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Iraq Update March 2001: Agency Law

 


A new law recently issued in Iraq now regulates commercial agencies /company representations, an important area of business particularly to foreign companies. Agency Law No. (51) of 2000, which replaces previous agency laws, defines commercial agencies as "any business activity performed in Iraq by a person in his capacity as an agent for an individual or a corporate entity from abroad whether it is a trade, commission or other commercial agency provided for in special trade, companies and transport laws".

The justification for issuing the new Agency Law was stated as "to regulate the business of commercial agencies, realise development objectives, limit aspects of exploitation and prohibit illegal mediation." Several new requirements and restrictions were imposed to achieve these objectives. A Commercial agents must be exclusively an Iraqi nationals or companies wholly owned by such nationals. Agents who were previously authorised to act as such prior to the application of the new law were given one year to conform to it's new detailed provisions and obtain the requisite licence. Government employees or public servants are prohibited from acting as commercial agents.

A new important aspect reintroduced in this Law is specifically aimed at avoiding corrupt practices. Provisions of the Law prohibit the government and socialist sector departments, i.e. official governmental office or public/state organisations and companies, to conclude transactions with foreign principals through commercial agents. These official Departments should deal directly with Arab or foreign producers or manufactures except when they can obtain a specific approval to deal with or through an authorised agents. The above prohibition is coupled with the imposition of severe penalties for violations of the provisions of new Agency Law. Violators can be sentenced to pay fines or serve prison sentence for periods which can be for life.

For further information and assistance in a specific matter, contact Gulf Law.

Other Updates:

Iraq Update: December 2010

Iraq Update: December 2008

Iraq Update: August 2004

Iraq Update: October 2003

Iraq Update: Agency Law

Iraq Update: July 2003

Iraq Update on Agency Law: March 2001

Gulf Law: Iraq, Saudi, Jordan, UAE. Corporate Company Law

 

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