High-Risk Countries and FATF Listings

Central Bank of Iraq Issues Guidance on High-Risk Countries and FATF Listings The Central Bank of Iraq (CBI), through its Anti-Money Laundering and Counter-Terrorist Financing Office, has issued an official guidance note addressing high-risk countries and clarifying the regulatory implications of a country’s inclusion on the Financial Action Task Force (FATF) lists. This guidance aims to enhance awareness among banks, financial institutions, and designated non-financial businesses and professions (DNFBPs) regarding risk-based compliance obligations when dealing with jurisdictions classified as high risk or subject to FATF monitoring. Key Points of the CBI Guidance Defines the concept of high-risk countries from an AML/CFT perspective Explains the difference between FATF high-risk jurisdictions and jurisdictions under increased monitoring Highlights the regulatory and compliance consequences of engaging with listed countries Emphasizes the need for enhanced due diligence (EDD) measures Reinforces alignment with international AML/CFT standards Regulatory Impact on Financial Institutions Entities operating in Iraq are required to: Apply enhanced customer due diligence when transactions involve high-risk jurisdictions Increase monitoring, reporting, and documentation controls Review internal risk assessment models and compliance frameworks Ensure alignment with CBI instructions and FATF recommendations Failure to adequately address risks related to high-risk countries may expose institutions to regulatory action, reputational risk, and operational disruption. Why This Guidance Matters This issuance reflects the CBI’s continued commitment to: Strengthen Iraq’s AML/CFT framework Protect the integrity of the financial and banking system Support compliance with international financial governance standards Reduce exposure to cross-border financial crime risks How Etihad Can Assist Etihad provides legal and regulatory advisory services to banks, financial institutions, and businesses, supporting compliance with applicable laws, regulations, and regulatory guidance issued by any competent authorities.