Some Iraqis are demanding an end to the U.S. military presence in Iraq, in the context of intensified confrontation between the United States and Iran. Tensions increased for months during 2019 as Iran-backed Iraqi militia targeted U.S. and Iraqi military and civilian personnel in a series of rocket attacks, and as unclaimed airstrikes in Iraq targeted Iranian officials and Iraqi militia facilities and personnel. After a rocket attack killed and wounded U.S. contractors in December 2019, President Donald Trump cited U.S. concerns about the imminent threat of new attacks in ordering the U.S. military to kill Iranian Major General Qasem Soleimani and Iraqi Popular Mobilization Force leader Abu Mahdi al Muhandis in Iraq on January 2, 2020. Days later, the Iraqi Council of Representatives voted to direct the Iraqi government to end operations by international military forces in Iraq. More than 5,000 U.S. military personnel and hundreds of international counterparts remain in Iraq at the government's invitation, subject to bilateral executive-to-executive agreements. The deepening security strains have Iraq: Issues in the 116th Congress July 17, 2020 Iraq’s unicameral legislature, the Council of Representatives (COR), voted to approve Prime Minister Mustafa al Kadhimi’s government program in May 2020 and finished confirmation of Christopher M. Blanchard his cabinet in June, ending a months-long political vacuum. Al Kadhimi has billed his Specialist in Middle government as transitional, pledging to move to early elections as soon as they can be held safely Eastern Affairs and fairly. He has acknowledged and begun acting to address the demands of protestors, whose mass demonstrations paralyzed Iraq in late 2019 and early 2020, and led to former prime minister Adel Abd al Mahdi’s resignation in November 2019. Kadhimi and his cabinet are contending with difficult choices and risks stemming from ongoing U.S.-Iran tensions, diminished oil revenues, resulting fiscal pressures, the Coronavirus Disease 2019 (COVID-19) pandemic, and remnants of the Islamic State organization (IS, aka ISIS/ISIL). U.S.-Iraqi cooperation has achieved several shared goals in recent years, but joint efforts also have faced significant challenges. U.S. and coalition military assistance aided Iraqi efforts to end IS control of Iraqi territory from 2014 through 2018, and since have continued to support Iraqi counterterrorism operations and efforts to stabilize recovered areas and build the capacity of Iraqi security forces. U.S. military personnel and coalition counterparts remain in Iraq at the government’s invitation, subject to bilateral executive-to-executive agreements. Iraqi forces evicted IS forces from urban strongholds with coalition assistance, but IS fighters continue to prosecute attacks from rural and remote areas, with the pace and scope of attacks increasing since mid-2019. During 2019 and early 2020, deepening U.S.-Iranian-Iraqi security strains amplified underlying political disputes among amplified underlying political disputes among Iraqis over the leadership of their government and the future of Iraq's international orientation and partnerships. Meanwhile, U.S. officials report that Islamic State (IS, aka ISIS/ISIL) fighters are regrouping in Iraq, and judge that the Iraqi security services lack key capabilities they would need to independently maintain gains made against the Islamic State after years of fighting. For background on Iraq, see CRS Report R45025, Iraq: Background and U.S. Policy.

U.S. Policy and Issues for Congress. In general, U.S. engagement in Iraq since 2011 has sought to support Iraq's development as a secure, sovereign democracy. Successive Administrations have trained and supported Iraqi security forces, while expressing concern about Iranian influence. In 2019, Congress appropriated additional military and civilian aid for Iraq without certainty about the future of Iraq's governing arrangements or how change ’s international orientation and partnerships. These disputes were a significant factor in the delayed formation of the new Iraqi government. As confrontation between the United States and Iran has intensified, some Iraqis have grown more insistent in demanding an end to the presence of U.S. and other coalition military forces in Iraq. Tensions increased during 2019 as Iran-backed Iraqi militia targeted U.S. and Iraqi military and civilian personnel in a series of rocket attacks, and as unclaimed airstrikes in Iraq targeted Iranian officials and Iraqi militia facilities and fighters. After a rocket attack killed and wounded U.S. contractors in December 2019, President Donald Trump cited U.S. concerns about the imminent threat of new attacks in ordering the U.S. military to kill Iranian Major General Qas em Soleimani and Iraqi Popular Mobilization Commission leader Abu Mahdi al Muhandis in Iraq on January 2, 2020. Days later, the Iraqi Council of Representatives voted to direct the Iraqi government to end operations by international military forces in Iraq. When another Iraqi militia attack killed and wounded U.S. and United Kingdom (U.K.) forces in March 2020, t he U.S. military conducted retaliatory airstrikes. Intermittent rocket attacks have continued, with Iraqi officials taking some steps to disrupt hostile operations by suspects, some of whom are Iran-aligned militia members. In general, U.S. engagement in Iraq since 2011 has sought to support Iraq’s development as a secure, sovereign democracy. Successive Administrations have trained and supported Iraqi security forces (including Kurdish peshmerga), while expressing concern about Iranian influence. Mass protests in Iraq have highlighted underlying demands for systemic political change amid intensifying economic and social pressures created by the COVID-19 pandemic. To address security issues and a broader range of shared economic, stabilization, and cultural exchange concerns, U.S. and Iraqi officials began a high-level strategic dialogue in June 2020 pursuant to the 2008 U.S.-Iraq Strategic Framework Agreement. The dialogue is set to address the future of the U.S. military presence in Iraq and develop shared understandings regarding U.S. foreign assistance and Iraqi reform efforts. The Trump Administration repeatedly has extended a temporary waiver of U.S. sanctions to allow Iraq to purchase electricity and natural gas from Iran, but the issue may remain a recurrent irritant until Iraq completes plans to become more energy self-sufficient and diversify its energy partners. In July, Iraqi Finance Minister Ali Allawi announced that Iraq seeks $5 billion in support from the International Monetary Fund. In 2019, Congress appropriated additional military and civilian aid for Iraq without certainty about the future of Iraq’s governing arrangements or about how change in Iraq and to the U.S. military and civilian presence there might affect U.S. interests. Having appropriated hundreds of millions of dollars more for Iraq programs and authorized continued military programsassistance efforts through December 2020, Congress may seek to clarify the Trump Administration'’s intentions toward partnership with Iraq and offer its own perspectives on U.S.-Iraqi relations.

After the Islamic State: Cooperation, Competition, and Chaos

Iraq's national election in May 2018 held s national election in May 2018 held Qarar 14 out the promise of a fresh start for the country after the war with the Islamic State Others 63 group, but low turnout and an inconclusive result instead produced paralysis. Pro-Iran factions did well in the election, but did not achieve a controlling interest. Their rivals secured influential levels of representation, but did not present unified leadership or an alternative domestic agenda Source: Iraq Independent High Electoral Commission. result instead produced paralysis. The Sa’irun (On the March) coalition led by populist Shia cleric and longtime U.S. antagonist Muqtada al Sadr’s Istiqama (Integrity) list placed first in the election (54 seats), followed by the predominantly Shia Fatah (Conquest) coalition led by Hadi al Ameri of the Badr Organization (48 seats). Fatah includes several individuals formerly associated with the Popular Mobilization 1 Safwan Al Amin, “What “Inclusivity” Means in Iraq,” Atlantic Council – MENASource, March 28, 2016. 2 See Ahmed T abaqchali and Renad Mansour, “Webinar: Will COVID-19 Mark the Endgame for Iraq’s Muhasasa T a'ifia?” Chatham House (UK), April 30, 2020. Congressional Research Service 3 Iraq: Issues in the 116th Congress Commission (PMC) and the mostly Shia Popular Mobilization Forces (PMF). The Fatah list, as wel as former prime minister Nouri al Maliki’s separate State of Law list, included figures with ties to Iran. Fatah’s rivals secured representation, but did not present unified leadership or a shared alternative agenda. Former Prime Minister Haider al Abadi’s Nasr (Victory) coalition placed third (42 seats), while Ammar al Hakim’s Hikma (Wisdom) list and former interim prime minister and Vice President Iyad Al awi’s Wataniya (National) list also won large blocs of seats. Among Kurdish parties, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) won the most seats, and smal er Kurdish opposition lists protested al eged irregularities. As negotiations continued, Nasr and Sa’irun members joined with others to form the Islah (Reform) bloc in the COR, while Fatah and State of Law formed the core of a rival Bin’a (Reconstruction) bloc. Months of negotiation in 2018 produced a compromise government under the leadership of Prime Minister Adel Abd al Mahdi, but his lack of an individual political mandate and his reliance on the consensus of fractious political blocs appear to have diluted his government's efforts at reform. diluted his reform efforts. Meanwhile, tensions between the United States and Iran increased steadily during this period (see textbox below), as U.S. officials implemented more intense sanctions on Iran and Iranian leaders used proxies to undermine regional security in defiance of the Trump Administration's "’s “maximum pressure"” campaign.3 In 2018 and 2019, U.S. officials attributed a series of indirect fire attacks on some U.S. and Iraqi instal ations to Iranian proxy forces, including a December 2019 rocket attack on an Iraqi military base that kil ed a U.S. citizen contractor and wounded others. Tensions crested as U.S. retaliatory strikes targeted pro-Iranian militia forces operating as PMF units and armed Iraqi demonstrations surrounded the U.S. Embassy. After a January 2020, U.S. military strike in Baghdad kil ed Iranian Major General and Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF) commander Qasem Soleimani and Iraqi PMF leader Jamal Ja’far al Ibrahimi (commonly referred to as Abu Mahdi al Muhandis), the future of U.S. and other foreign forces in Iraq reemerged as a pivotal political issue. Iraqi leaders condemned the U.S. strike and Iranian counterstrikes as violations of Iraqi sovereignty, and the COR voted to direct then-acting Prime Minister Adel Abd Al Mahdi to ask al foreign military forces to leave the country.4 Abd Al Mahdi deferred the question of the presence of foreign forces until the seating of the new government, even after a deadly militia attack and U.S. counterstrike in March. Meanwhile, U.S. forces consolidated their presence on fewer bases with enhanced force protection, and the counter-IS coalition has shifted to a more streamlined advising posture. In June 2020, U.S. and Iraqi officials engaged in talks on security, economic cooperation, public health, and other matters under the rubric of a high-level strategic dialogue. Iran-aligned factions continue to insist that the United States withdraw al military forces. Years of conflict, poor service delivery, corruption, sacrifice, and foreign interference have strained the Iraqi population’s patience with the status quo, adding to the pressures that their leaders face from the country’s uncertain domestic and regional security environment. Some U.S. officials perceive a “growing revulsion for Iraq’s political elite by the rest of the population,”5 but it is with these divided elites that U.S. officials are now engaged to develop a new vision for bilateral relations. 3 See also, CRS Report R45795, U.S.-Iran Conflict and Implications for U.S. Policy. 4 T hose COR members present adopted by voice vote a parliamentary decision directing the Iraqi government inter alia to withdraw its request to the international anti-IS coalition for military support and to remove all foreign forces from Iraq and end the use of Iraq’s territory, waters, and airspace by foreign militaries. Under Iraq’s constitution, binding legislation originates with the executive and is reviewed and amended by the legislature. Iraqi courts have not consistently considered COR decisions (akin to concurrent resolutions under the U.S. system) to be binding. 5 Principal Deputy Assistant Secretary of State Joey Hood, Statement for the Record, Senate Foreign Relations Subcommittee on the Middle East, South Asia, Central Asia, and Counterterrorism (SFRC-ME), December 4, 2019. Congressional Research Service 4 Figure 2. Iraq: Select Political and Religious Figures CRS-5 link to page 18 Iraq: Issues in the 116th Congress campaign.¹

U.S.-Iran Confrontation Intensifies

Iran'U.S.-Iran Confrontation Intensifies in Iraq Iran’s government supported insurgent attacks on U.S. forces in Iraq during the U.S. military presence from 2003 to 2011. From 2012 through 2017, U.S.-Iranian competition in Iraq remained largely largely contained and relatively nonviolent. However, in 2018 and 2019, U.S. officials attributed a series of indirect fire attacks on some U.S. and Iraqi instal ationsIraqi installations to Iranian proxy forces. During unrest in southern Iraq during summer 2018, the State Department directed the temporary evacuation of U.S. personnel and the temporary closure of the U.S. Consulate in Basra after indirect fire attacks on the consulate and the U.S. Embassy compound in Baghdad. U.S. officials attributed the attacks to Iran -backed forces and said that the United States would hold Iran accountable and respond directly to future attacks on U.S. facilities or personnel by Iran-backed entities.³ 6 In May 2019, the State Department ordered the departure of nonemergency U.S. government personnel from Iraq, citing an "“increased threat stream."⁴ ”7 The Administration extended the ordered departure through November 2019, and, in December 2019, notified Congress of its plan to reduce personnel levels in Iraq on a permanent basis.

