This Update is produced on a monthly basis. It provides an update on new legislation in certain Middle East countries (Bahrain, Egypt, Jordan, the Kingdom of Saudi Arabia, Kuwait, Qatar, the Sultanate of Oman and the United Arab Emirates) where SNR Denton has offices. We also include Turkey and Lebanon updates from our affiliate and associate firms in Istanbul and Beirut respectively.

This Update is not an exhaustive list of all new legislation, but a summary of new legislation that we feel may be significant for clients. Should you require further detail on any of the laws referred to in this Update, please contact the relevant managing partner. Please note that, in some jurisdictions, new laws may come into effect which have not been officially published in the publications we have reviewed as mentioned below. Also, some of the official publications in these jurisdictions are not published on a regular basis.

Bahrain

New legislation is published weekly in the Official Gazette.

New and Revised CBB Regulations on the Way

The Central Bank of Bahrain (CBB) is developing new rules to govern the activities of small and medium enterprises (SMEs) in the microfinance industry, which are expected to be issued sometime during 2012. The main reason behind the development of these rules is the recognised need of SMEs for affordable finance to facilitate their growth.

Furthermore, the CBB is revising existing rules governing the mutual funds industry, broadening the range of funds that can be established in Bahrain to include real estate investment trusts (REITs) and private investment undertakings. The new regulations expand the current ones to include new rules addressing corporate governance and the duties and responsibilities of relevant parties. The revised rules are currently open for consultation and are expected to be issued sometime during 2012.

Egypt

New legislation is published in the Official Gazette.

Ministerial Decree No. 54 2012

Concerning the tax accounting rules and principles for small enterprises and procedures for tax collection on their profits.

Dated 8 February 2012                                                                                                            Effective from 9 February 2012

Prime Minister Decree No. 32 2012

Regarding the formation of the ministerial group for settlement of investmentrelated disputes.

Dated 12 January 2012                                                                                                           Effective from the date of its publication

The Supreme Council of the Armed Forces Decree No. 14 2012

Concerning the integrated development of the Sinai Peninsula.

Dated 19 January 2012                                                                                                           Effective from 20 January 2012

Decree No. 11 2012

Establishing incentives for the settlement of taxes. Official Journal Issue No. 2 (Bis)

Dated 16 January 2012                                                                                                          Effective from 17 January 2012

Jordan

New legislation is published in the Official Gazette. There is no set date for publication.  

There are no new laws or regulations this month. However, the following draft laws are being deliberated by the House of Representatives:

  • Draft Law Amending Law on Crime Prevention of 2011
  • Draft Law Amending Municipalities Law of 2012
  • Draft Law Amending Drugs and Mentally Impairing Substances Law of 2012
  • Draft Political Parties Law of 2012
  • Draft Law Amending Anti-Corruption Commission Law of 2011  

Furthermore, other laws being deliberated which may result in amendments include:

  • Temporary Railway Law No. 32 of 2010
  • Temporary Renewable Energy and Efficiency Law No. 3 of 2010
  • Temporary Law Amending Road Transport Law No. 28 of 2010

Kingdom of Saudi Arabia

New legislation is published weekly in the Official Gazette. The following are the latest legislative updates in the Kingdom of Saudi Arabia according to the latest bulletins of the Official Gazette.

Bulletin of Friday 4 Rabie I 1433 H. (27 January 2012 G.), Year 89, Issue No. 4394 (Um Al-Quara):

Cultural Cooperation

Having perused the submittal by HRH the Board Chairman of the King Abdul Aziz Foundation for Research and Archives; and having perused the Consultative Council's Resolution No. 11/53 dated 04/11/1432 H., the Council of Ministers agreed to approve a memorandum of cooperation between the King Abdul Aziz Foundation for Research and Archives in the Kingdom of Saudi Arabia and the Al-Bairouni Institute for Oriental Studies in the Republic of Uzbekistan, which memorandum was executed in the city of Riyadh on 12/02/1432 H., corresponding to 16/01/2011 G., based on the wording attached to the Resolution. A draft Royal Decree has been drawn up to that effect.

Cultural Cooperation

The Council of Ministers agreed to authorise HE Minister of Petroleum and Mineral Resources, or his delegate, to hold discussions with the Chinese side on a draft protocol amending the protocol made between and by the government of the Kingdom of Saudi Arabia and the government of the People’s Republic of China for cooperation in the petrol, gas and minerals sectors, as ratified by Royal Decree No. M/25 dated 25/04/1427 H., to have such draft protocol signed based on the wording attached to the Resolution, and to submit the final signed version for completion of the statutory procedures.

