Legal Briefing- August 2020

Government

President Bashar Al-Assad issued Decree 210/2020 formally designating Hussein Arnous as Prime Minister following the parliamentary elections in July. Arnous had already been serving in the position since June following the dismissal of the previous incumbent Imad Khamis.

President Bashar Al-Assad issued Decree 221/2020 appointing the new 30-member government under the leadership of Prime Minister Hussein Arnous following the parliamentary elections. The composition of the Council of Ministers is as follows: 1) Prime Minister Hussein Arnous; 2) Deputy Prime Minister and Minister of Defence Major General Ali Abdullah Ayoub; 3) Deputy Prime Minister and Minister of Foreign and Expatriate Affairs Walid Mouallem; 4) Minister of Religious Endowments Mohammed Abdel-Sattar Al-Sayed; 5) Minister of Presidential Affairs Mansour Fadlallah Azzam; 6) Minister of Local Administration Hussein Makhlouf; 7) Minister of Administrative Development Salam Al-Saffaf; 8) Minister of Social Affairs and Labour Salwa Abdullah; 9) Minister of Economy and Foreign Trade Mohammed Samer Al-Khalil; 10) Minister of Information Imad Abdullah Sara; 11) Minister of Interior Brigadier General Mohammed Khaled Rahmoun; 12) Minister of Tourism Mohammed Rami Martini; 13) Minister of Higher Education Bassam Ibrahim; 14) Minister of Public Works and Housing Souheil Abdel-Latif; 15) Minister of Communications and Technology Eyad Al-Khatib; 16) Minister of Internal Trade and Consumer Protection Talal Al-Barazi; 17) Minister of Culture Loubana Mshaweh; 18) Minister of Education Darem Tabbaa; 19) Minister of Justice Ahmed Al-Sayyed; 20) Minister of Water Resources Tammam Raad; 21) Minister of Finance Kinan Yaghi; 22) Minister of Transport Zouheir Khazim; 23) Minister of Petroleum and Mineral Resources Bassam Toumeh; 24) Minister of Health Hassan Al-Ghabbash; 25) Minister of Industry Ziad Sabbagh; 26) Minister of Agriculture and Agrarian Reform Mohammed Hassan Qatana; 27) Minister of Electricity Ghassan Al-Zamel; 28) Minister of State Mohammed Fayez Al-Barsha; 29) Minister of State Mohammed Samir Haddad; and 30) Minister of State Maloul Al-Hussein.

Parliament

President Bashar Al-Assad issued Decree 209/2020 calling on the People’s Assembly to formally convene for the third legislative term under the Constitution of 2012 for the first time on August 10th.

The new MPs in Parliament were sworn in and Hammoudeh Sabbagh was re-elected as Speaker of the People’s Assembly.

President Bashar Al-Assad addressed the new Parliament and spoke at length about the current circumstances facing Syria. He elaborated that support must be extended to micro-investments and the agricultural sector, which he described as the pillar of the national economy. He explained that urgent reforms in the agricultural sector are able to yield swift and wide results   more so than any other sector. He listed terrorism and corruption as the two biggest threats facing Syria.

Health

Countless cases of COVID-19 are potentially not being diagnosed in Syria due to limited testing capabilities, patients with symptoms refusing to seek medical assistance for fear of quarantine facilities, individuals brushing off mild symptoms, and asymptomatic cases in general. Despite regular notices being put out by the Ministry of Health, it is clear that they are not sufficient enough to reach the population, many of whom are adopting a lax attitude to the risks posed by COVID-19. During this public health emergency, essential guidance is required. Meanwhile, Syrian doctors are growing frustrated at the spread of false information and baseless claims regarding COVID-19 across social media that is only serving to fuel the pandemic further while they are now estimating the number of cases based on the death rates they are recording. The Syrian government is wary of imposing a second lockdown for fear of burdening an already fragile economy. Mandating the use of face masks may help mitigate the pandemic but their affordability and the decreased purchasing power of Syrians should be borne in mind.

