Legal Briefing- February to March 2017

Commerce

  • According to the Damascus Chamber of Commerce, the value of trade disputes before the Commercial Court is worth hundreds of millions of Syrian Pounds and could potentially reach SYP 1 billion. The Commercial Court in Damascus is akin to a civil magistrate judicial authority called the “Peace Court” or the “Court of Conciliation” that hears cases before the Court of First Instance. Up to 130 lawsuits a month come to the attention of the Commercial Court. Cases before the Commercial Court in Damascus date back to 1987 with one dispute worth SYP 20 million devaluing over the last 30 years. The drawback with prolonged litigation in Syria today is that the amounts in dispute are losing their value considerably over the years and decades as some court cases take 30 years before a final judgment is rendered. According to the Damascus Chamber of Commerce, the judiciary is not totally at fault for lengthy delays as parties to a dispute employ deliberate strategies to prolong court procedures in an effort to wear down their opponents. In response, legislative reform is being pushed through by the Ministry of Justice in cooperation with the courts to speed up litigation but the results are yet to be seen. In any event, full legal reform is preferable rather than piecemeal measures that do not address the source of the problem at heart.
  • The Commercial Court hears cases related to foreign investments where one of the parties to the contract is a Syrian national. It also adjudicates cases related to foreign investments where the contract is signed overseas but executed inside Syria.
  • The Ministry of Internal Trade and Consumer Protection considered referring severe violations of the Consumer Protection Law to the military justice system. In this respect, potential amendments to the Law are being proposed. Such a move would create controversy as infringements of these kinds are dealt with by the civil courts unless they contain a criminal element requiring the criminal courts.
  • The Council of Ministers issued an order to reduce the rate of fuel consumption in private establishments by 25%. The decision follows the gradual improvement in fuel imports.
  • The Prime Minister extended the time period for public authorities to secure their needs without recourse to the laws for six months starting in March. The authority to do so is provided for in Article 2 of Legislative Decree 40/2014.

Industry

  • The Ministry of Industry formed a special committee tasked with attracting investors to the Syrian market and facilitating their operations.
  • The Economic Committee linked to the Council of Ministers recommended the importation of diesel fuel to satisfy the demands of industrial businesses.

Finance

  • There is concern that delaying the enactment of a new bill to protect the Syrian Pound only encourages speculation in the local currency. The bill, which was prepared over two years ago, was sent to the government after it was reviewed by the State Planning Commission and the Central Bank but it was never enacted. Further procrastination and delays only allows more time and confidence for speculators to abuse the Syrian Pound and tarnish its value. Nevertheless, it has remained stable for a while now but the passage of this piece of legislation would further enhance the stability of the currency. In fact, its value appreciated on news that the government was preparing such a bill. The bill provides for harsh sanctions against manipulators, including those involved in unregulated foreign currency deals. It also makes provision for licensing those who publish the exchange rate of the Syrian Pound and sanctions those doing so without a license. There are calls for imprisoning those engaged in illegal transfers and publishing black market rates of the Syrian Pound that deviate from the Central Bank bulletin.
  • Some parties have called for measures similar to those undertaken in the 1980s to deal with the crisis in the Syrian Pound’s value in this current time of conflict. The recommendations include criminalizing the possession of US Dollars and dealings in foreign currencies, and the return of the Economic Security Court. An economic emergency law was also proposed as opposed to allowing the Central Bank to guide the foreign exchange sector during the war.
  • The Monetary and Credit Council revoked the licenses of 18 foreign exchange companies and offices for failure to comply with legal provisions.
  • The Central Bank is studying new controls on investment and residential loans.
  • A bill in the People’s Assembly seeks a solution to some of the financial entanglements faced by public entities in Syria to settle their debt liabilities. According to the Minister of Finance, state subsidies on goods and services are a leading contributor to the financial entanglements faced by public entities.
  • The Director of the Damascus Securities Exchange admitted that efforts to convince family businesses to list on the stock market have failed. Legislation to this effect was passed in the late 2000s but recent efforts to do so are aimed at companies that are incorporated during the reconstruction period.

