This article considers how UK suppliers should test exclusivity, customer allocation and restrictions on competing products in Iraqi distribution arrangements. Exclusivity can justify a distributor’s investment in stock, training and promotion, but the same agreement may restrict customers, competing brands or market access in ways that require competition analysis. The commercial justification should be weighed against the actual restrictions and their effect on the Iraqi market.
The principal framework is the Competition and Antitrust Law No. 14 of 2010 and its Implementation Instructions No. 1 of 2026, administered by the Competition and Antitrust Council. The Law on Regulating Commercial Agency No. 79 of 2017 may also apply to the distribution relationship, but agency registration does not substitute for competition compliance. The Civil Code No. 40 of 1951 governs the contract, including the consequences of void terms.
Identifying the restrictions
The analysis should cover the whole relationship, including schedules, rebate schemes and informal instructions. A distributor described as independent may in practice be required to refuse certain customers, avoid competing brands or seek approval for every sale, and those requirements should be assessed by their substance.
Review of distribution contracts in Iraq should distinguish the territory granted from obligations restricting dealings outside it, and identify whether the supplier also sells directly or through other distributors whose conduct is coordinated. Dual distribution and parallel networks raise different competition questions from a simple single-distributor appointment.
Customer allocation and competing products
The Competition Law prohibits agreements and practices that restrict competition, including market or customer allocation and conduct aimed at preventing dealings with competitors. A clause reserving key accounts or prohibiting competing products therefore needs analysis of its scope and effect, and should not be assumed lawful because it appears in an international template.
Relevant factors include the products involved, available alternatives, duration and the extent to which customers or competing suppliers are foreclosed. A limited non-compete linked to a specific investment differs from an indefinite restriction across unrelated products. The assessment should rest on market evidence, not on general assertions that the supplier is too small to matter.
Registration and regulatory review
The 2026 implementing instructions set out requirements for notifying or registering certain agreements with the Competition and Antitrust Council and for review of restrictive arrangements. Their application should be considered when the agreement is structured, together with any submission required and the information needed to explain the arrangement. The Council has become noticeably more active since it began publishing guidance, and enforcement risk should be treated as real.
Foreign competition clearance or compliance with UK distribution rules does not resolve the Iraqi position. Iraqi conditions should be built into the implementation timetable, and the agreement should allow the parties to respond lawfully if the Council requires changes, rather than obliging the distributor to continue conduct that conflicts with a binding decision.
Consequences of non-compliance
Restrictive provisions that breach the Competition Law may be void, which can unravel the commercial bargain, and the Law provides for fines and other sanctions against the parties involved. Distributors sometimes rely on competition arguments to resist termination or enforcement of non-competes, so a supplier that has not assessed its restrictions may find its contractual position weaker than expected in a dispute.
Drafting proportionate obligations
Commercial aims should be translated into obligations no broader than necessary. Minimum stock levels, service standards and defined investment commitments may achieve the supplier’s goals without extensive bans on customer dealings, though their combined effect, including rebates that operate as practical restrictions, still needs review.
Corporate compliance arrangements in Iraq should support the contract through training and review of actual sales practices. Managers should know which customer or competitor information may be shared and who can approve changes. Termination of exclusivity may raise separate agency law issues, and restrictions should be reviewed periodically as markets and networks change.
Agency registration and termination
Where the distributor is registered as a commercial agent, termination of exclusivity or of the relationship must also be assessed under the Commercial Agency Law, which regulates termination and deregistration and may give the agent claims if termination is unjustified. Suppliers should plan transitions carefully, document legitimate reasons for changes, and coordinate competition and agency considerations, since a change made to address a competition concern may still trigger agency law consequences.
Finally, suppliers should consider how their Iraqi distribution arrangements fit within their wider regional network. Restrictions on parallel imports from neighbouring markets, or on online sales into Iraq, should be assessed under Iraqi competition law as well as the law of the other jurisdictions involved, since regional structures designed elsewhere may not account for Iraqi requirements.
Conclusion & how Etihad Law Firm can help
Exclusivity should be judged by the rights it creates and the market conduct it produces, under Iraqi competition rules rather than foreign assumptions.
As Iraq competition law advisors for British companies, Etihad Law Firm reviews distribution and agency agreements, assesses restrictions under the Competition Law and its 2026 instructions, assists with Council registrations and advises on compliance programmes, so that commercial protections remain within the applicable Iraqi legal framework.