The law making process in Ethiopia

This briefing has been published by Atkilit Bekele, Deborah Haddis and Natenael Melaku of Mesfin Tafesee & Associates Law Office, Ethiopia, who have agreed to Simmons & Simmons making it available to elexica subscribers.

Law making in Ethiopia is exercised at three levels. At a primary level, it is made by the parliament known in Ethiopia as the Ethiopian House of People’s Representatives (HPR). The laws that the HPR enacts are known as Proclamations. At secondary and tertiary levels, laws are made by the various organs of government through delegation. The chief law maker at the secondary level is the Council of Ministers (CoM). Laws enacted by CoM are known as “Regulations”. Proclamations and Regulations are required to be published and come out as laws in the form of a special gazette known as the Negarit Gazette. At a tertiary level, there is a huge body of rules continually enacted by various government organs justified by their day to day operational needs. These rules come in various nomenclatures such as directives, circulars, notices, guidelines, etc. Although the tertiary level of rules has significant impact on citizens’ daily lives as they interface with government institutions, they are, for the most part, not published and are inaccessible. This is gradually changing for the better because of the government’s continuous effort to ensure access to information to the public and the development of information technology but the pace of change is far from the desired level. Note that this legal update does not address this category of rules.

Between themselves, the HPR and CoM enacted a total of 102 legislations. Our review of the legislative activities is divided into two sections. In the first section we will briefly summarise the most important legislations that are expected to impact the business community. In the second section, we have listed the Proclamations and Regulations enacted by the HPR and the CoM.

Summary

Authentication and Registration Documents Proclamation No.922/2015

This Proclamation was enacted with the objective of meeting international standards and to create a uniform document authentication and registration process. It has introduced new procedures as to authentication activities, procedures and duties of the notary, improperly authenticated and registered documents.

Federal Attorney General Establishment Proclamation. Proclamation No. 943/2016

This Proclamation aims at better protecting public and government interests through the establishment of a singular public prosecution entity known as the Attorney General of the Federal Democratic Republic of Ethiopia directly accountable to the Prime Minister and the Council of Ministers, entrusted with the duties of formulating Criminal Justice policies and working as the principal advisor and representative of the federal government regarding legal matters. The impact of this Proclamation is to centralise prosecution activity which has been fragmented and shared among many other public institutions such as the Ethiopian Revenue Customs Authority, the Trade Competition and Consumer Protection Authority, etc.

Computer Crime Proclamation No. 958/2016

Arising out of the fact that the existing laws in Ethiopia are found not to be adequately aligned with technological changes and are not sufficient to prevent, control, investigate and prosecute the suspects of computer crimes, a new law that defines and penalises computer crimes has been enacted. This proclamation has repealed Articles 706 to 710 of the Criminal Code of the Federal Democratic Republic of Ethiopia and Article 5 of Telecom Fraud Offence Proclamation No.761/2012.

Commercial Registration and Business Licensing Proclamation No. 980/2016

The new Commercial Registration and Business Licensing Proclamation introduces various new procedures and has done away with some previous requirements in the licensing and registration process. Some of the changes brought about by this Proclamation are the repeal of the requirement for the annual renewal of the commercial registration certificate, the acknowledgment of franchiser-franchisee agreements, the permit for foreign chamber of commerce associations to be registered in Ethiopia, the repeal of the requirement to present a proof of the deposit of minimum capital for domestic investors, the repeal of the requirement to annually renew competence certificate as a pre-requirement for the annual renewal of business licenses, the revival of the publication pre-requirement for the annual renewal of business licenses, the revival of the publication requirement when a business organization is registered , the introduction of some new offences and their penalties.

Income Tax Proclamation (Extraordinary Issue No. 979/2008 E.C) & Federal Tax Administration Proclamation (Extraordinary Issue No. 983/2008 E.C)

Both the Amharic and English versions of the Income Tax Proclamation have been enacted. However, it is only the Amharic version of the Federal Tax Administration Proclamation that has been enacted. The major changes made to the tax regime brought about by these Proclamations relate to income tax rates and the appeal procedure.

Federal Documents Authentication & Registration Agency Establishment Council of Ministers No. 379/2016

This Regulation establishes the Federal Documents Authentication and Registration Agency, by elevating the Documents Authentication and Registration Office to the level of an agency. This is in order to provide services at a federal level and coordinate activities of document authentication centrally and provide some level of autonomy to the agency. The agency will be executing all the responsibilities stated under proclamation No.922/2015 as well as providing professional and technical assistance for regional document authentication institutions.

Commercial Bank of Ethiopia’s Takeover of the Construction & Business Bank Share Company Council of Ministers Regulation. Regulation No. 384/2016

As it was decided that the Commercial bank of Ethiopia is to take over the Construction and Business Bank share company, this Regulation has formally amalgamated the Construction and Business Bank Share company with the Commercial Bank of Ethiopia. This repeals regulation No. 203/1994, which previously dealt with the establishment of the Construction and Business Bank share company.

Geothermal Resources Development Proclamation 2016

Among the bills that were approved by HPR in its urgent session of 2016 was the Geothermal Resources Development Proclamation. Before this Proclamation, investment in geothermal resource development was subjected to Mining Operations Proclamation No.678/2010. Though this Proclamation is not yet published in the Negarit Gazette and, as such, has not yet become a law, it is said to regulate the geothermal energy sector taking into consideration the peculiar characteristics of the particular form of this source of energy.

The list of proclamations and regulations