WASHINGTON, DC – Recently, Iraq instituted a new tendering rule that would have resulted in U.S. rice being forced to completely withdraw from the Iraq market, however, it appears a solution has been found.
In question was a new rule requiring 10 percent of the payment to any U.S. exporter be held by the Iraqi tax authorities until completion of the goods delivery and the certification that the exporter does not owe taxes in Iraq. The method of first withholding 10 percent of the payment and then subsequent certification conflict with standard anti-bribery policies.
Representatives Rick Crawford (R-AR) and Ralph Abraham (R-LA) individually sent letters to U.S. Ambassador Douglas Silliman in Baghdad, urging his assistance. The strong relationships between U.S. embassy personnel in Baghdad and officials at the Ministry of Trade and Ministry of Finance that were forged during the 2016 development and signing of a Memorandum of Understanding (MOU) between the parties helped resolve this issue in an efficient and practical manner, with a waiver of this withholding for the Iraqi Grain Board. Prime Minister Haider al-Abadi has signed the waiver, clearing the way for U.S. participation in tenders.
However, the current tender for 30,000 metric tons of rice does not reflect the new waiver, so it is unclear if U.S. companies will be able to participate.
“The U.S. rice industry eagerly awaits a fair and transparent MOU tender that we can participate in,” said Brian King, USA Rice chairman. “This incident clearly demonstrates the need for USA Rice to remain vigilant in the market, along with key industry allies in Congress and the State Department, as they have done. Our growers are looking for stable, dependable markets, and we all believe Iraq can be a great success story for us.”