middle east committee

May 2, 2007 � Volume 1, Issue 1 � Middle East Committee

A Note From the Editors

Welcome to the Middle East Law Bulletin, ABA

International’s first and only law bulletin on legal

developments in the Middle East. The Bulletin welcomes

submissions on newsworthy or professionally significant

legal developments in the Middle East, whether they relate

to constitutions, legislative matters, administrative law or

court cases, or whether they bear on legal education, legal

practitioners, the practice of law or the development and

progress of national and regional bar associations or other

legal institutions. Submissions should principally be from

legal practitioners and academics whose practices,

academic endeavors and interests focus on the Middle

East. Submissions should be made to the editor Jim

Phipps at [email protected].

While this first edition is gloriously robust, not

every edition will be similar. Indeed, we anticipate that

many editions will be single article submissions,

highlighting, reporting on or analyzing developments as

the occur. The only inducements we can offer to those

submitting materials will be the opportunity to be

published in a newsletter reaching a significant number of

fellow practitioners and academics.

We hope you will decide to contribute to the

Bulletin and to become an active participant in the Middle

East Committee.

Legal Developments in 20061

The year 2006 in the Middle East will be

remembered for many significant legal developments. The

economy, much as in 2005, was a focus for most of the

countries in the Middle East. Iraq, Kuwait, Libya, Turkey,

and the U.A.E., for example, all passed legislation meant to

streamline and attract foreign investment.

In 2006, the trend toward democratization in the

region (as reported in 2003 to 2005) deepened. Popular

elections, some of which were monitored by European

Union observers such as in Yemen, were held.

Furthermore, Qatar announced it would hold legislative

elections in 2007, its first since 1970. Also, there were

public demonstrations and demands by the judiciary for

greater independence from the executive in Egypt,

Morocco, Iran, and Tunisia. In Iran, the bar association

struggled to maintain its independence from the judiciary.

Wars dominated many parts of the Middle East,

both ongoing clashes such those in Iraq, Sudan, and

Afghanistan, to new conflicts such as that between

Hezbollah and Israel. Many of those countries that were

not experiencing immediate conflict were recovering from

it by taking steps to revitalize their economies, such as in

Algeria and Eritrea.

While Kuwait passed laws to protect freedom of

press, critics argue that laws passed in Egypt and Jordan

which aim to give security forces broad powers to arrest

1 It goes without saying that the views and opinions expressed in this Bulletin are those of the concerned authors and not of their respective employers, the editors, the ABA, ABA International, the Middle East Committee or any of the members or leaders in any of these organizations.

Middle East Committee Welcome to the Middle East Law Bulletin! No. 01/2007


and detain individuals associated with terrorism curtail civil

liberties, much like critics in the United States argued when

the Patriot Act was enacted and later extended.

In this first edition of the Bulletin, individual

country reporters highlight what, in their view, are some of

the more dramatic legal developments in the countries

covered in this report. A special report is also provided on

Islamic Finance and on the Iranian Bar Association’s

struggle for independence from the executive.

* * *

Special Report: Islamic Finance∗

The year 2006 proved to be a year of growth and

expansion in Islamic Finance: New financial products have

been created; the largest sukuk to date was announced; and

new ways of tracking Islamic-compliant funds have been

implemented. “Islamic banking operations now exist in

about 100 countries across the world with estimated assets

of $300 billion and it is growing at a pace of over 15 per

cent a year with the growth rate set to continue.”2 For

instance, in Bahrain, the key projects of the Islamic

investment bank, Gulf Finance House, included the $1.3

billion Royal Metropolis in Jordan, the $3.8 billion

Legends in Dubai, the $1.4 billion Gateway to Morocco in

Morocco, and the $2.6 billion Energy City in Qatar.3

In the first quarter 2006, corporate bond

issuances totaled $10.2 billion, the most significant being

the Dubai Ports issuance of the largest sukuk to date, a 2-

year convertible $3.5 billion bond.4 Sovereign issuances in

2006 totaled $2.7 billion with an additional $6.7 billion

∗ Jennifer Riccio prepared this special report on Islamic Finance. 2 Islamic Banking Growing Fast, Bahrain Tribune, (June 11, 2006),available at: http://www.bahraintribune.com/ArticleDetail.asp 3 Islamic Banking Growing Fast, Bahrain Tribune, (June 11, 2006),available at: http://www.bahraintribune.com/ArticleDetail.asp 4 Mahmoud Amin El-Gamal, Overview of Islamic Finance, Occasional Paper No. 4, page 5 (August 2006), available at: http://www.treasury.gov/offices/international-affairs/occasional-paper-series/08042006_OccasionalPaper4.pdf

slated for the remainder of the year, which is up from $706

million in 2005.5

On June 19, 2006, the Lebanon-based investment

bank, BSEC (Bemo Securitisation), announced the pricing

of the first-ever Shariah-compliant gas-backed

securitisation.6 The $165.67 million sukuk originated from

the Texas-based East Cameron Partners (ECP).7 The

sukuk is the first-ever Islamic securitisation rated by S&P,

the first originating out of the United States, and the first

embedding Shariah-compliant hedges.8 The design is a

two-tier structure, “with a Purchaser SPV located in

Delaware to acquire the assets and an Issuer SPV located

in the Cayman Islands to issue the Sukuk to the capital

markets and use the proceeds to invest in the Purchaser

SPV by way of a Shariah-compliant Funding Agreement.”9

The Dow Jones Indexes and Citigroup Corporate

and Investment Banking launched The Dow Jones

5 Mahmoud Amin El-Gamal, Overview of Islamic Finance, Occasional Paper No. 4, page 5 (August 2006), available at: http://www.treasury.gov/offices/international-affairs/occasional-paper-series/08042006_OccasionalPaper4.pdf 6 East Cameron Gas Sukuka New Sukuk Innovation Comes To Market BSEC Announces The Successful Closing Of The First Ever Oil And Gas Shariah Compliant Securitisation, (June 19, 2006), available at: http://www.bemosecuritisation.com/highlights/files/MSG%200000%20ECP%20-%20PR%20-%20ENG%20-%2019%20June%2006.pdf 7 East Cameron Gas Sukuka New Sukuk Innovation Comes To Market BSEC Announces The Successful Closing Of The First Ever Oil And Gas Shariah Compliant Securitisation, (June 19, 2006), available at: http://www.bemosecuritisation.com/highlights/files/MSG%200000%20ECP%20-%20PR%20-%20ENG%20-%2019%20June%2006.pdf 8 East Cameron Gas Sukuka New Sukuk Innovation Comes To Market BSEC Announces The Successful Closing Of The First Ever Oil And Gas Shariah Compliant Securitisation, (June 19, 2006), available at: http://www.bemosecuritisation.com/highlights/files/MSG%200000%20ECP%20-%20PR%20-%20ENG%20-%2019%20June%2006.pdf 9 East Cameron Gas Sukuka New Sukuk Innovation Comes To Market BSEC Announces The Successful Closing Of The First Ever Oil And Gas Shariah Compliant Securitisation, (June 19, 2006), available at: http://www.bemosecuritisation.com/highlights/files/MSG%200000%20ECP%20-%20PR%20-%20ENG%20-%2019%20June%2006.pdf


Citigroup® Sukuk Index, the first index that measures the

performance of global bonds that comply with Islamic

investment guidelines and is made up of investment-grade,

U.S. dollar-denominated Islamic bonds.10 “The index

shares design criteria and calculation assumptions with the

broader Citigroup fixed-income index family, and its

screens for Sharia compliance that is consistent with those

of the Dow Jones Islamic Market (DJIM) Indexes.”11 To

be included in the index, a bond must comply with both

Shariah Law and the Bahrain-based Auditing &

Accounting Organization of Islamic Financial Institutions

(AAOIFI) standards for tradable sukuk; must have a

minimum maturity of one year; a minimum issue size of

US$250 million; and an explicit or implicit rating of at least

BBB-/Baa3 by leading rating agencies.12

On October 4, 2006, the Islamic Finance

Information Service (IFIS) announced the launch of the

first online Islamic Finance Shariah Supervisory Database

that will monitor and update the composition of Shariah

boards worldwide covering Regulatory Agencies, Islamic

banks, Islamic funds, or conventional institutions that

either dedicated Islamic windows or offered Islamic

products.13

Faisal Finance (Switzerland) S.A, was awarded a

full banking license by the Swiss Federal Banking

Commission and is now the first Islamic Private Bank to

be launched in Switzerland.14 The principal shareholder of

10 The Dow Jones Indexes Timeline, available at: http://www.djindexes.com/mdsidx/?event=showAboutUsTimeline 11 The Dow Jones Citigroup® Sukuk Index Overivew, available at: http://www.djindexes.com/mdsidx/?event=Sukuk 12 The Dow Jones Citigroup® Sukuk Index Overivew, available at: http://www.djindexes.com/mdsidx/?event=Sukuk 13 IFIS Launches Exclusive Online Islamic Finance Shariah Supervisory Database, (October 4, 2006), available at: https://site.securities.com/press_releases/index.html?pr=press20061004_3 14 Faisal Finance (Switzerland) Sa Becomes Faisal Private Bank (Switzerland) Sa, After Receiving A Full Banking License By The Swiss Federal Banking Commission, The International Islamic Finance Forum, (October 3, 2006), available at:

Faisal Private Bank is the Bahrain-based Ithmaar Bank

BSC, which launched its IPO on the Bahrain stock

exchange on February 19, 2006, with a total issued and

fully paid-up capital of Ithmaar is US$ 360,000,000.15

In November, the Dubai Islamic Bank announced

the creation of a new investment product; the Shariah-

compliant 3-year Capital Protected DFM (Dubai Financial

Market) Note, which will have a minimum investment of

$10,000 and will offer a maximum potential return of 12

percent per annum.

Current trends may indicate a continued

expansion of Islamic Finance in the world’s economic

markets.

* * *

Algeria∗

In 2006, Algeria continued to make efforts to

modernize and stabilize its economy and emerge from the

after effects of its ten year long bloody civil war in the

1990’s.1 The government granted amnesty to rebels of the

war who remained at large, able to hide in the deserts and

mountains which make up much of the southern portion

of the country.2 In an effort to foster stability, the

government also agreed to release at least one jailed

militant as part of its efforts at reconciliation.3 In

September, Rabah Kebir, a leader of one of the banned

http://www.iiff.com/index.cfm?page=news_details&category=1&id=173&menuid=2 15 Faisal Finance (Switzerland) Sa Becomes Faisal Private Bank (Switzerland) Sa, After Receiving A Full Banking License By The Swiss Federal Banking Commission, The International Islamic Finance Forum, (October 3, 2006), available at: http://www.iiff.com/index.cfm?page=news_details&category=1&id=173&menuid=2 ∗ Bernadette M. Chala serves as General Counsel to international business headquartered in Orange County, California. 1BBC News, Country Profile: Algeria (September 13, 2005), available at http://news.bbc.co.uk/2/hi/middle_east/country_profiles/790556.stm; see also, République Algérienne Démocratique et Populaire, available at http://www.el-mouradia.dz/. 2Ibid. 3BBC News, Islamist Leader Freed in Algeria (March 13, 2006) available at http://news.bbc.co.uk/2/hi/africa/4801318.stm.


extremist Islamic Salvation Front (FIS) returned from a

self-imposed exile and even urged rebels still fighting the

state to disarm.4 However, Algeria continues to experience

some sporadic violence as a result of some militants’

continued refusal to disarm, especially in the more rural

regions of the country.5

Algeria has a vision for long term development,

including developing its marina and directing investment

not just to large scale projects but also to small and mid-

scale projects. The government has been proactive in

directing investment to other sectors of the economy, such

as telecommunications and tourism.6 These efforts are

being made to decrease the country’s reliance on oil and

gas exports. Algeria is the eleventh largest oil producer and

fourth largest producer of natural gas worldwide.7 For

instance, Algeria has used its dominance in oil and natural

gas production to foster relationships with European

countries, such as Italy and Germany.8 Algeria has also

worked to strengthen ties with France, the former colonial

power that used to rule Algeria.9 The relationship was

recently so strained that the two nations delayed signing a

proposed friendship treaty that was due to be signed at the

end of last year.10

4BBC News, Algeria: A Timeline (November 17, 2006), available at http://news.bbc.co.uk/2/hi/middle_east/country_profiles/811140.stm; BBC News, Algeria Amnesty Deadline Expiring (August 28, 2006), available at http://news.bbc.co.uk/2/hi/africa/5292500.stm. 5BBC News, Bomb Blasts Shake Algeria Towns (October 30, 2006), available at http://news.bbc.co.uk/2/hi/africa/6098136.stm. 6Reuters, Algeria Appeals for Arab Investment (November 19, 2006), available at http://asia.news.yahoo.com/061118/3/2t50p.html. 7Turkish Press, Germany and Algeria Agree to Build Cooperation in Energy Sector (November 16, 2006), available at http://www.turkishpress.com/news.asp?id=151486. 8Associated Foreign Press, German Energy Group E.ON Signs Liquid Gas Deal in Algeria (November 16, 2006), available at http://news.yahoo.com/s/afp/20061116/bs_afp/algeriagermanyeu_061116163823. 9Global Africa Network, Sarkozy Draws Cheers, Vitriol in Algeria (November 15, 2006), available at http://news.africast.com/africastv/article.php?newsID=60436. 10Ibid.

