Syrian Law- Proposed Legislation

Termination of Public Contracts

• Contractors are still seeking the issuance of the law that would terminate public contracts and the subsequent reimbursement of stamp duties in an attempt to limit damage to their interests.
• The President of the Rural Damascus Contractors Syndicate has explained that the government hesitated at the beginning to issue a law to terminate public contracts.
• The government appeared concerned about the estimated enormous costs that it interpreted as being associated with the process.
• However, the Syndicate held that the costs involved would not have a material effect on the Public Treasury’s finances as they would merely include refunding bond and retention payments to contractors.
• It was also revealed that there are around 10,000 contracts or projects that meet the requirements for contractual termination.

Touristic Free Zones

• The Ministry of Tourism is working on establishing free zones to provide facilities for touristic investments.
• There are currently plans for four such touristic free zones, including one in Tartous province and three in Lattakia province.

Insurance Courts

• The Council of Ministers has approved a draft law to set up insurance courts in each province at the levels of first instance courts and courts of appeal.
• The creation of these courts to try insurance-related cases will resemble the set-up of banking courts.
• There have been calls from interested parties in the insurance industry for the establishment of these types of courts for some time now.

Listing of Foreign Exchange Companies

• Consultations between the Syrian Commission on Financial Markets and Securities (SCFMS) and the Central Bank in their joint committee continue regarding the inclusion of foreign exchange companies on the DSE.
• Not long ago, 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 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.
• One proposal that was being discussed that would facilitate the listing of foreign exchange companies on the DSE would be to give these companies the right to trade up to five percent of their shares without the need to obtain the consent of the Central Bank.

Bond Market

• Syrians continue to await the government’s response to a proposal that calls for the creation of a bond market as interested parties continue to provide their input on the idea.
• Months ago, the SCFMS announced that work was underway to launch a bond market by the end of 2015 following the creation of a special committee to realize this objective.
• Furthermore, serious discussions are being held with a view to issuing Islamic bonds on the DSE.

Billing System

• According to the Deputy Minister of Finance, the amendments to the Billing Bill have been completed.
• The Deputy Minister of Finance has explained that the current conditions in Syria require the application of the billing system.
• The Ministry’s plan in implementing this system extends over a three-year period and the Ministry initially aims to start imposing it on importers and industrialists.
• The Council of Ministers initially approved the draft law pertaining to the billing system, which will have consequences for the tax system.
• The Draft Billing Law was submitted to the government for approval after amendments by the Ministry of Finance were included.
• The Ministry of Finance held discussions about the provisions of the Draft Law after receiving feedback from the Damascus Chamber of Commerce and other interested parties.
• Despite its initial approval, the Ministry of Finance has confirmed that the Draft Law was returned to it by the Council of Ministers so that it could work alongside the Ministry of Justice to develop the executive regulations, which will accompany the bill upon enactment.
• Once completed, the Draft Law will be sent back to the Council of Ministers for approval once again.
• If enacted, this piece of legislation will introduce the billing system into Syria, which is anticipated to have a positive effect on the economy and the operation of the tax system.
• It is also envisioned that the billing system will help curb any fraudulent activity and increase transparency especially when it concerns customs documents.
• There are hopes it will have an effect on limiting transactions in the informal economy.
• Additionally, the Ministry of Finance has stated that the Draft Billing Law will complement the provisions of the recently-enacted Consumer Protection Law.
• There is a general consensus that tax reform without the passage of the Billing Bill is not going to be productive or forthcoming.
• At the same time, there is mounting frustration that work on this piece of legislation has been ongoing for the past eight years.

National Fund for Social Development

• The Federation of Syrian Chambers of Industry has referred a draft law to establish the National Fund for Social Development (NFSD) to the Prime Minister’s Office after previously doing so in 2013.
• The NFSD plans to finance the rebuilding of Syria’s infrastructure without recourse to borrowing.
• The draft provides incentives for various parties to contribute funds for reconstruction projects including entitlements to profits.
• Players from all parts of the economy will be invited to contribute with the NFSD.
• The government and the private sector will equally contribute 50% of the budget of the NFSD.

Financing of Local Councils

• The Council of Ministers has approved a bill amending the Local Councils Finance Law, which seeks to unify the financial laws related to revenues collected by local councils throughout Syria.
• The bill will seek to ensure that the councils are supplied with new resources to help them improve their financial positions, which will enable them to carry out their projects and provide better services to Syrians.

General Commission for Taxes and Fees

• A committee has been formed in the Ministry of Finance to review laws and regulations to improve the capabilities of the General Commission for Taxes and Fees.

