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Trade Information

IraqITIC.com - Trade In Iraq:

The principal Trade Law of Iraq is the CPA Order 54; CPA Order 38 deals with the Reconstruction Levy and CPA Order 70 provides the amendments to the aforementioned laws.

Iraq's Trade Environment (download)

TRADE IN GOODS

Tariff Structure:
According to CPA Order 38 there is a 5% Reconstruction Levy (RL) on goods imported in to Iraq. All other customs tariffs, duties, import taxes and surcharges stand suspended; the only exception is the vehicle entry inspection fee of $30 per truck. However there is exemption from the RL for food items, medicines, books, clothing and items pertaining to humanitarian assistance. Also exempted are the coalition forces, NGOs, foreign governments and companies undertaking reconstruction work and international organizations and agencies providing assistance.

Import Regulations
Registration Requirements:
Legal Persons must fulfill the following requirements:

At the time of registration, the importing company must describe its activities with the term "General Trade": Law of Commerce No. 30 (1984)
The company must register with the Customs: Law of Customs No. 23 (1984)
The company must register with the Chamber of Commerce: Law of Commerce No. 30 (1984)

The following documents are required in order to register: Law of Commerce No. 30 (1984)

Trader's Name, Date & Place of Birth and Nationality
Trader's Commercial Name
Date of Start of Operations and Date of Ownership
Address of Operation(s) in Iraq and/or Abroad
Type of Commercial Activity
Name of Agents (if any); their Date/Place of Birth and Nationality
Contract of lease (non-certified) verifying the location of the headquarters of the trader's commercial activities

Natural persons must fulfill the following requirements:

All registration requirements, regulations and documents are the same as for legal persons, except that the natural person is not required to register with the customs according to the Law of Customs No. 23 (1984) and the Law of Commerce No. 30 (1984).

For details on Registration, Online Registration, Commercial Laws & Regulations and Registration Application Forms, please visit the Iraq Registrar of Companies (Ministry of Trade): http://www.br-iraq.com/English/default.htm

Harmonized System (HS):
The current Iraqi tariff system classifies goods down to the four (4)-digit level based on the Customs Cooperation Council Nomenclature (CCCN); the Harmonized System (HS) is in the process of adoption.

Import duty drawback schemes: Due to the suspension of customs duties there is at present no drawback scheme.

Quantitative Import Restrictions (Prohibitions, Quotas, Licensing Systems): Please see CPA Order 54.

Import licensing procedures: There are no licensing procedures in effect at present.

Customs Valuation [WTO Customs Valuation Agreement (Annex 4)]:
Calculation of the ad-valorem reconstruction levy is assessed in accordance with Article VII of the General Agreement on Tariffs and Trade 1994 (GATT). Please see CPA Order 54.

Customs Formalities:

The following customs documents are required for imports under the Law of Customs No. 23 (1984):

Customs Declaration Form
Commercial Invoice approved by the Chamber of Commerce, and Certified by the concerned authorities
Bill of Lading
Certificate of Origin
Standards, Veterinary, Health, Food Safety and Phyto-sanitary Certificates (as relevant)

Pre-Shipment Inspection: No pre-shipment inspections are required

Rules of Origin: Under the Law of Customs No. 23 (1984), the Director General of Customs may require a separate certificate of origin. The practice is to require such a certificate, certified by the Chamber of Commerce or similar body in the country of origin.

Export Regulations:

The law applicable to exports is the Law of Customs No. 23 (1984)

Tariff: There are no export tariffs other than a $35 per ton levy on scrap metal.

Registration Requirements: Registration requirements for exporters are the same as for Importers

Quantitative Restrictions i.e. Prohibitions, Quotas and Licensing Requirements: Please see CPA Order 54 for details.

Export licensing procedures: There are no export licensing requirements.

Transit Trade:

As all customs duties are presently suspended, no duties are applicable to goods in transit. Furthermore according to CPA Order 54 the Reconstruction Levy does not apply to goods in transit

Technical Regulations and Standards:

Product standards in Iraq are controlled by the Central Organization for Standardization and Quality Control (COSQC), an independent government agency. The COSQC reviews domestic goods for health, safety and quality factors. The COSQC maintains relations with international standards organizations and provides technical assistance to the offices responsible for patent and other intellectual property rights matters. Iraq currently has approximately 3000 product standards.

For more details please visit the Ministry of Trade website at: http://www.motiraq.org

Free Economic Zones:

Basra / Khawr AZ Zubair Free Zone

In operation since June 2004, this Free Zone is spread over an area of a million square meters. Located 40km from Basra the zone has access to the Arabian Gulf through the port of Khawr-az-Zubair.

