Country Reports on Terrorism 2017 - Iraq

Overview: By the end of 2017, Iraqi Security Forces (ISF), with the support of the U.S.-led Global Coalition to Defeat ISIS, had reclaimed all of the territory that ISIS had captured in 2014 and 2015. As ISIS retreated from Mosul and other cities, its fighters used improvised explosive devices, homemade mines, and mortars to booby-trap homes, public spaces, and critical infrastructure to impede the movement of Iraq's security forces and terrorize returning residents. Despite Iraqi progress on the battlefield, ISIS maintained the capability to conduct deadly terrorist attacks. U.S.-designated Foreign Terrorist Organization Kata'ib Hizballah continued to operate in Iraq during 2017, exacerbating sectarian tensions. Along with its nefarious activities, Kata'ib Hizballah continued to combat ISIS alongside the Iraqi military, police, and other Popular Mobilization Force units during the year. Iraq expanded its cooperation with the United States and other members of the international community to counter terrorism, including taking steps to dismantle ISIS's financial activity. Iraq passed 31 resolutions aimed at stopping terrorist financing and made significant progress implementing its 2016 Anti-Money Laundering/Countering Terrorism Finance law, including establishing a committee that designated at least 30 individuals in 2017.

2017 Terrorist Incidents: According to the United Nations (UN), acts of terrorism, violence, and armed conflict with ISIS killed more than 3,000 civilians and injured more than 4,600 in 2017. ISIS's continued ability to use captured and improvised military equipment allowed it to employ sophisticated methods including the use of armored vehicle-borne improvised explosive devices and chlorine gas. ISIS continued to commit atrocities involving the use of child soldiers, mass murder, and enslavement of ethnic and religious minorities, rape, forced marriage, and executing civilians, including women and children, attempting to flee its rule. As the ISF recaptured territory, ISIS killed thousands of Iraqi civilians, forcing residents to remain as human shields to discourage airstrikes and shooting those attempting to flee. ISIS continued to carry out suicide and hit-and-run attacks throughout the country, the most significant being the coordinated attack on a security checkpoint and restaurant on the outskirts of Nasariyah on September 14 that killed more than 80 Iraqis. Other prominent ISIS attacks included:

• On February 28, two suicide bombers detonated explosives in a market in Sadr City, Baghdad, killing at least 60 people.

• On June 9, a suicide bomber detonated his explosive belt at a crowded market in Musaiyab, Babylon, south of Baghdad, killing 30 people.

• Also on June 9, a female suicide bomber detonated her explosives belt in the market east of the city of Karbala, killing 30 people.

• On November 21, a powerful truck bomb exploded in Tuz Khurmatu, Kirkuk, killing at least 32 people.

Legislation, Law Enforcement, and Border Security: Iraq improved its ability to detect and prevent terrorist threats and continued to disrupt terrorist activities, detaining, arresting, and trying thousands of suspected terrorists in 2017. A lack of centralized databases hindered its ability to track the number of terrorism suspects it detained and arrested in 2017. Iraq has multiple security, law enforcement, and intelligence organizations with overlapping responsibilities, including the Counterterrorism Service, National Security Service, Iraqi National Intelligence Service, military intelligence, and assorted Ministry of Interior units including national and local police. Lack of interagency cooperation is a vulnerability that Iraq has identified through its security sector reform program. During the campaign to liberate Iraq, many Iraqi counterterrorism and law enforcement personnel also acted as front-line soldiers, which degraded their organizations' ability to carry out their intended roles. Additionally, ISIS destroyed large portions of the law enforcement infrastructure, including prisons. Suspected terrorists are often detained in overcrowded facilities for extended periods.

Iraq re-established control over its border crossings with Syria in 2017 but border security remained a critical capability gap, as the ISF has limited capability to prevent smuggling across the Iraq-Syria border. Iraq conducted biographic and biometric screening at multiple land and air ports of entry and announced plans to begin issuing biometric passports in early 2018. It shared biometric information on known and suspected terrorists and exemplars of its identity documents with the United States, INTERPOL, and other international partners.

Countering the Financing of Terrorism: Iraq is a member of the Middle East and North Africa Financial Action Task Force, a Financial Action Task Force (FATF)-style regional body. Iraq is under review by the FATF, due to a number of strategic deficiencies in its anti-money laundering/countering the financing of terrorism (AML/CFT) regime.

Iraq has improved this regime, including issuing a set of regulations in accordance with its 2016 law, to help bolster its compliance with the FATF recommendations. In 2017, FATF postponed an evaluation on Iraq's AML/CFT regime due to uncertainty about the continued applicability of the Federal AML/CFT Law in the Iraqi Kurdistan Region (IKR) following the IKR's September 2017 referendum on independence.

In 2017, the Government of Iraq, including the Central Bank of Iraq, law enforcement, and the judiciary, continued to dismantle ISIS's financial activity and safeguard its financial institutions from exploitation by ISIS. Iraq enforced a national directive to prohibit financial transactions with banks and financial companies located in ISIS-controlled areas. It cut off salary payments to government employees to prevent those salaries from being "taxed" by ISIS and prohibited exchange houses and transfer companies located in ISIS-held areas and those suspected of illicit activity from accessing U.S. banknotes in the central bank's currency auctions. It also shared a list of banned exchange houses and money transfer companies with regional regulators and took judicial action against more than a dozen individuals and companies suspected of illicit financial activity. These actions ranged from business closures to the arrest of suspects. Iraq also barred ISIS financial facilitators Salim Mustafa Muhammad al Mansur and Umar al-Kubaysi, as well as al-Kubaysi's company, the Al Kawthar Money Exchange, from Iraq's financial system and froze all of their assets under Iraq's jurisdiction.

For further information on money laundering and financial crimes, see the 2018 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes.

Countering Violent Extremism (CVE): Iraq remained active in its strategic messaging to discredit ISIS and was finalizing its 2018 CVE strategy at the end of 2017. In November, it organized, planned, and held the Third International Conference to Counter ISIS Media, which focused on sharing information to combat terrorist ideology.

Many foreign terrorist fighters are in Iraqi custody and Iraq has detained a large number of foreign women and children with family affiliations to ISIS fighters. Additionally, displaced Iraqis, whose extended family members are suspected of supporting ISIS, remain vulnerable to revenge attacks or retribution killings, or are denied access to services. Consequently, ISIS-affiliated families are often unwilling or unable to return to their place of origin. Iraq acknowledged that the return and reintegration of family members of suspected ISIS supporters is important to prevent future radicalization to violence.

In June, Iraq signed a bilateral agreement with Saudi Arabia that aims to combat violent extremism and terrorism through means like eliminating the financing of terrorism and combating sectarian discrimination.

International and Regional Cooperation: Iraq continued to work with multilateral and regional organizations including the United Nations, the Organization of Islamic Cooperation, and the Arab League to support counterterrorism efforts. In May, the UN Security Council Counter-Terrorism Committee held a meeting on Iraq's counterterrorism assistance needs.