Exports from Iran to five major Arab countries are the hub for global traders

Iraq is considered the second-largest source of oil in the world, and the majority of its revenue comes from the sale of oil products. The proximity of Iraq’s border to Iran has facilitated imports into Iraq, where approximately 90% of its needed goods are imported. According to statistics from 2020, Iraq’s exports to other countries amounted to $65,484,012,000, or more than 65 billion dollars. Therefore, Iranian manufacturers can, by producing high-quality and diverse products, gain a significant share in exports to Iraq and operate in its thriving market.

The majority of goods imported into Iraq come from countries such as the UAE, Syria, Turkey, China, South Korea, Jordan, Germany, the United States, and the Islamic Republic of Iran. Iraq is considered one of Iran’s most important trading partners. The destruction of infrastructure has increased the country’s need for consumer goods and equipment, making Iraq an increasingly attractive market for traders. This has drawn the attention of more and more merchants toward exporting to Iraq, bringing them substantial profits.

?How to Find Iraqi Traders

Finding customers in Iraq is one of the biggest challenges that merchants face when exporting goods to Iraq. Below, we introduce some :effective methods for finding business partners in Iraq

  • Using Trading Companies: One of the best ways to find business partners in Iraq is to seek assistance from trading companies. These companies are familiar with prominent traders and reputable commercial companies in Iraq and can connect you with major and well-known traders in the country.
  • Field Marketing: Companies that have experience in marketing and exporting to Iraq know that some well-known traders and trading companies in Iraq have offices or booths in the country’s wholesale markets. Therefore, one effective way to find Iraqi traders is to have a presence in these wholesale markets. Managers or international trade and export experts from Iranian manufacturing and trading companies can travel to Iraq and get to know the prominent traders there through inquiries in these markets.

  • Participating in Reputable International Exhibitions: Participating in reputable international exhibitions is one of the effective ways to find customers and introduce products and services. Through this method, you can find your business partners. Additionally, many major Iraqi traders and importers attend these exhibitions, offering an excellent opportunity to establish connections with them.

  • Inquiring from Wholesalers and Bulk Sellers: Many major Iraqi traders and importers do not have commercial offices in wholesale markets, but they do have sales representatives. One important step in these markets is to inquire from wholesalers and bulk sellers who offer products similar to yours. In this way, you can obtain information about prominent traders of the specific product you are offering.

?How to Communicate with Iraqi Traders

Another important issue to consider during the export process to Iraq is understanding the etiquette of negotiating with Iraqi merchants. Below are some of the most important points that should be taken into account during negotiations with traders in Iraq:

  • Iraqis place great importance on the Arabic language, so it is highly recommended to prepare a version of your catalog in Arabic.
  • Email marketing is one of the best methods you can use to communicate with Iraqi traders.
  • If you are not fluent in Arabic, it is essential to have a translator with you.
  • Translate all relevant product documents into Arabic.
  • The common languages in Iraq are Arabic and Kurdish, so be sure to translate your business cards into one of these two languages.
  • In Iraq, crossing legs is considered inappropriate; avoid this gesture during business meetings.
  • Maintain eye contact during negotiations.
  • Smoking is a common practice in business meetings.
  • Do not be surprised by delays from Iraqi traders during business appointments. Iraqi traders prefer to physically inspect the goods they are dealing with.

?What Goods Does Iraq Need

Statistics show that approximately 68% of goods exported to Iraq are intermediary goods, 28% are consumer goods, and 4% are capital goods. Iran faces competition in exporting goods to Iraq, with major competitors being countries like India, Turkey, China, Jordan, the UAE, and the United States.

:The main export items to Iraq include

Herbal and chemical medicines, raw materials for herbal and chemical medicines, and pharmaceutical machinery;
Mineral fuels, mineral oils, and products derived from their distillation; bituminous substances, and other minerals;
Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad or plated, etc.;
Edible fruits and nuts; peel of citrus fruit or melons;
Copper and articles thereof;
Iron and steel;
Ships, boats, and floating structures;
Lead and articles thereof;
Miscellaneous chemical products;
Machinery, mechanical appliances, nuclear reactors, boilers, and parts thereof;
Raw hides and skins (excluding furskins) and leather.

