Friday, December 5, 2014


This week's disclosure from Iraq, to the effect that 29 of the 33 private banks located there are under criminal investigation for money laundering and corruption, is your cue to exit all financial transactions with any bank or NBFI located there. It is also time to tell your bank clients that you will no longer wire funds, or accept incoming wires from Iraq. Things there are simply out of control, with no AML/CFT compliance, and no law enforcement.

In a nutshell, the reasons why, as I see it:

(1) A report from the US Special Inspector for Iraq Reconstruction says $100bn has left Iraq since 2003, and is now in Iran, Beirut, and the United Arab Emirates.

(2) 50,000 Iraqi Army soldiers, all drawing monthly pay, have been shown to be non-existent, meaning that their commanders have been enriching themselves at Iraq's expense.

(3) The former Shiite-led government of Maliki terminated many competent military officers, and installed Shiite officers in their place, irrespective of their qualifications for leadership. As a result, the army cannot defeat ISIS on the field of battle.

(4) Iraq is fast becoming a close ally of Iran; the Iranian fighter jet attack, on ISIS in Iraqi territory, proved it.

It is time to withdraw, lest you sustain huge losses later, and to advise your bank clients that you will no longer deal with Iraqi banks, NBFIs, or businesses, in any way, for Country Risk is now at unacceptable levels.

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