For an Iraqi importer, the hardest part of buying drilling chemicals from China is often not the product, the price, or even the verification — it is moving the money. Since the central bank closed its dollar window at the end of 2024, import payments run through commercial banks with foreign correspondent relationships, and only a limited number of Iraqi banks hold them. This page explains the constraint in plain terms and shows the payment structures that work inside it. It is general information from a supplier’s desk, not banking advice — your bank’s trade department has the final word.
Until late 2024, importers could access dollars through the Central Bank of Iraq’s daily auction and its electronic transfer platform. That window is closed. Today an import payment is an ordinary international wire sent by a commercial bank — which means the bank itself must hold a relationship with a foreign correspondent bank that clears USD. Relatively few Iraqi banks do, the list shifts as compliance reviews add and remove banks, and the banks that qualify carry heavy documentation duties on every transfer. The practical consequences for an importer: wires take longer than the invoice assumes, large single transfers are harder to place than smaller ones, and the paperwork behind each wire matters as much as the balance behind it.
A letter of credit is the textbook answer and a poor practical one here. Iraqi banks that issue LCs commonly require heavy cash coverage — a large share of the LC value deposited up front — which defeats the purpose of buying on credit terms. Add issuance time, document-compliance risk, and confirmation costs on the Chinese side, and a small-to-mid-size chemical order rarely justifies one. LCs remain the right tool for very large contracts; for container-scale drilling-chemical trade, staged wire payments against documents do the same protective work with less cost and less delay.
| Stage | Money moved | What protects you |
|---|---|---|
| Order placed | 30% deposit | Supplier verification done before this point — license, name-match, COA format (see the verification guide) |
| Production + inspection | Nothing | Pre-shipment inspection on request: sampling, loading supervision, sealed container |
| Cargo on the water | 70% balance | Paid only against the document set — bill of lading, packing list, batch COA — proving what shipped |
| Arrival + clearance | Nothing | You test the goods against the COA; the document file supports any claim |
The structure splits your exposure: the deposit is the only money at risk before the cargo exists, and it moves after the company-level checks. The balance — the bulk of the cash — moves only against evidence. From Iraq there is a second, less obvious benefit: two moderate wires are often easier and faster to place through a correspondent-constrained bank than one large one, and each wire has a clean paper justification (deposit invoice; balance invoice plus shipping documents), which is exactly what the bank’s compliance review wants to see.
Iraqi banks scrutinize transfers, so keep the file simple and consistent — nothing a compliance reviewer has to question: a signed proforma invoice naming the exact beneficiary company, the commercial invoice for each stage, the packing list, the bill of lading and certificate of analysis for the balance payment, and consistency everywhere — one company name, character for character, across quotation, invoice, license, and bank account. A transfer request where the beneficiary name differs from the seller’s registered name is both a compliance problem at your bank and the single most common fraud pattern in this trade. If a seller ever asks you to pay a different company, a personal account, or a wallet, stop.
CFR your port, USD, 30% with order, 70% against shipping documents. No letter of credit required. One beneficiary name on every document, inspection before shipment on request, and the full document file prepared for your bank and your clearing agent before the vessel arrives.