Ali Zuweid's Political Programme · Proposed legislation · Economy, Finance, Investment and Employment
Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing Law
Comprehensive modernisation of Law No. (39) of 2015, preserving the Council and financial intelligence office while rebuilding the system around risk and effectiveness: verifiable beneficial ownership, virtual-asset regulation, effective supervision of non-financial professions, targeted financial sanctions aligned with current international regimes, financial investigation and confiscation, and specialised measures against proliferation financing.
Executive Summary
Since 2015, Iraq has had a relatively modern anti-money laundering and counter-terrorist financing law, followed by Terrorist Asset Freezing Regulation No. (6) of 2023, due diligence instructions, rules on politically exposed persons, and development of the sanctions platform and goAML. The 2024 FATF/MENAFATF assessment also found that many core technical requirements were present in Iraqi law, including the legal framework for proliferation-financing targeted financial sanctions. This document therefore does not begin by assuming the previous system was empty or a failure.
The problem revealed in 2024–2026 was the gap between legal provisions and effective implementation. The mutual evaluation identified weaknesses or deficiencies in aspects of non-financial professions, beneficial ownership, new technologies, value transfer services, proliferation-financing coordination, and the quality and use of financial reports. On 19 June 2026, FATF placed Iraq among jurisdictions under increased monitoring following a high-level political commitment to implement a joint action plan.
The 2026 plan does not seek a single formal amendment. It covers deeper risk understanding, detection of informal money transfer services, a legislative framework for virtual asset service providers, better implementation of politically exposed person and targeted financial sanctions requirements, improved quality and use of suspicious transaction reports, stronger beneficial ownership, more money-laundering and terrorist-financing investigations and prosecutions, improved non-profit organisation assessment, and stronger detection of evasion of proliferation-financing sanctions. Comprehensive modernisation is therefore more coherent than a series of fragmented amendments.
The proposal preserves the Anti-Money Laundering and Counter-Terrorist Financing Council and Office, strengthening the Office's independence rather than creating a new financial intelligence unit. It also temporarily preserves the freezing regulation, 2023 instructions and subsequent rules, allowing a transition while references and terminology are updated under the new law.
The most prominent legislative addition concerns virtual assets. For the first time, the proposal establishes an express legal basis for licensing or registering virtual asset service providers, due diligence, the travel rule, freezing and reporting, leaving regulatory detail to the Central Bank and competent bodies. This directly responds to the 2026 FATF plan and work begun by the Supreme National Committee for Regulating Virtual Assets in 2025.
The second addition is beneficial ownership. The proposal does not duplicate the Companies Law scheduled for modernisation in POL-40. It imposes the required anti-money laundering outcome: identify the natural person ultimately owning or controlling an entity, trace the ownership chain, disclose nominee relationships and make a reliable central register available to authorities, while referring institutional details to the Companies Law.
On proliferation financing, the proposal avoids anchoring the law to an international regime that may change. The 2024 mutual evaluation relied on the 1718 and 2231 regimes, but the situation later changed: from 27 September 2025, the Security Council reapplied earlier Iran sanctions resolutions and re-established the 1737 Committee and list. The proposal therefore provides for dynamic implementation of regimes currently in force, identifies 1718 and 1737 in their current status, and requires authorities to update lists following any subsequent international change.
The law does not treat all non-profit organisations as high risk. It adopts a risk-based approach focused on the subset genuinely vulnerable to terrorist-financing abuse, protecting legitimate humanitarian and civil society work from disproportionate disruption.
The framework through 2026
Anti-Money Laundering and Counter-Terrorist Financing Law No. (39) of 2015 remains in force and is published on the Office's official platform alongside regulations and instructions. The law reconstituted the Office and granted it independence, and established a national council chaired by the Central Bank Governor with government and law-enforcement bodies represented.
Due diligence instructions and politically exposed person rules were issued in 2023, together with Terrorist Asset Freezing Regulation No. (6) of 2023, which expanded the legal framework for targeted financial sanctions. In 2025–2026, the Central Bank continued issuing supervisory rules for banks, exchange companies, payment companies and non-bank institutions.
By 2026, Iraq had an updated official platform for domestic and international sanctions lists, grievances, match reports and frozen assets, alongside the goAML reporting system. The proposal therefore builds on existing operational infrastructure rather than replacing it with parallel systems.
FATF action plan and increased monitoring
In June 2026, Iraq committed to an action plan with FATF and MENAFATF after being placed under increased monitoring. The plan has nine linked directions: more precise risk understanding; detection of informal money transfer services and regulation of virtual asset service providers; implementation of politically exposed person and targeted sanctions requirements; improved suspicious reporting and use of financial intelligence; stronger beneficial ownership; increased money-laundering investigations and prosecutions; increased terrorist-financing investigations and prosecutions and remediation of technical deficiencies; proportionate assessment of non-profit organisation risks; and stronger capacity to counter evasion of proliferation-financing sanctions.
In July and September 2026, Iraqi authorities held specialised activities on implementing targeted sanctions and issued updated guidance for financial institutions and non-financial professions. This confirms that some 2024 gaps are already being addressed. The law is therefore designed to turn these measures into a permanent framework and prevent future inconsistencies between guidance and regulations.
Legislative policy
The most appropriate form is repeal and replacement of Law 39 of 2015 while retaining its principal institutions. Its scope has effectively expanded to include proliferation financing, and incorporating virtual assets, beneficial ownership, stronger non-financial supervision and detailed targeted-sanctions rules through dozens of amendments would make the law less clear.
The new law does not turn FATF into an Iraqi legislator. FATF recommendations and the action plan are an international standard and monitoring framework; domestic legal obligations arise from Iraqi legislation, binding Security Council decisions and applicable treaties. The proposal therefore preserves parliamentary, judicial and national authority while using the international plan to identify gaps requiring attention.
It also distinguishes prevention from investigation. Financial institutions are not law-enforcement bodies; their duty is to know customers, monitor risk and report. The Office analyses, investigators collect evidence, and courts determine liability and confiscation. This separation matters both for rights protection and for improving the quality of each stage.
Draft Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing Law
Chapter One — General Provisions
Article 1 — Title
This Law shall be called the Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing Law.
Article 2 — Objectives
This Law aims to protect the financial system, economy and society from money laundering, terrorist financing and financing the proliferation of weapons of mass destruction; strengthen the risk-based approach; develop financial intelligence, investigation, confiscation and international cooperation; improve supervision of financial institutions and designated non-financial businesses and professions; regulate virtual-asset risks and informal money transfer services; and strengthen beneficial ownership transparency and targeted financial sanctions.
Article 3 — Scope of Application
This Law applies to financial institutions, designated non-financial businesses and professions, virtual asset service providers when licensed, non-profit organisations within terrorist-financing risk-based limits, relevant supervisory, enforcement, investigative, judicial and administrative bodies, and any person expressly bound by its provisions.
Article 4 — Relationship with other laws
This Law applies without prejudice to laws on penalties, criminal procedure, the Central Bank, banking, companies, commerce, taxation, customs, integrity, counter-terrorism, weapons, international sanctions and data protection. It is the special law governing prevention, reporting, analysis, freezing and confiscation obligations within its subject matter.
