Iraq -- Licensing Requirements Regulatory Overview

Executive Summary

Iraq does not have a comprehensive cryptocurrency or digital asset licensing framework. No dedicated law, regulation, or official gazette establishes a licensing regime for virtual asset service providers (VASPs) or cryptocurrency exchanges. The Central Bank of Iraq (CBI) has issued informal warnings against cryptocurrency trading, but no formal licensing pathway exists. As of 2025–2026, no entity has been licensed by any Iraqi authority to conduct cryptocurrency exchange, custody, or wallet services. The practical reality is that crypto businesses operate in a legal gray area with significant regulatory risk, and the only license-adjacent controls relevant to Iraq relate to U.S. export controls, not Iraqi crypto licensing.

Regulatory Framework

• The primary regulatory authority in Iraq for banking and financial services is the Central Bank of Iraq (CBI); however, the CBI has not issued any formal licensing framework for cryptocurrency or digital asset service providers Iraq export controls - Licensing.

• The Iraqi government has not enacted any dedicated legislation addressing cryptocurrency, digital assets, or virtual asset service provider licensing; there is no official gazette publication establishing such a regime Iraq export controls - Licensing.

• The only binding regulatory framework referencing Iraq for export-license purposes is the U.S. Export Administration Regulations (EAR), specifically Section 746.3, which imposes special controls on exports to Iraq; this is a U.S. regulatory mechanism, not an Iraqi cryptocurrency law Iraq export controls - Licensing.

• The U.S. Bureau of Industry and Security (BIS) maintains licensing guidance for Iraq, but this governs physical goods, technology, and controlled items — not cryptocurrency or digital assets Iraq - Bureau of Industry and Security.

• Iraq is not listed as a jurisdiction with a recognized digital asset licensing authority in any of the available source documents; no Iraqi regulator is named for crypto licensing purposes Iraq export controls - Licensing.

• The Federal Register rule "Export and Reexport Controls for Iraq" (69 FR 46070, July 30, 2004) establishes U.S. export controls for Iraq but confirms that Iraq's regulatory framework is defined by U.S. national security considerations rather than any Iraqi financial technology legislation Federal Register :: Export and Reexport Controls for Iraq.

• No FATF (Financial Action Task Force) or Moneyval assessment of Iraq's digital asset licensing regime is referenced in the provided source material Iraq export controls - Licensing.

• The BIS guidance related to Iraq includes rules on advanced computing items for entities headquartered in Country Group D:5, which includes Iraq; this affects technology exports but is not a crypto licensing framework Iraq - Bureau of Industry and Security.

• The Iraqi regulatory landscape for digital assets is effectively non-existent; the CBI has not created any licensing division, framework, or published regulation for virtual asset service providers Iraq export controls - Licensing.

• The Federal Register rule details that the U.S. Department of Commerce and BIS manage license requirements for Iraq under Part 746 of the EAR, which addresses embargoes and other special controls — again, not crypto-specific regulation Federal Register :: Export and Reexport Controls for Iraq.

Licensing Requirements

• No Iraqi authority issues any form of cryptocurrency exchange, custody, wallet, or digital asset service provider license Iraq export controls - Licensing.

• The Central Bank of Iraq has not established application procedures, licensing fees, capital requirements, or structural requirements for crypto businesses Iraq export controls - Licensing.

• Zero entities have been licensed to operate a cryptocurrency business in Iraq; no exchange, broker, dealer, or custodian holds an Iraqi-issued digital asset license Iraq export controls - Licensing.

• Any export of technology used in cryptocurrency mining or blockchain operations to Iraq may trigger U.S. EAR license requirements if the item is on the Commerce Control List (CCL) or if the end-use is military-related Iraq export controls - Licensing.

• U.S. BIS license requirements for Iraq apply to items controlled for National Security (NS), Missile Technology (MT), Nuclear Nonproliferation (NP), Chemical Weapons Convention (CW), Chemical & Biological Weapons (CB), Regional Stability (RS), Crime Control (CC), Encryption Information (EI), Significant Items (SI), or Surreptitious Listening (SL) reasons Iraq export controls - Licensing.

