This update is intended for general guidance only. It should not be relied upon as legal advice.
EFSA AMENDS AND REPORTS .......................... 1
January 2012
THE MARKET NEWS FROM TEXTILES TO STOCK MAKET
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NEWS ON POLITICS , CON SUMER PROTECTION AND & D ’S LATEST DEAL ..... 3
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newsletter
EGYPT ’S SO URCE FO R LEGAL UPDAT ES
EFSA Decision to Amend Regulatory & Supervisory Controls of Factoring On December 8th 2011, the Board of EFSA issued a decision to amend the regulatory and supervisory controls of factoring, replacing paragraphs three and five of Article two of EFSA Decision no. 120 of 2010. According to the new decision, founders and shareholders of the factoring company must include a financial institution or more owning at least 20% from the issued capital. Financial institutions are defined to include banks that are subjected to the supervision of the Central Bank of Egypt, insurance companies, financial leasing companies, mortgage finance companies, venture capital funds and companies, holding companies that practice financial activities through affiliates subject to EFSA’s supervision, foreign banks and companies which practice similar activities subject to the supervision of a member of international institutions e.g. The International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS). The company must confine its activities to factoring only; however, it may add another activity after obtaining the approval of EFSA. In this respect, factoring shall have independent accounts. According to the new decree, companies under the supervision of EFSA can add factoring to its activities after gaining EFSA’s approval. To gain EFSA’s approval, the company needs to meet the following prerequisites: 1. The company’s issued capital and paid capital is not be less than the minimum limit set for each activity being practiced by the company. 2. The company must keep all documents that allow it
to prepare independent accounts for factoring that is in accordance with the Egyptian Accounting Standards. 3. Assign a managing director or a manager for the factoring activity in the company. Such manager must meet the conditions stated in paragraph seven of Article two of Decision no. 120 of 2010. 4. The company is to prepare separate annual and quarterly financial statements for the factoring activity according to the Egyptian Accounting Standards. The above-mentioned amendments are applicable the day following the date of its publication in the Egyptian Gazette.
EFSA issued its monthly report regarding the performance of the non-banking financial activities for September 2011. The report includes the most significant features of the regulatory performance of EFSA’s departments. With an outline for the activities of the Capital Market, the Insurance, the Mortgage Finance, the Financial Leasing as well as the decisions issued to regulate the market. To review the full report, check the following link: http:// www.efsa.gov.eg/content/efsa2_ar/efsa_report/ report_efsa4.htm
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This update is intended for general guidance only. It should not be relied upon as legal advice.
Trading, Clearing and Settlement for Small & Mid Cap Companies
According to Article one of Decree 738 of 2011 issued by The Egyptian Financial Supervisory Authority, companies listed on the small and mid cap market (NILEX) at the Egyptian Exchange shall be traded in a daily one-hour trading session with the same applicable trading mechanism as that of the main market. The price limits are allowed to fluctuate 5% above or below the open price; the closing price is calculated as a volume weighted average price at the end of each trading session, provided a minimum volume traded of 100 shares is concluded with a minimum value of EGP 20,000 or its equivalent in other currencies. Article two provides that settlement of small and mid cap stocks shall take place on (T+2). Article three states that the Exchange shall put in place all necessary procedures for proper surveillance and monitoring of all transactions executed for the small and mid cap companies, without prejudice to the surveillance and market control rules applied in the main market.
Increase of Energy Prices on Energy Intensive Industries The Minister of Finance announced that starting from January 2012, Egypt would implement a decision to cut down energy subsidies and increase prices for energy-intensive factories such as those producing ceramics, steel, cement, and / or fertilizers. “Gas and electricity prices for energy-intensive factories will be increased by $1, which is 33% of the current price,” said the Minister. For more information, check: http://www.mof.gov.eg/English/MOFNews/Press/Pages/ Budgetcutstotargetsubsidiestoenergyintensiveindustries,saysminister.aspx
36,000 New Investor in EGX in 2011 Egyptian Exchange (EGX) said in its annual report that the year 2011 has witnessed the joining of about 36,000 new investors of different nationalities to the Egyptian money market, compared to about 35,000 investors in the previous year. The report indicated that such increase took place despite the difficult economic conditions in Egypt during the past year.
