Corruption, weak legal systems fuel money laundering in Iraq’s investment sector
Corruption has transformed Iraq’s investment sector into a vehicle for laundering illegal funds, resulting in the collapse of genuine investment.
ERBIL (Kurdistan24) – Iraq’s struggle with corruption and fragile legal systems has created an environment where money laundering thrives, with the investment sector becoming a primary route for illicit activities. Unfinished projects stand as glaring examples of how corruption has undermined legitimate investment opportunities, turning Iraq into a hub for global money laundering schemes.
Corruption has transformed Iraq’s investment sector into a vehicle for laundering illegal funds, resulting in the collapse of genuine investment. Illicit money is often funneled into seemingly legitimate projects that offer no real economic value, contributing to significant economic and social instability. This situation also hampers investment opportunities by creating barriers for honest investors.
A prevalent method of laundering money in Iraq is through the real estate sector, where illegal funds are used to purchase housing units. This influx of illicit money has driven up property prices, making it increasingly difficult for citizens to afford homes.
Numerous unfinished investment projects across Iraq serve as a façade for money laundering operations. Instead of driving economic recovery, foreign investments are often exploited for illicit activities. A case in point is the glass and ceramics factory in Ramadi, Anbar province. Two years after a Russian company announced plans to invest in the project, no real progress has been made, raising concerns about the project’s legitimacy.
The banking sector in Iraq is also complicit in enabling money laundering and currency smuggling. While failing to provide meaningful services to the public, banks have become breeding grounds for corruption. Advances in technology have further expanded opportunities for money laundering. Fazel Gharawi, head of Iraq’s Strategic Center for Human Rights, revealed that even online platforms like PlayerUnknown's Battlegrounds (PUBG) are being exploited, with funds leaving Iraq under the guise of gaming transactions.
Corruption and legal weaknesses in Iraq have attracted not only companies and individuals but also neighboring countries, turning the country into a hotspot for international money laundering. This has raised alarm about the future of Iraq’s economy, as these illicit activities threaten its long-term stability and development.