Article 5 — Basic definitions
For this Law: “Office” means the Anti-Money Laundering and Counter-Terrorist Financing Office; “Council” means the Anti-Money Laundering and Counter-Terrorist Financing Council; “financial institution” means a person carrying on a covered financial activity under this Law and instructions; “designated non-financial businesses and professions” means the categories specified by international standards and this Law; “beneficial owner” means the natural person ultimately owning or controlling a customer, legal person or legal arrangement, or on whose behalf a transaction is conducted; “virtual asset” means a digital representation of value that can be digitally traded or transferred and used for payment or investment, excluding digital representations of fiat currencies or securities governed by another law; “virtual asset service provider” means a person professionally conducting a service specified in this Law; “suspicious transaction” means a transaction, attempt or activity reasonably suspected of connection with money laundering, terrorist financing, proliferation financing or a predicate offence; “targeted financial sanctions” means freezing funds or economic resources and prohibiting their availability to persons and entities designated under binding decisions; and “proliferation financing” means provision of funds or financial or economic services connected with proliferation of weapons of mass destruction or their delivery systems in a manner prohibited internationally or domestically.
Article 6 — Risk-based approach
Authorities and regulated entities shall apply measures proportionate to money-laundering, terrorist-financing and proliferation-financing risks. Measures shall be enhanced for higher risks and may be simplified for low-risk cases where standards and law permit and no suspicion exists.
Article 7 — Non-discrimination and proper application
This Law's requirements shall not be a pretext for prohibited discrimination or exclusion of a group from the financial system without objective risk assessment. They do not prevent refusal or termination of a relationship if due diligence cannot be completed or risks are unmanageable.
Article 8 — Professional confidentiality
Banking or professional confidentiality shall not prevent information being provided to the Office or competent bodies under the law, while the duty to protect information against unlawful use or disclosure remains.
Chapter Two — Offences and liability
Article 9 — Money-laundering offence
A person commits money laundering by converting, transferring, exchanging, acquiring, possessing or using funds, knowing or believing on factual grounds that they derive from an offence, with intent to conceal or disguise their unlawful origin, nature, location or ownership or help the predicate offender evade its consequences.
Article 10 — Self-laundering
The predicate offender may also be the money-laundering offender. A predicate-offence conviction is not required if the criminal origin of the funds is established under evidentiary rules.
Article 11 — Predicate offence
All felonies and misdemeanours generating proceeds under the law are money-laundering predicate offences, including in particular corruption, bribery, embezzlement, drug, human and arms trafficking, smuggling, organised crime, tax and customs offences, cybercrime, fraud and forgery.
Article 12 — Foreign predicate offence
A predicate offence may occur outside Iraq if the conduct is criminal where committed or would constitute an offence if committed in Iraq, subject to applicable treaties.
Article 13 — Terrorist-financing offence
A person commits terrorist financing by directly or indirectly providing, collecting, transferring or making available funds or assets by any means, intending or knowing that they will be used wholly or partly by a terrorist or terrorist organisation, to commit a terrorist act, or to finance travel, training, recruitment or an activity criminalised by law.
Article 14 — No required link to a specific terrorist act
Terrorist financing does not require funds to be linked to a specific terrorist act or the act actually to occur, provided the other legal elements are present.
Article 15 — Proliferation financing
Applicable laws shall punish anyone intentionally providing, collecting, transferring or making available funds, economic resources or services to support prohibited activity involving proliferation of weapons of mass destruction or their delivery systems, or to assist evasion of mandatory targeted financial sanctions.
Article 16 — Attempt and participation
Attempt, participation, conspiracy, assistance, incitement and facilitation of offences under this Chapter shall be punishable under general rules.
Article 17 — Legal-person liability
A legal person, other than state bodies acting in their sovereign capacity, shall be liable for an offence committed in its name or interests through an act or omission of management, a representative or a person with effective authority, without prejudice to natural-person liability.
Article 18 — Penalties for legal persons
Fines and appropriate measures may be imposed, including activity prohibitions, premises closure or licence revocation where legally permitted, with regard to proportionality and the rights of bona fide third parties.
Article 19 — Aggravating circumstances
Aggravating circumstances include abuse of public office or a profession, commission within an organised group, use of a financial institution or shell company, repeat offending, substantial proceeds, or connection with terrorist or proliferation financing.
Article 20 — More severe penalties preserved
Application of this Law does not preclude a more severe penalty under another law.
Chapter Three — Council, Office and national strategy
Article 21 — Anti-Money Laundering and Counter-Terrorist Financing Council
The Anti-Money Laundering and Counter-Terrorist Financing Council shall continue as the supreme national policy and coordination body, chaired by the Central Bank Governor or lawful substitute and comprising senior representatives of competent bodies specified by regulation.
Article 22 — Functions of the Council
The Council shall approve the national strategy, coordinate risk assessments, propose legislation, issue general instructions within its remit, monitor the international action plan, coordinate targeted financial sanctions and proliferation risks, and review performance and statistics.
Article 23 — Specialised committees
The Council may establish standing or temporary committees on terrorist and proliferation financing risks, virtual assets, non-profit organisations, beneficial ownership, asset recovery and other matters.
Article 24 — Anti-Money Laundering and Counter-Terrorist Financing Office
The Office shall continue as an operationally independent national financial intelligence unit, with legal personality or financial and administrative independence to the extent prescribed by this Law and regulations, ensuring operational autonomy and freedom from direction in analysing or referring a report.
Article 25 — Functions of the Office
The Office shall receive and analyse suspicious transaction reports and prescribed data, request necessary information, suspend transactions where legally permitted, refer findings to competent bodies, exchange information with counterpart units, and issue indicators, typologies and guidance.
Article 26 — Director-General of the Office
The Director-General shall be appointed on competence, integrity and experience criteria. The term and termination procedure shall protect operational independence while ensuring legal accountability.
Article 27 — Office budget
The Office shall receive sufficient human, technical and financial resources protected from interference in individual cases. Expenditure shall be audited by the Board of Supreme Audit without unjustified access to confidential intelligence.
Article 28 — National database
The Office shall manage secure databases interconnected with competent bodies under defined powers and access and audit logs. No central database giving unrestricted access to citizens' data shall be created without a legal basis and purpose.
Article 29 — National strategy
A national strategy lasting at least four years shall be adopted and updated according to risk assessment and international developments, with measurable objectives and indicators and each body's responsibilities defined.
Article 30 — Annual report
The Council shall annually report to the Council of Ministers on implementation of the strategy and international action plan, trends, risks and results. A non-confidential summary shall be published.
Article 31 — National statistics
A uniform statistical system shall cover reports, investigations, prosecutions, convictions, confiscations, international cooperation, supervisory sanctions and actual implementation of targeted financial sanctions.
Article 32 — Effectiveness assessment
Performance assessment shall go beyond counts of instructions, training courses or reports to include financial intelligence quality and use, investigations, confiscated assets, freezing times and compliance in the highest-risk sectors.
Chapter Four — National risk assessment and sectoral policies
Article 33 — National risk assessment
Iraq shall periodically assess money-laundering, terrorist-financing and proliferation-financing risks, with a full update at least every four years and updates to particular sectors or risks whenever material changes arise.
Article 34 — Assessment scope
Assessment shall cover proceeds-generating offences, the cash economy, borders, informal transfers, banking and non-banking sectors, real estate, precious metals and stones, legal and accounting professions, non-profit organisations, virtual assets, legal persons and proliferation risks.
Article 35 — Data and participation
Public, supervisory and law-enforcement bodies shall provide the Council and Office with data needed for assessment within legal limits. Private-sector, academic and expert participation is permitted without disclosing confidential information.
Article 36 — Sectoral assessment
Each supervisor shall regularly assess and update the risks of its sector, using results in inspection, guidance and resource plans.
Article 37 — Geographical risks
Risks at ports of entry, borders, high-trade or cash-intensive areas, and areas affected by smuggling or organised crime shall be considered without stigmatising residents or disrupting lawful activity.
Article 38 — International risks
Risks from higher-risk countries, territories or networks shall be considered. Enhanced measures or countermeasures shall apply where required by law, an international decision or an approved risk assessment.