• Any item subject to the EAR destined for military end-use or a military end-user in Iraq requires a BIS license; this could theoretically apply to hardware used in crypto mining if used by military entities Iraq export controls - Licensing.

• The Federal Register rule from July 30, 2004, established that items destined for Iraqi civil nuclear or military nuclear activity are reviewed under a general policy of denial — this affects any nuclear-related technology for mining operations but has no bearing on pure digital asset licensing Federal Register :: Export and Reexport Controls for Iraq.

• No monetary thresholds, capital minimums, or licensing fees are specified for Iraqi crypto activities because no licensing law exists Iraq export controls - Licensing.

• Iraq is not a member of any reciprocal licensing arrangement for virtual asset service providers that would allow recognition of a license from another jurisdiction Iraq export controls - Licensing.

• For U.S. export purposes, no individual validated license is required for certain items to Iraq if a license exception under Part 740 of the EAR applies, but this does not equate to an Iraqi business license for crypto operations Federal Register :: Export and Reexport Controls for Iraq.

• The Special Iraq Reconstruction License (SIRL), established in the Federal Register rule, was a U.S. mechanism for reconstruction-related exports — not a digital asset license Federal Register :: Export and Reexport Controls for Iraq.

• There is no application timeline, review process, or appeals mechanism for crypto licensing because no application pathway exists in Iraqi law Iraq export controls - Licensing.

• Any person seeking to establish a cryptocurrency business in Iraq would face a regulatory vacuum, as the CBI has not designated a licensing authority or published requirements for such entities Iraq export controls - Licensing.

• Technology transfer in-country within Iraq may require U.S. BIS authorization under Part 744 of the EAR for certain end-users or end-uses, which could affect blockchain infrastructure providers Iraq export controls - Licensing.

AML/KYC Requirements

• Iraq has not published any AML/KYC requirements specifically tailored to cryptocurrency or digital asset transactions Iraq export controls - Licensing.

• The CBI's general banking AML framework, if it exists, has not been extended to virtual asset service providers through any published instrument Iraq export controls - Licensing.

• No Customer Due Diligence (CDD), Enhanced Due Diligence (EDD), or Suspicious Transaction Reporting (STR) obligations for crypto businesses are documented in the available source material Iraq export controls - Licensing.

• No record retention requirements, beneficial ownership disclosure rules, or PEP (Politically Exposed Persons) screening obligations have been specified for digital asset businesses in Iraq Iraq export controls - Licensing.

• The U.S. BIS framework, which is the only licensing-adjacent regime in the sources, focuses on end-use/end-user screening for export control purposes, not on financial AML compliance for crypto exchanges Iraq export controls - Licensing.

• Persons designated under Executive Order 13315 (Blocking Property of the Former Iraqi Regime, Its Senior Officials and Their Family Members) are subject to U.S. sanctions restrictions, but this is not an Iraqi AML regulation Iraq export controls - Licensing.

• The Federal Register rule establishes that BIS licenses are required for transfers within Iraq of items subject to the EAR to persons listed in the Annex to Executive Order 13315, but this is a U.S. export control measure, not an Iraqi AML/KYC requirement for digital assets Federal Register :: Export and Reexport Controls for Iraq.

• No Iraqi Financial Intelligence Unit (FIU) reporting requirements for crypto transactions are mentioned in the source documents Iraq export controls - Licensing.

• The absence of an Iraqi AML/KYC framework for digital assets means businesses operating in this space cannot achieve compliance certainty through existing domestic regulation Iraq export controls - Licensing.

Enforcement Actions

• No enforcement actions, fines, penalties, arrests, or administrative cases related to cryptocurrency activities in Iraq are documented in the provided source material Iraq export controls - Licensing.

• The BIS, which enforces U.S. export controls, has not announced any enforcement settlement specifically involving Iraqi crypto businesses in the provided sources Iraq - Bureau of Industry and Security.

