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New Data Protection Law in Egypt

Posted on: August 27th, 2020

On the 15th of July 2020, Egypt enacted the Data Protection Law No. 151 of 2020 (hereinafter  the “DPL” or the “Law”), the first of its kind for the state, to govern the activities related to personal data recipients, controllers, and processors. The DPL will come into effect three months following its publication in the official gazette, where it has been decreed that the Executive Regulations shall follow within six months after said publication. However, companies are required to comply with the DPL no later than a year after the Executive Regulations have been published.

Given the global dependency on digitalization, the DPL has been long called for, in order to ensure that users’ (the “Data Subjects”) rights, privacy and data are protected when being processed, stored and/or transferred. Under the DPL, personal data encompasses any data related to an identified natural person or identifiable, either directly or indirectly, through a connection made between this data and any other data; such as a name, voice, photo, identification number, online information identifiers, or any data identifying psychological, genetic, economic, cultural or  their social identity.

Data Subjects have a right to be informed of when their personal data will be processed, stored and/or transferred, and the purpose behind carrying out these aforementioned actions. The Law also requires prior consent for such uses, which may be withdrawn at any point by the Data Subject.

DPL’s territorial scope extends beyond the borders of the Arab Republic of Egypt with respect that it applies to anyone who commits a crime stipulated in the law, whether the perpetrator is an Egyptian inside or outside Egypt, or a non-Egyptian residing inside Egypt, or non-Egyptians outside Egypt if the act is punishable in the country in which it occurred and the Data Subject to the crime is an Egyptian or foreigners residing in Egypt.

One of the key aspects of the Law is the establishment of a data protection center (the “Center”). The Center will be the entity tasked with laying the groundwork for data protection regulations, procedures, policies and the overall national plan. The Center will have oversight on matters and breaches dealing with data protection.

Compliance with the new Law will likely be clearer after the issuance of the DPL’s Executive Regulations; however, certain compliance criteria is already evident. Entities storing, processing, collecting and/or transferring Personal Data will have to: (1) have a Data Protection Officer (the “DPO”), (2) the DPO must be licensed by the Center, (3) the DPO must provide the Center with regular reports as well as report any breaches and (4) the DPO is to remain independent of the corporate body he/she works for.

Failure to comply with the Law exposes the organization to criminal liability; this is besides the administrative penalties such as warnings, suspensions and/or withdrawal of the license. Depending on the crimes committed, penalties may range from small to substantial fines to as harsh as imprisonment.

Thus, the key takeaways from the DPL is the establishment of the Center, the appointment of a DPO, the Economic Courts being the court of competence and that criminal liability and harsh monetary fines may arise out of breaches in compliance of the Law.

How we can help

Under the DPL, companies processing, storing, controlling and/or transferring the personal data of Egyptians and Residents will need to comply.

Eldib Advocates’ dedicated a Data Protection Team comprising of IP, IT and Compliance lawyers who would be happy and are ready to assist your organization, be it a startup, SME, or large enterprise, to comply with these new requirements prior to them coming into effect. The Law imposes onerous fines and penalties for non-compliance; thus, our goal is to enable you to conduct your business in compliance with said Law with confidence, clarity and accuracy.

We can support clients in a variety of industries and sectors; i.e. Shipping/Transportation, Telecommunication and Media, Hospitality, Insurance, Retail, Real Estate, and Financial Entities such as exchanges, private money transfer companies, etc.

Please feel free to reach out to dataprotection@eldib.com.eg should you have any questions or require any assistance in this regard.

هل ما يحدث في العالم الآن يعد من قبيل القوة القاهرة أم هو ظرف طارئ استثنائي ؟

Posted on: April 26th, 2020

هل ما يحدث في العالم الآن يعد من قبيل القوة القاهرة أم هو ظرف طارئ استثنائي ؟

   يشهد العالم الآن إحدى الوقائع الغير مسبوقه فى العالم مع تعطل شبه كامل في جميع المجالات اليومية و قد أثر هذا التعطل بلا أدنى شك على حياتنا العملية و الشخصية ، فبينما تتخد جميع دول العالم إجراءات احترازية للحد من تفشي الوباء المستجد (الكورونا) او كما يطلق عليه البعض الأخر (كوفيد-19)، تطرأ  ثغرة قانونيه تتعلق بكيفية التعامل مع الوضع الراهن، فهل يعد من قبيل القوة القاهرة و ما يستتبعها من رفع جميع الأعباء و الالتزامات التعاقدية على المتعاقدين، ام ان هذا الوضع يعد ظرفاً استثنائياً مؤقتاً يترتب عليه تعديل الالتزامات التعاقديه وفقاً لنظرية الظروف الطارئة [Theorie de l’imprevision]، و ما هو حكم القانون المصري حيال ذلك؟

و يمكن تعريف القوة القاهرة بأنها الحادث المفاجئ الذي لا يمكن توقعه او الإستحالة المطلقة في دفعه، لذلك يشترط  ما يلى لإعتبار الظرف من قبيل القوة القاهرة:

1- استحالة التوقع: و يشترط في عدم التوقع ان يكون هذا الحادث غير متوقع حدوثه مطلقاً اى نادر الوقوع او غير مألوف.

