The Iraqi Federal Supreme Court convened today to review two complaints filed against the Prime Minister concerning the implementation of the ASYCUDA system (Automated System for Customs Data). The court adjourned its ruling to Wednesday.

The complaints, submitted by two Members of Parliament, called for declaring the Council of Ministers' decision to implement the ASYCUDA system unconstitutional, citing Decree No. 957 of 2025. They also requested the issuance of a suspension order.

The ASYCUDA system is software that automates customs processes, reduces paperwork, improves revenue, and makes trade faster and more transparent.

Customs Duty Reductions and Rising Prices

Recently, Iraq announced a 25 percent reduction in customs duties; however, traders have expressed that this concession remains insufficient. Since the start of the year, Iraq has enforced the system, imposing tariffs ranging from 5 to 30 percent on imports of food and goods. Despite this, prices have continued to rise.

Protests Amid Economic Strain

Meanwhile, shopkeepers and traders across various cities in central and southern Iraq have launched protests against increased taxes and fees amid soaring prices.

Kurdistan Region Has Not Adopted the ASYCUDA System

In contrast, the Kurdistan Region has yet to adopt the ASYCUDA system. Last week, a delegation from the region was scheduled to visit Iraqi customs authorities to review customs procedures over a three-month period; however, the meeting was postponed indefinitely.

Implementation Challenges and Market Impact

As a result of Iraq’s adoption of the system, traders have increasingly turned to the Kurdistan Region for business transactions. This shift has raised concerns within the Iraqi Ministry of Commerce, which has mandated that traders pay 100 dinars per kilogram when retrieving goods from the Kurdistan Region at customs.

The implementation of the ASYCUDA system has faced challenges, notably the lengthy procedures that prevent traders from quickly obtaining U.S. dollars at the official central bank rate, prompting many to purchase dollars on the black market, thereby creating additional problems.

Future Revenue and Trade Facilitation Measures

Customs revenues are anticipated to rise in the coming months. To facilitate trade, new guidelines have been introduced to expedite procedures and streamline payments. Previously, high customs rates led traders to seek border crossings not connected to the electronic system.

Warnings and Economic Concerns

Channel8 has learned that the increased compliance costs associated with the system have contributed to higher market prices.

Additionally, presidents of Iraqi chambers of commerce have repeatedly emphasized that customs duties should primarily serve to regulate domestic and international trade, rather than solely function as a means of revenue collection.