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Pensions for Weapons

The cabinet passed the militia pay and pensions law. Al-Zaidi can seat the last ministers as one package. The coalition's mission ends today.

Wednesday, September 30. The coalition that arrived in 2014 closes its mission today, with the last soldiers gone since Sunday. On Tuesday, the day before that deadline, Iraq's Council of Ministers voted through the bill the armed factions have argued over for 2 years. It is the law that puts the Popular Mobilization Forces on the same footing as every other state security agency. Service terms. Ranks. Retirement. Compensation for the families of the fallen. Al-Zaidi's office referred it to parliament the same evening.

In the same window, per Iraqi-press channels, the blocs handed al-Zaidi the authority to fill the 9 empty chairs himself, as one package, once the Sovereignty Day ceremonies are over. And Kataib Hezbollah, the faction that refuses every version of the deal, announced it will monitor Iraqi airspace from Thursday and bring the government down if the ban on Iranian flights holds.

Look at the order of Iraq's three moves. A payroll offered by the state, then a pen taken on the cabinet, then a threat from the holdout. We take them in that order.

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The Service and Retirement Law

Let's start with the vote itself, because the community will call it the militia law and the factions will call it their due. Per al-Zaidi's office, the cabinet "voted in favor of the Popular Mobilization Forces bill" and "approved referring the bill to parliament for a vote, in accordance with constitutional provisions." The package includes the PMF Service and Retirement Law. Its stated purpose is to organize the Popular Mobilization Commission the way the state organizes its other security agencies. A structure. A ladder of ranks. Pensions, and compensation for the families of fighters killed in service.

This is the legal door we have described since August, and it now has a shape. The bill first went to Iraq's parliament in early 2025 and was shelved, over an argument inside the Shia house and an American objection. It came back in August without the parts Washington had refused, the Staff College and the al-Muhandis General Company among them, as we reported in September First. Regional press reports that Washington still opposes it, on the concern that it legitimizes groups tied to Iran. Hold both facts. The version that cleared cabinet is the version those objections already shaped.

Here is why the vote matters to an IQD holder. Nothing Left to Resist laid out how an Iraqi militia stays in business. An occupier to point at. Weapons to point with. A payroll from Tehran underneath both. The occupier's mission ends today, and the payroll, by the confession of Iran's own banker, is dry. What this law does is put a state payroll on the table instead. Roughly 70 armed groups sit under the PMF umbrella. Every fighter in them now has a legal path to a rank, a salary and a pension inside the Iraqi state. Its price is the one al-Zaidi named at the General Assembly: the state decides war and peace, and weapons stay in constitutional hands.

Rubio told reporters in New York last week that three militias have already disarmed and joined the national government. Tuesday's bill makes their choice permanent, and stands as the offer to the ones who have not yet made it.

One Package

Behind the law came the chairs. Per Iraqi-press channels, most political forces have authorized al-Zaidi to select the candidates he considers suitable for the vacant ministries, Interior and Defense included. The mandate covers the deputy premier posts too. If the blocs cannot agree, the nominees go forward as a single package. The cabinet is expected to be completed after the ceremonies marking Sovereignty Day, with a televised address by al-Zaidi on the occasion.

The same report says the Coordination Framework will send a delegation to the Kurdistan Region once the celebrations end, to settle the second deputy premier and the Kurdish-share ministries. That is the seat whose American objection was lifted after al-Zaidi gave guarantees in New York, per The Occupation Is Over. On Tuesday he sat with Nouri al-Maliki, and the readout spoke of dialogue among the national political forces "to complete the government formation."

For 4 months the 9 vacancies were a bargaining chip every bloc held. A package mandate changes who holds it. The names go in together or not at all, so nobody trades Interior against Defense seat by seat. We carry the mandate at the weight of its sourcing, unnamed, and we print no date, because parliament has printed none. What is on the record is the sequence. Law first. Then the chairs. Then the speech.

Who Holds the Airspace

Now the holdout, because its answer landed inside the same window and it is the loudest thing in the Iraq file. On Monday Kataib Hezbollah's security official, Abu Mujahid al-Assaf, published a statement. From October 1, the group says, it will monitor Iraqi airspace to ensure it is not violated by hostile aviation. In the Kurdish press version: "We will warn at first, and then we will shoot them down." If the government keeps enforcing the American ban on Iranian carriers, the faction will work to bring it down "by all means," and could close Iraq's crossings with the states taking part in the blockade on Iran.

The same day, the commander of the air force, Lieutenant General Khalid al-Tamimi, said something the community did not notice. Every aerial mission inside Iraq, he said, is carried out "with complete independence from the International Coalition," which has flown none in Iraq since the start of the year. "We possess an integrated system to engage hostile targets and protect Iraqi airspace," he added. Baghdad is in advanced talks with Paris for 14 Rafale fighters.

Two statements about one airspace, 24 hours apart. One from a faction with no aircraft, no radar and no legal standing once the law above passes. One from the officer who owns the aircraft. Kurdistan put its own worry on the record too. Its Peshmerga ministry called the American departure without any defense system "a cause for concern," and said the federal government now bears primary responsibility for the Region's airspace.

Our read is this. A faction that threatens to shoot down aircraft the day the Americans leave is telling you what it lost when they left. For 3 years the argument for its weapons was the foreign presence. As of today that presence is gone, the pay scale for coming in is published, and the only thing left to claim is the air above Baghdad. Claiming it is not holding it.

