December 1, 2008
On November 16, 2008, the White House and the Iraqi Cabinet approved a Status of Forces Agreement (SOFA), subject to the approval of the Iraqi Parliament. On November 27, 2008, the Iraqi Parliament approved the SOFA by a vote of 149 to 35. This new SOFA subjects U.S. contractors operating in Iraq to many aspects of Iraqi law, including criminal prosecution. Government contractors operating in Iraq need to be aware of this new development and adjust their operations to deal with it.
Although the primary purpose of the SOFA is to provide a legal basis to continue U.S. military operations in Iraq beyond December 31, 2008, when the United Nations mandate expires, this agreement has significant consequences for private contractors operating in Iraq. As of today, non-Iraqis who work as private contractors in Iraq are largely immune from Iraqi law. Under the new SOFA, effective January 1, 2009, all contractors operating in Iraq, including those working for the United States, will forfeit this immunity. Indeed, they will be subject to Iraqi criminal and civil laws, as well as the procedures of the Iraqi judicial system.
On June 27, 2004, the United States administrator for Iraq, Paul Bremer, issued Coalition Provisional Authority (CPA) Order 17, which states that "[c]ontractors shall not be subject to Iraqi laws or regulations in matters relating to the terms and conditions of their Contract…." CPA Order 17 also make contractors "immune from Iraqi legal process" for acts performed pursuant to that contract. This immunity includes immunity from local Iraqi criminal, civil and administrative jurisdiction, and from any form of arrest or detention. Although CPA Order 17 was issued shortly before the United States-led government disbanded, this grant of immunity remains in effect under CPA 100 until revoked or superseded by the Iraqi Government.
In contrast to current law, the SOFA specifically grants Iraq "the primary right to exercise jurisdiction over United States contractors and United States contractor employees." This means that, beginning in 2009, private contractors operating in Iraq will be subject to the Iraqi Penal Code and the Iraqi Law on Criminal Proceedings—even when they are performing under the terms of their United States government contracts. Iraqi officials may attempt to retroactively enforce this provision and seek to prosecute contractors for acts that were committed prior to 2009. Iraqi criminal law and procedure vary significantly from U.S. criminal law. Given these differences, and the well-publicized allegations of corruption within the Iraqi police and judicial system, contractors will face genuine challenges if subjected to Iraqi arrest, detention and trial.
The SOFA does permit the United States to request that Iraq "waive its primary right of jurisdiction in a particular case" and subject contractors to United States federal law, but that decision remains solely with the discretion of Iraqi officials. Although the United States has pledged to work with the Iraqi government to help ensure that any United States contractor "accused of a crime is treated fairly," the United States acknowledges that contractors "can no longer expect that they will enjoy the wide ranging immunity from Iraqi law that has been in effect since 2003." Given what many Iraqis view as the uneven prosecution of private contractors under United States criminal law and under the Uniform Code of Military Justice, it is by no means certain that Iraq will waive its jurisdiction in these cases.
In addition to the serious issues raised by subjecting private contractors to Iraqi criminal law, the SOFA also subjects contractors to several components of Iraqi civil law. While contractors remain exempt from some of the civil law requirements, they are subject to many others. For example, while contractors will remain exempt from Iraqi import and export requirements for items that are used exclusively pursuant to the SOFA, contractors will be subject to "licenses, other restrictions, taxes, custom duties, or any other charges imposed in Iraq" for personal effects and equipment for personal consumption and use. As a result, private contractors operating in Iraq will need to familiarize themselves with various aspects of Iraqi civil law and procedure including tax, tort, contracts and customs and import laws.
The full effect of the SOFA will not be known for some time after it goes into effect. That said, it is clear that it will significantly alter the landscape for private contractors operating in Iraq. At a minimum, it is likely to present significant legal and business challenges for private contractors operating in Iraq for the foreseeable future. Gibson Dunn & Crutcher has attorneys within its white collar defense and government contracts practice groups with boots on the ground experience working in Iraq helping to restore the Iraqi judicial system. These attorneys have worked with the Iraqi Ministry of Defense, participated in proceedings before the Central Criminal Court of Iraq, and worked with local Iraqi police, lawyers, and judges at the regional and local levels.
Gibson Dunn & Crutcher’s lawyers, are available to assist clients in addressing any questions they may have regarding this issue. Please contact the Gibson Dunn attorney with whom you work, or Karen L. Manos, (202-955-8536, [email protected]), F. Joseph Warin (202-887-3609, [email protected]), or Joseph D. West (202-955-8658, [email protected]), all in the in the firm’s Washington, D.C. office.
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