Financial Crime World

Iraq Enacts Tough Anti-Money Laundering and Combating the Financing of Terrorism Regulations

Strengthening Financial System to Combat Illicit Activities

Baghdad, Iraq - The Iraqi government has introduced new regulations aimed at combating money laundering and financing terrorism. These measures are designed to strengthen the country’s efforts in preventing the misuse of its financial system for illicit activities.

The regulations, which came into effect on [date], require financial institutions, including banks, exchange bureaus, and other financial services providers, to implement strict anti-money laundering (AML) and combating the financing of terrorism (CFT) measures. The new rules also establish a special administrative department within each institution responsible for monitoring compliance with AML/CFT regulations.

Key Provisions

  • Customer Due Diligence: Financial institutions must conduct customer due diligence, including identifying the beneficial owner of companies and other entities.
  • Suspicious Transactions Reporting: Institutions must report suspicious transactions to the Anti-Money Laundering and Combating the Financing of Terrorism Office (AML/CFT Office) immediately.
  • Anonymous Accounts Prohibition: Financial institutions are prohibited from opening or maintaining anonymous accounts or accounts under fictitious names.
  • Dealing with Shell Banks: Institutions must refrain from dealing with shell banks, correspondent financial institutions that allow their accounts to be used by shell banks, and financial institutions that provide services to internationally banned financing institutions.

Terrorist Funds Freezing Committee

The regulations also establish a Terrorist Funds Freezing Committee, which will be responsible for freezing the funds of terrorists or other assets of persons designated by the UN Sanctions Committee. The committee will consist of representatives from various government ministries, including:

  • Central Bank of Iraq
  • Ministry of Finance
  • Ministry of Interior
  • Others

Impact and Timeline

The new regulations are seen as a major step forward in strengthening Iraq’s financial system and preventing it from being used for illicit activities. They bring the country into line with international standards on AML/CFT and will help to protect its financial institutions and customers from the risks associated with money laundering and terrorism financing.

Timeline:

  • [Date]: Regulations come into effect
  • [Date]: Financial institutions must establish special administrative departments for combating money laundering and financing terrorism
  • [Date]: Institutions must conduct customer due diligence and report suspicious transactions

Source: Iraqi government regulations, Anti-Money Laundering and Combating the Financing of Terrorism Office