Dr. Ali Muhsin Ismail: The Iraqi Financial System

Ali Muhsin

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

  1. 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.
  2. 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.
  3. 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.
  4. 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

AT: What training components are or will be required for
professionals in AML/CTF and financial crimes related duties at Iraqi financial

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
    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. 

Interviewed by: Jose Victor Lewis, head of Africa and the Middle East, ACAMS, Miami, FL, USA, jlewis@acams.org

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