ACAMS Today had the opportunity to speak with Dr. Ali Muhsin Ismail, governor of the Central Bank of Iraq (CBI), to discuss how the CBI has been enhancing the Iraqi financial system. Dr. Ismail has worked for more than three decades in Iraq, Kuwait and Canada in the fields of management, financial analysis and audit after receiving specialty certificates in accounting, business administration and public finance. In the last 10 years, he took over leading positions. He was inspector general of the Ministry of Oil, secretary general of the Council of Ministers for eight years and is currently assigned as governor of the Central Bank of Iraq.
ACAMS Today: What are some of the steps that the CBI adopted to enhance the Iraqi financial system?
Dr. Ali Muhsin Ismail: The CBI sustains price stability and provides economic activities with a stable path for growth. In addition, it established an effective mechanism to exchange Iraqi dinar with foreign currencies, via the currency window.
Since 2004, the CBI has faced many challenges and has spent a lot of resources, in order to avoid the following bad effects:
- Risk challenges due to bank system weaknesses and financial shallowness
- Dependency challenges—before issuing CBI law (56) in 2004, most of the bank system belonged to fiscal authority
- CBI conducts its monetary policy, in order to re-establish soundness to the banking system
AT: How is the CBI addressing money laundering, terrorist financing and sanctions-related issues?
AMI: The CBI developed an anti-money laundering and counter-terrorist financing (AML/CTF) national strategy for the next five years and it was released in May. This strategy is centered on the following four quadrants:
- Awareness quadrant: Launch and promote a national media strategy to raise the level of awareness and knowledge of AML/CTF for citizens, government institutions and business organizations, including financial institutions and banks and other related professions. This strategy will depend on effective marketing tools, such as television ads, radio talk shows, posters and newspaper articles to promote the knowledge and understanding of AML/CTF.
- Restructuring of AML/CTF quadrant: Rebuilding the AML/CTF directorate with a strong emphasis on strong leadership and management, employees’ capacity building and talent recruitment program, and implementation of an information technology infrastructure including database, software, hardware and systems, effective and detailed processes and procedures.
- International coordination and support quadrant: Continue building strong international relationships particularly with the Financial Action Task Force (FATF) and MENAFATF and corresponding financial intelligence units to share and exchange intelligence, information, and to provide the technical support and assistance needed for knowledge transfer and capacity building.
- The relationship with local government institutions and private organizations quadrant: Define and improve the relationship with related government organizations, such as judiciary, ministries (trade ministry, taxation and customs office) and intelligence law enforcement agencies and the private sector (banks, financial institutions and related businesses) to promote AML/CTF law, regulations, processes and procedures to counter crimes, terrorism and unlawful financial activities.
AT: What training components are or will be required for professionals in AML/CTF and financial crimes related duties at Iraqi financial institutions?
AMI: We believe that the required training components for professionals working in Iraqi financial institutions are:
- Banks Secrecy Law
- Compliance programs (know your customer)
- Risk assessment programs (AML/the Office of Foreign Assets Control)
- Internal control and monitoring programs
- AML/CTF compliance officer certifications
- AML law integrated into risk intelligence policies and procedures
CBI has started implementing some of these components in 2016 and will continue to deliver others in 2017-2020 by partnering with international professional organizations and external government departments.
AT: Similar to a number of countries in the MENA region, does the CBI envision requiring professionals within financial institutions to hold internationally recognized designations such as the certified anti-money laundering specialist certification?
AMI: As any regulated industry such as medical or judiciary and law or education, CBI believes that the financial and banking sector should and must employ professionals with the right qualifications, skills and experience. We have already started implementing standards and regulations for AML, compliance and risk management employees in banks and financial institutions. Therefore, before they are accepted to work at CBI, they must demonstrate these prerequisites. In addition, we have partnered with some reputed international institutions to conduct accredited programs and certifications to ensure that all of our professionals have these credentials.