?How to Send Sample Goods to Iraq

Given the current conditions in our country, shipping goods to Iraq or even to Baghdad is highly profitable for Iranian merchants and traders. Whether you wish to send small parcels or very large shipments to Iraq, there are several methods of transporting goods to this destination, each with its specific regulations. Obtaining comprehensive cargo insurance is essential, as transporting goods always involves unforeseen risks. For sending sample goods to Iraq, costs may be higher than for large shipments, primarily due to customs fees. You can use shared transport containers to reduce costs.

How to Negotiate with Iraqi Traders?

  1. The Iraqi market is one of the main export destinations for Iranian products, and trading with this country is relatively simpler for Iranian companies compared to others. Familiarity with the etiquette of business negotiations with Iraqis is crucial for success in this market.
  2. Initial Introduction and Familiarization: Most initial meetings are based on creating recognition and acquaintance. If you are not fluent in Arabic, be sure to use a translator or someone familiar with the language. Start conversations with short and friendly exchanges.
  3. Translation of Documents: It is essential to translate your product or service documents into Arabic and preferably send them to the Iraqi party before meetings.
  4. Avoid Ambiguous Phrases: Avoid using ambiguous phrases in negotiations. Since the common languages in Iraq are Arabic and Kurdish, it is advisable to translate one side of your business card into these languages.
  5. Greeting Iraqi Traders: In business interactions, greetings typically start with a handshake. Handshakes usually last long, so try not to be the first to withdraw your hand.
  6. Starting Initial Negotiations with Iraqi Traders: When negotiating with an Iraqi trader, avoid speaking from a higher status, as this behavior is unpleasant for them. Also, avoid direct criticism of the Iraqi individual, as they are sensitive to this, and such actions may damage your credibility. In business meetings, strictly avoid crossing legs, as this is considered impolite in Iraq.
  7. Establishing Eye Contact During Negotiations: During negotiations with Iraqi parties, maintain eye contact. This enhances the effectiveness of the negotiation.

What are the Rules for Contracting with Iraqi Traders?

The Iraqi Commercial Law, enacted in 1984, places a special focus on commercial activities and traders to balance individual interests with public welfare. These laws specifically address international trade and outline various types of contracts.

Types of International Purchase and Sale Contracts

  1. Free on Board (FOB) Contract: According to Article 298 of the Iraqi Commercial Law, this type of contract is fulfilled when the goods are delivered on board the ship at the port designated by the buyer. In this case, the seller is responsible for all costs and risks until the goods pass over the ship’s rail. After passing, the responsibility for the goods lies with the buyer.
  2. Cost, Insurance, and Freight (CIF) Contract: As per Article 302 of the Iraqi Commercial Law, this type of contract includes an agreement for the transportation of goods from the shipping port to the destination port and their insurance against transport risks. The seller is responsible for the costs of shipping, insurance, and loading the goods on the ship. The seller’s responsibility continues until the goods are loaded onto the ship’s rail.
  3. Carriage and Freight (C&F) Contract: According to Article 307 of the Iraqi Commercial Law, this type of contract includes an agreement for transporting goods from the port of shipment to the destination port, but the seller is not obligated to insure the goods against transportation risks. The terms of this contract are similar to those of the CIF contract, except that insurance is not the seller’s responsibility.
  4. Free Alongside Ship (FAS) Contract: Based on Article 309 of the Iraqi Commercial Law, under this type of contract, the goods must be delivered alongside the ship. The seller is responsible for delivering the goods to the designated loading location but is not responsible for subsequent risks.

?How to Transport Goods

There are several methods for transporting goods to Iraq, each with its specific regulations. To send goods to Iraq, you can choose from various options to find the fastest one. By choosing air freight, you can instantly send your goods in the shortest time possible. This method is quicker than sea transport but usually takes about a week or more for your goods to reach the designated location.

For the cheapest way to send items to Iraq, you can opt for standard shipping or economic shipping. Delivery in this method might take a week or more. Another method for transporting goods to Iraq is by sea. You can export all goods to Iraq by transferring them to the country’s ports and then loading them onto cargo ships.

