Iraq Legal delay interest (فوائد قانونية)
Iraq Legal delay interest (فوائد قانونية) is 5 percent, in force since 8 Sep 1953. Last checked against the official source on 11 Aug 2026.
Iraq's legal delay interest under Article 171 of the Civil Code No. 40 of 1951: a fixed 5% per annum in commercial matters and 4% in civil matters, payable as compensation for late payment of a money debt of known amount. The headline served is the commercial 5%.
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| Current value | 5 percent |
|---|---|
| In force from | 1953-09-08 |
| Official source | Civil Code No. 40 of 1951 (القانون المدني العراقي رقم 40 لسنة 1951), Art. 171: 'إذا كان محل الالتزام مبلغاً من النقود وكان معلوم المقدار وقت نشوء الالتزام وتأخر المدين في الوفاء به كان ملزماً أن يدفع للدائن على سبيل التعويض عن التأخير فوائد قانونية قدرها أربعة في المائة في المسائل المدنية وخمسة في المائة في المسائل التجارية، وتسري هذه الفوائد من تاريخ المطالبة القضائية بها إن لم يحدد الاتفاق أو العرف التجاري تاريخاً آخر لسريانها وهذا كله ما لم ينص القانون على غيره' (where the object of the obligation is a sum of money known in amount when the obligation arose and the debtor delays payment, he must pay the creditor by way of compensation for the delay legal interest of four per cent in civil matters and five per cent in commercial matters, running from the date of judicial demand unless agreement or commercial custom fixes another date, all unless the law provides otherwise); Art. 172: 'يجوز للمتعاقدين ان يتفقا على سعر آخر للفوائد على الا يزيد هذا السعر على سبعة في المائة' (the parties may agree another rate of interest provided it does not exceed seven per cent). TEXT REPRODUCED ON A PERSONAL BLOG - the only reachable full text; see confidence_note. |
| Last verified | 2026-08-11 |
| Verification | secondary — Corroborated, but the primary instrument was NOT read (usually the publishing host blocks automated access). NO OFFICIAL TEXT OF THE IRAQI CIVIL CODE IS REACHABLE. The 5% commercial / 4% civil delay-interest rates and the 7% ceiling rest on the text of Arts. 171-174 of Civil Code No. 40 of 1951 as reproduced on moshrig63.wordpress.com, a personal Arabic-language blog - not on any government publication. Every official route was tried on 11 August 2026 and failed: (1) the Higher Judicial Council's official Iraqi legislation database (iraqld.hjc.iq, 'قاعدة التشريعات العراقية', which indexes all Iraqi laws since 1918) returns HTTP 403 to every request, as do hjc.iq, sjc.iq, parliament.iq and iraqfsc.iq - the whole Iraqi judicial/parliamentary web estate appears to block requests from outside Iraq; (2) the Ministry of Justice site (moj.gov.iq) IS reachable and publishes the Official Gazette الوقائع العراقية at /iraqmag/, but the archive there carries only recent issues (latest No. 4876 of 10 August 2026) and has no 1951 back-file and no consolidated-legislation section - the Civil Code was promulgated in the Gazette on 8 September 1951 and entered into force 8 September 1953, well outside the online range; (3) UNHCR Refworld's record of the Iraqi Civil Code (refworld.org/legal/legislation/natlegbod/1951/104270) returns HTTP 403, and in any case holds only an unofficial 1990 English translation; (4) ILO NATLEX does not cover civil codes, being confined to labour, social-security and related legislation. The Arabic wording quoted was independently corroborated against multiple concurring reproductions, but no reproduction is authoritative. The value has NOT been changed - the rates are long-settled and uncontested; only the evidence is weak, and the series is labelled accordingly. Re-verify the moment iraqld.hjc.iq becomes reachable. |
| Provenance | source fingerprint |
What this value means
TWO RATES, ONE ARTICLE — Art. 171 of the Civil Code fixes legal delay interest at 5% per annum in COMMERCIAL matters and 4% per annum in CIVIL matters. The figure served here is the commercial 5%; use 4% for a purely civil money obligation. The rate has been unchanged since the Code entered into force on 8 September 1953 (enacted 8 September 1951, effective two years later) — no reference rate and no periodic setter. IT RUNS FROM JUDICIAL DEMAND, NOT FROM MATURITY: Art. 171 makes the interest run from the date of the judicial claim unless the agreement or commercial custom fixes another starting date. This is the single most important trap for a creditor — unlike the Gulf commercial codes, delay interest does not begin at maturity by default, so time spent chasing payment out of court earns nothing unless the contract says otherwise. AGREED RATES ARE CAPPED AT 7%: Art. 172 lets the parties stipulate a different rate provided it does not exceed seven per cent; a higher stipulation is reduced to 7% and the excess already paid must be returned, and commissions or benefits taken by the creditor beyond that ceiling are treated as concealed interest. NO PROOF OF DAMAGE, PLUS TOP-UP: Art. 173 dispenses with proof that the delay caused loss, and lets the creditor claim SUPPLEMENTARY compensation where his damage exceeds the interest and the debtor acted fraudulently or with gross fault. TWO ABSOLUTE LIMITS (Art. 174): interest may not be charged on accrued interest — no compounding — and the total interest collected may not exceed the principal, save as commercial usage permits. The 4/5/7 structure applies to the money obligation itself; it is not a licence for banks, whose pricing sits under the Central Bank of Iraq regime.
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