Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay

Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Introduction Entities concerned with the implementation of Security Council resolutions related to combating money laundering, terrorist financing, and the financing of the proliferation of weapons are committed to implementing these resolutions in accordance with the provisions of effective national legislation. To ensure the effective and immediate application of targeted financial sanctions, the Anti-Money Laundering and Counter-Terrorist Financing Law No. (39) of 2015 was issued. Based on the provisions of Article (22) thereof, the Terrorist Funds Freezing System No. (6) of 2023, as amended, was issued, which specified the necessary procedures and mechanisms for implementing listing, freezing, and delisting decisions in accordance with approved legal frameworks. This manual aims to provide simplified practical guidelines for financial institutions, designated non-financial businesses and professions, and implementing entities, with the goal of clarifying their operational responsibilities and procedures in implementing targeted financial sanctions without delay, thereby ensuring the prevention of making economic resources or funds available to listed persons and entities. The scope of applying targeted financial sanctions according to this manual includes procedures related to persons and entities listed under Security Council resolutions related to terrorism, terrorist financing, and the financing of the proliferation of weapons of mass destruction, including resolutions (1267/1989), (1988), (1373), (1718), (2231), and any subsequent related resolutions. This manual is considered a guiding reference for organizing screening, verification, freezing, reporting, and record-keeping procedures, and does not supersede the provisions of effective laws, regulations, and instructions. Objective of the Manual This manual aims to:

Unify the procedures for implementing targeted financial sanctions among the concerned entities.
Ensure the implementation of listing, freezing, and delisting decisions immediately upon their publication by the competent authority.
Clarify the responsibilities of financial institutions and designated non-financial businesses and professions in the field of targeted financial sanctions.
Enhance screening and matching systems among the concerned entities.
Ensure the prevention of making economic resources or funds available to listed persons and entities.
Enhance coordination and cooperation between the Terrorist Funds Freezing Committee and related entities.
Support compliance with international requirements related to the implementation of targeted financial sanctions.
Ensure access of implementing entities to targeted financial sanctions lists and their updates on an ongoing basis, enabling them to take necessary actions without delay.
Clarify the procedures for requests for delisting or lifting of freezing, and requests for exceptions for basic and exceptional expenses in accordance with effective legal procedures.
Scope of Application
This manual applies to the following entities:
Security, administrative, supervisory, and regulatory authorities, financial institutions, owners of designated non-financial businesses and professions, non-governmental organizations, and every person present in the Republic of Iraq. Legal Basis This manual was prepared based on:
Anti-Money Laundering and Counter-Terrorist Financing Law No. (39) of 2015.
Terrorist Funds Freezing System No. (6) of 2023, as amended.
Security Council resolutions related to targeted financial sanctions.
Relevant international standards, especially the recommendations of the Financial Action Task Force (FATF).
Instructions and controls issued by the competent authorities in accordance with effective legislation.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Definitions For the purposes of this manual, the following terms shall have the meanings indicated opposite each of them:
Targeted Financial Sanctions: Procedures taken to freeze funds and economic resources and prevent their availability to persons and entities listed in accordance with relevant Security Council resolutions or national listing decisions, without delay.
Freezing: Preventing any operation of transfer, disposal, use, or change in the nature of funds or economic resources belonging to listed persons or entities, whether directly or indirectly.
Funds and Other Assets: Any assets, including, but not limited to, financial assets, real estate, tangible and intangible property, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets, including, but not not limited to, bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, letters of credit, and any interest, dividends or other income on or value accruing from or generated by such funds or other assets, and any other assets which could be used to obtain funds, goods or services, including, but not limited to, raw materials, finished products, equipment, and means of transport, whether directly or indirectly, and any other assets that can be used to obtain funds, goods or services.
Designated Entities or Persons: Persons, groups, and projects identified by the Sanctions Committees affiliated with the Security Council and the Terrorist Funds Freezing Committee.
Without Delay: Freezing funds or other assets within twenty-four (24) hours from the issuance of the listing decision by the Sanctions Committee affiliated with the Security Council or the Terrorist Funds Freezing Committee.