?How to Transfer Money from Iraq to Iran

To transfer money from Iraq to Iran, you must have identification documents like a passport, residency card, and the sender’s phone number and address for personal account transfers. For company transfers, invoices and documents showing the purpose of the payment are necessary.

:To transfer money from Iraq to Iran via PayPal, follow these steps

  1. Choose a Trusted Exchange Service: First, send the PayPal email address of one of the reliable exchange services, such as Pay98 or Venda, to the individual intending to transfer money to Iran.
  2. Register on the Exchange Website: Visit the desired exchange website and sign up. Then verify your account.
  3. Access the User Panel: After logging into your user panel, select “PayPal Services” from the list of services, and then choose “Sell PayPal Dollars.” At this stage, complete the forms for sending money to Iran and send your bank transfer receipt to the exchange service.
  4. Bank Transfer: Transfer the desired amount from any bank to one of the accounts introduced by the exchange in Malaysia or the UAE.
  5. Deposit the Rial Equivalent: The exchange service will deposit the Rial equivalent into your account after deducting banking fees and considering the current exchange rate. This process takes less than 24 hours.

The above services are performed without the exchange charging any fees; however, any deductions from your account are taken by the originating bank, the intermediary bank, or the transferring company. It should be noted that due to Iran’s economic sanctions, currency transfers should not be related to sanctioned activities like nuclear energy, oil, and petrochemical industries. Moreover, transfers lacking sufficient documentation or linked to terrorism, drug trafficking, and money laundering will not be accepted.

?What Are the Customs Regulations Between Iran and Iraq

Sending goods to Iraq involves regulations that you need to be aware of in advance and keep updated about. Below are some of the most important export regulations to Iraq.

  1. Before starting the process of sending goods to Iraq, you need to draft a contract with your trading partner or customer in Iraq, clearly specifying all conditions and terms.
  2. You should have a well-planned strategy for marketing and selling your export products in Iraq; otherwise, you may face difficulties selling your goods. You need to understand the market for your product in Iraq and research your competitors in this market.
  3. For exporting goods to Iraq, certain permits are required, which might vary depending on the product. You must identify the necessary permits for your intended product and obtain them from the relevant governmental body before exporting. One essential permit for sending goods to Iraq is the Certificate of Origin. Without this document, you cannot clear your goods through Iraqi customs. The packaging of your product must meet the required standards, and it is essential that the packaging labels are printed in both English and Arabic. The packaging can be a significant factor in your product’s sales, so take special care to make your product competitive in the Iraqi market.
  4. Ensure that your export goods have the necessary quality and standards for export. For example, if you are exporting food or any edible products to Iraq, obtaining permits from the Ministry of Health is essential. Additionally, almost all goods require an inspection certificate; without it, customs clearance in Iraq is not possible.
  5. Another critical factor in sending goods to Iraq is proper and competitive pricing. Set prices that are competitive compared to products from other countries to enhance your product’s sales chances. Additionally, be sure to issue an invoice for your goods.
  6. Depending on the type of goods, their packaging, and transportation costs, you can use different methods to transport your goods to Iraq. However, since Iraq shares the most extensive land border with Iran, ground transportation is typically the best and least costly method of transporting goods to Iraq. Ensure the goods are packaged properly and that the transportation means are suitable to reduce potential damage to the goods during transit.

Conclusion

Iran-Iraq relations have always experienced ups and downs, but currently, they are at an optimal point in terms of political, commercial, economic, and cultural relations. This is due to the fact that the highest volume of Iran’s exports is to Iraq. The Trade Promotion Organization of Iran has prohibited exporting goods to Iraq without Latin or Arabic labels. The Iraqi Standards Institute has ordered that all goods be exported with both Latin and Arabic labels.

The conditions for exporting goods to Iraq from Iran require Latin and Arabic labeling on the products. If the export goods lack the specifications acceptable to Iraqi customs, officials will prevent their entry into the country, causing irreparable harm to exporters and producers. These conditions are executed based on a joint agreement between the Iranian and Iraqi standards institutes to resolve past issues of exporting goods labeled in Persian. To maintain trade exchanges between the two countries, there must be mutual cooperation in controlling goods smuggling, health standards, and the quality of export and import goods.