Legal Briefing- October 23, 2016

Government

  • Legislative Decree 22/2016 establishes the Cabinet Consultative Council to advise the Prime Minister and ministers on affairs of state.
  • The Minister of Administrative Development told Syrian TV that the initiatives to improve the administrative processes within the various ministries are underway. During his interview, the Minister faced tough questioning regarding his performance and he replied that his door is open to anyone.

Parliament

  • The second session of the People’s Assembly began with the Prime Minister and ministers in attendance. The Prime Minister reviewed the economic, social and services situation in the country before MPs.
  • The People’s Assembly has been holding discussions on amending its Rules of Procedure so that they conform to new realities and the provisions of the Constitution. The Constitutional and Legislative Affairs Committee has taken the lead by holding deliberations on the proposed amendments. All 17 parliamentary committees are participating in the consultations. Proposed changes include the addition of new committees and more powers for Parliament’s Executive Office.
  • The Speaker of the People’s Assembly is seeking Iranian assistance in establishing a research centre in the Syrian Parliament as part of the reconstruction phase.
  • Syrian MPs have visited the new Governor of Aleppo to discuss the reactivation of public services in the province.

Commerce

  • The Minister of Economy and Foreign Trade has formally repealed the Import Deposit Rules meaning that there is no longer a requirement to deposit an amount in Syrian Pounds equal to 25% of the value of the imports with the Central Bank in order to secure an import license.
  • The Ministry of Economy and Foreign Trade has issued executive regulations related to the granting of import licenses for basic, industrial and agricultural goods.
  • The Minister of Internal Trade and Consumer Protection has told MPs in the People’s Assembly that granting import licenses to the largest number of traders has somewhat minimized monopolistic practices in the markets.
  • The Council of Ministers has requested that the Ministry of Justice prepare legislation that penalizes those persons who harm the interests of Syrian agricultural and industrial exports.
  • The Ministry of Industry wants businesses to obtain food safety certificates prior to exporting goods.
  • There has been tension recently between the Ministry of Economy and Foreign Trade and merchants over a recent decision to require imported goods to have the same country of source and origin.
  • The Ministry of Economy and Foreign Trade has called on industrialists to cease importing grain from Saudi Arabia to Syria and to secure alternative supplies. The Ministry has also informed them to secure alternative imports of raw materials other than from Lebanon and Jordan after the end of the year.
  • Lebanon has lifted a three-month old protectionist ban on the import of fruits and vegetables from Syria but licenses are now required.
  • There was initial controversy that the Lebanese judiciary permitted the export of wheat contaminated with carcinogenic substances to Syria. However, the Ministry of Internal Trade and Consumer Protection denied that any such shipment entered Syria.
  • The Minister of Finance has issued a regulation permitting the return of illegally-imported goods to their owners in exchange for fines equivalent to their value.
  • The Customs Directorate has registered 4,251 cases amounting to fines worth SYP 2.9 billion during the first nine months of this year.
  • Manufacturers are complaining that the decision to reduce profit margins on many imported and local goods threatens industries nationwide. The Ministry of Internal Trade and Consumer Protection regulation reduces the profit margins of wholesalers and retailers with respect to numerous products.
  • The government has reduced the prices of certain basic goods in an effort to increase the purchasing power of Syrians and curtail monopolistic practices in the markets.
  • A SYP 1 million fine and a one-year prison sentence will be imposed on anyone caught illicitly trading bread. Bread prices are protected by law.
  • The Prime Minister has instructed the Ministry of Industry and the Ministry of Internal Trade and Consumer Protection to open outlets for selling Aleppo-made products in the Damascus commercial districts of Salhiyeh and Hariqa.
  • The Council of Ministers has discussed the possibility of establishing a company specialized in exportation from the public and private sectors.
  • It has been revealed that a number of merchants have been trading without being registered on the Commercial Registry.
  • Syria and Iraq are working towards removing all administrative and customs-related obstacles that hinder trade between the two countries.
  • The Council of Ministers has decided to reform the joint Syrian committees with countries that maintained friendly economic and commercial ties with Syria.