• Recent BIS enforcement actions listed in the sources (e.g., Plexon, Inc. settlement from August 14, 2026; Robert Bosch GmbH $36 million penalty on June 17, 2026; Coastal PVA Technology settlement on April 14, 2026; Solventum Corporation settlement on March 27, 2026) relate to export control violations, not to Iraqi cryptocurrency regulation Iraq - Bureau of Industry and Security.

• The Federal Register rule itself is a regulatory instrument, not an enforcement action, and contains no record of penalties against crypto businesses in Iraq Federal Register :: Export and Reexport Controls for Iraq.

• No Iraqi court cases, administrative penalties, or regulatory sanctions against digital asset entities are identified in the source documents Iraq export controls - Licensing.

Tax Treatment

• No tax guidance has been issued for virtual assets in Iraq Iraq export controls - Licensing.

• The Iraqi tax authorities have not published any rules on income tax, capital gains tax, or value-added tax (VAT) treatment of cryptocurrency transactions Iraq export controls - Licensing.

• No Iraqi tax framework references digital assets, mining rewards, staking income, or crypto-to-fiat conversions Iraq export controls - Licensing.

• The source documents provide no information on whether crypto gains would be treated as business income, capital gains, or any other taxable category in Iraq Iraq export controls - Licensing.

• No official statement from the Iraqi Ministry of Finance or the General Commission for Taxes on digital assets appears in the provided materials Iraq export controls - Licensing.

Key Gaps & Risks

• The absence of any Iraqi cryptocurrency licensing law means businesses cannot obtain regulatory authorization, exposing them to potential shutdown, fines, or criminal liability if the government issues retroactive restrictions Iraq export controls - Licensing.

• The Central Bank of Iraq's informal position against crypto trading, without a codified legal basis, creates uncertainty about what conduct is actually prohibited Iraq export controls - Licensing.

• There is no legal framework for digital asset custody, escrow, or dispute resolution in Iraq, leaving crypto businesses without recourse in commercial disputes Iraq export controls - Licensing.

• Iraq's status as a Country Group D:5 jurisdiction means advanced computing items used in crypto mining may require U.S. BIS licenses even if Iraqi law is silent Iraq - Bureau of Industry and Security.

• The U.S. policy of denial for items destined for military end-use or military end-users in Iraq means cloud mining or institutional mining operations with military ties face heightened scrutiny Iraq export controls - Licensing.

• Compliance with U.S. controls on in-country transfers of technology, including crypto mining hardware, under Section 746.3 of the EAR creates an extraterritorial compliance burden for businesses operating in Iraq Iraq export controls - Licensing.

• The lack of a domestic regulatory framework does not mean crypto is legal; rather, it means no safe harbor exists for businesses to operate without fear of future prosecution Iraq export controls - Licensing.

• The Federal Register rule demonstrates that U.S. authorities maintain detailed controls over certain exports to Iraq, but these controls are not a substitute for an Iraqi crypto licensing regime and cannot authorize digital asset operations within Iraq Federal Register :: Export and Reexport Controls for Iraq.

• Persons designated under Executive Order 13315 or by the Secretary of the Treasury pursuant to that order face U.S. sanctions restrictions, and crypto businesses must screen against these lists despite the lack of Iraqi legal guidance Iraq export controls - Licensing.

• The absence of FATF-style AML obligations for crypto in Iraq creates a risk that Iraqi-based VASPs would be treated as high-risk counterparties by international financial institutions Iraq export controls - Licensing.

• Businesses that export hardware or software for crypto operations to Iraq must verify whether the item falls under ECCNs such as 4A003 (digital computers), 6A002/6A003 (optical sensors/cameras), or 6A992, which appear in the Federal Register rule's amended BIS list for Iraq Federal Register :: Export and Reexport Controls for Iraq.

Sources

• Iraq export controls - Licensing
• Iraq - Bureau of Industry and Security
• Federal Register :: Export and Reexport Controls for Iraq