Month: January 2022

                                                     

By Luwam Chalachew, Legal Assistant at DMLO

Introduction 

Transitional justice is a process or mechanism in which countries emerging from conflicts respond to massive human right violations that the normal procedures become insufficient to address the atrocities. At a period of transition, the need to address past violations would arise. This need is addressed through what is usually referred to as transitional justice.

Transitional justice’s main aim is in order to ensure accountability, serve justice and achieve reconciliation. Transitional justice consists of both judicial and non-judicial measures implemented in order to redress human right abuses.    

Objective of Transitional Justice 

The main objective of transitional justice is to end human right violence and ensure human right protection. The primary objectives are establishing the truth, providing victims a public platform, holding perpetrators accountable, strengthening the rule of law, providing victims with compensation, effectuating institutional reform, promoting reconciliation, and promoting national consultation.

Society During Transitional Period

Transitional justice has to address the needs of societies in transition. The main needs that arise in societies in transition are the following:

1. The need for justice- Victims of violations or their relatives and the society at large need to see the perpetrators of the violations brought to justice. It is thus necessary that transitional justice should provide a mechanism by which this need may be satisfied. It is generally proposed that justice shall be rendered in order for a society to break with the past & move forward.
2. The need to know the truth- The society in general, and victims or relatives in particular, wants to know who among its members did participate in the violations, the degree of their participation and why the violation happened. There are two arguments regarding this point. Some people argued that knowing the truth about the past is crucial to build a viable, rights-respecting & democratic society as well as to ensure that violations wouldn’t happen again. On the other side some people argued that knowing the truth is not desirable as it may lead to further suspicion & animosity between those that claim to be victims & their relatives on the one hand and alleged perpetrators. 
3. The need for reconciliation- Society may also need to create conciliation among its members.  There may be a general understanding that one group of the society are victims while others are perpetrators or vice versa. This and other factors are likely to develop among members of the society a mentality of suspicion, mistrust & even animosity. A society wishing for moving forward should therefore address this mentality. Society should have a mechanism of reconciling its divided members & building trust, confidence & mutual respect among its members. A divided society should break with the past, establish a stable system & move forward. In addition to this there might be the need for compensation for the victims in society. 

 Modalities of Transitional Justice   

There are different modalities of transitional justice which are utilized in different stages.

1. Prosecution- this process involves the investigation & prosecution of alleged perpetrators, and imposition of penalty if found guilty. Thus, it involves the apprehension of perpetrators, the gathering of evidence, and the filing of criminal charges. And making judicial hearings and decisions according to the law.  Prosecution is not only an alternative but also an obligation in some grave human right violation.  Examples of grave violations are war crimes, the crime of genocide, and crimes against humanity. In these cases, countries have the duty under international human right laws as well as international customary laws to prosecute or extradite violators for crimes committed anywhere.
2. Truth and reconciliation- for this mechanism, societies may establish truth commissions or truth and reconciliation commissions. The main priority of this modality is to reveal truths about the past, create conciliation, and achieve a successful transition. 
3. Amnesty- the term amnesty refers to an official act, usually through law, prospectively barring prosecutions of a class of persons for a particular set of actions or events. But it is questionable whether amnesties satisfy society’s needs or not. 
4.  Reparation- Reparations can include monetary compensation, medical and psychological services, health care, educational support, return of property or compensation for loss thereof, but also official public apologies, building museums and memorials, and establishing days of commemoration to the victims of conflict.  

Conclusion 

Generally transitional justice is an essential part of the peace rebuilding process, as the need to obtain justice for victims of conflict has been the main idea for keeping the country stable. 