Implementing Entities: Includes security, administrative, supervisory, and regulatory authorities, financial institutions, owners of designated non-financial businesses and professions, non-governmental organizations, and every person present in the Republic of Iraq.
Beneficial Owner: The natural person who ultimately owns or exercises ultimate effective control over a client or on whose behalf a transaction is being conducted, as well as the natural person who exercises ultimate effective control over a legal person or arrangement.
Screening: Continuous verification procedures of client names and beneficial owners against targeted financial sanctions lists.
True Match: The case where it is confirmed that the entity or person subject to screening is the same as the listed entity or person.
Potential Match: The case where there is a similarity between client data and the data of a listed entity or person, requiring additional verification procedures.
False Positive: The case where, after verification, it is found that the client or person subject to screening is not the listed entity or person.
Occasional Client: A person who deals with the obliged entity to carry out one or more transactions without an ongoing business relationship, and the obliged entity is committed to screening them in accordance with targeted financial sanctions requirements.
Basic Expenses: Payments allocated for basic expenses, including payment of amounts related to food, medicines, medical treatment, taxes, insurance premiums, public service fees, or mortgage payments, or rent. This is limited to paying reasonable professional fees and expenses incurred in providing legal services, fees, or the cost of necessary services.
Exceptional Expenses: Payments allocated for exceptional expenses other than basic expenses, provided that the Terrorist Funds Freezing Committee assesses their necessity for those covered by the freezing decision.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Role of the Terrorist Funds Freezing Committee and the Anti-Money Laundering and Counter-Terrorist Financing Office
Article (1)
The Terrorist Funds Freezing Committee in the General Secretariat of the Council of Ministers is the competent authority for implementing procedures related to freezing terrorist funds in accordance with the provisions of the Terrorist Funds Freezing System No. (6) of 2023.
Article (2)
The Anti-Money Laundering and Counter-Terrorist Financing Office undertakes the following tasks:
Publishing all decisions related to targeted financial sanctions (IQTFS) immediately and directly upon their issuance from the Security Council and the national list issued by the Terrorist Funds Freezing Committee.
Publishing targeted financial sanctions lists and the Terrorist Funds Freezing Committee lists directly on the Office's electronic website – active lists.
Sending notifications related to the procedures taken regarding the above two paragraphs to the liaison members of the implementing entities and the obliged entities registered on the notification platform of the website.
Providing lists in electronic format (Excel) suitable for use, which helps obliged entities in conducting screening and matching operations.
IQTFS Smart Phone Application
Article (3)
The Anti-Money Laundering and Counter-Terrorist Financing Office has adopted the IQTFS smart phone application as an electronic support tool to enhance the rapid arrival of notifications related to targeted financial sanctions to the liaison members of the Terrorist Funds Freezing Committee and the implementing entities, without delay.
Article (4)
The application works to:
Directly link to the lists of the Security Council and the Terrorist Funds Freezing Committee.
Directly reflect updates and notifications related to listing, amendment, or delisting.
Send electronic alerts to implementing entities.
Support the speed of information exchange related to targeted financial sanctions and the Terrorist Funds Freezing Committee.
Article (5)
The IQTFS application is a support tool for the effective and immediate implementation of targeted financial sanctions and the Terrorist Funds Freezing Committee, and does not exempt obliged entities from the responsibility of:
Following up on the official electronic website of the Anti-Money Laundering and Counter-Terrorist Financing Office.
Following up on lists issued by approved official sources.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Access to Targeted Financial Sanctions Lists and their Updates
Article (6)
Implementing entities are committed to following up on lists issued by approved official sources, which include:
The Consolidated Security Council List of Persons and Entities Subject to Sanctions.
Sanctions Committee lists established pursuant to Resolution (1988) concerning the Taliban movement and associated entities.
Sanctions Committee lists established pursuant to Resolution (1718) concerning the Democratic People's Republic of Korea.
Sanctions Committee lists established pursuant to Resolution (2231) concerning measures related to Iran.
The National List issued by the Terrorist Funds Freezing Committee.
