Legal Briefing- April 2020

International Trade

  • Since 2011, imports of goods into Syria have been hindered one way or another by international sanctions, import controls imposed by the government, a depreciated Syrian Pound making imports more expensive, and now global supply chain disruptions caused by the COVID-19 pandemic.
  • Some export controls are being put into place to help increase the supply of certain necessary goods and materials in the local markets and to help keep prices down. The Ministry of Economy and Foreign Trade suspended exports of certain medicines, such as chloroquine, azithromycin and paracetamol, until further notice as part of the COVID-19 response plan in order to ensure their availability in the local markets. According to the Minister of Health, chloroquine and azithromycin are manufactured in Syria and form part of the treatment protocol adopted by the government to treat patients hospitalized due to COVID-19.
  • The government is allowing importers to clear their goods using copies of their original documents for a period of two months provided that the original versions are submitted within two months from the date of the clearance process.
  • Syria has received 75,000 tons of wheat from Russia as part of an aid agreement, which will also see an additional 25,000 tons of wheat delivered as well. On a related note, the Syrian Grains Corporation contracted with a Russian entity for the purchase of 475,000 tons of Russian wheat, which arrived in Tartous Port.
  • A source at the Abou Kamal border crossing between Syria and Iraq confirmed that the shipment of goods from Iraq into Syria has stopped completely due to COVID-19 while Syrian exports to Iraq have substantially decreased.

Commerce

  • The Council of Ministers eased some restrictions on certain sectors of the economy to resume activities though with the minimum amount of the workforce required.
  • Manufacturers and merchants in Syria faced multiple sources of pressure, including the closure of retail outlets to sell their products, a build-up of stock, ongoing payments of salaries despite the inactivity, and price controls that eat into their profit margins.
  • While the government permitted the partial reopening of some businesses, merchants began calling for a complete reopening, particularly in anticipation of Ramadan.
  • The Council of Ministers called on the Ministry of Local Administration and the Environment and the Ministry of Interior to ensure that governors and police chiefs, respectively, in the provinces obligate commercial establishments to adhere to the rules on partial reopening.
  • The government is implementing procedures to subject sterilizers and other similar products to administrative pricing whereby a uniform price is adopted and all sellers whether in the public or private sectors must abide by them.
  • Subsidies and price controls imposed on products by the government, particularly goods that have been subjected to enhanced oversight as part of the COVID-19 measures, have reportedly led to an increase in smuggling cases to neighboring countries where profit margins are higher.
  • There has been an increase in e-commerce transactions in Syria following the decision to close markets, restaurants and cafes in accordance with the precautionary measures to prevent the spread of COVID-19.

Consumers

  • Subsidized bread is now being sold via the smart card system in the provinces of Damascus and Rural Damascus before being extended to the rest of the country. Other subsidized items being sold via the smart card include fuel products, rice, sugar, tea and vegetable oil. Furthermore, the Minister of Internal Trade and Consumer Protection reportedly stated that Takamol, the company contracted to manage the smart card system, would cease to do so. Rather, it would continue to solely provide technical services.

Finance

  • The Council of Ministers granted approval for the Syrian Electronic Payments Corporation to start processing bill payments for public services digitally as part of the e-government initiative.
  • The lockdown measures adopted by governments around the world in response to the COVID-19 pandemic, the plunge in oil prices and disruptions to logistics will all affect the amounts of remittances sent to Syria by expatriates overseas.

Health

  • The Public Laboratories Department at the Ministry of Health, and in particular staff at the Emergent Diseases and Epidemics Laboratory, are conducting COVID-19 diagnosis tests using the standardized kits approved by the World Health Organization, which include five PCR machines.
  • A medical aid package provided by China to Syria for detecting COVID-19 cases arrived at Damascus International Airport. For his part, the Chinese Ambassador to Syria Feng Biao affirmed that another medical aid package will be sent soon.
  • The Ministry of Health received a package of Russian medical aid to help in the diagnosis and treatment of COVID-19.
  • The Aleppo Chamber of Industry selected a team to manufacture ventilators in Syria, one of which was produced and subjected to testing. The Aleppo Chamber of Industry subsequently handed over its first ventilator to the Ministry of Health for further testing. Based on approval from the Ministry, more ventilators are expected to be produced to treat patients with severe cases of COVID-19.
  • The Economic Committee affiliated to the Council of Ministers recommended the approval of a contract for the Ministry of Health to secure serum for public hospitals with a total value of approximately SYP 542 million.