Local councils in Syria are becoming more proactive in taking matters into their own hands to prevent the spread of COVID-19 by ordering the closure of certain public facilities to avoid gatherings and obliging residents within their jurisdiction to wear face masks or face fines. As a result, the Governor of Rural Damascus called on all local councils under his authority not to take any actions or make any statements with respect to the COVID-19 pandemic but rather to abide by the decisions of the governmental team in charge of the national response. Consequently, the Governor of Rural Damascus revoked the ordinances issued by the local councils under his authority with respect to imposing preventative measures to limit the spread of COVID-19, including restrictions on public places and shops, and mandating face masks. Subsequently, the Governorate of Rural Damascus announced that it has given wide powers to the executive committees of the local councils to take the measures they deem appropriate to protect against COVID-19 and that they will be provided with material support.

Prices of oxygen cylinders are reportedly increasing in Syria and difficult to purchase due to growing demand apparently caused by widespread concern over COVID-19 and potentially limited capacity at hospitals to receive patients.

The General Corporation for Iron and Steel Products in Hama affiliated to the Ministry of Industry established two assembly lines to manufacture and fill oxygen cylinders at a rate of 2,500 cubic meters per hour to meet growing demands brought on by the COVID-19 pandemic. The Ministry of Industry indicated that the price of a 40-liter cylinder would be set at SYP 2,700 in accordance with specifications issued by the Ministry of Internal Trade and Consumer Protection. Some merchants took advantage of the pandemic and began selling cylinders at prices ranging from SYP 300,000 to SYP 500,000 while their market rate before COVID-19 was approximately SYP 25,000 to SYP 50,000. One cylinder was sold monthly then but now more than 100 cylinders are sold daily. The sellers of oxygen cylinders stated that the cylinders were imported from China and filled with oxygen locally but that after the explosion at Beirut Port, there was a shortage of cylinders causing merchants to increase prices.

The COVID-19 pandemic has raised the spotlight on reports of non-compliance by private hospitals with respect to the pricing regulations set by the Ministry of Health and how much patients may be charged for health care services as state-owned hospitals operate at full capacity. As state-owned hospitals which offer free health care become inundated with patients, many with suspected cases of COVID-19, attention is turning to private hospitals. There are reports that private hospitals are turning away patients who lack adequate health insurance coverage. Private hospital owners for their part complain that pricing regulations set by the Ministry of Health make it challenging for them to operate. While private hospitals can legally be penalized including by being shut, doing so in the midst of a pandemic may prove controversial.

Doctors, teachers, lawyers and countless others have fallen victim to COVID-19 with many deaths reported as the pandemic reached its peak in Syria during the summer season. Various reports suggest that the COVID-19 pandemic has peaked in Syria for now and cases are starting to drop across government-controlled areas.

State-owned pharmaceutical company Arab Medical Corporation, known as Tamico, is launching the drug azithromycin in the markets after it was approved as part of the treatment protocol for COVID-19. Tamico is producing and marketing the drug azithromycin in addition to paracetamol that the company produces in large quantities, which has lately been utilized as part of the treatment protocol for COVID-19.

The Dean of the Faculty of Medicine at the University of Damascus expects Syria to request delivery of the COVID-19 vaccine produced by Russia and it could potentially be licensed to a local Syrian pharmaceutical company to manufacture and distribute to the population.

Medical aid dispatched by the Emirates Red Crescent to the Syrian Arab Red Crescent arrived in Damascus International Airport. It includes medicines, ventilators, sterilizers and testing kits to combat the COVID-19 pandemic.

The Director of the Counter-Trafficking of Persons Department at the Ministry of Interior stressed the need for legislation to further regulate organ donation in order to curtail the illegal trafficking of human organs. Organ donation is currently governed by Law 30/2003, which replaced the outdated Law 31/1972 and its amendments provided for in Law 43/1986. The criteria for organ donation under Law 30/2003 is further detailed in Resolution 73/2004 issued by the then-Minister of Health. Furthermore, Law 3/2007 provides for the creation of a Damascus-based bank to collect corneas and regulate transplants accordingly. As part of the clampdown on illegal organ trafficking, Legislative Decree 3/2010 was issued to combat human trafficking in general and the Counter-Trafficking of Persons Department was subsequently established in 2010. The number of individuals arrested on charges of trafficking of persons in Syria reached 655 between 2011 and 2019.

