Financial Crime World

Iraq Takes Steps to Combat Money Laundering and Terrorism Financing with New Regulations

The Iraqi government has recently enacted a range of anti-money laundering (AML) and counter-terrorism financing (CTF) regulations to strengthen its financial system and curb illegal activities.

The AML/CTF Regime in Iraq

At the heart of Iraq’s AML/CTF regime is the Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015, which provides a comprehensive framework for combating financial crime. Key requirements include:

  • Customer due diligence
  • Know your customer (KYC) rules
  • Suspicious transaction reporting
  • Record-keeping
  • Internal controls
  • Training

Who is Subject to the Regulations?

All financial institutions, non-financial businesses, professions, and designated non-financial businesses and professions (DNFBPs) are subject to these regulations.

Customer Due Diligence and KYC Rules

Customer due diligence is a critical component of Iraq’s AML/CTF regime. Institutions must:

  • Verify client identities
  • Determine the purpose of transactions exceeding specific thresholds

KYC rules also apply when dealing with non-account holders who conduct transactions worth at least 5 million Iraqi dinars (approximately $4,250). Beneficial owners must be identified when creating an account or transacting more than 10 million Iraqi dinars (roughly $8,500).

Suspicious Transaction Reporting and Record-Keeping

Entities subject to the AMLA must:

  • Report suspicious transactions to Iraq’s financial intelligence unit (FIU)
  • Freeze funds until guidance is obtained
  • Maintain accurate records of transactions and client interactions for at least five years

Internal Controls and Training

To achieve compliance, financial institutions and DNFBPs must adopt internal controls and policies, including processes for identifying, reporting, and managing money laundering and terrorism financing threats. Training is also a critical component, with personnel expected to be aware of the dangers of money laundering and terrorism financing and know how to detect and report suspicious activity.

Implementation and Compliance

The Office of Combating Money Laundering and Terrorist Financing (Money Laundering Reporting Office) plays a crucial role in implementing Iraq’s AML/CTF regime. The office is responsible for:

  • Receiving, analyzing, and investigating reports of suspected money laundering or terrorist financing

To ensure compliance with these regulations, financial institutions and DNFBPs must implement robust internal controls, including customer due diligence, record-keeping, and suspicious transaction reporting. Failure to comply can result in severe penalties, making it essential for businesses to prioritize AML/CTF compliance.

Solution from Sanction Scanner

Sanction Scanner solutions provide a comprehensive range of anti-money laundering software solutions designed to help financial institutions and DNFBPs ensure compliance with Iraq’s AML/CFT regulations. By leveraging Sanction Scanner’s cutting-edge technology and expertise, organizations can effectively detect and prevent money laundering and terrorist financing activities, safeguarding their reputation and ensuring compliance with regulatory requirements.