IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with Amereller
4.2 Material Shareholding Disclosure Threshold Material Shareholding Disclosure
Another common hurdle in stakebuilding is the voting process. Shareholders often face difficulties reaching a majority agreement on alternative voting rules, as they must adhere to the procedures set out in the Companies Law. 4.4 Dealings in Derivatives Lack of Clear Regulation Dealing in derivatives is not clearly regulated under Iraqi law. Case-by-Case Decision The Register of Companies makes decisions on deriv - atives transactions on a case-by-case basis. This approach means that each derivatives deal is individually assessed to ensure compliance with the overall corporate and financial framework. 4.5 Filing/Reporting Obligations Iraq’s competition framework is governed by Law No 14 of 2010 on Competition and Monopoly Preven - tion. However, this law does not set out any filing or reporting obligations for derivatives under securities disclosure or competition laws. The law primarily focuses on preventing monopolistic practices and maintaining fair competition. It does not include provisions specifically addressing derivatives transactions. Therefore, there are no additional mandated filing or reporting obligations for derivatives under this law. 4.6 Transparency Shareholder Disclosure Obligations The law in Iraq does not require shareholders to declare the purpose of their acquisition or their inten - tion regarding control of the company. However, the Companies’ Registrar mandates that all companies file an Ultimate Beneficial Owner (UBO) declaration. This UBO form must clearly identify the ultimate owner who controls the shares in the company.
In Iraq, material disclosures cover all the significant records of a company. These include the following. • Financial statements – detailed reports of the com - pany’s financial performance. • Shareholders’ resolutions – documentation of deci - sions made by the shareholders. • Financial liabilities and transactions – information on debts, loans, and significant financial dealings. • Partnerships and business deals – details of any joint ventures or strategic alliances. • Employee records – lists of employees along with their salaries. • Loans and debts – comprehensive records of out - standing financial obligations. Filing Obligations The filing obligations apply to the company rather than to individual shareholders. Companies are required to: • file annual financial statements; • submit monthly payroll taxes and social security contributions; • provide an annual Ultimate Beneficiary Owner Dec - laration and a letter of good standing from parent company in the case of branches; and • renew the PO box and local Domain registration. These requirements ensure transparency and accountability, providing regulators and stakeholders with a clear view of the company’s operational and financial status. 4.3 Hurdles to Stakebuilding Alteration of Reporting Thresholds and Other Hurdles to Stakebuilding in Iraq According to the Iraqi Companies Law, reporting and filing requirements are mandatory and cannot be altered or reduced by the articles of incorporation or by-laws. Companies may only impose additional obli - gations provided these are consistent with the statu - tory requirements. For example, general assembly meetings can have increased requirements, but they cannot reduce what is stipulated by law.
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