(Reuters) - Iraq's cabinet approved a draft law on Tuesday to end foreign security firms' immunity from prosecution by scrapping a controversial decree that Iraqis say amounts to a "licence to kill".
The bill, which has to be approved by parliament, follows a September 16 shooting incident involving Blackwater in which 17 Iraqis were killed. The U.S. security firm said its guards acted lawfully, but the shooting enraged the Iraqi government.
In Washington, a U.S. government official said efforts to bring charges in U.S. courts could be complicated by an offer of limited immunity to Blackwater security guards by State Department investigators. The New York Times said the investigators did not have the authority to make such an offer.
"The cabinet has approved a law that will put non-Iraqi firms and those they employ under Iraqi law," Iraqi government spokesman Ali al-Dabbagh told Reuters after a cabinet meeting.
Iraq says there are more than 180 mainly U.S. and European security companies in Iraq, with estimates of the number of private contractors ranging from 25,000 to 48,000.
Dabbagh said the bill proposed cancelling Order 17, a decree issued by the U.S.-led Coalition Provisional Authority (CPA) in 2004 shortly before it handed control to an interim Iraqi government.
A long-running a source of friction between Washington and Baghdad, the measure prevents foreign contractors from being prosecuted in local courts. Iraqi efforts to revoke it had got nowhere until the Blackwater shooting.
Private security contractors expressed concern at the prospect of losing immunity, saying it would expose them to the vagaries of the Iraqi judicial system, which the United Nations mission in Iraq said in its latest human rights report often failed to give defendants a fair hearing.