Overview:  By the end of 2018, Iraqi Security Forces (ISF) were in nominal control of all territories liberated from ISIS.  Reverting to clandestine tactics following its loss of territory, ISIS increasingly resorted to targeted assassinations of police and local political leaders, along with IEDs and shooting attacks directed at both government and government-associated civilian targets.  ISIS sought to reestablish support among populations in Ninewa, Kirkuk, Diyala, Salah ad Din, and Anbar provinces, in particular. Although ISIS maintained the capability to conduct deadly terrorist attacks in Iraq, these attacks resulted in fewer casualties in 2018 than in 2017. The Iran-backed, U.S.-designated FTO, Kata’ib Hizballah, continued to operate in Iraq during 2018. Iran-aligned Iraqi militias instigated violent and destabilizing activities in Iraq and within the region.

In 2018, the Departments of State and the Treasury designated as Specially Designated Global Terrorists several affiliates of Iran-backed Iraqi militias outside the control of the government.  The Kurdistan Workers Party (commonly known as the PKK), a terrorist group headquartered in the mountains of northern Iraq, continued to conduct terrorist attacks in Turkey. Iraq continued its cooperation with the United States and the international community to counter terrorism and dismantle ISIS’s financial networks. Iraq continued to make progress implementing its 2016 AML/CFT law. The AML/CFT Committee, established in 2017, designated at least 34 individuals in 2018.

In 2018, following ISIS’s demonstrated use of chemical agents in territory it controlled between 2014 and 2017, the United States continued to work with Iraq to deny ISIS access to chemical, biological, radiological, and nuclear (CBRN) materials and expertise strengthening the ability of Iraq’s government, academic institutions, and private sector to secure weaponizable chemical and biological materials and detect, disrupt, and respond effectively to suspected CBRN activity.

2018 Terrorist Incidents: According to the UN, acts of terrorism, violence, and armed conflict with ISIS killed more than 900 civilians and injured more than 1,600 as of November 30.  This was a significant decrease from 2017, when roughly 3,000 civilians died and 4,600 were injured. ISIS continued to carry out suicide and hit-and-run attacks throughout the country. The most significant of these was a pair of coordinated suicide bombings in Baghdad’s al-Tayaran Square on January 15 that killed 38 Iraqis and wounded 105 others.  Other prominent ISIS attacks included the following:

• On February 18, ISIS militants ambushed a convoy of pro-government militia fighters in Kirkuk governorate, killing at least 27 people.

• On April 12, a suicide bomber attacked a funeral for Sunni tribal fighters near Shirqat in Salah al-Din governorate, killing at least 25 mourners and injuring at least 18 others.
• On August 29, a suicide car bomber targeted a pro-government militia checkpoint near al-Qaim in Anbar governorate, killing 16 people and wounding 20 others.
• On September 28, Iran-backed terrorists were responsible for repeated incidents of fire on the U.S. Consulate in Basrah.
• On October 6, ISIS conducted its first attack in Fallujah since the city was liberated in June 2016.
• On November 8, a car bomb exploded near a restaurant in Mosul, Ninewa governorate, killing 13 people and wounding 23 others. This represented the first VBIED attack since Mosul’s liberation in July 2017.

Legislation, Law Enforcement, and Border Security: Iraq made no significant changes to its counterterrorism legal framework in 2018.

Iraq improved its ability to detect and prevent terrorist threats and continued to disrupt terrorist activities by detaining, arresting, and trying thousands of suspected terrorists in 2018.  However, the lack of centralized databases continued to hinder Iraq’s ability to track the number of terrorism suspects it detained and arrested.

Iraq has multiple security, law enforcement, and intelligence organizations with overlapping responsibilities, including the Counterterrorism Service, the National Security Services, the Iraqi National Intelligence Service, military intelligence, and assorted Ministry of Interior units including national and local police.  The United States assisted Iraqi counterterrorism efforts by providing training, equipment, and other assistance to such law enforcement organization. Iraq has identified improving interagency cooperation as a priority for its security sector reform program.  As part of that program, the Ministry of Interior recognized the need to shift priorities from supporting major combat operations against ISIS to more traditional law enforcement activities such as criminal investigations and local policing. Significant portions of law enforcement infrastructure in liberated territories destroyed by ISIS – including prisons, border posts, and police stations – remain in ruins.

Border security remained a critical capability gap, as the ISF has limited capability to fully secure Iraq’s borders with Syria and Iran.  Iraq and the United States are partnering to close this gap through broader deployment of and upgrades to the U.S.-provided PISCES. The Ministry of Interior shared biometric information on known and suspected terrorists as well as 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 (MENAFATF) and the Defeat-ISIS Coalition’s Counter-ISIS Finance Group. Iraq worked with FATF to improve strategic deficiencies in its AML/CFT regime.  Iraq improved this regime with U.S. assistance, including issuing a set of regulations in accordance with its 2016 law, to help bolster its compliance with the FATF recommendations.  In June 2018, FATF removed Iraq from monitoring under its ongoing global AML/CFT compliance process (“grey list”) of high-risk jurisdictions.

In 2018, the Government of Iraq – including the Central Bank of Iraq, law enforcement, and the judiciary – continued to dismantle ISIS’s financial networks 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 areas formerly controlled by ISIS (before their territorial defeat).  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 arrests of suspects.

Countering Violent Extremism: Iraq remained active in its strategic messaging to discredit ISIS, including through its membership in the Global Coalition to Defeat ISIS’s Communications Working Group, and engaged with U.S. military and civilian counterparts to develop a wide range of capabilities to build national cohesion and combat terrorist ideology. The Government of Iraq and the Global Coalition to Defeat ISIS also implemented stabilization, reconciliation, and accountability programs to strengthen locals’ ability to counter violent extremism.

Many FTFs remain in Iraqi custody, and Iraq has detained a large number of ISIS-affiliated foreign women and children. Additionally, displaced Iraqis whose extended family members are suspected of supporting ISIS remained vulnerable to revenge attacks or retribution killings, or were denied access to services or freedom of movement.  Consequently, ISIS-affiliated family members 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, as well as the provision of fair and equal justice, is important to prevent future radicalization to violence.

International and Regional Cooperation: Iraq is a pivotal member of the Global Coalition to Defeat ISIS and a participant in all Coalition Working Groups (Foreign Terrorist Fighters, Counter-ISIS Finance Group, Stabilization, and Communications). Iraq continued to work with multilateral and regional organizations, including the UN, NATO, the Organization of Islamic Cooperation, INTERPOL, and the Arab League to support counterterrorism efforts.  In July, foreign ministers from the Global Coalition to Defeat ISIS recognized the ISF’s efforts at a Coalition meeting in Brussels.