This guide reports on the existing and future opportunities for trade and investm ent in I raq. The U.S. Governm ent, including the U.S. Departm ent of
Com m erce, continues to work with Coalition partners, international organizations, and the business com m unity to facilitate econom ic recovery through
reconstruction contracts, private investm ent, and other business opportunities. General inform ation on I raq can be found on the U.S. Governm ent\u2019s World

Authority (CPA) ceased to exist on that day although it\u2019s website (www.cpa-iraq.org/ ) will be m aintained for reference purposes. Although the CPA no longer exists, the orders the CPA established through its 100 decrees m ake up a significant portion of I raqi com m ercial law. On June 29, 2004, the U.S. Em bassy in Baghdad officially opened (http: / / iraq.usem bassy.gov3 ).

Following the January 2004 elections, the I raqis have been putting together the I raqi Transitional Governm ent (I TG), headed by Prim e Minister Ibrahim al-Jaafari. The I TG\u2019s prim ary responsibility is to adm inister I raq\u2019s affairs, in particular to provide for the welfare and security of the Iraqi people, prom ote econom ic developm ent, and write and pass I raq\u2019s new perm anent constitution. The constitution is to be written and voted upon by October 2005. The I raqi people will then select a constitutional governm ent in Decem ber 2005.

The current laws governing I raq are a product of its recent history and leadership. Under the Hussein regim e, an established com m ercial law existed. A U.S. Governm ent analysis of the Hussein regim e\u2019s com m ercial law in I raq can be found at:h t t p : / / w w w . e x p o r t . g o v / i r a q / p d f / i r a q _ co m m e r ci a l _ l a w _ cu r r e n t . p d f4 Download the I raqi Com m ercial Law Overview (PDF only). This law was significantly am ended by the CPA orders. These orders liberalized the investm ent and business environm ent, went far in creating im portant com m ercial laws and institutions that are up to international standards, and m ake up a significant com ponent of current Iraqi com m ercial law. All referenced CPA orders can be found on the old CPA website at: http:/ / www.iraqcoalition.org/ regulations5. Som e CPA Orders m ay not be fully im plem ented at this tim e. I t is im portant to understand both the CPA Orders and the form er regim e\u2019s law to effectively do business in I raq.

I t appears that the basic econom ic situation in I raq is better today than it was less than a year ago. GDP growth has reportedly recovered the ground it lost in 2003. GDP in 2004 m ay have grown by as m uch as 40 percent. Both the I MF and the World Bank have predicted a 2005 GDP growth rate of 15 percent. Further im provem ents in growth will be dependent on reconstruction efforts, security and sound m onetary and fiscal policies by the I raqi governm ent.

On March 6, 2004, the CPA issued Order # 56 prom ulgating a new Central Bank of I raq (CBI ) law. The new CBI law establishes a central bank authorized to
perform certain m onetary functions, m anage foreign reserves, act as the governm ent\u2019s banker and fiscal agent, issue currency, establish and m aintain
system s for clearing and settlem ent of paym ent transactions, and supervise private banks.

As of January 15, 2004, I raq\u2019s currency was successfully transitioned to the New I raqi Dinar (NI D) (http: / / www.cpa-iraq.org/ pressreleases
/ 20040115_exchange_end.htm6). By all accounts, the I raqis have wholeheartedly em braced their new dinars. Not only are the new notes m uch m ore
difficult to counterfeit -- a chronic problem under the old currency regim e -- the I raqis now have six denom inations available, up from only two.

The CBI has responsibility over exchange rate policy. The NI D is a free-floating currency. However the CBI uses m onetary policy to stabilize the NI D against other currencies, especially the U.S. dollar. I t does this through a daily foreign currency auction that stabilizes the rate and allows it to adjust when needed. For exchange rate history visit the Central Bank of I raq website:http://www.cbiraq.org/cbs6.htm7. The value of the currency steadily appreciated after its introduction and settled around 1,470 dinars per dollar.

On March 1,2004, the Central Bank of I raq liberalized interest rates on deposits, loans, credits, securities, and all other domestic financial instrum ents. The
CBI previously set these rates.This represents a m ajor step in the developm ent of I raq\u2019s financial system . The decision to liberalize interest rates is
facilitating the m odernization and developm ent of Iraq's financial system based on m arket principles.