Algeria is also making attempts to decrease

unemployment. Currently, the government estimates that

employment is at 15.3 percent but the unemployment rate

for those under 30 years of age is closer to 70 percent.11

Continued progress in stabilizing the economy can be

reflected in Algeria’s use of recent high oil prices to repay

ahead of schedule its foreign debt to countries such as the

United States and Germany.12 Algeria has also chosen to

direct the money it has saved in interest payments toward

building and developing its infrastructure, with projects

such as improving and building a stable water supply.13

* * *

Egypt∗

In a step which disappointed political reformers,

April 2006 saw the Egyptian Parliament’s decision to

extend the country’s long standing emergency laws which

give the security forces broad powers to arrest and detain

individuals without charge. Parliament agreed to extend

the legislation, which has been in place since 1981, for

another two years16.

The same month saw public demonstrations in

Cairo in support of demands made by the country’s

judiciary for greater independence from the executive17.

Long standing demands presented by the Judges club, an

informal body which has led a series of challenges to the

Government, include a complete shift of authority from

the Ministry of Justice to the Judicial Council, which is the

11Associated Foreign Press, German Energy Group E.ON Signs Liquid Gas Deal in Algeria (November 16, 2006), available at http://news.yahoo.com/s/afp/20061116/bs_afp/algeriagermanyeu_061116163823. [Same as FN 8.] 12Ibid. 13Associated Foreign Press, Algeria Agrees Early Debt Repayment to Germany (November 15, 2006), available at http://news.yahoo.com/s/afp/20061115/wl_africa_afp/algeriaeconomydebt_061115215314. ∗ Llyr Rowlands, Associate at Hunton & Williams LLP, Washington DC and Judge Hesham Mourad, Bani Swaif First Instance Court, Egypt wrote the article on Egypt. 16 Egypt extends its emergency laws, BBC New, April 30, 2006, http://news.bbc.co.uk/2/hi/middle_east/4960332.stm 17 Press release from the UN News centre http://www.un.org/apps/news/story.asp?NewsID=18853&Cr=Egypt&Cr1


central structure for overseeing most judicial affairs; being

able to elect a number of Council members and

strengthening the Judges Club18. In June 2006, and in

response to these demands, the Egyptian Parliament

passed an amendment19 to the Judicial Authority Act20.

Whilst the amendments did not address all grievances,

there were some concessions for the judges, to include an

independent budget administered by the Judicial Council

and an even greater role for the Council in judicial affairs.

In criminal law and procedure, there were two

important developments during 2006. In July, Parliament

passed an amendment21 to the Penal Code22 abolishing

imprisonment for a number of offences relating to the

‘freedom of the press’, particularly the crime of ‘libel’.

Whilst the changes removed certain media curbs, the Penal

Code continues to mandate imprisonment for libeling the

President and foreign heads of state.

In the same month, Parliament also passed an

amendment23 to the Criminal Procedural law24, which

reduces the time-periods that an accused can be remanded

in custody awaiting trial. If the accused is acquitted at trial

the Prosecutor’s office is required to publish the acquittal

decision in two daily newspapers25. The amendment also

provides for alternatives to being remanded in custody,

such as home confinement or ordering the accused to

report to a police station at certain times.

Other developments include Egypt’s decision in

September 2006 to revive the civilian nuclear power

program it froze 20 years ago following the accident at the

Chernobyl plant, Ukraine. The Government plans to build

18 Unlikely reformers: Egyptian Judges Challenge the Regime by Professor Nathan Brown, Jurist Legal News and Research, June 8, 2006 19 Amendment No. 142/2006 20 Law No. 46/1972 21 Amendment No. 147/2006 22 Law No. 58/1937 23 Amendment No. 145/2006 24 Law No. 150/1950 25 Article 312 bis of the Criminal Procedural law (as amended)

a new nuclear power station at El-Dabaa, on the

Mediterranean coast, within the next 10 years26.

* * *

Eritrea∗

In Eritrea, border tensions with Ethiopia dominated

2006. The hostilities stem from Ethiopia's refusal to permit

the Ethiopia Eritrea Boundary Commission ("EEBC") to

physically demarcate the boundary delimited in the

EEBC's April 2002 decision, in large part because it

awards the disputed village of Badme to Eritrea.27 After

initial cooperation, Eritrea also raised obstacles to the

EEBC's work – in particular by restricting EEBC field

staff and UN peacekeepers.28 At the start of 2006,

observers reported that Eritrea and Ethiopia had amassed

250,000 and 130,000 troops, respectively, along the

border.29 Efforts by the Security Council30 and the EEBC31

failed to diffuse the crisis. In a November 27, 2006

statement, the EEBC announced the Parties had 12

months to demarcate their border.32 If in that time the

Parties fail to reach necessary agreement or enable the

Commission to resume its work, the boundary as

demarcated by the turning points setout in an annex to the

26 Egypt unveils nuclear power plan, BBC News, September 25, 2006,http://news.bbc.co.uk/2/hi/middle_east/5376860.stm ∗ Brian J. Vohrer, an attorney with the Washington, D.C. office of the law firm LeBoeuf, Lamb, Greene & MacRae LLP, prepared the report on developments in Eritrea. 27 Statement by the Eritrea-Ethiopia Boundary Commission, paras. 7 & 10 (Nov. 27, 2007), http://www.pca-cpa.org/ENGLISH/RPC/EEBC/Statement%20271106.pdf (hereafter "November 27 EEBC Statement"); Boundary Commission Calls Meeting to Resume Marking of Ethiopia-Eritrea Border, Associated Press, Mar. 9, 2006. By way of background, the Parties agreed to establish the EEBC to delimit and demarcate their shared border in the December 12, 2002 Algiers Peace Agreement. 28 November 27 EEBC Statement, para. 11. 29 War Talk puts Attention from Internal Woes; Ethiopia, Eritrea Peace in Danger, The Atlanta Journal Constitution, Jan. 1, 2006. 30 U.N. Security Council Resolution 1640 (Nov. 23, 2005); U.N. Security Council Resolution 1681 (May 31, 2006); U.N. Security Council Resolution 1710 (Sept. 29, 2006). 31 Ethiopia-Eritrea Border Talks End "without any progress"; BBC News, May 20, 2006; Ethiopia, Eritrea Tussle over Border Ruling: Meeting Fate Unclear, Jun. 14, 2006. 32 November 27 EEBC Statement, para. 22.


EEBC statement "will automatically stand", and the EEBC

will consider its mandate complete.33 Both sides objected.34

In contrast, improved relations between Eritrea and

Sudan emerged in 2006 as the two States restored full

diplomatic relations, reopened their shared border, and

discussed cooperation on political, agricultural and

economic issues.35 Eritrea also successfully mediated a

peace agreement between the Sudanese Government

and the East Sudan Front.36 Eritrea's relations with

Yemen improved through new bilateral arrangements

and the establishment of a joint fisheries firm on the

basis of a 1999 arbitral award that delimited their

maritime boundary.37

On the economic front, Eritrea created a free port

zone at its expanded Massawa port to increase trade

with Middle East markets and spur business

development.38 The Government also sought to boost

enforcement of its foreign currency exchange

regulations and warned currency traders that violations

will be prosecuted.39 China emerged as a strong

partner in 2006 by providing a $22 million (USD) low-

interest loan to Eritrea to modernize its

telecommunications infrastructure and offering the

prospect of additional loan agreements.40 The two

33 Id. at para. 22. 34 Eritrea, Ethiopia Reject 'Paper Demarcation', Durham University International Boundaries Research Unit, Nov. 15, 2006, http://www.dur.ac.uk/ibru/news/boundary_news/?itemno=4886&rehref=%2Fibru%2F&resubj= Boundary+news%20Headlines. 35 Eritrea and Sudan Seek to Rebuild Bilateral Ties, World Markets Research, Jun. 13, 2006; Governing Parties in Eritrea, Sudan Sign Memo of Understanding, BBC News, Aug. 27, 2006. 36 President Commends Eritrea's Role in Resolving East Sudan Issue; AllAfrica Global Media, Nov. 16, 2006, http://allafrica.com/stories/200611160510.html. 37 Eritrea-Yemen set up Joint Committee in San'a on Bilateral Issues, BBC News, Aug. 15, 2006; Eritea, Yemen Sign Pact to Set up Joint Fishery Firm, BBC News, Nov. 11, 2006. 38 Eritrea Opens Free Port Zone, Xinhua News, May 23, 2006. 39 Eritrea Warns Illegal Currency Traders of Prosecution, Agence France Presse, Nov. 4, 2006. 40 Eritrea and China Conclude Loan Agreement, Africa News, Jul. 4, 2006.

countries also concluded a cooperation agreement in

the health sector.41

Eritrea's human rights record was again questioned

in 2006 as the organization "Reporters without

Borders" ranked the State among the worst violators

of press freedom and the U.S. Department of State

pointed to "numerous serious abuses" by the Eritrean

Government.42 The EU and the U.S. Department of

State reiterated particular concern for 11 members of

Eritrea's Parliament and a number of local journalists

detained since September 18, 2001.43

* * *

Ethiopia ∗

Numerous key legal developments occurred in

Ethiopia during 2006. Among these was important

legislation relating to economic development in the

country. A proclamation providing greater trademark

protection and setting forth registration procedures for

trademarks44 was passed that, among other things, ensures

that foreign parties enjoy the same trademark protection

rights as domestic parties.45 The Ethiopian Parliament also

promulgated new laws addressing agriculture and

biodiversity, key areas to Ethiopia’s largely agrarian

economy.46 In addition, new legislation was passed relating

41 Eritrea, China Conclude Cooperation Agreement, Africa News, Oct. 12, 2006. 42 Eritrea, Ethiopia Ranked Among Worst Press Violators, U.S. Fed News, Oct. 24, 2006. U.S. Dep't of State, Eritrea: Country Reports on Human Rights Practices – 2005 (Mar. 8, 2006), http://www.state.gov/g/ drl/rls/hrrpt/2005/61568.htm (hereafter "Eritrea Country Report"). 43 EU Comments on Political Prisoners in Eritrea, U.S. Fed News, Sept. 18, 2006; Eritrea Country Report. ∗ Thomas R. Snider is an attorney practicing in the International Law and Dispute Resolution Group at Hunton & Williams LLP in Washington, D.C. 44 See Trademark Registration and Protection Proclamation No. 501/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 37, July 7, 2006. 45 See id. at art. 3. 46 See Ethiopian Sugar Development Agency Establishment Proclamation No. 504/2006, FEDERAL NEGARIT GAZETA., 12th


to other fields of law, including labor law, social security,

and foreign relations,47 and Ethiopia ratified the

Comprehensive Nuclear-Test-Ban Treaty and the

Convention for the Safeguarding of the Intangible Cultural

Heritage during the year.48

Events stemming from the 2005 national elections

also continued to play a role on the Ethiopian legal scene

in 2006 with important constitutional issues having arisen

in the treason trial involving members of opposition

political parties accused of insurrection following the

elections.49 In addition, a key development occurred in

another unrelated trial at year’s end when an Ethiopian

court convicted former Ethiopian ruler Mengistu

Hailemariam in absentia of genocide and other charges

Year, No. 40, July 27, 2006; Ethiopian Organic Agriculture System Proclamation No. 488/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 21, Mar. 8, 2006; Access to Genetic Resources and Community Knowledge, and Community Rights Proclamation No. 482/2006, FEDERAL NEGARIT GAZETA., 13th Year, No. 13, Feb. 27, 2006; Plant Breeders’ Right Proclamation No. 481/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 12, Feb. 27, 2006, available at http://www.ethiopar.net/type/Amharic/hopre/bills/1998/481.ae..pdf. 47 See Labour (Amendment) Proclamation No. 494/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 30, June 29, 2006; Social Security Agency Re-establishment Proclamation No. 495/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 31, June 29, 2006; The Security Cooperation Between the Federal Democratic Republic of Ethiopia and the Republic of Yemen Agreement Ratification Proclamation No. 485/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 16, Feb. 20, 2006; Convention Between the Government of the Federal Democratic Republic of Ethiopia and Romania for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Ratification Proclamation No. 486/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 19, Mar. 4, 2006. 48 See The Comprehensive Nuclear Test-Ban-Treaty Ratification Proclamation No. 493/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 29, June 16, 2006; Convention for the Safeguarding of the Intangible Cultural Heritage Ratification Proclamation No. 484/2006, FEDERAL NEGARIT GAZETA., 12th Year, No. 15, Feb. 20, 2006. 49 See, e.g., Betsy Pisik, Treason Trial of 129 Opponents Begins; Defendants Say Ruling “Already Given” by Meles, WASH. TIMES, Feb. 24, 2006, at A13.

