Iraq

Basrah Obelisk Law Firm was pleased to participate in the 14th Edition of the ICC MENA Conference on International Arbitration, held in the UAE, a premier regional platform bringing together arbitration practitioners, experts, and institutions from around the world. The firm was represented by Dr. Buraq al-Hamdy, Managing Partner of Basrah Obelisk Law Firm, along with a team of our lawyers: Mr. Mushtat Al Mushtat, Mr. Ammar Mahdi Hachem, Mr. Wadah Hamed and Mr. Azzam Mohammad Naama, reflecting our ongoing commitment to excellence in international arbitration and professional development. In addition to attending the conference, our team participated in the ICC Institute of World Business Law Advanced Training on Complex Arbitrations: Focus on Procedural Issues, held on January 26, 2026 prior to the conference. This specialized training provided our lawyers with deeper insights into complex procedural matters in international arbitration, further enhancing our firm’s expertise and ability to provide cutting-edge legal services in the MENA region and beyond. The conference featured high-level panel discussions addressing key challenges shaping arbitration in the MENA region and beyond. The second panel, with Nayla Sleiman Al-Obeidli, Fatima Balfaqeeh, Niyati Gandhi, and Roland Ziade, examined the evolving investment landscape in MENA, focusing on risk allocation between states, SOEs, and investors amid changing regulatory and geopolitical conditions. Another panel, comprising Joseph Chedrawe KC, Alain Farhad, Dietmar W. Prager, Zineb Ramid, and Nadine Debbas Achkar, explored pricing volatility and risk allocation in commercial contracts, emphasizing the role of contractual precision and governing law in dispute prevention. The conference concluded with a live mock session of the ICC Court, led by ICC Court President, Claudia Salomon, alongside ICC Court members and counsel, offering practical insight into cost allocation and award scrutiny in international arbitration. Basrah Obelisk Law Firm’s participation underscores the firm’s dedication to strengthening its arbitration practice, expanding regional and international networks, and contributing to the advancement of dispute resolution standards across the MENA region.

Under the leadership of Dr. Buraq Al-Hamdy, Basrah Obelisk Law Firm proudly participated in the Iraq Arbitration Week 2025, held for its second edition in Baghdad between November 29 and December 2, 2025.   This year’s edition gathered leading international experts, government representatives, and arbitration practitioners to discuss best practices in dispute resolution and enhance Iraq’s arbitration ecosystem.   The firm’s participation reflects its ongoing commitment to advancing legal excellence, strengthening arbitration culture in Iraq, and contributing to the national and international dialogue on modern dispute settlement mechanisms.   At Basrah Obelisk Law Firm, we remain dedicated to supporting the growth of arbitration in Iraq, fostering a more efficient and trusted environment for resolving commercial disputes and empowering legal institutions to align with global standards.  

The Industrial Sector in Iraq: Promising Opportunities for Foreign Investors By: Mohammed A. Taha, Founder and Managing Partner of Marsa Law Date: August 2026Introduction: In recent years, Iraq's industrial sector has witnessed remarkable development, accompanied by a relative improvement in the security situation across various provinces. This transformation has helped create a highly attractive environment for foreign investors wishing to establish industrial projects within the country. This appeal is particularly driven by the customs exemptions and preferential advantages granted to these local factories compared to imported products, significantly enhancing their competitiveness in the local market.Two Legal Pathways for Establishing Foreign Factories: A foreign investor wishing to establish a manufacturing plant in Iraq can take one of two legal paths:1. Registration with the National Investment Commission (NIC): Under this pathway, the project is governed by the provisions of the Iraqi Investment Law No. 13 of 2013. The primary advantage of this option is that it allows the foreign investor full (100%) ownership of the factory without the need for a local partner. This makes it the preferred choice for many investors who wish to retain absolute control over their project's management and invested capital.2. Registration with the Ministry of Industry and Minerals: The second pathway is governed by the Private Sector Industrial Investment Law No. 20 of 1998. This option features a set of incentives specifically tailored to the industrial sector. However, unlike the first path, it legally requires the presence of an Iraqi partner in the joint venture.Each of these pathways has its unique advantages. The choice between them depends entirely on the nature of the project, the investor's strategic goals, and their willingness to engage in a local partnership.Key Privileges Granted to Foreign Investors:Regardless of the chosen pathway, foreign investors benefit from a comprehensive set of privileges stipulated in the aforementioned laws, most notably:Expedited Visas: Facilitating the issuance of entry visas and work permits for foreign experts and technical staff working on the project.Customs Exemptions: Zero tariffs on raw materials and equipment necessary for manufacturing.Exchange Rate Benefits: Capitalizing on the exchange rate difference between the official dollar rate adopted by the Central Bank of Iraq (CBI) and the parallel market rate, which constitutes a significant additional economic advantage for industrial projects.Additional Incentives: Various other detailed advantages are outlined within the