Dear Readers,
It is my pleasure to welcome you to our quarterly AHK Iraq Business Newsletter.
At a time when the current Gulf crisis is shaping regional dynamics and creating new economic and logistical challenges, Iraq is navigating a period of heightened complexity. Despite regional uncertainty, the country continues to demonstrate resilience and a commitment to reconstruction, economic diversification, and international cooperation. These developments underline the importance of reliable information and close dialogue with international partners.
As AHK Iraq – Deutsches Wirtschaftsbüro Irak, we remain firmly committed to supporting German companies with sector‑specific insights and timely updates on both ongoing and upcoming projects in this evolving market. Our mission is to provide informed perspectives on how regional developments affect the business environment in Iraq, while highlighting opportunities that persist across key sectors.
Iraq continues to offer substantial potential for German businesses - from energy and infrastructure to manufacturing, services, and technology. Through this newsletter, we aim to keep you informed about key economic and political developments, emerging business trends, and AHK Iraq’s activities, while offering practical guidance for companies seeking to strengthen or expand their engagement in the Iraqi market during challenging times.
We invite you to stay connected, explore new opportunities, and join our growing network. As always, your feedback and engagement are greatly appreciated.
We look forward to meeting you soon.
Dr. Martin Henkelmann
Delegate
I. Iraq Market Update: Resilience, Reform, and Emerging Opportunities
Despite regional turbulence, Iraq continues to demonstrate remarkable economic resilience and a clear commitment to modernization. Recent events have reshaped short‑term market conditions, yet the country’s reform trajectory remains intact - offering forward‑looking entrepreneurs a market with strong fundamentals and long‑term potential.
1. Economic Context: Before and After the February 28 Gulf Crisis
Iraq had been recording steady progress in customs reform, port modernization, energy stability, and financial‑sector development. These efforts contributed to improving trade facilitation and strengthening the overall business environment.
Following the temporary closure of the Strait of Hormuz, economic conditions tightened; however, the government responded swiftly with practical measures aimed at sustaining trade flows and supporting the private sector.
2. Customs Modernization and Revenue Developments
ASYCUDA Rollout (Before February 28)
On 1 January 2026, Iraq introduced the ASYCUDA digital customs system, replacing the outdated flat‑fee structure. This transition marked a major step toward international standards, covering 16,400 product lines with transparent, rules‑based tariffs.
Typical rates include:
- Essential foodstuffs 0.5–5%
- Industrial raw materials 0.5–2%
- Appliances 10–15%
- Luxury products 20–30%
- High‑duty items (vehicles, plastics, electronics, cleaning products) 10–65%
Revenue Growth
The reform strengthened fiscal performance:
- 2025: IQD 2.5 trillion
- 2026 forecast: > IQD 10 trillion
- January 2026: IQD 137 billion
Post‑Crisis Challenges & Government Response
After 28 February, valuation distortions and higher insurance costs caused port congestion.
In March, the government acted decisively by:
- Allowing goods to be released under bank or legal guarantees (up to 90 days)
- Reducing storage fees
- Lowering ASYCUDA valuation benchmarks by 25%
- Prioritizing real commercial invoices
- Requiring banks to confirm invoice data
3. Ports & Logistics: Capacity Up, Temporarily Constrained
Strong Performance Before February 28
- IFC investment of USD 120 million enhanced equipment and operations at Umm Qasr
- Port capacity set to increase from 550,000 TEU to 830,000 TEU
- Gulftainer reported 28% growth at the start of 2026
Impact of the Gulf Crisis
The closure of the Strait of Hormuz led to an abrupt suspension of maritime traffic, causing immediate supply‑chain disruptions and trade bottlenecks.
Nonetheless, port expansion plans remain on track, underpinning medium‑ and long‑term growth and improved resilience once regional conditions stabilize.
Maritime Boundary Dialogue
In February, Iraq submitted a revised maritime‑zone map to the UN, prompting objections from Kuwait over overlapping areas near Fasht al‑Qaid and Fasht al‑Aij. While the matter remains diplomatic, it highlights the need for clear maritime boundaries to support future port development and stable shipping routes.
4. Energy Sector: Temporary Pressure, Strong Fundamentals
Before February 28
Oil production held steady at approximately 3.3 million b/d, providing a stable revenue base.
