FATF Places Iraq on Grey List for Anti-Money Laundering and Counter-Terrorist Financing Monitoring

The decision was announced during the organization's latest plenary meeting held in Paris, where FATF confirmed the addition of both Iraq and Bosnia and Herzegovina to the list, citing the need for continued progress in strengthening certain areas related to financial supervision, compliance, and regulatory effectiveness

This development represents one of the most significant challenges currently facing Iraq’s financial sector, particularly at a time when the country is experiencing continued growth in electronic payments, digital wallets, and broader initiatives aimed at expanding financial inclusion and reducing reliance on cash transactions

While inclusion on the grey list does not result in financial sanctions or exclusion from the global financial system, it does place additional compliance expectations on Iraqi financial institutions and highlights the need for further improvements in anti-money laundering and counter-terrorist financing frameworks in line with international standards

The decision comes as Iraq continues efforts to modernize its financial sector and expand the use of digital payment solutions and electronic financial services As a result, regulatory compliance, risk management, and financial oversight are expected to become even more important priorities for banks, payment companies, and fintech providers operating in the country

Industry observers expect the announcement to receive close attention from Iraqi banks and financial institutions due to its potential implications for international financial relationships, correspondent banking partnerships, and the confidence of foreign institutions and investors in the Iraqi market