Legal Briefing – September 2021
President Bashar Al-Assad travelled to Moscow to meet Russian President Vladimir Putin on the heels of recent developments in Syria, including the ongoing economic crisis, the regaining of control in Daraa, the situations in the northwest and northeast of the country, re-engagement in the Levant and potential constitutional talks in Geneva.
In a departure from its 10-year disassociation policy, a Lebanese government delegation visited Damascus for the first time since 2011 after securing an implicit Caesar Act sanctions waiver from the US to import electricity from Syria transmitted via Jordan using Egyptian gas.
Jordan explained that it has not yet been determined what Syria will receive in exchange for transiting gas and electricity to Lebanon but likely supplies of the same. Syria will repair the damaged parts of its network and the US Caesar Act provisions will probably be waived.
The Minister of Petroleum and Mineral Resources confirmed that Syria will be supplied with quantities of Egyptian gas to support its electric power networks in return for permitting the transport of Egyptian gas to Lebanon through its territory via the Arab Gas Pipeline.
Syrian-Jordanian bilateral activity has led to the resumption of commercial aviation ties for the first time since 2012, the removal of all trade restrictions on the border, plans to reopen the joint free trade zone and reactivating the electricity network linking both countries.
The Central Bank stipulated that until the end of February 2022, importers must resort to financing via their bank accounts, whether in Syria or abroad, or through Syrian banks licensed to deal in foreign exchange, or from a licensed foreign exchange bureau, and provide proof.
The Central Bank prohibited banks from allowing authorised agents to withdraw cash from their principal’s bank account based on a general or special power of attorney issued by a notary public. Rather, they must appear before the bank at least once and execute an authorisation.
The Syrian Electronic Payments Corporation announced that it has teamed up with mobile network operators Syriatel and MTN Syria to allow subscribers to pay their utility and government service bills through applications that support prepaid accounts linked with relevant banks.
The Central Bank issued Resolution 1071/2021 obliging exporters to sell 50% of their foreign exchange proceeds earned through exports to the Central Bank at the official exchange rate. The Customs Directorate will not allow any exports unless the exporter commits to this pledge. The Federation of Syrian Chambers of Industry subsequently reached an agreement with the Central Bank for the latter to purchase 50% of the foreign exchange proceeds at the parallel market rate plus SYP 20. If the parallel rate is SYP 3,390 per US Dollar, the purchase price will be SYP 3,410.
The Central Bank confirmed it is prepared to purchase foreign exchange from exporters outside Syria where they are unable or unwilling to transfer it due to sanctions. The Central Bank is offering to purchase all export earnings at the premium rate, not just 50% from exporters. Exporters can alternatively sell their foreign exchange to importers provided that their contracts are executed through a licensed foreign exchange bureau acting as an intermediary to prevent black market dealings. Moreover, they can sell directly to foreign exchange bureaus.
The Ministry of Internal Trade and Consumer Protection and the Customs Directorate affiliated to the Ministry of Finance have reportedly set up a joint automated network to confirm which goods enter Syrian territory and their date of import to better police price gouging.
The Syrian Commission on Financial Markets and Securities agreed to reactivate the trading of Syriatel’s shares in the Damascus Securities Exchange after the Council of State Administrative Court revoked its judicial custody order this past July after it was imposed in June 2020. The move to reactivate trading after 15 months followed the approval of the Minister of Finance, the election of a new board of directors, and an agreement with the Telecommunications Regulatory Authority to settle an outstanding amount of SYP 134 billion by borrowing the funds.
The Supreme Investment Council approved the minimum value for projects to be licensed pursuant to the new Investment Law along with a procedural manual to guide investors who submit their applications to the one-stop Investor Services Center, thereby shortening the process.
The Supreme Investment Council approved the executive regulations of the new Investment Law. In the past few months, investment licenses were granted by the Supreme Investment Council on a provisional basis pending the issuance of the executive regulations.
The Supreme Investment Council agreed to approve the application for a new project for the production of cancer drugs pursuant to the Investment Law. The project to be established in the Adra Industrial Park is anticipated to create 34 job opportunities and cost SYP 15 billion.
The Damascus Provincial Council approved the zoning plan for the Damascus district of Jobar, which will be published in the Official Gazette. There is then a 30-day period for interested parties to object before the plans are submitted to the Ministry of Housing for approval.
The President issued Presidential Decree 237/2021 rezoning the Qaboun and Harasta districts of Damascus based on Plan No. 104. The 200-hectare area will be subjected to the Real Estate Regeneration Law 10/2018, granting shares to the original owners in the respective plots.
The Minister of Internal Trade and Consumer Protection attributed shortages of gas and heating oil to tankers refraining from shipping to Syrian ports out of fear of falling afoul of international sanctions and forfeiting insurance coverage, as well as black market manipulators.
The People’s Assembly deliberated the Renewable Energy Bill, which consists of 26 articles and aims to discourage traditional fuel consumption by imposing a one percent tax on electricity, oil products and automobiles to finance a fund to support domestic renewable energy use.
The first flight of Pakistan International Airlines (PIA) to Damascus International Airport arrived in the Syrian capital, marking the return of air traffic between the two countries, which had been suspended for the past 10 years.
The Peasants Union revealed that wheat production in 2021 decreased due to a drought, a lack of rain, and damage to some cultivated areas, reaching 400,000 tons compared to 600,000 tons last year while annual demand exceeds 1 million tons, thereby creating a need for imports.
The Minister of Education reportedly stated that the government does not object to teaching Kurdish in public schools like it already does with Armenian, Assyrian (Syriac) and Circassian while commenting that more authorities are expected to be decentralised towards local councils. A number of commentators however disputed the Minister of Education’s statements that the Assyrian and Circassian languages are taught in public schools in Syria while another suggested that Armenian is only taught in private schools.
A combination of factors is reportedly contributing to a new emigration wave of Syrians to countries such as Egypt, Iraq and Turkey, including declining purchasing power, a lack of fuel and electricity, and a deteriorating business atmosphere characterised by disputed tax levies.