Article (7)
Lists and updates are available through the following means:
The official electronic website of the Anti-Money Laundering and Counter-Terrorist Financing Office.
Official notifications sent to registered entities.
The IQTFS smart phone application.
Official websites of the Security Council.
Official letters sent by relevant entities.
The Iraqi Official Gazette.
Responsibilities of Implementing Entities
Article (8)
Implementing entities are committed to the following:
Developing written internal policies and procedures for implementing targeted financial sanctions and the requirements of the Terrorist Funds Freezing Committee.
Designating a responsible official for following up on obligations related to targeted financial sanctions.
Subscribing and registering in the IQTFS application and the notification platform on the website of the Anti-Money Laundering and Counter-Terrorist Financing Office.
Continuously updating client databases.
Conducting screening against targeted financial sanctions lists before establishing any business relationship or providing any service.
Conducting periodic screening of existing clients and beneficial owners.
Screening parties, agents, or authorized persons associated with transactions.
Taking freezing actions immediately upon confirmation of a true match.
Preventing the provision of funds, economic resources, or services to listed persons and entities.
Reporting to the competent authorities in accordance with approved procedures and forms.
Retaining records and documents related to screening and freezing operations.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Requirements for Electronic Screening Systems
Article (9)
The electronic screening systems at implementing entities must meet the following requirements:
Ability to receive and update lists periodically.
Possibility of searching using full or partial names.
Taking into account different ways of writing names in Arabic and foreign languages.
Supporting search by alternative names, titles, and different writing methods.
Possibility of screening the beneficial owner and associated parties.
Retaining a record of search and screening results.
Possibility of extracting reports proving the execution of screening operations.
Protecting data and information related to screening operations.
Defining access permissions to screening systems according to responsibility levels.
Procedures for Dealing with Screening Results
Article (10)
When a matching result appears with one of the names contained in the targeted financial sanctions lists and the Terrorist Funds Freezing Committee, the implementing entity must take verification procedures to confirm the nature of the match before making a final decision, except in cases where the identification data is sufficient to prove the match.
Article (11)
When evaluating the screening result, available data is considered, including:
Full name and four-part name.
Alternative names.
Two-part name.
Date of birth.
Place of birth.
Nationality.
Place of residence.
Official documents or ID number.
Nature of activity.
Address of residence or place of work.
Any other available identification data.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Classification of Screening Results
Article (12)
Screening results are divided into the following cases:
First: True Match
A true match is confirmed when sufficient indicators are available to confirm that the client, the associated person, or the beneficial owner is the same as the listed entity or person. In this case, the implementing entity must:
Implement freezing without delay.
Prevent any transfer, disposal, or movement of funds or economic resources.
Prevent the provision of any economic benefits or services to the listed entity or person.
Document the actions taken.
Report to the Terrorist Funds Freezing Committee and a copy thereof to the Anti-Money Laundering and Counter-Terrorist Financing Office through approved channels.
Not notify the listed person or any unauthorized party of the existence of the screening or freezing process.
Second: Potential Match
In case of similarity in name or data, the implementing entity must:
Conduct an additional review of the available data.
Compare identification information with list data.
Use available information sources for verification.
Document the verification result and reasons for the decision.
Not disclose to the client about the screening or review procedures related to targeted financial sanctions and the Terrorist Funds Freezing Committee.
Third: False Positive
If, after verification, it is found that the client is not associated with the listed entity or person:
The verification result is documented.
Supporting documents are retained.
The reason for excluding the match is recorded.
The relationship with the client continues in accordance with approved risk management procedures.
Procedures for Implementing Freezing Without Delay
Article (13)
Upon confirmation of a true match, the implementing entity must implement freezing immediately, without waiting for any additional action. This includes:
Freezing accounts, funds, and assets associated with the listed entity or person.
Stopping any disposal, transfer, or withdrawal operations of frozen funds.
Preventing the provision of any financial or economic services to the listed entity or person.
Preventing the transfer, remittance, or use of frozen funds.
Taking necessary measures to prevent the direct or indirect availability of funds or economic resources.