laws, which vary depending on the type of industrial activity and the overall scale of the investment.The Critical Importance of Trademark Registration in Iraq: A fundamental point we strongly advise for every foreign investor intending to manufacture products under their brand in Iraq is to proactively and officially register their trademark with the competent Iraqi authorities, securing a legal license to use it through the local factory.Failure to register the trademark can expose products to severe complications at checkpoints affiliated with the Iraqi Customs Directorates. Unlicensed goods may be seized by customs committees under the pretext of lacking official authorization to use the brand, causing substantial financial losses and delays in market distribution. Therefore, preemptive trademark registration is an indispensable precautionary measure to ensure operations proceed without legal or administrative bottlenecks.Recent Figures and Statistics (2025-2026): Official figures released during 2025-2026 reflect an upward trajectory in the volume of investment flowing into Iraq:In October 2025, the Iraqi Prime Minister stated that total Arab and foreign investments entering Iraq over the previous two years exceeded $100 billion. These were distributed across multiple sectors—prominently manufacturing, housing, energy, and agriculture—compared to a cumulative total of only about $35 billion by the end of 2022. These investments include partnerships with global corporations in fertilizers, sulfur, phosphates, iron, as well as the food and pharmaceutical industries.Conversely, the 2026 World Investment Report issued by the United Nations Conference on Trade and Development (UNCTAD) indicates that actual Foreign Direct Investment (FDI) cash inflows into Iraq during 2025 amounted to approximately $0.4 billion. This placed Iraq eighth in the Arab world, trailing significantly behind countries like the UAE ($63 billion), Kuwait ($36 billion), and Saudi Arabia ($27 billion).This discrepancy between the two figures is not a contradiction, but rather a difference in measurement metrics: The government figure ($100 billion) likely refers to the total projected value of investment licenses, contracts granted, or projects agreed upon across various tracks. Meanwhile, the UNCTAD figure measures actual cash flows recorded in the balance of payments—a more conservative and precise metric universally adopted by economists for cross-country comparisons.According to the Chairman of the National Investment Commission, Iraq is currently preparing to launch new industrial and agricultural mega-projects, including specialized industrial cities, aiming to attract additional investments projected to reach $250 billion over the next two years.These figures illustrate that while Iraq is experiencing massive momentum in investment pledges and granted licenses, it remains in the early stages of attracting actual, realized FDI compared to its Gulf neighbors. The gap between "announcing an investment" and its "actual execution on the ground" still exists and requires close monitoring.Conclusion:The current reality of Iraq's industrial sector demonstrates a clear, aggressive government directive to encourage foreign investment through versatile legal frameworks that offer genuine flexibility and incentives. However, capitalizing on this sector requires the investor to possess a precise understanding of the nuances between the available legal pathways and to rigorously fulfill all compliance procedures—foremost among them intellectual property protection—to guarantee a secure and sustainable investment in the Iraqi market.

Introduction At its fifteenth ordinary session held on 18 August 2026, the Iraqi Council of Ministers issued Resolution No. (413) of 2026, adopting the principle of advance collection of customs duties and estimated tax guarantees on imported goods, effective 1 October 2026. This Resolution is not a minor procedural amendment; rather, it represents a substantive shift in the philosophy of customs collection in Iraq — moving from collection at the point of clearance to collection at the point of financing, i.e., at the time the importer deposits the funds for outward transfer with an authorized bank for import purposes.Key Provisions of the Resolution The Resolution rests on four principal pillars: 1. Principle of Advance Collection: Customs duties and estimated tax guarantees are to be collected at the time the importer deposits funds for outward transfer with authorized banks for import purposes, effective 1 October 2026. 2. Obligations of Authorized Banks: Authorized banks are prohibited from executing any outward transfer, opening any documentary credit, or financing any import transaction, unless the importer — within the same banking transaction — has first paid the customs duties and estimated tax guarantees through the ASYCUDA system and the approved electronic payment mechanisms, and such amounts have been transferred to the General Treasury accounts and the relevant accounts at the Ministry of Finance within a maximum period of seven days, depending on the nature of the amount collected. 3. Basis for Calculating the Amounts: The estimated customs duties and tax guarantees are calculated on the basis of the preliminary data submitted by the importer, including the commercial invoice, shipping or import documents, customs classification, and the type, value, and origin of the goods, in accordance with the customs tariff schedules and the approved tax guarantee tables referenced in Council of Ministers Resolution No. (957) of 2025. 