This article considers how UK suppliers and project companies should document repairs, replacement units and changes in customs status for equipment used on Iraqi projects. Equipment may leave Iraq for repair and return alongside a temporary replacement. Commercially this may be a warranty exchange at no extra cost, but for customs purposes the original machine, the repaired unit and the replacement can each be separate movements needing their own declarations and records.
The Customs Law No. 23 of 1984 and the Customs Tariff Law No. 22 of 2010, as amended, provide the main framework, including the suspension regimes for temporary admission and temporary export for repair, administered by the General Commission of Customs. Equipment imported under an investment licence may also be subject to conditions under the Investment Law No. 13 of 2006. The treatment should be confirmed before dispatch, particularly where equipment entered under a project-specific arrangement.
Establishing the original customs position
The first step is to identify how the equipment entered Iraq and which entity made the declaration. Permanently imported goods, goods under temporary admission and goods benefiting from an exemption are subject to different conditions. The project contract is relevant but does not itself establish customs status.
The file should contain the entry declaration, identification details, customs assessment and any approval supporting relief. Review of Iraqi trade and customs arrangements should also identify outstanding guarantees, expiry dates and restrictions on transfer or use. A contractor’s asset register should be reconciled with customs records rather than treated as a substitute for them.
Export for repair and return
When equipment is sent abroad for repair, the outward declaration should record its identity and intended return. Serial numbers, photographs and technical descriptions help show that the returning item is the same equipment, and the repair report and invoice should explain the work done and any components replaced.
The Customs Law allows goods exported temporarily for repair to be re-imported with relief, subject to its requirements and deadlines. Duty on return may be assessed on the value of the repair or replaced parts rather than the whole machine, but only if the conditions were met at export. Prior import clearance does not make every later return free of duties or documentation.
Replacement units and warranty documentation
A replacement with a different serial number is generally a separate import. A warranty letter explains the commercial arrangement but does not establish customs relief, and the importer should clarify whether the original unit will return, remain abroad or be scrapped.
Documents should distinguish a temporary loan from a permanent replacement. A no-charge invoice must still provide the information needed for valuation, since customs value is not zero merely because no price is paid. Describing a new machine as the repaired original creates serious inconsistencies, particularly where project approvals, guarantees and asset registers identify the original specifically, and can amount to a false declaration under the Customs Law.
Exempted equipment under investment licences
Equipment imported duty-free under an investment licence must generally be used for the licensed project. Exporting it, replacing it or transferring it may need the investment commission’s approval, and failure to account for it can trigger duties and penalties. Project companies should keep the commission informed of significant replacements and ensure that exemption records match the equipment actually installed.
Changes of status and allocation of responsibility
Temporary admission does not allow goods to be sold or kept indefinitely. If the project changes or a replacement will stay in Iraq, the procedure for extending, regularising or converting customs status should be followed before existing conditions are breached, as late regularisation can attract fines.
The supply contract should allocate responsibility for declarations, documents, duties and storage, and for the consequences of inaccurate information supplied by another party. Where an assessment or detention is disputed, Iraqi dispute resolution support should consider the objection procedure and deadlines alongside the operational need to release the equipment. Using a broker does not relieve the importer of responsibility for the declaration, and warranty correspondence should be kept with the customs file.
Practical record-keeping
Project companies should maintain a customs register for significant equipment, recording entry declarations, customs status, expiry dates, guarantees and any movements in or out of Iraq. Linking this register to the maintenance system means that any repair or replacement automatically prompts a customs check. When personnel change, the register preserves knowledge that is otherwise held informally by a few individuals, reducing the risk of missed deadlines and unexplained discrepancies.
Where equipment moves between projects within Iraq, the original customs conditions should also be checked, as goods admitted temporarily or with exemptions for one project may not automatically be used on another. Transfers between related companies may likewise require customs or investment commission approval, and should be documented in the same register.
Conclusion & how Etihad Law Firm can help
Repair and replacement movements require a consistent record linking each item’s identity, commercial purpose and customs status.
As Iraq customs dispute lawyers for British companies, Etihad Law Firm advises on temporary admission, repair and exemption regimes, reviews supporting documentation and contract allocations, and represents suppliers and project companies in customs objections and disputes.