Amendment to the Investment Law Tha
Amendment to the Investment Law That Might Be Unconstitutional
Rarely has a legal issue generated as much public interest and debate as the latest amendment to the Investment Law,[1] issued one day prior to the Egypt Economic Development Conference in Sharm El Sheikh. This amendment was reviewed in detail in our May 2015 issue of the Egypt Legal Update, which criticized various aspects of the Law, including the difficulty of implementing the licensing one-stop-shop promised by the government, the lack of transparency in the new system for land allocation, the lack of clarity of the status of private free zones, and the fact that the General Authority for Investment and Free Zones is now becoming a regulator and not a promoter.
But in spite of various calls by experts for the review of the law, no response has yet come from the Government. On the contrary, a rather unpleasant surprise came in the form of an "addendum"[2] issued by the Secretariat of the Council of Ministers and published in the Official Gazette introducing certain amendments to the law (the "Addendum").
In terms of substance, this Addendum deals with a few procedural matters only pertaining to company establishment in accordance with the Investment Law and reinstates certain provisions which were deleted in the previous amendment.
However, and unfortunately, this Addendum causes serious constitutional problems and threatens the credibility of the Government. The principle of introducing "addendums" by way of a published decision from the Cabinet Secretariat is in itself acceptable and quite customary. However, such corrections are limited to typographical errors, mistaken figures, or simple omissions at the time of publication. Publishing an eight page Addendum in order to cover up for flaws in the law amounts to new legislation which cannot be issued neither by the Cabinet Secretariat, nor the Prime Minister, or even the whole Cabinet of Ministers, and can only be issued by the President of the Republic using the temporary legislative authority granted to him by the Constitution. Thus this latest Addendum did not address the flaws of the Law, and in fact may be rendered unconstitutional.
[1] Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 11 (bis), dated March 12, 2015.
[2] Cabinet of Ministers' Addendum to the Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 18 (bis) (b), 5 May 2015.
Rarely has a legal issue generated as much public interest and debate as the latest amendment to the Investment Law,[1] issued one day prior to the Egypt Economic Development Conference in Sharm El Sheikh. This amendment was reviewed in detail in our May 2015 issue of the Egypt Legal Update, which criticized various aspects of the Law, including the difficulty of implementing the licensing one-stop-shop promised by the government, the lack of transparency in the new system for land allocation, the lack of clarity of the status of private free zones, and the fact that the General Authority for Investment and Free Zones is now becoming a regulator and not a promoter.
But in spite of various calls by experts for the review of the law, no response has yet come from the Government. On the contrary, a rather unpleasant surprise came in the form of an "addendum"[2] issued by the Secretariat of the Council of Ministers and published in the Official Gazette introducing certain amendments to the law (the "Addendum").
In terms of substance, this Addendum deals with a few procedural matters only pertaining to company establishment in accordance with the Investment Law and reinstates certain provisions which were deleted in the previous amendment.
However, and unfortunately, this Addendum causes serious constitutional problems and threatens the credibility of the Government. The principle of introducing "addendums" by way of a published decision from the Cabinet Secretariat is in itself acceptable and quite customary. However, such corrections are limited to typographical errors, mistaken figures, or simple omissions at the time of publication. Publishing an eight page Addendum in order to cover up for flaws in the law amounts to new legislation which cannot be issued neither by the Cabinet Secretariat, nor the Prime Minister, or even the whole Cabinet of Ministers, and can only be issued by the President of the Republic using the temporary legislative authority granted to him by the Constitution. Thus this latest Addendum did not address the flaws of the Law, and in fact may be rendered unconstitutional.
[1] Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 11 (bis), dated March 12, 2015.
[2] Cabinet of Ministers' Addendum to the Presidential Decree-Law No. 17/2015 amending the Investment Law No. 8/1997 among others, Official Gazette, Issue No. 18 (bis) (b), 5 May 2015.