Republic of Iraq Federal Board of Supreme Audit Country Report ASOSAI 10 th research project “ AUDIT TO DETECT FRAUD AND CORRUPTION: EVALUATION OF THE FIGHT AGAINST CORRUPTION AND MONEY LAUNDERING” Third meeting Thailand/Bangkok/ august 2013

NamePositionQuestionnaire Ahmad Saleem Dhari FBSA’s director general/member of anticorruption joint council Current situation of anti-corruption Chartered accountant: Ph.D. Nada Taher Compliance control maneger/ al Rasheed Bank Current situation of anti-money laundering Preface After developing the final questionnaire part III, which have adopted by all participants, we have disseminated the questionnaire to fill it out by affiliated specialists: The results were as following:

Question number Content of questionAnswer 1 Does your country have an anti-corruption strategy? Stand-alone strategy 2 content is covered in the anti-corruption document in your country Objectives and priority areas 3 Does the anti-corruption strategy have an action plan Yes 4 elements contained in the Anti-corruption action plan Specific institutions responsible for the implementation of each measure 5 Are the anti-corruption document(s) and action plan(s) publicized? Yes 6 measures that your country has employed in fighting corruption  Open and transparency in the operation of agencies  Development and implementation of entitlements, norms and standards  Administrative reform  Development and enforcement of the code of conduct and the code of professional ethics  Declaration of assets and income 1- Anti corruption questionnaire

Question number Content of questionAnswer 7 Does your country have an anti-corruption agency? Yes 8 main responsibilities/functions of the ACA in your country - Monitor and evaluate the implementation of the anti-corruption strategy - Conduct investigations - Disseminate knowledge on anti-corruption activities - Raise public awareness about the fight against corruption - Identify the causes of corruption and to propose to the competent authorities of measures to help eliminate it - Keep a database on the statistics regarding cases of corruption year by years - Research and analysis on conflict of interest in the public management 9 Does your agency re-evaluate bodies/ areas/ activities Regularly, periodically 10 Has your agency established a hotline or a website Yes 1- Anti corruption questionnaire

Question number Content of questionAnswer 11 How does your country criminalize different types of corrupted activities? - By the Criminal Law - By various laws with certain provisions concerning corruption 12 which of the following types of corruption does your country need to enact new legislation Abuse of position/power 13 types of measures against corruption 1.Detective actions 2.Punitive measure 3.Preventive policies and measures 14 Does your country have laws and regulations governing the financing of political parties? No 15 Does your country have laws and regulations governing code of ethics of public officials? Yes 16 Does your country have laws and regulations governing declaration of assets by public officials? Yes 17 Does your country have “accounting and auditing standards” Yes 1- Anti corruption questionnaire

Question number Content of questionAnswer 18 Do public officials have legal obligation for public officials to report corruption- related offence? YES 19 implementation of the rules/regulationGood 20 Has your country have ratified (UNCAC) YES 21 has your country begun the UNCAC peer review process yes 22 Is your country a member of any anti- corruption conventions, initiatives or international project 23 success level of international cooperation: 1.Extradition 2.Mutual legal assistance 3.Asset recovery 4.Cooperation with law enforcement and international authorities 5.Cooperation between national authorities and the private sector and international cooperation Moderate High Moderate 24 assess the effect of media in fighting corruption media have helped public to recognize the real situation of corruption 1- Anti corruption questionnaire

Question number Content of questionAnswer 25 How does society Participate in tackling corruption? Actively but not effectively 26 level of anti-corruption efforts in your country now with those in past years Much higher than past years 27 Does your country provide anti-corruption educational/training programs for the followings? Public officials 28 factors inhibit the result of the fight against corruption Lack of competent and experienced staff to handle corruption cases 29 comment on the result of the current fight against corruption Have had positive impact 30 role of citizen participation in fighting corruption: - Promoting public sector transparency and accountability and citizen participation. - Engaging civil society in corruption prevention efforts - Complaint system/ Whistle Blower, and Denunciation Have 1- Anti corruption questionnaire

Through the review of questionnaire’s results, we have reached to a set of conclusions, we enlist it as following: A.The national strategic plan has designed in scientific and proper way to fits with the future view of the fighting against corruption. It has planned to implement this strategy with all required measures to achieve its goals, also it distinguished with transparency by publishing its contents to be reviewed by both private and public sectors and citizens. B.The creation of such special agency came in accordance with putting the anti-corruption National Strategy into force and to follow up the implementation of that strategy. The agency has various responsibilities and functions like monitoring the implementation of the strategy and dissemination knowledge and awareness about the phenomenon of corruption. C.Corruption offenses have classified through criminal law and there is a draft of combating corruption law in the stages of legislation to give this phenomenon a specific and distinct classification. D.One of the most common types of corruption that needs to enact its own law is position or power abuse; this was associated with the absence of laws governing the financing of political parties. E.One of the most important aspects of international cooperation in the fight against corruption is the ratification of the UNCAC and to do the peer review process, but the level of international cooperation is average in the aspects extradition and asset recovery. F.At the current time, the phenomena of corruption are more clear for most citizens, this is due to promoting awareness of the citizens of this phenomenon, as well as trains public officials to face corruption cases, but that staff who faces such cases does not have the necessary competence to fight all kinds of corruption.

