Cities Authority Law

Based on what was approved by the Council of Representatives pursuant to the provisions of Clause (First) of Article (61) and Clause (Third) of Article (73) of the Constitution, the President of the Republic decided on 21/5/2019 to issue the following law:

Article 1

For the purposes of this law, the following terms shall have the meanings set forth below:

1. Ministry: The Ministry of Industry and Minerals.
2. Minister: The Minister of Industry and Minerals.
3. Industrial City: A geographically designated area established under the provisions of this law, allocated for conducting industrial activities and services outside the boundaries of Baghdad Municipality and municipalities in the regions and governorates not incorporated into a region.
4. Developer: A person responsible for designing, establishing, or developing the industrial city, including its infrastructure and public services.
5. Industrial City Manager: A person responsible for managing, operating, and maintaining the industrial city.
6. License: A document granted by the Industrial Cities Authority to establish, develop, operate, or maintain an industrial city.
7. Authority: The body responsible for establishing, developing, managing, and supervising industrial cities in coordination with relevant entities.

Article 2

The objectives of this law are as follows:

1. Contribute to achieving the goals of the state's general economic policy.
2. Organize industrial activities in areas equipped with infrastructure and services.
3. Promote the use of industrial cities to facilitate economic reform.
4. Regulate the establishment, development, and management of industrial cities.
5. Encourage local and foreign private sector investment in industrial cities across all governorates and partnerships with the public sector.
6. Attract and stimulate the relocation of existing industrial activities to industrial cities established under this law.

Article 3

1. The provisions of this law apply to:
   a. Existing or under-construction industrial cities and areas, as well as economic activities.
   b. Newly established industrial cities and activities.
2. The following are exempt from this law:
   a. Activities related to crude oil or natural gas exploration, production, transportation, marketing, sale, or export.
   b. Activities governed by the Private Investment in Crude Oil Refining Law No. (64) of 2007 and the Mineral Investment Law No. (91) of 1988.

Article 4

1. An authority named the Industrial Cities Authority shall be established, affiliated with the Ministry of Industry and Minerals, enjoying legal personality, financial, and administrative independence. It shall be represented by its president and headquartered in Baghdad, with branches established in the regions and governorates not incorporated into a region.
2. The authority shall be headed by an employee holding the title of Director General, with at least a bachelor's degree and no less than 20 years of experience in engineering, legal, administrative, or accounting fields, appointed in accordance with the law.
3. The president of the authority shall be assisted by a Deputy Director General, similarly qualified and experienced, appointed in accordance with the law.

Article 5

The authority shall undertake the following tasks:

1. Oversee the implementation of a national strategy for developing industrial cities in Iraq.
2. Conduct or supervise feasibility studies and execute development plans for selected industrial cities.
3. Regulate the establishment, development, and management of industrial cities.
4. Coordinate with relevant government entities to establish industrial cities, ensuring that lands are delivered free of encumbrances.
5. Supervise, guide, support, and evaluate the performance of industrial city administrations.
6. Collaborate with similar institutions in other countries.
7. Raise awareness about the importance of existing and future industrial cities.

Article 6

1. The Authority shall have a Board of Directors consisting of:
   a. The Minister, as Chairman.
   b. The Head of the Authority, as a member and Deputy Chairman.
   c. The Director General of Industrial Development in the Ministry of Industry and Minerals, as a member.
   d. Representatives at the level of Director General from the following entities, as members:

   1. Ministry of Planning
   2. Ministry of Finance
   3. 
      
   4. Ministry of Construction, Housing, Municipalities, and Public Works
   5. Ministry of Health and Environment
   6. Ministry of Trade
   7. Ministry of Electricity
   8. National Investment Authority

   Director General of the Industrial Bank
   e. Representatives from the following entities:

   1. Two members from the Iraqi Federation of Industries
   2. One member from the Federation of Chambers of Commerce
   3. One member from the Federation of Businessmen

   f. A representative from the High Commission for Coordination between Provinces, as a member.
   The term of membership in the Board of Directors shall be four (4) years, renewable once, except for clauses (a), (b), and (c) of paragraph 1 of this article.
   A representative of the governorate where an industrial city is being established shall attend Board meetings.
   The Board may seek the opinions of experts and specialists.
   a. The Board shall meet at least once every two months.
   b. An extraordinary meeting may be convened at the request of the Chairman or upon a written, justified request by half of the members.
   A quorum for the Board's meetings is achieved with the attendance of two-thirds of its members, including the Chairman. Decisions shall be made by a majority of attendees. In the case of a tie, the side voted on by the Chairman shall prevail.
   The Deputy Chairman shall act on behalf of the Chairman in their absence.

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   Article 7
   The Board of Directors shall perform the following duties:
   a. Develop a national strategy for establishing, developing, and managing industrial cities in Iraq and oversee its implementation upon approval by the Council of Ministers.
   b. Monitor and evaluate the Authority's activities and prioritize the establishment and management of industrial cities.
   c. Approve the Authority's annual work plan, budget, and submitted reports, and review them.
   The Board may delegate some of its duties to the Head of the Authority.

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   Article 8
   The financial resources of the Authority shall consist of the following:

   1Allocations in the Ministry's annual general budget.

   2Grants, donations, and contributions from domestic and foreign entities in accordance with the law.

   3Fees collected by the Authority under the provisions of this law.

