In June 2026 the Financial Task Force put Iraq back on its grey list for countries involved in money laundering. The Task Force’s president Elisa de Anda Madrazo said that Baghdad needed to take urgent measures to cut the volume of cash based transactions, improve investigations, and more. Iraq was on the grey list before starting in 2018 but then taken off only to fall back.
An analyst told Al Mada that the designation jeopardizes the Central Bank of Iraq working with international financial institutions and could be placed on the Task Force’s blacklist without serious reforms.
Prime Minister Ali al-Zaidi said one of his major goals is to fight corruption. He named a new Central Bank governor as a result. Nazar Nassir Hussein is a career regulator and an anti-money laundering specialist who has been with the bank for 25 years.
The problem for Iraq as always with issues of corruption are the ruling parties. They not only run the government but many of the leading companies in the nation as well. They are the main ones involved in money laundering and since they also run the institutions which are supposed to police the banks they have a vested interest in undermining any rules which are set up.
Case in point. In December 2024 the Central Bank announced that it was punishing 49 companies for money laundering and blocking them from transferring money. Then in February 2025 the Bank said it was going to ban five banks from taking part in its dollar auctions as part of an effort with the U.S. Treasury Department. Similar press releases are made every year and yet that did not stop Baghdad from being placed back upon the Financial Task Force’s grey list. That’s because every company and bank that gets banned by the Central Bank is easily replaced by a new one created to continue the illegal practices.
In the long term, being placed upon watch lists by international groups such as the Financial Task Force really mean little for what actually happens within Iraq. That’s because outside groups can be swayed by what officials, the government and the Central Bank say about reforms even though they actually mean little. All kinds of new regulations, decrees and commissions can be created but the people making and enforcing them mostly come from the ruling parties who are doing the robbing.
SOURCES
Al Aalem, “Behind the Scenes of the International Decision: Why Has Iraq Returned to Financial Monitoring?” 6/21/26
Asharq Al-Awsat, "Iraq to Kick off Crackdown on Money Laundering," 6/21/26
Bas News, “Iraq Placed Back on FATF Grey List Amid Anti-Money Laundering Concerns,” 6/21/26
The Insight International, “Iraq’s central bank to ban five local banks from US dollar transactions,” 2/17/25
Al Mada, “The Central Bank of Iraq punishes 49 companies involved in “money launder” and warns of other fake ones,” 12/17/24
- “Iraq Returns to Money Laundering “Grey List”: Warnings of Financial Isolation and Heavy Economic Costs,” 6/21/26
Mahmoud, Sinan, “Iraq appoints new central bank governor amid financial strain and push for reform,” The National, 6/22/26
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