Iraqi Banks Rush to Meet US Compliance Deadlines

Iraqi private banks are intensifying their efforts to comply with US regulations, as per instructions from the Central Bank of Iraq (CBI). The CBI has mandated stronger anti-money laundering and counter-terrorist financing controls, tighter governance, closer monitoring of dollar movements, and measures to prevent smuggling and illicit transfers. Banks have been given deadlines to complete these procedures, with failure potentially limiting access to international banking services.

Employees at several private lenders report that management has intensified work, with some staff working 12 hours a day and experiencing severe exhaustion and fainting cases. This indicates the urgency of the situation and the pressure on banks to comply.

The CBI Governor Nizar Nasser Hussein held high-level meetings with US Treasury officials that resulted in an understanding to return restricted Iraqi banks to foreign correspondent channels in currencies other than the US dollar. Currently, seven banks are eligible to resume non-dollar correspondent banking and may later qualify for dollar transactions after completing further compliance and governance requirements.

The Prime Minister's office announced on July 18 that these meetings had taken place and led to a positive outcome, with the understanding to return restricted Iraqi banks to foreign correspondent channels in currencies other than the US dollar. This development is seen as a significant step towards normalizing Iraq's banking sector and improving its relationship with international partners.