Document Type

Article

Disciplines

International Law

Abstract

On September 20, 2003 Paul Bremer, the head of the Iraqi Coalition Provisional Authority (CPA),' announced a new policy toward foreign investment in Iraq. The policy, outlined in Coalition Provisional Authority Order Number 39,3 provides a radical new framework for foreign investment that is unprecedented in the region. There was widespread international reaction to Order 39, and to two of its provisions in particular. First, Order 39 opens the door for foreign firms to potentially dominate sectors of the Iraqi economy by permitting 100% foreign ownership.' Second, it allows foreigners to lease Iraqi land for as long as forty years.

These sweeping provisions create long-range effects for the budding Iraqi democracy. By implementing comprehensive foreign investment provisions, the new Iraqi government's power over foreign investment policy, a cornerstone of their new economy, may be severely curtailed. This note argues that the curtailment of this fundamental aspect of the new government will result in a semisovereign Iraq, unable to achieve true autonomy. Order 39 is indicative of many of the legal questions that the current occupation in Iraq is creating, and highlights the lack of resources in the international law field with which to formulate answers.' Currently, the United States-led occupation is creating a state that is more characteristic of a colony than a democratic republic, setting a dangerous precedent for the international community.

Part II of this note provides a brief background of the recent U.S. involvement in Iraq and formation of the Coalition Provisional Authority.8 Part III examines in detail the creation of Order 39. Part IV considers its legal basis and authority, specifically as to how the United States, as an occupying power, is trying to create immutable facets of the new government. Part V offers a theoretical framework for evaluating sovereignty, and how economic restrictions can significantly affect state sovereignty. This note analyzes how the future Iraq may fit into that framework, and how Order 39 may violate Iraq's future sovereignty, concluding in the final section that the foreign investment policy created by Order 39 will result in a semisovereign Iraq.

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