For more info or queries you may contact us at info@dmethiolawyers.com

                                    

By Luwam Chalachew, Legal Assistant at DMLO

Introduction 

Investment incentives are special rights granted for certain categories of investors in order to promote and facilitate private investors to play their role in investing and accelerating the country’s economic growth. In Ethiopia according to Investment Proclamation No. 1180/2020, investment areas eligible for incentives as well as the amount of incentive shall be determined by regulation to be enacted by the Council of Ministers. Accordingly, the Investment Regulation No.474/2020 Article 21 relating to investment incentives affirms that the Council of Ministers Regulation No.270/2012 will remain valid and applicable. Thus, the investment incentives granted to investors engaged in areas eligible for investment incentives will be discussed herein under.

 Income Tax Exemption for New Enterprises  

According to Article 5 of Regulation No.270/2012, any investors who establish a new enterprise in the following states;

1. The State of Gambela Peoples;
2. The State of Benishangul Gumuz;
3. the State of Afar (except in areas within 15 Kilometers right and left of the Awash River); 
4. The State of Somali;
5. Guji and Borena Zones of the State of Oromia; And 
6. South Omo Zone, Segen (Derashe, Amaro, Konso and Burji) Area Peoples Zone, Bench Maji Zone, Sheka Zone, Dawro Zone, Kaffa Zone or Konta and Basketo Special Woredas of the State of Southern Nations, Nationalities and Peoples

 shall be entitled to an income tax deduction of 30% for three consecutive years.

Income Tax Exemption for Expansion or Upgrading of an Existing Enterprise  

Any investor expanding or upgrading his existing enterprise with respect to the additional income generated by the expansion or upgrading shall be entitled to income tax exemption for a period of time to be specified taking in to consideration the specific activity and location of the investor. 

Income Tax Exemption for Investors Exporting Products and Services

Any investor who exports products and services shall be entitled to income tax exemption for two years. Not only an exporter but also any person who supplies products or services input at least 60% of his product to an exporter shall be also entitled to the same kind of exemption. In addition to that Ethiopian products and services destined for export are exempted from payment of any export tax subject to few exceptions.

Exemption from Customs Duty  

Exemption from payment of customs duty is granted to investors to import all investment capital goods. This includes plant machinery and equipment, construction materials as well as spare parts worth up to 15% of the total value of the capital goods with in five years from the date of commissioning of the project.However an exception here is that such goods are not produced locally in comparable quantity, quality and price. Exemptions from customs duties or other taxes levied on imports are also granted for raw materials necessary for the production of goods. 

An investor granted with customs duty exemption who buys capital goods or construction materials from local manufacturing industries shall be refunded the customs duty paid for raw materials or components used as inputs for the production of such goods.

Loss Carry Forward 

An enterprise that suffers losses during the income tax exemption period can carry forward such losses, following the expiration of the income tax exemption period for half of the tax exemption period. Any loss incurred during the income tax exemption period is not allowed to carry forward for more than five income tax periods.

Conclusion 

Generally income tax exemption and exemptions from customs duty are granted for both domestic and foreign investors. This is to encourage private investment in all corners of Ethiopia and promote the inflow of foreign capital and technology.. 

By Mahlet Mesganaw, Partner at DMLO

Foreign nationals of Ethiopian origin shall be granted a special identification card. The procedure and eligibility requirements for the special identification card are specified under Proclamation No. 270/2002 and Regulation No. 101/2004. The identification card is issued with the aim of executing the rights, privileges and responsibilities of those foreign nationals of Ethiopian origin.

Who Issues the Identification Cards

The Ministry of Foreign Affairs and the Immigration, Nationality and Vital Events Agency are tasked with the authority to issue the identification cards. MoFA will issue the identification cards through its embassies all over the world when the request comes outside of Ethiopia. When the request for the identification card is made in Ethiopia, the Agency shall be the authority to issue the identification cards.

Who is Eligible

A person who has been an Ethiopian national before acquiring a foreign nationality is eligible. Moreover, if the foreign national has at least one of his parents or grandparents or great grandparents who were an Ethiopian national, then he is eligible for the identification card. One exception here is that an Eritrean who forfeited Ethiopian nationality for Eritrean nationality is not eligible.