Importation of Clothes, Furniture & Textile Decree No. 626 of 2011 was issued by the Minister of Industry and Foreign Trade obliging importers of clothes, furniture, textile, carpets, and floor covering to obtain a certificate of Inspection and Review stating that these products are in accordance with the Egyptian specifications. The Certificate can be issued from an ILAC accredited entity, or from an Egyptian entity accredited by the Minister of Industry and Foreign Trade. The Certificate needs to list the products’ amount, value, country of manufacture, name and address of manufacturer, trademarks, and importer’s name.
The Egyptian Non-oil Foreign Trade Digest The Ministry of Industry and Foreign Trade issued a Non-oil Foreign Trade Digest for the year 2011. The Digest clarifies the annual export and import sectors, the main export markets for the year 2011, trade volume with the different markets in the world, and detailed statics about exports and imports in different sectors. To review the Digest, check the following link: http://www.goeic.gov.eg/downloadsfiles/Digest%20December%202011.pdf 2
This update is intended for general guidance only. It should not be relied upon as legal advice.
ECA may refer cases to Public Prosecution Independently
I&D N EWS
The Egyptian Competition Authority (ECA) now has the independent power to settle its final cases or to refer them to the Public prosecution. The Prime Minister issued Decree No.1410 of 2011 under which the competences stipulated in article 21 of Competition Law are delegated to ECA Chairman. According to Article 21 of the Competition Law No. 3 of 2005, criminal lawsuits or any procedure taken therein shall not be initiated in relation to acts violating the provisions of this Law, unless a request of the Competent Minister or the person delegated by him is presented. The Competent Minister or the person delegated by him may settle with the violating parity before a final judgment is rendered, in return for the payment of an amount not less than double the minimum fine imposed by the Law and not exceeding double its maximum. The settlement shall be considered a waiver of the criminal lawsuit filing request and shall result in the lapse of the criminal lawsuit relevant to the same case subject of suing. culture, contributing to the furtherance of the principle of equality between the people of Egypt regardless of their origin, gender, religion or belief.
The National Council for Justice and Equality The Prime Minister issued Decree No.1417 of 2011 for the establishment of council affiliated to the Cabinet called the “National Council for Justice and Equality”; aiming at promoting the value of justice and equality, disseminating citizenship
The Council is specifically competent to studying the draft laws and regulations required to effectuate the principles of equality and justice. The Council also monitors all cases of discrimination between people, receives related complaints, alarms the competent authorities about any prospect crisis, and suggests proper and modern solutions.
The 10th edition of Nice Classification The 10th edition of Nice Classification entered into force on 1 January 2012. The Nice Classification is a short name for International Classification of Goods and Services (ICGS) adopted in 1957 by the Nice Agreement, for the Purposes of the Registration of Trademarks. Egypt signed the Nice Agreement on June 18th, 2005. The classification consists of 45 classes: the first 34 attributed to goods while the remaining are for services. For further information on the Nice Classification and its most recent edition, please check the following link: http://www.wipo.int/classifications/nice/en/about_the_ncl/ preface.html 3
I&D now represents a leading French Company in the food industry for a joint venture with a leading Company in the industry of cheese and dairy products in Egypt, through the acquisition of 100% of the French Company Egyptian subsidiary against shares swap with an aggregate amount of EGP 100,000,000. The deal is ongoing and shall be announced in the Egyptian market by the end of February.
25 of January a Public Holiday The Prime Minister issued Decree No. 1355 of 2011 announcing the 25th of January every year as a public holiday to mark the anniversary of the 25th of January Revolution as well as the Police day; it’s announced to be a paid holiday for employees in both, public and private sectors.
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