In December 2019 In December 2019 and March 2020, U.S. officials reiterated reiterated warnings that the United States would respond forcefullyforceful y to any attacks on U.S. persons or interests in Iraq and the wider region. After a rocket attack on an Iraqi military base killed base kil ed a U.S. citizen contractor and wounded others near Kirkuk, Iraq on December 27 27, 2019, U.S. military forces forces launched airstrikes against facilities and personnel affiliated with Iran-backed groups in Iraq and Syria. In western Iraq, the U.S. strikes killed kil ed and wounded dozens of personnel associated with the U.S.-designated Foreign Terrorist Organization Kata'ib Hezbollah’ib Hezbol ah (KH, Figure 5), who were operating as elements of Iraq'3), who are formal y part of Iraq’s state-affiliated Popular Mobilization Forces.

(PMF). Iraqi officials protested the December 29 U.S. attacks on Kata'ib Hezbollah’ib Hezbol ah as a violation of Iraqi sovereignty, and, days later, Kata'ib HezbollahKH members and other figures associated with Iran-linked militias and PMF units marched to the U.S. Embassy in Baghdad and damaged property, setting outer buildings on fire. Iraqi officials and security forces reestablished reestablished order outside the embassy, but tensions remained high, with KH supporters and other pro-Iran figures threatening further action and vowing to expel the United States from Iraq by force if necessary.

In the early morning hours of January 3, 2020 (Iraq local time), a U.S. airstrike near Baghdad International Airport hit a convoy carrying Iranian Major General and Islamic Revolutionary Guards Corps-Qods Force (IRGC-QF) commander commander Qasem Soleimani, killing kil ing him and KH founder and Iraqi PMFPMC leader Jamal Ja'’far al Ibrahimi (commonly referred referred to as Abu Mahdi al Muhandis). U.S. officials hold Solemani responsible Soleimani responsible for a lethal campaign of insurgent attacks on U.S. forces during the U.S. military presence presence in Iraq from 2003 to 2011 that resulted in the deaths of hundreds of603 U.S. soldiers and injuries to thousands more. Soleimani to many more.8 Soleimani and Muhandis have played central roles in Iran'’s efforts to develop and maintain ties to armed groups in Iraq over the last 20 years, and Soleimani long served as a leading Iranian emissary emissary to Iraqi political and security figures. Muhandis had served as PMF Deputy Commander.

