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Exporting to Iraq from the U.S. has proven to play a critical role in the creation of an open and democratic economy. Goods and services exported from the United States continue to flow into Iraq but not at the same pace as other parts of the world.
Exporting goods to Iraq requires understanding Iraqi trade protocols and adherence to their trade regulations. Specified documents like the following are required to clear Iraqi customs by the Ministry of Trade. Goods cannot be exported to Iraq without these documents.
Doing business in Iraq takes an incredible amount of resources, networking, and knowhow. This guide will help bring insight into the mystery of doing business with this Middle Eastern nation.
Iraq is in a region with a rich history in the arts, sciences, trade, and religious pilgrimage. However, this part of the world has also been wrought with political unrest, humanitarian crimes, and terrorist insurgencies.
Due to these troubles, the nations of the world, particularly western nations like the United States and 39 other countries, launched a military offensive known as The Gulf War. A second conflict occurred from 2003 through 2011, known as The Iraq War, and helped stabilize the region.
In the post-war years, Iraq has turned into a democratic society. However, they are still dealing with many of the difficulties that plague their past. These difficulties contribute to Iraq's slow but steady climb to economic relevance.
Unfortunately, there are several current challenges facing investors and exporters to Iraq, which include the following:
These examples are just a few troubles that affect exporters who deal with and invest in Iraq. Fortunately, these issues are being addressed with the help of government agencies in both the US and Iraq.
In the past few years, the US government, in coordination with Iraq, has re-instituted the strategic framework of the Trade and Investment Framework Agreement (TIFA). This agreement provides the US export community with renewed assurance in trade relations and security.
This has strengthened their chief exports like oil, making Iraq the fifth largest crude oil supplier in the world. The oil industry now makes up over 90% of its Gross Domestic product (GDP). The Kingdom of Saudi Arabi also has also proven to be a strong strategic economic partner in the same region.
Strengthened partnerships with western oil companies also bring in export potential through emerging new technologies and equipment to help their oil industry thrive. The related oil equipment and technology is a preferred US export related to their chief product.
The US Department of the Treasury (UST) and Office of Foreign Assets Control (OFAC) administered Iraq's stabilization and sanctions against the opposition insurgency. After the war in Iraq ended, sanctions under 31 CFR chapter 5 ceased.
Provisions were adopted to institute 31 CFR section 576 with numerous adaptations that would lend themselves to reconstructing and stabilizing Iraq's economy. These provisions also aim to prop up Iraq's ability to trade with the world more competently.
There are currently zero U.S. sanctions in place regarding the nation of Iraq. However, some people and entities associated with the old dictatorial regime under Saddam Hussein are barred from importing from the US.
Suppose you are attempting to export into Iraq with a person or entity subject to OFAC sanctions. In that case, you will need to contact OFAC directly for a feedback form, further clarification, and instructions.
In the post-war years, Iraq has enjoyed the United States as a chief ally in military defense and economic trade. These two nations are engaged in what's commonly known as bilateral economic relations.
In 2011, Iraq shifted to a market-oriented economy over the previous central economy system. Under the Generalized System of Preferences program (GSP), Iraq enjoys a duty-free trade agreement with the United States.
The US is a significant trade partner with Iraq because we buy a large portion of their oil exports and, in turn, export all goods to Iraq. It is, however, essential to know that while the US does not charge duties and taxes under GSP, Iraq still charges the US those fees.
In a recent post by the US Department of State (DOS) in conjunction with the Department of Commerce, 2021 trade relations showed nearly one billion dollars in economic export trade from the US to Iraq. Iraq would export almost 4 billion dollars worth of oil to the US.
The table below illustrates a couple of crucial categories revolving around economic trade with Iraq. These data tables give you an idea of what commodities are of chief concern to US and Iraqi interests.
It is fascinating to note that certain goods are more desirable than others. This information should help give you an edge as to what goods categories you should consider when looking to export to Iraq. US agriculture is a top import for Iraq, and exporters should focus on this category.
| Year | 2016 | 2017 | 2018 | 2019 |
| Import to US | $5.9 M | $10.8 M | $11.9 M | $7.1 M |
| Export to Iraq | $1.3 M | $1.2 M | $1.3 M | $1.2 M |
| Year | 2016 | 2017 | 2018 | 2019 |
| Import to US | $65.5 M | $53.3 M | $59.9 M | $176.8 M |
| Export to Iraq | $1.1 M | $955.7 T | $914.4 T | $1.1 M |
| Year | 2016 | 2017 | 2018 | 2019 |
| Import to US | $300 T | $500 T | $800 T | $400 T |
| Export to Iraq | $132.5 M | $163.2 M | $374 M | $231.3 M |
Iraq is currently a member of various world organizations, such as the World Bank, United Nations, International Labor Organization, Arab League, and the World Trade Organization, to name a few.
Ironically, the Iraqi government has taken a politically charged economic stance against Israel. They belong to the Arab Boycott, which prohibits Iraqis from conducting trade of any kind with an Israeli individual or company.
Regardless of this action, the economic revival and flow of goods into Iraq is viewed as an emerging success. If you want to export goods into Iraq, now is the time to jump into this expanding market ripe with opportunity.
Iraq is no longer an enemy of the western world; therefore, open trade with the western world is alive and flourishing. With 31 CFR Chapter five lifted and the institution of section 576, open exchange with Iraq has become legal.
The previous section outlined trade relations in terms of activity and general commodities. However, now we will look at what is legally required for exporting goods to Iraq as outlined by the US and Iraqi governments.