2- استحالة الدفع، أو بمعنى آخر ينبغي ان تكون إستحالة تلافى الحادث أو تنفيذ الالتزام استحالة مطلقة، فلا تكون استحالة بالنسبة للمدين وحده بل استحالة بالنسبة لأي شخص يكون في موقف المدين، و هذا هو وجه التمييز بين القوة القاهرة و نظرية الظروف الطارئة.

ويؤدي توافر الشروط السابقة إلي اعفاء افراد التعاقد من اية مسئولية تترتب علي عدم تنفيذ البنود المتفق عليها بالعقد وينفسخ العقد دون تحميل المدين بأي مسئولية.

ولكن يظل الأمر معلقاً فيما يخص الظروف الحالية و التكييف السليم لها حسب القانون المصرى: هل توافرت شروط إعتبارها من قبيل القوة القاهرة أم يجب عتبار هذه اظروف من قبيل الظروف الاستثنائية العابرة ؟ و هل يستحيل تنفيذ الالتزام التعاقدي بشكل كلي؟ أم يتم التنفيذ العقد ولكن بشكل جزئي فقط نظراً للقرارات التي أصدرتها وزارة القوي العاملة و رئاسة مجلس الوزراء؟

فوفقا للقانون المدنى المصرى يجب توافر الشروط الثلاثة التاليه يشترط لاعتبار واقعه الوباء المنوه عنها و التدابير الاحترازيه التى اتخذتها الدوله المصريه كقوة قاهرة يترتب عليها فسخ العقد:

1- أن تكون الواقعة المشكلة للقوة القاهرة أجنبية اى خارجة عن ارادة الطرف المتضرر من الواقعه و المتمسك بها

2- أن تكون الواقعة غير متوقعة الحدوث من قبل الطرف المتضرر من الواقعه و المتمسك بها.

3- استحالة دفع الواقعه التى تشكل القوة القاهرة و يقصد بالاستحاله هنا الاستحاله الكليه و ليس الاستحاله الجزئيه.

لذلك فاذا رغب الطرف المتضرر من واقعه الوباء و التدابير الاحترازيه التى اتخذتها الدوله اعتبارها كقوه قاهره يترتب عليها فسخ العقد، فعليه اللجوء الى القضاء يطلب بفسخ العقد تاسيسا على ان تنفيذ الالتزاماته التعاقديه اصبحت مستحيله استحاله كليه بسبب عام و خارج عن اراده اطراف التعاقد.

اما اذا رغب الطرف المتضرر من واقعه الوباء و التدابير الاحترازيه التى اتخذتها الدوله اعتبارها كظرف استثنائى يحق له معه طلب تعديل التزاماته التعاقديه ، فعليه اللجوء ابضا الى القضاء يطلب تعديل التزاماته التعاقديه، تاسيسا على ان تنفيذ التزاماته التعاقديه اصبح مرهقا او مستحيلا استحاله نسبيه بسبب عام و خارج عن اراده اطراف التعاقد.

وهنا يكون للقاضى مطلق الحرية في اعتبار هذه الظروف من قبيل الظروف الطارئه او ظرف استثنائى.

في ضوء ما سبق فاننا نرى ان انتشار وباء فيروس كورونا المستجد (كوفيد-١٩) فى جمهوريه مصر العربيه و التدابير الاحترازيه التى اتخذتها الدوله حيال ذلك الوباء و آثار التعطل فى الدولة بسبب الفيروس يعد من قبيل الحدث الطارىء مما ترتب عليه تعليق العمل فى بعض الصناعات بشكل مؤقت

وعليه فمن غير المحتمل على ضوء الظروف الحاليه (و التى يمكن أن تتغير خلال الأسابيع القليله القادمة) أنه مع تطبيق القرارات الوزاريه الحالية أن يقوم  النظام القضائى المصرى بتكييف آثار فيروس كورونا المستجد (كوفيد-١٩) كقوة قاهرة بل سينظر الليها بإعتبارها حادث طارئ يترتب عليه إمكانية تعديل الالتزامات التعاقديه.