Reporting to the Terrorist Funds Freezing Committee and a copy thereof to the Anti-Money Laundering and Counter-Terrorist Financing Office through approved channels.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Scope of Funds and Economic Resources Covered by Freezing
Article (14)
Freezing includes all funds and economic resources belonging to the listed entity or person or under their control, by way of example:
Bank accounts.
Deposits.
Cash funds.
Financial securities.
Investment portfolios.
Electronic payment instruments.
Financial rights.
Returns and profits due.
Movable and immovable properties.
Digital assets or any other assets.
Freezing also extends to:
Funds directly owned by the listed entity or person.
Funds indirectly owned.
Funds controlled by the listed entity or person.
Funds that accrue to the listed entity or person after the listing date.
Economic resources or funds managed for the benefit of the listed entity or person.
Prohibition of Making Funds and Economic Resources Available
Article (15)
All implementing entities are prohibited from making any funds, economic resources, or financial services available, directly or indirectly, to listed entities or persons. The prohibition includes, depending on the nature of the activity, the following:
Opening new accounts.
Providing credit facilities or financing.
Executing financial transfers.
Issuing payment instruments.
Providing investment services.
Providing insurance services.
Executing any transaction or service that leads to the benefit of the listed entity or person.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Reporting on Freezing Procedures
Article (16)
When implementing freezing procedures, the implementing entity must report to the Terrorist Funds Freezing Committee and a copy thereof to the Anti-Money Laundering and Counter-Terrorist Financing Office, in accordance with approved channels and forms. The report on freezing procedures includes, when available, the following information:
Data of the listed entity or person.
Source of listing.
Date and time of match detection.
Date and time of freezing implementation.
Type of frozen funds or economic resources.
Value of funds or estimated value of frozen economic resources.
Account number, document, or reference associated with the frozen funds.
Actions taken by the obliged entity.
Any additional relevant information.
The implementing entity is committed not to disclose to the listed entity or person or any unauthorized party about the existence of screening or verification procedures, or reporting or freezing, unless required by law or requested by the competent authorities. Obligations of Designated Non-Financial Businesses and Professions
Article (17)
Designated non-financial businesses and professions are committed to applying targeted financial sanctions and the decisions of the Terrorist Funds Freezing Committee, in a manner that ensures the non-availability of funds, according to the nature of their activity, as follows:
Real Estate Brokers when buying or selling real estate.
Dealers in Precious Metals and Stones when conducting any financial transaction.
Lawyers when carrying out activities covered by the Anti-Money Laundering and Counter-Terrorist Financing Law.
Accountants and Auditors when carrying out activities covered by the Law.
Providers of Company or Legal Arrangement Services.
Any other professions or businesses specified by law or effective instructions.
Obligations of Real Estate Brokers
Article (18)
Real estate brokers are committed to the following:
Screening the names of parties to buying, selling, and leasing operations when the provisions of the law apply.
Verifying the identity of clients and beneficial owners.
Ensuring that the beneficial owner or person is not present in the targeted financial sanctions lists.
Not completing any transaction in which the beneficial owner or person is listed.
Retaining records of screening and verification procedures.
Reporting cases of true match in accordance with approved procedures.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Obligations of Dealers in Precious Metals and Stones
Article (19)
Dealers in precious metals and stones are committed to the following:
Screening clients and parties associated with transactions.
Verifying the beneficial owner when there is another person benefiting from the transaction.
Not buying, selling, or transferring precious metals or stones for the benefit of listed entities or persons.
Retaining information and documents supporting screening procedures.
Taking reporting actions when a true match exists.
Obligations of Lawyers, Accountants, and Providers of Company Services
Article (20)
Lawyers, accountants, and providers of company services, when practicing activities covered by the law, are committed to the following:
Screening the names of clients and beneficial owners.
Verifying persons who represent the client or act on their behalf.
Not providing services for establishing, managing, or arranging legal structures for the benefit of listed entities or persons.
Not managing, transferring, or arranging funds belonging to listed entities or persons.
Not creating or managing legal arrangements aimed at concealing control over frozen funds.
Retaining relevant records.
Reporting true matches through approved channels.
