Over the weekend, a new bill was presented to Iraq's parliament after months of political wrangling. The bill aims to regulate paramilitaries known as the Popular Mobilization Forces, or PMF.

Should the bill pass, its critics predict dire consequences. It would make "armed terrorist groups undermining Iraq's sovereignty," part of the official Iraqi military, the US State Department has warned.

Supporters of the bill have a very different opinion, arguing that it could be a way of assimilating armed groups back into state institutions. That could allow "Iraq [to] finally break free of Iran's two-decade-long influence over its politics," Renad Mansour, director of the Iraq Initiative project at UK think tank, Chatham House, suggested last month.

What's in the draft law?

The much-debated law is actually an amendment to one that already exists, Law No. 40 or 2016. This made the PMF part of Iraq's armed forces.

The PMF were first formed in 2014 when religious leaders called upon able-bodied men to fight the extremist group known as the "Islamic State."

Since then, PMF groups have become powerful parts of the Iraqi system. Some — but not all — PMF factions operate independently of the state. These tend to pledge loyalty to Iranian religious and military leadership because the neighboring country has provided them with financial, logistical and even spiritual support. They're considered a part of Iran's so-called "Axis of Resistance," which also includes Hezbollah in Lebanon, the Houthis in Yemen and Hamas in Gaza.

Putting Iran ahead of Iraq has been seen as problematic both by ordinary Iraqis and their politicians, as well as the US, which has over 2,000 troops in Iraq. Certain PMF groups are known to be behind attacks on US bases in Iraq and Jordan.

The new draft law — colloquially called "the PMF law" — aims to update the original 2016 law, which only offered a minimal definition about what the PMF was.

"Ambiguities around command hierarchy, budgetary oversight and integration into the national security framework have since become persistent sources of tension," Ali al-Mawlawi, director of London-based consultancy Horizon Advisory, explained earlier this year.

"The new bill seeks to address these gaps by establishing clearer parameters for the PMF's role within the Iraqi state," he wrote for the Washington-based Stimson Center.

The new PMF law would do things like establish a PMF military academy and grant the PMF chairman broader powers, allowing them to direct operations without speaking to other authorities first. The new law would also further legitimize a commercial entity connected to the PMF, the Muhandis General Company for Construction, Engineering and Mechanical, Agricultural and Industrial Contracting. Observers say the company, created in 2023, has engaged in land grabs and gets preferential treatment when it comes to government contracts.

What do opponents of the new law say?

Critics of the new PMF law point to similarities between the PMF and Iran's Islamic Revolutionary Guard Corps, or IRGC. Since it was established in 1979 during Iran's revolution, the IRGC has grown in power and now operates separately to Iran's official military. 

If the new law passes, the PMF, which also started as a temporary wartime entity, would become "a parallel armed force empowered to do as its commanders see fit," Michael Knights, an expert on Iraq at the Washington Institute, argued in an April analysis. The PMF would become "a fully empowered ministry-like institution that would be very difficult to reform later, let alone dissolve."

The US State Department, under President Donald Trump, has been vehemently opposed to that. "We support genuine Iraqi sovereignty, not legislation that would turn Iraq into an Iranian satellite state," a State Department spokesperson said earlier this month.

The US has pushed Iraqi politicians not to pass the new PMF law, threatening financial sanctions or suspension of security cooperation. It has also insisted the PMF should be disarmed altogether. The fact that US troops are in Iraq is thought to have prevented Israel from bombing the country. Iraq's oil income goes through international banks and could be held up by the US. 

What do the law's supporters say?

Iraqi politicians, including the country's Prime Minister Mohammed Shia al-Sudani, have pushed back, arguing the new law is actually a way to better control the PMF.

Calls to simply disarm or dissolve the PMF are unrealistic and "risk inflaming sectarian tensions," al-Mawlawi explained in his analysis for the Stimson Center.

And the PMF is not just a monolithic Iranian proxy, as is often argued by the US, al-Mawlawi said. There are many groups in it and it has deep roots in Iraqi society. Nor does it operate completely outside the government's chain of command.

"But there is little doubt that the organization is plagued by internal decay and growing public cynicism," he noted. "Left unchecked, the PMF risks remaining a divisive and politicized force vulnerable to external manipulation."

So reform is needed, al-Mawlawi argues, but it must be meaningful. For example, the PMF should be less political, it shouldn't be so close to Iran, it needs transparency on its finances, and should basically return to its core objective of protecting Iraq from terrorism. 

Prime Minister al-Sudani has been trying to move Iraq away from Iranian influence and he might have more success than his predecessors, experts at the European Council on Foreign Relations wrote in a May policy briefing looking at how the conflict in Gaza was impacting the region.

The weakening of other members of the "Axis of Resistance" and the desire to avoid a major clash with the US or Israel will count towards that, they say.

"Having seen the destruction wrought on Hezbollah, these groups [the PMF] are anxious to avoid such an outcome," the ECFR experts explain. "While this is making them more cooperative compared with previous integration efforts, they remain unlikely to cede decision-making authority to the state, even within new government structures."

To avoid conflict, any reform must "involve making clear to Iran's local allies that they are not facing an existential threat and that there is space for them in the emerging new political systems," the ECFR says.

What happens next?

On Saturday, a finalized draft of the PMF law was submitted to parliament and, according to Iraqi media reports, politicians who support it were pushing for it to be passed as soon as possible.

However on Sunday, the speaker of Iraq's parliament, Mahmoud al-Mashhadani, told Baghdad-based satellite channel, Alawla TV, the draft law was unlikely to move further along anytime soon. The US threats had to be taken seriously and the law, which wasn't urgent, could be revisited later, al-Mashhadani said.