The Mission Closes

The coalition formed in 2014 ends its Iraq mission today. Italy went first. Its defense minister, Guido Crosetto, told parliament on Tuesday that "from tomorrow, therefore, our military presence in Iraq will end," after 12 years, leaving two Carabinieri officers under the European Union's advisory mission.

Notice who has said nothing. No statement from the Pentagon, from Central Command or from the White House marks the day, and the American press covering the close notes the same absence. Iraqi state media has the four-day holiday, the badges with the map of Iraq, and al-Zaidi's speech. That is the register the day is written in, and it is Iraqi.

A former American ambassador to Baghdad, Douglas Silliman, described the strategy in one line this week: the prime minister is building a political case that these Iran-aligned forces no longer have reason for weapons. Tuesday's cabinet vote is that case, filed as law.

The Street and the Ledger

Baghdad's money changers did not celebrate. A hundred dollars closed Tuesday near 157,500 IQD in the capital, up from 156,500 on Monday and 155,250 on Sunday, with Baghdad shops selling at 158,000. Erbil matched it. The CBI's posted rate stays at 131,000. The cash shipment the government spokesman promised on Saturday, "in the coming days," had not entered the country by Tuesday night. A street told that dollars are coming, then left 3 days without them, prices the wait.

Two files stay on their dates. Tomorrow the advance customs payment goes live, the rule from Iraq Invites America's Banks. Importers pay duties before their dollars leave the bank. The 2027 budget is still with the Council of Ministers, which voted the PMF law this week and not the budget. Parliament's date to receive it, October 15, stands. No total, no oil price and no exchange-rate line has been published, yet.

Iraq's business press ran a guest column on Tuesday under the question half the community is asking this week: does the IQD revalue on Sovereignty Day? Its answer is the one this channel gave in A Sovereign IQD. The rate of 1,310 was set by the bank in February 2023 and sits where it was set. A troop exit grants the bank no authority it did not already have. Its wire this week carried 7-day auctions at 5.25% and staff training courses, and nothing else. We continue to be patient for what comes next.

Tehran's Ledger

Next door the numbers ran the other way. Iran's rial hit 2.54 million to the dollar on Tuesday, a record, from 2.4 million on Monday. Seven European governments, Germany, France and Italy among them, told their citizens to leave Iran the same day.

The talks have stalled. Per American reporting on Tuesday, neither side will budge on Hormuz, and officials believe the President could order a return to major combat operations after the election. Trump's own words on Sunday, after a report that he had offered sanctions relief: "This is untrue. I offered them NOTHING." Bessent put a deadline on Tehran's cash the same morning. Iran will have nothing left to trade, he said, probably inside 2 weeks, with about 15 million barrels of its oil still out for delivery.

The financial siege took its weekly step. On Tuesday the Treasury designated 10 individuals and entities in Beijing, Hong Kong and Pakistan for buying weapons components for Iran's defense ministry, under Operation Economic Outcast. And Tether confirmed the size of the digital leg: over $550 million in Iran-linked stablecoins frozen this year, including $344 million across two wallets in April that the Treasury added to the Central Bank of Iran's sanctions listing the next day, and $131 million across four more in July. A central bank's own wallets, frozen by a private issuer, on public ledgers anyone can read.

Markets priced the week without drama. American consumer confidence sat at its lowest since 2014, the 10-year yield at 5.24%, gold at $4,163 and silver at $61. Brent fell to $102.59 as Middle East crude exports recovered to 16.3 million barrels a day, the highest since the war began.

The Read

For the past 7 months we have told you an Iraqi militia runs on three things: an occupier to point at, weapons to point with, and a payroll underneath. Today the occupier's mission ends. The payroll from Tehran is dry, by the confession of the man who keeps Iran's books. And on Tuesday the Iraqi state put its own payroll on the table, in law: ranks, salaries and pensions for the fighters who bring their weapons inside the state. Pensions for weapons. That is the trade the cabinet sent to parliament the day before the coalition left.

History has run this trade before, and the numbers are on the record. In November 2016 the Colombian state signed its accord with the FARC after 52 years of war. What moved the weapons was not a battlefield victory. Fighters who came in received a monthly payment from the state, set at 90% of the minimum wage for 24 months, plus a lump sum to start a business. In return their weapons went to a United Nations mission. By the following September the mission had counted 8,994 weapons handed in, above one per fighter, and the location of 1,027 arms caches. The holdouts who refused are still in the jungle, and the state stopped negotiating with them. A payroll and a legal door moved more weapons than 5 decades of fighting.

Iraq's version has the same shape and a shorter timetable. Three factions have already crossed, and the law that pays them cleared cabinet on Tuesday. The holdout answered with a threat to shoot at aircraft it cannot see. It also threatened to topple a government whose last chairs the blocs just handed to al-Zaidi to fill as a block. Read the airspace statement for what it is: a faction whose reason to carry weapons left the country on Sunday, reaching for a new one.

For the IQD, the order we have carried all year holds. Weapons come under the state, and the law that buys that outcome is now in parliament's hands. A completed government follows, and the mandate to complete it was issued this week. Then the budget, still at the cabinet table with October 15 as its date. And last, the rate, which belongs to the bank that spent this week publishing auction notices at its standard rate.

The watch holds its shape and it's a reason to celebrate.
Tomorrow, Sovereignty Day, the customs rule and al-Zaidi's address. Early October for the weapons principles the Hikma movement promised. October 15 for the budget. And the CBI wire, quiet until the morning it is not.

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