Insurance Protection

Having reviewed the submittal by the Public Pension Agency; and having reviewed the Consultative Council's Resolution No. 66/57 dated 18/11/1432 H, the Council of Ministers resolved as follows:

  1. the provisions of the Consolidated Law for Provision of Insurance Protection to GCC citizens working in any GCC member state other than their own shall apply to pension payees voluntarily covered under the Pension Law;
  2. if a pension payee covered under the Pension Law desires to be governed by the provisions of the Consolidated Law for Provision of Insurance Protection to GCC citizens, payment of his pension under the Pension Law shall be suspended; and 
  3. the provisions of paragraphs (a) and (b) above shall apply with effect from the effective date of the Consolidated Law for Provision of Insurance Protection. A draft Royal Decree has been drawn up to that effect.

A draft Royal Decree has been drawn up to that effect.

Bulletin of Friday 11 Rabie I 1433 H. (03 February 2012 G.), Year 89, Issue No. 4395 (Um Al-Quara):

Cooperation with Afghanistan

The Council of Ministers agreed to authorise HRH the Minister of Foreign Affairs, or his delegate, to hold discussions with the Afghani side on a draft general agreement for cooperation between the government of the Kingdom of Saudi Arabia and the government of the Islamic Republic of Afghanistan based on the wording attached to the Resolution, and to submit the results thereof to the Council of Ministers for completion of the statutory procedures.

Sports Cooperation with Pakistan

The Council of Ministers agreed to authorise HRH the General President of Youth Welfare, or his delegate, to hold discussions with the Pakistani side on a draft agreement for cooperation in sports between the government of the Kingdom of Saudi Arabia and the government of the Islamic Republic of Pakistan based on the wording attached to the Resolution, and to submit the final signed version for completion of the statutory procedures.

Bulletin of Friday 18 Rabie I 1433 H. (10 February 2012 G.), Year 89, Issue No. 4396 (Um Al-Quara):

Three Memoranda of Understanding

Having perused the submittal by HRH Crown Prince the Deputy President of the Council of Ministers and the Minister of Interior; and having reviewed the Consultative Council's Resolution No. 50/46 dated 02/08/1432 H., the Council of Ministers approved three Memoranda of Understanding between the government of the Kingdom of Saudi Arabia and the Republic of Lebanon, the government of Andorra, and the government of Estonia, respectively, in the scope of exchange of financial investigations respecting money laundry and the funding of terrorism, which memoranda were executed on 18/07/1431 H, corresponding to 30/06/2010 G., based on the wording attached to the Resolutions.

A draft Royal Decree has been drawn up to that effect.

Cooperation with Qatar

The Council of Ministers agreed to authorise HE the Minister of Commerce and Industry, the Board Chairman of the Saudi Standards, Metrology and Quality Organization, or his delegate, to hold discussions with the Qatari side on a draft for a technical cooperation programme in the scope of metrology between the Saudi Standards, Metrology and Quality Organization, on the one part, and the Qatari Ministry of Environment, on the other part, and to sign the said programme, based on the wording attached to the Resolution, within the framework of the Saudi Qatari Coordination Council.

Scientific Cooperation with Finland

Having perused the submittal by HE the Minister of Higher Education; and having reviewed the Consultative Council's Resolution No. 62/53 dated 14/11/1432, the Council of Ministers agreed to approve a memorandum of scientific and educational cooperation between the Ministry of Higher Education in the Kingdom of Saudi Arabia, on the one part, and the Ministry of Education and Culture in Finland, on the other part, which memorandum was signed in Helsinki on 12/03/1431 H., corresponding to 15/02/2011 G, based on the wording attached to the Resolution.

A draft Royal Decree has been drawn up to that effect. Approval of Accounts The Council of Ministers decided to approve the final accounts of the General Organization of King Fahad Causeway for the financial year 1431/1432 H.

Approval of Accounts

The Council of Ministers decided to approve the final accounts of the General Organization of King Fahad Causeway for the financial year 1431/1432 H.

Kuwait

New legislation is published weekly in the Official Gazette.

Recent Amendments to the Establishment and Operation of Financial Intermediation Companies in Lebanon (the Lebanese Central Bank’s Intermediate Decision No. 10910/2012)

The Lebanese Central Bank (the BdL) recently amended its Basic Decision No. 7136/1996 relating to the establishment and operation of financial intermediation companies. Intermediate Decision No. 10910/2012 strives to strengthen the financial sector and to tighten the regulator’s control over the institutions that are licensed to offer financial intermediation services in Lebanon.