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   Article 9

   1. The Authority shall grant licenses for the establishment, development, or operation of an industrial city.
   2. The conditions for granting licenses mentioned in paragraph 1 of this article shall be determined by regulations issued by the Minister.

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   Article 10

   1. The Authority shall decide on license applications within thirty (30) days from the date of submission.
   2. Failure to respond within the period specified in paragraph 1 of this article shall be deemed approval.
   3. Applicants whose requests are denied may appeal the decision before the Administrative Judiciary Court in accordance with the law.

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   Article 11
   The industrial city shall be managed by a natural or legal person who shall perform the following duties:

   1. Oversee daily activities and provide services within the industrial city.
   2. Operate, monitor, design, maintain, and develop the industrial city and promote it.
   3. Provide facilities and services within the industrial city in coordination with the Authority and relevant entities as per the law.
   4. Contract with third parties for the management, maintenance, and servicing of the industrial city.
   5. Collect service fees within the industrial city.
   6. Employ local and foreign labor in accordance with the law.
   7. Transfer capital and its returns within and outside Iraq in compliance with the law and the Central Bank of Iraq's regulations if the city manager is foreign.
   8. Maintain and preserve the assets of the industrial city.
   9. Set a schedule for fees charged for services and collect them in alignment with the Authority’s strategy.
   10. Provide services within the industrial city to encourage and facilitate operational activities.
   11. Promote the industrial city domestically and internationally.

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   Article 12
   The Authority may revoke a license in the following cases:

   Declaration of bankruptcy by the developer or industrial city manager.

   1. Failure to commence establishment or development within one year from the contract date without valid justification.
   2. Non-compliance or failure to establish or develop the city within three (3) years of the contract date.
   3. Providing false or misleading information or using unlawful methods to obtain any privileges or benefits under this law.

   Violation of this law, following these procedures:
   a.

   1. Issue a warning to address the violation or initiate the project within the period specified by the Authority.

   If the violation persists, issue a final warning for thirty (30) days. After this period, impose a delay penalty proportionate to the time discrepancy, not exceeding ten percent (10%) of the project's cost.
   b. If the violation is not rectified after exhausting the measures in a(1) and a(2), the Authority shall revoke the license, effective from the date of violation. This does not affect third-party rights to claim compensation from the developer for damages caused by the violation or any other penalties.

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   Article 13
   The Authority may revoke the license if the developer fails to implement the contract in accordance with its terms and timelines.

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   Article 14
   The developer and manager of the industrial city shall:

   1. Establish the industrial city, commence operations within it, and develop fixed assets to promote economic growth.
   2. Prepare and update the city's development plan as per the technical documents submitted with the license application.
   3. Construct fixed assets, including infrastructure, within the industrial city and oversee external infrastructure development in coordination with relevant institutions.

   Submit semi-annual reports to the Authority detailing:
   a. Investments made within the past year and expected investments for the coming year.
   b. Developed land within the industrial city and all fixed assets established therein.
   c. Any additional information required by the Authority.

   1. Comply with performance requirements stipulated in the issued license and contracts with the Authority.

   Provide technical training to Iraqi workers as per contracts with the Authority.                                                                                                                              Article 15
   The developer and manager of the industrial city shall enjoy the following:

   The right to lease or sublease properties in the industrial city or enter into usufruct agreements for a period not exceeding fifty (50) years, renewable once.

   1. The ability to enter into contracts with third parties for the development and provision of services in the industrial city, including infrastructure within the city, under preferential terms.
   2. The collection of service fees provided during the establishment of the industrial city.
   3. The transfer of funds in accordance with the instructions issued by the Central Bank of Iraq regarding foreign developers.
   4. The employment of local and foreign labor in compliance with the law.

   
   Article 16
   The Authority guarantees the following:

   1. Non-discrimination in treatment between Iraqi and foreign developers or managers of the industrial city.
   2. The protection of private property, fixed assets, and investments related to the industrial city.

   Article 17
   Disputes arising from the implementation of this law shall be subject to Iraqi law and the jurisdiction of Iraqi courts. However, it is permissible to agree with the developer to resort to commercial arbitration (national or international) through an agreement that specifies arbitration procedures, the arbitration authority, and the applicable law.
   Article 18

   1. The customs and tax exemptions stipulated in Investment Law No. (13) of 2006 or the Industrial Investment Law for Private and Mixed Sectors No. (20) of 1998 shall apply to all licensed economic activities in the industrial city.
   2. The Ministry of Oil shall provide those covered by the provisions of Article (3/First) of this law, who have obtained federal industrial development licenses across all governorates of Iraq and the Kurdistan Region, with petroleum derivatives at the prevailing official price, exclusively for industrial project use.
   3. The Ministry of Electricity shall supply those covered by the provisions of Article (3/First) of this law, who have obtained federal industrial development licenses across all governorates of Iraq and the Kurdistan Region, with electricity at a subsidized price, exclusively for industrial project use.

   Article 19
   The accounts of the Authority shall be subject to the audit and oversight of the Federal Board of Supreme Audit.
   Article 20

   1. Regulations may be issued to facilitate the implementation of the provisions of this law.

   a. The formations of the Authority and their tasks shall be defined by internal regulations issued by the Minister.
   b. The Minister shall issue instructions to facilitate the implementation of the provisions of this law.
   Article 21

   This law shall come into force on the date of its publication in the Official Gazette.

1. Dr. Barham Salih
   President of the Republice Republic

   Law of the Industrial Cities Authority