Baghdad — The Administrative Court of the State Council has ruled to cancel a directive issued by the Governor of the Central Bank of Iraq (CBI) that required buyers in real estate transactions exceeding 100 million dinars to deposit payments into licensed banks.
In its verdict dated October 29, 2025, the court declared that the circular was issued without proper legal authority and therefore violated existing laws, warranting its cancellation.
According to the court’s decision — a copy of which was obtained by dinaropinions.com — the Central Bank’s Circular No. (13/4/9), issued on January 15, 2025, was introduced as part of anti-money laundering efforts under the Anti-Money Laundering and Counter-Terrorism Financing Council.
However, the court clarified that the Anti-Money Laundering Council lacks legal personality and administrative or financial independence, and its role is limited to providing advice and studies under Article 7 of its founding law. It cannot issue binding instructions to banks or the public.
The court further ruled that the Governor of the Central Bank does not have the authority to restrict or regulate real estate sales, noting that such powers rest solely with the Council of Ministers and must be based on specific legal authorization.
Rejecting arguments of lack of jurisdiction, the court affirmed that the CBI’s circular was an administrative decision issued by a government entity, thus falling under its legal review rather than the jurisdiction of the Financial Services Court.
The ruling emphasized that the measure had negatively impacted Iraq’s real estate sector, particularly in Baghdad, by discouraging transactions and harming legitimate businesses. The inclusion of the Baghdad Chamber of Commerce in the proceedings highlighted that the directive was seen as unfair to a wide segment of market participants, causing a sharp decline in sales and purchases across the country.
Furthermore, the court noted that the policy led to manipulation and underreporting of real estate values, as buyers and sellers attempted to avoid the deposit requirement, resulting in reduced state revenue from taxes and fees.
The decision also criticized the CBI for implementing the mechanism without conducting adequate economic or social studies, and for excluding real estate transactions tied to investment residential complexes, which limited the effectiveness of anti-money laundering oversight.
The court’s ruling, issued in the presence of all parties, remains subject to appeal before the Supreme Administrative Court.
