CENTRAL BANK OF IRAQ - MONEY LAUNDERING REPORTING

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 001609 SIPDIS E.O. 12958: DECL: 04/12/2019 TAGS: EFIN PTER KTFN KCRM PGOV SNAR IZ SUBJECT: CENTRAL BANK OF IRAQ - MONEY LAUNDERING REPORTING OFFICE BAGHDAD 00001609 001.2 OF 002 ////////////ZFR/////////////////ZFR////////// //////ZFR///////////////// MESSAGE BEEN CANCELED AND WILL BE RESENT WITH NEW MRN. /////////////ZFR///////////////ZFR/////////// //////ZFR///////////////// BAGHDAD 00001609 002 OF 002 -------------- ¶7. (SBU) Ena'am stated that the new Anti-Money Laundering (AML) Law has been drafted and sent to the Shura Council for review. It specifies predicate crimes for the crime of money laundering, unlike the previous AML Law. However, she predicted that it will require a long time to get through the Shura Council. Freezing Assets -------------- ¶8. (SBU) Ena'am described two ways that the freezing of assets can occur. One is the "holding" of assets under a judicial order from the Ministry of Justice (MOJ). The other is a "collection of government debts" by the CBI. The latter can be used to hold assets when government assets are involved, and it proceeds as follows. The head of MLRO informs the CBI of the need to investigate a case, and upon completion of the investigation (which requires approximately a week),the MLRO provides a memorandum to the CBI Governor. If necessary, the CBI then contacts the Financial Crime Department of the MOI which will investigate the crime, and also the MOJ to request a judicial order to hold the assets. Relationship with Other Ministries -------------- ¶9. (C) The CBI has the authority to investigate financial crimes, but the MOI does not always inform the CBI when it investigates crimes with a financial crime element. As a result, the CBI is attempting to integrate itself more into the law enforcement process. It has requested participation in the National Committee, which is included within the new draft AML law at MENA-FATF's request. The committee will meet once a month to discuss cases to be transferred to the courts. The CBI also seeks greater authority, including the ability to issue arrest warrants. ¶10. (C) Ena'am provided an example of how the CBI can use its authority to investigate financial crimes to address criminal cases even when the MOI does not prosecute them. In one case, the CBI discovered payroll embezzlement by an employee, but the MOI issued a decision that the employee was not guilty and the employee demanded reinstatement. The CBI then required that the employee return the embezzled funds and obtained an order to hold the assets until they were returned. This action was possible because the embezzled funds were deemed "government debts." ¶11. (C) Ena'am also provided an example of how the CBI educates other government institutions that are not well informed about Iraq's AML Law. She once received a 2 a.m. call from a judge in Rutba after customs police found a man at the Jordanian border with $3 million hidden in his car who claimed to transport the money legally. The judge, not knowing the applicable law, contacted the MLRO. Ena'am informed the judge that amounts up to $10,000 were legal to transport, but larger amounts had to be declared. Therefore, crossing the border with the money concealed was illegal and required investigation. Comment -------------- ¶12. (C) The MRLO's higher leadership is experienced long-term CBI staff members who appear well-informed about AML-CFT issues and determined to improve the capacity and powers of the office. They appear to be aware of the current limitations of the MLRO and are eager to improve the knowledge level of its personnel through training programs. (This discussion did not focus on the MLRO's limitations, aside from the lack of experienced personnel, but reftel provides details). This said, MLRO leadership is strongly deferential to the CBI, even to the point of deferring all Qdeferential to the CBI, even to the point of deferring all FSAT visit arrangements to the CBI. These issues should be taken into account in future cooperation with the MLRO. FORD