2- Anti-money laundering questionnaire Question number Content of questionAnswer 1 Is money laundering a criminal offenceYes 2 specific laws and/or regulations in place covering anti-money laundering Yes 3 law could cover all money laundering aspects yes 4 rate the implementation of anti-money laundering law Fair 5 Is there a national Financial Intelligent Unit Yes 6 official authority/board in your jurisdiction that takes in hand on anti-money laundering Yes / Central Bank of Iraq 7 measures of anti-money laundering does your agency apply - Identify customer and update customer information - Report, provide and save information - Gather, treat and transform information - Apply temporary measures to adjudge violations

2- Anti-money laundering questionnaire Question number Content of questionAnswer 8 Does your anti-money laundering board/authority enjoy independence in following aspects in your country - Functional - Financial 9 Does your anti-money laundering board/authority perform following functions - Developing policies and improving legislation - Data collecting, analyzing, evaluation - Supervision - Coordination - Investigations of the cases - Carry out researches, conducting sector- based studies etc. - Requesting any kind of information and documents from public institutions - Exchange information and documents with counterparts 10 rank the effectiveness of anti-money laundering 1.Detective actions 2.Preventive policies and measures 3.Punitive measure 11 citizens to inform (denounce) the country’s AML Yes 12 updated rules and information about the process of anti-money laundering Yes 13 AML have anti-money laundering (AML) & Know Your Customer (KYC) procedures yes

Question number Content of questionAnswer 14 financial institutions have the following legal obligations to comply with concerning anti-money laundering law - Internal controls and procedures to comply with regulatory framework concerning AML - Thorough client identification - Having an anti-money laundering officer - Client due diligence procedures - Risk focused assessment of customer base and their transactions - Prohibition of anonymous accounts - Identification and reporting of suspicious activities to the appropriate authorities Monitoring program for suspicious or unusual activities - Policies covering relationships with politically exposed persons consistent with industry best practices - Policy prohibiting accounts/relationships with shell banks - there is no certain law commit the politicians to disclose their financial status and bank accounts 15 financial institutions comply with the following legal obligations or administrative policies - Implementation systems for the identification of its customer, including customer information in the case of recorded transaction, account opening, etc. - Collecting information and assessing its customer’s AML policies and practices. - Screening its customer’s information against sanction lists issued by the government or international bodies

Question number Content of questionAnswer 16 common types of suspicious transaction reports 1.Refusals to show identification 2.Suspicious behaviors 3.Unusual account activities 4.Unusually large cash transactions 5.Unusual use/exchange of cash 6.Cutting large amount of transaction into pieces 7.Inconsistencies with the financial profile of the customer or account 8.Avoiding reporting obligations 9.Clear evidence of illegal activities linked with a transfer 10.Inconsistency between the declaration of the customer and documents 17 Are financial institutions obliged to comply with FATF recommendations Yes 28 Rate of ability to cooperate and exchange financial information at international level Fair 19 cooperation agreements or protocols among the local institutions No

Question number Content of questionAnswer 20 punishment of money laundering incidents Inappropriate penalties 21 factors inhibit the result of the fight against money laundering - Money laundering criminals are not severely punished - Limitation of citizen’s knowledge about money laundering criminal - Lack of competent and experienced staff to handle money laundering cases 22 factors inhibit the result of the fight against money laundering - Money laundering criminals are not severely punished - Limitation of citizen’s knowledge about money laundering criminal - Lack of competent and experienced staff to handle money laundering cases 23 anti-money laundering educational/training programs for Financial institutions 24 controlling systems are the keystone and deterrent for fighting against money laundering Yes 25 any high institutions providing training workshops for the employees of controlling agencies Yes 26 comment on the result of the current fight against-money laundering Have not had evident impact nowadays but will have in the future

Through our review we have noticed the following results: A.The process of money laundering is criminal offense and there are a specific laws to combat money laundering, but the laws does not cover all aspects of money laundering. We have a national information unit works as a hub to collect, analyze and disseminate the information related with money laundering, and that unit represented by the Department of money laundering in the CBI (Central Bank of Iraq). B.The Department of money laundering has several measures to combat money laundering;(identify the client and his updated information, collecting, processing and transferring money laundering information, apply temporary procedures to arbitrate the irregularities). This department has a variety of tasks such as (developing policies and improving of legislation and collecting, analysis and evaluation of data also verifying some cases). C.The CPI’s department have developed regulations to be applied on all financial institutions, these institutions are obliged by law to carry out a range of measures that will cope with anti-money laundering law, such as : -  Comprehensive identification of client  Existence of an official to combat money laundering in the financial institutions  The prohibition of anonymous accounts  A program to monitor suspicious activities to the competent authorities. D. Refusal of displaying the identity is of the most common type of suspicious transactions in the financial institutions, while considered the lack of consistency between the announcements of the client and documents the less than those types. E. The citizens have not given the role to fight against money laundering through promoting transparency and accountability of the public sector as well as engaging community; otherwise they just play the role of complaints. F. It perceived at the money laundering penalties as sanctions not suitable for the size of crime of that phenomenon. G. Internal control systems are the foundation stone in the face of money laundering because of the effectiveness of internal control systems in achieving their objective which to protect the assets and compliance with laws and regulations. H. The fight against money laundering has not achieved the required results, but the impact of these measures was positive, therefore we needs more efforts and works to reach our goals.

Thank you