Article 39 — Publication of findings
A national assessment summary shall identify principal risks and required policies. Operational and security information may be withheld where publication would harm law enforcement or national security.
Article 40 — Resource allocation
Supervisory, investigative, analytical and awareness resources shall target higher-risk sectors and risks rather than be distributed formally and equally where this would reduce effectiveness.
Article 41 — Review of measures
The Council shall review policies and instructions disproportionate to risks or causing financial exclusion or unnecessary burdens, proposing amendments without reducing protection.
Article 42 — Emerging risks
The Council shall establish a mechanism to monitor emerging risks from new technologies, products, payment methods or business models, issuing temporary measures where necessary within legal limits.
Chapter Five — Customer due diligence
Article 43 — Due diligence duty
Regulated entities shall conduct due diligence when establishing a business relationship, performing occasional transactions above prescribed thresholds, encountering suspicion, or doubting the accuracy or adequacy of previous data.
Article 44 — Due diligence elements
Due diligence includes identifying and verifying customers, identifying and reasonably verifying beneficial owners, understanding the relationship's purpose and nature, obtaining appropriate information on activities and source of funds where needed, and ongoing monitoring.
Article 45 — Natural persons
Natural persons shall be verified using reliable independent documents or sources. Government digital identity and supervisor-approved electronic verification methods may be used.
Article 46 — Legal persons
Formation, name, legal form, address, governing powers, management members, authorised representatives, and ownership and control structure shall be verified.
Article 47 — Beneficial owners
Regulated entities shall take reasonable steps to identify the natural person ultimately owning or controlling the customer. If identification remains impossible after the tests are exhausted, they shall identify the natural person controlling through other means and then the senior managing official, documenting reasons for moving between tests.
Article 48 — Ownership chain
Reliance on the direct owner is insufficient where ownership passes through multiple companies or arrangements. The chain shall be traced to natural persons exercising ultimate control.
Article 49 — Legal arrangements
For a trust or similar legal arrangement, the settlor, trustee, beneficiaries or beneficiary classes, protector and anyone exercising ultimate control shall be identified according to the arrangement's nature.
Article 50 — Verification before the relationship begins
As a rule, verification shall precede the relationship or transaction. Limited elements may be completed afterwards where risks are low and delay is necessary to avoid interrupting normal business, under supervisory rules.
Article 51 — Inability to complete due diligence
If due diligence cannot be completed, the relationship shall not begin or transaction proceed, or the existing relationship shall be terminated as appropriate. A suspicious report shall be considered without tipping off the customer.
Article 52 — Ongoing monitoring
Transactions shall be reviewed throughout the relationship for consistency with knowledge of the customer, activities, risks and source of funds where required. Data shall be updated at risk-proportionate intervals.
Article 53 — Simplified due diligence
Simplified measures may apply to low risks under a documented assessment and supervisory instructions, but not where suspicion or identified higher risks exist.
Article 54 — Enhanced due diligence
High-risk relationships shall undergo enhanced due diligence, including additional information on the customer, beneficial owner, source of wealth and funds and purpose, senior management approval, and more frequent monitoring.
Article 55 — Non-face-to-face customers
Remote relationships are not automatically high risk where reliable digital identity and suitable controls are used. Additional measures shall apply where technology or the environment is exposed to impersonation or fraud risks.
Article 56 — Existing relationships
Existing customers shall undergo due diligence at appropriate times on a materiality and risk basis. An old account is not exempt merely because it predates this Law.
Article 57 — Numbered or pseudonymous accounts
Anonymous or fictitious-name accounts are prohibited. An internal number or pseudonym may be used solely for operational confidentiality if the bank knows the customer's identity and it is available to compliance staff and competent authorities.
Article 58 — Record retention
Due diligence, identity, ownership, transaction, correspondence and analysis records shall be retained for at least five years after relationship termination or transaction execution, or longer where lawfully ordered by a competent body.
Article 59 — Transaction reconstruction
Records shall suffice to reconstruct a transaction's path, origin, beneficiary, date, value and method for investigative and judicial use.
Article 60 — Reliance on third parties
A financial institution or other regulated entity may perform elements of due diligence if supervisory conditions and immediate information access are satisfied. Ultimate responsibility remains with the regulated entity.
Chapter Six — Politically exposed persons and high-risk relationships
Article 61 — Definition of politically exposed persons
Politically exposed persons include those holding or formerly holding prominent domestic, foreign or international-organisation public functions, their family members and close associates under applicable rules. The definition does not extend to middle-ranking or junior employees merely because of public employment.
Article 62 — Risk-based approach to domestic persons
Regulated entities shall determine whether the customer or beneficial owner is a domestic politically exposed person and apply enhanced measures where relationship risk is high, according to rules and actual risks.
Article 63 — Foreign persons
Foreign politically exposed persons shall undergo enhanced due diligence, including senior management approval, reasonable measures to establish sources of wealth and funds, and enhanced relationship monitoring.
Article 64 — International organisations
Appropriate measures shall apply to senior international-organisation officials according to risk and international standards.
Article 65 — End of status
Risk assessment shall not end automatically when office is relinquished. Proportionate measures shall continue as long as actual risks justify, considering the former role, relationships and influence.
Article 66 — No automatic exclusion
Persons and their families shall not be refused financial services solely because of politically exposed status if risks can be managed lawfully and proportionately.
Article 67 — High-risk countries
Institutions shall apply enhanced due diligence to relationships and transactions involving countries designated high risk by competent bodies or FATF, and implement countermeasures when binding instructions require them.
Article 68 — Unusual financial circumstances
Complex or unusually large transactions, or those lacking an apparent economic or lawful purpose, shall be examined. Findings shall be documented and retained.
Article 69 — Corruption risks
Regulated entities shall pay particular attention to indicators of bribery, embezzlement, abuse of office, public contracts and shell companies, linking them to beneficial ownership and source-of-funds assessment.
Article 70 — Free zones and trade
Risk-based measures shall apply to trade finance, free zones, high-value goods and transactions involving smuggling or misleading trade invoices without unjustifiably disrupting legitimate trade.
Chapter Seven — Bank transfers, correspondent banking and value transfer services
Article 71 — Transfer information
Domestic and cross-border financial transfers shall carry accurate, sufficient originator and beneficiary information under Central Bank and international thresholds and requirements.
Article 72 — Incomplete transfers
Institutions shall establish risk-based procedures for executing, rejecting or suspending transfers lacking mandatory information, considering suspicious reporting where appropriate.
Article 73 — Correspondent banks
Before establishing a cross-border correspondent relationship, the institution shall gather information on the respondent bank's business, reputation, supervision and controls, define each party's responsibilities and obtain senior management approval.
Article 74 — Shell banks
Correspondent relationships with shell banks shall not be established or maintained. Institutions shall take reasonable measures to ensure respondent banks do not allow shell banks to use their accounts.
Article 75 — Payable-through accounts
Where a respondent bank's customers receive direct access to a correspondent account, the institution shall verify that the respondent performed due diligence and can provide information on request.
Article 76 — Money or value transfer services
No money or value transfer service may be professionally provided without licensing or registration by the competent authority. Licensed providers are subject to all obligations under this Law.
Article 77 — Informal providers
Competent bodies shall detect unlicensed money or value transfer services and take effective, proportionate and dissuasive measures, while offering a lawful licensing route to providers meeting the conditions.
Article 78 — Agents
Transfer service providers shall maintain an updated list of agents and branches, ensure their compliance controls, training and monitoring, and bear responsibility for failures within the agent network.
Article 79 — Traditional remittances
Traditional hawala or value transfer systems are not exempt from licensing or registration because of customary practice. Requirements shall be proportionate to risks and activity size.