related to the deaths of nearly 2,000 people during his time

in power.50

* * *

Iran*

A. THE NUCLEAR PROGRAM

Iran’s interaction with the International Atomic

Energy Agency (IAEA) and the United Nations Security

Council over its nuclear enrichment program dominated

headlines at home and abroad. In December 2006 the

Security Council voted unanimously to impose sanctions

on Tehran over its nuclear program.51 The sanctions focus

on a ban on trade in nuclear-related technology and a

freeze on some Iranian assets.52 Iran’s parliament, the

Majles, responded by passing a bill which calls for a review

of Iran’s cooperation with the IAEA.53 Members of the

Majles pointed out that in light of Iran’s full cooperation

with the IAEA thus far, including over 2000 hour/person

inspections at nuclear sites, that it was not logical to

continue cooperation with the agency.54

B. THE CENTENNIAL ANNIVERSARY OF THE IRANIAN

CONSTITUTIONAL REVOLUTION

In 2006 Iran celebrated the centennial anniversary

of the Iranian Constitutional Revolution of 1906-1911.

The Constitutional Revolution resulted in Iran’s first

written constitution. This constitution was founded on the

50 See Mengistu Found Guilty of Genocide, BBC NEWS, December 12, 2006, http://news.bbc.co.uk/ 2/hi/africa/6171429.stm. * Anahita Ferasat is a 2006 graduate of Loyola Law School in Los Angeles, where she was on the staff of the Loyola of Los Angeles International and Comparative Law Review, and she is now an associate at the law firm of Baker Olson LeCroy and Danielian in Glendale, California. 51 Iran to Revise IAEA Co-operation, BBC NEWS, Dec. 27, 2006, http://news.bbc.co.uk/2/hi/middle_east/6211561.stm.

52 Id. 53 Id. 54 (quoted from) Ala’eddin Borujerdi, head of the Parliamentary Commission for National Security and Foreign Policy. Iran Parliament Deplores UN Resolution as “Tyrannical, Unjust” Dec. 24 2006 BBC Monitoring Financial Times Information ACC-No. 12006122416-1359A-GNW www.lexis.com. Last visited Jan. 28, 2007.


rule of fair and just laws, provided for a free press, and

encouraged respect for individual rights. The August 5,

1906 decree also called for the creation of an elected

parliament.55 In line with its celebration of the

Constitution Revolution, the Majles in 2006 passed the

Electoral System Bill, which removes the condition that

the president of Iran must be chosen from among Iran’s

distinguished religious and political figures.56

C. THE ECONOMY

In economic developments, Tehran said it would

shift its foreign currency reserves from the dollar to the

euro and would use the euro for future commercial

transactions overseas.57 Even though the currency move is

to apply to oil sales as well, it is expected that Iran will still

accept oil payments in dollars.58

D. HUMAN RIGHTS

The freeing of Iranian dissident Akbar Ganji was a

triumph for human rights activists around the world. Ganji

was jailed in 2000 when the regime claimed he was

defaming the regime and jeopardizing national security

based on his investigative articles that linked Iran’s

intelligence ministry to the killings of dozens of dissidents

during the 1990s.59 His incarceration garnered international

attention during his 73-day hunger strike which was

intended to protest his treatment and incarceration.60 Since

his release from prison Ganji has embarked on a world

tour to speak out on Iran’s human rights violations and to

accept awards for his journalistic heroism.61

55 Sean McCormack, Iran: Centennial Anniversary of the Constitutional Revolution http://www.state.gov/r/pa/prs/ps/2006/70005.htm August 4, 2006, Last visited Jan. 28, 2007. 56 Iran Full Text of Bill on Comprehensive Electoral System Oct. 24 2006 BBC Monitoring International Financial Times Information www.lexis.com, Last visited Jan. 28, 2007. 57 Dollar Dropped in Iran Asset Move, BBC NEWS, Dec. 18 2006, http://news.bbc.co.uk/2/hi/business/6190865.stm. 58 Id. 59 Washington Post. Free Thinker; Iranian Dissident Akbar Ganji, at Liberty to Speak his Mind, at Least Until He Goes Back Home, Aug. 14, 2006 Robin Wright. Section: Style; C01 (also from lexis.com) 60 Id. 61 Id.

E. FREEDOM OF PRESS

Several members of the Majles have expressed

unhappiness with recent government regulations

concerning the registration with a state organization of all

Iranian websites.62 Parliamentarians claim that the new

policy is redundant, as there is already a committee that

prepares a list of destructive sites every week, and that it

violates the rights of people. Censorship is on the increase

in Iran as some 10 million internet sites have been filtered

by the authorities, and the speed of the internet has been

significantly reduced.63

E. INDEPENDENCE OF THE BAR∗

The history of advocacy in Iran dates back to pre-

constitutional revolution (1903), when legal claims were

resolved by religious scholars.64 The Iranian Bar

Association was founded in 1912 and gained its

independence from the Judiciary in 1952, during the

administration of Prime Minister Dr. Mohammad

Mosadegh.65 This independence was destabilized for 18

years following the Islamic Revolution in 1979, during

which the Judiciary appointed two pre-revolutionary

attorneys to run the central Bar Association.66 The Bar

Association regained its independence through holding a

free election to elect its Board of Directors in 1997.67

Today, Iran has fifteen (15) provincial Bar Associations

62 Saeed Barzin, Unhappiness in Majlis About Website Registration and Filtering in Iran, BBC Monitoring, January 19, 2007 www.lexis.com. Last visited January 28, 2007. 63 Id. ∗ Baharak Keshavarz is an attorney practicing law in Iran and New York. She is a graduate of Tehran and Azad University in Iran and Pace Law School in New York. She is now working as a solo practitioner in New York and is an associate at the law Firm of “Keshavarz and Associates” in Iran. 64 Twenty Five Year Developments of Advocacy, Iran: Central Bar Association Publication, 1965, at 12. 65 Iranian Bar Association, 90 years of History, 50 Years of Independence, Iranian Bar Association website. http://www.iranbar.org/pltren1.php 66 Special Edition of Vekalat Magazine for the twenty third election of the Board of Directors of the Central Bar Association, Vekalat Magazine: Iran, March 2003, at 22. 67 Iranian Bar Association, 90 years of History, 50 Year of Independence, Supra.


with about 25,000 attorney members and a union

coordinating among the provincial Bar Associations.68

The independence of the Bar was violated in 1997, when

the “Statue of the Procedure of Acquiring the Advocacy

License” was ratified and entitled the Disciplinary Court of

Judges to evaluate qualifications of the candidates running

for the Bar Association Board of Directors instead of the

Bar Association Supervisory Board.69

Article 187 of the Third National Development

Plan (2000-2004), vested the Judiciary with the authority to

grant law graduates permission to establish legal

counseling offices and represent people at courts.70

Accordingly, the independence of the Bar Associations

was violated once again by creation of a society whose

members are government lawyers and their licenses are

being renewed by the Judiciary.71 The term of the Third

National Plan was terminated in 2004 but the above-

mentioned society continues to operate in spite of the

ongoing opposition from the Bar Associations and even

some members of the Parliament and some individuals

within the Judiciary system.

One of the recent legal developments has been the

ratification of regulations for implementation of Article 31

and 32 of the “Statue to Amend Part of Justice

Administration Laws” in 2005, according to which,

representation of plaintiffs in civil cases by attorneys is

mandatory. 72 Implementation of this statue has been

expediting the court proceedings and has familiarized

individuals with their constitutional right of access to

68 Iranian Bar Association Union, [updated figures obtained from Mr. Bahman Keshavarz, president of the Central Bar Association on telephone interview dated November 26, 2006], Iranian Bar Association website. http://iranbar.org/ptitr.php#12 69 The Collection of the Laws and Statues of Advocacy, Iran: The Administration of Codification and Expurgation of the Laws and Regulations, Summer of 2003, at 116-117. 70 Id. at 135-136. 71 Id. at 230. 72 Keshavarz, Bahman, Chronology of Legal and Judicial Event in 2005, Iran: Special Edition of Shargh Newspaper, 2005, at 32.

justice, but the illegal Article 187, is still threatening the

existence of the Iranian Bar Associations and

independence of justice in Iran.73

* * *

Iraq∗

Iraq’s nascent government has begun the process

of producing the legislation that will determine the

country’s future development. The key pieces of Iraqi

legislation passed in 2006 were the Law on the

Commission for the Solution of Real Estate Disputes, the

Iraqi Investment Law, the Kurdistan Regional

Government (KRG) Oil Law, and the Iraqi Law of

Citizenship.

A. PROPERTY ISSUES:

This year saw the replacement of the Iraqi

Property Claims Commission with a new but similar entity

designed to address disputes over immoveable property.

The law on the Commission for the Solution of Real

Estate Disputes, which annulled CPA Regulation 12, was

published in the official Iraqi gazette No 4018 on 6 March

2006 and entered into force on the date of its

publication.74 This new commission shall be the body for

real estate issues including the confiscation of property for

political, racial, religious, or any other cases resulting of the

Ba'th regime's policies during the period of its rule

between 17 July 1968 and 9 April 2003.75 This new

Commission for Resolution of Real Property Disputes

(CRRPD) will strive to return real property or restore

73 Id. ∗ Dan E. Stigall is a United States Army Judge Advocate (JAG). J.D., Louisiana State University, Paul M. Hebert Law Center (2000); B.A., Louisiana State University (1996). 74 See Law on the Commission for the Solution of Real Estate Disputes, Iraqi Gazette No 4018 (6 March 2006). See also Niqash, “Law on the Commission for Solution of Real Estate Disputes”, available at http://www.niqash.org/content.php?contentTypeID=170&id=1638 (discussing the parameters of this legislation.) 75 See Law on the Commission for the Solution of Real Estate Disputes, supra note i.


interests therein to the rightful party. In those cases in

which such restitution is not possible or appropriate, the

rightful owner, possessor or user may receive other types

of redress, such as monetary compensation from another

private party, or compensation awarded by the

Government of Iraq.76

B. INVESTMENT ISSUES:

An Iraqi Investment Law was also approved by

the Iraqi National Assembly on October 10, 2006 and will

likely come into effect after its approval by the president

and subsequent publication in the Iraqi Official Gazette.77

This new law will regulate the national and foreign

investment process in Iraq. The law creates a National

Commission for Investment, a single commission which

will focus on federal investment projects and will be

responsible for the formulation of the national policy for

investment, the development of investment plans and

controls on investments, and will monitors the application

of those controls.78 The law also creates separate

commissions in the regions and governorates which will

have powers to grant investment licenses, encourage

investment, and open branches in areas under their

jurisdiction in consultation with the National Commission

for Investment.79

C. OIL ISSUES:

Meanwhile, the Kurdish Regional Government

(KRG) and the Iraqi Central Government promulgated

competing draft oil laws. On 22 October 2006 the Iraqi

Kurdish government passed the Kurdistan Regional

Government (KRG) Oil Law, its own law governing the

76 See Commission for Resolution of Real Property Disputes (CRRPD) website, available at http://ipcciraq.org/en/index.php 77 See Iraqi Investment Law (draft) available at http://www.niqash.org/content.php?contentTypeID=169&id=1587. See also Niqash, “The Iraqi Investment Law at a Glance”, available at http://www.niqash.org/content.php?contentTypeID=169&id=1587 (discussing the main features of this proposed legislation.) 78 See Iraqi Investment Law (draft), supra note iv. 79 Id.