Ambulances transported Syrians injured in the Beirut Port explosion back to Syria for medical treatment. The move was part of the measures by the Ministry of Health to facilitate the return of Syrian nationals affected by the explosion in Beirut.

Education

The recently departed Council of Ministers resolved to commence the academic school year on September 13th after reviewing the health protocol submitted by the Ministry of Education in response to the COVID-19 pandemic.

Judiciary

The Chairman of the Bar Association suspected that at least 14 lawyers may have died from COVID-19 and has called out the Ministry of Justice on the need to further regulate the courts to avoid the overcrowding of judges, lawyers and clerks, which is a hotbed for the spread of the disease. Subsequently, the Bar Association clashed with the Ministry of Justice over the Bar Association’s decision to grant collective leaves of absence to lawyers from court hearings for fear of COVID-19 while the Ministry of Justice affirmed that the Bar Association has no such legal right to do so. The dispute prompted the intervention of the Supreme Judicial Council to resolve the matter but the Chairman of the Bar Association has threatened lawsuits against officials of the Ministry of Justice if lawyers are infected with COVID-19. The Supreme Judicial Council eventually decided that a judicial holiday would not be granted during this period and that the courts would continue to operate while adhering to the precautionary measures necessary to address the COVID-19 pandemic.

The Minister of Justice announced decisions by the Supreme Judicial Council holding judges accountable through dismissal or by delaying their promotion due to their commission of serious judicial errors but their names were withheld from publication pursuant to the Judiciary Law.

The Minister of Justice confirmed that the Judiciary Law is being reviewed by a committee and proposed amendments to modernize it, including those based on feedback from judges, were postponed due to the COVID-19 pandemic. The role of Vice-President of the Supreme Judicial Council is also being subjected to potential reform. While the Minister of Justice may retain this post, there is speculation that the Chief Justice of the Court of Cassation may fill this position instead. In his capacity as President of the Republic, President Bashar Al-Assad serves as President of the Supreme Judicial Council, which is tasked with overseeing the court system, though the Minister of Justice as Vice-President of the Supreme Judicial Council overseas daily affairs. There have been calls for years now to replace the Minister of Justice, a member of the executive branch, with the Chief Justice of the Court of Cassation, a member of the judicial branch, as Vice-President of the Supreme Judicial Council to strengthen the separation of powers.

The Minister of Justice also confirmed that the Civil Procedure Code, which governs the functioning of the court system, is being revised by a committee of judges and lawyers. The Code was recently overhauled a few years ago when it was issued by virtue of Law 1/2016.

Finance

As the government’s fiscal agent, the Central Bank carried out a sale of treasury bonds on behalf of the Ministry of Finance for the second time this year. Banks purchased treasury bonds worth SYP 150 billion at a coupon rate of 6.17% and with a maturity period of two years.

Google Play dropped the mobile application of the state-owned Commercial Bank of Syria citing US sanctions imposed against Syria.

Commerce

Economists are studying the effects of the destruction of Beirut Port on Syria. A significant chunk of imports arrives in Syria via Beirut Port, which is expected to cause major problems and further goods shortages for Syria as well as Lebanon apart from the financial crisis. Moreover, the trade axis between Beirut, Damascus and the Gulf region is expected to take a hit. Tripoli Port in Lebanon is being considered as an alternative import route but some analysts are suggesting that it has limited capacity. Consequently, they suggest that foreign traders will be obliged to utilize Syrian ports to transport their goods onwards to the Gulf region and beyond, though this theory is not yet clear at this point, particularly due to the matter of sanctions compliance.

There are concerns that some merchants may try to exploit the Beirut Port explosion to raise the prices of their goods by claiming that it will be challenging to import them into Syria via Lebanon after the incident or that the goods were damaged or destroyed in the explosion.