Education

  • The government decided that in light of the precautionary measures taken to prevent the spread of COVID-19, the more than four million primary and middle school students will not resume classes this academic year but will rather advance to the next grade. According to the Ministry of Education, there are still plans to hold brevet and baccalaureate examinations, which are usually taken at the end of middle school and secondary school respectively, for the 557,000 enrolled students. The Ministry stated that it plans to increase the number of exam centres to ensure social distancing between students.

Transport

  • The government set a curfew in all the provinces for every Friday and Saturday as of 12pm until 6am the following day during the COVID-19 lockdown before amending it for Ramadan.
  • The government took the decision to allow the movement of persons between the provinces for a limited period of time after positioning medical teams on the entrances of each province to carry out checks for cases of COVID-19.
  • The government decided to revoke the restriction on the movement of persons between cities and rural areas within the same province.
  • The Directorate of Maritime Ports in the Ministry of Transport confirmed that no vessel shall be received from any seaport except after the required certificate is issued confirming that the vessel is free of any COVID-19 cases and has been sterilized accordingly.

Employment

  • The Ministry of Social Affairs and Labour affirmed that private sector employers are not permitted to terminate the employment of their employees under the current circumstances until further notice and that they must continue to pay their salaries and social security contributions.
  • The Council of Ministers approved a plan proposed by the Ministry of Social Affairs and Labour to provide financial aid to almost 100,000 workers affected by the preventive measures to combat COVID-19, which reportedly suggests allocating up to SYP 100,000 to every individual.
  • The Ministry of Social Affairs and Labour subsequently launched its online initiative entitled the National Campaign for the Emergency Social Response to address the effects on the labour market caused by the COVID-19 economic disruptions and provide aid accordingly. Unemployed individuals who can register and apply for aid are categorized as either 70 years of age or older, have special needs, are formerly daily or seasonal workers, or are formerly self-employed.

Agriculture

  • The Council of Ministers approved a public-private partnership project between the Ministry of Agriculture and Agrarian Reform and the Ministry of Water Resources on the one hand and the private sector on the other. The objective is to establish a significant agricultural project developed on land measuring 12,000 hectares in size and located in the provinces of Aleppo and Raqqa.
  • The President of the Peasants Union expects a 30% increase in agricultural production following the decision of the government to reduce fertilizer prices.

Energy

  • The Council of Ministers discussed a proposal to set up a public entity of an economic nature to be called the General Establishment for the Transmission and Distribution of Electricity to replace and consolidate the two bodies independently carrying out these activities.
  • The Ministry of Petroleum and Mineral Resources announced that the oil and gas facilities in the Hayan and Al-Shaer fields outside of Homs were put back into service.
  • The Minister of Petroleum and Mineral Resources affirmed that fuel prices in Syria will not be affected by the drop in global oil prices since fuel products are subsidized by the government. While oil imports into Syria may be cheaper, the international sanctions reportedly impact on costs.

Real Estate

  • A Syrian investor looking to partner up with Damascus Cham Holding in Marota City suggested that the latter was imposing too many bureaucratic hurdles that could cause the entire real estate development project to suffer the same fate as the Yelbagha project. Yelbagha is a decades-old ongoing project located in Damascus that was mired in legal complications and is yet to be completed. Damascus Cham Holding hit back at the accusation and replied that the disagreements with the investor are due to complexities caused by the sanctions.

Public Procurement

  • The government reduced the administrative and bureaucratic conditions it imposes on contractors during the current period as part of its declared plan to facilitate and ensure its public procurement requirements are met more quickly.

Telecommunications

  • The Telecommunications Regulatory Authority informed the mobile network operators Syriatel and MTN Syria of their obligation to comply with the decision of the Board of Commissioners to pay outstanding dues owed to the Public Treasury in the amount of SYP 233.8 billion before May 5th. The Telecommunications Regulatory Authority emphasized that in the event the companies fail to comply with the specified deadline, the Board of Commissioners would take all the necessary legal measures to guarantee the rights of the Public Treasury.
  • In a rare public statement criticizing state regulators, prominent businessman and Chairman of the Board of Directors of Syriatel Rami Makhlouf agreed to pay dues amounting to between SYP 125 billion and SYP 130 billion demanded by the Telecommunications Regulatory Authority. In the statement, he requested that Syriatel makes the payments in installments to prevent any risk of a corporate collapse and further pleaded with President Bashar Al-Assad to personally oversee the distribution of the funds to the poorer segments of society.

