Iraqi prime minister announces reforms to ‘modernize’ digital payment systems

BAGHDAD — Prime Minister Mohammed Shia Al-Sudani has announced a new package of 16 reforms aimed at boosting Iraq’s digital payment systems.

The reforms are designed to enhance financial transparency, improve cybersecurity, and upgrade the technological infrastructure of financial institutions. Key measures include establishing a dedicated budget to support digital systems and mandating the adoption of electronic systems across all ministries and government institutions.

According to a report from state-owned Al Iraqiya, the new package includes:

1. Directing the Ministry of Planning, in cooperation with the Central Bank of Iraq and the World Bank, to establish a national budget dedicated to supporting and developing digital payment systems across the country.

2. Instructing all ministries, including the Central Bank of Iraq, to prepare regular electronic cash flow statements to ensure financial transparency, determine liquidity, and manage risks, thereby contributing to better financial planning.

3. Mandating government ministries and institutions to forge strategic partnerships with banking and non-banking financial institutions, as well as technology firms, and to adopt effective steps for collaboration and the exchange of proposals and expertise.

4. Requiring financial institutions and banks to upgrade their technical and digital systems according to the latest international standards, including enhanced anti-money laundering and anti-fraud systems, to ensure operational efficiency, improve the quality of banking services, and achieve full compliance with regulatory controls.

5. Obligating financial and banking institutions to develop cybersecurity systems and adopt a cyber-resilience framework while strictly adhering to the Central Bank’s electronic governance regulations, ensuring comprehensive protection against cyber threats and business continuity during crises.

6. Directing ministries and government institutions to develop competent government task forces to monitor electronic payment operations daily through training and qualification, using specialized systems gateways provided by payment service companies.

7. Instructing the Ministry of Communications to collaborate with ministries and government institutions to expedite the adoption of the Electronic Signature and Transactions Law No. 78 of 2012, aligning it with the requirements of electronic payments and collection settlements in cooperation with the Central Bank of Iraq.

8. Mandating the Ministry of Finance to provide a study on the mechanisms for creating intermediary accounts used by government institutions to handle restricted government accounts, addressing issues such as payment failures for citizens.

9. The Central Bank is to issue directives to both private and public banks to operate with transparency and avoid discrimination between electronic payment companies.

10. The Central Bank of Iraq is tasked with preparing the necessary procedures to eliminate predetermined payment caps for locally used prepaid cards, ensuring broader and more flexible usage.

11. Instructing ministries and government institutions to establish specialized units within state departments to facilitate financial reconciliation, settlements, and resolve disputes arising from electronic payments, in coordination with banks.

12. Directing the Integrity Commission to intensify oversight of collection points in government departments to ensure transparency and integrity.

13. Instructing the Financial Supervisory Authority to draft and enact administrative and financial updates compatible with electronic payment systems and continuously monitor these updates.

14. Emphasizing to government institutions and electronic payment service providers the implementation of the provisions in electronic collection and payment agreements, as per each party’s responsibilities outlined in those agreements.

15. Directing state-owned banks to complete the activation of a comprehensive banking system to improve financial and administrative performance.

16. Mandating all ministries and government institutions to adopt advanced electronic administrative and accounting systems to enhance efficiency and transparency.