On 18 November, Iraq finally ratified the Convention on the Settlement of Investment Disputes (ICSID Convention), which enters into force for Iraq on 17 December. This strategic decision comes at a time when Iraq needs significant amounts of Foreign Direct Investments in order to rebuild its country.
While Iraq has signed more than 30 Bilateral Investment Treaties (BITs), only the BITs with Japan and Kuwait have entered into force. Iraq has also ratified a multilateral investment protection treaty among several Arabic states. But there are many BITs in the pipeline, which are pending signature and/or ratification, for example with Slovakia, Iran, the UAE, the Czech Republic, Bahrain, China, Macedonia, Vietnam, Italy, Netherlands and Poland.
Unfortunately, Iraq is still not yet party to the New York Convention, which means that non-ICSID awards still face difficulties of being recognised and enforceable.
Despite the limited number of Iraqi BITs in force, the fact that Iraq has now ratified the ICSID Convention is a positive sign towards investors by providing them a reliable and globally recognized dispute settlement forum. The signature and ratification of more BITs, which will provide for access to ICSID, would significantly increase the attractiveness of Iraq.