Solicitors governing body: Iraq Bar Association; Kurdistan Bar Association
Financial regulator: Central Bank of Iraq
IFLR1000 ranking categories:
Financial and corporate (published October) - Financial and corporate
Iraq is an Islamic, federal republic with a civil law system. The constitution, adopted in 2005, is derived from shariah law, and influenced by Egyptian and Western legislation, and the country is divided into broadly politically-autonomous governates and larger federal regions. The latter, of which Kurdistan is one, have greater independence and are entitled to form their own security services (police and army). Kurdistan also has its own bar association.
Iraq’s recent history is turbulent. The Gulf War and the related trade sanctions, invasion by the US, and now a conflict with insurgent group Islamic State (IS). More than three decades of almost consistent violence has not engendered stable economic growth, and the most recent fight with IS has stalled the recovery further. Bureaucracy and corruption within the public sector have hindered development too.
Given the security threat and challenging business environment in Iraq, the quota of foreign firms present in the country is somewhat surprising, most focus their practices around the country's significant oil and gas sector. Foreign lawyers are entitled to practice the law of their jurisdiction.
Eversheds and Dubai based, Middle East firm, Al Tammi & Co, both have two branches in the country. Lebanese firms El-Aref and Airut Law Offices are also present. Confluent Law Group, a foreign firm dedicated to Iraq work, which is managed by a former Clifford Chance counsel, is another notable foreign adviser.
Large western international firms are not present in the country. Those focussed on oil and gas or with offices in the region, work on the larger deals remotely. Vinson & Elkins, Herbert Smith Freehills, Sherman & Sterling, Latham & Watkins and Clifford Chance are all involved in Iraq work, representing domestic clients from offices in Saudi Arabia or UAE.
An abundance of natural resources is not the only appeal of Iraq. Efforts have been made to facilitate and encourage foreign trade and investment and the current administration is committed to diversifying the heavily oil-revenue dependent economy. For the most part, there are no foreign ownership restrictions or requirements to have partners who are Iraqi nationals in most industry sectors. Foreign companies need a local partner to participate in work relating to oil and gas extraction or production. Other benefits include a liberalised stock exchange, open to foreigners, and tax breaks for businesses involved in areas deemed nationally important.
For lawyers, oil and gas work is a reliable source of revenue and, with the country’s social infrastructure in dire need of reconstruction and modernisation, project development advice represents another good work stream.
Ben Naylor - EMEA Editor
Al Tamimi & Co, the largest firm originating from the Middle East, is active across the financial and corporate space and in project development in Iraq. Banking, oil and gas, and telecoms are sectors where the firm has worked on significant, large transactions in recent years.
The firm’s recent transactional highlights included a number of deals for foreign state-controlled lenders providing finance to Iraqi entities. Among the highlights were a mandate for a national development bank on a cross-border loan. In M&A the firm represented a client making an inbound acquisition in the food sector.
China Export Import Bank, the Government of Iraq, and Fresenius Medical Care Middle East are a few of the firm’s publishable significant clients.