When exporting goods to Iraq, a license is required if those goods are listed on Export Administration Regulations (EAR) list. The set of laws This list has to do with goods that are still under the United Nations Security Council (UNSC) Title 15§ 746.3, recently amended on August 24, 2022.
The legal framework of these resolutions dictates that arms or other military equipment and materials are not legally allowed to be exported to Iraq differently than directly to the Iraqi government.
Also, goods that fall under the categories of exacted or accessory to nuclear activities or weapons are also restricted. Regardless if the interests revolve around industrial, agricultural, or medical means.
Chemical or biological agents are also considered contraband and strictly prohibited for export into Iraq. License requirements for goods are listed on the Commerce Control lists under the EAR section 742.
Export controls comprise the fundamental legalities of EAR. When it comes to the legality and fine print of various goods to potentially export to Iraq or any other Middle Eastern Nation such as Iran, Jordan, and Lebanon, definitely seek the aid of an export consultant.
Anyone looking to export goods to Iraq must follow the rules and regulations established under trade agreements between the US and Iraq. Iraqi customs clearance regulations dictate that imported goods into Iraq must comply with the Iraqi Law of Customs.
The two primary customs laws are:
Goods imported into Iraq are subject to taxes and duties, which the Iraqi Customs Authority administers under these laws. The table below illustrates the import duties and tax percentages that have fluctuated over the years since sanctions and normal trade relations have resumed.
| Year | Percentage |
| 2014 | 17% |
| 2015 | 5% |
| 2016 | 9% |
| 2017 | 19% |
| 2018 | 30% |
| 2019 | 26% |
As an exporter, it is necessary to familiarize yourself with some fundamental categories of trade that you will need to understand.
The following are essential to all exporters:
Standardized export documentation is required, such as:
The Certificate of Conformity (COC) requires the origin state's Secretary of State approval. Also, the Commercial Attache of Iraq and the Chamber of Commerce must stamp these documents for approval on certain sensitive items.
The COC is now required for goods spanning 12 categories. The COC is essential because it covers the legality of goods and their quality standards related to Iraq's laws.
In any case, exporting to a country like Iraq is similar to other nations in exporting goods. However, it would be best if you remembered that this nation was a recent combatant to the US, and requirements and regulations can be tricky to navigate.
With that information in mind, it is best always to consult an expert on your commodity, especially as it relates to a country that went from being an enemy to a strategic partner in a short time.
Like any foreign nation, there are different rules regarding what is allowed and what isn't. Sometimes, you must acquire approval before starting the export process.
Below is a set of examples that outline both allowed and restricted goods. Again, it is essential to note that Iraq is a unique case. Iraq is an emerging strategic partner that is still shaping its economic future.
Examples of Allowed Goods:
Examples of Restricted Goods:
The list of allowed and restricted commodities in Iraq is extensive and ever-changing. The best advice is to consult with an expert in goods based exporting to particular case foreign nations like Iraq with an expert.
Iraq currently enjoys a variety of trade partnerships around the world. Iraq has significant trade partnerships with countries like the US, India, South Korea, and China. Iraq also has multiple other alliances with other nations worldwide.
Iraq's market-driven economy has been gradually evolving every year. The expanse of consumer demand is growing beyond traditional norms the country has seen in the past from a more centralized economy.
The US has firmly committed to aiding Iraq in its recovery efforts in a post-Saddam Hussein world. As stated earlier, the US is a strategic partner in Iraq's economy. Machinery, pharmaceuticals, electronics, agriculture, and more lead the way in exports.
| Commodity | Value |
| Machinery | $184.6 Million |
| Automobiles | $132 Million |
| Pharmaceuticals | $94.8 Million |
| Medical Equipment | $91.2 Million |
| Electronics | $80.2 Million |
| Agriculture | $45.9 Million |
The US exported nearly one billion dollars in various goods last year alone. While the statistics show a very up and down trend, the US consistently exports around a billion dollars worth of goods to Iraq annually.
There have been no signs of an economic slowdown. On the contrary, new product types and existing consumer demand is growing by steady margins.
Shifting from a market-oriented economy to a centralized one takes time, but prospects look promising.
| Commodity | Value |
| Broadcasting Equipment | $3.3 Billion |
| Refined Petroleum | $2.6 Billion |
| Automobiles | $1.8 Billion |
| Jewelry | $1.4 Billion |
| Packaged Medicaments | $1 Billion |
When comparing the top imports coming into Iraq from worldwide partners and Iraq's strategic partner, the US, things start to become skewed. There are similarities, but the overall outlook is attractive.
Iraq seeks out certain products from the US pretty exclusively, like pharmaceuticals, machinery, electronic equipment, and medical equipment. Other commodities, such as refined petroleum, automobiles, and jewelry, are brought from elsewhere.
In summary, Iraq has a bright future ahead of economic recovery and rise. The Middle-East region is filled with both extreme riches and extreme poverty. Coming from oppression and rebuilding, Iraq is on the way to achieving financial success.
Exporting to Iraq or any other foreign nation is challenging, especially for first-time or relatively new exporters. Shipping goods to Iraq, as mentioned throughout the article, is unlike shipping to most other countries worldwide.
Iraq is a nation that has a different form of red tape surrounding it, so you will want to trust in the experts to help facilitate your needs. Ship with confidence and smarts; that's our motto at Cargo Export USA.
Our team of brokers and consultants is ready and eager to help you manage and execute your export needs today. We offer the best in industry results and performance. Our transparency and complete visibility are precisely what you need for your business.
You can contact our team at (866) 301-0635 for answers to your questions or get started exporting with confidence. Whether exporting to Europe or the Middle East, Cargo Export USA is on your side.
