This article considers how US export contracts with Iraqi buyers should allocate re-screening, end-use information and decisions to suspend shipment. An exporter may complete initial checks on an Iraqi order and later learn of a changed end user, destination or use. It then needs to reassess the shipment without assuming that a broad compliance clause resolves every contractual consequence for the parties.
US export controls and sanctions rules require their own current analysis by the exporter’s US advisers. On the Iraqi side, the Civil Code No. 40 of 1951 governs the sale contract, the buyer’s information duties, delay, impossibility and remedies; the Customs Law No. 23 of 1984 and Customs Tariff Law No. 22 of 2010 govern import; and the Public Contracts Implementation Instructions No. 1 of 2025 apply where the buyer is a public entity. Sector approvals from bodies such as the Ministry of Health or the Communications and Media Commission may also be required for particular goods.
Separating a legal restriction from an internal policy decision
The applicable export position depends on the item, the parties, the end use and the relevant rules, not on the country name alone. The concern should be classified as a legal prohibition, a licensing requirement, missing information or a supplier policy that goes beyond legal requirements, because each has different contractual consequences.
A review of international trade contracts in Iraq should make those distinctions explicit. The Civil Code releases a party where performance becomes impossible for a cause beyond its control, but an internal decision to avoid a transaction is not automatically impossibility. A seller that declines to ship for policy reasons may be liable to the buyer unless the contract allows it.
Defining the buyer’s information and cooperation obligations
The contract should state what information the buyer must provide and when updates are required. End-user and end-use statements should be specific enough to support a real assessment, rather than generic certificates that omit intermediaries or the actual installation site. The cooperation provisions should cover:
- End-user identity, ownership and control information.
- The intended application and installation location.
- Changes in consignee, routing or onward transfer.
- Documents reasonably required for licensing or verification.
- Prompt correction of information found to be inaccurate.
The buyer should not guarantee facts beyond its knowledge without understanding the undertaking. Deliberately incomplete or misleading information, however, can have contractual and legal consequences independent of the shipment decision, including liability for the seller’s losses under the Civil Code.
Making re-screening and suspension workable
The contract should specify when updated checks may take place and who decides whether shipment proceeds. A temporary hold should have an identified basis and a communication process, subject to lawful confidentiality restrictions, and the parties should exchange relevant information rather than allowing a silent suspension to continue indefinitely.
Storage, insurance, delivery dates and advance payments during a hold should be addressed. A problem caused by the buyer’s breach should be distinguished from a later legal change or licensing decision outside either party’s control, each with its own defined consequence. Related letters of credit and guarantees should also be checked, since suspending shipment does not extend an instrument’s expiry or change its independent payment conditions.
Keeping Iraqi import obligations in the analysis
A US export authorisation does not establish that goods can lawfully enter or be used in Iraq. Customs classification, sector approvals, conformity certificates and the importer’s registration require separate review. Conversely, Iraqi clearance does not resolve the exporter’s obligations under the rules that apply to it.
For public-sector supply projects in Iraq, changes to delivery dates and prices require authorised approval, and the 2025 instructions limit permissible variations. A customer’s project team may not be able to grant a binding extension or release a guarantee, so formal notices required under the public contract should be sent alongside compliance correspondence.
Force majeure and change-in-law clauses
Many export contracts rely on force majeure clauses to deal with new restrictions. These should be drafted to cover changes in export control and sanctions laws expressly, with clear notice requirements and consequences, because the Civil Code’s general rules on impossibility may not apply where a restriction is foreseeable or only makes performance more difficult. A tailored change-in-law clause is usually more reliable than a general reference to government action.
Documenting the decision and the commercial position
If lawful performance remains unavailable, termination, refunds and surviving obligations should be assessed under the contract and applicable law. The exporter should document the basis for its decision, the information it relied on and the communications with the buyer, both for its US compliance file and for any later dispute in Iraq.
Conclusion & how Etihad Law Firm can help
Clear allocation of information duties and suspension rights allows US exporters to respond to new compliance concerns without creating avoidable contractual liability in Iraq.
As Iraq international trade lawyers for American companies, Etihad Law Firm drafts export and supply terms, advises on Iraqi import and sector approvals, and assesses buyer remedies and termination, coordinating with the exporter’s US advisers so that justified shipment restrictions are distinguished from unresolved commercial risk.