The Guideline on Suspicious Transaction Indicators for Money Laundering and Terrorist Financing via Electronic Payment Services 2020

The Central Bank of Iraq has issued this Guideline to outline the suspicious transaction indicators for money laundering and terrorist financing through electronic payment services, in accordance with the Anti-Money Laundering and Counter-Terrorist Financing Law No. (39) of 2015, and its executive regulations. This guideline applies to all licensed electronic payment service providers and defines the key indicators across three main stages: Placement, Layering, and Integration.

1. Placement (الوضع)

Refers to the initial introduction of funds into the financial system through electronic payment channels. Indicators include large or frequent cash deposits converted to digital balances, transactions just below reporting thresholds, and rapid movement of funds immediately after account opening.

2. Layering (التجريد/الطبقات)

Involves complex electronic transactions designed to obscure the origin of funds. Indicators include multiple transfers between accounts, cross-border digital payments, use of intermediary payment gateways, and transactions with high-risk jurisdictions or shell companies.

3. Integration (الدمج/التكامل)

Occurs when laundered funds are re-entered into the legitimate economy via electronic payments. Indicators include large purchases funded through digital wallets, investments in real estate or securities via payment platforms, and consistent transaction patterns matching the customer’s profile.

The guideline further details specific suspicious indicators (numbered 1 to 15) covering:

1. Rapid movement of funds shortly after account opening.
2. Transactions inconsistent with the customer’s known business or profile.
3. Use of multiple electronic payment instruments by a single entity.
4. High volume or value transactions relative to account activity.
5. Transactions involving high-risk countries or designated non-profit organizations.
6. Unusual patterns in ATM and point-of-sale electronic transactions.
7. Frequent transfers to/from accounts with no clear economic purpose.
8. Transactions occurring outside normal business hours or through digital channels.
9. Use of prepaid electronic payment instruments for large-value transfers.
10. Mismatch between the stated purpose and actual flow of funds.
11. Frequent returns or reversals of electronic payments.
12. Transactions involving politically exposed persons (PEPs).
13. Use of multiple digital wallets or payment accounts by the same user.
14. Unusual geographic distribution of electronic transactions.
15. Transactions linked to known money laundering or terrorist financing typologies.

The guideline mandates that electronic payment service providers monitor, record, and report these indicators to the Central Bank of Iraq. It specifies reporting channels, including email (info@aml.iq) and contact numbers ((07809291412)), and requires periodic reviews to ensure compliance. The document aligns with the 2015 AML/CFT Law and its executive regulations, providing a practical framework for identifying and mitigating risks in electronic payment ecosystems.

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