The main amendments are as follows:

  • Whereas the former Decision recognized only a single category of financial intermediation companies, Intermediate Decision Nos. 10910/2012 established three separate categories of financial intermediation companies. In addition, it not only generally increases the requirements related to their capital but also determines the different thresholds for the minimum paid-up capital for each of these three categories. Also, the new Decision allows only one category of financial intermediation companies to carry out all of the activities and transactions listed under the notion of “financial intermediation services”, while limiting the activity of the two other categories to only a number of these transactions and activities.
  • Moreover, the Decision amended the list of “financial intermediation services”: the new list is far more exhaustive and detailed than the initial list, thereby making it more difficult to get around applicable licensing requirements. The Decision also refers to the execution of orders, introducing brokerage, discretionary and non-discretionary portfolio management, the marketing and promotion of financial products, and collective investment schemes, as well as consulting services and counselling in relation to financial markets or the issuance and marketing of financial instruments. In addition, the Decision provides that only licensed institutions may act as market makers and liquidity providers provided that they comply with the requirements set out in the Decision’s appendix.
  • With respect to the relationship between the financial intermediation companies and their clients, the Decision sets a threshold for the opening of an account: a minimum of US$10,000 should now be invested, which should help prevent small investors from engaging in speculation. The Decision also raises the transparency standards for the financial intermediation companies: in addition to the existing obligation to inform clients of the risks that the transactions entail for them and in relation to the status of their accounts, the new regulation requires that the financial intermediaries obtain their clients’ approval or acknowledgement in a number of instances.

Issued on 27 January 2012                                                                                                                                                Effective from date of issuance (except

                                                                                                                                                               for (i) the minimum capital thresholds

                                                                                                                                                                    (the provisions will  enter into effect one

                                                                                                                                                                     year after the date of issuance) and (ii)

                                                                                                                                                                    the minimum investment (institutions

                                                                                                                                                                  must comply with this requirement

                                                                                                                                                                          within a three month period starting on

                                                                                                                                                                                       25 January 2012)).

 

Lebanon

New legislation is published weekly in the Official Gazette.

Regulation introducing Amendments to Chapter 8 of the Capital Market Authority (CMA)

Introduces new obligations for a portfolio investment supervisor and portfolio custodian to comply with the CMA Executive Regulations and the orders issued by a portfolio manager. Amends provisions relating to investment portfolios explaining types of portfolio, portfolio capital, and provides for additional obligations and compliance rules for a portfolio manager.

Promulgated on 19 February 2012                                                                                          Effective from 19 February 2012

Qatar

New legislation is published monthly in the Official Gazette.

Transparency and Administration Monitoring Authority established by Emiri Decree 75 of 2011

This Decree was issued on 29 November 2011 and effective on the same date. It establishes the Transparency and Administration Monitoring Authority, which has the goal of combating corruption and preventing the occurrence of and investigating crimes relating to public money or public jobs.

National Sports Day. Emiri Decree 80 of 2011

Issued on 6 December 2011 and effective on 6 January 2012, this Decree designates the first Tuesday of the second week of the month of February as a sports day for the State. This sports day is a paid public holiday for both private and public sectors. The public and private sectors are required to organise sports events in the State throughout the day to establish an awareness of sport and its role in the life of individuals and society.

Law 17 of 2011 Regarding the Border Precautions for the Protection of Intellectual Property

Issued on 17 November 2011 and effective on 17 December 2012, this law introduces mechanisms for effecting intellectual property rights recognised under the relevant laws of Qatar, whereby products that infringe these rights are now prohibited under this law from being brought into Qatar through the borders. The General Administration of Customs in Qatar shall take all measures required to ensure that the infringing products are prohibited from being imported into Qatar where it has prima facie evidence of the fact of infringement. The law provides for procedures for the owner of the infringed right to apply to the General Administration of Customs requesting it not to release the infringing products, and procedures available to the importer of the products to object to any decision by this Administration to that effect, if any.

Sultanate of Oman

New legislation is published twice monthly in the Official Gazette.

Central Bank of Oman

Decision MM/2380/155/10/11/5

Amends some of the provisions of the Implementing Regulations of the Law Promulgating the Insurance of Bank Deposits Number BM/39/5/95.

Promulgated on 4 December 2011                                                        Effective from 1 January 2012 Ministry of Manpower

Ministerial Decision No. 656/2011

Determines the circumstances, events and works that permit the employment of women during the night and the conditions for such employment.

Promulgated on 31 December 2011                                                       Effective on the day following publication

Ministerial Decision No. 657/2011

Regulates emergency leave for the private sector.

Promulgated on 31 December 2011                                                          Effective on the day following publication

Turkey

New legislation is published daily in the Official Gazette.

