Legal Briefing- Up to Mid-April 2017

Construction

  • Contractors continue to suffer from a number of problems including the lack of invoice payments and inflation with respect to the prices of construction materials. Where there are joint contractors and one has emigrated overseas, the client is not always paying the invoices unless both are present. Contractors complain that they feel that they are subjected to extortion by public sector lawyers due to these problems. Meanwhile, the authorities continue to claim that they will find solutions to these concerns very soon.
  • A contractor retracted his description of blackmail directed towards public sector lawyers but rather accused them of unnecessary delays in handling his case.
  • There are calls to amend the Contractor Classification System due to inflation and the issuance of the 2016 Prices Guide that updates the costs of construction materials. Such a measure would help ensure that the right contractors bid for the appropriate public projects.
  • Contractors in syndicates argued that it is time for fresh faces to take up posts in the running of these trade union bodies.

Commerce

  • Confectionary producers in Damascus called for less taxes and freedom from price controls in order to maintain the quality of their products. Price controls when there are increases in the costs of raw materials in addition to import controls as well are affecting the quality of production. There were other calls for replacing closures and imprisonment for consumer violations with fines instead.
  • The government discussed a bill imposing a SYP 10,000 per kilogram (or part thereof) fine on persons who smuggle tobacco and foreign cigarettes. Additionally, these products will be confiscated. Such measures come in light of efforts to protect the national tobacco industry from foreign competition and price manipulation caused by smuggling.
  • The Ministry of Economy and Foreign Trade issued the Unified Electronic Guide for the Granting of Import Licenses.
  • The Minister of Internal Trade and Consumer Protection said that olive oil will be imported from friendly countries but the decision was criticized since Syria is a major exporter.
  • Restrictions imposed on the bulk export of olive oil forced merchants to resort to costly exports of small amounts of the product.
  • As part of its mandate, the Competition Protection and Anti-Monopoly Commission acted against monopolists in the markets and against a decision by the Ministry of Agriculture. The Ministry objected to the decision by the Commission but in doing so, it faced problems in the Council of State, the Administrative Court.
  • The Competition Protection and Anti-Monopoly Commission is seeking cooperation with government bodies to amend the merger notification threshold from a 30% market share to a 25% market share instead.
  • The former Minister of Internal Trade Bassam Roustom complained that under the current circumstances, life in Syria is no longer fit for living.

Industry

  • President Bashar Al-Assad ratified Law 19/2017 on industrial imports. The Law exempts imported machines and production lines bound for licensed industrial businesses from customs duties and other import fees. Accordingly, the Ministry of Economy and Foreign Trade will be in charge of granting import licenses for these machines and production lines.
  • MPs stressed the need to form committees to evaluate losses inflicted on the industrial sector with the aim of suing states backing armed groups in Syria.
  • The Prime Minister issued a regulation allowing industrialists to obtain temporary administrative licensing outside of the industrial cities under certain conditions.
  • The Prime Minister also said that the government is prepared to provide loans immediately to support the production process.
  • The Ministry of Industry is planning to revitalize the public and private sectors through tax incentives and financial facilities approved by the government.
  • The Council of Ministers tasked the Ministry of Petroleum and Mineral Resources with developing a new mechanism for distributing petroleum products to industrialists and farmers to back production.

Investments

  • The Economic Committee linked to the Council of Ministers issued Regulation 3664/2017 resolving disputes involving investors based in the free zones. Investors based in the free zones and tendering for public sector contracts shall be treated as foreign companies. The issuance of this Regulation was in response to the previous treatment of such free zone investors as local companies. Any company established in the free zones shall be treated as a foreign company as far as Syrian law is concerned.

Companies

  • The Minister of Internal Trade and Consumer Protection ratified the incorporation of a private joint stock holding company with a capital of SYP 741 million. The businessman Salim Daaboul is said to own 73% of the company while eight others own the remaining 27%. The holding company was incorporated in Rural Damascus province. It is a significant news item because the incorporation of holding companies in Syria is rare due to the high minimum capital requirements and also due to its current timing.

