The Iraqi government has taken a new step towards the implementation of the 2015 Anti-Money Laundering and Counter-terrorism Financing Law by agreeing to freeze the financial assets of extremist groups.

The new measure, approved in a September 18th cabinet meeting, is designed to cut off the funding sources of extremist groups and stifle their criminal activities.

The decision is in line with the amended Anti-Money Laundering and Counter-terrorism Financing Law No. 39 of 2015, economic adviser to the Prime Minister Mudher Mohammed Saleh told Diyaruna.

The law, which went into effect last September, provided for the issuance of "a list of decisions and regulations that combat the movement of illegal funds in accordance with international standards and conventions", Saleh said.

"Pursuant to the law, Iraq now has obligations to the international community to take all procedural and preventive measures to block terrorist funds," he said.

"Additionally, it must co-operate in this regard with world countries to exchange information and expertise," he said, noting that this will help combat money laundering and its use to fund terrorist activities and organised crime.

The recent move "demonstrates Iraq’s seriousness and willingness to enhance joint action with all countries and international organisations and institutions to go after the funding resources of terrorist individuals and groups", he said.

Extremist groups move funds around under the guise of donations or other illegal covers, he said, adding that seizing these funds supports international efforts to dry up their funding sources and curb their criminal activity.

"Iraqi forces achieved major victories against the terrorists and were able to shrink their influence and expel them from several cities," he said. "With its recent decision, the government affirms Iraq's determination to fight terrorism, both by force of arms and through legal channels."

'A firm and deterrent decision'

The government's move is "a firm and deterrent decision that has important implications on internal and international security", said Iraqi MP Iskandar Witwit, who serves on the parliamentary security and defence committee.

"Combating money laundering through monitoring and going after fictitious bank accounts and suspect business transactions and activities is one of the important measures needed to undermine terrorist activity," he told Diyaruna.

Terror groups rely heavily on this "dirty money" to finance their activities and ensure their local and global sustainability, he said, adding that the new law will deprive them of proceeds that would constitute a major source of their funding.

"The resolution also provides for going after and freezing all assets of those legally proven to be involved in terrorism," Witwit said, urging the international community to support and co-ordinate with Iraq to help it combat money laundering and terror financing.

Key tool in war on terrorism

The government's "long-awaited decision is an important tool in the war on terrorism", said Iraqi MP Abdul Salam al-Maliki, who serves on the parliamentary economic committee.

The decision as a "major step in the right direction", he told Diyaruna, especially as it comes amid successive military victories against the "Islamic State of Iraq and the Levant" (ISIL) in Iraq.

"The decision combats terrorist funding sources and the illegal movement of money, and freezes the money [ISIL] made from stealing the country's oil wealth and looting the state’s public property during their occupation of cities," he said.

"We must harness all our national capabilities to ensure the implementation of the decision and open a front for a long-term economic war against the terrorists to strip them of all the elements they need to survive and continue their activities," al-Maliki added.