A New Law for Licensing Public Stor

One of the most important laws affecting economic and commercial activity – especially for small and medium enterprises – was recently published, namely the Public Stores Law No. 154 of 2019 (the “Law”).[1] The Law replaces a set of previous laws that were passed between 1954 and 1956 to regulate industrial and commercial stores as well as public stores and entertainment places and which constituted an important source for the obstructing of commercial activity in Egypt and the facilitating of manipulation and corruption. Hence, the new Law represents a significant and positive legislative development. The following are the main provisions of the Law: Definition of Public Stores that Are Subject to the Law The Law defines a “public store” as any facility that is used in undertaking for-profit commercial or crafts-related work or to provide for-profit services, entertainment, or celebrations. However, the following are excluded from the scope of the Law:

1. Tourist, hotel, and industrial facilities regulated under other laws.
2. Stores owned or run by the Armed Forces.
3. Stores with special regulations and falling under the laws for Special Economic Zones, for the Development in the Sinai Peninsula, or for Investment.
4. Stores that require the issuance of activity licenses in accordance with certain laws regulating said activities.

Licensing System As per the Law, each public store must obtain a license issued by one of the competent centres (established in local units or in the new cities administration or from other authorities with the power to issue licenses). Each centre is to be headed by a specialist in the local unit or city administration and is to include the membership of representatives from the police departments, Industrial Security, health departments, the Environmental Affairs Agency, and the Egyptian Food Safety Authority. The licenses are issued in accordance with the general requirements that are to be set by the High Committee for Licensing (the “High Committee”). Falling under the Prime Minister and chaired by the Minister in charge of Local Administration, the High Committee includes six experts and specialists and its tasks also include setting the civil protection requirements as well as those related to the environment, health, industrial security, and occupational safety and health. It is also tasked with categorizing public stores according to their activities and setting the regulations for each of these categories as well as determining the fees and the prerequisites that must be met by the managers of some of these public stores. It also identifies the books and records that must be kept in these cases. Such a system takes away the discretionary powers of setting the requirements and regulations from the local units and different licensing authorities, which limits the obstruction of the activities without legitimate cause in addition to limiting exploitation and corruption. The Law also introduces a new provision which stipulates that by default the licenses are not to have specific validity periods, except in the cases specified by the High Committee. The Law also allows for issuing temporary permits for ad hoc stores set up during special occasions, holidays, or exhibitions. This, too, is an important provision that removes from the store’s owner the need to renegotiate every time for the license renewal and his/her subjection to the power and exploitation of the competent employee. Licensing Procedures A licensing application is to be submitted to the competent centre along with the documents and fees specified by the High Committee. The centre must then notify the applicant whether the application was initially accepted or rejected (with the reasons for such) within 60 days from the date of application; otherwise, the application is deemed accepted. In the case of initial acceptance, the applicant is notified of all the general and specific requirements related to the store and the applicant must notify the centre, upon fulfilling these requirements, so that the latter undertakes inspection within a period not exceeding a month from the date of notification of initial acceptance. If some requirements are not met, the centre notifies the applicant once more to attend to this within a month. Licensing by Notification As an exception to the above, the Law introduces a new licensing system via notification for activities that do not represent a high degree of risks/hazards and which are to be specified in a decision by the High Committee. As per this new system, those wishing to establish a public store “that does not represent a high degree of risk/hazard” must notify the licensing centre of operating the store, as per the relevant form, and the centre is then to provide receipt of notification and undertake the inspection of said store within 90 days. If the inspection concludes the absence of any violations to the requirements, the store is considered licensed after the fees have been paid. However, in cases of violations, the store’s owner must address these within 90 days to avoid the administrative closing of the store. Accreditation Offices The Law also introduces accreditation offices, which are authorized to undertake technical inspections as well as the examination of documents related to the licensing of the stores in order to assist the applicants, examine their files, and provide them with certificates of accreditation that can be submitted to the licensing centres to finalize the necessary procedures. The competent licensing centres are to accept these certificates, but they retain the right to inspect the stores nevertheless in accordance with the provisions of the Law. Accreditation offices are to be established and granted their competencies and powers, as stipulated in the Law, through a decision issued by the High Committee. Given that these competencies and powers are of paramount importance, the Law sets different obligations that accreditation offices must comply with, including sound professional standards, the avoidance of conflict of interest, and the maintenance of confidentiality of information, and as such, these offices will be held accountable for violating any of these obligations. Revocation of the License In exchange for facilitating the procedures for issuing licenses, the Law provides for various cases that could lead to the revocation of the license of a public store, the most important of which are:

1. Voluntarily suspending the store’s activities and informing the licensing centre.
2. Suspending the store’s activities for two consecutive years without acceptable justification.
3. If the store is removed from its place.
4. Modifying the store’s activities without obtaining a prior license.
5. If the store becomes inoperable or poses a threat to public health, safety, or security.
6. If the store does not comply to the requirements of the Law such that its continuation poses serious harm to public health, safety, the environment, or security.
7. If the store is repeatedly closed for administrative reasons more than once during the same year.

The closing of the store occurs through a reasoned decision by the competent centre but it only goes into effect after one month from the date of notifying the store’s owner of the reasons behind the revocation of the store’s license and his/her failure to address the violations. Additionally, the competent centre requests the utilities operators to interrupt the supply of such utilities (in part or full) until the causes of such violations are removed. Penalties The Law stipulates a fine ranging from EGP 20,000 to 50,000 if a store operates without a license or modifies its activities without obtaining a license. In case of recidivism, the penalty is imprisonment for a period ranging from six months to one year. The Law also stipulates a fine ranging from EGP 10,000 to 100,000 on any entity that misrepresents itself as an accreditation office without being registered as such in accordance with the Law. Transitional Provisions

• The Prime Minister is to issue the Executive Regulations of the Law within three months from the date of its coming into force, i.e., before 2 January 2020. Until then, the old regulations remain in force.
• Licenses issued prior to the issuance of the Law remain valid but are subject to the new provisions of the Law.
• Existing and unlicensed stores are required to complete their licensing in accordance with the new system within one year from the date of publication of the new licensing requirements for public stores.

  [1] Law No. 154/2019 on Public Stores, Official Gazette, Issue No. 39 (bis) (b), 1 October 2019.