Modifications to the Issuance of Fu
Modifications to the Issuance of Future Suez Canals Certificates
On September 1st, 2014, the President issued Decree-Law No 119 of 2014[1] organizing the offering to the Egyptian public of investment certificates for the digging of the second Suez Canal. The fundraising was highly successful, raising more than EGP 64 billion in just 8 days.
The decree stated that the investment certificates were to be offered by the four State-owned banks – the National Bank of Egypt, Banque Misr, Banque du Caire, and the Suez Canal Bank – with the funds to be raised to be allocated to the Suez Canal Authority, and to be guaranteed by the Ministry of Finance. The funds were to be used to "finance the upgrade and development of the Suez Canal”. The Decree also exempted the return on the investment certificates from all taxes and duties.
On 22 March 2015, the President issued Decree-Law No 19 of 2015 on the same subject (the "Decree"), but with three key differences from the September 2014 Decree.[2] Firstly, the issuance of the certificates is now guaranteed by the Treasury, as opposed to the Ministry of Finance, and is subject to the approval of the Cabinet, which is more accurate. Secondly, the new Decree states that the proceeds of the certificates will also be used for the ‘improvement’ of the Suez Canal, and not just ‘development’, which allows the Authority more freedom in utilizing the funds. Finally, the certificates can now be issued in different types and categories, as opposed to being separated into different categories only in the 2014 Decree.
Conclusion
Given that the Egyptian legal system does not allow for the retroactive implementation of the provisions of new laws, the new Decree does not affect the legal situation of the previously issued certificates, nor the State’s obligations towards their holders. Instead, the new Decree will be applied in the event that the Suez Canal Authority chooses to issue new certificates; this is understood from the text of the new Decree, which does not repeal or amend any of the 2014 decree’s provisions. [1] Presidential Decree-Law No. 119/2014 on the Issuance of Suez Canals Certificates, Official Gazette, Issue No. 35 (bis), 1 September 2014. [2] Presidential Decree-Law No. 19/2015 on the Issuance of Suez Canals Certificates, Official Gazette, Issue No. 12 (bis), 22 March 2015.
On September 1st, 2014, the President issued Decree-Law No 119 of 2014[1] organizing the offering to the Egyptian public of investment certificates for the digging of the second Suez Canal. The fundraising was highly successful, raising more than EGP 64 billion in just 8 days.
The decree stated that the investment certificates were to be offered by the four State-owned banks – the National Bank of Egypt, Banque Misr, Banque du Caire, and the Suez Canal Bank – with the funds to be raised to be allocated to the Suez Canal Authority, and to be guaranteed by the Ministry of Finance. The funds were to be used to "finance the upgrade and development of the Suez Canal”. The Decree also exempted the return on the investment certificates from all taxes and duties.
On 22 March 2015, the President issued Decree-Law No 19 of 2015 on the same subject (the "Decree"), but with three key differences from the September 2014 Decree.[2] Firstly, the issuance of the certificates is now guaranteed by the Treasury, as opposed to the Ministry of Finance, and is subject to the approval of the Cabinet, which is more accurate. Secondly, the new Decree states that the proceeds of the certificates will also be used for the ‘improvement’ of the Suez Canal, and not just ‘development’, which allows the Authority more freedom in utilizing the funds. Finally, the certificates can now be issued in different types and categories, as opposed to being separated into different categories only in the 2014 Decree.