The U.S. operation was met with shock in Iraq, and then-Prime Minister Abd al Mahdi and President Barham Salih issued statements condemning the strike as a violation of Iraqi sovereignty. The prime minister called minister cal ed for and then addressed a special session of the Council of Representatives (COR) on January 5, recommending that the quorum of legislators present vote to direct his government to ask all al foreign military forces to leave the country.9 A subsequent voice vote confirmed the proposed COR decision, which some factions insist is binding. 6 Statement by the White House Press Secretary, September 11, 2018; and, Ben Kesling and Micha el Gordon, “U.S. to Close Consulate in Iraq, Citing T hreats From Iran,” Wall Street Journal, September 28, 2018. 7 Security Alert – U. S. Embassy Baghdad, Iraq, May 15, 2019; and, Chad Garland, “ State Department orders evacuation of nonemergency US government employees from Iraq,” Stars and Stripes, May 15, 2019. 8 “Iran killed more US troops in Iraq than previously known, Pentagon says,” Military Times, April 4, 2019 9 Prime Minister Abd al Mahdi’s status as a caretaker raised some questions about his mandate. In past instances where the political mandate of key institutions has been in question, executive authorities have at times deferred to legislative directives contained in COR-adopted decisions. For example, amid a dispute over May 2018 national election results the COR passed a decision mandating a recount on certain terms. T hen-Prime Minister Hayder al Abadi was not obliged to implement the decision, but did so out of deference to the COR’s representative legitimacy. Under normal political circumstances, an Iraqi prime minister would not require any COR action to amend or end Iraq’s bilateral security arrangements with the United States or any other international coalition members since the agreements are not based on legislative decisions but are governed by executive-to-executive decisions. In this case, the COR had recognized Prime Minister Abd al Mahdi’s resignation in early December 2019. In light of the gravity of the questions involving foreign forces and the fraught security circumstances prevailing in Iraq in January, it appears that he chose to solicit a decision from the COR to bolster the legitimacy of his caretaker government’s response. Congressional Research Service 6 Iraq: Issues in the 116th Congress Protests, Violence, and U.S. Responses Iraqi citizens’ have long expressed frustration with endemic corruption, economic stagnation, poor service delivery, and foreign interference, including through periodic protests. By October 2019, however, broad dissatisfaction ignited a mass protest movement led by young activists demanding fundamental political change. Mass protests paralyzed several urban areas across central and southern Iraq for months in late 2019 and early 2020, including central Baghdad. The movement channeled nationalist, nonsectarian sentiment and a range of frustrations into potent rejections of the post-2003 political order, the creation of which many Iraqis attribute to U.S. intervention in Iraq.10 Protestors reiterated past demonstrators’ concerns and frustrations with the prevailing system’s failures while voicing louder, more direct critiques of Iranian political interference than in the past. Some Iraqi security forces and Iran-backed militias acted to violently suppress protests, kil ing more than 550 people, wounding thousands, and fueling growing domestic and international anxiety over Iraq’s future. Members of some state security bodies that had garnered public trust through the war with the Islamic State perpetrated violence against protestors. Iraqi political rivals and competing foreign powers appear to have responded to the protest movement based on calculations about how the movement’s demands might affect their respective interests. Arguably, Iran-aligned groups have worked to forestal political outcomes that could threaten their power to shape security in Iraq and to entrench pro-Iran figures and militia groups inside Iraq’s national security apparatus. U.S. officials embraced some protestors’ cal s for reform while expressing concern about the empowerment of Iranian proxies and wariness about Iraq’s future alignment.11 In response to protestors’ demands, Prime Minister Adel Abd al Mahdi resigned in November 2019 after one year in office. He then served in a caretaker role for nearly 6 months while other Iraqi political leaders remained deadlocked over a replacement candidate. Protestor cal s for improved governance, reliable local services, more trustworthy and capable security forces, and greater economic opportunity broadly correspond to stated U.S. goals for Iraq. However, U.S. officials did not endorse demands for an immediate political transition during the height of the protest movement, and stated in December 2019 that they were taking care not to portray protestors “as pro-American.”12 Instead, U.S. officials advocated for protestors’ rights to demonstrate and express themselves freely without coercive force or undue restrictions on media and communications.13 U.S. officials urged Iraqi leaders to respond seriously to protestors’ demands and to avoid attacks against unarmed protestors, while expressing broad U.S. goals for continued partnership with “a free and independent and sovereign Iraq.”14 10 According to former U.S. Deputy Chief of Mission in Iraq and Principal Deputy Secretary of State for Near East Affairs (PDAS) Joey Hood, “ Although many protesters are too young to remember Saddam’s tyranny, most are intimately familiar with the shortcomings of political elites that many believe the United States is responsible for bringing to power.” PDAS Hood, Statement for the Record, SFRC-ME, op cit. 11 Assistant Secretary of State for Near East Affairs David Schenker called on Iraqi leaders “to investigate and hold accountable” individuals responsible for attacks on protestors and to reject “the distorting influence Iran has exerted on the political process.” Assistant Secretary of State for Near Eastern Affairs David Schenker, Special Briefing, Washington, DC, December 2, 2019. 12 Hood, Statement for the Record, SFRC-ME, op cit. 13 Hood, T estimony before SFRC-ME, op cit. 14 After dozens of protestors were killed in late November 2019, Secretary of State Michael Pompeo and other officials said that the Administration “ will not hesitate” to use tools at its disposal, “ including designations under the Global Congressional Research Service 7 Iraq: Issues in the 116th Congress In December, the U.S. Department of the Treasury announced Global Magnitsky sanctions against “three leaders of Iran-backed militias in Iraq that opened fire on peaceful protests” (see “U.S. Policy and the Popular Mobilization Forces” textbox below) and an Iraqi mil ionaire businessman “for bribing government officials and engaging in corruption at the expense of the Iraqi people.”15 During the crackdowns, U.S. officials acknowledged that there had been “Iraqi military leaders and units implicated” in some cases of violence, but they also noted that there was uncertainty about responsibility in other cases.16 U.S. officials have reviewed reports of violence against protestors and have said these reviews wil inform decisions about Iraqi military and federal police participation in U.S. security assistance programs.17 Transitional Government Takes Office as Iraqis Demand Change The protest movement subsided in early 2020 as public fatigue reportedly grew and in the face of risks and restrictions related to the COVID-19 pandemic. In May 2020, the Council of Representatives approved Mustafa al Kadhimi, the director of the Iraqi National Intel igence Service, as prime minister and endorsed his proposed program and 15 cabinet ministers. Al Kadhimi’s confirmation followed withdrawal from consideration by two previous prime ministers-designate who failed to garner sufficient support from competing blocs. The COR approved the remainder of Al Kadhimi’s cabinet members in June 2020. Upon taking office, Al Kadhimi declared his government would serve in a transitional capacity until early elections (which are otherwise due in 2022) and would work to improve security and fight corruption. Among the priorities identified in his government program are:  mobilizing resources to fight the COVID-19 pandemic;  “restricting weapons to state and military institutions”;  “submitting a draft budget law to address the economic crisis”; and  “protecting the sovereignty and security of Iraq, continuing to fight terrorism, and providing a national vision on the future of foreign forces in Iraq.” Since taking office, Prime Minister Al Kadhimi has pledged to investigate the disappearance of several protest activists, ordered the release of detained demonstrators, and stated his government’s commitment to protecting the interests of poorer Iraqis when considering policies for spending reforms. Since May, pressing concerns related to the COVID-19 pandemic, Iraq’s fiscal crisis, and defiant militia groups have overshadowed discussions of finalizing the 2020 budget and preparing for early elections. Public Health and COVID-19 Neighboring Iran was the early epicenter of COVID-19 pandemic in the Middle East region, creating significant public health chal enges for Iraq’s then-acting government. Acting leaders instituted travel restrictions and strict internal curfews to help contain the early spread of the coronavirus and began mobilizing the limited capacity of Iraq’s public health system to meet Magnitsky Act, to sanction corrupt individuals who are stealing the public wealth of the Iraqi people and those killing and wounding peaceful protesters.” Remarks by Secretary of State Michael Pompeo, November 18, 2019; Secretary of State Michael Pompeo, Remarks to the Press, November 26, 2019. 15 T reasury Sanctions Iran-Backed Militia Leaders Who Killed Innocent Demonstrators in Iraq, December 6, 2019. 16 Hood, T estimony before SFRC-ME, op cit. 17 Ibid. Congressional Research Service 8 Iraq: Issues in the 116th Congress expected needs. Kurdistan Regional Government (KRG) officials also instituted local mitigation measures in areas under their jurisdiction. Prime Minister Al Kadhimi’s government has amended and extended curfew measures, maintained closures at some points of entry, and institute internal movement restrictions, varying by governorate. KRG officials similarly have limited nonessential movement inside the Kurdistan region on varying terms and amended and extended lockdown measures in some areas for specific periods.18 Iraq’s public and private health systems have significant shortcomings and limited capacity, amplifying risks.19 Iraq has approximately 0.8 physicians and 1.3 hospital beds per 1,000 people (below the global average of 1.5 and 2.7, respectively), according to World Bank statistics. From April 21 to June 23, Iraqi authorities confirmed an increase in COVID-19 cases from 1,574 to 34,500 and fatalities from 82 to 1,252.20 Limited testing and public health surveil ance capacity may be underrepresenting the full incidence of the disease. Upticks in case detection and the number of governorates reporting cases have occurred as testing volume has grown. The United States has provided $10 mil ion through the United Nations Development Program’s Funding Facility for Stabilization to support emergency health infrastructure improvements related to COVID-19. Additional U.S. financing seeks to assist International Organization for Migration (IOM) programs to address COVID-19 risks among vulnerable populations in Iraq. Economic and Fiscal Challenges Among the most pressing effects of the pandemic on Iraq are economic and fiscal consequences: curfews and movement restrictions have suppressed private sector economic activity and lower global demand for oil has contributed to plummeting oil prices, jeopardizing Iraq’s public finances. In June, Prime Minister Al Kadhimi said, “We are witnessing the worst economic situation since the formation of the Iraqi state.”21 Oil exports provide more than 90% of public-sector revenue in Iraq, and insecurity, weak service delivery, and corruption have hindered growth in non-oil sectors over time. In June 2020, Iraq’s Finance Minister Ali Al awi raised alarm about the country’s resulting fiscal chal enges and reform needs, saying, “We are in an existential economic situation. ...If oil prices stay at this level for a year and our expenses stay the same, [then] without a doubt we’re going to hit a wal .”22 Prior to the COVID-19 pandemic, strained public finances already were complicating national government and KRG leaders’ efforts to address the country’s many chal enges. The combined effects of periods of lower global oil prices, expansion of public-sector liabilities,23 and the costs of the military campaign against the Islamic State exacerbated national budget deficits in 2016 18 T he International Organization for Migration (IOM) monitors and reports on evolving movement limits put in place by national and KRG authorities during the COVID-19 emergency. See IOM, “ Iraq Mobility Restrictions Due to COVID-19, 16–29 June 2020,” June 29, 2020. T he United Nations Office for the Coordination of Humanitarian Affairs regularly reports on COVID-19 pandemic conditions and related health measures. 19 Ahmed Aboulenein and Reade Levinson, “T he medical crisis that’s aggravating Iraq’s unrest ,” Reuters, March 2, 2020. 20 United Nations High Commissioner for Refugees (UNHCR), COVID-19 Update V, April 19, 2020, and COVID-19 Update XI, June 23, 2020. 21 Alissa Rubin, “In Iraq, a New Prime Minister T akes Stock of His Bloodied Land,” New York Times, June 16, 2020. 22 Maya Gebeily, “Without urgent reform, Iraq economy will face irreparable shocks,” AFP, June 22, 2020. 23 In October 2019, the World Bank summarized this trend as follows: “Repeating past patterns of ‘windfall’ spending, higher oil revenues have resulted in a rising wage bill and public consumption. ... T he fiscal policy stance is expansionary based on a higher wage bill and subsidies to lessen social pressures amidst weak private sector job creation.” World Bank Group, Macro Poverty Outlook – Iraq, October 2019. Congressional Research Service 9 Iraq: Issues in the 116th Congress and 2017.24 The Iraqi government borrowed domestical y and international y to meet its financing needs, including through a U.S.-guaranteed bond offering and through a U.S.-promoted Stand-by Arrangement with the International Monetary Fund. Stronger economic performance improved conditions in 2018 and 2019, but leaders made several concessions during the 2019 protests that increased budget costs. Iraq’s overal debt-to-GDP ratio remains relatively low, but lower oil output and revenues in 2020 are expected to drastical y reduce annual GDP and increase borrowing needs. Iraq’s government needs COR authorization to enter into foreign and domestic borrowing agreements, and the COR approved authorization for new borrowing on June 24, with stipulations requiring the government to pay new employees brought on in response to protests and to submit a reform plan. Iraq manages its overal oil production in line with mutual y agreed output limits set in consultation the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries (OPEC+), including Russia. Iraqi output and exports exceeded the OPEC+ agreed levels through May 2020, and in June, Iraqi oil officials announced specific plans to reduce output from major fields and said they “wil keep lowering production gradual y to comply with OPEC quota.”25 A draft 2020 budget considered before the pandemic assumed a $56 benchmark price, but sales in May brought an average of $21 per barrel and sales in June brought $33 per barrel.26 A July report from the World Food Program and World Bank estimated that Iraq would need oil sales at $76 per barrel to meet its current budget commitments.27 In recent months, government officials have reported significant shortfal s in revenue and announced that the government has initiated a credit arrangement with state banks to provide salaries for state employees. A restructuring committee also has been studying public financial commitments and recommending changes to the Prime Minister. Monthly revenue deficits already have created short-term bottlenecks in debt-service, salary, and benefit payments, with Iraqi leaders discussing deferral of debt payments with the IMF and drawing some citizens’ criticism for delays in some benefits to retirees and civil servant salaries.28 Iraq also reportedly has sought concessions from Kuwait on the payment of reparations for the 1990 Iraqi invasion, and is expected to turn to foreign lenders for budget support for the remainder of 2020.29 Until recently, fiscal pressures have been most acute in the federal y recognized Kurdistan region, where the fal out from the national government’s response to the Kurdistan Regional Government’s KRG September 2017 referendum had further strained the KRG’s already weakened ability to pay salaries to its public-sector employees and security forces. The KRG’s post-referendum loss of control over significant oil resources in Kirkuk governorate, coupled with changes implemented by national government authorities over shipments of oil from those fields via the KRG-controlled export pipeline to Turkey, contributed to a sharp decline in revenue for the KRG during 2018. KRG leaders borrowed funds domestical y and international y to cover costs, delaying and deferring salaries and benefits. Related issues have shaped consideration of recent national budgets in the COR, with Kurdish representatives criticizing the government’s proposals to al ocate the KRG a smal er percentage 24 IMF Country Report No. 17/251, Iraq: Second Review of the T hree-Year Stand-By Arrangement, August 2017. 25 Reuters, “Iraq agrees with oil companies on deeper output cuts in June- sources,” June 14, 2020. 26 AFP, “Iraq oil exports sink to comply with OPEC cuts,” July 2, 2020. 27 Food and Agriculture Organization (FAO), International Fund for Agricultural Development (IFAD), World Food Programme (WFP) and the World Bank, Food Security in Iraq: Im pact of COVID-19, April-June 2020, July 2020 28 Shaima Rashid, “Iraq is discussing a pause in payments on its debt with the [International] Monetary Fund,” Al Sabah (Iraq), April 16, 2020; and, AFP, “ In Iraq, public outrage over austerity stymies reform plan,” June 16, 2020. 29 Stephen Kalin, “ Iraq T urns to Neighbors to Ease Economic Strains,” Wall Street Journal, May 24, 2020. Congressional Research Service 10 Iraq: Issues in the 116th Congress of funds to the KRI than the 17% benchmark reflected in past budgets. National government objectives reportedly include revision of KRG al ocations based on new population estimates and enhanced transparency for the collection of national and regional taxes in the KRI, the payment of administrative charges to oil companies operating in the KRI, KRG public employee verification, and the al ocation of KRG oil revenues. Agreements reached for the national government to pay KRG civil service and peshmerga salaries in the 2019 budget were linked to the KRG placing 250,000 barrels per day of oil exports under federal control in exchange for financial al ocations for verified expenses. The transfer of national funds to the KRG in 2019 eased some fiscal pressures that had required the KRG to impose payment limits that had fueled protests by Kurdish civil servants and others. However, disputes over export levels and budget transfers remained unresolved, and attempts to reach a new agreement stal ed after Prime Minister Abd al Mahdi’s resignation. In April 2020, the Iraqi government announced that it would not transfer an expected round of funding, citing the need to resolve outstanding differences. In May, Prime Minister Al Kadhimi agreed to transfer one additional month’s payment in anticipation of renewed high-level talks between KRG and national government officials in Baghdad. Talks were held in June as KRG officials announced plans for some salary and benefit cuts for KRG employees, but reports suggest that the two sides continue to differ over key proposals to resolve the budget dispute.30 Protests have resumed in the Kurdistan region, with civil servants demanding delayed salaries and farmers protesting difficult market conditions. Iraq, Iran, and U.S. Sanctions Broad U.S. efforts to put pressure on Iran extend to the Iraqi energy sector, where years of sanctions, conflict, neglect, and mismanagement have left Iraq dependent on purchases of natural gas and electricity from its Iranian neighbors.31 Since 2018, Iraqi leaders have sought relief from U.S. sanctions on related transactions with Iran. The Trump Administration has renewed repeated temporary permissions for Iraq to continue these transactions, with the provision that the proceeds are held in escrow in Iraq and not returned to Iran. In May, the Trump Administration issued a 120-day waiver on related sanctions. Ongoing U.S. initiatives encourage Iraq to diversify its energy ties with its neighbors and develop more independence for its energy sector. U.S. assistance programs have supported electricity interconnection projects in neighboring Jordan, and Iraqi officials have discussed potential energy sector investments with Saudi officials in 2020. U.S. officials promote U.S. companies as potential partners for Iraq through the expansion of domestic electricity generation capacity and the introduction of technology to capture the large amounts of natural gas that are flared (burned at wel heads). As of July 2020, related contracts with U.S. firms had not been finalized. Ongoing Militia Tensions Influence Domestic Politics and Foreign Ties Prime Minister Al Kadhimi and his backers remained engaged in a complicated political, bureaucratic, diplomatic, and security contest with rivals and adversaries over the future of Iraqi militia forces and the U.S. and coalition military presence in Iraq.32 One of Prime Minister Al Kadhimi’s first acts upon taking office in May 2020 was to personal y visit and publicly consult with the heads of Iraq’s military, Ministry of Interior, and Counterterrorism Service (CTS), as wel as the interim leaders of the Popular Mobilization Commission (PMC) and its associated 30 Lawk Ghafuri, “KRG announces salary cuts to cope with economic crisis,” Rudaw (Erbil), June 21, 2020. 