After the Strait of Hormuz Closure
- Tanker traffic disruptions filled storage rapidly
- Iraq declared force majeure on some foreign‑operated fields
- Production temporarily reduced to ~900,000 b/d
- Refineries continued operating to ensure domestic supply
Gas Imports
Flows from Iran resumed on 25 February at 7 million m³/day, later declining to ~5 million m³/day after disruptions at South Pars - affecting national power generation.
The crisis shows that higher self-sufficiency makes Iraq more resilient.
5. Financial Sector: Reform Momentum Continued
Before February 28
The Central Bank of Iraq completed an important phase of banking‑sector restructuring. Compliant banks regained the ability to:
- Conduct international transfers
- Issue letters of credit in EUR, AED, CNY, JOD
After February 28
Enhanced regulatory oversight temporarily restricted certain institutions from accessing dollar auctions until compliance is verified - reinforcing transparency and financial integrity.
6. Digital Transformation & Investment Outlook
Iraq launched a new digital platform to streamline real‑estate transactions and reduce bureaucracy - another sign of the country’s shift toward modern governance.
Senior government officials continue to emphasize improving the investment climate, with particular interest in partnerships with international firms in:
- Industry and manufacturing
- Housing and urban development
- Energy and renewables
- Infrastructure and transport
Even amid regional challenges, Iraq maintains a strategic focus on diversification and modernization.
II. Crisis Intelligence Briefing: Iraqi Ports and Maritime Trade (Feb-Apr 2026)
Executive Summary (Status: 8 April 2026):
The escalation of U.S.–Iran tensions in late February 2026 exposed critical vulnerabilities in Iraq’s logistics system. The near-total disruption of the Strait of Hormuz in Marchth - rough which around 94% of Iraq’s oil exports transit - severely constrained maritime flows and access to southern export terminals.
As of early April 2026, a fragile ceasefire has enabled a partial and controlled reopening of the Strait, allowing limited transit, including Iraqi shipments. However, operations remain constrained by security risks, elevated insurance costs, and cautious market behavior, preventing full normalization.
In response, Iraq has intensified the use of alternative corridors via Turkey and Jordan, underscoring the strategic need for diversification. Air transport continues to face intermittent disruptions, while logistics providers have adapted through rerouting and regional hubs to maintain essential supply chains.
Financial and regulatory pressures remain elevated. Increased U.S. scrutiny of Iraqi banking channels continues to complicate international payments, while sanctions-related constraints on Iranian gas imports persist, adding pressure to the domestic energy system.
Industry feedback indicates:
- Higher logistics and insurance costs
- Continued shift toward land-based transport
- Temporary reliance on alternative gateways such as Aqaba
- Early but fragile signs of stabilisation
Overall, the system has moved from acute disruption to partial stabilisation, but remains highly exposed to geopolitical volatility.
III. Tenders
The Iraqi government is making large-scale investments in infrastructure, energy, and further industrial sectors to foster economic diversification. As part of this, public tenders and projects are frequently announced, presenting opportunities for international businesses to engage in Iraq’s growing market.
The Ministry of Planning in Baghdad (MoP) and the National Investment Commission (NIC) are regularly publishing tenders across various industries.
Please find below the official links to the latest tenders:
Other Links:
IV. Press Release
IFC investment to expand Umm Qasr Port
This is the most significant news because it directly impacts transport and logistics capacity. The International Finance Corporation is financing Aloreen to buy four ship‑to‑shore cranes and ten rubber‑tyred gantry cranes, increasing the port’s capacity from 550,000 to around 830,000 TEUs and aligning with the Development Road initiative. Such an expansion enhances Iraq’s role as a regional trade hub and opens opportunities for German logistics firms.
– Source: International Finance Corporation
Emergency measures for oil export crisis
With the Strait of Hormuz closed, the cabinet empowered the Oil Ministry to manage potential export disruptions and stressed that refinery operations and gas production would continue. These measures are important for understanding supply‑chain risks for German energy and industrial investors.
– Source: Ministry of Oil
Focus on creating an attractive investment environment
Finance Minister Taif Sami told the South Korean ambassador that the government prioritises building an attractive environment for international companies and is automating banking systems. Such reforms can improve the ease of doing business for German investors.
– Source: Iraqi News Agency
Iraq deposits maritime zones map; Kuwait protests
The Ports Company confirmed that Iraq submitted its maritime zones map to the UN, covering internal waters and its exclusive economic zone; Kuwait formally objected to the claims. While largely political, this issue could influence maritime navigation and investment.
