A delegation from the Kurdistan Regional Government (KRG) arrived in Baghdad on Thursday to begin a new round of negotiations with federal authorities. The delegation met with officials from Iraq’s Ministry of Finance and the Federal Board of Supreme Audit.
The delegation was led by Omed Sabah, Head of the KRG Council of Ministers’ Diwan. The talks focused on resolving two major issues that continue to affect relations between Erbil and Baghdad: the payment of public sector salaries and the implementation of the ASYCUDA automated customs system.
The payment of June salaries for public sector employees in the Kurdistan Region was the top priority during the discussions. Thousands of regional government employees are awaiting the release of their salaries.
KRG officials informed the federal government that the region has experienced a significant decline in its non-oil domestic revenues. As a result, the regional government said it could no longer transfer the previously agreed 120 billion Iraqi dinars to the federal treasury.
The KRG delegation called on Baghdad to implement the existing legal framework governing financial relations between the two governments. Under that framework, the Kurdistan Region would transfer 50 percent of its actual non-oil domestic revenues to the federal government, while Baghdad would cover the salaries of public sector employees. KRG officials argued that this mechanism would provide a more sustainable solution to the ongoing financial dispute.
The talks also addressed the long-running disagreement over the implementation of the ASYCUDA automated customs system. Previous rounds of negotiations have failed to produce a final agreement.
Differences remain over customs classifications and the digital management of border crossings. The federal government is seeking full operational control of the electronic customs system, while the KRG is requesting greater clarity regarding its share of border revenues.
Border management and revenue-sharing continue to be major points of contention between the two sides. Nevertheless, both governments expressed hope that the latest round of negotiations would help move the discussions toward a lasting agreement.
Three separate KRG delegations visited Baghdad last week to discuss financial entitlements and revenue-sharing issues. They also participated in a meeting of Iraq’s High Economic Council aimed at strengthening the country’s economic stability.
Both governments are seeking a breakthrough during Thursday’s talks that could ease long-standing tensions between Erbil and Baghdad. However, several complex financial and technical issues remain unresolved, making a final agreement difficult to achieve.