Legal Briefing – April 2017 (2)

Investments

• The Damascus Chamber of Industry requested permission to import used machinery in accordance with the Investment Laws.

Companies

• The Damascus Chamber of Industry requested a further two-year extension for companies to fully comply with the provisions of the Companies Law. 1,400 limited liability companies still need to settle their status with the Ministry of Internal Trade and Consumer Protection.

Commerce

• The Damascus Chamber of Industry called for revoking the decision requiring the private sector to sell 15% of their imports to the Ministry of Internal Trade and Consumer Protection.
• It seems that only merchants who violate the law will not be granted import licenses.
• No executive regulations for the Unified Electronic Guide for the Granting of Import Licenses are to be issued apparently.
• The Economic Committee called on the Council of Ministers to retain the import ban on bottled water for another year since local demand is already met.
• The Council of Ministers discussed a bill incorporating the Syrian Grain Establishment tied to the Minister of Internal Trade and Consumer Protection. The Establishment will have legal personality along with financial and administrative independence.
• The Council of Ministers discussed a bill pertaining to the Chambers of Commerce and their relationship with the Federation of Syrian Chambers of Commerce.

Industry

• The Damascus Chamber of Industry proposed cancelling the administrative licensing requirements for the industrial cities.

Finance

• Private banks complained that decisions taken by the Central Bank are forcing depositors to avoid placing cash with Syrian banks. One major decision affecting this state of affairs is Regulation 15/2015 issued by the Money Laundering Commission. Issues such as taking custody of cash by the Central Bank and meeting cash withdrawal requests by banks in a timely manner are among the problems. Banks want the Central Bank to control the inflation index instead of the foreign exchange rate. Banks also want the establishment of an independent Federation of Syrian Banks to participate in the decision-making process. They also seek the revocation of a decision that requires them to obtain security clearance for selling the repossessed properties of defaulting debtors. In addition, they want the requirement on them to obtain a security clearance to purchase or lease a property to be cancelled as well.
• A Syrian banker called for the creation of a Syrian lobby group in the United States to advocate for the removal of American sanctions against Syria.
• The Prime Minister requested the Ministry of Justice to meet with private banks and get their feedback on problems with the banking courts.
• The Damascus Chamber of Industry called for the establishment of a foreign exchange office to finance the importation of raw materials for the industrial sector.

Taxation

• Legislation was being considered to exempt late taxpayers from fines and interest payments and it was eventually passed. The plan was to exempt taxpayers if they make the required tax payments by December 31, 2017. Income taxes due in 2015 and 2016 as well as consumption taxes are also subject to exemption if payment is made by the end of the year. The legislation also applies to other taxes, such as on touristic establishments and so forth. The Executive Regulations laying down the details of how this Law will be implemented were also being prepared. The Executive Regulations list the relevant dues, such as those pertaining to income, payroll, real estate, inheritance, wills, donations, expatriates, cars and so forth. The Law does not apply to taxpayers whose businesses are located in conflict areas as they are exempt from interest and fine payments for three years. Conflict areas will be designated accordingly by specialized provincial committees in coordination with the Ministry of Finance. The Ministry itself was placing emphasis on the importance of the provisions in the Law.
• The Ministry of Finance put a stop to more than 10 laws related to tax policy. The Ministry is currently working on a tax reform program and is therefore developing new legislation. The Minister of Finance pledged that there would be no new taxes and no increases in current taxes. The objective is to achieve justice in the tax system, close loopholes exploited by individuals for personal gain, and to reform and correct the system to increase public revenues. Consequently, the Ministry formed an expanded committee on January 3rd to study and review the tax regime in order to propose legislation to reform it. In addition, the Directorate of Finance in Damascus is studying proposals to implement the tax reform program.

Property

• The Governorate of Damascus approved the transfer of ownership of six real estate properties to Souria Holding, one of the leading companies in the country.
• There are concerns that the competencies of the General Commission for Real Estate Development and Investment are overlapping with those of local councils. Such concern is especially true with respect to the issue of random housing, which could lead to legislative reform to address such problems.
• The General Commission for Real Estate Development and Investment asserted that 25 real estate development zones have been established in eight provinces.
• The Council of Ministers discussed a bill dealing with the necessary treatments for damaged buildings.

Intellectual Property

• The Council of Ministers discussed a bill setting a deadline for inventors to settle their fee payments in order to protect their patent rights.

Construction

• A recent decision on adjusting the prices of loss-making construction projects only affects the public sector contractors, not the private ones.

Transport

• The corporatization of Syrian Arab Airlines is underway as the Ministry of Transport announced that the government had given its approval to the establishment of the Syrian Airlines Corporation, which is to have a capital of SYP 6 billion.
• The Council of Ministers discussed a bill on the transfer of goods by road and agreed to submit it to the concerned authorities for deliberations.
• The Council of Ministers extended a deadline for proprietors of Gulf-owned trucks to settle their legal status by an additional six-month period.

Tourism

• The Council of Ministers requested the Ministry of Tourism to review laws applicable to its sector with the aim of promoting touristic activities in safe areas.