Finance

  • After an initial offer by Banque Bemo Saudi Fransi to purchase a 45% stake in Syria Gulf Bank, the deal has apparently fallen through and will not go ahead. The Board of Directors of Syria Gulf Bank studied the offer made by Banque Bemo Saudi Fransi and by other parties but did not approve any of them. Although consolidation is usually welcome at a time of economic challenges, it appears to have hit an obstacle in the Syrian banking market.
  • The Prime Minister approved the establishment of the Federation of Syrian Banks to advise and lobby on behalf of the banking sector.
  • The Damascus Securities Exchange, the country’s stock market, announced the imminent increase of weekly trading sessions from four to five sessions.
  • The government is preparing new mechanisms for when it comes to putting together its 2018 national budget.

Taxation

  • The Council of Ministers approved a number of bills, including one on amending tax legislation to prevent double taxation.
  • The Minister of Finance stressed the importance of utilizing actual real estate market valuations for fighting corruption and determining tax liability.
  • The Ministry of Transport reminded owners of armored vehicles to settle all customs duties and fees within the deadline set by Legislative Decree 12/2017. The deadline ended in early May 2017.

Property

  • The Council of Ministers discussed a new bill regulating the General Commission for Real Estate Development and Investment, which was established by the Property Investment Law.

Employment

  • The Prime Minister informed the People’s Assembly that the Public Employment Bill and the Employment Positions Bill will be issued simultaneously.
  • The government is seeking to provide employment to the wives of martyrs.
  • The Ministry of Social Affairs and Labour issued a circular clarifying a set of procedures for granting permanent employment under the Temporary Employees Law.
  • Law 15/2017 extends the provisions of Law 4/2016 for another year. Law 4/2016 exempts employers registered with the General Establishment for Social Security from paying interest payments and other fines incurred.

Education

  • The Faculty of Law at the University of Damascus won first place in the Regional International Humanitarian Law Mock Courts Competition held at Cairo University. The University of Damascus beat its Egyptian counterpart in the semi-finals and the Moroccans in the final in a competition among six teams.
  • The Prime Minister said no final decision had been taken on the division of the University of Damascus into two separate entities.

Health

  • Pharmacists called for amendments to the Rural Service Law that requires them to work for a certain period of time in the countryside.
  • Pharmacists call for the establishment of a Syrian Food and Drug Administration.

Local Councils

  • Some MPs called for delegating more powers to provincial and local authorities to speed up bureaucratic measures and curb corruption. They also stressed the need for reconsidering some provisions of the Local Administration Law and compensating for terrorism-related property damage. According to the Minister of Local Administration and the Environment, several bills and laws were drafted with the aim to improve performance at the local levels, and deal with the reconstruction stage and removal of debris.
  • The government is studying a bill which includes the authority to ratify sale, lease and investment contracts with respect to real estate owned by local councils. The bill also applies to properties owned by administrative bodies in accordance with existing laws and regulations.

Media

  • One Syrian writer called for public-private partnerships in the media industry where the state media company is losing revenues.

Telecommunications

  • The Council of Ministers approved the technical, legal and financial conditions for launching web television services through packages of channels broadcast via the internet.
  • The Council of Ministers discussed a bill to exempt debtors of the Syrian Telecommunications Company from interest payments and other fees if they pay their bills by December 31, 2017.
  • The Syrian Telecommunications Company raised internet prices by 50%.

Tourism

  • The Council of Ministers approved new mechanisms set by the Ministry of Tourism for attracting tourists for religious purposes.

Transport

  • The Council of Ministers approved the bill incorporating the Syrian Airlines Establishment, which enjoys financial and administrative independence. The bill amends Decree 2748/1975, which set up the state-owned carrier Syrian Arab Airlines, and aims to develop and restructure the aviation sector. The new measure is part of plans to corporatize the airline. The bill also seeks to expand the private sector’s role in the aviation sector.
  • The Governorate of Damascus imposed a new SYP 50,000 fee on Lebanese and Jordanian cars entering Syria.
  • Legislation is expected soon to increase fees on motor vehicles according to their engine capacity. The Ministry of Transport is preparing the amendments to the Motor Vehicles Fees Law provided for in Legislative Decree 117/1961 in this respect.