Article 80 — Electronic payments
Payment, wallet and electronic-money providers shall meet Central Bank requirements on due diligence, monitoring, reporting and record retention in proportion to risks.
Chapter Eight — Virtual assets and service providers
Article 81 — Regulatory principle
Virtual asset services shall not be provided in or from Iraq without licensing or registration by the legally designated authority. This does not prevent the Central Bank from prohibiting a particular activity or product where stability or public-protection risks require.
Article 82 — Covered activities
Virtual asset services, when performed for others, include exchange between virtual assets and fiat currency, exchange between virtual assets, transfer, custody or administration of control instruments, and participation in issuance or related financial services, under regulatory definitions.
Article 83 — Licensing
Licensing requires disclosure of beneficial ownership, source of capital, governance, management, technical controls, cybersecurity, the anti-money laundering, counter-terrorist financing and counter-proliferation financing system, and place of effective management.
Article 84 — Prohibition on anonymous activity
Services primarily intended to conceal a transaction's originator or beneficiary or break the data chain so as to prevent legal compliance are prohibited, with due regard to legitimate technologies that do not obstruct competent authorities' law enforcement.
Article 85 — Travel rule
Licensed entities shall obtain, transmit and retain originator and beneficiary data for virtual asset transfers under supervisory thresholds and rules.
Article 86 — Unhosted wallets
Unhosted wallets may be used subject to risk assessment and proportionate verification. Dealings shall not be automatically prohibited unless a reasoned legal or supervisory decision addresses a specific risk.
Article 87 — Platforms outside Iraq
A foreign platform shall not target the Iraqi public or regularly provide services within Iraq without licensing or arrangements required by the competent authority. Unlicensed activity may be blocked under the law and prescribed judicial or administrative procedures.
Article 88 — Stable assets and tokens
Stable assets and tokens representing value or a financial right shall be governed by legislation appropriate to their economic substance. Technical labels shall not circumvent banking, securities or payment laws.
Article 89 — Due diligence and reporting
Licensed entities shall apply due diligence, monitoring, reporting, record retention and targeted financial sanctions under the same principles as financial institutions, with technical proportionality.
Article 90 — Technical freezing and seizure
Licensed entities shall maintain technical arrangements enabling freezing, seizure and confiscation orders where they control the asset, key or account.
Article 91 — Cross-border risks
The supervisor shall coordinate with foreign bodies regarding cross-border platforms and providers. Enhanced measures may target entities lacking equivalent supervision.
Article 92 — Regulatory transition
Regulations shall set a transition period for any existing activities to apply for licensing or cease. Filing an application alone does not authorise continuation of prohibited activity.
Chapter Nine — Designated non-financial businesses and professions
Article 93 — Covered categories
Designated non-financial businesses and professions include, according to activity and risk, lawyers, accountants, auditors, real-estate agents, precious-metal and stone dealers, jewellers, company and legal-arrangement service providers, and other categories designated by law or regulation following risk assessment.
Article 94 — Lawyers' obligations
Obligations apply when lawyers participate for clients in financial or real-estate transactions, management of funds or accounts, or establishment or management of companies or legal arrangements. Legally protected defence and advice confidentiality outside these activities is unaffected.
Article 95 — Real-estate agents
Real-estate agents shall conduct due diligence on both transaction parties where their work permits, identify beneficial owners and report suspicion under the law.
Article 96 — Precious-metal and stone dealers
Due diligence and reporting shall apply to cash or non-cash transactions exceeding prescribed thresholds or risk levels. Source and customer data shall be retained under instructions.
Article 97 — Accountants and auditors
Obligations apply when managing client funds, forming companies or conducting transactions for clients. Auditors shall apply independent procedures where money laundering is suspected without tipping off the client.
Article 98 — Company service providers
Persons forming or managing companies, providing addresses, nominee shareholders or directors, or legal arrangements shall be subject to licensing or registration, due diligence and information retention under regulations.
Article 99 — Notaries
Verification and reporting measures appropriate to notaries' public-official status and the transactions they authenticate shall apply without changing their legal employment status.
Article 100 — Supervision
Each profession shall have a clearly designated supervisor with inspection, information-request and administrative-sanction powers. No regulated category shall lack an effective supervisor.
Article 101 — Risk-based supervision
Supervisors shall prioritise higher-risk professions and activities and develop sector guidance and on-site and off-site examinations rather than rely on formal registration alone.
Article 102 — Reporting
Designated non-financial businesses and professions shall use the Office-designated reporting system and receive technical channels and training suited to their size and nature.
Article 103 — Proportionality for small practices
Requirements shall be proportionate to size and risk. Small professional practices shall not be required to maintain compliance structures equivalent to large financial institutions, without exemption from verification and reporting.
Article 104 — Sanctions
Violations shall attract effective, proportionate and dissuasive sanctions, including warnings, fines, restrictions, suspension, licence revocation or referral to professional bodies under the law.
Chapter Ten — Non-profit organisations
Article 105 — Risk-based approach
Not all non-profit organisations shall be treated as high risk. Through sector assessment, the state shall identify the subset potentially exposed to terrorist-financing risk and apply focused, proportionate measures.
Article 106 — Protection of legitimate activity
Counter-terrorist financing measures shall not unnecessarily disrupt legitimate humanitarian, charitable or civil society work or deny it financial services merely because it is non-profit.
Article 107 — Registration and transparency
Organisations subject to applicable laws shall register basic information, management, objectives, principal funding sources and programme beneficiaries according to risk level.
Article 108 — Internal governance
Higher-risk organisations shall apply internal controls over fundraising, transfers, beneficiaries, foreign projects and partners and retain appropriate records.
Article 109 — Humanitarian transfers
Humanitarian exemptions in Security Council decisions and the law shall be observed. Competent bodies shall provide clear channels for necessary licences or exemptions without unjustified delay.
Article 110 — Awareness and partnership
Supervisors shall engage and raise awareness with the non-profit sector to understand risks and develop preventive tools, rather than rely exclusively on sanctions.
Article 111 — Proportionate supervision
Supervision shall target higher-risk organisations or activities using indicators and evidence. General lists or religious or political assumptions shall not determine risk classification.
Article 112 — Sanctions
Sanctions shall be graduated and proportionate. Corrective measures shall precede suspension or dissolution for non-serious, remediable violations, without prejudice to serious offences.
Chapter Eleven — Suspicious transaction reporting
Article 113 — Reporting duty
A regulated entity shall promptly report to the Office if it suspects or reasonably has grounds to suspect that funds, a transaction or an attempt relate to money laundering, terrorist financing, proliferation financing or criminal proceeds.
Article 114 — Attempts
Reporting covers attempted or rejected transactions where grounds for suspicion exist, even if no funds moved.
Article 115 — No monetary threshold
Where suspicion exists, the reporting duty does not depend on any monetary threshold.
Article 116 — Other automatic reports
The Council or supervisors may require automatic cash, cross-border or periodic reports for risk-based analysis, without replacing suspicious reporting.
Article 117 — Report contents
Reports shall include available information on parties, beneficial owners, transactions, accounts, indicators, reasons for suspicion and supporting documents.
Article 118 — Legal protection for reporters
No person or entity shall incur civil, criminal or disciplinary liability for good-faith reporting under the law, even if suspicion is not subsequently substantiated.
Article 119 — Prohibition on tipping off
Informing customers or third parties of a suspicious report, Office analysis or request is prohibited where it would reveal the procedure or harm investigation, subject to professional exceptions prescribed by law.
Article 120 — Compliance officer
Entities specified by regulations shall appoint an independent compliance officer with rank, powers and resources proportionate to size and direct access to senior management or the board.