وعلى ضوء ما سبق ، ستعتمد هذه الاعتبارات على طبيعة العقد ، بالإضافة إلى تقدير المحكمة للتفسير والتطبيقات الواقعية.

فريقنا جاهز للمساعدة في جميع الاستفسارات المتعلقة بالعقود. يرجى إخبارنا كيف يمكننا المساعدة ، ونحن نتفهم أننا نمر بأوقات عصيبة  ونأمل أن تتمكن خدماتنا من معاونتكم.

 

Are COVID-19 Consequences Considered Force Majeure Under Egyptian Law?

Posted on: April 26th, 2020

Is What’s Happening With COVID-19 Now Considered to be Force Majeure or is it Hardship?

The world is currently witnessing one of the most unprecedented events of modern times, given the almost complete disruption of our day to day lives. This disruption has undoubtedly effected everyone’s professional and private life, and while countries all over the world are taking the necessary precautionary measures to limit the outbreak of the newly emerging coronavirus pandemic (COVID-19), a legal point of contention arises with regards to how the current situation should be interpreted: should it be considered as force majeure, resulting in the parties being released of all contractual obligations? Or, should it be considered as only temporary hardship, necessitating contract amendments that would adjust the contractual obligations pursuant to the “Theory of the Unforeseen” or “Theorie de l’imprevision?” Furthermore, what is the proper interpretation of the aforementioned under Egyptian Law?

Force majeure can be defined as a sudden accident that is unforeseeable and absolutely unavoidable. As such, in order for the criteria of force majeure to be met, the following conditions should exist:

1 – Impossible foreseeability of the event: it is impossible to foresee such an event due to its rarity or unusualness.

2- It is an unavoidable event: in other words, it would have been impossible to avoid the event or carryout contractual obligations; such impossibility exists not only for the debtor, but also, for any person in his/her position, and this is the main distinction between Force majeure and the “Theory of the Unforeseen” or “Theorie de l’imprevision.”

The presence of the above conditions would relieve the contractual parties of any liability arising from failure to implement the terms agreed upon in the contract, and as such, the contract would be rescinded without the debtor having to bear any responsibility thereof.

Yet the question remains, given the current circumstances, what is the appropriate interpretation under Egyptian Law? Have the conditions of force majeure been met or should the situation be considered one of exceptional hardship? Is it impossible to implement contractual obligations entirely? Or, is execution of the contract be feasible, but only partially, in light of the decisions issued by the Ministry of Manpower and the Prime Minister’s office?

According to the Egyptian Civil Code, for a pandemic to be considered an event of force majeure, precautionary measures had have been taken by the country that would make fulfilment of contractual obligations impossible, which would result in the rescission of the contract. As such, for the latter to occur, the following three conditions must be met:

  1. The event resulting in a force majeure is foreign in nature; that is, it is beyond the control of the party aggrieved by the situation and the one who insists on it.
  2. The occurrence is unforeseeable by the party aggrieved by the incident and the one who adheres to it.
  3. It is impossible to avoid the event that constitutes the force majeure and by impossible, we mean entirely impossible, and not partially impossible.

Therefore, in the event that the party aggrieved by both the pandemic and the precautionary measures taken by the Egyptian State wishes to consider these events as an event of force majeure, and in turn wishes to rescind the contract, he/she must resort to the judiciary, and request such rescission of the contract based on the fact that the execution of contractual obligations has become totally impossible due to a reason that is beyond the contractual parties wills.

However, in the event that the party aggrieved by both the pandemic and the precautionary measures taken by the Egyptian State  wishes  to consider these as exceptional circumstances and consequently, he/she would be entitled to seek amendments his/her contractual obligations, he/she must also apply  before the court seeking such amendments, based on the fact that the execution of such obligations has become burdensome or relatively  impossible  due to a general reason that is beyond the contractual parties wills.

Under such circumstances, the judge shall have the sole discretion to consider these circumstances as emergency circumstances or exceptional circumstances.

In light of the foregoing, we are of the opinion that the spread of the novel Coronavirus (COVID-19) in Egypt, bearing in mind the precautionary measures put in place by the Egyptian State  regarding this pandemic, the effects and current state of disruption due to  COVID-19  would be  categorized as that of exceptional hardship, resulting in the temporary suspension of  certain industries.

Hence, it is unlikely, given the current state of events (which may change over the course of the next few weeks) and the current ministerial decrees in place, that Egyptian Judiciary find the effects of COVID-19 to be those of force majeure but rather that of exceptional hardship against which, the contractual obligations may be amended.

That being said, such considerations would depend on the nature of the contract, as well as the court’s discretion for interpretation and factual applications.

Our team is equipped to assist with all contract related queries. Please let us know how we could be of assistance; we appreciate that these are difficult times we are going through and we hope that our services can provide you with some semblance of relief that you may require.