Obligations of Non-Governmental Organizations
Article (21)
Non-governmental organizations are committed to the following:
Screening beneficiaries of their programs and activities against targeted financial sanctions lists.
Verifying persons and entities associated with the implementation of their programs or the provision of their assistance.
Ensuring that funds, assistance, or economic resources are not directed to listed entities or persons.
Retaining records of screening and verification operations.
Taking necessary actions and reporting to the competent authorities when a true match exists.
Exceptions and Licenses for Using Frozen Funds
Article (22)
Frozen economic resources or funds may not be disposed of or used except in cases permitted by law or the system, and requests for permission for basic expenses may be considered in accordance with approvals issued by the Terrorist Funds Freezing Committee and procedures stipulated in the Terrorist Funds Freezing System No. (6) of 2023 by the Committee, and this includes, upon approval:
Food and basic living needs.
Medical and therapeutic expenses.
Expenses related to housing and rent.
Government fees or taxes due in accordance with the necessary approvals.
Any other expenses permitted by the Committee.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay
Article (23)
Requests for exception are submitted to the Terrorist Funds Freezing Committee, accompanied by supporting documents, and must include:
Data of the applicant.
Data of the listed entity or person.
Reason for the request.
Value of the requested amount.
Nature of the expense.
Supporting documents.
Any additional information requested by the competent authority.
Delisting and Lifting of Freezing
Article (24)
Freezing of economic resources and funds is lifted when a decision is issued by the Terrorist Funds Freezing Committee to lift the freezing, or when the entity or person is delisted from the targeted financial sanctions lists in accordance with approved legal procedures.
Article (25)
Upon receiving a decision to delist or lift freezing, the implementing entity must:
Update its databases and screening systems.
Lift restrictions on economic resources or funds in accordance with the issued decision.
Document the date and time of lifting freezing procedures.
Retain a record of the actions taken.
Ensure that no freezing action continues after its legal reason has ceased.
Procedures for Requests to Delist from UN Security Council Lists
Article (26)
Listed entities or persons in the Security Council lists may submit requests for delisting in accordance with the mechanisms and procedures approved by the Sanctions Committees affiliated with the Security Council. Implementing entities are committed to:
Clarifying the procedures available to listed entities or persons for submitting delisting requests.
Directing requests related to Security Council lists to the competent international mechanisms when needed.
Following up on decisions issued regarding delisting requests according to jurisdiction.
Updating implementing entities with any amendment that occurs to the listing status.
Guidance Manual on the Obligation of Financial Institutions, Designated Non-Financial Businesses and Professions, and Implementing Entities to Apply Targeted Financial Sanctions Without Delay Training and Awareness
Article (27)
Implementing entities are committed to developing appropriate training programs to ensure employees' understanding of targeted financial sanctions procedures and the decisions of the Terrorist Funds Freezing Committee and their implementation mechanisms. Training programs shall include, at a minimum, the following:
The concept of targeted financial sanctions.
Sources of national and UN lists.
Mechanism for following up on lists and updates.
Using electronic screening systems.
Procedures for verifying matches.
Freezing procedures without delay.
Reporting procedures.
Obligations related to confidentiality and non-disclosure.
Actions to be taken in case of non-compliance.
Training concerned employees periodically, especially:
Anti-Money Laundering and Counter-Terrorist Financing reporting officers.
Compliance officers.
Client acceptance or account opening officers.
Operations and transfers officers.
Employees dealing with clients.
Responsibilities of Senior Management
Article (28)
Senior management at entities is responsible for ensuring the existence of an effective framework for implementing targeted financial sanctions and the decisions of the Terrorist Funds Freezing Committee. This includes:
Adopting written policies and procedures for implementing targeted financial sanctions.
Providing the necessary human and technical resources for applying screening and freezing requirements.
Ensuring the existence of an effective system for following up on lists and their updates.
Ensuring the independence of the Anti-Money Laundering and Counter-Terrorist Financing reporting officer and granting them the necessary powers.
Reviewing reports related to the implementation of targeted financial sanctions.
Addressing shortcomings identified through internal control or regulatory authorities.