Iraq removed from EU list of high-risk money laundering countries

Dilan Sirwan
ERBIL, Kurdistan Region - Iraq has been taken off the European Union’s list of countries at high risk of money laundering and financing terrorism, the EU’s ambassador to Baghdad said on Sunday, noting that the move will pave the way for further cooperation and investment.

During a meeting with the Iraqi Prime Minister Mustafa al-Kadhimi, the EU Ambassador to Iraq Ville Varjola told the premier that Iraq has made it off the list of countries at high risk of money laundering and financing terrorism, a move later confirmed by a statement from Kadhimi’s office.

Varjola then took to Twitter to share the news, saying that it will "pave the way for deepening cooperation and investment."

Iraqi Prime Minister Mustafa al-Kadhimi welcomed the EU's decision in a tweet on Monday, saying that "the decision of the EU to delist Iraq from the list of high risk countries on AML/CTF is a manifestation of our effective diplomatic efforts."

Kurdistan Region Prime Minister Masrour Barzani also welcomed the decision. 

"In recent years, the KRG [Kurdistan regional Government] and the federal government in Baghdad have worked together with our partners in the international community to target the financing of terrorism and criminal networks, including illegal currency auctions and informal money service businesses," Barzani said on Monday evening. 

Iraq was added to the list in 2016. In 2019, the EU named Iraq on the list of 23 countries that “have strategic deficiencies” in their anti-money laundering and counter-terrorist financing laws.

The aim of the list was to protect the EU's financial systems by “better preventing money laundering and terrorists financial risks,” the statement by the European Union commission read alongside the list.

Iraqi Prime Minister Mustafa al-Kadhimi had previously called on EU member states to remove Iraq from the list, which can restrict the transfer of finances between countries and hinder private enterprises.

On a trip to Brussels in July, Kadhimi met with the president of the European Commission, Ursula von der Leyen, telling her that Iraq was seeking European support to be removed from the Commission's list of high-risk countries.

The prime minister’s efforts followed the decision of his cabinet in October 2020 to introduce its White Paper, a series of economic reforms which include financial, economic and institutional changes to the country’s oil, electricity, agriculture, and education sectors, as well as tackling waste and corruption.

"We will continue working diligently to serve our national interests, and achieve Iraq's deserved status," the prime minister added.

The move from the EU came after the UK removed Iraq in April from the list of countries at high risk of money laundering.

The Iraqi Central Bank at the time welcomed the decision saying that it "positively reflected in facilitating business and entering companies between the two countries, as well as supporting financial operations between the Iraqi banking sector and the United Kingdom."

Corruption is rife in Iraq and an estimated $150 billion has been taken out of the country since 2003.

Updated at 7:57 pm