Country Report - SAI Iraq

The financial and administrative corruption and money laundering are
organized crimes that have a negative effect on the community’s, economic,
social and security aspects. In addition to being one of the cross-border crime
and international terrorism that threatens the stability of societies and their
security. this not easy to control without unifying the international efforts and
cooperation to make the combating effective. Therefore, Iraq has start to face
these crimes seriously through:
 Establishing Intelligence Office for combating money laundering in the CBI
under Article (12) of the Anti-Money Laundering No. 93 of 2004. This act of law
formed to collect information on financial transactions that are subject to
financial monitoring, reporting financial data, processing such information,
analysis and dissemination to secure the financial institutions and the
implementation of the Iraqi policy to prevent money laundering and the
financing of crimes and terrorism.
 Establishing the Joint Council for fighting corruption, headed by the Secretary
General of the Ministers council and the membership of the heads of (Council
of higher Judicial, BSA, the Commission of Integrity) and the Prime Minister
coordinator for the controlling and representative of the inspectors general.
The council goal is the coordination among anti-corruption agencies
represented in this Council, ensure the distribution of roles among them,
activation for their efforts, making recommendations and proposals on
legislations, procedures and appropriate regulations to build a strong front to
face the grave phenomena of corruption and different challenges.
 Issuance of combating money laundering law No. 93 for the year 2004 in
addition to the adopted laws such as Penal Code No. 111 of 1969
 The national strategy has initiated for the fight against corruption for the years
2010-2014, it aims to reduce the phenomena of corruption through:
 Prevention: build a legal and judicial system to be able to achieve
effective deter measures.
 Deterrence: building a wide national system to involve both official and
public institutions
 Create a wide national front, involving both official and public
 Reform from top to bottom of political and executive hierarchy,
starting from the top to the lowest levels of the Executive.
The BSA has played prominent and effective role in the fight against
corruption and money laundering, building on BSA awareness of the fact that
effective deterrence of terrorism, crime and fraud requires strong controls
against illegal acts. Among BSA practices to fight against these tow
phenomena, are the following:
FBSA an active member of the Joint Council for the fight against corruption,
which has formed in 2007
Participation in the development of the national strategy of anti-corruption
for years (2010-2014), which responds to the United Nations Convention
Against Corruption, that we joined in 2007 to serve as a comprehensive,
detailed plan and guide to combat corruption at all levels
Extraordinary efforts by auditors in various activities of government
departments, including contracts and referral procedures and implementation
Contribute with other regulatory authorities, which is (Commission of
Integrity, inspectors general offices) to refer reports that include indicators of
corruption for the purposes of verification and investigation
Developing a questionnaire for corruption indicators in Iraq and holding a
broad conference during which a national indicators of corruption in Iraq were
developed, as well as measuring citizen awareness of administrative
corruption and money laundering.
Questionnaire: evaluation of current situation of
money laundering
Content of question in the questionnaire
how serious is the situation of money
Money laundering is increasing
Partially agree
money laundering tends to be more
main pattern of money laundering
Partially agree
Both in public and private entities
fields that’s have the highest risk of money
Finance, banking
the most common method of money laundering Cash transaction
Favorite environments for money laundering
offences closely associated with money
Use of cash and illegal money transfer is
Content of question in the questionnaire
 Becoming legitimate
 Hiding illegally accumulated wealth
 Increase profit
consequences of money laundering
 consequences of money laundering
 Weakened financial institutions
 Negative impact on foreign investment
economic and social consequences caused Very serious
by money laundering
Impact of money laundering on national
main reason criminals launder money
Through studying and analyzing the answers of questionnaire, we have reached
number of conclusions:
The process of money laundering have a serious impact on the country’s
economic, social political aspects, which effect and influenced by those factors as
big it was, but the general impression that money laundering increasing the
more technology evolved, increased of business volume and economic openness.
Financials and banking sectors are the most vulnerable to money laundering,
taking into consideration that’s other business patterns are also exposed to
money laundering but to a lower extent. Moreover the most prevalence types of
money laundering are remittances, which intended to give laundered money
There are a number of reasons to commit money laundering, mainly the
Give legitimacy to the laundered money.
Hide the illegal wealth
Increase profits
These reasons continue to increase and the importance of those reasons varies
depending on technology developments and the evolution of business.
Is obvious to everyone that the increase in crimes generates a negative
impact on society, therefore money laundering will generates a number
of consequences, which includes:
 Increase crimes and corruption
 Weaken financial institutions
 Negative impact on foreign investments
These consequences are very important and have a negative impact
on society, therefore we needs to develop solutions to avoid it by using
(risk management) or minimize their effects if they occur (Crisis
Management). On the other hand, that money may be used to finance
terrorist activities which will affect the national security.
Questionnaire: evaluation of current situation of corruption
Content of question in the questionnaire
prevalence of corruption
prevalence of corruption compared with
previous years
Transparency International’s-Corruption
Perception Index fairly reflects the reality of
country’s score of the Global Integrity Index
fairly reflects the reality of corruption
tolerance level of people toward corruption
Moderate and widespread among some public
Slightly lower than previously
Strongly intolerant towards corruption
strength of steps taken by government against
pattern of corruption dealings
Higher than moderate
types of corruption most prevalence
Petty corruption
Highly predictable
Content of question in the questionnaire
prevalence of petty corruption
Who involved in petty corruption
Medium Management, Rank and file employees
Who involved in grand corruption
most common types of corruption
Powerful government officials
Business entrepreneurs
sectors most vulnerable to corruption
The probability of occurring corruption
Procurement contracts
Monies and assets gained from corruption most Bank deposits
often used as…
root cause of corruption
Complicated and cumbersome administrative
“Weak accounting practices, including lack of
timely financial management are
conditions favorable for corruption.”
Prioritizing monitoring the situation of
High priority
Content of question in the questionnaire
prioritizing complaints of corruption or fraud
from the public
emphasizing the importance role of whistle
blower in reporting of corruption
Is whistle blowing an effective avenue to lodge
complaints of corruption
how much damage does corruption cause to
the government’s budget
how much damage does corruption cause to
the private sector?
High priority
Very important
Very serious
Through interpretative analysis of the answers, we have reached the
following conclusions:
The corruption is moderate widespread among public sectors, but its
prevalence start to decrease compared with the previous years,
because of increase citizen’s awareness of corruption, their
intolerance toward corruption as well as enacting laws and
establishing anti corruption committees; which have an active role
decreasing this phenomenon.
Petty corruption is widespread in my country, especially in the
medium management and supervisors.
Government high officials are involved with grand corruption and
the most common type is bribery.
The most vulnerable sector to corruption is customs and the most
vulnerable activities to corruption are procurement contracts.
Corruption monies are mostly used as a bank deposits.
The main cause of corruption in my country is complicated
administrative procedures; which considered point of weakness in
the internal control system of the institutions that are exposed to
corruption, as well as weak accounting practices by these institutions
will increase motivate corrupters in that institution.
The complaints on corruption will have priority in the SAI’s work
after verifying the information to be included in the audit work.
The corruption has a serious damage on all social levels and in
private and public sector.
Thanks for your attention