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A
new law recently issued in Iraq now regulates commercial agencies /company representations,
an important area of business particularly to foreign companies. Agency Law No.
(51) of 2000, which replaces previous agency laws, defines commercial agencies
as "any business activity performed in Iraq by a person in his capacity as an
agent for an individual or a corporate entity from abroad whether it is a trade,
commission or other commercial agency provided for in special trade, companies
and transport laws". The
justification for issuing the new Agency Law was stated as "to regulate the business
of commercial agencies, realise development objectives, limit aspects of exploitation
and prohibit illegal mediation." Several new requirements and restrictions were
imposed to achieve these objectives. A Commercial agents must be exclusively an
Iraqi nationals or companies wholly owned by such nationals. Agents who were previously
authorised to act as such prior to the application of the new law were given one
year to conform to it's new detailed provisions and obtain the requisite licence.
Government employees or public servants are prohibited from acting as commercial
agents. A new
important aspect reintroduced in this Law is specifically aimed at avoiding corrupt
practices. Provisions of the Law prohibit the government and socialist sector
departments, i.e. official governmental office or public/state organisations and
companies, to conclude transactions with foreign principals through commercial
agents. These official Departments should deal directly with Arab or foreign producers
or manufactures except when they can obtain a specific approval to deal with or
through an authorised agents. The above prohibition is coupled with the imposition
of severe penalties for violations of the provisions of new Agency Law. Violators
can be sentenced to pay fines or serve prison sentence for periods which can be
for life. For
further information and assistance in a specific matter, contact Gulf
Law. Other
Updates: Iraq
Update: December 2010 Iraq
Update: December 2008 Iraq
Update: August 2004 Iraq
Update: October 2003 Iraq
Update: Agency Law Iraq
Update: July 2003 Iraq
Update on Agency Law: March 2001 Gulf Law: Iraq, Saudi, Jordan,
UAE. Corporate Company Law
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