Legal Briefing – May 2021
Presidential Elections
The Supreme Constitutional Court confirmed that three of the 51 registered candidates satisfied the legal conditions for standing in the presidential elections, including the incumbent Bashar Al-Assad, Abdullah Abdullah and Mahmoud Marei, all of whom won parliamentary backing.
With 95.1% of the vote, the Speaker of the People’s Assembly formally declared that Bashar Al-Assad will be the next President of Syria. Al-Assad, who will be sworn into office in July, is constitutionally barred from seeking a further fifth presidential term in 2028.
The Supreme Judicial Electoral Commission (SJEC), an arm of the Supreme Judicial Council, oversaw the presidential election. Syrian expatriates voted via their embassies on May 20th while resident Syrians voted on May 26th. SJEC officials tallied the votes once polls closed.
Once SJEC counted the votes, it presented the result to the Supreme Constitutional Court (SCC) for confirmation. The SCC certified the result and forwarded it to the Speaker of the People’s Assembly to make the formal announcement to the public and declare the winner.
Investment Law
The President issued the new Investment Law 18/2021, which repeals and replaces Legislative Decree 8/2007. The new Law aims to simplify the procedures to obtain a license from the Syrian Investment Authority, whose main feature is tax exemptions for projects of national interest.
Various sectors of the economy continue to be targeted for private capital investments from both local and foreign businesses, thereby entitling investors to purchase and lease as much land as necessary.
Special economic zones will be created to cater for the development of certain sectors of the economy deemed strategic.
The terms of a licensed investment must remain consistent without any surprise amendments. An investment license cannot be revoked unless the investor is notified of any breaches they commit.
The tax and customs duty incentives in certain cases reach the level of complete tax exemption for a project. Imports of equipment, machinery, assembly lines and transport systems will be processed free of duties and tariffs. Agricultural projects will not be taxed on profits.
Touristic, hospitality and recreational investments will also be covered in the new Law as opposed to their hitherto standalone legislation and will be exempt from customs duties and other fees. Development projects will benefit from a 75% discount on income taxes for 10 years.
Some industrial projects benefit from exemptions ranging from 50% to 75% on income taxes, including those pertaining to technology, medicine, pharmaceuticals, renewable energy, waste recycling, and crafts. Emphasis is also placed on local labor and the promotion of exports.
Syrian and foreign investors both benefit from facilities, including the right to open a bank account and obtain credit for their project in Syrian Pounds and foreign currencies from local banks. Profits, interests and proceeds from sales of shares can be transferred abroad.
If the investment license is not issued within the legal deadline, any capital transferred to Syria in anticipation of a project can be repatriated overseas by applicants. Investors, their families and employees have the right to obtain residence permits if they are not Syrian.
It is no longer possible for the Minister of Finance to impose an administrative provisional attachment order on a licensed project, as this prerogative belongs solely to the judiciary.
Any civil or commercial disputes arising from the investment contract or license will be settled by a new dedicated arbitration center hosted by the Federation of Syrian Chambers of Commerce governed by its rules and with either local or foreign arbitrators as the parties desire.
Finance
The Council of Ministers issued a directive mandating the incorporation of the Damascus-based ‘Islamic National Bank’ in the form of a Sharia-compliant public joint stock company with a share capital of SYP 25 billion comprised of 250 million shares. Its shareholder base is comprised of a Lebanese company owning 49% of its shares, the Syrian state-owned Industrial Bank holding 10%, other minority shareholders, and 25% of the Islamic bank’s shares will be offered for public subscription on the Damascus Securities Exchange.
Alpha Capital has become the first securities brokerage firm to offer online share trading services after it obtained approval to do so from the Board of Commissioners of the Syrian Commission on Financial Markets and Securities, the capital markets authority.
Monetary
The Damascus Chamber of Commerce called on traders and manufacturers to support the Syrian Pound, which is hovering around the SYP 3,000 to the US Dollar mark on the black market, by stopping the purchase of US Dollars until the end of May.
The Monetary and Credit Council issued Resolution 209/2021 allowing individuals entering Syria to carry with them up to $500,000.00 or its equivalent in foreign currency as long as the amount is declared in accordance with instructions from the Money Laundering Commission. The measure signed off by the Governor of the Central Bank, who chairs the monetary authority, repeals Monetary and Credit Council Resolution 1273/2015, which previously provided a limit of $100,000.00 or its equivalent in foreign currency that could enter the country. The new regulations were issued pursuant to the Monetary Law 23/2002, Legislative Decree 208/1952 and Monetary and Credit Council Resolution 873/2012, with the last one being amended accordingly to increase the permissible amount to $500,000.00.