Jordan closed its border with Syria for three weeks due to the spike in COVID-19 cases. Fruits and vegetables were subsequently exported by Syrian traders to Arab countries by sea instead of land after the Syrian-Jordanian border crossing at Jaber was closed by the Jordanian authorities to protect against the spread of COVID-19.

The Economic Committee affiliated to the Council of Ministers proposed ceasing imports of iron products – smooth and grooved coils – on the basis of protecting the national industry in line with a recommendation from the Ministry of Industry.

The Economic Committee affiliated to the Council of Ministers approved the application of the Greater Arab Free Trade Agreement to the importation of copper rods used in the manufacture of electrical cables by reducing customs duties on them. The Greater Arab Free Trade Agreement is applied accordingly whenever more than 40% of the components of a product originate in a fellow Arab country. Usually, such evidence is certified by the local chamber of commerce and the foreign commercial attaché at the local consulate.

The Council of State Administrative Court in Damascus issued an injunction staying the decision of the Ministry of Internal Trade and Consumer Protection, which permitted members of the Chambers of Commerce to pay fees for previous years in one go and participate in chamber elections.

Industry

The Prime Minister’s Office mandated the Ministry of Industry to form a committee tasked with preparing legal instruments to liquidate and dissolve all public sector manufacturing companies that have been dormant during the war and cannot be reactivated.

A Syrian glass factory based in the Adra Industrial Park announced the conclusion of preliminary agreements with seven merchants to supply 25,000 square meters of glass to Lebanon, which is in huge demand following the explosion at Beirut Port that caused substantial damage. The state-owned glass factory is affiliated with the Ministry of Industry and will coordinate with the Federation of Syrian Chambers of Industry the means by which to export glass to Lebanon to aid in the reconstruction process.

The decades-old state-owned Syrian Arab Corporation for Electronic Industries known as Syronics signed a contract with Iran’s Shahab Electronic Industries for the supply of television monitors.

Construction

The Minister of Internal Trade and Consumer Protection announced an agreement with the Ministry of Industry to price cement sold by the public and private sectors in order to narrow the price differences between them to curtail black market transactions. A source in the Ministry of Industry indicated that the reduction in cement available in the market is caused by traders withdrawing large quantities of it and monopolizing it in order to manipulate and raise prices while noting that the private sector has reduced production. Four companies affiliated with the state-owned General Establishment for Cement and Construction Materials produce around 4,000 tons of cement per day while the production by the private sector is approximately 1,500 tons of cement per day. Syria’s annual demand for cement ranges from 20 million to 30 million tons bearing in mind reconstruction requirements while its current production does not exceed five million tons, meaning there is a need to build new cement plants. The General Establishment for Cement and Construction Materials falls under the jurisdiction of the Ministry of Industry and includes nine companies but a number of factories, especially those based in Aleppo, were destroyed during the war. Private sector production of cement on the other hand is limited to the Al-Badia Cement Co., a public joint stock company listed on the Damascus Securities Exchange.

The Ministry of Internal Trade and Consumer Protection set the selling prices of Portland cement produced in the factories and companies affiliated with the state-owned General Corporation for Cement and Construction Materials to more than SYP 60,000 per ton.

Property

The Council of Ministers discussed a bill to exempt investors and tenants of properties granted by or leased from the state from royalty and rental payments respectively for agreements dated from March 15, 2011 until the end of 2019 due to damages sustained during the war.

The Prime Minister’s Office requested all ministries to conduct an inventory of all government buildings under their authority that are under construction so as to evaluate the possibility of dispensing with them in favor of other public entities to avoid leasing properties.

Although Tartous City Council approved new zoning plans pursuant to Legislative Decree 5/1982 for the eastern front of the city’s seaside for the first time in 40 years last October, the file was not submitted to the Ministry of Public Works and Housing for ratification. The delay in forwarding the relevant file to the Ministry of Public Works and Housing means that Tartous hosts the worst façade on the shores of the Mediterranean Sea. Many residents of the area are demanding an investigation into the reasons for the delay.

The Governorate of Damascus agreed to postpone issuing the final zoning plan for the Yarmouk district in the capital after many objections were registered.

