IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with AMERELLER
5.2 Market Practice on Timing Timing of Disclosure
Employment and labour matters • Confirmation of compliance with Iraqi labour laws, including employee contracts and social security contributions. • Review of the composition of the workforce and related liabilities. Regulatory compliance • Verification of regulatory filings and compli - ance with Iraqi Companies Law and other relevant regulations, despite the challenges posed by incomplete public records. Risk and liability assessment • Identification of potential legal liabilities, ongoing disputes or pending litigation. • Evaluation of insurance coverage and any contingent liabilities. Intellectual property and assets • Confirmation of the ownership of intellectual property and other critical assets. • Investigation of any encumbrances or dis - putes over these assets. Given the challenges in obtaining reliable public records in Iraq, a comprehensive due diligence process is always recommended to fully assess the target company’s status and mitigate risks. 5.4 Standstills or Exclusivity Under Iraqi regulation, neither standstills nor exclusivity provisions are mandated. These con - ditions are typically negotiated between the par - ties, rather than being required by law. 5.5 Definitive Agreements Documentation of Tender Offer Terms and Conditions Under Iraqi law, M&A are governed by the Iraqi Companies Law. The process is based on a
There are no statutory regulations governing the timing of disclosure in this context. As a result, market practice is the dominant criterion. Market practice prevails In the absence of legal requirements, companies follow prevailing market practices to determine the appropriate timing of disclosure. Discretion in negotiations Acquirers and targets can agree on disclosure conditions during negotiations, allowing flexibil - ity to meet their specific needs. 5.3 Scope of Due Diligence Scope of Due Diligence in a Negotiated Business Combination in Iraq Due to the instability in Iraq and the often incom - plete and inaccessible public records, a very detailed due diligence process is essential. The following aspects are typically scrutinised. Corporate records and legal structure • Review of articles of incorporation, sharehold - ers’ resolutions and any amendments. • Verification of the company’s legal status and organisational structure, recognising that public records may be incomplete. Financial due diligence • Examination of financial statements, bank accounts and outstanding liabilities. • Analysis of cash flow, profitability and debt levels. Operational and commercial due diligence • Assessment of the target’s business model, market position and customer base. • Evaluation of supplier relationships and key contractual obligations.
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