The Iraqi government’s Customer Due Diligence “CDD” Rules are designed to combat money laundering, terrorist financing, and other financial crimes by establishing a comprehensive framework for financial institutions to verify the identities of their customers and understand their financial activities. These rules are essential for ensuring that financial institutions operate transparently, mitigate risks, and comply with international standards on anti-money laundering “AML” and counter-terrorism financing “CTF”.
These instructions outline the required procedures for customer identification, the determination of the beneficial owner, and the ongoing monitoring of transactions. They also specify the conditions under which financial institutions must conduct enhanced or simplified due diligence based on the risk profile of a customer or the transaction.
The measures cover a wide range of issues, including the timing of due diligence activities, reliance on third parties, and the record-keeping requirements for financial institutions. The instructions emphasize a risk-based approach, where different levels of scrutiny are applied depending on the perceived risk of a transaction or customer.
By adhering to these rules, institutions can help protect the financial system from being misused for illicit activities and contribute to Iraq’s efforts to align with international best practices in financial regulation and compliance.