Central Bank of Iraq announces progress in dollar control procedures

The Central Bank of Iraq announced progress in monitoring foreign transfers and cash dollar sales and providing protection for the banking and financial sector from the risks of money laundering, following the ongoing discussions of the Central Bank of Iraq with the Federal Reserve and the US Treasury Department.

The bank's governor, Ali Al-Alaq, said in statements to Al-Hurra website that "the ongoing quarterly meetings with the Federal Reserve and the US Treasury Department within the framework of organizing operations and coordination between the two sides, which have close relations, led to an agreement on procedures and formulas that are consistent with best practices and international standards, the latest of which was the plan related to organizing foreign transfer operations by rebuilding them according to new standards and methods."

Al-Alaq revealed that Iraq has achieved 95% progress in terms of monitoring procedures for foreign transfers and cash dollar sales, and providing protection for the banking and financial sector from the risks of money laundering operations.

In July 2023, the US Treasury imposed sanctions on 14 banks, and months before that, similar sanctions were imposed on 4 other Iraqi banks after they were accused of money laundering.

The Iraqi government, through the Central Bank of Iraq, has been continuing its negotiations for about two years with the US Treasury Department to lift sanctions on these banks, all of which are private banks. 

Jamal Kocher, a member of the Iraqi Parliamentary Finance Committee, confirms that the majority of the sanctioned banks are private banks that represent fronts for political parties with which the United States has stopped dealing.

Koger explained to Alhurra that “the US Treasury imposed sanctions on these Iraqi banks for their involvement in practices that fall under money laundering, money smuggling, and suspicious transactions. In return, the owners of these banks are pressuring the government to lift the sanctions on them, but I do not think that the United States will yield to these pressures. On the contrary, it is adamant about its position, and I do not think that without changing the behavior of these banks, America will abandon these sanctions and their imposition.”

Koger points out that the American pressures on the Central Bank of Iraq will not be eased unless there are changes in the behavior of these banks, calling on these banks to fully implement the conditions required by the US Federal Reserve in terms of transparency, clarity, and commitment to US sanctions on some countries. He said, “Any bank that deviates from these obligations will be subject to US sanctions, and measures will be taken against it.”

The number of banks in Iraq is about 79 banks, 8 of which are government banks, and one digital bank, while the banking sector suffers from a weakness in providing modern and advanced banking services.

For about two years, the Iraqi government has been seeking to digitize financial services, correct and rectify financial policy, enhance financial inclusion, keep pace with technological development, and restructure the banking sector in the country, which has not yet shaken off the dust of the political, economic, and security crises that have plagued it for decades.  link