4. Implementation Timeline: The Ministry of Finance, in coordination with the Central Bank of Iraq, the General Customs Authority, and the General Tax Authority, has been tasked with preparing an executive, accounting, and technical mechanism within fifteen days. This mechanism is to include the electronic payment pathway, approved account numbers, the bank-linkage mechanism, the settlement and refund mechanism for discrepancies, and procedures for handling exemptions, exceptions, non-arrival of goods, and data discrepancies.Interconnection with the Iraqi ASYCUDA SystemThis Resolution cannot be properly understood in isolation from the ASYCUDA Iraq system — the integrated electronic platform linking four principal parties: the importer, the importer’s bank, the Central Bank of Iraq, and the General Customs Authority. Under the new Resolution, the payment of customs duties and estimated tax guarantees becomes an integral step within the banking transaction cycle itself, occurring prior to the execution of the outward transfer or the opening of the documentary credit, rather than a subsequent step carried out at the time of customs clearance at the port or border crossing. Payment methods within this system are organized along two principal tracks: Advance Payment: The transfer is executed prior to the issuance of the final declaration and the clearance of the goods. Payment After Import, or via Letter of Credit (L/C): In both cases, the customs clearance documents, together with the final declaration, must be submitted to the bank prior to execution of the transfer or the imposition of the transfer. The system further classifies “advance data” into five categories (numbered 01 through 05), depending on the nature of the transaction — invoice only; invoice partially or fully paid prior to system activation; goods imported during 2025 without a corresponding transfer; a mixed declaration; or a prior declaration reserved exclusively for specific categories of goods (foodstuffs, pharmaceuticals, medical supplies, and animal feed) imported exclusively through the Ibrahim Al-Khalil crossing into the Kurdistan Region or the federal territories. Correctly identifying the applicable category is essential for importers and their legal or customs representatives in order to avoid delay or rejection of the declaration.The Importance of Correctly Disclosing Freight and Insurance Charges under Incoterms Proper implementation of the Resolution is closely tied to the accuracy of the data contained in the commercial invoice, and in particular to how freight and insurance charges are disclosed in accordance with the applicable delivery term: Under CFR, CIF, CPT, and CIP, the seller must disclose freight charges (and insurance charges, in the case of CIF and CIP) separately from the value of the goods on the invoice, as the seller bears these costs. Under DAP, DPU, and DDP, separate disclosure is preferred, even though the seller bears the transport costs to a specified destination. Under EXW, FCA, and FOB, such charges may be disclosed where they are paid by, or known to, the seller, although this is not mandatory. Because the Iraqi General Customs Authority relies on invoice data within the ASYCUDA system for customs valuation purposes, any failure to properly separate these amounts may give rise to valuation disputes, or result in an inaccurate calculation of the estimated duties and tax guarantees under the new advance-collection regime.Practical Implications for Importing Companies, Particularly Turkish and Other Foreign Companies Operating in Iraq 1. Restructuring of Cash Flow: The Resolution requires importing companies to allocate the liquidity necessary to cover the estimated customs duties and tax guarantees at an earlier stage of the import cycle — namely, at the point of outward transfer — rather than upon the arrival or clearance of the goods. 2. Precision of Commercial Documentation: The importance of preparing commercial invoices that fully comply with ASYCUDA requirements is heightened — including complete party details, HS code, weight, quantity, unit price, total amount and origin, delivery and payment terms, and the beneficiary’s bank account details. Any omission or inconsistency may delay the calculation of the estimated amounts or expose the transaction to rejection or delay. 3. Review of Commercial Contracts and Delivery Terms: It is advisable to review the Incoterms provisions used in existing and future contracts with Turkish and other foreign suppliers, to ensure the proper disclosure of freight and insurance charges and to avoid any issues in customs valuation. 4. Early Coordination with Authorized Banks: Importers must now coordinate in advance with their banks regarding the electronic payment mechanism through ASYCUDA, to ensure that outward transfers or documentary credits are not disrupted following the Resolution’s entry into force on 1 October 2026. 5. Monitoring the Forthcoming Implementing Mechanism: As the Resolution has delegated the detailed implementation — including the payment pathway, settlement mechanism, and exemption and exception procedures — to a mechanism to be prepared by the Ministry of Finance in coordination with the relevant authorities within fifteen days, close monitoring of the issuance of this mechanism is essential for every company importing into, or investing in, the Iraqi market.Conclusion Council of Ministers Resolution No. (413) of 2026 marks a fundamental shift in Iraq’s customs and tax collection framework, by directly linking bank financing of imports to prior customs and tax compliance through the ASYCUDA system. This shift is of particular significance to foreign companies, and especially to Turkish companies active in the Iraq Türkiye trade corridor, which are advised to review the structuring of their contracts, commercial invoices, and bank financing arrangements to ensure compliance with the new requirements ahead of the effective date of 1 October 2026.