The spouse, who holds a foreign nationality but is married with a foreign national of Ethiopian origin is also eligible to apply for the identification card. Here spouses who are Eritrean nationals are accommodated.

Minors, who are children of holders of the foreign national Ethiopian origin identification card, are eligible to enjoy the rights and privileges granted to  the foreign national of Ethiopian origin. The names of the minors shall be mentioned in their parent(s) identification card. This will enable the minors to enjoy the corresponding rights and privileges without a separate identification card. Nevertheless, the minor can request for a separate identification card from his parent(s). Considering the law on minors and the circumstances for the request, a separate identification card may be issued to the minor.

Some foreign nationals who reside in Ethiopia but who are not Ethiopians by origin may be eligible for the identification card. When the MoFA and the Agency jointly find it appropriate, a foreign national residing in Ethiopia may be eligible to acquire foreign national of Ethiopian origin identification card.

Document Requirements

The application shall be in a prescribed form. The form shall be accompanied by four recent passport size photographs. In addition to that there will be documentary evidence showing the applicant is a foreign national of Ethiopian origin. Valid passport or travel document and marriage certificate and birth certificates of his children under the age of 18, if applicable, shall also be produced.

Rights and Privileges of Having the Identification Card

The foreign nationals of Ethiopian origin are not required to have an entry visa or residence permit to live in Ethiopia. They can be employed in Ethiopia without a work permit requirement. Enjoy pension schemes under the relevant pension law. Own immovable property. They will be considered as domestic investors to invest in Ethiopia under the investment law. In general, enjoy the economic, social and administrative services without any restrictions as imposed on foreign nationals.

Validity Period and Renewals

The validity period of the identification card shall be five years since the date of issuance. Renewal shall be conducted after ascertaining the fact that grounds for cancellation are non-existence. The Ethiopian mission shall conduct the renewal when the request is abroad and the Agency when the request is in-country.

Service Fee

The amount of fee payable to obtain the identification card is US$ 500(Five Hundred Dollars) or for renewal USD$ 200(Two Hundred Dollars) or for lost identification USD$ 300(Three Hundred Dollars) or their equivalent in local currency where it is requested or in ETB if the applicant is residing in Ethiopia.

Return of the Identification Card

Without any reason whatsoever and at any time, a holder of the identification card may return the identification card to the issuing authority. However, if there are obligations the identification card holder entered during the validity period of his identification card, he shall be obliged to discharge his obligations.

Cancellation of the Identification Card

If the identification is obtained by means of fraud, false representation or concealment of any material fact, the identification card may be canceled. If the holder of the identification card is convicted for crimes of terrorism or smuggling of narcotics or armament, the identification card will be cancelled. The identification card will be canceled, if the holder is a citizen of a country at war with Ethiopia or is willingly helping such country. If the holder of the identification card proved to have served in the regular army or intelligence of another country, the identification card will be canceled. Finally the identification card will be canceled if holding the identification card is contrary to public and national interest. The cancellation decision shall be passed by a joint session of the MoFA and the Agency.

Therefore, the procedure for issuance of the identification card till the return or cancellation of the identification card are listed by law. Enjoyment of the rights and privileges are believed to strengthen the ties of foreign nationals of Ethiopian origin to their country of origin and contribute to the development and prosperity of Ethiopia.

By Mahlet Mesganaw, Partner at DMLO

Foreign Nationals of Ethiopian Origin(Diasporas) are believed to contribute to the development and prosperity of Ethiopia. Lifting legal restrictions were done starting from 2002. Some of the laws lifting restrictions on the diaspora will be discussed briefly here below.

Foreign Nationals of Ethiopian Origin are defined to include those foreign nationals who had at least one  parent or grandparent or great grandparent being an Ethiopian national. In addition to that, those who had been Ethiopian nationals before  acquiring a foreign national fall under foreign nationals of Ethiopian origin definition. One exception here is that an Eritrean who forfeited Ethiopian nationality for Eritrean nationality cannot be considered foreign national of Ethiopian origin. Spouses and minor of the person who holds a foreign national of Ethiopian origin identification card are also eligible to apply for the identification card. Some foreign nationals who reside in Ethiopia but who are not Ethiopians by origin may be eligible for the identification card.