Media

  • The Syrian soap opera industry faces pressures this Ramadan, which are primarily linked to the COVID-19 lockdown in Syria that affected filming schedules. As such, some shows have had to postpone airing while others managed to complete filming before the lockdown. However, Syrian production companies have faced difficulties in licensing their works to Arab satellite channels. The ongoing worldwide economic downturn has led to a shortage of advertisers and sponsors on satellite channels, which in turn affects demand for soap operas. Syrian production companies are also competing with their Egyptian and Gulf counterparts for the attention of satellite channels. Under such circumstances, Syrian series are being aired on Syrian satellite channels, but Abu Dhabi TV and Saudi-owned MBC are screening Syrian shows. Another key factor affecting the Syrian drama industry was the emigration of a number of popular Syrian actors and actresses starting in 2011 following the outbreak of conflict in Syria. Many of them now reside in Beirut, Cairo and Dubai.

Civil Status

  • Legislative reform of the Civil Status Law was finalized, which will reduce pre-existing administrative procedures thereby facilitating the procurement of civil registration documents in any province irrespective of whether an individual is officially registered there or not.

Public Administration

  • The government began giving the green light to ministries and administrative bodies to gradually resume providing public services.

Parliament

  • The Supreme Constitutional Court judged that the decision to postpone parliamentary elections to the People’s Assembly in light of the disruptions caused by COVID-19 was lawful and that doing so is a decision for the President of the Republic.
  • The Council of Ministers amended Article 42(d) of Cabinet Resolution 10/2014, which includes the Executive Regulations of the Electoral Law, so that public sector employees wishing to run in the parliamentary elections are granted a 10-day unpaid leave right before the election.

Judiciary

  • The Minister of Justice issued Resolution 1099/2020 appointing Lama Mazher, the Deputy Chief Justice of the Court of Cassation, as the new Public Prosecutor of the Syrian Arab Republic. The decision was based on the Judiciary Law 98/1961, the Basic Personnel Law 135/1945 and Supreme Judicial Council Resolution 191/2020.

International

  • The EU expressed its support for the call by United Nations Secretary-General António Guterres to reduce the sanctions imposed on certain countries, such as Syria, in light of the risks posed by the COVID-19 pandemic. The EU called on its counterparts, implying the US and others, to lift sanctions imposed on Syria and other countries that prevent medical and humanitarian aid from reaching them amid the COVID-19 pandemic. The Ministry of Foreign and Expatriate Affairs in Syria asserted that such statements by EU officials about alleviating sanctions imposed against Syria should be read in the context of a political angle.
  • While the US insisted that the health sector is exempted from the sanctions regime it imposes on Syria and other countries, it is quite clear that numerous medical suppliers avoid such exports to sanctioned countries in practice out of fear of any incidental compliance breaches. An apprehension of falling foul of the sanctions leads goods and service providers to avoid the Syrian market, especially since it is not large enough for such risks. The possibility that medical supplies could inadvertently have dual-use functions also disrupts the supply chains. By refusing to suspend or at least substantially lift any of the US sanctions imposed on such countries, there is always the possibility that significant medical equipment to mitigate the consequences of and treat cases of COVID-19 in these countries will not be forthcoming. It is arguable that the US sanctions and those of other countries are in effect hindering the global fight against COVID-19 given that it is a highly contagious infectious disease. In the case of Syria, China and Russia have stepped in with medical supplies to complement local efforts on the ground, however limited.
  • The Minister of Health affirmed that difficulties in importing medical supplies to combat COVID-19 caused by the international sanctions regimes imposed against Syria will be mitigated through direct contact with China to help secure the necessary requirements.
  • Syrian Ambassador to China Imad Moustapha confirmed that China is providing support to Syria as it seeks to curb the spread of COVID-19.

Miscellaneous

  • According to a poll conducted by the Syrian Law Journal, 51% of respondents think that international sanctions have the most impact on the Syrian economy whereas 44% believe the war in general does while only five percent consider COVID-19 will have the most bearing. The poll only listed those three choices. The financial situation in Lebanon was not included as an option in the poll, though it surely has a byproduct effect on the economic situation in Syria, especially in light of the war and international sanctions imposed on Syria.
  • According to a poll conducted by the Syrian Law Journal, 82% of respondents think that the Syrian War has a higher chance, even if not eventually realized, of formally coming to an end under a Donald Trump presidency in the United States compared with 18% under a Joe Biden presidency.
  • Syria has been facing the combined effects of conflict and sanctions since 2011, the consequences of the Lebanese financial crisis since October 2019 and in April 2020, both disease in the form of COVID-19 and earthquakes off the Syrian coast and near the Syrian-Lebanese border.