regulation of oil production in the Kurdish areas.80 This

law effectively asserts Kurdish dominion over Kurdish oil

and gas by designating the Kurdish Minister of Natural

Resources as “…the competent official of the Regional

Government to oversee and regulate Petroleum

Operations.81 The responsibilities of the Ministry include,

but are not limited to, the formulation, regulation and

monitoring of Petroleum Operation policies, as well as the

regulation, planning, implementation, supervision,

inspection, auditing and enforcement of all Petroleum

Operations by all Persons and all activities relating thereto,

including the marketing of Petroleum.”82 This Minister is

not part of the central government but “the person

appointed by the Prime Minister of the Kurdistan

Region”.83 Further buttressing Kurdish dominion over its

regional resources, the law states that states the KRG shall

directly receive its share of all revenue from current and

future petroleum operations in its area and will then share

any surplus revenue with other parts of Iraq. That revenue

may, alternatively, be received directly by the Government

of Iraq under a revenue sharing agreement.84

The Iraqi Central Government has very recently

completed a draft national law that will also address the

issue of oil on Iraq.85 The Iraqi Central Government’s

proposed law (known as the “National Hydrocarbon

Law”) states that the central government and regional

governments can negotiate contracts with foreign oil

companies, but that all contracts must also be approved by

80 See Niqash, “Draft of Kurdistan Oil Law Published”, available at http://www.niqash.org/content.php?contentTypeID=214&id=1627 (discussing the enactment of this legislation.) 81 See Kurdistan Regional Government Oil Law, Article 7, Section 1. 82 Id. 83 See Kurdistan Regional Government Oil Law, Article 2. 84 See Kurdistan Regional Government Oil Law, Article 5, Section 4. 85 See Barry Newhouse, Kurdish Officials Praise Iraqi Oil Draft Law, but Hurdles Remain (1 March 2006), available at http://voanews.com/english/2007-03-01-voa39.cfm


a council in Baghdad that is not yet created.86 The draft

reportedly does not address how the government will

divide the revenues from oil contracts among the central

and regional governments of Iraq.87 Khaled Salih, a

spokesman for the Kurdish regional government, has

indicated that a further agreement will be negotiated under

a "Revenue Sharing Law" that has not yet been approved

by the Iraqi Cabinet.88 According to Mr. Salih, once the

Cabinet has approved the revenue-sharing agreement, both

the agreement and the draft oil law will be sent together to

Iraq's parliament for approval.89

U.S. Ambassador to Iraq, Zalmay Khalilzad,

praised the National Hydrocarbon Law, stating that it

reaffirms that oil and gas resources are owned by all the

people of Iraq and contains a firm commitment to

revenue-sharing among regions and provinces on the basis

of population.90 In addition, it establishes a predictable

framework and processes for federal-regional cooperation

that demonstrate the government's commitment to

democracy and federalism, creates a principal policymaking

body for energy that will have representatives from all of

Iraq's regions and oil-producing provinces, and ensures

that all revenue from oil sales will go into a single national

account and that provinces will receive direct shares of oil

revenue.91 It also establishes international standards for

transparency and mandates public disclosure of contracts

and associated revenue and payments, measures which are

86 Id. 87 Id. 88 Id. 89 Id.

90 See Zalmay Khalilzad, A Shared Stake in Iraq's Future: How the Oil Agreement Points the Way Forward (March 3, 2007) available at http://usinfo.state.gov/xarchives/display.html?p=washfile-english&y=2007&m=March&x=20070303173414lnkais0.3565332

91 Id.

designed to build confidence in the new political order and

to counter corruption.92

At the time of the writing of this article, the

National Hydrocarbon Law is still in draft form and, in

order for it to take effect, will need to be enacted by the

Iraqi Council of Representatives.93 However, Ambassador

Khalilzad has indicated that it is likely to pass.94

D. CITIZENSHIP ISSUES:

The Iraqi Nationality Act (No. 26/2006) was

published in the Iraqi Gazette No. 4019, issued on 7

March 2006.95 This new law articulates how Iraqi

citizenship is acquired and lost. Every Iraqi person whose

citizenship was terminated for any political or sectarian,

reason or due to some form of discrimination may redeem

it by submitting a request for their Iraqi citizenship to be

renewed.96 Children of deceased Iraqi citizens who were

thusly stripped of their citizenship can obtain Iraqi

citizenship if they request it.97

According to the new law, to be considered as an

Iraqi, one must be born of an Iraqi father or mother, be

born in Iraq to unknown parents, or be a child found in

Iraq without father or mother. In those cases of an

otherwise stateless child, evidence of citizenship in another

country may invalidate the Iraqi citizenship.98 Likewise,

anyone born outside of Iraq to an Iraqi mother and

unknown father or Iraqi father is eligible for Iraqi

citizenship so long as he or she applies for citizenship

within one year of reaching the age of 18 and is within the

Iraqi territory when applying for citizenship99

92 Id. 93 Id. 94 Id. 95 See Niqash “Iraq Citizenship Law”, available at http://www.niqash.org/content.php?contentTypeID=169&id=1366 (discussing the enactment of this law.) 96 See Iraqi Nationality Act (No. 26/2006) (Iraqi Law of Citizenship), Article XIX. 97 Id., Article XIX. 98 Id., Article III. 99 Id., Article IV.


Non-Iraqis can apply for Iraqi citizenship but they

must be at least 18 years of age, they must have entered

Iraq legally and be living in Iraq at the time they apply for

citizenship, and they must have been living in Iraq for no

less than 10 years prior to the application for citizenship.

Further, they must be of good moral character, not have

any felony or misdemeanor convictions, and must be free

of infectious diseases.100 Non-Iraqi women married to

Iraqi men may obtain Iraqi citizenship if they meet the

requirements set forth in the law (entering Iraqi legally, in

Iraq when they apply, free of infectious diseases, etc.) but

must only have resided in Iraq for three years.101 Non-

Iraqis who are granted Iraqi citizenship must take an oath

of loyalty to Iraq no later than 90 days from the date a

person was scheduled to obtain Iraqi citizenship.102 One is

only considered an Iraqi from the date the performance of

this oath.103 Palestinians are expressly forbidden from

applying for Iraqi citizenship. The articulated reason for

this prohibition is to encourage them to return to their

homeland.104

Finally, the government may terminate or cancel a

naturalized citizen’s Iraqi citizenship if it is proved that he

or she did or attempted any dangerous action against the

security of the country or provided false information about

himself or about his family upon submitting the request.

This provision of the law envisions a judicial proceeding of

some sort, noting that citizenship in such cases can be

terminated after announcement the verdict and after the

appeal.105

D. FEDERALISM ISSUES:

In October of 2006, the Iraqi Parliament

approved a law that allows provinces to unite to form

100 Id., Article V. 101 Id., Article VIII 102 Id. 103 Id. 104 Id., Article V. 105 Id., Article XV.

autonomous regions.106 This law allows that Regions may

be created by one of three ways: a request from one third

of the members in each of the Governorate Councils; a

request by one tenth of the voters in each of the

Governorates that seek to create the Region; or a request

by one third of the members of the Legislative Councils in

the political subdivisions wanting to merge.107 In the case

of a Governorate seeking to join a Region, the request

must be presented by one third of the members of the

Governorate Council together with the consent of one

third of the members of that Region’s Legislative

Council.108 In all cases, these requests are then presented

to the Council of Ministers which, in turn, refers the

matter to the High Commission for Elections which

conducts a referendum on the matter in the impacted

areas.109

If the referendum is successful and the majority of

voters support the request, then the results are announced

within 15 days of the vote.110 The Prime Minister then

issues a decree to form the new Region within a week.111 If

the referendum is not successful, it may be attempted

again after a year has elapsed from the date of the

declaration of the prior referendum.112 Once a new Region

is formed, it is temporarily governed by a Transitional

Legislative Council , which then drafts a permanent

constitution for the new Region.113

The new Regions formed pursuant to this

procedure are still governed by the Federal laws in force in

106 See Kirk Semple, In Victory for Shiite Leader, Iraqi Parliamenes Creating Autonomous Regions, New York Times (October 12, 2006).

107 See Law on the Operational Procedures for the Creation of Regions, Article 2, sections 1, 2, and 3. 108 Id. section 4. 109 Id. Article 4, section 1. 110 Id. Article 6. 111 Id. Article 8, section 1. 112 Id. Article 9. 113 Id. Article 20.


Iraq as well as relevant Governorate laws.114 The

permanent constitution of the newly created region may

repeal former Governorate laws so long as it does not do

so in a manner inconsistent with the Federal

Constitution.115 The region also retains the rights

contained in article 121 of the Federal Constitution, which

states that the administrative, political, cultural and

educational rights for the various nationalities, such as

Turkmen, Caldeans, Assyrians, and all others, shall be

guaranteed.116

This law was backed by some Shi'ite majority

leaders who may wish to create a large, autonomous region

in oil-rich southern Iraq, but was boycotted by the

Accordance Front, the largest political bloc of the Sunni

minority, and passed without their approval.117

* * *

Jordan∗

During 2006, Jordan witnessed many legal developments.

However, three legal developments stood out and captured

the headlines. In 2006, Jordan an enacted anti-terror law.118

The law came as a response to the terrorist attacks on

three hotels in Amman in 2005.119 The passing of the anti-

terror law generated heated debate. Opponents of the law

predict that it would unnecessarily curtail individual

114 Id. Article 23, section 1. 115 Id. 116 Id. Article 23, section 2. See also Constitution of Iraq, Article 121, (“This Constitution shall guarantee the administrative, political, cultural and educational rights for the various nationalities, such as Turkmen, Caldeans, Assyrians and all other components. This will be organized by law. “) 117 See Reuters, Iraqi Parliament Approves Federal Law, (October 11, 2006), available at http://www.alertnet.org/thenews/newsdesk/IBO145418.htm ∗ Bashar H. Malkawi, Assistant Professor of Commercial Law, Hashemite University, Jordan. Dr. Malkawi holds an S.J.D from the American University, Washington College of Law, and an L.L.M from the University of Arizona. Email address: [email protected]. 118 See Anti-Terror Law No. 55 of 2006, Official Gazette No. 4790 (Nov. 1, 2006). 119 See The Economist, Caught in the Middle as Usual: Jordan (Nov. 12, 2005).

liberties.120 The anti-terror law criminalizes a wide range of

behavior as acts of terror, including “interacting” with any

terrorist group.121 The law also permits officials to conduct

surveillance of terrorism suspects and allows police to

detain suspects for 30 days without access to a lawyer and

without judicial review.

A new tax law has been drafted and set for vote pending

several readings in the Parliament.122 The proposed

changes to the tax law are intended to curb evasion,

improve tax collection, and ensure justice in taxpaying.