31 Isabel Coles and Ali Nabhan, “Oil-Rich Iraq Can’t Keep the Lights On,” Wall Street Journal, July 21, 2018. 32 See Phillip Smyth, “Iranian Militias in Iraq’s Parliament: Political Outcomes and U.S. Response,” Washington Institute for Near East Policy, PolicyWatch 2979, June 11, 2018; Michael Knights, “ Kadhimi as Commander-in-Chief: First Steps in Iraqi Security Sector Reform,” Washington Institute for Near East Policy, May 19, 2020; and, Shahla Al Kli, “Al-Kadhimi and the Kataib Hezbollah raid,” Middle East Institute, June 30, 2020. Congressional Research Service 11 link to page 18 Iraq: Issues in the 116th Congress militias—the Popular Mobilization Forces (PMF). In echoing his predecessors’ intention to ensure that armed groups only hold and use weapons with state authorization and through the chain of command to the prime minister’s office, Al Kadhimi is chal enging the network of Iran-aligned militia actors associated with and outside of the PMC/PMF (see Figure 3 and textbox below). Some of these actors seek to preserve their autonomy and ties to Iran while continuing to enjoy Iraqi state protection and benefits under the Iraqi law. Others more outwardly chal enge the prime minister’s authority and include suspects in the murder of Iraqi civilians and ongoing indirect fire attacks against facilities hosting U.S. and coalition personnel and on supply convoys. The PMC and PMF were founded in 2014 and continue to participate in Iraq’s fight against the Islamic State. However, some groups with PMF units have come to present an implicit, and, at times, explicit chal enge to the authority of the state, even as the overal PMC/PMF structure has been recognized as a permanent state security force.33 The PMF are largely but not solely drawn from Iraq’s Shia Arab majority: Sunni, Turkmen, and Christian PMF militia also remain active. Among Shia units, groups organized by and associated with certain shrines and clerics in the city of Najaf have struggled for resources and influence in the PMC/PMF with Iran-linked figures. Prime Minister Al Kadhimi’s predecessors attempted to regularize and place bureaucratic guardrails around the PMC/PMF enterprise through a 2016 law and a series of decrees and organizational directives, with mixed results.34 In early June 2020, the prime minister’s office issued new implementation guidance for measures intended to strengthen state control of the PMC/PMF.35 The guidance follows up on a July 2019 decree reiterating demands that the PMF and PMC conform to Iraqi law. According to the U.S. Defense Intel igence Agency (DIA), “some PMF brigades followed the [July 2019] decree by shutting down headquarters and turning in weapons, but several Iranian-aligned groups refused to comply.”36 The DIA judged in 2019 that “Iranian-affiliated groups within the PMF are unlikely to change their loyalties because of [Abd Al Mahdi’s] order.”37 The PMC adopted a reorganization plan in September 2019, but the reshuffle left Iran-aligned individuals in key internal PMC/PMF leadership positions. Following the January 2020 U.S. strike against Qasem Soleimani and PMF Deputy Commander/KH leader Abu Mahdi al Muhandis, several Iraqi militia forces, including some that participate in PMF operations, have vowed revenge against the United States and stated their renewed commitment to expel ing U.S. forces. Others cal ed for a measured approach and disavowed potential attacks on non-military targets as a means of fulfil ing their objectives. In monitoring U.S.-Iraqi talks, KH and some Fatah leaders continue to insist that U.S. forces depart. 33 Some Shia forces discussed recruiting militia to resist IS attacks prior to Grand Ayatollah Ali al Sistani’s June 2014 call for citizens to help fight the Islamic State. Many Shia volunteers responded to Sistani’s call by joining militias that became the PMF. T hen-Prime Minister Nouri al Maliki established the PMC in June 2014 to give volunteer forces “ a sense of legal justification and a degree of institutionalization.” For background, see Fanar Haddad, “ Understanding Iraq’s Hashd al-Sha’bi,” T he Century Foundation, March 5, 2018; Renad Mansour, “More T han Militias: Iraq’s Popular Mobilization Forces Are Here to Stay,” War on the Rocks, April 3, 2018; Renad Mansour and Faleh Jabar, “T he Popular Mobilization Forces and Iraq’s Future,” Carnegie Middle East Center, April 28, 2017. 34 In addition to outlining salary and benefit arrangements important to individual PMF volunteers, th e 2016 law and subsequent decrees call for all PMF units to be placed fully under the authority of the commander -in-chief (Prime Minister) and to be subject to military discipline and organization. See Michael Knights, Hamdi Malik, and Aymenn Jawad Al-T amimi, Honored, Not Contained The Future Of Iraq’s Popular Mobilization Forces, Washington Institute for Near East Policy, March 2020. 35 Michael Knights and Hamdi Malik, “Hashd Reforms in Iraq Conceal More T han T hey Reveal,” Washington Institute for Near East Policy, June 9, 2020. 36 Lead Inspector General for Overseas Contingency Operations (LIG-OCO), Report to Congress on Operation Inherent Resolve, July 1, 2019-October 25, 2019. 37 Ibid. Congressional Research Service 12 Iraq: Issues in the 116th Congress Figure 3. Select Iraqi Shia Political Groups, Leaders, and Militias Congressional Research Service 13 Iraq: Issues in the 116th Congress In March 2020, a new group cal ing itself Usbat al Tha’ireen (League of the Revolutionaries) emerged and since then has claimed responsibility for actual and attempted attacks against U.S. targets, posting aerial surveil ance footage of key U.S. instal ations in Iraq.38 The late Iraqi security analyst Hisham al Hashimi—who was close to government leaders and who gunmen assassinated in Baghdad in July 202039—described the new group in March “as a faction that revives the ideology of the 2007 Special Groups, which were dubbed the death squads by research experts. These were radical Shia cel s who believed that the answer lay in resistance, arms, and fighting U.S. troops via hybrid tactics or gueril a warfare or irregular warfare.”40 Al Hashimi judged that the group seeks “to provoke these [U.S.] troops into an uncalculated retaliation that causes kil ing of Iraqi security or military forces or civilians. This way they can create public resentment against the foreign presence.” Prime Minister Al Kadhimi has vowed to find and punish Al Hashimi’s kil ers. In late June, CTS forces arrested fourteen KH members and a foreign national in a highly publicized operation to disrupt rocket fire on U.S. and Iraqi facilities in and around Baghdad.41 Authorities subsequently released most of the KH detainees, and KH figures responded with their own shows of force and critiques of the prime minister in the wake of the arrests. KH retains PMF units under the PMC’s jurisdiction, and its former secretary general has served as the PMC’s interim chief of staff since February, after a U.S. strike kil ed his predecessor and mentor, the late Abu Mahdi al Muhandis.42 In July, Prime Minister Al Kadhimi replaced long serving National Security Adviser and National Security Service head Falih al Fayyad with a former Interior Minister and a Badr Organization leader, Qasim al Araji, and Maj. Gen. Abdul Ghani al Asadi, respectively. Al Fayyad retained his position as PMC head. The prime minister in May had restored Lt. Gen. Abdul Wahhab al Saadi as CTS commander; Saadi’s September 2019 dismissal drew protests that contributed to broader popular criticism of the Abd al Mahdi government.43 Further steps to recast the internal leadership of the PMC and/or to reorganize or demobilize specific PMF units could indicate the relative outcome of rivalries within the organizations and between the Prime Minister and Iran-aligned PMC/PMF individuals and units.44 Further security force operations against militia members suspected of attacks and assassinations and/or additional attacks by anti-U.S. militia groups could lead to an escalation in tensions and affect the prospects for ongoing U.S.-Iraq dialogue and security cooperation.45 38 Louisa Loveluck and Missy Ryan, “Militia attacks on Americans in Iraq are becoming more audacious. T he U.S. is wrestling with how to respond,” Washington Post, March 28, 2020. 39 Isabel Coles, “Pompeo Urges Iraq to Act Against Killers of T op Security Analyst,” Wall Street Journal, July 8, 2020. 40 Al Nas News (Baghdad), “ Recent Shellings Attributed to Group: Who are the League of the Revolutionaries?” March 19, 2020. T he Special Groups were Iran -backed militia forces that targeted U.S. personnel in Iraq. See Michael Knights, “T he Evolution of Iran’s Special Groups in Iraq,” CTC Sentinel, Vol. 3, Issue 11, November 2010. 41 Associated Press, “Iraqi Forces Arrest Men Suspected of Attacks T argeting US,” June 26, 2020. 42 In February 2020, some PMC/PMF officials named KH official Abd al Aziz al Muhammadawi (aka Abu Fadak) as deputy commander of the PMC/PMF. However, several PMC/PMF officials associated with shrines based in Najaf (and viewed as more independent of Iranian influence) reportedly rejected the appointment, and the prime minister’s office had not confirmed the appointment formally as of July 2020. 43 Al Saadi became nationally prominent for his role in leading CT S operations against the Islamic State. Bassem Mroue, “Iraq’s removal of counterterrorism chief sparks controversy,” Associated Press, September 29, 2019. 44 See Ali Alfoneh, “Succession Crisis in Iraq’s Popular Mobilization Forces,” Arab Gulf States Institute in Washington, April 3, 2020. 45 Associated Press, “Iran-Backed Militia Says PM’s Actions Could Bring Escalation,” July 8, 2020. Congressional Research Service 14 Iraq: Issues in the 116th Congress U.S. Policy and the Popular Mobilization Forces U.S. officials have recognized the contributions that PMF volunteers have made to Iraq’s fight against the Islamic State; they have also remained wary for years about Iran-linked elements of the PMF that the U.S. government believes operate as Iranian proxy forces outside formal Iraqi government and military control.46 The U.S. Intel igence Community in 2019 described Iran-linked Shia militia—whether PMF or not—as the “primary threat” to U.S. personnel in Iraq, and suggested that the threat posed by Iran-linked groups wil grow as they press for the United States to withdraw its forces from Iraq.47 In general, the popularity of the PMF and broadly expressed popular respect for the sacrifices made by individual volunteers in the fight against the Islamic State have created vexing political questions for Iraqi leaders and U.S. officials. These issues are complicated further by the apparent involvement of PMF fighters in human rights abuses and attacks on foreign military forces present in Iraq at the invitation of the Iraqi government. Since 2019, U.S. officials have accused some PMF personnel and associated figures of a range of human rights abuses.  In January 2020, the U.S. government designated Asa’ib Ahl al Haq (AAH) as a Foreign Terrorist Organization, and named two of its leaders, Qais and Laith al Khazali, as Special y Designated Global Terrorists (SDGTs).  In December 2019, the U.S. government designated the Khazalis for Global Magnitsky human rights-related sanctions. According to the U.S. Treasury Department, “during the late 2019 protests in many cities in Iraq, AAH has opened fire on and kil ed protesters.”48  The U.S. government similarly designated for human rights sanctions Husayn Falih Aziz (aka Abu Zaynab) al Lami, the security director for the PMF.49 According to the human rights designation notices, Qais al Khazali and Al Lami were “part of a committee of Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) proxies that approved the use of lethal violence against protesters for the purpose of public intimidation.”  Earlier in 2019, the U.S. government listed Harakat Hezbol ah al Nujaba and its leader, Akram al Kabi, as SDGTs, and designated the commanders of the PMF 30th and 50th brigades for Global Magnitsky sanctions. U.S. policy seeks to support the long-term development of Iraq’s military, counterterrorism, and police services as alternatives to the continued use of PMF units to secure Iraq’s borders, communities, and territory recaptured from the Islamic State. PMF units continue to conduce operations against IS fighters in some areas, and redeployments or demobilization of PMF units could create new opportunities for IS fighters to exploit. U.S. military officials predicted in early 2019 that “competition over areas to operate and influence between the PMF and the ISF wil likely result in violence, abuse, and tension in areas where both entities operate.”50 Planning for New Elections Among protestors’ demands was a cal for early elections before those expected in 2022. For early elections to occur, two-thirds of the COR would have to vote to dissolve its current membership or the prime minister and president would have to jointly cal for early elections, to be held within 60 days. Both Prime Minister Al Kadhimi and President Salih have signaled their support for early elections. Amid protestor appeals, the COR adopted a new electoral law in December 2019 that would replace Iraq’s list-based election system with an individual candidate- and district-based system.51 However, the legislation did not fully define the terms and boundaries 46 See, U.S. Embassy Baghdad, “ Arming Ceremony at Al-T aqaddum Air Base in al-Habbaniya,” September 5, 2017; and, Ambassador Matthew H. T ueller, Statement for the Record, Senate Foreign Relations Committee, March 6, 2019. 47 Worldwide T hreat Assessment of the U.S. Intelligence Community, February 13, 2018. In Januar y 2019, the U.S. intelligence community assessed that the PMC/PMF “ plan to use newfound political power gained through positions in the new government to reduce or remove the U.S. military presence while competing with the Iraqi security forces for state resources.” Worldwide T hreat Assessment of the U.S. Intelligence Community, January 29, 2019. 48 T reasury Sanctions Iran-Backed Militia Leaders Who Killed Innocent Demonstrators in Iraq, December 6, 2019. 49 See Reuters, “Exclusive: Iran-backed militias deployed snipers in Iraq protests – sources,” October 17, 2019; Michael Knights, “Punishing Iran’s T riggermen in Iraq: Opening Moves in a Long Campaign,” Washington Institute for Near East Policy, PolicyWatch 3223, December 6, 2019. 50 LIG-OCO, Report to Congress on Operation Inherent Resolve, October 1-December 31, 2018. 51 In May, the U.N. Assistance Mission in Iraq reported to the Security Council that, “The final text of the electoral law, Congressional Research Service 15 Iraq: Issues in the 116th Congress for electoral districts or set out how the new system would provide for existing gender and ethnicity membership quotas.52 Some Sunni and Kurdish groups rejected the proposed law. As debate over refinement or amendment of the legislation continues, Iraqi leaders have not yet agreed on specific plans for holding an early national election. A new law for the Independent High Electoral Commission (IHEC) also adopted in December 2019 cal s for a panel of judges to lead expanded IHEC operations, creating new capacity and funding needs. The United Nations Assistance Mission in Iraq (UNAMI) works closely with IHEC, with U.S. support. Observers expect that Iraqi could hold elections in 2021 at the earliest, but differ over whether elections before the current early 2022 deadline should be a priority for Iraqis. In April and May, the Atlantic Council’s Abbas Khadim argued that “a snap election ...would not be held and introduce another government before the second half of 2021 at best.” Citing constitutional concerns, preparation costs, and political considerations, Khadim judged that “there would be no gain from such a process.”53 Writing in support of holding elections at the end of 2021, former U.S. National Security Council Director for Iraq Douglas Ol ivant argued that an early election would “have the virtue of a) giving the government time to prepare, b) costing the existing power structure little, by leaving power only four-six months early, and c) giving a smal win to the protesters, who can truthful y say they pushed elections into the preceding year.”54 Early elections under a revamped system could introduce new political currents and leaders, but fiscal pressures, political rivalries, and the limited capacity of some state institutions may present lasting hurdles to reform. The Administration told Senators in December that, ...nothing will change [in Iraq] until political leaders decide that government agencies should provide public services rather than serve as ATM machines for their parties. Until that happens, the people’s demands for a clean and effective government will not be met, no matter who serves as Prime Minister or in Cabinet positions.55 Following any new election—early or otherwise—government formation negotiations would recur, taking into consideration domestic and international developments over the interim period. Iraqi domestic debates over corruption, governance, and security, as wel as the ongoing regional struggle between Iran and the United States, have shaped the government formation and bilateral strategic dialogue in 2020 and would likely shape any forthcoming election in 2021 or beyond. Counterinsurgency and Stabilization Challenges Combatting Islamic State Insurgents Although the Islamic State’s exclusive control over distinct territories in Iraq ended in 2017, the U.S. intel igence community assessed in 2018 that the Islamic State had “started—and probably approved by the parliament in December 2019, has yet to be published in the official parliamentary gazette in the absence of a parliamentary decision on the delineation of constituencies and the apportionment of parliamentary seats among constituencies.” A consistent, nationwide districting process could require a census, which Iraq has not conducted since 1997. Census plans discussed since 2003 have been accompanied by significant political tensions. 52 See IFES, Elections in Iraq 2018: Council of Representatives Elections - Frequently Asked Questions, 2018. 53 Abbas Khadim, “ New Iraqi government must face a pandemic and oil price drop,” Atlantic Council – MENASource, May 7, 2020; Khadim, “Challenges for Iraq’s new government under Mustafa Al-Kadhimi,” Atlantic Council – MENASource, April 22, 2020. 54 Douglas Ollivant, “Keep Expectations Modest for Iraq’s New Government,” War on the Rocks, May 13, 2020. 55 Hood, Statement for the Record, SFRC-ME, op cit. Congressional Research Service 16 link to page 41 link to page 41 Iraq: Issues in the 116th Congress wil the country.⁵ Most Kurdish and Sunni COR members reportedly boycotted the session.

