Iraq’s top court has reduced the number of parliamentary seats allocated to the Kurdistan Region of Iraq (KRI), ordered the handover of all oil and non-oil revenues to the federal government and directed that the salaries of civil servants in the region should be paid by the federal government.
Iraq’s Federal Court on Wednesday delivered its verdict on several crucial cases that have long been points of contention between Baghdad and the Kurdistan Region. Among the cases were disputes over election law and budget allocations, which have now seen significant rulings that could alter the political and financial landscape of the autonomous region.
Reduction of Kurdistan’s Seats
The court ruled that the allocation of 11 minority quota seats in Kurdistan Region’s election law was unconstitutional and ordered their abolition, reducing the number of seats in the Kurdistan Region parliament from 111 to 100. The court also mandated the division of the Region into four electoral constituencies, with the next parliamentary elections to be overseen by the Iraqi Independent High Electoral Commission (IHEC) instead of the regional body.
Direct Payments to Civil Servants
The Federal Court’s ruling on salary payments mandated that the Iraqi federal government directly pay the salaries of public sector employees in the Kurdistan Region, bypassing the Kurdistan Regional Government (KRG).
The case was based on a complaint to the Iraqi Federal Court lodged by employees in the KRI after months of protests due to non-payment of salaries dating back to September 2023. The KRG officials have long accused Baghdad of not sending necessary funds.
The Iraqi government must ensure the payment of salaries for civil servants in the Kurdistan Region, without resorting to providing loans to the Kurdistan Regional Government (KRG) for salary distribution, as mandated by the court’s decision. These salary payments will be subtracted from the Kurdistan Region’s allocated share of the national budget.
Court’s decision has been met with approval from various opposition groups and civil servants who have long awaited resolution to the region’s financial disputes.
Legal experts interpret the rulings as a significant shift, potentially redefining the Kurdistan Parliament’s authority and its relationship with the central government in Baghdad.
Handover of Oil Revenues to Federal Authority
In its verdict, the court also mandated that the Kurdish administration hand over “all oil and non-oil revenues” to the federal government, along with conducting an audit of relevant financial accounts.
Previously, the region enjoyed independent funding through oil exports which partially funded salaries. However, the Baghdad government considered the independent exportation of oil unlawful, and in 2014 accused Turkey of violating the Crude Oil Pipeline Agreement signed in 1973, leading to an International Chamber of Commerce (ICC) ruling that Turkey pay compensation for the unauthorised export of oil from the KRI between 2014 and 2018.
The conduit for energy exports dispute involving the federal government and Turkey, has halted the oil revenue stream for the regional administration since late March.
With oil revenues depleted, Kurdistan currently relies primarily on taxes levied at border crossings with neighbouring countries, notably Iran and Turkey.
These rulings represent a seismic shift in the power dynamics between Erbil (Hewlêr) and Baghdad, directly challenging the ruling Kurdistan Democratic Party’s (KDP) dominance and the authority of KRG Prime Minister Masrour Barzani.
