Iraq Adopts FATF Action Plan to Strengthen Anti-Money Laundering and Counter-Terrorist Financing Framework

The Central Bank of Iraq (CBI) has announced the adoption of a joint action plan with the Financial Action Task Force (FATF) aimed at strengthening the country's framework for combating money laundering, terrorist financing, and proliferation financing

The announcement follows the FATF Plenary Meeting held in June 2026 and comes as part of ongoing cooperation between Iraq, FATF, and the Middle East and North Africa Financial Action Task Force (MENAFATF) to further enhance the regulatory and compliance environment of Iraq’s financial sector

According to an official statement issued by the Central Bank of Iraq, the country has made significant progress in several areas related to anti-money laundering and counter-terrorist financing (AML/CFT) since the publication of its Mutual Evaluation Report in 2024

These achievements include strengthening market entry controls, enhancing supervision of higher-risk sectors, and improving the understanding of financial crime risks among relevant authorities

The newly adopted action plan outlines a range of measures designed to further improve Iraq’s AML/CFT framework, including:

Strengthening national risk assessment processes
Regulating virtual asset service providers (VASPs)
Enhancing the quality and effectiveness of suspicious transaction reporting
Improving beneficial ownership transparency measures
Strengthening investigations related to money laundering and terrorist financing offenses

The Central Bank stated that implementation of the action plan will be carried out in cooperation with judicial, security, supervisory, and financial sector institutions under a defined timeline aimed at reinforcing compliance with international standards and strengthening the resilience of Iraq’s financial system

The statement also noted that Iraq successfully avoided placement on FATF’s blacklist due to the reforms and corrective measures undertaken by relevant institutions over recent years

According to the Central Bank, the next phase will focus on completing the requirements of the action plan while continuing efforts to enhance compliance, supervision, and financial sector governance

The announcement comes only days after FATF placed Iraq under increased monitoring, commonly referred to as the grey list Iraqi authorities emphasized that this designation is accompanied by a clear action plan intended to address identified deficiencies and further improve the effectiveness of the country's anti-money laundering and counter-terrorist financing framework