This article examines how German equipment sent to Iraq for repair or demonstration can be managed under temporary import arrangements, and what evidence is needed to close the procedure when the equipment leaves. The fact that equipment will eventually return to Germany does not, on its own, entitle it to temporary customs treatment.
The governing statute is the Customs Law No. 23 of 1984, which provides for suspension regimes including temporary admission, together with the Customs Tariff Law No. 22 of 2010 and the instructions issued by the General Commission of Customs. Where goods enter under an investment licence, the Investment Law No. 13 of 2006 may also apply. In the Kurdistan Region, regional customs administration and border procedures should be checked separately.
Confirming the procedure before shipment
Repair, exhibition, demonstration and use on a project can each attract different conditions. The precise purpose should be established and the applicable customs treatment confirmed with the competent authority before the goods are shipped. Permission available for one category does not automatically extend to every machine described as temporary, or to a commercial demonstration that is in reality a trial operation at a customer’s plant.
The importer, declarant, customs broker and the party providing any guarantee should be identified. The German owner’s retention of title does not remove obligations imposed on the person using the customs procedure. Where the route passes through different administrations, the arrangements for entry, internal movement and exit should each be confirmed rather than relying on a forwarder’s general assurance.
Keeping the goods identifiable
Temporary admission depends on a reliable link between the goods declared on entry and those presented for exit. Serial numbers, models and distinguishing marks should be recorded, and for equipment made up of several units the packing list and declaration should explain how the components relate to the complete machine.
The customs file should include:
- The stated purpose and the authority’s approval or conditions.
- Invoices or valuation documents reflecting the actual transaction.
- Identification records, photographs and entry inspection findings.
- The authorised location, period and any approved extension.
- Exit declarations and evidence accepted to discharge the procedure.
Marking an invoice pro forma does not create an exemption. Values and descriptions must remain accurate even if the Iraqi recipient pays nothing, and the Customs Law penalises false declarations.
Repairs, spare parts and changes of purpose
Repair can change the equipment’s condition and generate replacement parts, removed components and waste. How these will be treated under the authorised procedure should be agreed in advance; temporary status for the main machine does not automatically extend to consumables or every spare part shipped with it.
If a demonstration leads to a local sale, the required customs conversion and payment of duties should be completed before the buyer takes the equipment. Moving it to another customer or putting it into ordinary production may also depart from the approved purpose. A commercial agreement between supplier and customer cannot substitute for customs approval.
Deadlines and guarantees as separate obligations
The authorised period should be tracked and any extension applied for before expiry. Delayed repairs or cancelled freight do not extend the customs authorisation, and the authority’s acceptance of an extension should be obtained in writing.
The commercial contract should allocate storage, transport, duties and other costs arising from a breach of the procedure. That allocation governs recourse between the parties, but customs can still pursue the legally responsible person or call the guarantee. Release of a guarantee should be confirmed, not assumed because the machine has physically left.
Customs disputes and penalties
Where goods are not re-exported on time or are used outside their approved purpose, customs may claim the suspended duties and impose fines, and in serious cases treat the matter as customs smuggling under the Customs Law. Objections and appeals follow specific procedures and deadlines. Early engagement with the authority, supported by a well-organised file, usually resolves irregularities more effectively than contesting them after penalties are imposed.
Closing the entry with recognised evidence
The official exit and discharge documents should be retained and reconciled with the original declaration. A carrier’s delivery confirmation abroad may support the file but will not necessarily replace the evidence customs requires.
Contractual allocation between supplier and Iraqi recipient
The commercial agreement covering the repair or demonstration should set out who acts as importer, who provides any customs guarantee, who pays duties if the procedure is breached, and what happens if the customer delays the return of the equipment. It should also state that the equipment remains the supplier’s property, that it may not be moved, lent or used outside the agreed purpose, and that the customer must cooperate with exit formalities. Where the customer holds the equipment beyond the authorised period, the supplier should have a clear right to recover costs, including fines and duties, as well as a practical mechanism to retrieve the goods.
Insurance for equipment while in Iraq, including during inland transport and storage at the customer’s site, should be confirmed, as standard export cargo policies may stop at the point of delivery.
Conclusion & how Etihad Law Firm can help
Temporary imports are straightforward when the purpose, identification and exit evidence are planned before the goods arrive. As Iraq customs dispute lawyers for German companies, Etihad Law Firm advises on temporary admission conditions, reviews the contractual allocation of customs risk, and represents clients in objections and disputes with Iraqi customs authorities.