Analytical Study of the Phenomenon of Money Laundering and its Impact on the Iraqi Banking Sector

Raad Abdulameer Oleiwi

doi:10.29196/jubpas.v27i2.2078

Abstract

This study discusses the phenomenon of money laundering and its impact on the financial sector in general and the Iraqi banking sector. The research methodology describes money laundering in detail and the three basic stages of money laundering, placement, layering, and integration. How and where money laundering is a key reason to address this problem and what is the role of governments? It also deals with the impact of money laundering on the Iraqi economy, which is the theft of banks, the suspension of industrial projects, terrorism and corruption. The most important recommendations that limit this phenomenon is international cooperation and legal assistance in money laundering investigations. The use of programming and electronic systems to enter the information of owners of real estate and businesses to detect suspicious activities. To reduce this problem requires the establishment of specialized units in the Central Bank and the Ministry of Finance, Justice and the security services to apply all laws against money laundering. As for the Iraqi banking sector, it is necessary to verify the identity of the owners of the funds deposited in banks. Inform the competent authorities by the bank's management of any suspicious activity. In addition to confirming the documents proving the legality of the funds deposited.

Highlights

History reveals that the money laundering is one of the biggest causes of terrorism in many regions around the world and has a major impact on economic growth, and beside this, it is a threat to the country’s overall financial sector reputation
Must be addressed by all means and face firmly, and can be summarized the most important results of this study as follows: 1.There is a close correlation between the emergence of the problem of money laundering in the world and the phenomenon of globalization, which is exploited by some to hit the financial sectors. 2.Technological progress is being exploited in a variety of ways of spreading money laundering
Using advanced means such as the use of the Internet, ATM cards and satellite communication technology in money laundering operations. 3.Money laundering the process of mixing money illegally obtained in the economic cycle to show that it is legitimate money. 4.The existence of competition between banks led to the encouragement of owners of illegal capital to open accounts and cover them by these banks

Summary

Introduction

History reveals that the money laundering is one of the biggest causes of terrorism in many regions around the world and has a major impact on economic growth, and beside this, it is a threat to the country’s overall financial sector reputation. The Central Bank of Iraq (CBI) has organized a course on combating money laundering, terrorism financing, compliance, and risk management. Iraq occurs in the first place among the riskiest countries in terms of money laundering, according to the Basel Institute on Governance's 2017 edition of the Basel Anti-Money Laundering Index. This edition is an annual ranking that assesses 146 countries regarding money laundering risks. The report is based on 14 sub-indices that are weighted in each country's score among the most dangerous countries

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Conclusion