Judiciary

  • Hopes are pinned on the recently appointed Minister of Justice Hisham Al-Shaar, a judge, to develop and reform the judicial branch. Automation, speedier litigation, security for judges and legislative reform to keep up with current developments are key issues affecting the judiciary. Automation as part of the reform process is one of the biggest programs being undertaken by the Ministry of Justice. Legislative reform will need to be carried out in parallel with the automation of the judicial process to ensure its efficiency.
  • Another priority for the Minister of Justice will be to push through the new Judiciary Bill to replace the current 56-year old Law.
  • The Minister of Justice toured the courts at the Palace of Justice to find absences and consequently, warned judges that they must be at work on time every morning at 9am. The Minister continued his inspection for a second time to make sure that judges and court hearings are operating in a timely fashion.
  • President Bashar Al-Assad ratified Law 20/2017 to establish the Maritime Courts of First Instance and Appeal.

Government

  • Following a cabinet reshuffle, Adib Mayaleh, the long-serving Governor of the Central Bank and Minister of Economy and Foreign Trade, was replaced.

Parliament

  • The then-Speaker of the People’s Assembly Hadiyeh Abbas stressed during a parliamentary session that MPs’ questions to government ministers need to be clear, short, strategic and separate from previous issues already addressed but not if the issues have not already been dealt with in Parliament. In response, some MPs claimed that they have the right to question ministers as part of their duties and it is for them to submit their proposals accordingly. The Speaker at the time clarified that she had the right not to accept more than 10 oral questions in addition to discussions and interventions. The Speaker gave MPs the freedom to choose how they would like to intervene in the questioning of ministers.
  • MPs continued to subject government ministers to detailed questioning. One MP accused the Minister of Internal Trade and Consumer Protection of violating the Consumer Protection Law and the Constitution with respect to the judicial seizure of goods. Criticism was also leveled at the government for having failed to pass the new Public Employment Bill, the Public Procurement Bill and the Expropriation Bill so far. It has been observed that the bills are being prepared too quickly, without proper study, and without adequate distinctions between legislative and regulatory provisions. In light of the current economic situation, there are calls to amend the Income Tax Law in which the rates have to be reviewed and further calls for a solution to the imbalances between prices and salaries. There were also reminders that there needed to be a halt to building violations in Damascus. Focus was put on those parts of society that suffer from increased utility bills sanctioned by the government.

Military

  • A new circular was issued regarding the inability of certain citizens to postpone their military service obligations due to their corresponding diplomas.

Family Law

  • A Sharia judge in Damascus confirmed the spread of marriages that were previously unheard of in Syria due to the ongoing conflict.
  • Fraudulent marriage contracts among expatriates are being submitted to the Ministry of Foreign Affairs and Expatriates to be forwarded to the Ministry of Justice. More than half of marital contracts concluded overseas by expatriate Syrians are found not to conform to the law. Fraudulent acts involve using the names of judges that may not exist or replacing names of judges in the contracts.

International

  • The Greek Progressive Lawyers Union is seeking lawsuits against parties who contributed to the imposition of the sanctions regime against the Syrian people.
  • A Spanish court seized the assets belonging to former Syrian Vice-President Rifaat Al-Assad following a similar French court asset seizure in 2013. Both the French and Spanish cases against Rifaat Al-Assad alleged embezzlement of Syrian state funds back in the 1980s. The fact that the French and Spanish authorities only acted recently after 30 years has fuelled speculation that the lawsuits in question merely served political expediency as opposed to legal objectives. Questions were being asked as to whether France and Spain will be repatriating the embezzled funds to Syria or whether they will keep them in their possession.
  • Following a ruling by the European Court of Justice, the European Union was obliged to lift sanctions on Syrian businessman George Haswani.
  • Aleppo MP Fares Chehabi asked whether the Syrian government will take practical steps to withdraw Syria from the Arab League.

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