Iraq’s Financial Services Industry Grapples with Compliance Issues
======================================================
The financial services sector in Iraq is facing a multitude of compliance issues, with Elaf Islamic Bank being one of the few institutions that has taken steps to ensure it meets regulatory requirements.
Regulatory Guidelines and Compliance Efforts
The Central Bank of Iraq and international bodies such as MENAFATF have outlined strict guidelines for anti-money laundering, combating terrorism financing, and non-proliferation of weapons of mass destruction. Elaf Islamic Bank has revamped its compliance department to ensure it meets these standards.
Know Your Customer (KYC) Policies
The bank’s compliance team is responsible for monitoring and assessing the effectiveness of its policies, procedures, processes, and systems in place. They conduct regular checks to ensure that basic banking practices such as KYC policies are strictly followed.
- Customer screening and monitoring
- Classification of customers based on their risk profile
- Identification and alerting of suspicious activities to management and regulatory bodies
Proactive Approach to Regulatory Guidelines
The bank is also proactive in incorporating changes to regulatory guidelines into its procedures and processes, ensuring that all employees have adequate training to identify suspicious transactions and prevent non-compliance issues.
Quarterly and Yearly Audits
Independent audits are conducted on a quarterly and yearly basis to ensure the bank’s operations are compliant with Central Bank of Iraq and international regulatory bodies’ rules. The bank’s compliance policy requires that all operations be carried out in conformity with the highest ethical standards, applicable laws and regulations, and international best practices.
FATCA Compliance
The bank has declared itself “FATCA compliant” under the Model 2 IGA status, obtaining a Global Intermediary Identification Number (GIIN) from the Internal Revenue Service. The GIIN is L7VZ9D.99999.SL.368.
Industry-Wide Challenges
Experts say that compliance issues in Iraq’s financial services sector are not unique to Elaf Islamic Bank and that many institutions are struggling to meet regulatory requirements. However, the bank’s proactive approach sets it apart from others in the industry.
Note: FATCA (Foreign Account Tax Compliance Act) is a United States federal law aimed at combating offshore tax evasion. IGA (InterGovernmental Agreement) is an agreement between the US and other countries to implement FATCA. GIIN (Global Intermediary Identification Number) is a unique identifier assigned to financial institutions that are subject to FATCA reporting requirements.