A Turkish exporter with unpaid Iraqi invoices may be offered a customer guarantee or new security in exchange for more time. The decision should turn on the legal value of that protection, the evidence supporting the debt and the prospect of recovery against accessible assets. Another promise to pay may add little if its terms are uncertain.
Debt recovery in Iraq involves the Iraqi Civil Code, evidence rules and civil procedure, with enforcement governed by the applicable execution framework. The appropriate route depends on the documents and parties rather than the size of the unpaid balance alone.
Establish the debt before choosing the remedy
Confirm the identity of the debtor, contractual payment conditions and balance after credits and partial payments. A trading name or group logo may conceal that different orders were placed by different legal persons.
Reconcile the contract, invoices and delivery records with any complaint about defects or shortages. Where the buyer claims a deduction, identify its legal and factual basis. A claim for damages and a right to set off against the price require examination under their respective conditions.
The exporter should preserve the original documents and arrange any necessary translation or authentication for Iraqi proceedings. An internal spreadsheet can assist the calculation but should be supported by the underlying evidence.
If a Turkish judgment already exists, examine the applicable Iraqi recognition and enforcement route before relying on it locally. The existence of a foreign judgment does not dispense with that assessment.
Evaluate the proposed guarantee
A personal or corporate guarantee should clearly identify the guaranteed obligation and the person undertaking it. Check the signatory’s authority, the amount or scope covered and any conditions affecting demand or expiry.
A bank guarantee may create a different legal relationship from an ordinary guarantee by the customer’s owner. Its wording, applicable rules and demand requirements must be reviewed on their own terms.
The exporter should ask whether the proposed guarantor has assets that could realistically support recovery. A well-worded undertaking from an insolvent or untraceable guarantor may leave the commercial risk largely unchanged.
Test negotiated security before extending time
Security over property requires verification of ownership and prior rights. The debtor cannot give effective protection over an asset it does not own merely by listing it in a repayment agreement.
The review should establish:
- The precise asset and its legal owner.
- Existing mortgages, pledges or attachments.
- Required registration, possession or other formalities.
- The debt and future amounts secured.
- The permitted enforcement route.
- The consequences of another default.
Where a third party provides security, its consent and authority require separate verification. The exporter should understand when the protection becomes legally effective before granting an extension that changes its existing position.
Consider court protection and recovery together
Commercial court proceedings in Iraq require a review of jurisdiction, the dispute clause and any effective arbitration agreement. Interim attachment may be available where the statutory conditions are met, but an unpaid invoice does not automatically entitle the exporter to freeze all customer assets.
The application requires an appropriate documentary basis and may involve security, procedural deadlines and liability if the attachment proves unjustified. Identify assets belonging to the actual debtor and seek relief proportionate to the supported claim.
A negotiated repayment agreement should explain whether existing obligations continue, how payments are allocated and when any release becomes effective. Care is needed before replacing an existing debt or releasing guarantees, because the new arrangement may affect earlier protection.
Etihad Law Firm advises Turkish exporters on Iraqi debt recovery and commercial disputes. Assessing guarantees, security and litigation as connected options helps the exporter choose a response supported by enforceable documents and a realistic route to payment.