The new tax law harmonizes taxes and tightens penalties

for violations.123

Jordan’s labor law came under the spotlight, with calls for

reform. The U.S. National Labor Committee reported

foreign workers complains of despicable working

conditions in some factories, including 20-hour work days

and no pay for months, all in possible violation of the

U.S.-Jordan Free Trade Agreement.124 The report forced

Jordan to overhaul its inspection regime. For example,

Jordan increased the number of government inspectors

from 88 to 120.125 However, the steps taken by the

120 See Joshua Pantesco, Jordan Parliament Passes Contentious Anti-Terror Bill, available at <http://jurist.law.pitt.edu/paperchase/2006/08/jordan-parliament-passes-contentious.php> (last visited Oct. 30, 2006). 121 See Anti-Terror Law No. 55 of 2006, art. 3, supra note 1. 122 See Government Working on New Income Tax Law, Jordan Times (Apr. 25, 2006). 123 Currently, the tax law treats economic sectors differently. For example, industry is taxed at the rate of 15% of taxable income, banks and financial institutions are taxed at the rate of 35%, and insurance companies are taxed at the rate of 25%. See Income Tax Law No. 57 of 1985 and its amendments, Official Gazette No. 3343, art. 16.b (Oct. 1, 1985). The new tax law proposes to impose 20% tax on all economic sectors (with the exception of banks). Moreover, the law new tax law imposes fines and/or prison terms on violators of the tax law and considers tax evasion a crime against honor and integrity. See Draft Tax Law for the year 2006, arts. 12 & 34, available at <http://www.incometax.gov.jo/ incometax/main_menue/ legislations/an2.aspx> (last visited Nov. 3, 2006). 124 See Gary G. Yerkey, USTR Investigates Reports of Worker Abuse in Jordan in Violation of Free Trade Accord, 23 Int’l Trade Rep. (BNA) 774 (May 18, 2006). 125 See Gary G. Yerkey, Jordan Cracks Down on Firms Exploiting Foreign Workers in Violation of Trade Pact, 23 Int’l Trade Rep. (BNA) 1075 (July 13, 2006).


Jordanian government did not persuade U.S. worker and

trade associations who filed a complaint with the U.S.

government citing shortcomings in Jordan’s labor law.126

For instance, Jordan’s labor law permits only “Jordanian”

workers to apply for membership in a trade union.

* * *

Kuwait∗

Privatization of the Counter-Trade Offset Program

The Kuwait Ministry of Finance has transferred

the management of the Kuwait Counter-Trade Offset

Program (the “Program”) to the National Offset

Company(“NOC”), a private Kuwaiti company. The

privatization took effect on 2 September 2006. The

Minister of Finance, Bader Mishari Al Homaidhi, issued an

order providing that NOC would assume the management

responsibilities for the Program.127

Initiated in July 1992, the Program seeks to

promote the sustainability and expansion of the Kuwaiti

private sector through long-term, mutually beneficial,

collaborative business ventures between foreign

contractors of the Kuwait Government and Kuwait

businesses and private citizens in general. The Program

obliges foreign contractors to which it applies to perform

actions that will "offset" the outflow to such contractors

of money paid under certain Kuwait Government

contracts.

Freedom of Press

The Amir of Kuwait, Sheikh Sabah Al-Ahmad Al-

Jaber Al-Sabah, has ratified a bill passed in the Kuwait

National Assembly providing that newspapers in the

country may operate without censure.128 Since the

126 See Susan J. McGolrick, AFL-CIO, Textile Producers Accuse Jordan of Violating Trade Pact with U.S., 23 Int’l Trade Rep. (BNA) 1416 (Sep. 28, 2006). ∗ David Pfieffer of Bryan Cave LLP wrote the report on Kuwait. 127 Ministry of Finance Order No. 41 of 2006 Concerning the Transfer of Certain Offset Program Duties. 128 Law No.3 of 2006 Concerning Printed Materials and Publishing.

legislation took effect at least twelve newspapers have

applied for and obtained licenses to operate within Kuwait.

The Constitution of the State of Kuwait, which

was approved and promulgated in November 1962,

protects freedom of expression129 and the press130

generally, with some exceptions.

* * *

Libya∗

In July 2006, Libya's General People's Committee

(GPC)131 passed a decision132 providing for the creation of

a new type of Libyan company called a Mushtarika. A

follow-up GPC decision passed in November 2006133

makes a Mushtarika the only way134 in which foreign

natural and corporate persons can operate in Libya in

relation to certain specified sectors, including (a) the oil

field services industry, (b) contracting and civil works

including building and erection, (c) electricity, (d)

transportation and communications, and (e) industrial,

agricultural, marine, and livestock industries.

A Mushtarika allows foreigners to participate in a

majority stake of up to 65% of the company, thereby

allowing the foreign entity to maintain majority

shareholder control over the company for the first time.

Furthermore, a foreign company may select members of

the board of directors proportionate to the interest owned

by the foreign entity (up to the cap of 65%). This means

129 Constitution of the State of Kuwait, Article 36. 130 Ibid., Article 37. ∗ Martin Hunt & Feras Gadamsi of Bracewell & Giuliani LLP, and Tarek M. Eltumi of the Tumi Law Firm drafted the article on Libya. 131 One of the GPC's functions is to issue executive regulations. These executive regulations are secondary legislation that complement laws and show how they are to be applied. 132 GPC Decision No. 171/2006 Regarding the Executive Regulation to Law No. 21/2001 Regarding Commercial Activities As Amended by Law No. 1/2003. 133 GPC Decision No. 443/2006 Determination of Some Provisions Regarding Foreign Companies Practicing their Activities in Great Libyan Jamahiriya. 134 Article 3 of the GPC Decision No. 443/2006 allows the Secretariat of the GPC to grant special permission for companies in those sectors affected by this decision to organize differently for certain "projects of special nature."


the board of a Mushtarika company may be comprised of a

majority of foreign directors, provided that (1) the

chairman of the board is a Libyan national and (2) the

foreign company owns at least a majority interest in the

company. The minimum capital required to establish a

Mushtarika company is LYD 1 million (approx. $768,000),

at least a third of which must be fully paid up upon

incorporation, with the remainder being paid within 5

years of incorporation. The Company Registration

Department at the Ministry of Economy in Libya is already

accepting registration applications for the establishment of

Mushtarikas.

The GPC decision regarding Mushtarikas also

makes it easier for companies to operate on an equal

footing with national companies. Mushtarikas will be

granted preferences and incentives in order to (1) obtain

financing from banks, (2) receive rights for land use, (3)

establish factories and workshops, and (4) recruit and hire

skilled non-nationals for company projects where such

skilled workers cannot be sourced in the Libyan market.

* * *

Mauritania∗

On August 3, 2005, long time president Maaouya

Ould Sid Ahmed Taya was deposed in a bloodless coup

led by Colonel Ely Ould Mohammed Vall (alt. spelling Fal)

and the Military Council for Justice and Democracy

(MCJD).135 The MCJD dissolved the parliament,

suspended parts of the constitution, and formed a

transitional government.136 The international community

∗ Rebecca F. Rabb, third year law student, The Ohio State University Moritz College of Law, President of the Middle Eastern Law Students Association, and currently works for Nesbit Law Firm (an immigration law firm that focuses on French-speaking African clientele). 135 U.S. Department of State Country Reports on Human Rights Practices for 2005, Mauritania (Mar. 8, 2006), available at http://www.state.gov/g/drl/rls/hrrpt/2005/61581.htm. 136 Department of State International Religious Freedom Report for 2006, Mauritania (Sept. 15, 2006), available at http://www.state.gov/g/drl/rls/irf/2006/71313.htm.

has recognized the MCJD’s genuine steps towards

democracy, and criticism remains regarding the MCJD’s

failure to address corruption, past and ongoing human

rights violations against black Mauritanians, and the

disproportionate militarization of Mauritanian politics.137

The International Monetary Fund had planned to

remove Mauritania from the Multilateral Debt Relief

Initiative in December 2005, but found that the

government had adequately implemented sound

macroeconomic policies and remedial measures in order to

continue to qualify in 2006.138 Oil production provided a

good deal of the economic growth.139

In 2005, former oil minister Hmeida signed

additional amendments to the 2004 contract with

Australian Woodside Petroleum regarding the Chinguetti

oil deposit.140 The amendments decreased the Mauritanian

share in the oil revenue and lowered taxes.141 The MCJD

denounced the contractual amendments made with

Woodside Petroleum as illegal in January 2006, but

negotiated a settlement in July, after Woodside threatened

to compel international arbitration.142

On June 26, 2006 a constitutional referendum was

held, and Mauritanians approved of a new constitution by

a vote of 96%.143 The revised constitution limits the

137 See Boubacar N’Diaye, Mauritania, August 2005: Justice and Democracy, or Just Another Coup?, 105 AFR. AFF. 421, 434-39 (Apr. 21, 2006). 138 International Monetary Fund Country Report No. 06/272 (July 2006), available at http://www.imf.org/external/pubs/ft/scr/2006/cr06272.pdf. 139 Id. 140 Kate Askew & Violeta Ayala, Slick Operator, SYDNEY MORNING HERALD, June 3, 2006, available at http://www.smh.com.au/news/business/slick-operator/2006/06/02/1148956541283.html?page=fullpage#contentSwap2 141 Mauritania and Firm Row Over Oil, BBC NEWS, Feb. 6, 2006, available at http://news.bbc.co.uk/1/hi/business/4684836.stm. 142 Damian Sturzaker & Kim Middleton, Australia: The Importance of Carefully Managing Risk in Cross Border Investment, Mondaq Business Briefing (July 31, 2006), available at http://www.imakenews.com/iln/e_article000617573.cfm?x=b11,0,w. 143 Mauritania: Voters Embrace Pro-Democracy Reforms, IRIN NEWS, June 27, 2006, available at


president to a maximum of two consecutive five-year

terms of office fixes the maximum age of candidates at

seventy-five, and specifies that these provisions cannot be

changed in the future.144 Legislative elections were held in

November 2006, which resulted in a gain of representation

for certain opposition parties.145 Senatorial elections will be

held in January 2007, and the next presidential election is

planned for March 2007.146

* * *

Morocco∗

Constitutional Law: Moroccans are debating the

possibility of limiting the King’s constitutional powers.

Reformers hope to ensure more accountability and

independence of the legislative and judiciary branches of

government; opponents say that the King must retain his

political legitimacy as Monarch.147

Election Law: The government is delaying the formation

of electoral constituencies abroad, which would deny

participation in the 2007 elections to expatriates, who

make up 10% of the Moroccan population. Fear of an

Islamic Fundamentalist sweep is cited as the reason for the

delay.148

Migration Law: In July 2006, Morocco hosted nearly 50

countries for a conference on migration. Reducing illegal

http://www.irinnews.org/report.asp?ReportID=54238&SelectRegion=West_Africa&SelectCountry=MAURITANIA. 144 Mauritania Const. arts. 26-29, 99 (1991, as amended to 2006) available at http://www.oceanalaw.com/gateway/gateway.asp?ID=31&SessionID={0623D86E-1197-44B2-BECA-66A783C1E11B}. 145 Mauritania: Another Step in Democratic Transition, IRIN NEWS, Nov. 23, 2006, available at http://www.irinnews.org/report.asp?ReportID=56495&SelectRegion=West_Africa&SelectCountry=MAURITANIA. 146 Mauritania to Speed Up Democratic Transition, AGENCE FRANCE-PRESSE, Nov. 10, 2005, available at http://www.reliefweb.int/rw/RWB.NSF/db900SID/NKUA-6HZMZZ?OpenDocument. ∗ The report on Morocco was written by Carol Simpson Moncif. 147 Source: http://allafrica.com/stories/200611240089.html 148 Source: http://allafrica.com/stories/200610030002.html

migration and human trafficking throughout Africa and

Europe were major issues discussed.149

Trade Law: Legislators ratified a fishing ban treaty with

the EU. The number of EU fishing boats in Moroccan

waters will be reduced by 67%, and several at-risk species

will be protected.150

Family Law: The Family Solidarity Fund has been created

by the government to provide alimony when it has been

established that the debtor is unable to do so. If the ex-

wife was financially dependent on the husband and has no

income, the government will provide support to the

spouse and children.151

International Law: In May, the Justice Minister reported

on the steps that Morocco has taken to implement the

provisions of the International pact on Economic, Social

and Cultural Rights. Human rights, preservation of cultural

rights, and promotion of democracy were the key issues

scrutinized.152

* * *

Pakistan∗

The most significant legal development in

Pakistan has occurred in the field of criminal law,

specifically regarding rape laws under the Hudood

Ordinance.153 The Hudood Ordinance of 1979 was

intended to implement the Shari’a, or Islamic law, which

generally criminalizes and prescribes punishment for a

variety of acts such as theft, drinking alcohol, and

149 Source: http://state.gov/r/pa/prs/ps/2006/68996.htm 150 Source: http://www.middle-east-online.com/english/business/?id=18455 151 Source: http://www.justice.gov.ma/an/Actualites/Actualite.aspx?actualite=157&_=0 152 Source: http://www.justice.gov.ma/an/Actualites/Actualite.aspx?actualite=144&_=0 ∗ Sheheryar Sardar, a second year law student at Emory School of Law, wrote the report on Pakistan. 153 John L. Esposito, Women in Muslim Family Law 89 (Syracuse University Press, 2001).


adultery.154 Pakistan has a dual legal system consisting of

both Islamic and Civil law. The country’s lower house of

parliament has voted to excise and transfer the laws of

rape under the Ordinance, which is administered by the

Islamic courts, to the civil penal code.155 Once the upper

house of parliament approves the change, it will affect the

evidentiary standards associated with proving rape.

