Two Systems in One Country
The Kurdistan Region maintains its own judiciary, its own company registration and its own administrative apparatus alongside the federal system. A company registered in Erbil is not registered in Baghdad, and enforcement obtained in one does not translate automatically into the other.
For a foreign supplier the practical questions are therefore where the counterparty is registered, where it holds assets, and where the contract was performed. A creditor who pursues the wrong system spends money establishing a title that cannot be executed where the value sits.
Letters of Credit Dominate
A large proportion of Iraqi import trade moves under letters of credit, reflecting both counterparty risk and the mechanics of currency access. Where your transaction was financed that way, the dispute is generally documentary rather than commercial.
The analysis follows the usual pattern: whether the presentation complied, whether discrepancies were raised in time and whether they were waived. It frequently identifies a bank rather than the buyer as the party actually obliged, which is a materially better position than pursuing an importer.
Execution Directorates
Enforcement is conducted through execution directorates attached to the courts, which can attach accounts and property and place restrictions on the debtor. Their effectiveness depends considerably on where the assets are and which system holds jurisdiction over them.
Documents executed abroad require certified translation and legalisation before they will be accepted, and that process should begin at the assessment stage rather than when a hearing is listed.
Dinar Access and Transfer
Access to foreign currency for outbound transfer operates through mechanisms administered by the central bank, and conditions have varied. A settlement denominated in dinar is therefore not the same as a settlement received.
As elsewhere in the region, the answer is to make the currency, the source of funds and the transfer channel express settlement terms. Where the debtor has export earnings - oil services counterparties frequently do - structuring against those is the practical route.
How Long Does an Iraqi Claim Take?
| Stage | Typical Duration | Cost |
|---|---|---|
| System and document review Registration, assets, credit documents | 3–6 weeks | Low |
| Formal demand Arabic or Kurdish demand, negotiation | 3–6 weeks | Low |
| Court proceedings Federal or KRI, first instance | 1–2 years | High |
| Execution Through the execution directorate | 4–10 months | Medium |
How Does SXB Global Handle an Iraqi Case?
We establish which system the debtor belongs to and where its assets sit before any step is taken, because a title in the wrong system is worthless. Where a letter of credit was used we read that first - it often reveals a better counterparty than the buyer. Where legal proceedings become appropriate, SXB Global coordinates the instruction of appropriately authorised local counsel. Legal services are provided by the relevant independent legal professionals.