Nineveh / Flaifil Free Zone

The Flaifil Free Zone, with an area of 400,000m² is located in the north of Iraq to provide road and rail access to Turkey, Syria and Jordan.

Al-Quayem Free Zone

This zone has two stages (first stage 70,000m² and second stage 200,000m²) and is located near the Iraqi-Syrian border. It is also close to road and rail networks leading to Turkey, Jordan and Basra. In the first stage, Al-Quayem is restricted to commercial and service activities.

Exemptions:

Both Imports and Exports are exempt from all taxes and duties except the Reconstruction Levy
Capital, profits and investment income from projects in the Zone are exempt from all taxes and fees throughout the life of the project, including the foundation and construction phases

Type of Economic Activity:

Industrial: production and consumer, assembly, installation, sorting and refilling processes
Storage, re-export and trading
Service and storage projects and transport
Banking, insurance and reinsurance services
Supplementary and auxiliary professional and service activities
Prohibited activities include actions disallowed by other laws in force, such as weapons manufacture, environmentally-polluting industries and those banned by the place of origin

Legal Framework:

The Free Zones Authority is established under the Free Zone Authority Law No. 3/1998 (FZL) and operates under the Instructions for Free Zone Management and the Regulation of Investors' Business No.4/1999.

For details please also see: Guide to the Free Zones Authority of the Ministry of Finance, Republic of Iraq.

TRADE-RELATED INTELLECTUAL PROPERTY REGIME

Iraq is pursuing a policy of strong intellectual property protection, which it recognizes will be the engine for economic development. Iraq's Intellectual Property Laws have been updated with the goal of bringing the country's legal regime into compliance with the requirements of the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Agreement):

Trademarks and Indications Law No. 21, 1957 has been amended by CPA Order 80
Patent and Industrial Specimens Act No. 65, 1970 has been amended by CPA Order 81
The Copyright Law No. 3, 1971 has been amended by CPA Order 83

Trade in Services:

Iraq's transition from a centrally planned to a market economy is expected to usher in a new era for the development and expansion of the services sector. The government is determined to increase the share of services in the GDP by attracting foreign investment as well as generating local resources.

There has been substantial expansion in the areas of retail services and construction since 2003. Recent policy changes in Iraq have opened up important services sectors such as financial services and telecommunications; and privatization of state owned enterprises (SOEs) is expected to further bring about fresh opportunities. New investment regulations that encourage foreign investment will lead to attracting capital to the services sector.

The Ministry of Trade is primarily responsible for overseeing international trade in services; however various departments and agencies are involved in regulatory affairs relating to trade in services.

Please see Services Sector Regulations for the following details with respect to the services sector:

Services-related functions of the Ministries, Agencies or other bodies
Qualification requirements & procedures
Technical Standards
Licensing
Registration requirements
Provisions for review or remedy and its appropriate legal authority

Iraq's Bilateral and Multi-lateral Agreements relating to Foreign Trade in Goods and Services

Goods:
Iraq is signatory to 98 bilateral and 5 Multi-lateral agreements in trade and economic relations with 85 countries, facilitating trade through preferential tariffs.

Services:
Iraq is signatory to 175 bilateral agreements with 81 countries and 35 multi-lateral agreements. It is also a signatory to 350 sector-specific bilateral agreements in a number of fields including banking, electricity and tourism.

Double Taxation:
Iraq is signatory to 13 bilateral and multilateral agreements on avoidance of double taxation and the prevention of fiscal evasion.

Investment Promotion and Protection (IPPA):

IPPA Purpose: Promotion and Protection of Investments, Profit Repatriation, Access to Arbitration and Dispute Settlements, Fair Expropriation rules and Compensation for Losses.
Iraq is signatory to 32 bilateral and 9 multilateral agreements within the Arab League (AL)
Bilateral Agreements have also been signed with: Afghanistan, Bangladesh, India, Iran, Japan, Jordan, Kuwait, Mauritania, Republic of Korea, Sri Lanka, Syria, Tunisia, Turkey, United Kingdom, Vietnam, and Yemen.

Economic Integration, Customs Union and Free-Trade Area Agreements:

Iraq is committed to GAFTA (Greater Arab Free Trade Area), which aims at establishing Free Trade among Arab countries consistent with the provisions of the WTO by 2007
Bilateral Free Trade Area Agreements have been signed with: Algeria, Egypt, Jordan, Lebanon, Oman, Qatar, Sudan, Syria, Tunisia, Yemen, and the United Arab Emirates.

Labor Markets Integration Agreements

Multi-Lateral Agreements: ILO (International Labor Organization) and the Arab Labor Organization
Bilateral Agreements: Bangladesh, Philippines, Egypt, Morocco, Tunisia, and the UAE.

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