Under the Hudood Ordinance, a rape victim must

produce four Muslim adult male witnesses who must “give

evidence as eye-witnesses of the act of penetration

necessary to the offence.”156 If the victim is unable to

produce the witnesses, the alleged intercourse is assumed

consensual and thus, the victim is subject to punishment

under the crime of “zina,” or sexual relations outside of

marriage.157 The amendment, known as the Women’s

Protection Bill, will allow a victim to prove rape through a

variety of standard measures, including, but not limited to,

testimony without the required four Muslim male

witnesses and forensic evidence.158 However, a victim who

is unable to prove rape may still be prosecuted for

adultery; the coalition of religious parties, as members of

the National Assembly, incorporated it into the

amendment.159 Thus, the criminalization of adultery under

the Hudood Ordinance will remain in place. Nevertheless,

the amendment will provide for an individual charged with

adultery to post bail, a procedure the Hudood laws do not

provide.160

* * *

154 Id. 155 http://www.csmonitor.com/2006/1117/p07s02-wosc.html?s=u 156 Asifa Quraishi, Her Honor: An Islamic Critique of the Rape Laws of Pakistan from a Woman- Sensitive Perspective, (1997), http://www.crescentlife.com/articles/social%20issues/rape_laws.htm 157 Id. 158 http://www.theage.com.au/news/World/Pakistan-amends-rape-law-to-help-women/2006/11/16/1163266669406.html 159 Id. 160 http://hrw.org/english/docs/2006/11/14/pakist14576.htm

Palestine∗

Given the current political and military instability

of the West Bank and Gaza strip only a handful of laws

were enacted by the Palestinian Legislative Council (PLC)

during 2006.161 Of the laws enacted half call for the

creation of some form of independent body. For example,

Law No. 1 calls for the creation of an independent medical

and research council.162 Law No. 2 seeks to create a union

for Palestinian industrialists.163 Law No. 3 establishes an

independent higher constitutional court164 composed of a

chief justice, deputy chief justice, and seven other

justices.165 Two laws make minor revisions to existing

laws.166 The final law directs the Council of Ministers to

submit Public Budget Law of 2006 to the Legislative

Council.167 One of the more interesting laws has yet to be

∗ Hisham Kassim, B.A. University of Virginia 2003, J.D. expected University of Iowa College of Law 2007 (All Palestinian Laws and Bills are in Arabic translated by the author). 161 A total of six laws were passed during 2006. Palestinian Medical Council Law No. 1/2006, THE PALESTINIAN GAZETTE, January 16, 2006 (hereinafter Law No.1), General Union of Palestinian Industries Law No. 2/2006, THE PALESTINIAN GAZETTE, January 8, 2006 (hereinafter Law No. 2), Supreme Constitutional Court Law No. 3/2006, THE PALESTINIAN GAZETTE, February 13, 2006 (hereinafter Law No. 3), Amendments to the Provisions of the Elections Law No. 4/2006, THE PALESTINIAN GAZETTE, February 13, 2006 (hereinafter Law No. 4), Amendments to the Provisions Providing for the Sanctity of the Palestinian Flag Law No. 5/2006, THE PALESTINIAN GAZETTE, February 13, 2006 (hereinafter Law No. 5), and Submitting the Law of Public Budget to the Palestinian National Authority Law No. 6/2006, THE PALESTINIAN GAZETTE, March 29, 2006 (hereinafter Law No. 6). 162 Law No. 1, Section 2. 163 Law No. 2, Section 2. 164 Law No. 3, Section 1. 165 Id. at Section 2. 166 Law No. 5 makes minor aesthetic revisions to the dimension of the Palestinian flag as stipulated in Section 1 of the Sanctity of the Palestinian Flag Law No. 22/2005, The Palestinian Gazette, November 23, 2005. Law No. 4 adds an additional section to the Elections Law No. 9/2005, THE PALESTINIAN GAZETTE, June 18, 2005. Section 2.5 of Law No. 4 states that all elected members of the PLC will be become members of the Palestinian National Council and therefore must accept and abide by the Palestinian Liberation Organization’s Basic Law. 167 Law No. 6, Section 1.


enacted and it is still in draft form.168 The bill will be

submitted to the Legislative Council by early December

2006.

The main purpose of the current bill is to create

an independent body to help identify and quantify the

damages done to Palestinian individuals and corporate

entities and their respective properties as a result of

Israel`s construction of a barrier (“Wall”) mostly built in

the Occupied Palestinian Territory (“OPT”), including

East Jerusalem.169 The construction of Israel’s separation

barrier was declared in violation of international law on

July 9, 2004 by the International Court of Justice ("ICJ").170

The ICJ ruled that Israel was under an obligation to return

all property seized as a result of the construction of the

wall and if such restitution is materially impossible then

Israel is to compensate the victims.171 The first step in

implementing the ICJ ruling was the creation of a registry

by the Secretary General of the United Nations to quantify

the damages caused by the construction of the wall.172 The

second step is the creation of a national registry in the

West Bank and Gaza to document and assess the damages

caused by the construction of the wall. It is believed that a

national registry will increase the efficiency and accuracy of

the claims. This bill, once enacted, will hopefully give force

to the ICJ ruling.

* * *

168 The Law Concerning the Establishment of the National Register for Identifying Damages Caused by the Establishment of the Separation Wall No. # (2006) (on file with the author) (hereinafter Law No. #). 169 Law No. #, Section 2.A. 170 Advisory Opinion, Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, 2004 I.C.J. 131, para. 143 (July 9), available at http://www.icj-cij.org/icjwww/idocket/imwp/imwpframe.htm (last visited Mar. 1, 2005). 171 Id. at para. 153. 172 General Assembly, Letter dated 11 January 2005 from the Secretary General to the President of the General Assembly, ¶ 1, U.N. Doc. A/ES-10/294 (Jan. 13, 2005).

Qatar∗

The State of Qatar has announced that it will hold

legislative elections in early 2007, according to a statement

by Foreign Minister Hamad Bin Jasem Al-Thani.173 This

marks the first planned legislative elections to have been

held since 1970 when there were partial election

proceedings.174 For the past three decades, council

members have had their terms extended every four years

since.175 Qatar’s new constitution, which entered into force

on June 9, 2005, provides for a 45-member Consultative

Council, or Majlis As-Shura.176 The electorate, which

includes men and women, will elect two-thirds of this

Majlis As-Shura.177 The head of state, Emir Sheikh Hamad

bin Khalifa Al-Thani, will appoint the remaining fifteen

members.178 The electoral districts will be also be

delineated by the decree of the Emir.179 Members of the

Majlis al-Shura will serve 4-year terms and may be re-

elected.180 Candidates for office must be of Qatari descent,

at least 30 years of age, and fluent in the reading and

writing of the Arabic language.181

Earlier this year, a Qatari woman became the first

female to be elected to the Qatar Chamber of Commerce

and Industry, following a controversial election criticized

as being laced with irregularities, and opponents vowing a

∗ Salman Alam, a J.D. candidate in the class of 2007 at University of California, Hastings College of the Law, wrote the article at Qatar. 173 Arab Political Systems: Baseline Information and Reforms – Qatar (Carnegie Endowment for International Peace, Democracy and Rule of Law Project, Washington, D.C.), available at http://www.carnegieendowment.org/files/Qatar_APS.doc (last viewed November 21, 2006). 174The World Factbook, United States Central Intelligence Agency, available at https://www.cia.gov/cia/publications/factbook/geos/qa.html (last updated November 18, 2006). 175 Id. 176 Permanent Constitution of the State of Qatar art. 77. 177 Id. 178 Id. 179 Permanent Constitution of the State of Qatar art. 79. 180 Permanent Constitution of the State of Qatar art. 81. 181 Permanent Constitution of the State of Qatar art. 80.


court battle.182 Political parties are still banned from

participation in Qatar.183 Qatar’s sole human rights

watchdog, the National Human Rights Committee, could

also be entitled to monitor the poll process next year.184 In

April 2003, 96.6 percent of the local population voted in a

referendum to approve the permanent constitution

sanctioning parliamentary elections.185

* * *

Saudi Arabia∗

Notable legal developments in Saudi Arabia from

2005-06 include the establishment of basic features of the

capital markets and several investment-related reforms, the

opening of the insurance markets, a new labor law,

accession to the World Trade Organization, and the formal

accession of King Abdallah to the throne.186

A. Capital Markets Developments

In May 2005, authority over raising capital in

existing companies and conducting IPOs was transferred

from the Ministry of Commerce and Industry to the

relatively new Capital Market Authority (“CMA”).187 The

CMA followed by issuing regulations on licensing

procedures for persons authorized to participate in the

182 Barbara Bibbo, First Woman Elected To Qatar Chamber, GULF NEWS (Qatar), May 18, 2006. 183 Barbara Bibbo, Democracy Comes Calling In Qatar, GULF NEWS, March 26, 2005. 184 Qatar Rights Watchdog 'May Monitor Elections,’ GULF NEWS, November 13, 2006. 185 Id. ∗ Ronald Pump of Johnson & Pump prepared the report on Saudi Arabia. 186 Additional laws passed during this period include the Sales in Installments Law, certain IP protections, environmental protection regulations, and new mining regulations. The Sales in Installments Law, approved provides that a buyer must pay at least 20% of the purchase price upon delivery, unless the seller presents a contractual guarantee as in a mortgage. Article 7 provides that neither seller nor buyer may rescind the installments payments after a majority of payments have been rendered, even if the buyer fails to deliver payments on a timely basis. Article 9 mandates certain accounting practices for sales in installments, and article 10 establishes penalties for violations of the law of up to SR 100,000 (around US $ 26,666). The penalty applies for anyone who engages in the profession of sales on an installment basis without a commercial license. 187 The Capital Market Authority was established by the Capital Market Law of 2003. It began operation in August 2004.

securities field and business regulations governing such

persons on June 28, 2005.188 No person may practice

trading, dealing, arranging, managing, or exercising custody

over securities in the Kingdom without a license,189 and

non-Saudis are prohibited from investing on the Saudi

stock market either directly or through an unauthorized

intermediary.190 Joint stock companies are also prohibited

from investing in other joint stock companies listed on the

stock market unless such deals are included in each

company’s objects, and are limited to only buying 10%

regulations.

New regulations on corporate governance were

issued by the CMA in 2006, which clarified shareholder

rights and responsibilities of corporate board members.

The CMA is currently considering regulations on

investment funds, mergers and acquisitions, authorizing

listed companies to purchase their own shares, and real

estate investment funds.191 The Ministry of Commerce

began receiving applications for licensing initial public

offerings in real estate on July 8, 2006.

