny

Combating Money Laundering and Terrorist Financing in Iraq

As part of its efforts to combat money laundering and terrorist financing (AML/CFT), the Iraqi government has been assessed by the Financial Action Task Force (FATF) on its technical compliance with global standards. The latest follow-up report for 2023 reveals a mixed picture of progress.

Progress Made, but Challenges Remain

Iraq received largely compliant ratings in several areas, including:

  • Assessing risk and applying a risk-based approach (R.1)
  • National cooperation and coordination (R.2)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Customer due diligence (R.10)
  • Record keeping (R.11)

However, Iraq faced partially compliant ratings in several other areas, including:

  • Confiscation and provisional measures (R.4)
  • Terrorist financing offence (R.5)
  • New technologies (R.15)

The country was also found to be non-compliant in a few areas, including:

  • Transparency and beneficial ownership of legal persons (R.24)
  • Regulation and supervision of designated non-financial businesses and professions (DNFBPs) (R.28)

Call for Strengthening AML/CFT Regime

The report notes that Iraq has made progress in implementing some of the FATF Recommendations, but still faces challenges in several areas. The country’s authorities are urged to continue strengthening their AML/CFT regime to prevent the misuse of its financial system for criminal activities.

Consequences of Non-Compliance

Iraq is expected to address the shortcomings identified in the follow-up report and implement the necessary reforms to meet international standards. Failure to do so could result in further scrutiny from global authorities and potentially even sanctions.

Importance of FATF Recommendations

The FATF Recommendations provide a framework for countries to prevent and combat money laundering, terrorist financing, and other related threats. The organization’s assessments help identify areas of weakness and promote cooperation among countries to protect the global financial system.

Conclusion

Iraq’s AML/CFT regulations are under global scrutiny as the country continues to work towards strengthening its regime to prevent the misuse of its financial system for criminal activities. The country’s authorities must address the identified shortcomings and implement necessary reforms to meet international standards, or face potential consequences.