Financial Crime World

Iraq Toughens Fight Against Money Laundering and Terrorism Financing

The Iraqi government has taken significant steps to combat money laundering and terrorism financing by implementing stricter Know Your Customer (KYC) procedures for financial institutions.

New Requirements for Financial Institutions

According to the Anti-Money Laundering and Countering Terrorist Financing Law No. 39 of 2015, all financial institutions and designated non-financial businesses and professions (DNFBPs) are required to conduct customer due diligence (CDD) when:

  • Establishing a business connection
  • Completing a transaction worth more than five million Iraqi dinars (approximately $4,250)

Verification Requirements

Financial institutions must also verify the identity of non-account holders who conduct transactions worth at least 10 million Iraqi dinars (roughly $8,500). Additionally, beneficial owners must be identified when creating an account and transacting more than this amount.

Implementation and Enforcement

The Office of Combating Money Launderling and Terrorist Financing, established within the Central Bank of Iraq in 2007, is responsible for implementing and enforcing AML/CFT regulations. The office receives and analyzes suspicious transaction reports (STRs) from financial institutions and other reporting entities, and works to identify and disrupt money laundering and terrorist financing schemes.

Compliance Requirements

To achieve compliance with AML/CFT regulations, financial institutions must:

  • Adopt internal controls and policies
  • Establish procedures for identifying, reporting, and managing money laundering and terrorism financing threats
  • Conduct regular training for personnel to ensure awareness of the dangers of money laundering and terrorism financing, as well as how to detect and report suspicious activity

Consequences of Non-Compliance

Failure to comply with AML/CFT regulations can result in severe penalties, including fines and even criminal charges. Therefore, financial institutions in Iraq must take compliance seriously to avoid such consequences.

Sanction Scanner Solutions

Sanction Scanner solutions can help ensure that your firm is compliant with Iraq’s anti-money laundering legislation by providing comprehensive:

  • Customer due diligence
  • Record keeping
  • Suspicious transaction reporting capabilities

By implementing these measures, financial institutions in Iraq can effectively combat money laundering and terrorism financing, while also avoiding severe penalties.