RESEARCH: Iraq Securities

Executive Summary

Crypto activities in Iraq are not explicitly regulated, creating a grey area where compliance is uncertain. The primary regulator for traditional securities is the Iraqi Securities Commission (ISC), established by Law No. (74) of 2004. Licensing for crypto-related services does not appear to be available through the ISC, and no specific legislation addresses virtual assets or blockchain technology. Practically, entities may operate without formal authorization, exposing them to regulatory risk. AML/KYC obligations are tied to traditional financial activities overseen by the General Commission for Taxes (GCT) and the Anti-Money Laundering Law of 2022, but these do not directly apply to crypto unless classified as a financial service.

Regulatory Framework

• Regulatory Bodies:
  • Iraqi Securities Commission (ISC), established under Law No. (74) of 2004 https://isc.gov.iq/en
  • General Commission for Taxes (GCT) https://taxsummaries.pwc.com/iraq/corporate/taxes-on-corporate-income
• Primary Legislation:
  • Law No. (74) of 2004 concerning the establishment and regulation of the capital market https://isc.gov.iq/en
  • Anti-Money Laundering and Combating Financing of Terrorism Law of 2022, Article 3 defines money laundering procedures applicable to financial institutions https://taxsummaries.pwc.com/iraq/corporate/taxes-on-corporate-income
• International Standing: Iraq is a member of the Financial Action Task Force (FATF), adhering to global AML standards https://www.fatf-gafi.org/en/publications/Mutualevaluations/MER-Iraq-2024.html

Licensing Requirements

No specific licensing framework exists for crypto or blockchain services within the scope of traditional securities regulation. The ISC grants custodian licenses to banks but does not list any crypto-specific licenses https://isc.gov.iq/en/pages/263. Entities interested in operating as crypto exchanges would need to consult additional legal frameworks or potentially seek temporary approval from the Ministry of Trade.

AML/KYC Requirements

• CDD, EDD, STR Reporting: Obligated for financial institutions under the Anti-Money Laundering Law; no direct reference to virtual asset platforms https://isc.gov.iq/en/pages/25
• Beneficial Ownership Disclosure: Required for corporate entities registered with the ISC but not explicitly for crypto service providers https://taxsummaries.pwc.com/iraq/corporate/taxes-on-corporate-income
• PEP Screening: Mandatory under AML regulations, applies to all financial services https://isc.gov.iq/en/pages/25

Enforcement Actions

No documented enforcement actions specifically targeting crypto or blockchain activities in Iraq. The ISC's focus remains on traditional securities markets; however, any violation of the AML Law could lead to fines and potential imprisonment https://isc.gov.iq/en/pages/25.

Tax Treatment

• Corporate Income Tax: 15% flat rate for all juristic persons except partnerships. No specific tax rate for virtual asset activities https://taxsummaries.pwc.com/iraq/corporate/taxes-on-corporate-income
• No Direct Guidance on Virtual Assets: The absence of explicit cryptocurrency taxation means entities must interpret general tax laws https://isc.gov.iq/en/pages/44

Key Gaps & Risks

• Lack of specific legislation for cryptocurrencies and blockchain technologies.
• Unclear AML/KYC obligations for crypto service providers.
• Risk of regulatory arbitrage due to undefined compliance pathways.
• Potential tax ambiguity leading to non-compliance risks.

Sources

• Iraqi Securities Commission
• Contact us
• مركز ايداع الاوراق المالية العراقي – Iraqi CSD
• Instructions and Regulations
• Iraqi Securities Commission
• Rules and Instructions
• Iraqi Securities Commission
• Iraq securities Commission grants custodian license to ...
• Anti-money laundering law
• Iraq's measures to combat money laundering and terrorist ...
• Investor Guide
• Iraq - Individual - Other taxes - Worldwide Tax Summaries
• Taxes on corporate income - Iraq - Worldwide Tax Summaries