Prime Minister Mustafa Al Kadhimi welcomed the decision, saying it was “an important step in dedicating effective Iraqi diplomacy to serving the interests of the country”.
“Governmental and diplomatic efforts are continuing at various levels to serve our national interest and achieve Iraq's deserved status,” he said.
Iraq was added to the list six years ago and since then officials in Baghdad have urged the EU to de-list the country.
Baghdad’s anti-money laundering and counterterrorism financing laws were described as having “strategic deficiencies” by the EU in 2019.
The EU’s ambassador to Iraq Ville Varjola held talks with Mr Al Kadhimi on Sunday and informed him of the “good news".
Mr Varjola said the move “will pave the way for deepening financial cooperation and investment”.
He did not specify any reasons for the changes. EU criteria for being a high risk jurisdiction include a failure to impose criminal penalties on money laundering, a failure by banks to report suspicious transactions, which could involve financing terrorism or hiding corrupt payments, and a failure to implement targeted sanctions.
Iraq’s Foreign Ministry said the move would pave the way for “economic partnerships that push the wheel of reconstruction and investment.”
“Iraq's exit from the list of high-risk countries represents an important success for Iraqi diplomacy, especially for state institutions that are concerned with Iraq's compliance with the standards of international law,” Ahmed Al Sahah, Foreign Ministry spokesman told The National.
“Terrorism and the financing of terrorism is an international challenge, and for Iraq to succeed in complying with the criteria of this regulation reflects the confidence of the international community in the Iraqi government.”
Officials in the northern Kurdish region said the move would bring better economic cooperation between Iraq and the wider world.
“In recent years, the KRG [Kurdistan Regional Government] and the federal government in Baghdad have worked together with our partners in the international community to target the financing of terrorism and criminal networks, including illegal currency auctions and informal money service businesses,” Mr Barzani said.
“The success we have achieved together with the contribution of Europe should encourage cooperation in order to provide a bright economic future for our generations.”
Iraq's process to form a new government began on Sunday, following an early election held in October 2021.