Telecommunications

• President Bashar Al-Assad issued Legislative Decree 17/2017 exempting debtors to the Syrian Telecommunications Company from interest and other payments if they settle their debts. The Law applies to debtors who have subscribed to landline, telex, wireless devices and so forth. Subscribers whose subscriptions were cancelled due to unpaid debts can restore them if they pay half their debts at least.

Immigration

• The Syrian embassy in Amman and the Syrian consulate in Istanbul have stopped extending the validity periods of Syrian passports and travel documents for Syrians living in those countries. The decisions remain in place until further notice. The extension of the validity periods of passports and travel documents was hitherto available to anyone who visited those countries as well.

Lawyers

• The Bar Association issued a circular pertaining to lawyers who are the presidents or board members of their branches or members of the General Conference. The branches and the General Conference are organs of the Bar Association, which regulates lawyers and the legal profession. The circular prevents these specific lawyers from travelling abroad unless they obtain permission from the ruling Baath Party’s Regional Command. Designated lawyers must make a written request to the Bar Association two weeks before their scheduled departure and they must state the name of the country to which they intend to travel. The President of the Bar Association said that the regulatory body has the right to know to which countries these specific lawyers are travelling. He also denied that any circular will be issued that prevents all other lawyers from having to seek similar consents. The recent circular was in response to some lawyers travelling abroad without obtaining the necessary approvals.
• An agreement was reached between the Bar Association and the University of Damascus to promote scientific and professional cooperation.

Government

• There have been calls lately for the reappointment of a Deputy Prime Minister for Economic Affairs to steer Syria’s economic policies.
• The Prime Minister said legislation is being prepared to develop the powers and duties of deputy ministers.
• Regulation 785/2017 tasks a committee formed under the authority of the Ministry of Public Works and Housing with developing the public sector.

Parliament

• The Damascus History Foundation, founded by the Syrian historian Sami Moubayed, finds and preserves the capital’s judicial records, government correspondences, Land Registry documents and so forth. Moubayed explained that the archives of the Syrian Parliament were bundled into boxes and shipped to the Ghouta region just outside Damascus shortly before the conflict started. He confirmed that the archives had been lost along with the audio recordings of all parliamentary sessions from 1947 to 1967. He also clarified that Syrian government agencies vary with respect to their archives. Moubayed has been through the archives of the Parliament, the Ministry of Culture and the Ministry of Foreign Affairs and Expatriates. However, according to him, close to nothing of the archives survived until the present time at all three of these bodies. There is nevertheless a wealth of documents at private homes, whose fate is unknown, which are tucked away in attics and basements. Moubayed and the Damascus History Foundation work to find and preserve what is left of the archives through field work, personal visits, digitization, scanning and so forth.

Family Law

• Some Syrian embassies are requesting the Sharia courts to grant guardianship rights to expatriate Syrian women over their children. Ambassadors are making this request from the Sharia courts for a number of reasons, including for mothers to obtain or renew passports for their children. The father is usually responsible for obtaining or renewing passports for his children. Some women have been left overseas without their husbands and have thus had to seek the assistance of their respective Syrian embassies. Syrian embassies overseas are responsible for the personal status matters of Syrian expatriates, such as marriage, divorce and so forth. If a Syrian embassy is closed in a certain country, expatriates must seek the consular services of the nearest one to them in another country. A lot of embassies lack specialists in Personal Status Law so Syrian expatriates have had to resort to marital contracts under the laws of foreign countries.

Civil Status

• A source in the Ministry of Foreign Affairs and Expatriates revealed that powers of attorney from outside Syria destined for the Civil Registry no longer require clearances. The Civil Registry deals with matters related to a person’s civil status. Clearances in this case apply to those from the Ministry of Foreign Affairs and Expatriates and the security services. The powers of attorney can therefore be submitted directly to the Civil Registry. A source in the Sharia Court in Damascus explained that the lack of approvals by the Ministry was stalling procedures. The abolition of security clearances was regarded as necessary for expatriates since a number of matters including marital transactions were stopped due to a lack of approvals by the security services.

Women

• President Bashar Al-Assad issued Legislative Decree 16/2017 with respect to the General Women’s Union. The new Law revokes Law 33/1975 (amended by Law 3/1984), which led to the creation of the Union. Accordingly, the Ministry of Social Affairs and Labour will replace the Union with respect to its rights and duties.

International

• Canada added 27 individuals to its Syria sanctions list, including ministers, governors, the second-in-command of the Baath Party, the Central Bank Governor and so forth. Subsequently, Canada also sanctioned a further 17 Syrian individuals bringing the total number to 234. It also sanctioned an additional five legal entities bringing the total to 57.
• The United States Treasury Department froze the assets of all 271 employees of the Syrian Scientific Studies and Research Center and blocked American nationals and businesses from dealing with them.
• Eric Olsen, the CEO of Lafarge Holcim Ltd., resigned after two years at the helm amid a probe into the company’s operations in Syria and its alleged pay-off to ISIS to keep its factory in the country functioning.