Regulation Introducing Amendments to the Natural Gas Market Licence Regulation (Official Gazette No. 28211)

Stipulates provisions regarding the storage licence applications subsequent to the examination and assessment of the said application and the requirement for applicants to obtain the authorisation of the Presidency of Turkish Military General Staff for the use of the field on which the store in question is planned to be built.

Amends the minimum capital requirement for different licence holders and brings forth more documental requirements for the storage licences. Further amends the timing of the assessment of licence applications as the submission date of the payment of the one percent licence fee.

Promulgated on 21 February 2012                                                          Effective 21 February 2012

Regulation Introducing Amendments to the Regulation on Procedures and Principles of Petroleum Market Supervision, Preliminary Investigation and Inquisition (Official Gazette No. 28212)

Extends the definition of “replicate sample” by defining such sample as a sample stored under suitable conditions in the examining laboratory. Stipulates an administrative fine where there is a final verdict or a final confiscation decision without preliminary investigation or taking a statement. 

Promulgated on 22 February 2012                                                      Effective 22 February 2012

Capital Market Board (“CMB”) Communiqué (Serial IV, No. 57) Introducing Amendments to the Communiqué on Determination and Application of the Corporate Governance Principles (Serial IV, No. 56) (Official Gazette No. 28201)

Amends the need for Board of Directors’ independent members’ votes by introducing a right to defer the rejected decision to the General Assembly, and defines the term of office for the independent members, which will be up to three years.

Sets forth the CMB acceptance criteria for the nominees of the independent membership.

Promulgated on 11 February 2012                                                      Effective 11 February 2012

Turkish Energy Market Regulatory Authority (“EMRA”) Measurement Standards Communiqué on Licence Applications for Wind and Solar Energy (Official Gazette No. 28212)

Stipulates the principles and procedures of making a licence application for the purpose of establishing a wind and/or solar energy generation facility.

Stipulates that the applicants applying for a licence(s) (e.g. generation licence) required for establishing/operating the facility (“Applicants”) shall carry out certain measurements on the field that the facility is planned to be established.

Reads that one of the requirements is that the “measurement station” located in the field of the facility shall take measurements of the total solar radiation that each square meter receives.

Provides that, prior to the licence application, the Applicants shall take measurements regarding the field and submit one year’s data to EMRA. At least six months of the data provided to EMRA must have been produced as a result of in situ measurements.

Promulgated on 22 February 2012                                                        Effective 22 February 2012

United Arab Emirates

Dubai/UAE Federal Law

The UAE has passed two substantial pieces of legislation in the past few months which, whilst technically still in draft form, are likely to be promulgated in their current form.No relevant new legislation since the last edition of this Update.

Draft Federal Law concerning Commercial Companies

The law has been approved by the Council of Ministers and will come into force three months after it appears in the Official Gazette. This is expected to happen in the first quarter of 2012. Significant changes include:

  • scope for foreign investors to own more than 49 per cent of the shares in companies in strategic businesses;
  • the establishment of an LLC with only one shareholder;
  • increased levels of corporate governance and unified accounting standards; and
  • the abolition of minimum share capital

Draft Federal Law on Financial Restructuring and Bankruptcy for the UAE

The draft law provides for structured arrangements, which will be administered under direct court supervision. The aim is to allow rescue and rehabilitation of businesses first before moving into insolvency procedures.

The law is expected to apply to all entities under the UAE commercial companies law, traders, individuals and anyone engaged in commercial activity. It is not expected to apply to government entities or free zone companies.

The draft law also covers (i) preferential creditors, (ii) insolvency set-off (iii) financial collateral (additional new provisions), (iv) bankruptcy procedures for small estates and (v) priority funding.

Abu Dhabi

New legislation is published monthly in the Abu Dhabi Gazette

Resolution of the Chairman of the Executive Council No. (25) of 2011

Introducing amendments to the Tenancy Law No. (20) of 2006 (Abu Dhabi Official Gazette No.10 dated 31 December 2011). Extends the prohibition on landlords requiring tenants to vacate premises until 9 November 2012. Further approves the rental cap increase of five per cent for yearly lease renewals.

Promulgated on 9 November 2011                                                                            Effective 9 November 2011

Law No. (4) of 2011 Re-organising the Abu Dhabi Sports Council (Abu Dhabi Official Gazette No. 10 dated 31 December 2011)

Cancels the Resolution of the Chairman of the Executive Council No. (16) of 2006 establishing the Abu Dhabi Sports Council. Introduces provisions regarding the reorganisation and authorities of the Abu Dhabi Sports Council. The Chairman of the Executive Council will issue implementing byelaw and regulations.

Promulgated on 9 October 2011                                                                         Effective 9 October 2011