– Source: Ministry of Transports
VI. AHK Iraq Events Review
Industrial Ceramics & Materials Business Delegation to Munich
March 23–27, 2026
Together with AHK Iraq, a Kurdish business delegation participated in meetings in Munich at the ceramitec fair, one of the world’s leading trade fairs for the ceramics industry. The business delegation explored new technologies, established valuable industry connections, and identified concrete business opportunities for future cooperation.
Memorandum of Understanding (MoU) with FICC | 26 February 2026
The German Chamber of Commerce and Industry (DIHK) and the Federation of Iraqi Chambers of Commerce (FICC) signed a Memorandum of Understanding to further strengthen economic cooperation between Iraq and Germany.
The ceremony was attended by Dr. Sattar Al Jabri, Deputy Trade Minister, and Dr. Daniel Krebber, Ambassador of the Federal Republic of Germany to Iraq.
The agreement focuses on expanding Business-to-Business collaboration between the Iraqi and German private sectors.
What this partnership aims to achieve:
• Facilitate direct B2B matchmaking between Iraqi and German companies
• Organize sector-specific events
• Enhance the exchange of market intelligence
• Support investment initiatives and long-term commercial partnerships
Munich Security Conference Sidebar | 13-15 February 2026
On the sidelines of the Munich Security Conference, Germany’s Federal Minister for Economic Affairs and Energy, Katherina Reiche, met with Kurdistan Region President Nechirvan Idris Barzani. Discussions focused on German investment opportunities, energy cooperation, and renewable‑energy expertise. Both sides reaffirmed their commitment to deepen bilateral ties.
Business Breakfast in Halabja | 12 February 2026
AHK Iraq organised a business breakfast at Rasan Farm in Halabja with the theme “Driving Agricultural Development in Iraq through Made‑in‑Germany Solutions.” In partnership with ZV Export (ZVE), the event highlighted German breeding‑cattle genetics for sustainable dairy and livestock development. Over 15 farm owners and investors attended, and the Sulaymaniyah Chamber of Commerce facilitated additional B2B meetings. A representative from the Kurdistan Ministry of Agriculture presented sector priorities.
Investors Union of Kurdistan Meeting with VDMA Construction in Berlin | 10 February 2026
AHK Iraq’s Erbil office arranged a meeting between Mr. Kamal Agha (President of the Investors Union of Kurdistan) and Mr. Stephan Oehme (VDMA Construction – Equipment and Plant Engineering, Mining & Minerals). The discussion focused on strengthening cooperation in the construction sector - Kurdistan’s second‑largest industry after oil and gas - and preparing for a VDMA delegation to Erbil in May 2026.
German Business Delegation Reception and Network Event | 5 February 2026
AHK Iraq, in cooperation with the German Consulate General, organised a reception that brought together more than 60 companies. The event provided a networking platform for German delegates and local business leaders to explore partnerships.
German Business Delegation to Iraq Strengthens Economic Dialogue
BMWE- and DIHK‑Accompanied AHK & EFI Delegation Visits Baghdad and Erbil
31 January – 4 February 2026
From 31 January to 4 February 2026, AHK Iraq, in cooperation with EFI, organised a German business delegation to Baghdad and Erbil, accompanied by the German Federal Ministry for Economic Affairs and Energy (BMWE) and the Association of German Chambers of Industry and Commerce (DIHK). The delegation aimed to strengthen German–Iraqi economic relations and explore concrete cooperation and business opportunities.
The programme was officially opened in Baghdad by Dr. Martin Henkelmann, CEO and Delegate of AHK Iraq, and Mr. Suntke Heeren, Country Director Iraq, AHK Iraq. They welcomed the participating companies and outlined the strategic objectives of the delegation, highlighting the importance of BMWE and DIHK support in advancing German business engagement in Iraq.
The official opening took place in the presence of H.E. Dr. Daniel Krebber, Ambassador of the Federal Republic of Germany to Iraq, underlining the high-level political and institutional backing of the delegation.
Discussions in Baghdad focused on key strategic projects, including the Iraq Development Road, with contributions from the Prime Minister’s Office, the General Company for Ports of Iraq, the World Bank, and GIZ. Exchanges with representatives of BMWE and DIHK further strengthened the institutional framework of the delegation and provided participating companies with direct insights into Germany’s foreign trade promotion instruments.
