From Advance Declaration to Prepaid Duty: Cabinet Decisions 569 and 413

1. Key takeaways

Positioning. This article covers the second and third segments of the loop: advance declaration, prepayment, release verification. The first segment — the advance customs declaration under Cabinet Decision No. 569, in force from 2025-12-01 — is article 35. Here is the second segment: Cabinet Decision No. 413 (2026) applies advance or simultaneous payment of duties and tax deposits from 2026-10-01.

Per the KIMADIA announcement of 2026-09-23 retelling Cabinet Decision No. 413 (2026), advance collection applies from 2026-10-01 to the estimated customs duties and tax deposits on imported goods. The chain is: the importer must pay the estimated amounts in the same banking transaction through ASYCUDA and approved electronic payment, transferred to the Ministry of Finance treasury accounts within a maximum of 7 days; before that, approved banks must not process external financing, open letters of credit or finance imports. The Ministry of Finance, with the Central Bank of Iraq, the General Customs Authority, the Federal Tax Authority and its Accounting Department, must build the executive, accounting and technical mechanisms within a maximum of 15 days of adoption. GRZAN’s judgement: this turns clearance from a broker’s task into a finance and treasury planning task — if the letter of credit cannot be opened, the goods cannot be shipped.

• From 2026-10-01, estimated duties and tax deposits are collected in advance and simultaneously.
• Payment must be made in one banking transaction through ASYCUDA and approved electronic payment, credited within a maximum of 7 days.
• Before payment, approved banks must not provide external financing, open letters of credit or finance imports.
• Execution, accounting and technical mechanisms must be built within a maximum of 15 days of adoption.

2. Legal basis

The instruments below carry the prepayment rule and its schedule.

Extracts, translated from the Arabic key phrases. First, from 1 October 2026 advance collection applies to the estimated duties and tax deposits on imported goods, with the importer depositing the outward remittance amount for import purposes with an approved bank. Second, approved banks must not execute external financing, open documentary credits or finance imports until the importer has paid the estimated customs duties and tax deposits through ASYCUDA and approved electronic payment and transferred them to the general treasury accounts within a maximum of (7) days, according to the nature of the amount collected. Third, the amounts are computed from the importer’s preliminary data — the commercial invoice, the shipping or import documents, the customs classification, the goods type, their origin and their value — with the tax deposits taken according to the schedule referred to in Cabinet Decision No. 957 (2025). Fourth, the Ministry of Finance, with the Central Bank of Iraq, the General Customs Authority, the Federal Tax Authority and the Accounting Department, must build executive, accounting and technical mechanisms within a maximum of (15) days of adoption, including electronic payment paths, approved accounts, bank-enterprise interfaces, settlement and refund of differences, and handling of exemptions, non-arrivals and discrepant data.

3. Expert insights

The binding point is letter-of-credit issuance, not customs clearance. As long as the estimated taxes are unpaid, the bank may not open a letter of credit. For LC-settling Chinese manufacturers, production and shipment start depends on the buyer completing tax payment first, not on clearance efficiency. GRZAN writes this point into the payment-term preconditions during contract review.

Prepayment is based on preliminary data, so refunds and top-ups are inevitable. The estimate rests on invoice, shipping documents, classification, goods type, origin and value — all ex-ante data from the declaring party. The required Ministry of Finance mechanisms — settlement and refund of differences, handling of non-arrived or discrepant goods — amount to official acknowledgement that the prepaid and payable amounts will diverge. Cash planning follows prepayment plus a difference-pending period, not the finally paid amount.

In most markets tax payment follows the customs declaration. In China, import duties and import-stage taxes are declared and paid at declaration, with consolidated taxation conveniences for qualifying enterprises and no LC precondition; the EU likewise treats the declaration as the tax point. Iraq moves the tax node to before the bank opens the credit; funding efficiency tightens markedly, and the buyer’s funding pressure transmits into renegotiation of payment rhythm, delivery time and price terms.

Debunking the claim that this rule covers only medicines and medical devices. The object in the original text is imported goods — an all-category rule including devices, not singling them out. It was published through KIMADIA because KIMADIA is the import and marketing entity that announces to companies; the channel does not define the scope.

Read together with the Cabinet Decision 393 tariff reduction table. The prepayment estimate is computed from the customs tariff schedule, whose chapter-level rates appear in articles 34 and 35: estimate from chapter-level rates first, then add the tax deposits from the Decision 957 schedule.

Government goods follow a different funding rhythm. Cabinet Decision No. 428 (2026) gives the government goods channel a different arrangement: duties payable within 90 days, and a 21 working-day temporary release. Compared with the commercial channel, the government channel is visibly looser in cash occupation. GRZAN accordingly advises that a manufacturer serving both government tenders and private channels must not share one cash plan — the tax points and release conditions differ, and mixing them understates private-channel cash occupation. (Primary, verified — KIMADIA notice of September 2026 on the government goods undertaking.)

4. Practical recommendations

• GRZAN advises a prepayment duty estimate before signing: the manufacturer provides a draft commercial invoice and an HS classification opinion, the buyer estimates duties and tax deposits per the Decision 957 schedule, and both parties write who bears the cost, when it is paid and how differences are settled into the contract.
• Finance departments should list the ASYCUDA payment receipt as a letter-of-credit precondition; the export-side document list adds the buyer’s tax payment receipt number as a production trigger.
• Confirm with the issuing bank the submission timing, form and accepting branch of the ASYCUDA payment receipt; the domestic side aligns its supporting actions in advance. Practical estimate: this alignment usually takes 2–3 weeks (no official provision found).
• Maintain a prepayment-to-settlement ledger per batch — estimated amount, paid amount, difference, refund progress; the refund process and time limit were not given in the announcement and follow the Ministry of Finance’s later mechanism documents.
• Handle the funding rhythm of government projects separately under the channel of article 39 (Instruction No. 1 of 2025), not mixed with the commercial-channel model of this article.

5. Verification checklist

• □ Connect to KIMADIA post 57611 and the announcement PDF and re-check the effective date 2026-10-01, the 7-day and 15-day figures and letter number 34481.
• □ Search for the original of Cabinet Decision No. 413 (2026) to complete primary textual evidence.
• □ Search for the tax deposit schedule of Cabinet Decision No. 957 (2025) to obtain the concrete estimation table.
• □ Confirm with the Iraqi issuing bank the form, submission timing and accepting branch of the ASYCUDA payment receipt.
• □ Track the executive mechanism documents to be issued by the Ministry of Finance within 15 days of adoption (electronic payment paths, approved accounts, settlement and refund procedures).
• □ Recompute the prepayment from the HS chapter-level rates and compare item by item with the buyer’s estimate. A classification error changes both the rate and the applicable basis (method: article 30; modelling: article 34).
• □ Re-check whether the official documents cited here have been replaced by later instructions or decisions (verification baseline date: 29 October 2026).

Regulatory information verified as of 29 October 2026.

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support for the Iraqi market. Our team coordinates local importer arrangements, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com