Legal Briefing – June 2021
The Board of Directors of the state-owned Agricultural Cooperative Bank announced that it would stop selling fertilizers to farmers at the subsidized price but rather at the cost price following a proposal by the Economic Committee affiliated to the Council of Ministers.
The Prime Minister issued a directive to finance the importation of a number of basic and essential consumer items at the foreign exchange rate of SYP 2,525 to the US Dollar, as specified in the official Central Bank bulletin, with a commission not exceeding 10%.
Approximately 70 trucks loaded with the furniture of Syrian expatriates have been stranded at the Syrian-Jordanian border following the issuance of Resolution 682/2021 imposing customs duties on personal effects and household items of residents returning to Syria from overseas.
Businesses have been complaining that the Ministry of Finance is pursuing detrimental policies when imposing taxes on revenues it incorrectly classifies as profits. The Ministry of Finance for its part asserts that it is adopting harsher practices to crack down on tax evaders. Businesses are moreover having a challenging time balancing out the uncoordinated and sometimes conflicting requirements of the Ministry of Finance, the Ministry of Internal Trade and Consumer Protection, and the Ministry of Social Affairs and Labour.
The Ministry of Health raised the prices of around 12,000 pharmaceutical products but parts of the healthcare sector were not satisfied as the 30% increases did not equate to profitability. The Ministry attempted a balancing act to prevent a rise in medicine prices for consumers.
The Ministry of Education issued a resolution allowing some private schools to increase their tuition fees by up to a maximum of 50% as permissible pursuant to the Private Education Law provided for in Legislative Decree 55/2004.
The Ministry of Transport issued a resolution granting Syrian trucks priority in exporting goods overseas from Syria while foreign trucks will be able to transport such goods when Syrian trucks are unavailable.
The Ministry of Economy and Foreign Trade indicated that it will suspend issuances of certificates of origin for Syrian goods bound for Jordan via the Nassib crossing pending a reduction in congestion at the border, which is damaging the quality of exported fruits and vegetables.
Syrian Airlines and Cham Wings are resuming flights for passengers to and from airports in the United Arab Emirates.
The Director General of Ports in the Ministry of Transport confirmed that 104 marine sites along the coasts of Lattakia, Jableh, Banias and Tartous are being offered up to investors interested in developing beaches, fish farms and other seasonal and permanent touristic projects.
A local newspaper reported that the Ministry of Finance is not prepared to enforce the new Real Estate Sales Tax Law due to a lack of infrastructure that is hindering the delivery of accurate property appraisals. Valuations that exceeded market prices led to a freeze in sales.
The Ministry of Finance recently revealed that 1,720 real estate transactions worth a combined value of approximately SYP 210 billion occurred within 22 days of the implementation of the Real Estate Sales Tax Law without any objections raised to the property appraisals.
The Ministry of Finance clarified that real estate brokers and speculators are engaged in the continuous reselling of a property on several occasions before ultimately recording the latest transfer of ownership in the Land Registry in order to evade the Real Estate Sales Tax Law. On this basis, the Ministry of Finance issued a resolution to curb such practices by imposing the applicable tax on real estate transactions that are almost complete but are renounced before their registration in favor of a new buyer who also goes on to speculate in the property.
Two prices are being assigned to real estate properties – one by mortgage appraisers for banks and the other by committees affiliated to the Ministry of Finance for real estate sales tax purposes. Analysts do not see a contradiction as each valuation serves a distinct purpose. It has been noticed that mortgage valuations by banks have a tendency to be lower than the prevailing market rates while appraisals by the Ministry of Finance committees are overvalued. Problems should not arise unless there are significant differences between both figures.
Construction commenced on a tower in Basilia City to provide alternative residences for former settlers of the area. The General Housing Establishment is developing the project on behalf of the Governorate of Damascus, the General Corporation for Engineering Studies is the consultant, and the Military Construction Establishment is the contractor.
The Ministry of Economy and Foreign Trade licensed the opening of a branch of a Russian joint stock company in Damascus with the objective of implementing infrastructure works and extending water, gas and oil networks. The capital of the branch is specified as SYP 170.3 million.
OFAC issued a one-year general license authorizing the exportation of US goods and services related to the prevention, diagnosis and treatment of Covid in Syria as well as through certain blocked entities provided that the consent of the US Department of Commerce is obtained.
The US Department of the Treasury lifted sanctions on two companies affiliated with a Syrian businessman on the grounds of a change in the behavior of the concerned entities.
The Biden Administration reportedly decided not to extend the sanctions waiver for the US oil company Delta Crescent pertaining to its activities in northeast Syria where the Kurdish-led non-state SDF is the de facto authority.