Business-to-government and business-to-business engagement formed a central pillar of the programme. A German Business Day at the Baghdad International Fair offered a platform for networking and project discussions, followed by an official reception at the German Embassy in Baghdad, hosted by Ambassador Dr. Krebber.
Further meetings addressed financial cooperation and industrial capabilities, including talks with the Trade Bank of Iraq and a visit to Veridos, showcasing German expertise in secure identity and infrastructure solutions.
The delegation concluded in Erbil with high-level meetings with the Kurdistan Regional Government, including the Department of Foreign Relations, the Kurdistan Board of Investment, and key ministries. Discussions focused on business opportunities and long-term economic cooperation. The visit concluded with a reception hosted by H.E. Mr. Albrecht von Wittke, German Consul General in Erbil.
The BMWE- and DIHK‑accompanied delegation underlined Germany’s strong commitment to deepening economic cooperation with Iraq and supporting German companies in engaging with one of the region’s key emerging markets.
Business Breakfast Baghdad: Industrial Safety & Security | 2 February, 2026
We successfully hosted a Business Breakfast in Baghdad in collaboration with our trusted partner Pure Land, focused on industrial safety and security, as part of the German business delegation programme.
The session was organized with our partner Pure Land, who delivered a strong and insightful presentation, highlighting practical approaches and German standards in workplace safety.
The event brought together around 20 German companies, along with representatives from the German government and international institutions, creating a focused platform for exchange on regulatory developments, best practices, and operational challenges.
Our speakers:
- Mr. Hazim Yahia, CEO of Pure Land
- Mr. Adel Ekab, President of the Iraqi Federation of Industries
- Mr. Fadi Al Attar from Tüv Rheinland Middle East
Opened a valuable discussion contributing to safer, more resilient industrial environments in Iraq.
Erbil Logistics Expo | 15–18 January 2026
AHK Iraq participated in the Erbil Logistics Expo 2026 under the German Pavilion alongside partners Martrade Iraq and Al Konda Global Company. The joint presence showcased German‑Iraqi cooperation in logistics and provided a platform to engage with industry leaders, logistics providers, and investors. Discussions centred on trade facilitation, infrastructure development, and supply‑chain services in Iraq.
VII. Policy & Regulatory Updates
- Temporary customs relief measures: In early March 2026, the General Customs Authority permitted the release of goods for public‑sector entities with legal guarantees and private‑sector goods with bank guarantees to ease the container backlog. The government also reduced storage charges and cut ASYCUDA valuations by 25%.
- New valuation mechanism for customs: On 11 February 2026, the government adopted a dual mechanism: if goods are declared in the advance system, customs value is based on the commercial invoice; otherwise, recorded values are used. Banks must confirm invoice authenticity to enhance transparency and align with the World Trade Organization's valuation agreement.
- Banking reforms: The CBI continued its programme to restructure the banking sector, requiring banks to submit plans to continue, merge, or exit. Qualifying banks may resume cross‑border transactions and issue letters of credit in euros, dirhams, yuan, and dinar. Several banks and exchange companies were suspended from dollar auctions until they met compliance standards.
VIII. Trade Fair Finder
In this section, all key trade fairs taking place in Iraq can be found. For a comprehensive list of upcoming trade fairs, please access the Auma FairFinder.
Regarding trade fairs in Germany, as the official partner of Deutsche Messe, AHK Iraq is supporting Iraqi exhibitors who wish to showcase their products at trade fairs in Germany.
If you are an Iraqi exhibitor looking for more information, feel free to reach out to us for assistance and guidance.
IX. DEinternational Services
Navigating new markets can be challenging – but you don’t have to do it alone. Under the umbrella of AHK Iraq’s service entity, DEinternational GmbH, AHK Iraq offers the following tailored consultancy services:
- Initial Consultation
- Contact Finder
- Market Insight Reports
- Trade Fair Representation in Iraq
- Customized services available upon request.
X. AHK Iraq Partner Network
Disclaimer: The information provided in this newsletter is for general informational purposes only and does not constitute legal advice or legal consultation. While AHK Iraq strives to ensure the accuracy and timeliness of the content, it makes no guarantees regarding its correctness, completeness, or current relevance. AHK Iraq accepts no liability for any actions taken based on this information. For legal advice tailored to your specific situation, please consult a qualified legal professional.
