Global financial watchdog returns Iraq to financial crime list
Shafaq News- Paris/ Baghdad
Iraq returned to the Financial Action Task Force’s grey list on Friday, eight years after leaving the watchdog’s monitoring process, over gaps in its fight against money laundering, terrorism financing, and financial crime.
FATF President Elisa de Anda Madrazo clarified that the group’s plenary added Iraq to the list because more work is needed to address cash-related risks, increase money laundering and terrorism financing investigations, and strengthen the use of financial information.
The grey list, formally known as “jurisdictions under increased monitoring,” covers countries that have committed to fixing strategic deficiencies in their anti-money laundering, counter-terrorism financing, and proliferation financing systems within agreed timeframes.
Iraq made a “high-level political commitment” in June to work with FATF and the Middle East and North Africa Financial Action Task Force to strengthen its financial crime controls. Prime Minister Ali Al-Zaidi has also made economic reform, foreign investment, and anti-corruption central pillars of his program since taking office in May.
Read more: A guide to Ali Al-Zaidi's ministerial program
Iraq’s action plan requires stronger assessment of money laundering and terrorism financing risks, better detection of informal money transfer services, a legal framework for virtual asset service providers, and effective sanctions for breaches of anti-money laundering requirements. The plan also calls for more suspicious transaction reports from high-risk sectors, wider use of financial information, stronger beneficial ownership measures, more money laundering and terrorism financing investigations and prosecutions, tighter controls over non-profit sector risks, and improved ability to combat proliferation financing sanctions evasion.
FATF nevertheless noted progress since Iraq’s mutual evaluation report was adopted in November 2024, including stronger market entry controls, guidance for non-banking financial institutions and designated non-financial businesses, real estate risk measures, and authorities’ understanding of how legal entities can be misused for money laundering and terrorism financing.
Countries on the grey list remain under increased monitoring, but FATF does not call for enhanced due diligence measures against them. Instead, it advocates a risk-based approach that avoids cutting off entire classes of customers.
