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Customs Law Creating Tension Between Basrawis and the Government

07 Feb 2016


Salam Zidan

Yalla – al-Basra


Recent protests in Basra have demanded the end of controversial customs reforms enacted by the central government. Traders have been refusing to register taxable goods, leading to confiscations by government officials, who have sent the goods back to their point of origin.


As a result, the main ports in the province have seen a huge drop in trade and revenue. Shawn port is taking just 5 million dinars daily, down from a high of 570 million. Similarly at Shalamja revenue has dropped from 270 million to 3 million dinars per day. Goods trucks have to navigate up to 15 unofficial checkpoints in the country that are controlled by the ruling political parties, as well as official provincial borders.


Ahmed al-Sulaiti, spokesperson of Basra’s Provisional Council told Yalla, “Those affected by the enforcement of this law are not only the Basra Governorate but all governorates that have enforced the new law on their borders. Because of the double standards of the government in enforcing the law, in the Kurdistan Region the new law hasn’t been enforced, and added to this are the unofficial checkpoints”.


“Checkpoints in Anbar and Ninewa province are open and controlled by the Islamic State of iraq and the Levant [ISIL], and it is possible to import goods into those areas without paying duties” al-Sulaiti said.


He added, “Basra refuses to enforce the customs law because all its nine border points have been detrimentally affected, causing a rise in unemployment.” He called on the central government to consider suspending the law.


The government on Baghdad however, has no intention of doing so, as it faces a crippling financial crisis caused by the drop in global oil prices. It was approved in the 2016 budget, and non-oil related revenues were expected to reach 12 trillion dinars. It has issued instructions to the local authority in Basra to confiscate and return goods that have not been registered for duty.


Duty tariff are between 5%-100%, although government imports and Jordanian made goods are exempted because of previous trade agreements.


Campaign against the reforms


Abdul Hussein al-Ankabi, financial adviser to Prime Minister Haider al-Abadi, criticised the protests, telling Yalla, “Iraqis demand reforms and when we take appropriate measures they demonstrate against them. The new law is among the most important reforms because it contributes towards encouraging locally made products.”

He added, “Enforcement of the law has some negative effects, but in the long term it will contribute towards protecting local products, restoring inoperative factories, decreasing the level of unemployment and improving the economy. The production sector has been inoperative since 2003 when Iraqi markets were opened to foreign merchandise.”

He insists that the law “is federal and enforced everywhere. There is no truth in the rumours that circulate about the Kurdistan Region not enforcing the new law. In fact, the government enforced the law in the Kurdistan Region first then in other provinces.


The financial adviser to Prime Minister also pointed out that “the government has set up check points on the administrative boundaries of the capital Baghdad for the purpose of checking all goods submitted for entrance to ensure they have paid relevant duties.”


Prices increase


Abdul Rahman al-Mashhadani, an economic expert, said, “The government has enforced the Duty Law suddenly and without prior notice, and with duties reaching 30% traders refused to declare their goods, and many have participated in demonstrations in the province of Basra.” He continued, “The coming days will witness a rise in prices in Iraqi markets.”


The government will be incapable of continuing to collect the duties because the economy of the country is unable to fill the gap that has been created since 2003. For the law to be enacted, the economy needs many years to revive the production sectors such as agriculture and industry and enforcing the law needs to be gradual with prior notice.”


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