200% tariff! A variety of chemicals are restricted!

Several media outlets have reported that Iraq is facing a shortage of US dollars, in part because of increased restrictions by the US Federal Reserve aimed at stopping the transfer of dollars from Iraq to neighbouring Iran, which is subject to US sanctions. The shortage of funds has caused the value of the Iraqi dinar street currency to fall against the dollar.

In an effort to improve the structure of its foreign exchange reserves and ease a shortage of dollars, Iraq's central bank said on Feb. 22 that it would settle imports with China in yuan. At the same time, Iraq has imposed restrictions on the import of certain goods. Starting from June, Iraq will impose additional tariffs ranging from 15% to 200% on a variety of imported goods, including plastic products, galvanized and non-galvanized metal pipes.

Up to 200%! Additional tariffs on many kinds of goods!

A few days ago, according to the website of the Economic and Commercial Office of the Chinese Embassy in Iraq, the secretariat of the Iraqi Cabinet approved on February 20 a list of additional import duties aimed at protecting domestic producers:

▶ An additional duty of 65 per cent on epoxy resins and modern dyes, laundry detergents for washing coloured, black and dark clothes, floor and clothing fresheners, fabric softeners, liquids and gels, floor cleaners and dishwashers imported into Iraq from all countries and manufacturers.

▶ An additional duty of 100 per cent on cigarettes imported into Iraq from all countries and manufacturers in the form of boxes, plates, corrugated board or plain board with printed or unprinted partitions.

▶ Impose an additional duty of 200% on alcoholic beverages imported into Iraq from all countries and manufacturers.

▶ Impose an additional duty of 20% on plastic pipes and their accessories PPR & PPRC imported into Iraq from all countries and manufacturers.

▶ Impose an additional duty of 15% on galvanized and non-galvanized metal pipes imported into Iraq from all countries and manufacturers.

These measures are for a period of four years, without remission, and the local market is monitored during this period. This decision shall take effect 120 days after the date of promulgation.

It is worth noting that on 4 March, the Iraqi Customs Administration ordered all customs centres to ban all types of alcoholic beverages. The new decree imposes fines of 10 million to 25 million dinars (about $7,700 to $19,000) for violations.

Relax import restrictions on some goods

In addition, depending on market demand, the Government of Iraq has relaxed import restrictions on commodities such as urea and DAP (diammonium phosphate) fertilizer, medicines and medical supplies.

On 6 March, the Iraqi Cabinet meeting approved the following decisions on the import of urea and DAP (diammonium phosphate) fertilizers:

▶ Cancel the import license of urea and diammonium phosphate.

▶ Allows private and mixed sector companies, licensed agricultural offices and General Federation of Agricultural associations to import urea and DAP fertilizers without an import licence.

▶ Allow urea and DAP fertilizers to enter through designated border crossings (Trebil, Zurbatiya, Umm Qasr, Nineveh Dam and Darman in Kirkuk) in accordance with applicable procedures.

▶ The competent authorities shall conduct chemical and radiological inspection of imported fertilizers within 48 hours at border ports.

▶ Maintains Joint Operations Command and National Security Council procedures for moving fertilizer from all border crossings and checkpoints to depots.

▶ The National Security Adviser will coordinate with relevant authorities to establish mechanisms to regulate the storage of fertilizers and supervise their distribution.

Customs data showed that in the whole of 2022, bilateral trade between China and Iran reached 356.30 billion yuan, an increase of 47.8 percent over the same period last year. Among them, China's export to Iraq reached 93.58 billion yuan, up 35.9 percent year on year; Imports from Iraq reached 262.72 billion yuan, up 52.6 percent year on year. Companies that export these products to Iraq are advised to keep an eye on policy changes and make appropriate preparations and arrangements.