On January 8, Iran fired missiles at Iraqi military facilities hosting U.S. forces, damaging infrastructure but avoiding U.S. or Iraqi casualties. President Salih, COR Speaker Mohammed al Halbusi, and Iraq's Foreign Ministry described the Iranian attacks as violations of Iraq's sovereignty. Prime Minister Abd al Mahdi stated that his office was informed verbally as the strikes were under way and reiterated his government's desire to avoid war between outsiders inside of Iraq.¹¹ Kata'ib Hezbollah issued a statement calling for its forces to avoid further provocations in furtherance of efforts to expel U.S. forces through political action, and Qa'is Khazali, leader of the Iran-aligned and U.S.-designated Asa'ib Ahl al Haq militia (AAH, Figure 5), warned that Iraqi groups would take their own revenge for the U.S. strike.¹²

Implications and Possible Options for the United States

Since 2014, U.S. policy toward Iraq has focused on ensuring the defeat of the Islamic State as a transnational insurgent and terrorist threat, while laying the groundwork for what successive U.S. Administrations have expressed hope could be a long-term bilateral security, diplomatic, and economic partnership with Iraqis. U.S. and other foreign troops have operated in Iraq (Figure 1) at the invitation of the Iraqi government to conduct operations against Islamic State fighters, advise and assist Iraqi operations, and train and equip Iraqi security forces, including peshmerga forces associated with the Kurdistan Regional Government. Cooperative efforts have reduced the Islamic State threat, but Iraqi security needs remain considerable and officials on both sides never finalized detailed proposals for defining and pursuing a long-term collaboration.

Possible Scenarios

Possible Issues for Congress

Figure 1. Iraq: Areas of Influence and Operation As of December 2, 2019

Source: Congressional Research Service using ArcGIS, IHS Markit Conflict Monitor, U.S. government, and United Nations data. Notes: Areas of influence are approximate and subject to change.

Political Dynamics

Transition Expected in 2020 as Iraqis Demand Change

May 2018 Election, Unrest, and Government Formation

Iraqis held national legislative elections in May 2018, electing members for four-year terms in the 329 seat Council of Representatives (COR), Iraq's unicameral legislature. Turnout was lower in the 2018 COR election than in past national elections, and reported irregularities led to a months-long recount effort that delayed certification of the results until August. Political factions spent the summer months negotiating in a bid to identify the largest bloc within the COR—the parliamentary bloc charged with proposing a prime minister and new Iraqi cabinet (Figure 2).

The distribution of seats and alignment of actors precluded the emergence of a dominant coalition (see textbox below). The Sa'irun (On the March) coalition led by populist Shia cleric and longtime U.S. antagonist Muqtada al Sadr's Istiqama (Integrity) list placed first in the election (54 seats), followed by the predominantly Shia Fatah (Conquest) coalition led by Hadi al Ameri of the Badr Organization (48 seats). Fatah includes several individuals formerly associated with the Popular Mobilization Committee (PMC) and its militias—the mostly Shia PMF. Those elected include some figures with ties to Iran (see "The Future of the Popular Mobilization Forces" and Figure 5 below).

Figure 2. Iraq: Select Political and Religious Figures

Security Challenges Persist Across Iraq

Although the Islamic State's exclusive control over distinct territories in Iraq ended in 2017, the U.S. intelligence community assessed in 2018 that the Islamic State had "started—and probably will maintain—a robust insurgency in Iraq and Syria as part of a long-term strategy to ultimately enable the reemergence of its so-called caliphate."³⁹cal ed caliphate.”56 In January 2019, then-Director of National IntelligenceIntel igence Dan Coats told Congress that the Islamic State "“remains a terrorist and insurgent threat and will wil seek to exploit Sunni grievances with Baghdad and societal instability to eventually to eventual y regain Iraqi territory against Iraqi security forces that are stretched thin."⁴⁰ U.S. officials have reported that through October 2019, the Islamic State group in Iraq continued "to solidify and expand its command and control structure in Iraq, but had not increased its capabilities in areas where the Coalition was present."⁴¹ Combined Joint Task Force-Operation Inherent Resolve (CJTF-OIR) judged that IS fighters "continued to regroup in desert and mountainous areas where there is little to no local security presence" but were "incapable of conducting large-scale attacks."

