Peregraf
Iraq's Council of Ministers has approved the memorandum of understanding (MoU) reached with the Kurdistan Regional Government (KRG), paving the way for the disbursement of salaries to Kurdistan Region public employees. The agreement comes as a significant step toward resolving the protracted financial disputes between Erbil and Baghdad.
Khalid Shwani, Iraq's Minister of Justice, affirmed that the agreement will remain operational until Iraq's new budget is approved by the Iraqi parliament, extending through the end of this year. He confirmed that the salaries for May will now be disbursed, with June's payments expected to follow shortly.
Key Terms of the Agreement
Oil & Revenue Transfers: The KRG will supply 230,000 bpd to Iraq’s State Organization for Marketing of Oil (SOMO) and transfer 140 billion dinars ($100 million) monthly in non-oil revenues
Salary Disbursements: The federal government will distribute the salaries of Kurdistan Region public employees throught the rest of the months of 2026 starting from May
Duration: The deal remains in effect until Iraq’s 2026 budget is approved, expected later this year.
Shwani emphasized that if both governments maintain their commitment, this agreement could serve as a definitive pathway to resolving the longstanding salary crisis. He noted that the deal includes mechanisms for oil revenue transfers and salary disbursements through Iraq's centralized payroll system, Tawteen.
Implementation and Next Steps
A dedicated committee has been formed to oversee the process, with a mandate to submit progress reports to the federal government within two weeks. These reports will guide the systematic resolution of salary payments and budgetary allocations, ultimately aiming to integrate the KRG's financial and administrative systems with Iraq's federal framework.
KRG Prime Minister Masrour Barzani and Deputy Prime Minister Qubad Talabani presented the MoU's details during a cabinet meeting yesterday, following its initial approval in Baghdad last Tuesday. The agreement was reached after discussions between Bafel Talabani, President of the Patriotic Union of Kurdistan, and Iraqi officials, including Prime Minister Mohammed Shia al-Sudani and Judiciary Chief Faeq Zaidan.
A Preliminary Step Toward Broader Agreement
KRG spokesperson Peshawa Hawramani described the MoU as "preliminary," with both governments expected to negotiate a more comprehensive deal in the coming months. "As a start, the federal government will provide the salaries for these recent months," Hawramani stated.
Meanwhile, the resumption of oil exports from the Kurdistan Region to Turkey's Ceyhan port through Iraq's State Organization for Marketing of Oil (SOMO) is expected soon, with revenues direction to the federal treasury.
Public anger mounts in the Kurdistan Region, where civil servants are still waiting for their May and June salaries. Baghdad has linked salary disbursement to KRG’s compliance with federal budget terms, including the handover of oil and domestic revenues.
The 2023 Iraqi federal budget law requires the KRG to deliver 400,000 barrels per day (bpd) to the State Oil Marketing Organization (SOMO).
A February 2025 amendment to Iraq’s budget law formed a committee to audit oil production costs in the Kurdistan Region. Until that review is completed, Baghdad will compensate the KRG at a fixed rate of $16 per barrel.