A Turkish manufacturer may place valuable moulds and technical drawings with an Iraqi production partner without transferring ownership. If the relationship ends, possession of those assets can determine whether production continues elsewhere. The manufacturing agreement should establish the legal position of the tooling, information and stock before they enter the Iraqi factory.
The Iraqi Civil Code governs contractual duties and property questions, while intellectual property and industrial licensing rules may apply to particular rights and activities. Foreign investment in Iraq also requires attention to the chosen structure and any investment approval relied upon.
Distinguish ownership from permission to use
The agreement should identify which party owns each mould, machine and production input. Paying for tooling does not remove the need to document the ownership arrangement, especially where the Iraqi partner designs or purchases it in its own name.
A schedule should record serial numbers, photographs, location and the documents supporting title. It should also explain whether the partner receives temporary possession, a lease or another right of use. The legal consequences depend on that arrangement rather than the label placed on an invoice.
Responsibility for repairs and replacement should be stated separately. Funding maintenance does not necessarily confer ownership, while replacement tooling may require new ownership documents and an updated asset schedule.
Where equipment becomes attached to premises, incorporated into another asset or held by a subcontractor, examine the resulting property and recovery issues separately.
Define rights in specifications and improvements
Ownership of a physical mould and rights in its design are different matters. The contract should identify existing technical information and specify who may use improvements developed during production. It should address drawings, recipes, software settings and testing methods where relevant.
Confidentiality provisions need a defined purpose and practical restrictions on disclosure. The Iraqi partner should know whether it may share information with subcontractors and what obligations those recipients must accept. A confidentiality clause between two parties may offer limited protection if the information is routinely disclosed to others without controls.
Trademark, design or patent protection requires examination under the relevant Iraqi framework. Contract review in Iraq should therefore connect the production agreement with any available registered rights, rather than assuming the contract alone creates protection against all third parties.
Allocate ownership and risk in unfinished stock
Raw materials, work in progress and completed goods may have different owners and payment arrangements. Define when ownership and risk pass, how rejected batches are treated and whether the partner can sell surplus or cancelled production.
The agreement should address:
- Materials supplied by each party.
- Segregation and identification of customer-owned stock.
- Permitted production quantities and treatment of overruns.
- Inspection, testing and acceptance criteria.
- Responsibility for defective work and wasted materials.
- Insurance and evidence of covered interests.
Acceptance should be linked to the agreed specification. A delivery acknowledgement may prove receipt without resolving a later claim concerning a hidden defect. The remedy provisions should explain repair, replacement and compensation while respecting applicable mandatory rules.
Make the exit provisions legally usable
Termination should trigger an inventory reconciliation and an agreed method for returning property and technical information. Address access to the factory, removal costs, outstanding payments and the condition in which tooling must be delivered.
A disputed invoice can create arguments over retention or recovery of property. The parties should assess any applicable legal rights and agree an orderly process, with court relief considered where necessary. Physical entry or removal without lawful authority can generate a separate dispute.
The manufacturing licence and any investment approval should also be checked before transferring production or changing capacity. Etihad Law Firm advises Turkish manufacturers on Iraqi investment structures and production contracts, connecting ownership, confidentiality and exit remedies so that critical assets remain identifiable throughout the commercial relationship.