Seeking the "Enduring Defeat" of the Islamic State

As of January 2020, Iraqi security operations against IS fighters are ongoing in governorates in which the group formerly controlled territory or operated—Anbar, Ninewa, Salah al Din, Kirkuk, and Diyala. Some of these operations are conducted without U.S. and coalition support, while others are partnered with U.S. and coalition forces or supported by U.S. and coalition forces. The Coalition and Iraqi operations are intended to disrupt IS fighters' efforts to reestablish themselves as an organized threat and keep them separated from population centers”57 IS leader Abu Bakr al Baghdadi kil ed himself to avoid capture by U.S. forces in an October 2019 operation against his compound in Idlib, Syria, though according to defense officials, his death “did not result in any immediate degradation to ISIS’s capabilities.”58 His replacement, Amir Mohammed Said Abd al Rahman al Mawla (aka al Mawla), has not established a comparable international profile. Thousands of IS fighters have dispersed in rural and remote areas of Syria and Iraq, posing a threat to local security forces, U.S. and coalition forces, and civilians. In May 2020, Combined Joint Task Force- Operation Inherent Resolve (CJTF-OIR) reported that the Islamic State continues to wage “a low-level insurgency” but cannot hold territory in Iraq and Syria.59 In March 2020, CENTCOM reported to Congress that “most of the U.S. intel igence community predicts that without sustained pressure levied against it, ISIS has the potential to reconstitute in Iraq and Syria in short order, beyond the current capabilities of the U.S. to neutralize it without a capable, partnered ground force.”60 In July, U.S. CENTCOM Commander Gen. Kenneth McKenzie predicted that a low-level IS threat would remain “endemic.”61 U.S. officials have noted the ability of Islamic State insurgents to exploit weak security and governance in territory disputed between the Kurdistan region and the rest of Iraq. In July 2020, Iraqi national government officials announced that they would establish cooperative security centers with KRG counterparts to monitor security in some disputed areas.62 At the Iraqi government’s invitation, U.S. and other international military forces have remained in Iraq in the wake of the Islamic State’s 2017 defeat in order to help Iraqi forces combat remaining IS fighters and build the capacity of Iraqi partner forces (see “Security Cooperation and U.S. Training” below). U.S. military officials stopped official y reporting the size of the U.S. force in Iraq in 2017, but have confirmed that there has been a reduction in the number of U.S. military personnel and changes in U.S. capabilities in Iraq since that time.63 Oversight reporting in 2020 has referred to “roughly 5,000 troops” in Iraq.64 As of July 2020, 96 U.S. troops have been kil ed or have died as part of Operation Inherent Resolve (OIR), and 230 have been wounded.65 56 Worldwide T hreat Assessment of the U.S. Intelligence Community, February 13, 2018. 57 Worldwide T hreat Assessment of the U.S. Intelligence Community, January 29, 2019. 58 LIG-OCO, Report to Congress on Operation Inherent Resolve, October 1-December 31, 2019. 59 LIG-OCO, Report to Congress on Operation Inherent Resolve, January 1-March 31, 2020. 60 U.S. CENT COM Commander Gen. Kenneth McKenzie, House Armed Services Committee, March 10, 2020. 61 Jeff Seldin, “U.S. Efforts to Deal Islamic State ‘Enduring Defeat’ on Hold,” Voice of America, July 16, 2020. 62 Lawk Ghafuri, “Security gap in some of Iraq’s disputed territories reaches up to 13 square kilometers in size: Iraqi military official,” Rudaw (Erbil), July 10, 2020. 63 In February 2019, outgoing U.S. Ambassador to Iraq Douglas Silliman said, “At the request of the Iraqi Government and in full cooperat ion with Baghdad, just over 5,000 American forces continue to partner with the Iraqi Security Forces on their bases to advise, train, and equip them to ensure the lasting defeat of Daesh and to defend Iraq’s borders.” See Gen. Votel, T estimony before the House Armed Services Committee, February 27, 2018; and U.S. Embassy Baghdad, “Ambassador Silliman bids Farewell to Iraq,” February 5, 2019. 64 LIG-OCO, Report to Congress on Operation Inherent Resolve, October 1-December 31, 2019. 65 Department of Defense Casualty Analysis System, U.S. Military Casualties - Operation Inherent Resolve (OIR) Military Deaths and Wounded in Action, July 10, 2020. Among military deaths, 21 were the result of hostile action. Congressional Research Service 17 link to page 23 link to page 24 link to page 25 Iraq: Issues in the 116th Congress U.S. military officials credit their Iraqi partners with conducting increasingly independent counterterrorism and counterinsurgency operations. As noted above, U.S.-Iran tensions and violence led to the temporary suspension of U.S. and Coalition counter-IS operations and related training in January 2020 for force-protection reasons.

Press Cooperation later resumed, but training has remained limited due to distancing imposed by COVID-19 transmission concerns. Iraqi operations seek to disrupt IS fighters’ efforts to reestablish themselves as an organized threat, keep them separated from population centers, and pursue them in remote redoubts. Press accounts and U.S. government reports describe continuing IS attacks on Iraqi Security Forces and Popular Mobilization Forces, particularly in rural areas. Independent analysts have described dynamics in parts of these governorates in which IS fighters threaten, intimidate, and kill kil citizens in areas at night or where Iraq'’s national security forces are absent.⁴³66 In some areas, new displacement has occurred as civilians have fled IS attacks. Overall, however, through 2018, violence Violence against civilians dropped considerably from its 2014 highs through the end of 2018 (Figure 4), but some independent analysts argue that the Islamic State is showing “very significant resilience” in Iraq and warn that the effects of COVID-19 and U.S.-Iran tensions may create “unexpectedly favorable conditions in which to continue—or even accelerate—its recovery.”67 Press reports and IS claims suggest that attacks increased relative to 2019 (Figure 5) during the period before and during Ramadan in 2020, with most attacks and security operations occurring in Kirkuk, Diyala, Salah al-Din, Ninewa, and Anbar governorates (Figure 6). Figure 4(Figure 3). In cities like Mosul and Baghdad residents and visitors enjoyed increased freedom of movement and security, although IS activity was reported in Mosul and fatal security incidents have occurred in areas near Baghdad and several other locations since 2019 (Figure 4).

Figure 3. Estimated Iraqi Civilian Casualties from Conflict and Terrorism United Nations Assistance Mission in Iraq (UNAMI) Estimates of Monthly Casualties, 2012-2018

Source: United Nations Assistance Mission in Iraq. Some Notes: Some months lack data from some governorates. UNAMI stopped metric reporting in December 2018. 66 See Hassan Hassan, “Insurgents Again: T he Islamic State’s Calculated Reversion to Attrition in the Syria-Iraq Border Region and Beyond,” CTC Sentinel, Vol. 10, Issue 11, December 2017; Derek Henry Flood, “From Caliphate to Caves: T he Islamic State’s Asymmetric War in Northern Iraq,” USMA CT C Sentinel, Vol. 11, Issue 8, September 2018; Anthony H. Cordesman, Abdullah T oukan, and Max Molot, The Return of ISIS in Iraq, Syria, and the Middle East, Center for Strategic and International Studies, September 3, 2019; and Louisa Loveluck and Must afa Salim, “ ISIS exploits Iraq’s coronavirus lockdown to step up attacks,” Washington Post, May 8, 2020. 67 Michael Knights and Alex Almeida, “Remaining and Expanding: T he Recovery of Islamic State Operations in Iraq in 2019-2020,” CTC Sentinel, Vol. 13, Issue 5, May 2020. Congressional Research Service 18 Iraq: Issues in the 116th Congress Figure 5. Iraq: Reported Islamic State-Related Security Incidents with Fatalities, 2019 January 1, 2019 to December 31, 2019 Source: Prepared by CRS. Incident data from Armed Conflict Location and Event Data Project (ACLED). Available at https://acleddata.com. Area of Influence data from IHS Janes Conflict Monitor, December 2, 2019. Congressional Research Service 19 Iraq: Issues in the 116th Congress Figure 6. Iraq: Reported Islamic State-Related Security Incidents with Fatalities, 2020 January 1, 2020 to June 30, 2020 Source: Prepared by CRS. Incident data from Armed Conflict Location and Event Data Project (ACLED). Available at https://acleddata.com. Area of Influence data from IHS Janes Conflict Monitor, July 8, 2020. Congressional Research Service 20 Iraq: Issues in the 116th Congress U.S. Assessments of the Iraqi Security Forces U.S. assessments of the Iraqi Security Forces (ISF) in 2020 have emphasized the “increasingly independent” nature of Iraqi operations, stating that Iraqi forces can now “handle most aspects of a counter-insurgency autonomously.”68 U.S. tactical assistance to Iraqi operations appears limited to joint special operations missions, intel igence sharing, and some combat air support. Iraqi commanders’ use of their own air assets for intel igence, surveil ance, and reconnaissance (ISR) remains limited, according to U.S. officials.69 In July 2020, the coalition announced a transition of its Task Force-Iraq advising element to a smal er Military Advisor Group central y located in and around Baghdad to advise Iraqi commanders on operational-level planning.70 U.S. assessments in late 2019 had emphasized limitations in the wil and capability of ISF units to “find and fix” targets or exploit intel igence without assistance from coalition partners.71 More recent assessments note increased ISF efforts to clear remote areas where IS fighters operate, but judge that “the ISF continued to struggle to integrate the use of ISR and fires assets into their operations.”72 Similarly, U.S. assessments acknowledge the intel igence and reconnaissance capabilities of specialized Counterterrorism Service (CTS) units, but judge that “most CTS units” in early 2020 “were limited in their capacity to coordinate the maneuver of multiple subordinate elements in complex operations.”73 PMF units continue to conduct anti-IS operations in areas of eastern Iraq, and frequently suffer casualties in clashes with IS fighters and from IS attacks. governorates.