B. Insurance

In 2004, the Cooperative Insurance Companies

Law required all insurance companies in the Kingdom to

188 In addition to filing an extensive license application, authorized persons must maintain a capital deposit in an amount that varies depending upon the type of license requested ($13.3 million for trading, but smaller amounts for consultants and advisors), and a valid commercial registration in the Kingdom. 189 Reports indicate that as many as 270 investment funds were operating without a license in Saudi Arabia. The CMA issued numerous warnings in 2005 for these funds, instructing them to either apply for a license or cease operations. As of November 2006, the CMA has licensed 35 persons as authorized to participate in securities transactions. 190 At this time, non-Saudi residents in the Kingdom are permitted to invest in the Saudi stock market only through a licensed investment fund. Trading through an unauthorized intermediary violates Saudi Arabia’s Fronting Law (also known as Anti-Covering Up Law). Non-Saudis may apply for licenses to deal and manage investments, and as of March 25, 2006, were technically authorized to trade on the stock market through banks, subject to terms and conditions. 191 A draft regulation on Real Estate Investment Funds was issued for public discussion on June 7, 2006. A draft regulation allowing listed companies to purchase up to 10% of their own shares was proposed to the Saudi Cabinet on June 20, 2006.


file for a license from the Saudi Arabia Monetary Authority

(SAMA) or cease operations. In 2005, the deadline to file

passed, and numerous insurers who did not file before the

deadline were warned to cease operations. SAMA began

reviewing license applications in early 2005,192 and has

licensed several cooperative insurance companies with

mixed Saudi and foreign investment. SAMA has expressed

an intention to create a separate regulatory body to oversee

insurance in the Kingdom, modeled after the CMA.193

Also, in 2005, new regulations required local companies to

provide health insurance for expatriate employees as a

precondition for granting visas.

C. International Trade and Investment

In December 2005, the Kingdom became the

149th member of the World Trade Organization (WTO).

Under agreements negotiated prior to accession, the

Kingdom undertook numerous reforms, including opening

several closed sectors to foreign investment, altering

customs procedures, and implementing new laws and

procedures on intellectual property. The expatriate

business community expects additional implementing

resolutions to give effect to WTO agreements, particularly

the reduction or elimination of sponsor controls.

In March 2005, the Ministry of Commerce and

Industry announced several concessions to facilitate

foreign investment, including customs exemptions and

192 The Cooperative Insurance Companies Control Law requires applicants to possess capital of at least SR100 millions (US $ 26.6), to establish certain claims handling procedures, and to issue a series of periodic reports. 193 In Saudi Arabia, insurance, as generally practiced in Western jurisdictions, violates Islamic law and is therefore prohibited. However, most of the features of insurance are replicated through cooperative insurance societies. The Saudi Arabia Monetary Authority issued a new licensing regime in 2004, which effectively barred any unlicensed insurance firms from operation. The ban took effect in early 2005, and since that period, 16 new insurance companies have been licensed in addition to the National Company for Cooperative Insurance (NCCI), which operates pursuant to royal charter. Several press reports indicate that the government intends to establish a new entity to regulate the insurance sector modeled after the CMA.

more favorable real estate provisions relating to offices for

foreign entities.

D. Labor & Employment

A new Labor Law, issued August 2005 replaced the

Workmen and Laborers Law of 1969. Much of the new

law consists of reiterating regulations issued under the

previous law. However, certain new categories of laborers

are covered, new provisions and benefits for female

employees have been issued, additional regulations on

human resource management were enacted, new

provisions for workers with disabilities, and dispute

resolution procedures have been clarified in the new law.

On the other hand, the Ministry of Labor has undertaken a

variety of new procedures intended to curb the issuance of

work visas to foreign workers who comprise the bulk of

the labor force in Saudi Arabia.

E. Political Developments

In August 2005, King Abdallah ascended to the

throne, acquiring the formal powers he had exercised for

ten years. A new law of succession issued in October 2006

establishes a committee to determine the succession and a

medical review authority.

The first municipal council elections occurred in early

2005. A National Human Rights Commission established

in 2005 began reviewing allegations of human rights

abuses in the Kingdom.

* * *

Sudan∗

For three years the conflict in Darfur, located in

western Sudan, has persisted between the government-

backed militia, the Janjaweed, and three main rebel groups:

the Sudan Liberation Movement/Army (SLM/A), an

SLM/A splinter group, and the Justice and Equality

Movement.194 In 2004, a series of internationally-backed

∗ Bobbie Neal wrote the report on Sudan. *Bobbie S. Neal, a contract attorney with the Securities and Exchange Commission in Washington, D.C., prepared the report on developments in The Sudan.


peace negotiations between the two sides began.195 On

May 5, 2006, the Sudan government and the largest rebel

group, the SLM/A, signed a peace agreement intended to

end the conflict.196

The Darfur Peace Agreement (DPA) provided for

the security of the region and for the sharing of power and

wealth between the two sides.197 The DPA called for a

ceasefire and required the government of Sudan to disarm

and withdraw the Janjaweed to restricted zones by

October, which would be followed by the demobilization

of the rebel troops.198 The agreement also provided for the

reintegration of rebel troops into the national army and

police forces, and gave greater representation to the rebel

groups in the national, state, and local governments, and

the transitional authority overseeing the DPA.199

Additionally, the DPA granted the people of Darfur the

right to elect their own leaders and to determine the status

of the region by 2010.200 Moreover, the agreement created

a compensation fund for victims, a reconstruction fund to

redevelop the region, and a commission to help displaced

persons return home.201

Although some progress was made, the refusal of

the other rebel groups to sign the DPA contributed to

delay in the implementation of the agreement and to

violations of its provisions by both sides.202 Neither

194 See BUREAU OF AFRICAN AFFAIRS, U.S. DEPT. OF STATE, BACKGROUND NOTE: SUDAN, http://www.state.gov/r/pa/ei/bgn/5424.htm (last update Nov. 2006). 195 See id. 196 See Darfur Peace Agreement, May 5, 2006, available at http://www.issafrica.org/AF/profiles/sudan/dpa05052006.pdf. 197 See id. at ch. 1-3. 198 See id. at ch. 3. 199 See id. at ch. 1, art. 6-16, ch. 3, art. 29. 200 See id. at ch. 1, art. 6. 201 See id. at ch. 2, art. 17, 19, 21. 202 See COMMUNIQUE OF THE THIRD MEETING OF THE DARFUR PEACE AGREEMENT JOINT COMMISSION (Nov. 12, 2006) available at http://www.iss.co.za/dynamic/administration/file_manager/file_links/DARFURCOM12NOV06.PDF?link_id=&slink_id=3851&link_type=&slink_type=13&tmpl_id=3; Lydia Polgreen, Shaky Peace in Darfur at Risk, as a New Confrontation Looms, N.Y. TIMES, Aug. 31, 2006, at A1; Craig Timberg, Rebels Say They May

signatory disarmed or withdrew and the fighting

continued.203 In November, the international community

pressured the Sudan government into agreeing, in

principle, to allow a United Nations/African Union

peacekeeping force into Darfur to enforce compliance of

the DPA, but no deployment date was set.204

* * *

Tunisia∗

A. Economic Reform

As part of Tunisia’s gradual move towards

economic liberalization, significant events this year

included finalizing the government’s largest privatization

effort to date in which it sold off 35 percent of the

national telecommunications company;205 passing a law

that requires most companies to establish an audit

committee to increase reliability of corporation

information and to thereby prompt more investment on

the local stock exchange;206 and proposing measures to

ease restrictions on currency transfers as part of a long-

term goal to make its Dinar fully convertible;207

Abandon Darfur Pact, WASH. POST, Sept. 14, 2006, available in 2006 WLNR 15913765. 203 See id. 204 See Robert F. Worth, Sudan Says It Will Accept U.N.-African Peace Force in Darfur, N.Y. TIMES, Nov. 17, 2006, at A3. See generally S.C. Res. 1706, U.N. Doc. S/RES/1706 (Aug. 31, 2006). ∗ Vonda K. Vandaveer, an attorney licensed in Washington, DC and in California, wrote the report on Tunisia. 205 See Tecom in the News, Malta Today, May 7, 2006, available at http://www.maltatoday.com.mt/2006/05/07/b2.html and ILFR1000, Country Reports, Tunis, Legislative Process, The Privatization Process, available at http://www.iflr1000.com/default.asp?page=38&CH=3&sIndex=2&CountryID=112 (last visited Nov. 29, 2006). 206 Loi No. 2005-96 du Oct. 18, 2005 Relative au Renforcement de la Securite des relations financiers. See also Oxford Business Group, On the Straight and Narrow, EMERGING TUNISIA 2006, at 179. 207 Speech by President Zine El Abidine Ben Ali on the Occasion of the 19th Anniversary of the Change, Carthage, Tunisia, Nov. 7, 2006, available at http://www.tunisiaonlinenews.com/nov06/071106.htm (last visited Nov. 29, 2006) and President Ben Ali Announces Wide Ranging Set of Measures to Promote Human Rights and Political Pluralism in Tunisia, Tunisia Online News, Nov. 7, 2006, http://www.tunisiaonlinenews.com/nov06/071106-1.htm. See also Oxford Business Group, Dealing with Dinars, EMERGING


B. Human Rights Issues

Praised as a leader in the Middle East for

promoting women’s rights, Tunisia took additional steps

forward with proposals to equalize the minimum age of

marriage for men and women to be 18 and to preserve a

woman’s right to live in the marital house during and after

divorce proceedings if she has custody of the children.208

Also this year, the government released a total of 1,712

prisoners, many of whom had been convicted under anti-

terrorism laws, but whom human rights groups alleged

were political prisoners.209

Tunisia, however, provoked outrage for its

continued repression of other rights. In particular, it

passed a law giving the government full control over the

judicial training institute, which the Tunisian Bar

Association said threatens the profession's

independence.210 In response to a sit-in protesting the law,

TUNISIA 2006, at 30-31. Central Bank of Tunisia, Current Events of the Central Bank, Nov. 15, 2006 and Nov. 1, 2006, available at http://www.bct.gov.tn/j2ee/siteprod/english/actualites/activites.jsp (last visited Nov. 30, 2006). 208 Le Chef de l'Etat préside la réunion du conseil des ministres - Examen du projet de loi de finances pour l'année 2007 http://www.infotunisie.com/2006/10/111006-4.html; Speech by President Zine El Abidine Ben Ali on the 50th Anniversary of the Promulgation of the Code of Personal Status, Carthage, Tunisia, August 12, 2006, available at http://www.tunisiaonlinenews.com/august06/120806.html. See also President Ben Ali Reaffirms Tunisia’s Commitment to the Code of Personal Status, Announces Measures Promoting Women Rights, Aug. 12, 2006, Tunisia Online News, http://www.tunisiaonlinenews.com/august06/120806-1.html (last visited Nov. 29, 2006). 209 See Ben Ali Pardons 55 Islamist Prisoners, Middle East Online, Nov. 6, 2006, http://www.middle-east-online.com/english/tunisia/?id=18165 and Ben Ali Frees 1,600 Prisoners, Middle East Online, Feb. 27, 2006, http://www.middle-east-online.com/english/?id=15851 (last visited Nov. 29, 2006). See also U.S. Dep’t of State, Bureau of Public Affairs, Press Release (March 1, 2006), United States Welcomes Tunisian Release of Political Prisoners, http://www.state.gov/r/pa/prs/ps/2006/62396.htm. 210 Loi No. 89-87 du 15 mai 2006 Portant Organisation de la Profession d'Avocat - Mise à jour - Loi No. 2006-30 du 15 mai 2006, available at http://www.jurisitetunisie.com/tunisie/codes/avocat/menu.html; See also IDHAE-European Bar Human Rights Institute, Alerte Urgente Advocats, Afrique du Nord et Moyen Orient,

police attacked the lawyers and raided the office of the bar

association’s president.211 Other criticisms arose when

Tunisia was elected to the U.N. Human Rights Council212

despite its record of rights abuses and when it closed its

embassy in Qatar in reaction to an interview shown on Al

Jazeera, which is based in Qatar, with a Tunisian human

rights activist who urged peaceful protests against his

government’s repression.213 Criminal charges were also

filed against the man in Tunisia for inciting civil

disobedience.214

* * *

Turkey∗

Throughout the year 2006, Turkey has been

striving to make progress towards its major political goal

of becoming a full member of the European Union

(“EU”). The EU opened the accession negotiations with

Turkey in October 2005 and the first stage of the so-called

Tunsie, May 11, 2006, available at http://www.idhae.org/idhae-fr-page4.1.tun12.htm (last visited Nov. 29, 2006). 211 See Cairo Institute for Human Rights Studies, Press Releases 2006, May 24, 2006, Tunisia: A Hysterical Escalation of Repression, available at http://www.cihrs.org/Press_details_en.aspx?per_id=94&pr_year=2006 and IDHAE-European Bar Human Rights Institute, Alerte Urgente Advocats, Afrique du Nord et Moyen Orient, Tunsie, May 11, 2006, available at http://www.idhae.org/idhae-fr-page4.1.tun12.htm (last visited Nov. 29, 2006). 212 See IFEX, Comuniqué de presse (May 9, 2006), Tunisia Does Not Merit a Seat on the U.N. Human Rights Council, Say IFEX-TMG Members, available at http://www.ifex.org/fr/layout/set/print/content/view/full/74296/; Thalif Deen UN Defies West in Vote for Human Rights Council, Inter Press Service, May 9, 2006, available at http://www.globalpolicy.org/reform/topics/hrc/2006/0509defies.htm (last visited Nov. 29, 2006). 213 See Tunisia: OLPEC Condemns Defamation Campaign Against Al Jazeera, IFEX Clearing House Press Release, Nov. 3, 2006, available at http://allafrica.com/stories/200611030740.html and Tunisia Closes Embassy in Qatar Over Al-Jazeera 'Hostile Campaign', Middle East Online, Oct. 25, 2006, http://www.middle-east-online.com/english/tunisia/?id=18001 (last visited Nov. 29, 2006). 214 See Tunisia Closes Embassy in Qatar Over Al-Jazeera 'Hostile Campaign', Middle East Online, Oct. 25, 2006, http://www.middle-east-online.com/english/tunisia/?id=18001 (last visited Nov. 29, 2006). ∗ The report on Turkey was contributed by Hakki Gedik, of Hergüner Bilgen Özeke, Istanbul, Turkey.