Agriculture

According to European traders, Syria’s General Establishment for Cereal Processing, Storage and Trade issued an international tender to purchase 200,000 tonnes of soft wheat from the European Union or Black Sea region and a separate tender for 200,000 tonnes of wheat from Russia. The deadlines for both bid submissions are in September. The shipment of wheat in both tenders is reportedly expected 60 days after confirmation that the order has been placed and payment shall be made in US Dollars.

The poultry sector in Syria is facing pressures due to reduced access to animal feed and veterinary medicine.

Transport

Rail transport between Damascus and Tartous resumed for the first time in nine years. The first train arrived in the capital carrying 1,000 tons of grain from the coastal region.

Suggestions were being made at first that Syria reduce transit fees in order to encourage Lebanese traders to utilize Tartous Port and Lattakia Port as alternative solutions to Beirut Port due to the limited capacity available at the ports in the Lebanese cities of Tripoli, Sidon and Tyre. However, the drawback is that US and EU sanctions imposed against Syria will likely deter foreign merchants, freight forwarders, shipping companies, banks and insurance companies from approving the shipment of goods to Syrian ports even if the final destination is Lebanon.

According to the Minister of Transport, Lebanese trucks are to be exempted from transit fees when entering Syria from Lebanon. Syrian trucks are also to be exempted from transit fees when crossing Syrian territory or when loaded at Syrian ports and bound for another destination.

The Russian operator of Tartous Port Stroytransgaz confirmed its readiness to receive commercial vessels and advertised its geographical proximity to Iraq, Jordan and Lebanon. The port measures 3,000,000 square meters and hosts 22 berths. The container terminal occupies an area of 25 hectares with a storage capacity of 12,000 TEU and is equipped to accommodate reefer containers with a capacity of 300 TEU at the same time.

The government has reportedly agreed to extend the contract between the Ministry of Transport and Lattakia International Container Terminal (LICT) LLC, the company tasked with managing the container terminal at Lattakia Port for a further five years on more favorable terms for the government after the original 10-year agreement expired at the end of 2019. There had initially been speculation than an Iranian company would be entrusted with managing the container terminal at Lattakia Port.

The Minister of Transport issued a resolution setting out the conditions for the licensing of air cargo services businesses.

Energy

The Kurdish-led non-state de facto authority in northeastern Syria known as the Syrian Democratic Forces reportedly signed an agreement, deemed illegal under both Syrian and international law, with Delta Crescent LLC to operate in Syrian oil fields east of the Euphrates River. Delta Crescent LLC, which is a company incorporated in the US state of Delaware, apparently obtained an exemption from the Office of Foreign Assets Control, which is part of the US Department of the Treasury, to invest in Syria in contravention of the US’ Syria sanctions regime.

Repair works were carried out to resume the pumping of gas to the power station at Deir Ali after terrorists reportedly attacked the Arab Gas Pipeline in the regions of Doumair and Adra northeast of Damascus causing power blackouts across Syria. In addition to the Deir Ali power station, which was affected in the Arab Gas Pipeline explosion, the Tishreen and Nasserieh stations were also put out of service and required immediate attention to restore the flow of electricity by pumping gas accordingly.

Three new gas wells located in the eastern part of the province of Homs went into service with a production capacity of 700,000 cubic meters per day according to the Ministry of Petroleum and Mineral Resources.

Generator operators in the city of Aleppo who provide electricity to residents in the absence of regular electrical power provided by the state are facing pressure from the Executive Committee of the Governorate of Aleppo, Aleppo City Council, the Directorate of Internal Trade and Consumer Protection, and the Police Command of Aleppo over allegations of overpricing in contravention of the Consumer Protection Law and face revocations of their licenses.

Telecommunications

South African mobile network operator MTN plans to exit the Middle East, including the Syrian market. Talks to sell the 75% shareholding in MTN Syria are reportedly at an advanced stage. South African-based MTN Group Ltd. owns its stake in its Syrian operator through a subsidiary known as Investcom Mobile Communications Ltd. It intends to sell its majority shareholding to the minority shareholder TeleInvest Ltd. which already owns 25% of MTN Syria.

