ASYCUDA Implementation Between Erbil and Baghdad Awaits Final Cabinet Approval

ERBIL (Kurdistan24) - The implementation of the Automated System for Customs Data (ASYCUDA) between the Kurdistan Region and Iraq’s federal government has reached an advanced stage, with the process now awaiting final approval from Iraq’s Council of Ministers before it can enter the implementation phase, according to a legal adviser at the Kurdistan Region’s Ministry of Interior.

The move could bring an end to one of the outstanding issues between Erbil and Baghdad while creating a more unified electronic framework for managing customs procedures and border crossings across Iraq.

On Saturday, Sami Jalal, a legal adviser at the Kurdistan Region’s Ministry of Interior, told Kurdistan24 that the implementation process for the ASYCUDA system between the Kurdistan Regional Government and the federal government had made significant progress.

He said the only remaining step was for the issue to be placed on the agenda of a meeting of Iraq’s Council of Ministers so that the final approval could be granted.

“If the issue is placed on the agenda of the Council of Ministers meeting on any given day, it will be discussed in detail and approval will certainly be granted for implementation of the system,” Jalal said.

According to the adviser, the step is intended to organize border affairs across Iraq and bring an end to economic disagreements between the two sides.

The planned implementation between Erbil and Baghdad comes as Iraq has increasingly relied on ASYCUDA to modernize its customs administration and strengthen electronic oversight at federal border crossings.

The system, developed under the United Nations, is designed to automate customs procedures, process trade documentation electronically, and improve the monitoring of goods entering and leaving a country.

Iraqi authorities have presented ASYCUDA as a mechanism for improving transparency, reducing opportunities for manipulation, and accelerating commercial transactions.

The system also allows customs authorities to establish electronic records and links between border points, making it more difficult to alter invoices or conceal the movement of goods.

The federal government intends to extend ASYCUDA to all federal border crossings, with the broader objective of establishing a unified customs system across Iraq.

The reforms are also intended to bring Iraq’s customs administration closer to international standards and provide businesses with a more predictable system for processing imports and exports.

The expansion of electronic customs procedures has coincided with a sharp increase in customs revenues.

Iraq’s customs revenues exceeded 2.5 trillion Iraqi dinars during the first seven months of 2026, according to Samer Qasim al-Taie, director general of Iraq’s General Customs Authority.

Al-Taie said the amount collected during the first seven months of the year had already matched Iraq’s total customs earnings for all of 2023.

He attributed much of the increase to the implementation of ASYCUDA and the establishment of electronic links between federal customs points.

The increase has been particularly pronounced in recent months.

Customs revenue reached 500.6 billion dinars in July, according to al-Taie, representing a 150 percent increase compared with July of the previous year.

The rise highlights the impact of tighter electronic monitoring and greater integration between customs facilities.

Al-Taie predicted that customs revenue could exceed 3.5 trillion dinars by the end of 2026, which would set a record for Iraq if achieved.

The increase carries significance for Iraq as the country seeks to strengthen non-oil sources of state revenue and reduce its dependence on crude exports.

For years, Iraq’s fiscal position has remained heavily dependent on oil exports, leaving government finances vulnerable to fluctuations in global oil prices.

A sustained increase in customs income would provide another source of state revenue while strengthening oversight of the country’s extensive commercial borders.

The expansion of electronic customs procedures also forms part of broader efforts by the Iraqi government to reorganize non-oil revenues and reduce losses associated with smuggling, tax evasion, and administrative corruption.

Customs officials say greater electronic oversight has contributed to stronger revenue collection while improving the state’s ability to monitor trade flows.

The government’s broader plan is to extend ASYCUDA to all federal border crossings and establish a unified customs system across the country.

Electronic links between customs points are intended to strengthen coordination and create a more integrated system for monitoring commercial activity.

By creating electronic records across border crossings, the system is also intended to make it more difficult for customs documents to be manipulated or for the movement of goods to be concealed.

Against this wider reform effort, the planned implementation of ASYCUDA between the Kurdistan Region and the federal government carries a significance beyond the digitalization of customs procedures.

Sami Jalal said the process between Erbil and Baghdad had already passed through a good stage and that only the final approval of the Council of Ministers remained.

Once the issue is placed on the council’s agenda, he said it will be discussed in detail before approval is granted for implementation.

The stated objective is to reorganize border affairs throughout Iraq and resolve economic disagreements between the Kurdistan Region and the federal government.

The move would also bring the customs procedures between the two sides into the broader electronic framework being expanded across federal border crossings.

The customs gains reported by Iraq come amid wider efforts by Baghdad to increase public revenues outside the oil sector.

The first seven months of 2026 have already produced customs revenues exceeding 2.5 trillion dinars, while July alone generated more than 500 billion dinars.

If the projection of more than 3.5 trillion dinars by the end of the year is achieved, it would represent a record for Iraq.

For now, the pace of collection reported by the General Customs Authority suggests that the digitalization of customs operations is producing a measurable financial effect.

Whether that growth can be sustained through the remainder of 2026 will depend on the continued expansion of ASYCUDA, tighter enforcement, and the ability of customs authorities to close remaining gaps that allow revenues to escape the formal system.

For Erbil and Baghdad, however, the immediate milestone is more specific: the ASYCUDA system has reached the final stage before implementation, with the remaining decision resting with Iraq’s Council of Ministers.