Financial Crime World

IRAQ TIGHTENS BANKING REGULATIONS TO COMBAT MONEY LAUNDERING AND TERRORISM FINANCING

Iraq has taken significant steps to strengthen its banking regulations in order to prevent money laundering and terrorist financing, thereby enhancing the country’s financial stability and combating illicit activities.

The Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015 serves as the legal framework for AML/CFT in Iraq. This law requires financial institutions and non-financial businesses to implement strict measures to detect and prevent money laundering and terrorist financing.

Key Requirements

  • Customer due diligence: Financial institutions must conduct customer due diligence on clients and transactions exceeding a certain threshold.
  • Know your customer rules: Verify the identity of non-account holders involved in suspicious transactions.
  • Suspicious transaction reporting: Report any suspicious activities to the AML/CFT office.
  • Record-keeping: Maintain accurate records of all financial transactions.
  • Internal controls and policies: Establish internal controls and policies to prevent money laundering and terrorist financing.
  • Training: Provide training to employees on AML/CFT requirements and best practices.
  • Supervision: The Office of Anti-Money Laundering and Countering Terrorist Financing (AML/CFT) office is responsible for supervising financial institutions and non-financial businesses to ensure compliance with AML/CFT regulations.

Responsibilities of the AML/CFT Office

  • Receiving and investigating reports of suspected money laundering and terrorist financing.
  • Analyzing information to identify potential violations of the law.
  • Taking action against entities found to be in violation of the law.
  • Providing training to financial institutions and non-financial businesses on AML/CFT requirements and best practices.

Consequences of Non-Compliance

Financial institutions that fail to comply with AML/CFT regulations may face penalties, making it essential for them to implement robust compliance programs to ensure their operations are transparent and secure.

Expected Impact

The strengthening of banking regulations in Iraq is expected to:

  • Improve the country’s financial sector
  • Reduce the risk of money laundering and terrorist financing
  • Enhance Iraq’s reputation as a stable and secure financial hub