Financial Crime World

Iraq Cracks Down on Money Laundering and Terrorist Financing with Tough New Compliance Requirements

Strengthening the Fight Against Money Laundering and Terrorist Financing in Iraq

The Iraqi government has introduced a comprehensive set of anti-money laundering (AML) and counter-terrorism financing (CTF) regulations to strengthen its fight against money laundering and terrorist financing. The new laws aim to deter, identify, and punish money laundering and terrorist funding in the country.

Key Requirements for Financial Institutions and DNFBPs

According to experts, the key requirements of Iraq’s AML regulations are designed to ensure that financial institutions, non-financial businesses, professions, and designated non-financial businesses and professions (DNFBPs) take proactive steps to prevent and detect suspicious transactions.

  • Conduct customer due diligence (CDD) processes when establishing business connections or completing transactions worth over a certain level.
  • Verify clients’ identities, as well as the purpose and nature of the transaction.
  • Identify non-account holders who conduct transactions worth at least five million Iraqi dinars (approximately $4,250).
  • Recognize beneficial owners when creating an account or transacting more than 10 million Iraqi dinars (around $8,500).

Reporting Suspicious Transactions

Entities subject to the AML regulations are required to report suspicious transactions to Iraq’s financial intelligence unit (FIU) and freeze funds until guidance is obtained.

Compliance Requirements

To achieve compliance with the new regulations, financial institutions and DNFBPs must:

  • Adopt internal controls and policies, including policies and processes for identifying, reporting, and managing money laundering and terrorism financing threats.
  • Implement training programs to ensure that personnel are aware of the dangers of money laundering and terrorist financing, as well as how to detect and report suspicious activity.

Overseeing Compliance

The Office of Anti-Money Laundering and Countering Terrorist Financing (Money Laundering Reporting Office) has been established within the Central Bank of Iraq to oversee compliance with the new regulations. The office is responsible for:

  • Receiving and investigating reports of suspected money laundering or terrorist financing.
  • Providing technical guidance and support to financial institutions.

Consequences of Non-Compliance

Failure to comply with the new regulations can result in hefty penalties, making it essential for financial institutions and DNFBPs to take proactive steps to ensure compliance.

Expert Solutions for AML Compliance

Sanction Scanner solutions offer a comprehensive range of AML training programs and tools designed specifically for financial institutions operating in Iraq. Their expertise can help ensure that your organization is fully compliant with the new regulations, minimizing the risk of penalties and reputational damage.

“We are committed to ensuring that our country’s financial system is free from the scourge of money laundering and terrorist financing,” said a spokesperson for the Central Bank of Iraq. “The new regulations are an important step forward in achieving this goal.”