Legal Briefing – May 2018

Property

• Talks are ongoing between Damascus Cham Holding and Russian and Chinese investors about the possibility of establishing joint ventures to invest in Marota City and Basilia City.
• Regeneration projects in accordance with the new Urban Renewal Law are being considered in the Damascus suburbs of Harasta, Daraya and Yalda. The final designs of the renovation works that will take place in Daraya have been selected.
• According to the Minister of Public Works and Housing, 50 percent of residential areas in Syria are considered informal.
• The Minister of Public Works and Housing explained that there are no plans to amend the Expropriations Law because the new Urban Renewal Law along with other legislation on the books provides enough scope to deal with the real estate sector. Therefore, the government does not see much value in undertaking a legislative review with respect to the Expropriations Law.
• Damascus Provincial Council approved the transfer of some of its assets to Damascus Cham Holding. They include properties such as those in the Hamrawi neighbourhood near the Umayyad Mosque in Old Damascus.
• According to the Director of the General Commission for Real Estate Development and Investment, many Arab and foreign companies are exploring the potential of investing in the real estate market in Syria.

Construction

• The People’s Assembly approved a bill exempting industrialists and craftsmen from paying building permit renewal fees for a period of one year. The bill was ratified by President Bashar Al-Assad and became Law 18/2018.

Taxation

• The final touches are being put on the new Real Estate Sales Tax Bill, which will calculate sales taxes owed on property sales according to the actual market valuations as opposed to outdated figures.
• Syrian MPs in the People’s Assembly subjected the Minister of Finance to extensive questioning on the state of the taxation system and its shortfalls, claiming it is underdeveloped and not suitable to the current circumstances. The issue of tax evasion has received more attention since the conflict in Syria broke out as the government’s revenues came under pressure. The Ministry of Finance is focused on fixing the taxation regime by relying more on technology in a bid to combat instances of evasion. Criticism was also directed at the fact that the auditing of the public accounts which is mandated by the Constitution on an annual basis has been outstanding since 2012 due to a lack of resources.

Finance

• A bill has been passed that will amend Article 16(a) of the Monetary Law to permit the issuance of a SYP 5,000 note. The SYP 2,000 note was issued in the summer of 2017.
• The Ministry of Internal Trade and Consumer Protection has ratified the articles of association of Noor Microfinance, a private joint stock company with a capital of SYP 1 billion. Noor Microfinance is a subsidiary of Ramak Development and Humanitarian Projects and will provide small loans to borrowers.

Commerce

• The Ministry of Finance imposed an attachment order against the assets of a leading Syrian industrialist for import violations. The amount in dispute stemming from these violations is around SYP 8.6 billion.
• The Economic Committee linked to the Council of Ministers has revoked its decisions dating back to 2013 that obliged private sector importers to transfer 15% of their imported products to the publicly-owned Syrian Trade Establishment at cost.
• Syrian MPs have called for revoking a 2011 decision that prohibited the importation of cars since they are considered luxury items. The depreciation of the Syrian Pound starting in 2011 led the government to cease the importation of automobiles since they were increasing demand for foreign currency, which consequently added pressures on the Syrian Pound. The decision fueled an increase in the prices of second-hand cars, which has led to frustration and calls to resume importations. The move would also be expected to promote a freer market rather than a limited one run by monopolists.
• Emaar Automobiles, which was established months ago with a capital of SYP 500 million, is preparing to open a factory in Hassia Industrial City in Homs to produce automobile parts. The project was licensed by the Syrian Investment Authority, which grants benefits and incentives in accordance with the Investment Law.

Corporate

• According to the Director of the Damascus Securities Exchange, the government may take a decision soon to require newly established real estate development and finance companies to offer part of their shares to the general public on the stock market.

Tourism

• The Russian company Stroytransgaz has started work on a tourism project in Tartous worth $90 million (US).
• According to the Minister of Tourism, the Syrian and Egyptian authorities are cooperating together to increase bilateral tourism relations.

Aviation

• According to the Director of the Civil Aviation Authority, more than 15 applications have been submitted for the licensing of private airline companies.

Energy

• According to the Minister of Electricity, a bill could soon be issued to deal with cases related to the provision of electricity supplies in areas that witnessed conflict and were outside of the state’s control.

Employment

• MPs in the People’s Assembly called for an increase in the wages and salaries of public sector employees.
• According to the Ministry of Social Affairs and Labour, the proposed amendments to the Employment Law do not constitute more than five percent of the current legislation.

Lawyers

• The General Congress of the Bar Association approved a proposal to raise pensions for lawyers by 10%.

Judiciary

• President Bashar Al-Assad appointed the new justices of the Supreme Constitutional Court by virtue of Decree 165/2018. The former Speaker of the People’s Assembly Jihad Laham was appointed as the new Chief Justice of the Supreme Constitutional Court. In accepting his appointment, Laham resigned his seat as an MP. The new justices were sworn in before President Bashar Al-Assad in a ceremony attended by Hammoudeh Sabbagh, the Speaker of the People’s Assembly.

Administration

• There are complaints that reform of the public administration in Syria will not yield any results until decisions, regulations and circulars dating back to the premierships of Mustafa Miro and Naji Otri in the 2000s are replaced by modern ones that are more fitting to the present environment. The issue is that governmental measures are currently outdated and no longer fit for purpose.

Reconstruction

• Prime Minister Imad Khamis led a governmental delegation comprised of various ministers to the province of Deir Ez-Zor to determine the needs required for reconstruction. Deir Ez-Zor city was affected during the course of the war before it was brought back under the control of the state in November 2017.

Immigration

• Law 19/2018 amends Law 18/2017 and provides that Syrian citizens residing abroad can avail themselves of consular services such as passport renewals by paying the fee in US Dollars or its equivalent in Euros or in an approved local currency.

Family Law

• A bill was presented that would amend provisions of the Criminal Code to make it an offence punishable by imprisonment for any couple that weds through a customary marriage. There have been numerous instances of people being abused through marital procedures since the conflict in Syria erupted. As a result, the government wants to ensure marriages are properly registered with the courts but the harsh penalties contained in the new bill have drawn criticism.

Military

• For the first time since the war in Syria began and specifically since October 2010, the General Command of the Army and the Armed Forces formally declared the End of Active Service for the first class of Syrian soldiers carrying out their military service. The End of Active Service was conferred on the 102nd session of the Syrian Arab Army. The 102nd session refers to that class of soldiers who were enlisted in October 2010 from all the Syrian provinces, months before the crisis in the country erupted. According to the Military Service Law, Syrian males are required to undertake compulsory military service for a period of 18 months during peacetime. In wartime, the General Command can exercise its discretion and extend the period of military service. Given the years-long war in Syria, the 102nd session was engaged in active military service for almost eight years. Once the End of Active Service is conferred on a session, the respective soldiers are free to return home but become part of the reserve military force. Given their experience in military service, they become reservists and could be called upon at a later time if the need should arise. The End of Active Service conferred on the 102nd session followed the end of combat operations in and around Damascus.