Banking Law in Iraq

A bank must keep confidential all customer accounts, deposits, trusts and safe-deposit boxes, and may not disclose any information about them, directly or indirectly, except with the written consent of the customer, or of the customer's legal representative or one of the customer's heirs after death; by order of a court or the Public Prosecution in pending proceedings; or in cases permitted by law. This prohibition continues even after the customer's relationship with the bank ends (Article 49).

No. No current or former administrator, official, employee or agent of a bank may provide information about customers, their accounts or their transactions, or allow a third party access to it, except in cases permitted by law (Article 50).

Article 51 sets out cases in which secrecy does not apply, including: the work of auditors; requests by the Central Bank within the scope of its functions; measures taken to combat money laundering and terrorist financing; issuing a certificate stating the reasons for refusing to pay a cheque at the request of its lawful holder; exchanging information on customers' indebtedness and returned cheques for credit assessment; and disclosure by the bank of a customer's transactions to establish its rights in a court dispute between them.

Central Bank of Iraq instructions direct customers to submit their complaint first to the complaints and consumer protection section of the bank they deal with, and to keep proof of submission. The Central Bank has also set up an online platform for handling public complaints and enquiries, through which a complaint is referred to the financial institution concerned for resolution under the Central Bank's supervision; the link is published on its official website (https://cbi.iq/page/158).

No. No person in Iraq may carry on banking business or accept deposits from the public without a licence or permit from the Central Bank of Iraq (Article 3), and establishing a bank or a branch of a foreign bank requires a prior licence or permit (Article 4). Carrying on banking activity without a licence is an offence punishable by the penalty for fraud under the Penal Code (Article 57).

Penal Code No. 111 of 1969 punishes with imprisonment and a fine, or either of them, anyone who in bad faith issues a cheque knowing that there are insufficient funds to cover it, withdraws the funds after issuing it, or instructs the bank not to pay it (Article 459). The fine amounts in the Penal Code have been revised by later legislation, so they are calculated according to the provision in force. The holder of the cheque may ask the bank for a certificate stating the reasons for refusing payment (Banking Law, Article 51).

Islamic banks are subject to a special law, the Islamic Banking Law No. 43 of 2015, and, in matters not covered by a specific provision, to the Central Bank of Iraq Law, the Banking Law and other relevant laws.

Article 27 sets out the banking activities permitted under the licence, such as accepting deposits and extending credit and financing. Article 28 prohibits banks from engaging in trade, industry, transport, agriculture, insurance and other activities not authorised in Article 27, except temporarily, with the Central Bank's prior written approval, and to the extent necessary to recover the bank's debts.

Note The Central Bank frequently issues instructions on transfers, foreign currency and payment cards. Because these instructions change often, we check the text in force at the time of each consultation.