There is speculation that the Monetary and Credit Council may issue regulations soon setting out the conditions whereby goods may be sold in Syria to foreign nationals or non-resident Syrians in exchange for US Dollars, which would be an exception to Legislative Decree 3/2020.
The Central Bank repealed Resolution 717/2020 issued on May 10, 2020, which permitted Syrian expatriates to pay for their airplane tickets in Syrian Pounds. The measure was meant to facilitate the return of Syrians back to Syria during the start of the coronavirus pandemic.
Taxation
The Council of Ministers issued Resolution 682/2021 imposing customs duties on personal effects and household items of residents returning to Syria from overseas. The previous Resolution 4412/2006 exempted such items from customs duties pursuant to Article 178 of the Customs Law.
International Trade
The Jordanian authorities exempted some Syrian goods from its import ban for a period of three months but subjected them to quotas and a tariff of five percent. Trade restrictions against Syria were implemented by Jordan in May 2019.
The Jordanian Ministry of Interior approved the reopening of the Jaber-Nassib crossing on the Jordanian-Syrian border to accommodate 150 travelers per day in line with its Covid health protocol.
Commerce
The Director of Licensing at the National Network Services Authority revealed that only one website and two applications are licensed for electronic marketing purposes. 18 websites have conditional permits and the rest in use are unauthorized. Only the .sy domain can be utilized. The Ministry of Internal Trade and Consumer Protection, which is a co-regulator, issued regulations to this effect in February 2019. Businesses must comply with the Companies Law, the Commercial Code and the Electronic Commerce Law to secure all the required licenses and permits.
Industry
The President toured Hassia Industrial Park, visiting several factories and stressing the importance of the manufacturing facilities to revitalize the economy, describing the industrial sector as part of the national defense and independence of a sovereign state.
Telecommunications
The Ministry of Communications and Technology and the Central Bank jointly launched electronic payment services through the local mobile network providers Syriatel and MTN Syria so that citizens may pay their fees and bills electronically via their mobile phones.
The Ministry of Internal Trade and Consumer Protection approved the articles of association of Wafa Telecom, a private joint stock company with a share capital of SYP 10 billion that is expected to operate as the third mobile network provider alongside Syriatel and MTN Syria. In order to commence operations, Wafa Telecom will need to obtain a license from the Telecommunications Regulatory Authority. The company, whose term is valid for 22 years from the date of the first general assembly, is owned by seven shareholders, all of whom are corporations. The Director of the Telecommunications Regulatory Authority confirmed that the state-owned Syrian Telecommunications Corporation will partner with Wafa Telecom in providing mobile network services. The operator will commence operations at least six months after being licensed.
Employment
The President issued Legislative Decree 14/2021 granting a single tax-free disbursement of SYP 50,000 to all public sector employees, including civilian and military personnel, and SYP 40,000 to pensioners in anticipation of Eid Al-Fitr.
Health
The Ministry of Health launched an online platform on its website for Syrians to register for Covid vaccines free of charge. Priority will be given to medical and health personnel followed by the elderly. 71 hospitals, 96 dispensaries and 416 mobile teams will provide inoculations.
Inoculations of Covid vaccinations beyond medical personnel to other segments of society are underway in Syria with the main brands of Sputnik V, Sinopharm and AstraZeneca leading the charge. AstraZeneca is mainly being distributed via the Covax platform administered by the WHO.
Military
Signaling a further drawdown in the conflict and in his capacity as Lieutenant General and Commander-in-Chief of the Army and the Armed Forces, the President issued an administrative order ending the retention of certain reservist officers and personnel as of June 1st.
Criminal Law
The President issued Legislative Decree 13/2021 granting a comprehensive general amnesty for various crimes perpetrated by individuals before May 2, 2021, including for those persons convicted of currency violations.
International
At the invitation of the Saudi Ministry of Tourism, the Syrian Minister of Tourism travelled to Riyadh to participate in the conference of the World Tourism Organization.
Cyprus is reportedly set to reopen its embassy in Damascus for the first time in almost a decade. The Bar Association signed a lease agreement with the Cypriot government to rent out one of its buildings to house the Cypriot embassy.