“Corruption is one of the issues that German companies unfortunately have to deal with in Iraq and the Kurdistan Region,” Nasrin Khalil told Rudaw English on Wednesday.
“However, the main obstacle in front of German companies is the lack of transparency.”
According to Transparency International, Iraq is among the world’s most corrupt nations.
“Levels of corruption in the Kurdistan Region of Iraq, while lower than in Iraq as a whole, are relatively high compared to other countries in the region,” the monitor says.
The new Kurdistan Regional Government (KRG) headed by Prime Minister Masrour Barzani has pledged to tackle corruption and clean up the region’s business environment in the hope of attracting more foreign investment.
The KRG Integrity Commission has submitted 198 corruption cases to courts in the past year alone, of which just 33 have concluded.
The Commission estimates nearly 298.5 billion dinars ($250 million) is wrapped up in corruption cases. Almost 5.4 billion dinars ($4.5 million) has been recuperated so far, mostly in Sulaimani province.
Officials within the ruling Kurdish parties have also acknowledged the serious lack of transparency in government revenues and expenditure.
The lack of transparency is made worse by the region’s muddled regulatory environment.
“The process is not always clear for us, and there is no source that we can read to explain what we should do exactly to go through the process of deals with businesses in Iraq and Kurdistan Region,” Khalil said.
“Instead, every time we have to go and visit the ministers to understand what are the steps of the process and determine the real regulations.”
Khalil believes just 60-70 percent of rules and regulations are made available to the public. The lack of clarity leaves the system open to abuse and inefficiency.
Despite these challenges, Khalil says German firms find it far easier to invest in the Kurdistan Region than in federal Iraq as investors can get visas on arrival, register businesses easily, and import and export goods more straightforwardly.
There are 3,252 foreign companies registered in the Kurdistan Region, according to the Department for Company Registration. Some 2,371 of these are registered in Erbil.
At least 700 German companies operate in the Kurdistan Region and Iraq, according to the records of the German chamber of commerce in Erbil. However, just a fraction of these actually operate offices inside Iraq itself.
German firms mostly invest in automotive parts, food and beverages, chemicals, and machinery.
Germany has provided the Kurdish Peshmerga with weapons and training over the cause of its war with Islamic State (ISIS).
Germany has also been one of the largest donors of humanitarian aid, helping the Kurdistan Region to support millions of Iraqis and Syrians displaced by the war.
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