To enjoy the rights and privileges, the diaspora has to apply and acquire foreign national of Ethiopian origin identification card. However, a holder of such an identification card still cannot be employed on a regular basis in the national defense force, security apparatus, foreign affairs and other political establishments. More so, the holder of the identification card shall have no right to vote or be elected to any office of any level of government. 

Some of the privileges are mentioned under the proclamation namely Providing Foreign Nationals of Ethiopian Origin with Certain Rights to be Exercised in their Country of Origin Proclamation No. 270/2002. The foreign nationals of Ethiopian origin are not required to have an entry visa or residence permit to live in Ethiopia. They can be employed in Ethiopia without a work permit requirement. Enjoy pension schemes under the relevant pension law. Own immovable property. They will be considered as domestic investors to invest in Ethiopia under the investment law. In general, enjoy the economic, social and administrative services without any restrictions as imposed on foreign nationals.

Under Banking (Amendment) Proclamation No 1159/2019 and Insurance Business(Amendment) Proclamation No.1163/2019, a foreign national of Ethiopian origin is allowed to form and operate a bank or an insurance company or buy shares in a bank or insurance company. He can do so individually or through a company fully owned by foreign nationals of Ethiopian origin or jointly by foreign nationals of Ethiopian origin and Ethiopian nationals. His share purchase shall be in acceptable foreign currency. However when earning a dividend or transfer of those shares in any form, the payments shall be in local currency.

Investment Proclamation No.1180/2020 defines domestic investors to include those foreign nationals considered by relevant law of Ethiopia as domestic investors. As seen above under Proclamation No 270/2002, foreign nationals of Ethiopian origin are treated as domestic investors. Minimum capital requirement for investment will not apply to foreign nationals of Ethiopian origin. Foreign nationals of Ethiopian origin can engage in any businesses including those that are reserved for domestic investors. To see the list of businesses, you may click the following link: https://dmethiolawyers.com/investment-businesses-open-for-foreign-investors-in-ethiopia/

Family law wise, adoption of Ethiopian children is still made available. The Federal Supreme Court Cassation Bench on File No 189201 on March 11,2020 on Volume 24, allowed by interpretation foreign nationals of Ethiopian origins to adopt Ethiopian children. Adoption can be relative adoption or adoption from orphanages.

Advocacy  license permits for only Ethiopian nationals were lifted. Under Federal Advocacy Service Licencing and Administration Proclamation No. 1249/2021, not only Ethiopians but also foreign nationals of Ethiopian origin are allowed to request and acquire the federal advocacy license.

To sum up, lifting legal restrictions on foreign nationals of Ethiopian origin will enable their engagement in the economic and social development of their country of origin. Lifting legal restrictions will pave the way for a significant number of foreign nationals of Ethiopian origin to pour their finance, know-how and technology to the development and prosperity of Ethiopia.

For any further inquires you may contact us at info@dmethiolawyers.com

              

By Luwam Chalachew,, Legal Assistant at DMLO

Introduction 

Foreign national or an enterprise irrespective of where it is incorporated in which a foreign national has an ownership stake is considered a foreign investor. An enterprise incorporated outside of Ethiopia by any investor is also considered a foreign investor. An Ethiopian permanently residing abroad who opts for a foreign investor treatment under the law is also considered a foreign investor. The above list constitute foreign investor under the Investment Proclamation No 1180/2020..

Any foreign investor who can allocate a minimum capital of USD $200,000 can engage in investment in Ethiopia. A foreigner investing together with a domestic investor is required to come up with a minimum capital of USD $150,000. Fulfilling the minimum capital requirement, a foreign investor can invest in all businesses of investment except those reserved exclusively for domestic investors. 

