The Central Bank of Iraq (CBI) is contracting an independent audit firm to assess which banks have met the first phase of its banking reform program, a step that could restore their access to foreign currency transfer channels, the bank announced Tuesday.
CBI said it continues to work with restricted institutions to help them meet supervisory requirements, while compliant banks await the independent assessment that will determine whether their access is restored. The bank did not name the audit firm or provide a timeline for completion.
The restrictions trace back to 2023, when the US Federal Reserve and Treasury Department flagged dozens of Iraqi private banks for transactions suspected of facilitating dollar flows to Iran and other sanctioned parties. Washington responded by cutting those banks off from the dollar correspondent banking system, a move that effectively froze their ability to conduct international transfers. The CBI subsequently launched its reform program as a framework for restoring access to banks that could demonstrate compliance with international standards.
Iraqi banks are now completing the second phase of that program, which centers on governance, transparency, and institutional performance. The incoming independent audit will evaluate banks that cleared phase one against international transfer requirements, covering not only dollar channels but also euro, UAE dirham, and Chinese yuan access.
