Iraq Country Summary
Higher Risk
View full Ratings TableSanctions
Higher Concern
FATF AML Deficient List
Lower Concern
Terrorism
Medium Concern
Corruption
Higher Concern
US State ML Assessment
Higher Concern
Criminal Markets (GI Index)
Higher Concern
EU Tax Blacklist
Lower Concern
Offshore Finance Center
Lower Concern
Please note that although the below Summary will give a general outline of the AML risks associated with the jurisdiction, if you are a Regulated entity then you may need to demonstrate that your Jurisdictional AML risk assessment has included a full assessment of the risk elements that have been identified as underpinning overall Country AML risk. To satisfy these requirements, we would recommend that you use our Subscription area.
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Anti Money Laundering
FATF Status
Iraq was removed from the FATF List of Countries that have been identified as having strategic AML deficiencies on 29 June 2018.
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Iraq was undertaken in 2024. According to that Evaluation, Iraq was deemed Compliant for 14 and Largely Compliant for 13 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 2 of the Effectiveness ratings.
Sanctions
Current sanctions against Iraq are primarily UN Security Council measures, including an arms embargo that remains in place with exemptions for the Government of Iraq and the multinational force, cultural property restrictions, asset freezes targeting members of the former Saddam Hussein regime, and Development Fund requirements (the fund was wound up in 2011). Beyond the UN, other jurisdictions—the United States (OFAC), the European Union, the United Kingdom, Australia, Canada, Japan, New Zealand, Switzerland, Norway, Iceland, and Liechtenstein—maintain targeted sanctions such as arms embargoes, asset freezes on designated individuals, and cultural property protections, with recent actions like the January 2024 OFAC designation of Al-Huda Bank, while the Arab League currently has no sanctions against Iraq.
Criminality
Rating |
0 (bad) - 100 (good) |
|---|---|
| Transparency International Corruption Index | 28 |
| World Bank: Control of Corruption Percentile Rank | 8 |
Iraq faces significant challenges related to crime and corruption, with pervasive public corruption undermining trust in government and complicating business operations. Despite efforts to combat these issues through various anti-corruption initiatives and oversight bodies, the environment remains fraught with bribery, nepotism, and the influence of politically connected individuals, which hinders foreign investment and economic growth.
Economy
Iraq's economy is primarily driven by oil revenues, which constitute the main source of the government's budget. While the current government is working to strengthen business ties with U.S. and Western firms, the investment climate is hindered by various challenges, including regulatory burdens, corruption, and security concerns related to extremist threats and militia activities. Despite these obstacles, Iraq presents opportunities for foreign investors, particularly in sectors such as oil and gas, electricity, and technology, with the semi-autonomous Iraqi Kurdistan Region offering a more stable environment for investment, albeit with its own set of challenges.
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