The Telecommunications Regulatory Authority raised the customs duties to be collected by the Customs Directorate on mobile telephone devices imported into Syria. They were last increased in 2019.

Culture

A Syrian actor lambasted the Minister of Health and other Syrian ministers for instituting bureaucratic procedures that force individuals to visit one location to apply for a PCR test, then visit the Commercial Bank of Syria to pay the price, and then another place for the result. Another complaint focused on the logistics for entering Syrian territory by exchanging $100 (US) whereby individuals are only given receipts at the border and then they have to visit the bank to collect their proceeds in Syrian Pounds as opposed to one location. However, some media outlets have described the procedures as more straightforward. For his part, the General Manager of the Commercial Bank of Syria affirmed that the $100 (US) is exchanged into Syrian Pounds directly at the border.

Employment

The Minister of Social Affairs and Labour revealed that the new Employment Bill is being reviewed by the Council of Ministers and will be submitted to the People’s Assembly for approval. The Bill aims to close gaps discovered in the current Employment Law 17/2010 during the war. Following consultations between the Ministry and the trade unions, the Bill contains provisions that tighten the penalties on private sector employers for violations given that the present ones in Law 17/2010 are deemed obsolete in light of the economic effects of the war. The Bill does away with any discretionary authority for the competent authorities to grant exemptions in line with government policy and seeks to maintain the balance of interests of both employers and employees.

Local Councils

Pursuant to the Local Administration Law, President Bashar Al-Assad issued Decree 215/2020 dissolving the 49-member Lattakia City Council for the second time in approximately one year. The latest council was elected last January. The council is concerned with following up and handling services related to the city of Lattakia located in the province of the same name and works in coordination with the Provincial Council headed by the Governor of Lattakia. According to Article 122 of the Local Administration Law, the President of the Republic has the authority to dissolve local councils at their various levels and they shall be replaced with new local councils elected within 90 days from the date of dissolution.

International

Syria agreed to transfer a plot of land and marine space located in Lattakia measuring eight hectares to Russia in order to establish a medical center for its military personnel at the latter’s expense. The agreement was signed on June 21st in Damascus and on July 30th in Moscow.

45 delegates representing the government, opposition and civil society convened in Geneva to resume deliberations on the Constitution in accordance with UNSC Resolution 2254 after a nine-month hiatus but proceedings stalled after some delegates tested positive for COVID-19.

President Bashar Al-Assad and Foreign Minister Walid Mouallem expressed condolences to their Lebanese counterparts President Michel Aoun and Foreign Minister Charbel Wehbe respectively following the massive explosion in Beirut and affirmed Syria’s willingness to help Lebanon.

US Secretary of State Mike Pompeo confirmed that US President Donald Trump personally wrote to President Bashar Al-Assad about the case of missing journalist Austin Tice. Pompeo said that “the US government has repeatedly attempted to engage Syrian officials to seek Austin’s release”. Furthermore, Pompeo clarified that President Trump wrote to President Al-Assad in March to propose direct dialogue. Damascus maintains however that cooperation with any country which severed relations with Syria, such as the United States back in 2011, must be preceded by the resumption of diplomatic relations between the two countries.

The State Department and the Treasury Department in the US imposed yet another round of sanctions against Syria that correspond to specific wartime anniversary dates. The sanctions targeted six individuals not under the Caesar Act but rather Executive Orders 13894 and 13573.

Tribal resistance starts to gather momentum in northeastern Syria, particularly in Hassakeh, against the US occupation and the presence of the Kurdish-led non-state de facto authority known as the Syrian Democratic Forces.

The Special Tribunal for Lebanon rendered its verdict on the attack in Beirut on February 14, 2005 that killed former Lebanese Prime Minister Rafic Hariri and others after a decade-long trial and found that there was no evidence linking the Syrian government to the assassination.

Armed groups affiliated with Turkey based in Ras Al-Ain in northeastern Syria reportedly cut off the water supply to the city of Hassakeh through their control of the Alouk Water Station thereby threatening residents with thirst and increasing the risks of COVID-19.