Iraqi top court says two Erbil-related budget items 'unconstitutional'

ERBIL, Kurdistan Region - Iraq’s top court on Monday ruled that two phrases within Articles 11 and 13 of the recently-passed federal budget, both related to the Kurdistan Region, were "unconstitutional”, a month after the Region challenged the constitutionality of several items In the bill.

Iraq passed its highly contentious budget bill in June for the years 2023, 2024, and 2025, of which the Kurdistan Region’s share is 12.6 percent. In July the Kurdistan Regional Government’s (KRG) Prime Minister Masrour Barzani challenged the constitutionality of several paragraphs and phrases within the passed bill.

The Iraqi Federal Supreme Court revealed in a statement that it deemed the phrase “upon the approval of the federal prime minister” from Article 11 paragraph I, and the phrase “in the event that a solution is not possible, the parliament shall make the necessary decision” from Article 13 paragraph VII were both unconstitutional.

According to the paragraph from Article 11 of the passed bill, the finance ministry of the federal government will send the financial entitlements of the Kurdistan Region only after receiving approval from the Iraqi prime minister. The ruling of the court removes the requirement for the premier’s approval.

Article 13 details exporting the Kurdistan Region's oil in coordination with the Iraqi government and handover of its non-oil revenues to Baghdad.

The paragraph in Article 13 stipulates that in case of a disagreement on rights and obligations between the KRG and the federal government, a joint committee between the two sides will be formed to resolve disputes within 30 days. If no resolution is reached, the Iraqi parliament will make an appropriate decision.

Additionally, the court dismissed the KRG's lawsuits that contested the constitutionality of certain paragraphs in Articles 2, 11, 12, and 13.

The recently-passed budget includes a record $152 billion in spending, which has sparked concerns of instability should oil prices drop below the $70 per barrel threshold set in the bill. 

Iraq did not approve a new budget bill in 2022 amid political uncertainty after the 2021 election. The lack of a budget jeopardized the oil-dependent economy and prevented the government from taking advantage of soaring oil prices following Russia's invasion of Ukraine to combat poverty and bring much-needed economic stability.