Erbil-Baghdad Customs Deal Expected to Boost Commerce and Restore Business Confidence

ERBIL (Kurdistan24) - After nearly seven months of declining trade at the Ibrahim Khalil international border crossing, a new agreement between the Kurdistan Regional Government (KRG) and the Iraqi federal government is raising expectations that commercial activity will return to normal levels and that trade volumes will increase substantially.

The agreement centers on the implementation of the ASYCUDA customs system at the Ibrahim Khalil crossing, a move aimed at resolving longstanding obstacles faced by traders and companies operating through one of the Kurdistan Region's most important commercial gateways.

According to local business representatives, trade activity at Ibrahim Khalil fell by approximately 70 percent over the past seven months due to previous decisions by the Iraqi government and the incomplete implementation of the customs system.

During that period, traders reportedly faced numerous challenges, including delays in shipments, the holding of goods, and in some cases the repeated collection of customs fees at inspection points in central and southern Iraq.

Latif Othman, head of the Zakho Chamber of Commerce and Industry, told Kurdistan24 correspondent Mehvan Majid that the implementation of the ASYCUDA system at Ibrahim Khalil is expected to significantly increase trade activity and return commercial operations to a much healthier level.

He said trade had previously dropped by around 70 percent because of the earlier measures, but expressed confidence that the new system would help restore business activity.

Business owners operating along the border have welcomed the agreement, describing it as a fundamental solution to many of the challenges they have faced in recent months.

Mohammed Amin, a local trader, said businesses had previously encountered major difficulties with their shipments, but added that the new agreement is expected to normalize commercial transactions and create a more organized trading environment that benefits all parties.

Another trader, Shvan Abdi, highlighted what he described as an additional advantage of the agreement. He said the arrangement would make it easier for businesses to transfer funds through government banks and the Central Bank of Iraq, allowing traders to send money abroad at the official exchange rate to import goods.

He described the measure as a positive step for the business community.

According to available data, more than 1,000 companies operate within the Zakho Independent Administration border area, with nearly 500 of them registered with the Chamber of Commerce and Industry.

Many of those companies were negatively affected by the previous Iraqi government decisions, resulting in financial losses and reduced business activity.

Local officials and traders believe the implementation of the new agreement and the adoption of the ASYCUDA system will not only revive trade and restore confidence among businesses, but could also help thousands of workers return to their jobs after losing employment opportunities during the slowdown in commercial activity.

The development comes after the Kurdistan Region's Council of Ministers reaffirmed its support for a joint customs agreement with Baghdad aimed at implementing the ASYCUDA system across border crossings.

The agreement, signed on June 18, 2026, between Iraq's Federal Customs Authority and the Kurdistan Region's customs administration, seeks to unify customs procedures, digitize operations, increase transparency in border revenues, reduce bureaucratic obstacles, and facilitate the movement of trade throughout Iraq.

KRG officials have described the initiative as an important step toward modernizing customs administration, improving coordination with federal authorities, increasing public revenues, and strengthening economic cooperation between Erbil and Baghdad.

As preparations continue for the full implementation of the agreement, business leaders in Zakho say the success of the ASYCUDA system could mark a turning point for trade through Ibrahim Khalil and help restore economic momentum across the border region.