The Financial Action Task Force (FATF) has classified Iraq as a “grey list” country due to deficiencies in its anti-money laundering and counter-terrorism financing regulations.
This decision, announced during a recent FATF meeting, highlights the ongoing challenges Iraq faces in addressing risks associated with cash management and enhancing investigative measures related to money laundering and terrorism financing.
Meanwhile, Kuwait remains on the grey list despite recent efforts to strengthen its regulatory framework.
Algeria Leaves FATF Grey List
Yet Algeria was removed from FATF’s grey list, reflecting significant progress in implementing effective supervisory measures, beneficial ownership regulations and targeted financial sanctions.
Iraq’s addition comes as newly elected Prime Minister Ali Al-Zaidi aims to rebuild the economy and attract foreign investment, emphasising a commitment to combating corruption.
Iraq’s Political Reforms
Al-Zaidi’s recent dismissal of central bank governor Ali Al-Allaq, a figure who had held the position since 2014, underscores a strategic shift towards reform, with the appointment of Nizar Hussein, an anti-money laundering expert, potentially signalling a renewed focus on financial integrity.
Kuwait: Regulatory Actions
Kuwait’s continued presence on the grey list recognises its recent regulatory actions, including the closure of approximately 73,700 companies for non-disclosure of ownership.
Kuwait was placed on FATF’s grey list earlier this year. Since the listing, Kuwait is following FATF recommendations, prompted by external pressures particularly from Western nations.
The introduction of comprehensive anti-money laundering legislation in Kuwait has been pivotal in criminalising related offences and imposing severe penalties.
Algeria’s successful removal from the grey list is attributed to the enforcement of stringent banking practices, including a ban on cash deposits in corporate accounts, aimed at reducing financial risks.
The developments across the Gulf underline a broader push for financial transparency and safeguarding against illicit financial activities in centres of capital exchange across the GCC.
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