Stay safe, and in good spirits.

How Regulations In Egypt Are Aiming At Facilitating Business for SMEs

Posted on: December 19th, 2018

Egypt has been re-assessing many regulations in order to make the Egyptian market more conducive to both local and international investment. With a growing start-up community both in the tech industry and otherwise, laws such as the New Investment Law No. 72 of 2017 and the Small and Micro Enterprise Law No. 141, 2004, aim at leveling the playing field for new comers to the Egyptian market, allowing for equality of opportunity across a list of industries, empowering the ever-so-growing youth population and enhancing good governance and transparency.

According to Egypt’s Small and Micro Enterprise Law (No. 141, 2004) Small Enterprises are defined as “all companies or facilities with productive, commercial, or service-providing economic activities, with a minimum capital of 50,000 EGP, a maximum capital of 1,000,000 EGP, and a maximum of 50 employees. While Micro Enterprises are defined as all companies or facilities with productive, commercial, or service-providing economic activities, with a capital less than 50,000 EGP.”

These establishments/ projects which are in line with the guidelines of Law No. 141, 2004 intend to support citizens in need and enhance their role in economic development. With respect to funding and finance, the Egyptian authorities have taken the initiative to put in place tailored financing systems by the Central Bank of Egypt (CBE) such as creating funds in each of Egypt’s 27 governorates to facilitate these types of enterprises.  As the mindset shifts towards supporting SME’s the CBE, in 2016, established guidelines as an initiative to increase finance for SMEs by giving the authority to national banks to pledge a minimum of 20% of their loans to SMEs.[1]

A year later in 2017 the CBE took it a step further and worked closely with the banking sector by injecting a total financing of EGP 30 billion (EUR1.4 billion) to stimulate financing for microbusinesses which over the coming years is projected to aid around 10 million customers.[2]

That same year, Misr Venture Capital Company, a private fund with a capital of EGP 150 million (EUR 7.1 million), was founded by the Ministry of Trade and Industry aiming to relive distressed but viable SME’s by facilitating short-term financing mechanism.[3]

Moreover, in 2018 the CBE launched a four-year EGP 200 billion (EUR 9.3 billion) financial scheme to fund SMEs projects, also putting in place three plans to assist such enterprises by:

  • exempting banks from the reserve requirements for specific credit facilities for SMEs financing
  • facilitating the renewable energy sectors to invest in equipment and
  • providing short term facilities for working capital. [4]

Moreover, the regulation indicates that 10% of the available property for investment will be dedicated solely for the SME’s. The price payable for the purchase of the available plots of land will be proportionate to the cost of utilities /facilities. Otherwise a usufruct is another option for possessing the land against a 5% of the estimated value of the land.

All licenses, approvals or any other formalities for the creation of these establishment will be issued in less than 30 days from the day of submitting the request, same goes for the issuance of the commercial registries and the tax cards.

The regulation also will facilitate some of the following for establishment by:

  1. Identifying the investment opportunities.
  2. Assisting in a study analysis for all the available projects.
  3. Providing advice concerning the best price and place to buy the necessary machines and equipment.
  4. Risk analysis
  5. Marketing at local and international exhibition

These establishments shall not be  administratively suspended in case of committing a contravention. In such case, the owner will be informed with such contravention and the time limit to rectify it and only in case of default will the establishment will be suspended.

The current environment is quiet accommodating to new interest and development, and our firm aims at assisting those who seek services and advise with respect to establishing and realizing their ideas and/or projects. Our firm would work closely to cater to the needs of the investor and to formulate the best plan suitable for their endeavor, taking into consideration all the benefits provided by the law.

 

 

 

[1]Oxford Business Group (30 June 2016) “SME financing ramps up Egypt,”

www.oxfordbusinessgroup.com/news/sme-financing-ramps-egypt

[2]Enterprise (24 May 2017) “CBE Microfinance to push out EGPO30bn in subsidized financing to as many as 10mn borrowers within four years,” http://enterprise.press/stories/2017/24/cbe-microfinance-to-push-out-egp-30-bn-in-subsidized-financing-to-as-many-as-10-mn-borrowers-within-four-years

[3]Egyptian Ministry of Trade and Industry (29 May 2017) “Misr Venture Capital Launched Soon,”

www.mto.gov.eg/English/MediaCenter/News/Pages/Misr-Venture-Capital-lauched-soon.aspx

[4]OECD/EU/ETF (2018), The Mediterranean Middle East and North Africa 2018: Interim Assessment of Key SME Reforms, SME Policy Index, OECD Publishing, Paris

http://doi.org/10.1787/9789264304161-en pp.97-108