Commercial Agency
The commercial agency regime in Iraq originally operated under Commercial Agency Law No. 51 of 2000. In 2017, Iraq issued Law No. 79 of 2017, which introduced significant amendments to modernize commercial representation, address market competition, and regulate foreign principals engaging in the Iraqi market through agents or distributors.
Changes Introduced by Law No. 79 of 2017
- Registration Requirement Reinforced: The amendment strengthened the mandatory registration of commercial agencies with the Ministry of Trade’s Commercial Agency Register. Unregistered agencies may face restrictions related to:
- Customs clearance
- Importation rights
- Enforceability of commercial claims
- Recognition of Wider Agency Forms: The amendment expanded the scope to cover:
- Exclusive and non-exclusive representation
- Distribution and dealership models
- Commission agency
This aligned the law with modern commercial distribution practices.
- Foreign Principal Compliance: Foreign manufacturers or suppliers appointing Iraqi agents must now provide:
- Authorization letters
- Contract documentation
- Corporate evidence
Legalization/attestation procedures were reinforced to ensure authenticity.
- Contractual Clarity & Termination Rights: The amendment introduced stronger requirements for:
- Written agency agreements
- Termination procedures
- Compensation or settlement mechanisms where applicable
- Termination without legitimate cause may expose principals to claims depending on contract structure.
- Consumer & Warranty Obligations: Law No. 79 clarified the agent’s responsibility for:
- After-sales service
- Warranty support
- Spare parts and technical servicing (where applicable)
- These obligations are especially relevant for high-risk sectors (automotive, industrial, medical, oilfield equipment).
- Competition and Market Protection: The amendment aimed to prevent:
- Market dominance through exclusive dealings without justification
- Parallel import conflicts
- Abuse of exclusive distribution systems
- Regulatory authorities may intervene where competition concerns arise.
- Record-Keeping and Disclosure: Agents are now required to maintain updated commercial records to facilitate:
- Taxation
- Customs audits
- Consumer protection investigations
Practical Implications for Foreign Companies
Foreign suppliers entering Iraq should:
- Ensure agency contracts are legally compliant
- Legalize documentation for registration
- Address termination compensation clauses contractually
- Clarify exclusivity, pricing, and warranty responsibilities
Failure to properly register may result in:
- Disputes with customs
- Enforcement limitations
- Unofficial distribution channels (parallel imports)
- Regulatory scrutiny
How Etihad Can Assist
Etihad provides legal and regulatory advisory services to banks, financial institutions, and businesses, supporting compliance with applicable laws, regulations, and regulatory guidance issued by any competent authorities.