Article 121 — Electronic reporting
The Office shall use goAML or a successor national electronic system to receive reports and provide business-continuity alternatives during outages.
Article 122 — Report quality
The Office may return incomplete reports, request further information or issue sector feedback to improve quality. Volume alone is not a compliance indicator.
Article 123 — Feedback
The Office and supervisors shall provide periodic feedback on suspicious typologies, report quality and risks without disclosing confidential operations or investigations.
Article 124 — Non-financial sector reporting
Specific forms and guidance shall be developed for non-financial professions to reduce practical reporting barriers and improve understanding of indicators.
Chapter Twelve — Targeted financial sanctions
Article 125 — Implementation without delay
Targeted financial sanctions binding under Security Council decisions and the law shall be implemented immediately when designation takes effect, without prior notice to the designated person, using mechanisms prescribed by the freezing regulation.
Article 126 — Scope of funds and resources
Freezing covers directly or indirectly owned or controlled funds, assets and economic resources, wholly or jointly held, derived funds, and funds of persons or entities acting for or at the direction of a designated person where the sanctions regime requires.
Article 127 — Prohibition on availability
Funds, assets, economic resources or financial services shall not be made available directly or indirectly to or for a designated person or entity, subject to authorised exceptions.
Article 128 — Terrorism sanctions regimes
Obligations under Security Council regimes concerning terrorism and terrorist entities and domestic lists shall apply under the prevailing legal system.
Article 129 — Proliferation sanctions regimes
Financial measures concerning proliferation of weapons of mass destruction shall apply to regimes in force and binding at implementation, including the resolution 1718 regime concerning the Democratic People's Republic of Korea and the resolution 1737 regime concerning Iran following reinstatement, and any subsequent amending or replacement resolution.
Article 130 — List updates
A reliable national platform shall update lists and notices and supply data to institutions, businesses, professions and competent bodies immediately or near-immediately.
Article 131 — Customer and transaction screening
Regulated entities shall continuously screen names, ownership, control and transactions according to risk and available technology. Screening shall not be limited to exact name matching.
Article 132 — Potential matches
On a potential match, the entity shall take the action prescribed in national guidance, notify the Office or competent committee and maintain confidentiality.
Article 133 — Frozen-asset reports
Entities shall immediately report frozen funds or resources or attempted dealings and submit their details to the official platform.
Article 134 — Delisting and grievances
Clear procedures shall provide for grievances, delisting and correction of name-similarity cases, including referral to the competent United Nations body for international designations.
Article 135 — Basic expenses and exceptions
Use of part of frozen funds for basic or extraordinary expenses or fees may be authorised under Security Council decisions, the national system and required approval procedures.
Article 136 — Bona fide third parties
Bona fide third-party rights shall be protected under the law, provided designated persons are not enabled to receive prohibited benefits.
Article 137 — Implementation supervision
Supervisors shall verify immediate, effective implementation of targeted sanctions by regulated institutions, businesses and professions and impose appropriate sanctions for failure.
Article 138 — Effectiveness measurement
The Council shall monitor update delivery times, asset freezing, unfreezing, grievances, inspections and evasion cases, publishing aggregate statistics.
Chapter Thirteen — Counter-proliferation financing
Article 139 — National proliferation risk assessment
A specialised proliferation-financing risk assessment shall consider geography, trade, borders, dual-use goods, transfers, legal persons and evasion networks.
Article 140 — Institutional coordination
A standing mechanism shall bring together the Office, Central Bank, customs, border authorities, security bodies, trade, foreign affairs and sector supervisors to exchange proliferation-risk information within the law.
Article 141 — Trade and dual-use goods
Financial, customs and trade authorities shall coordinate monitoring of payments, shipments and intermediaries associated with prohibited or dual-use goods, using international control lists that become binding under the law.
Article 142 — Trade finance
Banks and institutions shall adopt guidance for detecting proliferation indicators in letters of credit, collections, invoices, shipping and insurance, including parties, goods, vessels and unusual routes.
Article 143 — Sanctions evasion
Complex ownership structures, shell companies, third-party transfers, re-exports and changes to vessel or beneficiary names are risk indicators requiring enhanced examination, but do not alone prove an offence.
Article 144 — Covered countries and regimes
Measures shall update automatically under applicable Security Council decisions rather than remain tied to an international decision or regime that has expired or changed.
Article 145 — Non-bank sector training
Supervisors shall train exchange, payment, insurance and securities companies and non-financial professions on proliferation indicators and targeted sanctions.
Article 146 — Proliferation-related inspections
Proliferation risks shall form part of on-site and off-site inspection plans. Supervision shall not be limited to money laundering and terrorist financing.
Article 147 — Reporting evasion
Regulated entities shall report suspected activity intended to evade proliferation-financing sanctions or conceal a designated person's ownership and control.
Article 148 — International cooperation
Competent authorities shall exchange information on proliferation and its financing with foreign and international bodies under laws and treaties, with use and confidentiality safeguards.
Article 149 — Updating measures after sanctions changes
When an international sanctions regime is reinstated, ended or amended, the competent national body shall immediately update lists and guidance to prevent unlawful freezing continuing or mandatory freezing being lifted.
Article 150 — Effectiveness review
The Council shall annually submit a non-confidential assessment of progress in understanding proliferation risks, implementing sanctions, detecting evasion and identifying deficiencies requiring amendment.
Chapter Fourteen — Beneficial ownership and legal persons
Article 151 — Basic information duty
Companies and legal persons established or registered in Iraq shall retain accurate, current basic information on formation, management, address and ownership under the Companies Law and special legislation.
Article 152 — Beneficial ownership information
Legal persons shall identify beneficial owners and retain adequate, accurate, current information, making it available to the Companies Registrar and competent bodies under the law.
Article 153 — Central register
A central beneficial ownership register shall be established or developed within the Companies Registrar. The Companies Law or regulations shall govern registration, verification, updating, access and sanctions, integrating with this Law's requirements.
Article 154 — Ownership and control through other means
Beneficial ownership identification shall extend beyond share percentages to control through agreements, voting rights, influence, arrangements, ownership chains or any other effective means.
Article 155 — Nominee shareholders or directors
Any nominee shareholder or director relationship and the actual nominator shall be disclosed where such arrangements are lawful. They shall not conceal ownership or control.
Article 156 — Verification
Competent bodies shall verify information using registers, tax and banking data, identity records, documents and other reliable sources. The register shall not rely solely on self-declaration.
Article 157 — Updating
Legal persons shall report material beneficial ownership changes within a short period prescribed by regulation and periodically confirm data even when unchanged.
Article 158 — Authority access
The Office and authorised investigative, judicial, tax, supervisory and other bodies shall have rapid information access proportionate to their powers.
Article 159 — Public access
The Companies Law shall determine publicly accessible information, balancing transparency, data protection and security. Restricted public access shall not prevent full access by competent authorities.
Article 160 — False information sanctions
Effective, proportionate sanctions shall apply to non-registration, failure to update, false information and concealment of beneficial owners, without prejudice to criminal liability for fraud or forgery.
Article 161 — Foreign legal persons
Beneficial ownership requirements shall apply to foreign persons conducting business or holding assets, accounts or branches in Iraq within statutory limits.
Article 162 — Foreign legal arrangements
Trustees or persons administering a foreign legal arrangement in Iraq shall disclose their capacity and provide party and beneficiary information to regulated entities and competent authorities under the law.
Chapter Fifteen — Supervision, oversight and administrative sanctions
Article 163 — Designation of supervisors
Regulations shall designate supervisors for each regulated category and prevent overlaps that obscure responsibility. The Central Bank remains supervisor of banks and financial institutions specified by its law.