Companies

  • It has been discovered that not all companies are complying with the provisions of the Companies Law despite being given several chances to do so since 2011.
  • The Damascus Chamber of Commerce (DCC) held a seminar to discuss the Foreign Companies Law, which deals with the regulation and registration of branches, offices, commercial agencies and brokerages. The DCC heard how the Law needs to conform to new realities and address the current circumstances as many foreign businesses ceased work in Syria but are nevertheless awaiting the reconstruction phase.
  • A pattern has emerged of foreign investors, especially Lebanese businesses, incorporating companies in Syria and leaving them dormant until reconstruction begins. The depreciation of the Syrian Pound translates into more lucrative and ten-times cheaper minimum capital requirements.

Finance

  • The Ministry of Finance has completed its review of the Billing Bill as part of plans to introduce the billing system into the taxation process. The Damascus Chamber of Commerce held a seminar to discuss the bill.
  • The Monetary and Credit Council (MCC) is considering raising the minimum capital requirements for foreign exchange offices and companies to SYP 400 million and SYP 2 billion from SYP 50 million and SYP 250 million respectively.
  • The MCC has determined the procedures for freezing bank accounts.
  • The Central Bank has set out new rules regulating the provision of guarantees by banks and under what circumstances they can or cannot be granted.
  • The Council of Ministers has called for public entities to coordinate with the Central Bank when opening foreign currency accounts.
  • The Damascus Securities Exchange (DSE) has made changes to trading rules on the stock market with regards to pricing issues.
  • The DSE is considering a legal review to facilitate the listing of new companies on the stock market.
  • The Prime Minister has appointed Abdel-Razzaq Qassem as the new Director-General of the DSE. Before becoming Minister of Finance in July, Maamoun Hamdan served in this post.
  • The Prime Minister has issued Regulation 1865/2016 delegating to the Minister of Finance the power to supervise the Syrian Commission on Financial Markets and Securities, the capital markets authority, and the DSE. In this respect, the Prime Minister has delegated his authorities with the exception of the right to convert the DSE to a joint stock company.
  • The value of banking-related claims have risen three-fold during the crisis in Syria, which led to the establishment of banking courts in 2014 to deal with the logjam. The Council of Ministers has directed the Ministries of Justice, Economy and Foreign Trade, and Finance to investigate non-performing loans owed to public and private banks. In this respect, banking courts are expected to process these claims. Moreover, the government is looking to involve the private sector to solve the problem of defaulting loans as the current approach did not yield many results.
  • The final draft of the national budget for 2017 has been submitted to the Council of Ministers for its approval. The total budget is expected to be set at SYP 2.66 trillion, of which SYP 1.98 trillion will cover running expenditures and SYP 678 billion will be spent on investments. Within the total figure, SYP 423 billion will be spent on social support. In comparison, the 2016 budget was fixed at SYP 1.98 trillion. The Supreme Council for Economic and Social Planning has set out the priorities for the 2017 national budget with a particular emphasis on the industrial sector.

Insurance

  • The insurance sector has fallen under the spotlight recently as the government highlights corrupt practices, which are expected to be addressed in new legislation. The Council of Ministers has stressed the need to rehabilitate the insurance sector to improve the economy.
  • The government is considering reducing the private sector’s share of compulsory insurance policies from 45% to 15% of the total business of each company.

Investments

  • Muhammad Hamsho MP has called for amendments to the Investment Law to support local production.
  • According to the Prime Minister, the government will facilitate investments in the coastal provinces of Lattakia and Tartous.
  • There appears to be a realization among consultants that in order for Syria to attract foreign investment in the future, the government must start pushing through legislation that contains stronger input from the private sector. The underlying argument is that Syria’s laws are drafted too much with a public sector mindset and that input from the private sector will be necessary to attract foreign investment.

Industry

  • The Council of Ministers has approved a plan by the Ministry of Industry for the industrial sector that calls for supporting marginal and profitable companies and restructuring loss-making companies. Incentives for the industrial sector include fee exemptions, loans, facilities in the industrial cities and so forth.
  • Aleppo MPs are coordinating with the Aleppo Chamber of Industry on the provision of services to their city and they have also discussed a bill pertaining to industrial cities affected by the war.

Public Procurement

  • The government is putting together a panel of legal experts to draft the executive regulations to the Public-Private Partnership (PPP) Law.
  • Muhammad Hamsho MP has called for the activation of the PPP Law.
  • The Prime Minister has issued a decision depriving a number of contractors from entering into public contracts with the state due to acts of fraud and forgery.