Real Estate Sales

• A bill regulating real estate sales was submitted to the government for consideration following its earlier approval of a bill amending the Capital Gains Tax Law.
• According to the Deputy Minister of Finance, the amendments to the Real Estate Sales Bill have been completed.

Real Estate Fees

• The government has approved a bill regulating real estate fees to link them to actual property market valuations following consultations between the General Commission for Taxes and Fees and the Ministry of Local Administration.
• The current Law 429/1948 that deals with this subject is quite outdated.

Old Rent Subleasing Fees

• A bill imposing fees on the subleasing of properties by old rent tenants is the subject of deliberations by the government following its earlier approval of a bill amending the Capital Gains Tax Law.
• Old lease contracts refer to those concluded under Legislative Decree 111/1952, which remain in force despite the passage of subsequent legislation.

Basic Real Estate Law

• It has been observed that there is a significant decrease in real estate litigation.
• Related to this issue is the fact that the basic Real Estate Law dating back to 1923 is severely outdated and requires an urgent review.
• In this respect, the Ministry of Justice has formed a committee to come up with urgent changes to the Law.

Transport of Goods

• The Council of Ministers is preparing to push through a draft law that will regulate the transport of goods following its completion by the Ministry of Transport.
• With an eye towards reconstruction, the Ministry of Transport is looking at new laws to regulate the transport of goods and persons, and intermodal transport.

Civil Aviation

• 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 bill aims to improve operations at the state-owned national carrier Syrian Arab Airlines and the air travel industry in general.
• It will encourage more private companies to be licensed and at the same time safeguard the status of the national carrier.
• Moreover, the government is requesting the Ministry of Transport to cease licensing private airline companies pending the passage of the bill.
• Before this request was made, the fourth private airline company was in the process of obtaining its license.
• 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.

Food and Drugs

• The Pharmacists Syndicate is working with the Ministry of Health to draft legislation that would monitor the quality of food and drug products and regulate their supply in the markets in the event of shortages.

Health Insurance

• Work is ongoing on a draft health insurance law and the prospective establishment of the Supreme Health Insurance Council (SHIC), which seek to extend coverage to interested parties.
• The government intends to set up the SHIC under the authority of the Minister of Finance and its aim will be to meet the medical needs of Syrians.

Water Resources

• According to the Minister of Water Resources, the Ministry has completed a draft law that calls on farmers to form water users associations.
• The Water Bill seeks to activate collective irrigation mechanisms and optimize water resources to reduce wastage and achieve sustainability.

Forestry

• The new Forestry Bill is expected to harshly punish offenders who cause harm to forests throughout Syria as the government is placing more emphasis on preserving them.

Cybercrimes

• The Minister of Justice has also set up a committee whose goal is to lay down the necessary framework to combat cybercrime.

Terrorism Court

• The People’s Assembly has referred a bill amending Article 5 of Law 22/2012, which establishes the Terrorism Court, to its Constitutional and Legislative Affairs Committee for review.
• The provision touches on the appeals process in the Terrorism Court.
• The Ministry of Justice was studying the bill that would establish a special chamber in the Court of Cassation to challenge acquittals by the Terrorism Court.
• The bill would grant the Public Prosecutor the right to file these appeals.
• The Ministry is also looking at ways to speed up trials of accused individuals charged under anti-terrorism legislation.
• Members of the legal profession are also encouraging the Ministry of Justice to collect all laws relating to terrorism, such as terrorism financing, into one comprehensive law.
• Proposals have been put forward to establish a terrorism court in Aleppo that would be similar in nature to the one in Damascus in order to adjudicate crimes in northern Syria.

Legal Affairs Department

• The Ministry of Justice has prepared a bill establishing the Civil Prosecutor’s Office with wide powers to replace the Legal Affairs Department, the body entrusted with managing the state’s legal cases.
• The Ministry of Justice had previously published on its website a draft law that governs the Legal Affairs Department.
• After an earlier proposal to dissolve this body, the Prime Minister had decided to retain it.
• There are currently 350,000 public sector cases that are managed by the state’s Legal Affairs Department.
• The Legal Affairs Department was responsible for more than 300,000 lawsuits in all of Syria last year.
• Dissolving it completely would have meant referring cases to private sector lawyers who charge higher fees than the state’s lawyers, which would be a drain on the Public Treasury.
• Despite the drawbacks inherent in the Legal Affairs Department, the previous bill at the time aimed to safeguard the state’s funds.
• As with the current bill, the earlier one envisioned broader powers for this body in handling cases and giving its approval for lawsuits to proceed.