Article 164 — Supervisory powers
Supervisors may request information, conduct on-site and off-site inspections, access records, test systems, require corrective plans and take enforcement action within the law.
Article 165 — Risk-based supervision
Each supervisor shall risk-rate regulated institutions or professions and set supervisory frequency and scope accordingly, updating ratings when risks change or material violations emerge.
Article 166 — Licensing and fitness
Supervisors shall prevent criminals and associates from holding qualifying interests, controlling or managing regulated institutions, including through beneficial ownership, source-of-funds and fitness verification.
Article 167 — Corrective plans
Supervisors may require corrective plans with defined deadlines and responsibilities, without precluding sanctions for serious violations.
Article 168 — Administrative sanctions
Sanctions include warnings, corrective orders, fines, activity or product restrictions, licence suspension or revocation, and removal or disqualification of officials, under proportionality and sectoral laws.
Article 169 — Management sanctions
Senior management and compliance officers may be held accountable where participation or gross negligence in violating this Law is established. Liability shall not arise automatically merely because an institutional violation occurred.
Article 170 — Publication of sanctions
Final decisions imposing material administrative sanctions may be published with the violation and measure stated, unless publication risks financial stability, an investigation or protected data.
Article 171 — Supervisory coordination
Supervisors shall share risk findings, inspections, sanctions and financial-group information within confidentiality limits and avoid unnecessary duplicate requests.
Article 172 — Financial groups
Financial groups shall undergo consolidated supervision of money-laundering, terrorist-financing and proliferation-financing risks and foreign branch and subsidiary policies.
Article 173 — Foreign branches
Iraqi institutions shall ensure that foreign branches and subsidiaries apply standards no lower than domestic requirements where host-country law permits, notifying the supervisor of conflicts.
Article 174 — Effectiveness testing
Inspections shall go beyond written policies to test implementation of due diligence, reporting, targeted sanctions, beneficial ownership identification, systems and actual outcomes.
Chapter Sixteen — Cross-border transport of cash and instruments
Article 175 — Disclosure or declaration
Bringing currency, bearer negotiable instruments and legally designated metals or valuables into or out of Iraq above the prescribed threshold shall be subject to disclosure or declaration.
Article 176 — Information
Declarations shall identify the carrier, fund owner, intended beneficiary, source, purpose, destination and amount or value.
Article 177 — Power to stop
Customs and competent bodies may temporarily stop or seize funds for non-declaration, false declaration or suspicion of money laundering, terrorist financing or proliferation financing, subject to legal safeguards and defined periods.
Article 178 — No automatic confiscation
Funds shall not be confiscated solely for non-declaration except within statutory limits and by competent decision, distinguishing administrative breaches from crime.
Article 179 — Information exchange
Suspicious-case data shall be transmitted to the Office and investigative bodies and may be exchanged internationally under treaties and the law.
Article 180 — Freight and mail
Measures shall apply to cash and instruments sent by mail or freight according to risk and lawful inspection powers.
Article 181 — Training and technology
Border authorities and customs shall develop detection and risk-assessment tools and specialist training, linking data to Office systems where needed.
Article 182 — Statistics
Aggregate statistics on declarations, violations, seizures, confiscations and suspicions shall be published without personal data disclosure.
Chapter Seventeen — Financial investigation, confiscation and asset recovery
Article 183 — Parallel financial investigation
For serious proceeds-generating or terrorism-related offences, investigators shall conduct parallel financial investigations identifying funds, beneficiaries, routes and assets available for seizure and confiscation.
Article 184 — Use of financial intelligence
Competent bodies may use Office reports and financial information as investigative intelligence under lawful procedures. A report alone is not evidence sufficient for conviction unless supported by admissible evidence.
Article 185 — Tracing powers
Investigative and judicial bodies may request banking, commercial, tax, customs, ownership and financial communication records under prescribed procedures and safeguards.
Article 186 — Provisional measures
Funds and assets suspected to be criminal proceeds or instrumentalities may be frozen, seized or restrained by competent decision on a legal basis, subject to judicial review and a reasonable duration.
Article 187 — Confiscation
Confiscation of proceeds, instrumentalities and equivalent-value property may be ordered under the law, protecting bona fide third-party rights.
Article 188 — Non-conviction-based confiscation
Non-conviction-based confiscation may be regulated in exceptional cases authorised by special law with full judicial safeguards, such as death, flight or legal inability to try the accused. This provision alone creates no administrative confiscation mechanism.
Article 189 — Commingled assets
Where proceeds are mixed with lawful funds, confiscation may extend to the proceeds' or benefit's value under judicial decision.
Article 190 — Asset income
Confiscation includes profits and returns generated by unlawful assets within statutory limits.
Article 191 — Management of seized assets
A professional system shall manage seized and confiscated assets to preserve value and prevent deterioration or manipulation. Perishable or costly-to-maintain assets may be sold by judicial order.
Article 192 — Asset register
A central register shall record seized and confiscated assets, the responsible body, case, value, status and final disposal, protecting investigative confidentiality.
Article 193 — Asset recovery
Competent bodies shall coordinate tracing and recovery outside Iraq and execute foreign requests under treaties, the law and reciprocity where applicable.
Article 194 — Asset sharing
Confiscated assets may be shared with another state under a treaty or legally authorised government decision after satisfying victims' and priority creditors' rights.
Article 195 — Victim compensation
Priority shall be given to restitution or compensation for victims where ordered by courts and feasible without impairing other legal rights.
Article 196 — Performance indicators
Recovery effectiveness shall be measured by the value of assets traced, seized, confiscated and returned relative to risks and estimated proceeds, rather than seizure-order counts alone.
Chapter Eighteen — International cooperation
Article 197 — Broad cooperation
Competent authorities shall cooperate as promptly and broadly as the law allows on money laundering, terrorist financing, proliferation financing, predicate offences and asset recovery.
Article 198 — Mutual legal assistance
Mutual legal assistance requests shall be made and received under criminal procedure law and applicable treaties, with a designated central authority and clear follow-up and prioritisation channels.
Article 199 — Speed and follow-up
Incoming and outgoing requests shall be registered with follow-up deadlines and responsibilities. Supplementary information may be sought instead of rejecting a remediable request.
Article 200 — Financial offences and confidentiality
A request shall not be refused solely because information is banking or tax information if statutory and treaty conditions are met.
Article 201 — Extradition
Persons wanted for covered offences may be extradited under extradition law and treaties. Differing legal offence names shall not prevent extradition where the conduct is criminal in both states.
Article 202 — Financial intelligence unit cooperation
The Office may exchange information spontaneously or on request with counterpart financial intelligence units under Egmont Group principles, treaties and arrangements, with appropriate use and confidentiality restrictions.
Article 203 — Supervisory cooperation
Supervisors may lawfully exchange information with counterparts on institutions, groups, ownership, risks and sanctions, without always requiring a judicial assistance request.
Article 204 — Joint investigation teams
Joint investigation teams or arrangements may be established for cross-border cases under a treaty or lawful approval, with powers and evidence use defined.
Article 205 — Spontaneous referrals
An Iraqi authority may spontaneously send information to a foreign body where relevant to crime or cross-border assets and legally permitted.
Article 206 — Protection of foreign information
Foreign information shall not be used for another purpose or disclosed to third parties contrary to the sender's conditions or the law without required consent.
Article 207 — Non-politicisation
International cooperation shall not target persons for lawful political opinion, religion, ethnicity or protected status. Requests may be refused if contrary to public policy or fundamental rights under the law.
Article 208 — Cooperation statistics
Statistics shall record response times, completed and refused requests, recovered assets and exchanged information and be used to improve performance.