screening was completed in October 2006.215 For the most

part due to the political issues concerning Cyprus, Turkey’s

progress216 towards meeting its obligations and, ultimately,

the Copenhagen criteria217 for accession to the EU, has,

however, been perceived by the European Commission as

falling behind. As a consequence thereof, the European

Commission recently recommended inter alia that the

Intergovernmental Conference on Accession with Turkey

215 The basis for the accession negotiations are laid down in a document called Negotiation Framework for Turkey dated October 2005 (see http://europa.eu.int/comm/enlargement/docs/pdf/st20002_en05_TR_framedoc.pdf.) On 3 October 2005, the negotiations were symbolically launched and, on 20 October 2005, the screening was opened for some of the 35 chapter headings. Screening is the formal process of examination of the entire body of the laws of the EU by the Commission in order to identify with, and explain to, the Turkish authorities the legal framework and administrative capacities that need to be adapted so as to apply EU law as a Member State. The entire body of the laws of the EU is known as acquis communautaire. This includes all the treaties, regulations and directives passed by the European institutions as well as judgments (see http://europa.eu.int/comm/development/body/legislation/index_en.htm.) The screening will be conducted in two stages. During the first stage, the Commission would explain its acquis to Turkey, while in the second stage it would be Turkey’s turn to explain its laws. While the first stage of the screening process was completed within one year as scheduled, it is being followed by negotiations between the Commission and Turkey on a chapter-by-chapter basis. Negotiations on one chapter, science and research, were opened and provisionally closed in June 2006. 216 On 8 November 2006 the Commission approved the Strategy Paper and the candidate countries’ (Croatia, the former Yugoslav Republic of Macedonia, Turkey) and potential candidate countries’ (Albania, Bosnia and Herzegovina, Montenegro, Serbia and Kosovo under UN Security Council Resolution 1244) progress reports on their road towards the EU. For the Progress Report on Turkey, see http://ec.europa.eu/enlargement/pdf/key_documents/2006/Nov/tr_sec_1390_en.pdf.

217 In June 1993, the Copenhagen European Council recognized the right of the countries of central and eastern Europe to join the EU when they have fulfilled three criteria: (i) political: stable institutions guaranteeing democracy, the rule of law, human rights and respect for minorities; (ii) economic: a functioning market economy; (iii) incorporation of the acquis communautaire: adherence to the various political, economic and monetary aims of the European Union. The Madrid European Council, which confirmed these accession criteria in December 1995, moreover, emphasized that candidate countries must have created the conditions for their integration through the adjustment of their administrative structures. See also http://europa.eu.int/comm/enlargement/intro/criteria.htm.

should not open negotiations on eight chapters covering

policy areas relevant to Turkey’s restrictions as regards the

Republic of Cyprus until the Commission confirms that

Turkey has fulfilled its commitments.218

The pace of legislative changes seemed to have

slowed down compared to the preceding year. The

following attempts to report some of the most significant

pieces of legislation that have passed219 the Parliament as a

result of the continuing reform process: (i) the amendment

to Article 35 of the Title Deed Law220 governing real

property acquisitions by foreigners; (ii) amendments to the

Environmental Law221 revised with a view to draw level

with the EU legislation; (iii) the Corporate Tax Law222

revamping the entire corporate tax system; and, (iv) the

Law on the Administrative Auditing Authority223

introducing a Turkish ombudsman. One should, moreover,

bear in mind that, apart from the major bills introduced in

2005224, there are further bills introduced in 2006 and

pending enactment, e.g., the draft Law on Obligations225.

With the European Commission’s somewhat

unconstructive stance towards Turkey, a widening current

account deficit, presidential elections in May 2007 and

218 See the European Commission’s recommendation on the continuation of accession negotiations with Turkey, http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/1652&format=HTML&aged=0&language=EN&guiLanguage=en.

219 Only changes, amendments and enactments between 1 December 2005 and 30 November 2006 are taken into account.

220 Published in the Official Gazette No: 26046 on 7 January 2006 (on file with author.)

221 Published in the Official Gazette No: 26167 on 13 May 2006 (on file with author.)

222 Published in the Official Gazette No: 26207 on 23 June 2006 (on file with author.)

223 Published in the Official Gazette No: 26318 on 13 October 2006 (on file with author.)

224 See Jim Phipps et. al., International Legal Developments in Review: 2005, Regional & Comparative Law, Middle East, 40 (2) INT’L LAW. 597, 623-24 nn. 169-171 (2006).

225 See http://www.kgm.adalet.gov.tr/borclarkanunu.htm (in the Turkish language, on file with author.)


parliamentary elections in November 2007, and a more

volatile global economic environment, the coming year

appears to become rather challenging for Turkey. Still,

some high profile privatization (e.g., of the TEDA�

electricity distribution facilities, the national carrier Turkish

Airlines and the major state-owned financial institution

Halkbank) together with an IPO of the country’s – recently

privatized via block sale – fixed-line operator Türk

Telekom, promise to attract attention.

* * *

Yemen∗

A. Commercial Law Developments

In Yemeni commercial law this past year, there

were two key developments. First, Yemen adopted the

National Reform Act, a statute including measures to

respond to Yemen’s severe corruption problem, financial

disclosure requirements for public officials, and

procurement transparency requirements.226 Second,

Yemen took steps to expand its economic relationships

with other nations: Yemen signed an agreement with the

Gulf Cooperation Council of Arab Gulf Countries to

develop cooperation in various standardized fields and

received a commitment from donors of $4.7 billion at a

meeting sponsored by the Council;227 joined the Common

∗ Martin T. Lutz, a partner in the International Law and Dispute Resolution Practice Group at Hunton & Williams LLP, in Houston, Texas; Abdalla Al-Meqbeli, head partner at Abdalla Al-Meqbeli & Associates in Sana’a, Yemen; and Ariel B. Waldman and Justin Steven Rubin, attorneys in the Washington, D.C. office of Wilmer Cutler Pickering Hale and Dorr LLP; prepared the report on developments in Yemen. 226 Christian Chaise, Corruption runs parallel economy in impoverished Yemen, Agence France Press, May 7, 2006. 227 GCC and Yemen Sign Standardization MOU, Bahrain News Agency, November 8, 2006; Yemeni-Gulf Ministerial Meeting Commence its Activities, Yemen New Agency, November 1, 2006 (noting the commitment made by the GCC in December 2005); Donors Pledge Commitment to Yemen’s Development, World Bank Press Release, November 16, 2006. Press Release No: 2007/147/MENA, viewed at http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/YEMENEXTN/0,.contentMDK:21131308~menuPK:310183~pagePK:2865066~piPK:2865079~theSitePK:310165,00.html

Market for Eastern and Southern Africa;228 entered into an

agreement with Eritrea to form a commercial fishing

concern;229 and made substantial progress towards a

bilateral agreement with Cuba.230

B. Constitutional and Democracy Developments

Yemen’s record in the past year with respect to

constitutional democracy was, once again, mixed. Yemen’s

President Ali Abdullah Saleh was reelected231 in an election

European Union observers judged to be generally well-

run,232 and the National Reform Act increased the

independence of the national judiciary and audit

institutions.233 However, Yemen’s freedom of speech

problems—particularly in the journalist context—remain

significant.. After criticizing government officials, a

newspaper editor was kidnapped.234 Another, after

reprinting cartoons of the Prophet Muhammad, was

imprisoned and his newspaper banned for six months.235

In recent years the legislative agenda in the

Republic of Yemen has largely been driven by Yemen’s

efforts to accede to The World Trade Organization

(“WTO”)236 and the Gulf Cooperation Council

228 Yemen to be supervisor member in CMESA, Yemen News Agency, November 18, 2006. 229 Yemen, Cuba to sign bilateral agreement in Sanaa, 25 November, BBC Worldwide Monitoring, November 20, 2006. 230 Shabait.com, Eritrea and Yemen Conclude Agreement on Establishment of Joint Fisheries Company, Africa News, November 10, 2006. 231 Donna Abu-Nasr, Yemeni Opposition Alleges Violation, Associated Press, September 21, 2006. 232 Id. 233 World Bank: Donors Pledge Commitment to Yemen’s Development, M2 Communications LTD, November 17, 2006. 234 Tevah Platt, He puts life on the line to report truth, Staten Island Advance, November 10, 2006. 235 Khaled Al-Mahdi, Yemen Jails Journalist Over Blasphemous Cartoons, Arab News, November 26, 2006. 236 The WTO established a Yemen Working Party in July of 2000 to work with the country to develop appropriate legal reforms as to trade, commerce, and investment information regarding the commitments made by Yemen. The status of progress toward meeting those commitments can be found on the WTO’s website at http://www.wto.org/english/thewto_e/acc_e/a1_yemen_e.htm (accessed December 4, 2006).


(“GCC”).237 In 2006, however, Yemeni politics was

dominated by the September presidential elections.

Consequently, after an active 2005 in which a number of

significant laws were adopted--e.g., Law 19/2005

amending Yemen’s competition law; Law 43/2005

pertaining to agencies and branches of foreign companies;

and Law 53/2005 amending Yemen’s Companies Law--

progress on reform measures in 2006 was more modest.

The two most significant pieces of 2006 legislation were:

Law 21/2006, which amended Yemen’s Anti Money

Laundering Law 35/2003 to create a committee of the

country’s major financial institutions to oversee laundering

controls, and to require that all money transfers of $1000

or more be registered with the Central Bank; and Law

29/2006, which required Yemen’s Islamic banks to

strengthen capital ratios, and increased the Central Bank’s

control over money flows, again as a means of preventing

money laundering.

With elections over, progress is expected soon on

several pieces of significant legislation now under

consideration in draft form: a new anti-corruption law

(which would establish an independent Supreme National

Authority for Fighting Corruption), a law regulating

government tenders, a law on leasing, and WTO-

compliant amendments to Yemen’s customs and

intellectual property laws.

In November of 2006, at the fourth meeting of

the Consultative Group of Yemen’s official donors, $4.7

billion was pledged by donor countries to aid in Yemen’s

reform efforts. In an effort to ensure that Yemen’s

lawmakers have additional incentive to proceed with the

reforms underway, the delivery of the funds will be

monitored by GCC parties and The World Bank, and

237 See, U.S. Commercial Service, Yemen Country Commercial Guide 2006, http://www.buyusa.gov/yemen/en/ccg.html (accessed December 4, 2006).

funding will be contingent on the extent to which Yemen

follows through on reform efforts currently underway.238

Editor-in-Chief James D. Phipps

Editor C. Scott Maravilla

Editor Anahita Ferasat

238 See, World Bank Press Release, “Donors Commit to Yemen’s Development (2006),” http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/YEMEN EXTN/0,,contentMDK:21131308~menuPK:310183~pagePK:2865066~piPK:2865079~theSitePK:310165,00.html (accessed Dec 4, 2006).

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