Businesses of Investment Open for Foreign Investment 

According to Article 6(3) of the Proclamation, one investment sector open to foreign investors is joint investment with the government of Ethiopia. Another businesses sector that is open for foreign investor is joint investment with domestic investors. All businesses outside the reserved businesses for domestic investors are also open for foreign businesses to engage in. In other words, foreign investors are not allowed to engage in the areas of investment which are exclusively reserved for domestic investors. Outside of the later, foreign investors are allowed either to invest alone or jointly on selected sectors with government and domestic investors.

Business Types Reserved for Join Investment with Government 

• Manufacturing of weapons, ammunition and explosives used as weapons or make weapons,
• Import and export of electronical  energy,
• International air transport services,
• Bus rapid transit and
• Postal service excluding courier service

Businesses Exclusively Reserved for Domestic Investors 

• Subject to applicable laws, banking, insurance, and microfinance business excluding capital goods finance business,
• Transmission and distribution of electrical energy through an integrated national grid system.
• Primary and middle level health service,
• Wholesale trade, petroleum, petroleum products, wholesale of own products produced in Ethiopia, excluding wholesalers of electronic commerce,
• Retail trade, excluding retail of electronic commerce as provided under appropriate  law of own products produced in Ethiopia,
• Import trade excluding liquefied petroleum gas and bitumen,
• Export trade of raw coffee, chat, oil seeds, pulses, minerals, hides and skins, products of natural forest, chicken, and livestock including pack animals brought on the market,
• Construction and  drilling services below grade 1,
• Hotel, lodge, resort, motel, guesthouse, and pension services excluding those that are star designated,
• Restaurant, tearoom, coffee shops, bars, nightclubs, and catering services excluding star designated national cuisine restaurant service,
• Travel agency, travel ticket sales and trade auxiliary service,
• Tour operation, 
• Operating lease of equipment, machineries and vehicles excluding industry specific heavy equipment, machineries, and specialized vehicles,
• Transport services, excluding the following areas,

1. Railway transport,
2. Cable-car transport,
3. Cold-chain transport,
4. Freight transport having a capacity of more than 25 tones, and
5. Transport services reserved for join investment with government or domestic investors,

• Making indigenous traditional medicines,
• Producing bakery products and pastries for domestic market,
• Grinding mils,
• Barbershop and beauty salon services, smothery. And tailoring except by garment factories,
• Maintenance and repair services including aircraft maintenance repair and overhaul (MRO), but excluding repair and maintenance of heavy industry machineries and medical equipment,
• Aircraft ground handling and other related services,
• Saw milling, timber manufacturing, and assembling of semi-finished wood products,
• Media service,
• Customs clearance service,
• Brick and block manufacturing,
• Quarrying,
• Lottery and sports betting,
• Laundry service excluding those provided on industrial scale,
• Translation secretarial services,
• Security services
• Brokerage services,
• Attorney and legal consultancy services and
• Private employment agency service, excluding such services for the employment of seafarers and other similar professionals that require high expertise and international experience and network.

Businesses Exclusively Reserved for Join Investment with Domestic and Foreign Investors 

• Freight forwarding and shipping agency services,
• Domestic air transport service,
• Cross- country public transportation service using buses with a seating capacity of more than 45 passengers,
• Urban mass transport service with large carrying capacity,
• Advertisement and promotion services,
• Audiovisual services, motion picture and video recording production and distribution and
• Accounting and auditing service. 

A foreign investors investing jointly with domestic investors in the businesses specified above are not allowed to hold more than 49% of the share capital of the investment enterprise.  

Conclusion 

Generally all business sectors are open for foreign investors except those reserved for domestic investors exclusively. For that matter, joint investment on selected businesses with the government or with a domestic investor, are indirectly businesses open  for foreign investors to engage in Ethiopia. Jointly or alone, a foreign investor can do investment business in Ethiopia in multitude of business sectors.

For any investment questions, you may contact us at info@dmethiolawyers.com