Chapter Nineteen — Data protection, rights and safeguards
Article 209 — Purpose limitation
Information under this Law shall be collected and processed for its specified purposes as necessary and proportionate. Anti-money laundering rules shall not create general financial surveillance without a lawful purpose.
Article 210 — Information security
Public and private bodies shall apply technical and organisational safeguards against unauthorised access, copying, leakage or alteration of sensitive data.
Article 211 — Access logs
Central systems shall log who accessed data, when and for what purpose. Unlawful use shall entail accountability.
Article 212 — Rectification
Persons may request correction of inaccurate identifying data in non-investigative registers under prescribed procedures, without acquiring a right to learn of a suspicious report or secret investigation.
Article 213 — Automated decisions
Automated risk-rating or matching systems shall operate under suitable human oversight. Automated results alone shall not justify conviction, confiscation or designation.
Article 214 — Right to challenge
Administrative decisions affecting a licence, property or right under this Law shall be subject to grievance and appeal under the law, with regard to the urgent nature of international freezing measures.
Article 215 — Prevention of excessive retention
Data shall be deleted or archived after the statutory period unless a legitimate judicial or investigative reason warrants longer retention.
Article 216 — Protection of reporting persons and employees
Laws protecting reporting persons, witnesses and employees refusing unlawful transactions shall apply, and unlawful employment retaliation shall be prohibited.
Chapter Twenty — Penalties, transitional and final provisions
Article 217 — Criminal penalties
Penalties for money laundering, terrorist financing and proliferation financing shall be set to ensure effectiveness, proportionality and deterrence, considering seriousness, proceeds, intent, participation and aggravating circumstances.
Article 218 — Administrative fines
Regulations or sectoral laws shall establish administrative fine ranges proportionate to institutional size, seriousness, repetition and benefit obtained. Minimum fines shall not become an ordinary business cost for large institutions.
Article 219 — Minor violations
Non-serious technical violations may be addressed by a corrective order or warning before a fine where no risk, repetition or bad faith exists, under a published enforcement policy.
Article 220 — Repetition
Repeating a violation or failing to implement a corrective plan shall justify a stronger administrative measure.
Article 221 — Public-official disciplinary liability
Public officials disclosing confidential information, deliberately obstructing a freezing measure or lawful request, or abusing powers shall incur disciplinary and criminal liability under applicable laws.
Article 222 — Continuation of the Office and Council
The Office and Council established under Law No. (39) of 2015 shall continue by operation of law without re-establishment. Rights, records, employees and obligations shall transfer to them consistently with this Law.
Article 223 — Continuation of the freezing regulation
Terrorist Asset Freezing Regulation No. (6) of 2023 and its implementing instructions and decisions shall remain in force where consistent until updated. International references shall be updated to reflect Security Council regimes actually in force.
Article 224 — Continuation of instructions
Existing due diligence instructions, politically exposed person rules, supervisory rules and guidance shall continue where consistent for no more than eighteen months or until replaced.
Article 225 — Virtual-asset framework
Within nine months, the Council of Ministers and competent supervisors shall issue the detailed legislative and regulatory framework for licensing or regulating virtual asset service providers. A special bill may be proposed if market characteristics require.
Article 226 — Beneficial ownership
Within six months, the government shall submit necessary amendments to the Companies Law and other legislation to establish an effective, verified beneficial ownership register consistent with this Law.
Article 227 — Non-profit organisations
Non-profit sector risk assessment shall be completed within nine months, and existing measures reviewed to remove disproportionate disruption of legitimate activity.
Article 228 — International action plan programme
The Council shall prepare a national plan, public in summary, to implement Iraq's commitments under FATF increased monitoring and update it according to FATF decisions, without treating the international plan as a substitute for Iraqi legislation.
Article 229 — Review of financial sanctions arrangements
Within three months, the government shall review the freezing regulation and guidance for consistency with current Security Council regimes, including reinstatement of the resolution 1737 regime on Iran since September 2025 and subsequent changes.
Article 230 — Regulations and instructions
The Council of Ministers, Council and supervisors shall each issue necessary regulations and instructions within their remit within one hundred and eighty days. They may not create offences or custodial penalties without legislation.
Article 231 — Review after three years
After three years, the government shall report to the Council of Representatives on effectiveness, covering FATF action plan implementation, investigations, convictions, confiscations, beneficial ownership, virtual assets, proliferation financing and the non-financial sector.
Article 232 — Repeal of the previous law
Anti-Money Laundering and Counter-Terrorist Financing Law No. (39) of 2015 is repealed from this Law's effective date. Legislative and decision references to it shall refer to corresponding provisions of this Law until amended.
Article 233 — Non-retroactivity
New criminalisation or a harsher penalty shall not apply to earlier conduct. Criminal rules more favourable to the accused shall apply under the Constitution and law, without prejudice to legally permitted immediate procedural measures.
Article 234 — Entry into force
This Law shall enter into force ninety days after publication in the Official Gazette, except provisions assigned a specific transition period.
Statement of reasons
This Law is enacted to modernise the Republic of Iraq's system against money laundering, terrorist financing and financing the proliferation of weapons of mass destruction; improve effective implementation of international standards and the 2026 FATF action plan; regulate virtual-asset risks and informal value transfer services; strengthen beneficial ownership transparency and risk-based supervision of financial institutions, non-financial professions and non-profit organisations; and develop targeted financial sanctions, financial investigation, confiscation and international cooperation while protecting rights, data and legitimate activity.
Explanatory memorandum
1. Why replace rather than amend the 2015 law?
The 2015 law marked a fundamental advance and created institutions that remain operational, but the legal environment has changed: the 2023 freezing regulation, new beneficial ownership standards, virtual assets, evolving proliferation risks, and a mutual evaluation and FATF plan in 2026. Consolidating these in one law is clearer than a chain of amendments and cross-references.
2. The Office remains in place
There is no need for a new financial intelligence unit. The current Office has a national platform, goAML and institutional relationships. What is needed is stronger independence, resources, information-request powers and feedback capacity, with financial oversight protecting operational confidentiality.
3. Virtual assets
The FATF plan expressly identified the need for a legislative framework for virtual asset service providers. The law defines core activities and obligations, leaving the Central Bank and competent authority to decide whether particular products are permitted, restricted or prohibited for monetary or financial reasons. It thus does not conflate anti-money laundering regulation with monetary policy decisions.
4. Beneficial ownership
The task is not merely to ask a company who owns it, but to identify the natural person ultimately controlling it, verify the information and keep it current. The proposal therefore links duties of companies and financial institutions with the central register, with details completed in Companies Law POL-40.
5. Suspicious reports
More reports are not an objective in themselves. A good report explains who conducted the transaction, what made it implausible, who the beneficial owner is and where funds went. The proposal therefore emphasises quality, feedback and investigative use of information, central elements of the 2026 plan.
6. Non-profit organisations
Risk-based assessment avoids subjecting every organisation to identical security treatment. Intensive measures target activities genuinely exposed to abuse, while legitimate humanitarian and civil society associations are protected from unjustified disruption of funding and services.
7. Financial sanctions are not confiscation
Freezing is a preventive measure prohibiting dealings in a designated person's assets; it does not automatically transfer ownership to the state. The proposal therefore provides for grievances, correction of false matches, basic-expense exceptions and bona fide third-party protection, while permanent confiscation still requires the appropriate judicial basis.
Proliferation financing and changes in the sanctions regime
The 2024 assessment found that Iraq had a legal basis for proliferation-related financial sanctions but recorded weaknesses in coordination, understanding and supervision outside some sectors. The international framework then changed after assessment. On 27 September 2025, the Security Council reapplied resolutions 1696, 1737, 1747, 1803, 1835 and 1929 concerning Iran and re-established the 1737 Committee list, while the 1718 regime for North Korea continued.