These conditions and trends suggest that while the capabilities of IS fighters remain limited at present, IS personnel and other armed groups could exploit persistent weaknesses in ISF capabilities to reconstitute the threats they poseand/or CTS/PMF capabilities to gradual y reconstitute the IS threat to Iraq and neighboring countries. This may be particularly true with regard to remote areas of Iraq or under circumstances where security forces remain otherwise occupied withface additional crowd control or force-protection duties that divert personnel or limited ISR assets. NATO Mission Iraq In paral el to coalition efforts, NATO agreed in 2018 to launch NATO Mission Iraq (NMI) to support Iraqi security sector reform and military professional development. NMI’s 500 personnel advise Iraq’s Ministry of Defense, Office of the National Security Advisor, and the Prime Minister’s National Operations Centre among others, and provide “train-the-trainer” programs at Iraqi military academies.74 68 LIG-OCO, Report to Congress on Operation Inherent Resolve, January 1 -March 31, 2020. 69 Ibid. 70 CJT F-OIR, Coalition T ask Force-Iraq transitions to Military Advisor Group, July 4, 2020. 71 LIG-OCO, Report to Congress on Operation Inherent Resolve, July 1-October 25, 2019. “ CJT F-OIR said that most commands within the ISF will not conduct operations to clear ISIS insurgents in mountainous and desert terrain without Coalition air cover, intelligence, surveillance, and reconnaissance (ISR), and coordination. Instead, ISF commands rely on the Coalition to monitor “points of interest” and collect ISR for them. Despite ongoing training, CJT F-OIR said that the ISF has not changed its level of reliance on Coalition forces for the last 9 months and tha t Iraqi commanders continue to request Coalition assets instead of utilizing their own systems. ” 72 LIG-OCO, Report to Congress on Operation Inherent Resolve, January 1 -March 31, 2020. 73 Ibid. 74 NAT O Mission Iraq, Fact Sheet, June 2020. Congressional Research Service 21 link to page 34 Iraq: Issues in the 116th Congress Stabilization and Reconstruction U.S. Support for U.N. Stabilization Stabilizing areas formerly held by the Islamic State group and/or damaged in counter-operations has required investments in infrastructure and housing along with support for economic development and communal dialogue. In a June 2020 visit to Mosul, Prime Minister Al Kadhimi solicited opinions from citizens on the region’s most pressing reconstruction needs, in turn articulating his own list of needs, including government revenue, a reconstruction ethos free from corruption, and reconciliation within the community.The U.S. government directs most stabilization assistance to areas of Iraq liberated from the Islamic State through the United Nations Development Program (UNDP)-administered Funding Facility for Stabilization (FFS).75 According to UNDP data as of April 2020, the FFS has received $1.29 bil ion in resources since its inception in mid-2015, with 2,320 projects reported completed with the support of UNDP-managed funding.76 Looking forward, UNDP is proposing a second phase of its stabilization efforts in Iraq—Stabilization Plus—which would extend the mandate of FFS until December 2023, to fulfil stabilization needs within the same geographic areas and sector under its mandate. According to UNDP, a steering committee chaired by the government of Iraq sets overal stabilization priorities for the FFS program, with governorate-level Iraqi authorities directly responsible for implementation. In January 2019, UNDP identified $426 mil ion in stabilization program funding shortfal s in five priority areas in Ninewa, Anbar, and Salah al Din governorates “deemed to be the most at risk to future conflict” and “integral for the broader stabilization of Iraq.”77 By the end of 2019, that funding gap had narrowed to $205 mil ion.78 While the 2019 mass protests did not take place in areas where FFS operates, UNDP noted that greater programmatic agility was required to adapt to a changing security and political context.79 UNDP officials have reported that earmarking of funding by donors “can result in funding being directed away from areas highlighted by the Iraqi authorities as being in great need.”80 Trump Administration requests to Congress for FY2018-FY2021 monies for Iraq programs included proposals to fund continued U.S. contributions to post-IS stabilization. The Trump Administration has notified Congress of foreign aid obligations for U.N.-managed stabilization programs during 2018, 2019, and 2020. This included funds to support stabilization in Anbar governorate, beyond the areas of Ninewa governorate where the Administration has directed most U.S. stabilization assistance since 2017 (see “Issues Affecting Religious and Ethnic Minorities” below). U.S. officials continue to seek greater Iraqi and international contributions to stabilization efforts in both Iraq and Syria. 75 FFS includes a Funding Facility for Immediate Stabilization (FFIS), a Funding Facility for Expanded Stabilization (FFES), and Economic Reform Facilities for the national government and the KRI. U.S. contributions to FFIS support stabilization activities under each of its “ Four Windows”: (1) light infrastructure rehabilitation, (2) livelihoods support, (3) local official capacity building, and (4) community reconciliation programs. 76 UNDP-Iraq, Funding Facility for Stabilization Annual Report 2019, April 15 , 2020. 77 UNDP-Iraq, Funding Facility for Stabilization Quarter III Report - 2018, January 3, 2019. 78 UNDP-Iraq, Funding Facility for Stabilization Annual Report 2019, April 15, 2020. 79 UNDP also cited challenges in 2019 arising from “the inherently complex and unpredictable nature of large-scale rehabilitation work.” Past UNDP FFS self-assessments highlighted rapid growth in the number of projects undertaken nationwide since 2016 and resulting strains created on program systems including procurement, management, and monitoring. UNDP-Iraq, Funding Facility for Stabilization Annual Report 2019, April 15, 2020. 80 UNDP response to CRS inquiry, May 2018. Congressional Research Service 22 Iraq: Issues in the 116th Congress Donor Support and Development Prospects At a February 2018 reconstruction conference in Kuwait, Iraqi authorities described more than $88 bil ion in short- and medium-term reconstruction needs, spanning various sectors and different areas of the country.81 Countries participating in the conference offered approximately $30 bil ion worth of loans, investment pledges, export credit arrangements, and grants in response. The Trump Administration actively supported the participation of U.S. companies in the conference and announced its intent to pursue $3 bil ion in Export-Import Bank support for Iraq. In October 2019, Iraq and the United States signed a memorandum of understanding increasing this potential support to $5 bil ion.82 Iraqi leaders have hoped to attract considerable private sector investment to help finance reconstruction needs and underwrite a new economic chapter for the country, but investment has not met hoped for levels since the Islamic State’s defeat at the end of 2017. The size of Iraq’s internal market and its advantages as a low-cost energy producer with identified infrastructure investment needs help make it attractive to investors. However, overcoming persistent concerns about security, service reliability, and corruption has proven chal enging. Foreign firms active in Iraq’s oil sector evacuated some foreign personnel during U.S.-Iran confrontations in December 2019 and January 2020, and further departures have accompanied the onset of the COVID-19 pandemic. Parties exploring investment opportunities may consider the security situation, Iraqi government’s ongoing response to the demands of protestors, COVID-19 outcomes, and the success or failure of new authorities in pursuing reforms. Is the United States Considering Sanctions on Iraq?83 In January 2020, President Trump threatened to impose sanctions on Iraq if Iraqi leaders force U.S. troops to withdraw on unfriendly terms.84 U.S. and Iraqi officials since have engaged in strategic dialogue that U.S. military officials expect wil result in a sustained, if reduced U.S. presence. The United States government has waived existing Iran-related sanctions on Iraqi energy transactions, but not permanently. U.S. officials have sanctioned some Iran-linked Iraqi groups and individuals for threatening Iraq’s stability, for violating the human rights of Iraqis, and for involvement in terrorism. Some analysts have argued “the timing and sequencing” of sanctions “is critical to maximizing desired effects and minimizing Tehran’s ability to exploit Iraqi blowback.”85 This logic may similarly apply to any forceful U.S. responses to attacks or provocations by Iran-aligned Iraqis. On May 20, 2020, the Trump Administration renewed the national emergency with respect to the stabilization of Iraq declared in Executive Order 13303 (2003) as modified by subsequent executive orders.86 Any future sanctions could be based on the national emergency declared in the 2003 Executive Order, or the President could declare that related events constitute a new, separate emergency under authorities stated in the National Emergency Act and International Emergency Economic Powers Act (NEA and IEEPA, respectively). Sanctions under IEEPA target U.S.-based assets and transactions with designated individuals; while a designation might not reap significant economic disruption, it can send a significant signal to the international community about an individual or entity. The National Emergencies Act, at 50 U.S.C. 1622, provides a legislative mechanism for Congress to terminate a national emergency with enactment of a joint resolution of disapproval. 81 Iraq Ministry of Planning, Reconstruction and Development Framework, February 2018. 82 Export-Import Bank of the United States, October 16, 2019. 83 Dianne Rennack, Specialist in Foreign Policy Legislation contributed to this section. 84 Maggie Haberman, “ T rump T hreatens Iranian Cultural Sites, and Warns of Sanctions on Iraq,” New York Times, January 5, 2020. Some press reporting suggests that Administration officials have begun preparing to implement the President’s sanctions threat if necessary and considering potential effects and consequences. Jeff Stein and Josh Dawsey, “After T rump’s threat, administration begins drafting possible sanctions on Iraq,” Washington Post, January 6, 2019. 85 Michael Knights, et al., “T he Smart Way to Sanction Iranian -Backed Militias in Iraq,” Washington Institute for Near East Policy, September 17, 2018. 86 Notice of May 20, 2020: Continuation of the National Emergency With Respect to the Stabilization of Iraq. Congressional Research Service 23 link to page 31 Iraq: Issues in the 116th Congress Short of declaring a national emergency, however, the President has broad authority to curtail foreign assistance (throughout the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.), and related authorizations and appropriations), sales and leases of defense articles and services (particularly section 3 of the Arms Export Control Act; 22 U.S.C. 2753), and entry into the United States of Iraqi nationals (Immigration and N ationality Act; particularly at 8 U.S.C. 1189). Should U.S.-Iraqi negotiations fail or future discord reemerge, any new punitive U.S. sanctions could complicate Iraq’s economic ties to its neighbors and to U.S. partners in Europe and Asia. Broad sanctions could elicit reciprocal hostility from Iraq. If denied opportunities to build economic ties to the United States and U.S. partners, Iraqis could instead mover closer to Iran, Russia, and/or China with whom they already have established economic ties. The Kurdistan Region and Relations with Baghdad The Kurdistan Region of northern Iraq (KRI) Kurdistan Region Legislative Election enjoys considerable administrative autonomy Seats won by Coalition/Party under the terms of Iraq’s 2005 federal constitution, but issues concerning territory, Coalition/Party Seats Won security, energy, and revenue sharing Kurdistan Democratic Party 45 continue to strain ties between the Kurdistan Patriotic Union of Kurdistan 21 Regional Government (KRG) and the government in Baghdad. In September 2017, Gorran (Change) Movement 12 the KRG held a controversial advisory New Generation 8 referendum on independence; amplifying Komal 7 crowd control or force-protection measures. A reconstituted IS threat might not reemerge rapidly under these circumstances, but the potential is evident.

The Future of the Popular Mobilization Forces

Many PMF-associated groups and figures participated in the May 2018 national elections under the auspices of the Fatah coalition headed by Badr Organization leader Hadi al Ameri (Figure 2).⁵⁰ Ameri and other prominent PMF-linked figures such as Asa'ib Ahl al Haq leader Qa'is al Khazali nominally disassociated themselves from the PMC/PMF in late 2017, in line with legal prohibitions on the participation of PMC/PMF officials in politics.⁵¹ Nevertheless, their movements' supporters and associated units remain integral to some ongoing PMF operations, and the Fatah coalition's campaign arguably benefited from its PMF association.

Figure 4. Iraq: Reported Islamic State-Related Security Incidents January 1, 2019 to September 30, 2019

Source: Prepared by CRS. Incident data from Armed Conflict Location and Event Data Project (ACLED). Available at https://acleddata.com. Area of Influence data from IHS Janes Conflict Monitor, December 2, 2019.

Figure 5. Select Iraqi Shia Political Groups, Leaders, and Militias

The Kurdistan Region and Relations with Baghdad

The Kurdistan Region of northern Iraq (KRI) enjoys considerable administrative autonomy under the terms of Iraq's 2005 federal constitution, but issues concerning territory, security, energy, and revenue sharing continue to strain ties between the Kurdistan Regional Government and the national government in Baghdad. In September 2017, the KRG held a controversial advisory referendum on independence, amplifying political tensions with the national political tensions with the national government (see textbox below).⁶³ The referendum was followed by a security 87 Reform List [Kurdistan Islamic Union The referendum was followed by a security 5 (KIU)-Islamic Movement of crisis as Iraqi Security Forces and PMF Kurdistan (IMK)] fighters reentered some disputed territories Azadi List that had been held by KRG peshmerga forces. Peshmerga peshmerga 1 (Communist Party) forces. Peshmerga fighters also withdrew from the city of Kirkuk and much of the Modern Coalition 1 governorate. Baghdad and the KRG have Turkmen Parties 5 since agreed on a number of issues, including Christian Parties 5 some border and customs controls issues, but have differed over the export of oil from Armenian Independent 1 some KRG-controlled fields and the transfer Source: Kurdistan Region Electoral Commission. of funds to pay the salaries of some KRG civil servants. While talks have continued, the ISF and peshmerga have remained deployed across from each other at various fronts throughout the disputed territories (Figure 6).

