Legal Briefing – July to August 2017

Finance

• The Central Bank formally issued the SYP 2,000 note and put it into circulation after the Syrian Pound lost more than 90% of its value since 2011. In recent years, Syrians were forced to carry a wad of cash every time they went out due to significant inflation as the largest note was the SYP 1,000. The SYP 1,000 note was introduced around 20 years ago. The SYP 2,000 note is roughly worth around $4 (US). There are no plans to issue a SYP 5,000 note and in any event, the law does not permit the issuance of a SYP 5,000 note.
• Proposed amendments to the Banking Courts Law are to include more stringent penalties for dealing with financial cases. A large number of debtors are currently outside of Syria so travel bans are not enough to deal with the current circumstances.
• The threats of US sanctions are leading a number of Lebanese banks to deconsolidate their operations in Syrian banks but not to sell their shares.

Taxation

• Law 25/2017 exempts income taxpayers for liabilities up to 2015 from interest payments and fines if they pay them by December 31, 2017. The Law also exempts consumption taxpayers and others for liabilities up to 2016 from interest payments and fines if they pay them by December 31, 2017.
• Actual real estate market valuations are nearing reality with the upcoming Real Estate Sales Tax Bill after years of undervalued and speculative property prices. Sellers of real estate have been paying nominal sales tax figures to the General Commission for Taxes and Fees for years due to official undervalued prices. The tax will be based on actual market rates as determined by the committees set up by the Ministry of Finance throughout the country. Once the new Bill is passed, the old and outdated real estate valuation figures that have been used for years will be replaced with market prices.
• According to the Minister of Finance, the electronic payments system will be implemented by the middle of next year and will contribute to tax reform.

Investments

• The Prime Minister opened the first Syrian Investment Forum in Damascus entitled “Syria, Towards the Future”. The Forum focused on supporting investments by providing the required facilities to implement them. Investments in tourism, industry, agriculture, transport, energy and other sectors were promoted along with discussions on the legal and financial environment. 150 projects were being offered for investment at the Forum, 50 of which were in the touristic sector with an estimated value of around SYP 60 billion. Investment facilities and the prospects of financing investment projects were the focus of the first session of the Forum. The government is apparently prepared to offer all legal facilities, loans and tax exemptions to boost investments. The past period witnessed the return of hundreds of factories into service, agricultural land into production, and reinvestments in oil fields and gas wells. All of these investments were made possible by the advances made by the Syrian Arab Army. The Prime Minister hoped the Forum would contribute to decisions to improve the investment sector, attract national and foreign investors, and solve persisting problems. He linked President Bashar Al-Assad’s National Initiative for Administrative Reform with improving the investment environment. The Minister of Information said the Forum sent the message to the private sector and businessmen to become active partners with the public sector in the reconstruction process. The Chairman of the Federation of Syrian Chambers of Commerce said that the current circumstances require a new investment law and partnerships between the public and private sectors.
• The Syrian Investment Agency and the Syrian-Chinese Businessmen Council signed a joint cooperation program to promote investment opportunities in Syria.
• The Prime Minister told Omani businessmen that investment opportunities will be given to countries that stood by Syria.
• The incorporation of companies in Syria picks up as a positive outlook on the political situation and reconstruction develops among investors.

Commerce

• The month of August mainly focused on the 59th Damascus International Fair, the first of its kind in four years. It highlighted potential reconstruction activities.
• News emerged that the Syrian government is cracking down hard on extortionist groups who ask for “fees” to let the goods of merchants pass by their checkpoints.
• Law 24/2017 amends Article 2 of Legislative Decree 30/2015 and further exempts cow imports from customs duties, fees and so forth for five years.
• The Ministry of Economy and Foreign Trade decreed an end to Regulation 145/2016, which barred the entry of imported goods into the free zones. The new Regulation revives Articles 140 and 141 of the Customs Law along with Articles 7 and 8 of the Free Zones Law. The Regulation aims to revive commercial investments in the free zones after restrictions were imposed last year to address economic imbalances.
• A center for promoting Syrian exports opened in Sharjah in the United Arab Emirates.
• A new lawsuit filed by the investors of Qassioun Mall against the Minister of Internal Trade and Consumer Protection alleges misrepresentations on expected revenues. Qassioun Mall is a state-owned asset leased to private sector investors in accordance with an investment agreement.
• The People’s Assembly reviewed the Tobacco Bill, with deliberations including a possible imposition of a SYP 30,000 fine on every smuggled kilogram of tobacco. It eventually became Law 26/2017, which provides for a fine on any person who smuggles or sells illegal tobacco and cigarettes. It was agreed that the fine is to be worth three times the value of the smuggled quantity. The Law comes in light of efforts to protect the national tobacco industry from foreign competition and price manipulation caused by smugglers.