I raq has been able to stabilize inflation, which was ram pant under the Hussein regim e. There was even a m odest fall in prices early in the transition as indicated by I raqi consum er price index statistics. Currently, inflation appears to be leveling off between 5 and 10 percent. It is im portant to note that low inflation or m odest inflation in the past gives little or no indication about what that index will be in the future.

Both the CPA and the I raqi Ministries have successfully acted to ensure that a free and sovereign I raq is able to function in the com m unity of nations. The CPA released its fiscal 2004 budget in October 2003, available at www.cpa-iraq.org/ budget. The 2005 budget has not yet been released CPA Order # 77 has also created the Board of Suprem e Audit in order to ensure ongoing I raqi Governm ent transparency. A sum m ary of CPA accom plishm ents can found at http://www.cpa-iraq.org/pressreleases/20040628_historic_review_cpa.doc8. Many of the Iraqi Ministries have websites and are listed at

I raq's large international debt of over $116 billion could negatively affect econom ic growth and future funding of reconstruction by international lenders. The
m em ber countries of the Paris Club m et in Novem ber 2004. They agreed on Novem ber 21 with the representatives of the Republic of I raq on a
com prehensive debt treatm ent of the public external debt owed to them providing a total am ount of debt reduction of 80% in three phases. I raq is also
currently working on debt reduction with its non-Paris Club creditors.

On February 11, 2004, m em bers of the World Trade Organization (WTO) approved I raq\u2019s request for observer status (http://www.wto.org/english
/thewto_e/whatis_e/tif_e/org6_e.htm10). On December 13, 2004, the WTO established a Working Party to examine Iraq\u2019s membership application. WTO
observer status and the establishm ent of a working party express the international com m unity's confidence in I raq and it sends a positive m essage of
transparency and predictability to the business com m unity.

A further indication of I raq\u2019s com m itm ent to the global trading com m unity is the recent change to intellectual property laws. The United States and Iraq
currently provide access to each other's patent and tradem ark laws and application procedures under the term s of the Paris Convention for the Protection of
I ndustrial Property. However, U.S. copyright owners have no access to I raqi copyright protection, as the United States and I raq are not m em bers of any of
the sam e copyright treaties. CPA Orders # 80, # 81, and # 83 provide am endm ents to the current Iraqi intellectual property regim e. The am m endm ents help

Treasury\u2019s Office of Foreign Assets Control (OFAC -http://www.ustreas.gov/offices/eotffc/ofac/13) was largely responsible for licensing products for export to Iraq. This jurisdiction was returned to the U.S. Department of Commerce\u2019s Bureau of Industry and Security (BIS - http://www.bis.doc.gov/14) on July 30, 2004 as per Presidential Executive Order 13550 and related regulations issued by the U.S. Departm ents of Treasury and Com m erce. BI S can assist com panies in determ ining whether an export license m ay be required for I raq. U.S. com panies m ust then work with BI S to obtain the license. U.S. export licensing requirem ents for products entering I raq can be found through the BI S website at:h t t p : / / a 2 5 7 . g . a k a m a i t e ch . n e t / 7 / 2 5 7 / 2 4 2 2 / 0 6 j u n 2 0 0 4 1 8 0 0 / edocket.access.gpo.gov/ 2004/ 04-17532.htm15 .

Security continues to be the num ber one concern of the international business com m unity in I raq. The security situation in I raq rem ains serious. Theft and violent crim e persist in I raq, and the potential for attacks against U.S. citizens and facilities rem ains high. Roads and other public areas can be dangerous for conspicuous foreign travelers. The U.S. Departm ent of State issues up-to-date travel warnings for countries throughout the world, and U.S. com panies and visitors are advised to carefully assess the situation in I raq.

U.S. Governm ent-funded contracts, as outlined in this guide, continue to be one of the leading business opportunities in I raq. Opportunities for U.S. firm s to
participate in the reconstruction of I raq are m ostly associated with rehabilitating the country's infrastructure. A convenient list of all recent contracts and
their known subcontractors, along with links to their website can be found ath t t p : / / w w w . e x po r t . g o v / i r a q / m a r k e t _ o ps/ co nt r a ct s. ht m l18 .

Contracting opportunities can be found through five m ain tendering organizations, discussed below. These are the Project and Contracting Office, the U.S. Agency for I nternational Developm ent, the U.S. Arm y Corps of Engineers, I raqi Ministries, and international organizations such as the United Nations and the World Bank.