Financial Crime World

Suspicion of Money Laundering or Terrorism Financing Rocks Financial Sector

In a significant move, financial institutions and designated non-financial businesses and professions (DNFBPs) in Iraq have been directed to enhance their efforts to combat money laundering and terrorism financing.

Intensified Efforts Required

Financial institutions must intensify their efforts to detect and prevent money laundering and terrorism financing. According to Article 11 of the Law, financial institutions are required to maintain records of customer identification data for at least five years after the business relationship has ended. These records must be available to competent authorities in a timely manner.

AML/CFT Programs Mandatory

Under Article 12, financial institutions and DNFBPs are mandated to establish and implement anti-money laundering and combating the financing of terrorism (AML/CFT) programs. This includes:

  • Assessing money laundering and terrorism financing risks related to their business
  • Implementing policies and procedures for identifying suspicious transactions
  • Providing ongoing training for employees

Additional Requirements

The law also mandates that financial institutions:

  • Refrain from opening or maintaining anonymous accounts or accounts under fictitious names
  • Abide by international sanctions
  • Report any suspected transactions to the relevant authorities immediately

Strengthening AML/CFT Efforts

Article 14 requires financial institutions to establish a special administrative department dedicated to combating money laundering and terrorism financing.

Terrorist Funds Freezing Committee Established

The government has established a Terrorist Funds Freezing Committee, comprising representatives from various ministries and bodies, to freeze the funds of terrorists or other assets designated by the UN Sanctions Committee or local authorities.

Key Takeaways

  • Financial institutions and DNFBPs must maintain records of customer identification data for at least five years.
  • Institutions must establish AML/CFT programs, including risk assessments and employee training.
  • Anonymous accounts or accounts under fictitious names are prohibited.
  • Suspected transactions must be reported to authorities immediately.
  • Financial institutions must refrain from dealing with shell banks or correspondent financial institutions that allow their accounts to be used by shell banks.
  • The Terrorist Funds Freezing Committee has been established to freeze the funds of terrorists or other assets designated by international or local authorities.