Industry

• Industrialists held the Ministry of Economy and Foreign trade responsible for holding up the implementation of the decree exempting industrial imports from 50% of customs duties. There were disagreements as to what should be included in the list of exempted industrial goods.

Property

• A claim was filed in the courts involving a landlord suing his tenant for posing as the owner of the house and selling it to a third party by using a fake identity card.
• The Governorate of Damascus determined the types of real estate building violations and the conditions for settling them in the case of private properties in the capital.
• More than 280 lawsuits relating to building violations are making their way through the courts in Damascus. The cases of building violations are heard before the criminal courts because penalties include fines and possible imprisonment. The cases of building violations in conflict areas are not being heard due to an absence of functioning courts in those regions. A lack of governmental oversight in conflict zones led to an increase in building violations in those respective areas. Lawsuits pertaining to building violations can be either between private parties or between a private party and a public authority. Building violations are registered accordingly in the Real Estate Gazette to give notice to interested and affected parties.
• The Council of Ministers deliberated on a bill exempting real estate owners whose properties were affected by terrorism from reconstruction and restoration fees.
• Mechanisms have been put in place to deal with situations where real estate owners have lost ownership documents as a result of the war.

Employment

• The Council of Ministers approved amendments to the Public Employment Law, which has been subjected to a lengthy review for years now.

Health

• Syrian MP Nabil Saleh launched a scathing attack on Health Minister Nizar Yazigi accusing him of suffering from paranoia.

Transport

• Legislation under consideration by the Ministry of Transport is set to increase fees for driving licenses but not vehicle transaction fees.

Local Councils

• New plans are underway by the government to strengthen the roles of provincial governors and local councils as part of plans for decentralization.

Military

• A new law provided for in Legislative Decree 24/2017 revokes the authority of the General Command of the Armed Forces to offer exemptions to Syrians from military service for a number of reasons. Accordingly, this Law revokes Article 25(h) of the Military Service Law provided for in Legislative Decree 30/2007, which had granted such authority in the first place. The Law also raised concerns about whether those persons who were previously granted exemptions by the General Command would have their exemptions withdrawn. However, there is no evidence as of yet that this is the case.

Criminal Law

• A controversial Criminal Code provision that criminalizes the act of a public sector employee leaving his or her post without prior permission has made the headlines recently. During the war, many public sector employees left their jobs without seeking prior permission and have ended up facing lawsuits.
• Judicial and law enforcement training in gathering digital evidence as part of efforts to combat cybercrimes is moving forward. Those taking part in the training courses include judges and the judiciary in general. Moreover, the Public Prosecutor’s Office for Cybercrimes should be established before the end of this year. Cybercrime is at the forefront of efforts being led by the Ministry of Justice, the Ministry of Interior and the Ministry of Communications and Technology to combat such offences.
• Syrian authorities are cooperating with INTERPOL to investigate and uncover cases of forged Syrian passports.

Lawyers

• Law graduates complained about the fees charged by the Bar Association but they are still considered among the lowest in the Arab world. Syrian law graduates must pay more than SYP 100,000 in Bar Association fees. The fear is that such fees will put off potential lawyers from pursuing the legal profession.
• According to the President of the Bar Association, there are reports that certain lawyers and other parties have been involved in forging powers of attorney.
• The President of the Bar Association also confirmed that work is ongoing to amend and further develop the Legal Profession Law.

