This study examines the civil liability of Iraqi banks for failed international funds transfers, with particular emphasis on the structural transition from the Electronic Platform System to the Correspondent Banking System, which was officially adopted at the beginning of 2025. The study analyzes the legal characterization of the bank's obligation, demonstrating that it constitutes a composite obligation combining an obligation to achieve a specific result in its technical aspects with an obligation to exercise a heightened duty of care in its regulatory and compliance aspects, in accordance with the Central Bank's guidelines governing correspondent banking relationships.
The study addresses the central legal issue of whether international restrictions and compliance requirements constitute a foreign cause that exempts the bank from liability, or whether they amount to a contractual breach resulting from the bank's failure to conduct adequate due diligence and to select competent correspondent banking channels.
The study concludes that the establishment of the Iraqi bank's civil liability entails full compensation for both the material and moral damages sustained by the customer, including compensation for the loss of a legally recognized commercial opportunity. It further asserts that banks may not invoke compliance requirements as a defense against liability unless they demonstrate that they have exercised all measures required under the prudent banker standard and have complied with the mandatory provisions of the Iraqi Civil Code and the Anti-Money Laundering Law.