Syrian Law Journal

Legal Briefing – April 2015

by · 04/05/2015

Welcome to our latest legal briefing covering the news of the past month- here is a taste of what is in store: in accordance with the Electricity Law 32/2010, the Ministry of Electricity has signed a memorandum of understanding with a German company to build a power plant. In light of the upcoming diplomatic consultations in Geneva, the government has relaxed restrictions on the ability of citizens abroad to obtain and renew passports. Recent news has revealed that a bond market could be set up later this year. Meanwhile, legal hurdles are deterring foreign exchange companies from listing their shares on the stock market. In financial news, a unified income tax law is being considered while exporters are now required to sell all of their foreign currency earnings to the banks. However, more cash is being made available to both importers and exporters by the Central Bank to facilitate their transactions while new legislation is being drafted with a view to bolster local industries and support Syrian exports.

  • The Ministry of Electricity has signed a memorandum of understanding with the German-based company Power International to build a 360 megawatt gas-fired power plant in order to meet the growing energy demands in the country. The agreement seeks to build on the provisions of the Electricity Law 32/2010, which seeks to promote private investment in this sector.
  • Legislative Decree 17/2015 amends Law 1/2014 by doubling the fees of consular services provided to Syrian nationals living overseas. Application fees for passports and visas are set at US$400 while the price for renewing them is fixed at US$200. Moreover, the security clearance procedures that are conducted by the Directorate of Immigration and Passports in the Ministry of Interior are being stopped, which means that passports will be issued to citizens even if they departed Syria illegally or if they possess unofficial passports or travel documents. The passage of this law is believed to be linked to the upcoming diplomatic consultations that are due to be held in Geneva this May under the auspices of the United Nations Special Envoy for Syria.
  • The Council of Ministers has approved a one-year extension for banks to comply with the minimum capital requirement rules provided for in Law 3/2010, which amends the Banking Law 28/2001.
  • The Syrian Commission on Financial Markets and Securities (SCFMS) announced that work is underway to launch a bond market later this year.
  • Furthermore, the SCFMS admitted that the current rule, which requires foreign exchange companies to seek the approval of the Central Bank whenever their shares are traded, is hindering the listing of these types of companies on the Damascus Securities Exchange (DSE). In this regard, a number of foreign exchange companies are incorporating themselves as private joint stock companies and avoiding going public on the DSE.
  • The Ministry of Finance will soon start considering draft legislation to impose a unified income tax. The tax brackets proposed are set to range from a minimum of 10-12% and will not exceed a maximum limit of 25%.
  • In light of the new Consumption Tax Law provided for in Legislative Decree 11/2015 and the recent amendments to the Income Tax Law passed in accordance with Legislative Decree 10/2015, the Directorate of the Ministry of Finance based in Rural Damascus is laying out a plan to review possible distortions in the collection of these taxes that may have taken place in the past.
  • Regulation 1397/2014, which was issued by the Prime Minister’s Office almost one year ago, allows the Central Bank to require exporters to sell 50% of their foreign currency earnings to any of the authorized banks in Syria. The Central Bank has since resolved to increase this amount to 100%. This decision reflects the current financial strain the economy finds itself under at the present time.
  • The amount of foreign currency exporters can now receive from licensed institutions is US$100,000 following a decision to this effect by the Central Bank. Previously, exporters were restricted to US$50,000. The Central Bank also raised the limit for the financing of import licenses from US$150,000 to US$300,000.
  • The Central Bank has permitted licensed banks to issue guarantees denominated in foreign currencies for the benefit of public sector entities.
  • The Directorate of Customs issued Regulation 62/2015, which merges customs declarations and does not allow them to correspond to more than one invoice.
  • Legislative Decree 18/2015 amends Law 28/2011 with regards to the imposition of a 30% fee on all Turkish goods and materials imported into Syria. The law requires the fees collected to be utilized for reconstruction efforts.
  • The Ministry of Economy and Foreign Trade has prepared a bill containing amendments to Legislative Decree 6/2009, which establishes the Export Development and Promotion Agency, and Legislative Decree 19/2009, which launches the Export Development Fund. These amendments seek to support the domestic production of goods and improve their quality in order to assist Syrian companies to meet local demand and to sell their products overseas even under the current strenuous conditions facing the country.
  • The Ministry of Internal Trade and Consumer Protection passed Regulation 751/2015, which increases the price of a liter of gasoline by SYP 10 from SYP 130 to SYP 140. In addition, the price of a tonne of fuel oil was raised from SYP 90,000 to SYP 105,000.
  • The Ministry of Labour and the Ministry of Administrative Development have agreed to jointly study changes to the rules governing public employment.
  • The Prime Minister has issued a circular stating that persons subject to military service in accordance with Legislative Decree 30/2007 (amended by Legislative Decree 33/2014) shall retain their employment rights, including those pertaining to promotions and compensation while on duty.
  • Legislative Decree 20/2015 grants ‘Cards of Honour’ to the relatives of martyrs, missing and disabled persons, which provides them with medical services free of charge, including hospitalizations, treatments and surgeries. In addition, they will receive a 50% discount on public transportation fees.
  • The Prime Minister has agreed to a recommendation by the Economic Committee that tax and fiscal exemptions granted to existing projects in certain provinces such as Deir Ez-Zor, Hassakeh and Raqqa be suspended in light of the current turmoil in that region.
  • The Prime Minister has indicated that restaurants in Damascus need to be classified accordingly in line with relevant legislation so as to avoid instances of tax evasion.
  • The Ministry of Tourism is drawing up the necessary regulations that will set the requirements and standards that must be met by hotel management companies applying for a license.
  • The provincial authority of Rural Damascus has formed a committee to assess damages sustained by touristic facilities. The committee is expected to provide compensation to affected investors, with priority going to those intending to reopen their establishments whether partially or fully.
  • The Ministry of Justice is requesting the courts to submit the monthly schedules of all prospective cases related to the illegal trade in oil derivatives.
  • The Ministry of Justice formed a committee to study the legislative and regulatory environment affecting the illegal trade in currencies for a period of one month.
  • Incidents of embezzlements of public funds have been soaring in number, particularly as a result of the ongoing crisis in Syria. Judicial statistics have revealed that up to 500 lawsuits are pending before the criminal courts. According to the Economic Criminal Code provided for in Law 3/2013, individuals found guilty of embezzling public funds can be sentenced from three to 15 years in prison with hard labour.
  • An official source in the Terrorism Court has revealed that there have been 2,400 acquittals so far this year.
  • The President of the Council of State has noted that the draft law that is expected to reform this administrative court will enhance its authority and allow it to exercise its powers accordingly without being marginalized as it allegedly was in the past.
  • Syria and Algeria have held discussions regarding the implementation of joint judicial agreements signed between both countries especially since they both possess judicial systems that are relatively identical to each other. In this regard, the Ministries of Justice and the Supreme Judicial Councils in both countries are seeking to cooperate closer with each other.