Taxation

  • There are complaints that taxation legislation suffers from a number of inconsistencies in relation to other tax exemption laws and the Constitution. There is much talk of boosting confidence in the tax system to encourage honest declarations but expectations of doing so appear to be quite low.
  • The Council of Ministers approved a bill exempting Syrian-made goods bound for exportation from consumption fees in order to support local industries.
  • Legislative Decree 12/2017 lays down provisions concerning customs duties and fines related to armored cars.
  • Law 8/2017 exempts poultry and cattle farms from income tax for a period of five years to economically support these facilities.

Insurance

  • The Minister of Finance issued a regulation laying down conditions for insurance companies to invest their funds.

Telecommunications

  • The listing of the mobile network operator Syriatel on the Damascus Securities Exchange appears to draw closer.

Employment

  • The Ministry of Labour issued Regulation 482/2017, which lays down the terms and conditions for the employment of women.

Health

  • Pharmaceutical prices face increases sanctioned by the Ministry of Health.

Education

  • Syrian MPs called on the Ministry of Higher Education to review the law governing universities. The Minister replied that the academic structures need to be amended while relevant laws require review before the actual law can be changed.
  • The Ministry of Higher Education considers including graduate studies on the curricula of Syria’s private universities. Syria currently boasts 21 private universities educating around 30,000 students.

Civil Status

  • The government raised the fees for identity cards from SYP 50 to SYP 1,000 to compensate for inflation and also increased the fines for lost and damaged identity cards.

Judiciary

  • The Council of Ministers approved the Council of State Administrative Bill to tackle drawbacks in the current 1959 Law and expand the jurisdiction of the Administrative Court.
  • The Ministry of Justice counted more than 26,000 lawsuits that worked their way through the court system in 2016, which included 8,411 civil cases, 17,148 criminal cases and 932 Sharia cases. There were 2,150,000 lawsuits registered in 2010 before the war.
  • According to a judicial source, lawsuits related to economic crimes in 2016 rose by 2,000 compared to the previous year.
  • The Minister of Justice ordered the relocation of the Court of Conciliation, the Court of First Instance and the Court of Appeal in Damascus from the Palace of Justice, which is undergoing renovation, to the Judicial Institute located in Mezzeh District. The relocation drew criticism from a majority of lawyers who condemned the move as wholly unproductive and the Damascus Bar Association formally protested the decision as it was not properly consulted on the matter. The Judicial Institute was described as not having the proper facilities required to hear court cases or process judicial documents. The Palace of Justice was deemed a more appropriate venue because it houses numerous bodies including the Civil Registry, the Land Registry, the Council of State Administrative Court, the police authorities and can also ensure the proper workings of the judiciary. The Minister of Justice replied that the transfer of the civil courts to Mezzeh was a temporary measure until renovation works at the Palace of Justice are completed.
  • President Bashar Al-Assad issued Decree 63/2017 establishing a magistrates court in the suburb of Qudsaya in Rural Damascus province.

Parliament

  • A new Aleppo MP took office following a parliamentary by-election on February 19th to fill a vacancy. The electoral result was ratified by President Bashar Al-Assad in accordance with the law.

Military

  • The Ministry of Defence clarified the groups of persons exempt from reservist military service including those in the public sector and the state authorities.

Reconstruction

  • The Governorate of Aleppo approved 10 new contracts for the reconstruction of the city.

Criminal Law

  • A probe into the dealings of French cement giant Lafarge Holcim uncovered payments made to armed groups in Syria. The allegations are that the company paid off ISIS to keep its operations in Syria up and running.
  • Law 6/2017 contains amendments to Article 4 of the Electricity Theft Law provided for in Legislative Decree 35/2015.

International

  • A case brought by a Syrian Christian family to the European Court of Justice pertaining to migration due to persecution by armed extremist groups could have ramifications for EU migration policy if the Court rules in favour of the family. The case was brought on behalf of the family after Belgian authorities denied them the right to enter the country and the top adviser to the Court suggested that Belgium therefore broke EU law in denying them visas.
  • US President Donald Trump once again issued a travel ban that bans Syrians and nationals of five other countries from entering the United States. The ban was subsequently blocked by the courts and is now on the docket in the Supreme Court.
  • The UK Export Control Order 2017 came into force and it reiterates trade restrictions against Syria.

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