The KRG delayed overdue legislative 7). In June 2020, Iraq protested Turkish violations of its airspace and territory in connection with ongoing Turkish military operations against Kurdistan Workers Party (PKK) forces inside northern Iraq. The KRI’s leading political movements have distinct relationships with the Turkish and Iranian governments, and anti-PKK operations may create domestic political chal enges for them. The KRG delayed overdue legislative elections for the Kurdistan National Assembly in the wake of the referendum crisis and held them on September 30, 2018. Kurdish leaders have since been engaged in regional government formation talks while also participating in cabinet formation and budget negotiations at the national level. The KDP won a plurality (45) of the 111 KNA seats in the September 2018 election, with the Patriotic Union of Kurdistan (PUK) and smallerThe KDP won a plurality (45) of 87 For background on the Kurdistan region, see CRS Report R45025, Iraq: Background and U.S. Policy. Congressional Research Service 24 link to page 10 link to page 14 link to page 41 Iraq: Issues in the 116th Congress the 111 KNA seats, with the Patriotic Union of Kurdistan (PUK) and smal er opposition and Islamist parties splitting the balance. With longtime KDP leader Masoud Barzani'’s term as president having expired in 2015, his nephew, KRG Prime Minister Nechirvan Barzani succeeded him in June 2019 (Figure 2). Masoud Barzani'’s son, security official Masrour Barzani, assumed the KRG prime ministership.

After the election, factions within the PUK appeared to have differences of opiniondiffer over KRG cabinet formation, while KDP and PUK differences were apparent at the national level. During 2018 government formation talks in Baghdad, the KDP sought to name the Kurdish candidate for the Iraqi national presidency, but a majority of COR members instead chose Barham Salih, a PUK member. In March 2019, KDP and PUK leaders announced a four-year political agreement providingthat al owed for the formation of a new KRG government and setting joint positions on candidates for the Iraqi national Minister of Justice position and governorship of Kirkuk.⁶⁴

Prior to Prime Minister Abd al Mahdi's the KRG cabinet and set joint positions on the national cabinet and the governorship of Kirkuk.88 During mass protests in central and southern Iraq during 2019 and 2020, Kurdish leaders recognized Arab Iraqi protestors’ concerns and criticized repressive violence, while convening to unify positions on proposed reforms that some Kurds fear could undermine the federal y recognized Kurdistan region’s rights under Iraq’s constitution.89 Prior to Prime Minister Abd al Mahdi’s November 2019 resignation announcement, KRG leaders reportedly planned to visit Baghdad to finalize an agreement over the export of 250,000 barrels per day of oil from the Kurdistan region under the national government'’s marketing authority.⁶⁵ 90 In exchange, Baghdad was to continue to make budget transfers in 2020 that pay KRG salaries. Disagreement over this issue hashad lingered throughout 2019 in light of the KRG's reported’s apparent failure to comply with previously agreed export arrangements. KRG officials and Abd al Mahdi did not finalize their nascent agreement during Abd al Mahdi’s tenure as caretaker prime minister, and prospects for negotiations over exports and financial transfers appeared to shape Kurdish leaders’ positions with regard to the formation of the current national cabinet. KRG-Baghdad fiscal issues remain outstanding (see “Economic and Fiscal Chal enges” above). U.S. and U.N. officials encourageto comply with previously agreed export arrangements. Negotiations over exports and financial transfers may shape Kurdish leaders' positions with regard to the formation of a caretaker government and the eventual formation of a new government after future national elections. Since October 2019, Kurdish leaders have recognized Arab Iraqi protestors' concerns and criticized repressive violence, while convening to unify positions on reforms that some Kurds fear could undermine the federally recognized Kurdistan region's rights under Iraq's constitution.⁶⁶

U.S. officials have encouraged Kurds and other Iraqis to engage on issues of dispute and to avoid unilateral military actions.91 U.S. officials also encourage improved security cooperation between the KRG and Baghdad, especiallyespecial y since IS remnants appear to be exploiting gaps created by the standoff in the disputed territories. KRG officials continue to express concern about the potential for an IS resurgence and chafe at operations by some PMF units in areas adjacent to the KRI. In July 2020, Iraqi military officials announced plans to establish some security coordination centers to jointly monitor security conditions in disputed areas w ith Kurdish peshmerga. This may include Regional Guard Brigades that receive U.S. military assistance (see “Security Cooperation and U.S. Training” below). 88 “Gov’t formation in Iraq Kurdish region closer after KDP -PUK deal,” Al Jazeera English, March 4, 2019. 89 Dana T aib Menmy, “As Iraqi calls to amend constitution rise, Kurds fear loss of political gains,” Al Monitor, November 18, 2019. 90 Associated Press, “ Iraqi Officials Cite Progress on Oil Deal With Kurds,” November 25, 2019. 91 Halgurd Sherwani, “Kurdistan PM, UN envoy discuss Erbil-Baghdad disputes,” K24 News (Erbil), July 7, 2020. Congressional Research Service 25 Iraq: Issues in the 116th Congress Figure 7. Disputed Territories in Iraq Areas of Influence as of July 8, 2020 Sources: Congressional Research Service using ArcGIS, IHS Markit Conflict Monitor, U.S. government, and United Nations data. Congressional Research Service 26 link to page 33 Iraq: Issues in the 116th Congress KRI.

Figure 6. Disputed Territories in Iraq Areas of Influence as of December 17, 2018

Sources: Congressional Research Service using ArcGIS, IHS Markit Conflict Monitor, U.S. government, and United Nations data.

Humanitarian Issues and Stabilization

Humanitarian Conditions

Humanitarian Conditions U.N. officials report several issues of ongoing humanitarian and protection concerns for displaced and returning populations and the host communities assisting them. With a range of needs and vulnerabilities, these populations require different forms of support, from immediate humanitarian assistance to resources for early recovery. Protection is a key priority in areas of displacement, where for example, harassment of displaced persons by armed actors and threats of forced return have occurred, as well as in areas of return. By December 2017, more Iraqis had returned to their home areas than those who had remained as internally displaced persons (IDPs) or who were becoming newly displaced. Nevertheless, humanitarian conditions remain difficult in many conflict-affected areas of Iraq. In November 2019, the U.N. Secretary General reported to the Security Council and emphasized that returns of internally displaced persons to their districts of origin should be "informed, safe, dignified, and voluntary."⁶⁷

As of October 31, 2019,wel as in areas of return. The U.N. Office for the Coordination of Humanitarian Affairs (UNOCHA) 2020 humanitarian needs assessment anticipates that as many as 4.1 mil ion Iraqis wil need some form of humanitarian assistance in 2020. In June, Iraq’s Ministry of Planning estimated that an additional 4.5 mil ion Iraqis are at risk of fal ing below the poverty line because of socio-economic disruptions attributable to the COVID-19 pandemic.92 As of April 2020, the International Organization for Migration (IOM) estimated that more than 4.7 mil ion 4.4 million Iraqis displaced after 2014 had returned to their districts, while more than 1.4 million individuals remained as displaced persons.⁶⁸ Ninewa governorate hosts the most IDPs of any single governorate (nearly one-thirdnearly 1.4 mil ion individuals remained as displaced persons (IDPs).93 Ninewa and Dohuk governorates host the most IDPs (more than 40 percent of the total), reflecting the lingering effects of the intense military operations against the Islamic State in Mosul and other areas of Ninewa during 2017 (Figure 8).94 (Table 2). Estimates suggest thousands of civilians were killed or wounded during the Mosul battle, which displaced more than 1 million people.

IOM estimates that the Kurdistan region hosts more than 700,000 IDPs (approximately 50% of the estimated 1.4 million nearly 700,000 IDPs (close to 50 percent of the remaining IDPs nationwide). IDP numbers in the KRI have declined since 2017, though not as rapidly as elsewhere. UNDP reported in June 2020 that “68 percent of IDPs and 59 percent of refugees across the KRI live in private residences outside of camp settings” and warned that “As protracted displacement drives more IDPs and refugees into private residences, community 92 UNAMI, Children make up the majority of up to 4.5 million Iraqis at risk of falling into poverty and deprivation due to the impact of covid-19, June 6, 2020. 93 IOM, Iraq Displacement T racking Monitor, Master List Report 115, March-April 2020. 94 Estimates suggest thousands of civilians were killed or wounded during the Mosul battle, which displaced more than 1 million people. Congressional Research Service 27 Iraq: Issues in the 116th Congress infrastructure is stretched, and the quality of access to water, sewerage networks and sealed roads diminishes.”95 The 2020 Iraq Humanitarian Response Plan (HRP) seeks $660.7 mil ion and as of Julyrapidly as in some other governorates.

The U.N. Office for the Coordination of Humanitarian Affairs (UNOCHA) 2020 humanitarian needs assessment anticipates that as many as 4.1 million Iraqis will need of some form of humanitarian assistance in 2020. The 2019 Iraq Humanitarian Response Plan (HRP) sought $701 million and as of January 2020, the 2020, the appeal had received $641 million188.2 mil ion, with an additional $303 million 160.8 mil ion received outside the plan.⁶⁹ 96 The United States was the top donor to the 2018 and 2019 Iraq HRPs. Since 2014, the United States has contributed nearly $2.7 billionbil ion to humanitarian relief efforts in Iraq, including more than $470 million mil ion in humanitarian support in FY2019.⁷⁰

Stabilization and Reconstruction

U.S. stabilization assistance to areas of Iraq that have been liberated from the Islamic State is directed through the United Nations Development Program (UNDP)-administered Funding Facility for Stabilization (FFS) and through other channels.⁷¹ According to UNDP data, the FFS has received $1.19 billion in resources since its inception in mid-2015, with nearly 2,200 projects reported completed with the support of UNDP-managed funding.⁷²

Economic and Fiscal Challenges

Related issues shaped consideration of the 2018 and 2019 budgets in the COR, with Kurdish representatives criticizing the government's budget proposals to allocate the KRG a smaller percentage of funds to the KRI than the 17% benchmark reflected in previous budgets. National government officials argue that KRG resources should be based on a revised population estimate, and agreements reached for the national government to pay KRG civil service and peshmerga salaries in the 2019 budget were linked to the KRG placing 250,000 barrels per day of oil exports under federal control in exchange for financial allocations for verified expenses. KRG oil contracts may limit the region's ability to meet Baghdad-requested targets, but the transfer of national funds to the KRG in 2019 eased some fiscal pressures that had required the KRG to impose payment limits that fueled protests.

U.S. Policy and Issues in the 116^th Congress

Security Cooperation and U.S. Training

U.S. and coalition training efforts for various Iraqi security forces have been implemented at different locations, including in the Kurdistan region, with U.S. training activities carried out pursuant to the authorities granted by Congress for the Iraq Train and Equip Program and the Office of Security Cooperation at the U.S. Embassy in Baghdad (OSC-I).⁸⁰ From FY2015 through FY2020, Congress authorized and appropriated more than $6.5 billion for train and equip assistance in Iraq (Table 3).

U.S. Foreign Assistance

The FY2020 foreign operations appropriations act (Division G, P.L. 116-94) appropriates $150 million in Economic Support Fund (ESF) aid, along with $250 million in FMF and other security assistance funds. The act also directs funds to support transitional justice programs and accountability for genocide, crimes against humanity, and war crimes in Iraq. (Table 4).

Stabilization and Issues Affecting Religious and Ethnic Minorities

Outlook