The proposal therefore does not repeat a fixed reference to resolution 2231 as in the 2023 regulation and 2024 assessment. It establishes a dynamic rule: institutions and authorities follow Security Council regimes in force at implementation and update lists and guidance immediately upon changes. This prevents freezing from continuing after its basis expires or a reinstated freeze being overlooked.
Reform also extends from name matching to evasion detection: indirect ownership and control, shell companies, third parties, trade finance, dual-use goods and unusual shipping routes. These indicators trigger examination but do not alone establish guilt.
Beneficial ownership and virtual assets
The proposal combines three layers: legal persons retain and update their beneficial ownership data; the Companies Registrar maintains a verifiable central register; and financial institutions independently verify rather than rely solely on a registry statement where inconsistencies arise. This design addresses the 2024 assessment's gap concerning ownership chains and control through other means.
Virtual asset service providers are subject to licensing, beneficial ownership, due diligence, reporting, targeted sanctions and the travel rule, with transition arrangements for existing activities. The law does not equate every digital use with crime; it regulates intermediaries according to risk.
Non-financial professions and non-profit organisations
A prominent 2024 finding was weak understanding and implementation by many non-financial businesses and professions of due diligence, beneficial ownership, reporting and targeted sanctions obligations, with very few suspicious reports from some. The proposal therefore moves supervision beyond naming a competent authority to an actual duty of risk-based inspection, sanctions and training.
At the same time, it prevents literal application of the banking model to small legal practices or charities. Requirements are proportionate to activities and risks and respect legitimate professional confidentiality and humanitarian work, without exempting genuinely risky financial transactions.
Investigation, confiscation and international cooperation
The proposal emphasises parallel financial investigation of proceeds-generating offences and terrorist financing so cases do not end in conviction while funds remain untouched. It regulates tracing, freezing, seizure, equivalent-value confiscation, asset management and recovery while protecting bona fide third parties and victims.
It also strengthens direct international cooperation between financial intelligence units and supervisors, retaining mutual legal assistance and extradition within judicial and treaty frameworks. The aim is to address slow requests and improve cross-border use of ownership and asset information.
Legislative alignment
| Framework | Proposed remedy |
|---|---|
| Law No. (39) of 2015 | Repeal and replacement, with the Council and Office continuing by operation of law. |
| Terrorist Asset Freezing Regulation No. (6) of 2023 | Transitional continuation and updated references to current Security Council regimes. |
| Due Diligence Instructions No. (1) of 2023 | Continue where consistent, then update within 18 months. |
| Politically Exposed Persons Rules No. (2) of 2023 and 2026 updates | Remain an implementation reference, reviewed under the risk-based approach. |
| Companies Law | Beneficial ownership registration, verification mechanisms and sanctions are completed in POL-40. |
| Central Bank Law and Banking Law | Remain the licensing and financial-supervision reference; this Law provides anti-money laundering obligations. |
| Counter-Terrorism Law and criminal laws | Remain the reference for offences and penalties not specifically governed by this Law. |
Financial and Implementation Implications
The proposal requires no new financial intelligence institution or council; both already exist. Additional costs focus on Office systems, the beneficial ownership register, the virtual-asset framework, data links, non-financial sector training and supervision, and proliferation-financing analysis and financial investigation tools.
A reliable total cannot be stated before specifying the ownership register's technical design, the scope of virtual-asset licensing and the number of supervisors needing added capacity. The law therefore requires implementation cost estimates within the budget instead of a hypothetical figure.
Reform may produce positive fiscal effects through asset recovery, reduced crime, better correspondent banking and greater international confidence. These benefits are neither guaranteed revenues nor a justification for a predetermined cost.
Transition and Implementation
Existing institutions and core regulations continue to prevent a legal vacuum. During the first nine months, priority goes to three areas directly tied to the 2026 FATF plan: the virtual-asset framework, beneficial ownership register and non-profit organisation risk assessment. The freezing regulation is also reviewed promptly for alignment with current international regimes after the Iran regime changed in 2025.
Increased monitoring is neither permanent status nor a judgement on the entire system. The law requires a national measurement plan linked to results permitting action items to close when genuinely achieved. After three years, a parliamentary report addresses effectiveness rather than merely regulations issued.
Sources and references
- Anti-Money Laundering and Counter-Terrorist Financing Office — LegislationThe official source for Anti-Money Laundering and Counter-Terrorist Financing Law No. (39) of 2015 and published regulations, instructions and guidance.
- Anti-Money Laundering and Counter-Terrorist Financing Office — Official website and national sanctions platformDocuments the Office's continuity and operational independence, sanctions-list platform, match reports, grievances and goAML through 2026.
- National Strategy Against Money Laundering, Terrorist Financing and Weapons Proliferation 2023–2027An official reference for the Council and Office structure and existing national strategy.
- Anti-Money Laundering and Counter-Terrorist Financing Council — Due Diligence Rules Instructions No. (1) of 2023The due diligence implementation framework for financial institutions and designated non-financial businesses and professions.
- Anti-Money Laundering and Counter-Terrorist Financing Council — Politically Exposed Persons Rules No. (2) of 2023A national reference for measures concerning domestic and foreign politically exposed persons and international-organisation officials.
- Central Bank of Iraq — Anti-money laundering and counter-terrorist financingIncludes supervisory rules against money laundering, terrorist financing and weapons proliferation, and due diligence instructions.
- Central Bank of Iraq — Banking supervisionDocuments 2026 updates on politically exposed persons, suspicious indicators, risk management and banking supervision.
- Central Bank of Iraq — Supervision of non-bank financial institutionsDocuments rules governing exchange, electronic payments and non-bank financial institutions through 2026.
- Central Bank of Iraq — FATF adopts Iraq's plan, 19 June 2026The official Iraqi source on the joint FATF action plan, including virtual assets, targeted sanctions, beneficial ownership, investigations and proliferation financing.
- FATF — Jurisdictions under Increased Monitoring, 19 June 2026Placed Iraq under increased monitoring in June 2026 and defined a nine-part plan to improve system effectiveness.
- FATF/MENAFATF — Mutual Evaluation Report of Iraq, 2024The latest comprehensive mutual evaluation, identifying effectiveness and compliance ratings and gaps in non-financial sectors, beneficial ownership and proliferation financing.
- MENAFATF — Mutual Evaluation Report of the Republic of IraqThe official regional publication reference for Iraq's second-round assessment.
- Central Bank of Iraq — Implementing targeted financial sanctions under the FATF plan, 16 July 2026Documents operational work towards immediate and effective targeted financial sanctions implementation.
- Central Bank of Iraq — Guidance on applying targeted financial sanctions, 20 September 2026The latest published official guidance for financial institutions and designated non-financial businesses and professions on implementation without delay.
- Central Bank of Iraq — Supreme National Committee for Regulating Virtual Assets, 14 December 2025Documents the start of government work on a comprehensive virtual-asset regulatory framework before the 2026 FATF plan.
- Security Council — Resolution 1718 Committee concerning the Democratic People's Republic of KoreaThe current international sanctions and weapons-of-mass-destruction proliferation-financing regime for North Korea.
- Security Council — Resolution 1737 Committee concerning IranThe international regime reinstated from 27 September 2025 concerning measures relating to Iran's proliferation programme.
- Security Council — 1737 list materialsDocuments re-establishment of the 1737 sanctions list after Security Council resolutions were reapplied in September 2025.
- Security Council — Consolidated sanctions listThe updated consolidated list of all persons and entities subject to Security Council measures.
Proposed legislation within Ali Zuweid's Political Programme · Prepared by Ali Zuweid