Judiciary

• According to current statistics, women make up around 30% of the more than 1,700 judges in Syria.
• The Minister of Justice oversaw an overhaul of judicial transfers throughout the courts.
• The unveiling of the renovated Palace of Justice in Damascus is expected soon.

Government

• President Bashar Al-Assad met with Judge Amina Al-Shammat, the new Director of the Central Supervisory and Inspection Agency (CSIA). The meeting dealt with imposing strict law enforcement measures to combat corruption, which spread significantly during the current conflict. President Al-Assad stressed the need for more effective monitoring of governmental institutions and the prevention of abuses of authority. He also called for preventing any party privy to a relationship with state institutions to intervene in the work of the CSIA. He stated that corruption can always find ways to exploit gaps in the laws and permeate institutions if they are not strong enough. Judge Al-Shammat affirmed that fighting corruption in governmental institutions and preventing wastage of public funds are top priorities for the CSIA.
• The Syrian government is preparing an anti-corruption program, which has garnered much interest lately.
• The Council of Ministers adopted the Executive Program of the National Initiative for Administrative Reform launched recently by President Bashar Al-Assad. The Council of Ministers focused on the procedures for executing the project, the timescale for each phase and the first steps for initiating it. The project is being prepared by the Ministry of Administrative Development to oversee a reform process in the various ministries and the public administration.
• The Syrian Deputy Foreign Minister called planned “elections” in Kurdish regions of Syria a “joke”.

Parliament

• In a rare move, the Speaker of the People’s Assembly Hadiyeh Abbas lost the confidence of MPs and was discharged from office after her handling of the Rules of Procedure deliberations. In this respect, 164 of the 250 MPs voted on a motion of no confidence in their Speaker. The Deputy Speaker and film director Najdat Anzour took over as Acting Speaker temporarily until a new vote was held to elect a new Speaker. Anzour is an independent MP and the first non-Baathist to hold the post since 1963 although in an interim capacity while Abbas was the first woman to hold the post since 1919. It is also the first time in history since the Baath Party took power in Syria that the Speaker of Parliament has been deposed by fellow MPs.
• After unseating their Speaker, MPs approved their new Rules of Procedure for the first time since 1974. The new Rules of Procedure are set to fill in gaps in the old parliamentary regime that did not address the current realities. They set a 60-day maximum limit to elect a new speaker while the previous Rules did not specify a time limit.
• The People’s Assembly and the media industry were locked in a legal dispute after a radio presenter made damaging allegations against two MPs. The allegations prompted the Minister of Justice to request the lifting of immunity of the two MPs to face legal charges. The People’s Assembly refused to lift their immunity and rather sought legal action against the radio presenter. In the end, the matter was settled. The episode highlighted the limitations the press faces under the Media Law passed in 2011.
• A company linked to a Syrian MP is subjected to an attachment order freezing its assets pending further investigations of wrongdoing.
• There was controversy surrounding MPs and their tinted car windows. After granting her initial approval, the then-Speaker of the People’s Assembly Hadiyeh Abbas retreated from her decision to permit MPs to install tinted windows.
• As part of plans to promote electronic programs in the People’s Assembly, MPs could soon be receiving iPads.

International

• Russia is said to have approved an agreement with Syria to maintain deployment of its forces at the Hmeimim airbase in Lattakia for the next 49 years, with an option to extend for an additional 25 years.
• Syria rejected and protested an Israeli announcement to hold illegitimate “local council elections” in the occupied Syrian Golan Heights. The UN deems Israel’s 1981 annexation and the application of its laws to the Syrian Golan Heights as illegal under international law.
• Not citing any evidence, the European Union imposed sanctions on 16 Syrian scientists and military officials.
• The new Nigerian Charge d’Affaires in Damascus conveyed a serious desire to implement trade and economic agreements signed between Syria and Nigeria.
• The United Kingdom set out new powers to impose sanctions after its exit from the European Union. If so, this would affect potential sanctions by the British government against Syria.