Telecommunications

  • The Damascus Securities Exchange is planning for the potential listing of the two mobile phone network operators Syriatel and MTN Syria on the stock market.
  • The Minister of Economy and Foreign Trade has issued Regulation 692/2016 allowing the importation of mobile phones that contain GPS after securing regulatory approval.
  • The Customs Directorate has reaped in SYP 20 million from settlements of cases involving illegally-imported mobile phones in line with the recently passed Law 20/2016.
  • The mandate of the Syrian Telecommunications Company, which was established pursuant to the Telecommunications Law 18/2010, has been extended by Legislative Decree 31/2016

Transport

  • The Council of Ministers has approved the new Civil Aviation Bill whose provisions are more compatible with international standards and practices than the current Law 6/2004. The bill seeks to restructure the Civil Aviation Authority by splitting its regulatory and operational functions. The bill contains more than 200 articles and regulates airports, airplanes, airworthiness certification and so forth. It includes provisions for the licensing of all types of air transport services. The purpose of this new piece of legislation appears to be to reflect the new realities where private airlines will take the lead in the market and not the national carrier Syrian Arab Airlines, which suffers from the effects of international sanctions. Private airline companies are now stepping in to fill parts of the vacuum being left by the national carrier.
  • The decision to unify all ticket prices for internal flights across Syria among the state-owned Syrian Arab Airlines and the private companies is relieving passenger pressure on the national carrier. Ministry of Transport Regulation 859/2016 fixes the prices at SYP 20,000.
  • Legislative Decree 24/2016 has amended Legislative Decree 34/2009 with regards to departure fees. Each person leaving Syria from an airport shall pay a fee of SYP 5,000 while those leaving from land borders or ports must pay SYP 2,000 each. Every car departing Syria incurs a fee of SYP 10,000.

Property

  • The government has provided a loan to the southern Damascus Al-Razi development project, which was set up by Legislative Decree 66/2012. The Law aims to carry out an urban redevelopment project in informal parts of southern Damascus that were the scenes of intense fighting during the current unrest. Up until now, around 25,000 people are owners in this development.
  • The Damascus provincial authority is set to launch a new holding company to develop real estate projects in the capital.
  • The Prime Minister has formed a committee comprised of the Damascus provincial authority and the Ministry of Justice to assess property holdings belonging to the provincial authority.
  • MPs in the People’s Assembly have heard that the Ministry of Local Administration and the Environment is ready to implement the Urban Development Law in all the provinces as part of the reconstruction phase.

Intellectual Property

  • The Ministry of Internal Trade and Consumer Protection is seeking an amendment to the Trademark Law to hasten the registration process by reducing the time period to object to trademark applications from 90 days to 30 days.

Employment

  • The Council of Ministers has approved a bill on gradually providing temporary workers with permanent employment status in the public sector rather than wait for amendments to the Public Employment Law. The bill calls for concluding annual contracts with them.
  • The Minister of Administrative Development continues to talk about the imminent passage of the new Public Employment Bill but this position has not changed much over the course of the last year and more.
  • It was revealed during a seminar hosted by the Damascus Chamber of Commerce that the delay in issuing work permits to foreign residents in Syria is due to time-consuming bureaucratic procedures.
  • The Lebanese Labour Ministry has been targeting Syrian employees working illegally in Lebanon in jobs reserved only for Lebanese nationals.

Local Councils

  • The People’s Assembly deliberated on the performance of the Ministry of Local Administration and the Environment and on ways to develop the Local Administration Law.
  • While a number of competing political agendas have been pushing for a federalist future for Syria, what the country could benefit from is decentralization and the empowerment of local councils. In this respect, a strong central government would devolve greater powers to local councils than has hitherto been the case under the Local Administration Law. Federalism would create a new level of laws in Syria that would make it more time-consuming and complicated for businesses and individuals to engage with each other. President Bashar Al-Assad has touched on the issue of federalism and held that any talk of it would have to be part of constitutional reform, a process that would not be owned by the government.
  • President Bashar Al-Assad has appointed Hussein Ahmad Diab as the new Governor of the province of Aleppo to replace Muhammad Marwan Olabi. The President also appointed Jayez Al-Moussa as the new Governor of Hassakeh to replace Muhammad Zaal Al-Ali.

