Iraqi Central Bank Affirms Continued Evaluation and Enhanced Oversight for International Standards

The Central Bank of Iraq (CBI) affirmed its commitment to continue evaluating banks and strengthening supervision to ensure compliance with international standards. These assurances follow an official visit by the Prime Minister, who met with the President of the United States. As part of ongoing efforts to enhance bilateral relations, the CBI Governor held high-level meetings with U.S. Treasury officials. These meetings led to a shared understanding for reinstating restricted Iraqi banks to external correspondent banking channels not linked to the U.S. dollar. This follows their fulfillment of approved compliance and governance standards, and completion of the first phase of the CBI's banking sector reform and re-licensing program. Moreover, banks that successfully complete all reform and re-licensing requirements will regain eligibility to conduct U.S. dollar transactions upon fulfilling all related regulatory procedures and requirements. This understanding is part of the CBI's comprehensive strategy aimed at modernizing the banking sector, enhancing its robustness, and elevating its efficiency, resilience, and competitiveness. This will contribute to its full integration into the global financial system, foster confidence in the Iraqi banking sector, and create an environment open to international financial institutions. The Central Bank reiterated its commitment to comprehensive evaluation of all Iraqi banks and to upgrading its regulatory and supervisory framework. This ensures sustained compliance with international standards and requirements for governance, risk management, anti-money laundering, and combating the financing of terrorism. It further indicated it would continue taking appropriate supervisory and regulatory measures against any institution failing to meet these standards. Such actions may include restricting or suspending access to international financial channels, or revoking licenses, whenever necessary and in accordance with effective legal and regulatory frameworks. The CBI Governor clarified that seven banks are currently eligible to return and operate within the non-dollar (other currencies) external correspondent banking channel. They will subsequently be entitled to deal in U.S. dollars after completing further compliance and governance requirements.