Media

  • Decree 23/2016 has abolished the National Media Council (NMC) five years after it was set up in accordance with the Media Law to replace the oversight authority of the Ministry of Information. Following the dissolution of the NMC, the Ministry of Information is planning a restructuring of the media industry.

Education

  • Bills were put forward to allow public lecturers to teach in private universities, increase seats for the children of martyrs and raise the retirement age for faculty and staff.
  • President Bashar Al-Assad issued Decree 293/2016 to increase the number of reserved seats for the children of martyrs in universities to 15 in every undergraduate course. In addition, they will also be entitled to two-percent of all seats in postgraduate courses.
  • The Ministry of Higher Education has decreed that private universities in Daraa should relocate back to their home province following an improvement in security conditions.

Health

  • The Ministry of Health has denied any plans to raise the prices of medicines.

Immigration

  • Legislative Decree 30/2016 amends Article 29(a) of Law 2/2014 and thereby raises the fees for granting residence permits to Arabs and foreigners living in Syria.
  • It has been reported that only 31 countries provide Syrians with visa-free travel.
  • The Lebanese Labour Minister is seeking the exit of Syrian refugees under a new plan as a guarantee against naturalization.
  • The United Arab Emirates has announced plans to receive 15,000 Syrian refugees over the next five years.

Arbitration

  • The Damascus Chamber of Commerce (DCC) hosted a lecture on arbitration and alternative dispute resolution methods in trade disputes. The Chairman of the DCC explained that there is not a real culture of arbitration in Syria. 54 arbitration centres were established in Syria since the issuance of the Arbitration Law in 2008 but none are operating due to the conflict.
  • The controversial exclusion of public contracts from the Arbitration Law is currently being reconsidered by a committee.

Judiciary

  • The Attorney-General in Idlib has argued that while his province may be outside of the state’s control, the courts are still functioning and hearing cases, particularly those relating to family law matters.
  • The Minister of Justice has set a time limit of eight months for courts and judicial bodies to consider cases brought before them.
  • Law 21/2016 establishes a common fund for judges, the state’s lawyers at the Legal Affairs Department and the Public Prosecutor’s Office.
  • President Bashar Al-Assad has appointed new judges to the Terrorism Court.
  • Ministry of Justice Regulation 5335/2015 lists the judicial documents that require official stamping before submission in return for a fee of SYP 200.

Family Law

  • Syria’s Kurds are promoting civil marriages in areas they physically control in northern Syria.
  • Lebanon’s Foreign Minister has backed the idea of women giving their spouses and children Lebanese nationality as long as their spouses are not Syrian or Palestinian.

Criminal Law

  • According to the President of the Criminal Court of Cassation, the instances of bribery increased tenfold during the current conflict in Syria.
  • Ahmad Kuzbari MP has called for legislation permitting the families of martyrs and wounded personnel to sue countries deemed aggressors against Syria. While on this subject, Syria is considering a lawsuit against the United States for the Deir Ez-Zor attack in September that killed Syrian soldiers.

International

  • A British delegation including parliamentary, academic and religious figures has visited Syria and met with President Bashar Al-Assad and the Minister of Tourism.
  • All 446 Russian Duma lawmakers unanimously approved the bilateral agreement to deploy Russian forces on Syrian territory indefinitely. Russia has also announced plans to make its presence at the Tartous Naval Base permanent by seeking the approval of the Duma.
  • The Syrian Prime Minister has invited China to take part in the reconstruction phase following a meeting with the Chinese Ambassador. Chinese companies have been eyeing contracts in Syria’s electricity sector.
  • The Czech Republic is seeking to strengthen ties with Syria with an eye towards reconstruction and it plans to lobby against sanctions imposed on Syria to the European Union.
  • A United Nations committee has published recommendations that seek to alleviate the effect of international sanctions on the delivery of humanitarian aid to Syria.
  • Two draft resolutions sponsored by France and Russia at the United Nations Security Council regarding the conflict in Syria have been vetoed.

Miscellaneous

  • The Council of Ministers has approved bills related to the illegal drawing of electricity, the regulation of plant quarantine and the protection of mineral resources. The latter bill includes preventing the illicit extraction, transportation, storage and/ or sale of mineral resources.

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