Month: April 2022

By Mahlet Mesganaw, Partner at DMLO

Introduction

Proclamation No 1263/2021 is the latest proclamation that provides for the definition of the powers and duties of the executive organs of the FDRE. The proclamation has listed 22 Ministries. In addition to Ministries, there are Commissions, Authorities, Administrations or Development, Services, Offices and Institutes as part of the executive organ. The Ministry of Women and Social Affair(MoWSA) is one Ministry under the executive organ and its powers and duties concerning children will be the focus of this brief informative article.

Ministry of Women and Social Affairs

MoWSA has been renamed and reorganized. The powers and duties that were entrusted to the Ministry of Women, Children and Youth are now vested to the MoWSA. Moreover, the powers and duties entrusted to the Ministry of Labor and Social Affairs other than concerning labor affairs are now transferred to MoWSA. Thus the Ministry has been renamed to accommodate both tasks as the Ministry of Women and Social Affairs. As a result, MoWSA will have powers and duties concerning women, children, youth, elderly, persons with disability and other vulnerable groups of the society.

Powers and Duties Regarding Children

Article 36 of Proclamation 1263/2021 details powers and duties of MoWSA. The powers and duties with respect to children include the power to initiate policies, strategies and laws concerning children, awareness creation and coordination with all stakeholders with respect to rights and well being of children and supporting centers that provide health, psychological, legal and rehabilitation services for children who are victims of violence. The Ministry is entrusted with the power and duty to design strategies to ensure local options of care and support including adoption for orphans and children exposed to risk due to various reasons. The Ministry is responsible to follow up Ethiopian children adopted under international adoption who are living abroad. Finally the Ministry has the power to conclude international treaties, agreements or contracts concerning children in accordance with the law and follow up implementation of the same.

Implementation and Reporting

Each of those powers and duties assigned to the Ministries are required to be implemented. Planning, preparation, and submitting for approval are required for some of the powers and duties. Upon approval, the Ministry is duty bound to implement them. Each Ministry is required to submit periodic performance reports to the Prime Minister, Council of Ministers and other concerned bodies. Implementing the powers and duties concerning children by MoWSA is expected and periodic performance reports will show how efficient the Ministry has been in alleviating the problems of Ethiopian vulnerable children.

Conclusion

The government of Ethiopia has structured the executive organ in the manner that enables coordination of tasks, efficient and cost effective implementation of policies, strategies and laws. The carefully detailed powers and duties of each Ministry is an indication of well intentioned structuring of tasks for each Ministry for evaluation on performance. The Ministry of Women and Social Affairs has been entrusted with vast powers ranging from children to women, youth to elderly and persons with disabilities to vulnerable groups. The ongoing vulnerability of children, especially abandoned, orphaned and children under risk, requires the Ministry’s preparation, planning and implementation. Participation of stakeholders has paramount importance. Periodic performance reports should show practical progress made, and in the absence accountability and responsibility of Ministers and State Ministers.

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By Dagnachew Tesfaye, Partner at DMLO

A trust is defined in the 1960 Civil Code of Ethiopia Article 516 as  ‘an institution by virtue of which specific property is constituted in an autonomous entity to be administered by a person, the trustee, in accordance with the instructions given by the person constituting the trust.’’ Thus there will arise the relationship of a trustee and beneficiary. The relationship between a trustee and beneficiary is like an arranged marriage. The grantor  choses the trustee with the aim that successful working relationships will evolve in maintaining and growing the trust for the use and benefit of the beneficiaries and remaindermen. Private trust is created for private interests. Private trust is different from charitable trust in that charitable trust is a trust created for charitable endeavors of public nature. Charitable trust is governed under the Organization of Civil Society Proclamation 1113/2019. Whereas private trust is governed under the Civil Code Articles 516-544. When family wealth is created and the wealth has to evolve through successive generations, trust is one instrument that enables to achieve this purpose.  A look at the distinction of trust law from others, trust administration,trust  investment, trust distribution and termination of trust  will be discussed in brief.

Difference between Trust, Agency, Bailment, Third Party in Contracts

A trustee is a kind of fiduciary who has been given something to hold by one party called the grantor for a stated period of time for the benefit of another party called the beneficiary. As a fiduciary, the trustee is bound to care for that thing with the highest duty of trust. This is different from the agency-principal relationship. Agency is a contract whereby a person, the agent, agrees with another person, the principal, to represent him and to perform on his behalf one or several legally binding acts. Whereas, trust an independent entity that administers something for the benefit of the beneficiary. The parties involved are the grantor, trustee and beneficiary. Similarly, private trust is different from bailment. A contract of bailment is a contract whereby one person, the bailee, undertakes to receive a chattel from another, the bailor. and to keep it on the latter’s behalf. Trust is also different from Promises and Stipulations of Third Parties in a contract. The beneficiaries in a promise or stipulation in a contract have the right to accept or reject the promise or stipulation. Beneficiaries have no such right other than accepting the grantor’s wish in the constitution of the trust document.

Formation

A trust can be formed by two types of instruments: donations ‘inter vivos’ or by a will. Donation ‘inter vivos’ is a donation carried out while alive or between  living individuals as opposed to donation ‘mortis causa’ that comes into effect on the death of the donor. The donation ‘inter vivos’ or will should contain clear wording and intention of forming a trust. The constituting documents should have clear wording of the trustees and beneficiaries and the trusted property, action or idea. A trust is formed not only for the benefit of a person called a beneficiary, but also to initiate or advance an action or idea.Trustees are appointed by the person constituting the trust or by the person designated by the person constituting the trust or in default of such person, by the court. 

The number of trustees in charitable trust for example has to either be three or five. For a private trust under the Civil Code, the trustees can be one or more but the maximum number may not exceed four.  Among trustees whose number is more than one, decision or administration of the trust will be taken by an agreement between them. In case of failure to agree, the decision of the majority prevails. A trustee proves his appointment as a trustee by requesting a court document showing his capacity and powers. In case of a charitable trust, a certificate of registration will be issued for the trustees to prove their appointment by a government body.

Administration of Trust

A trustee is an owner-in-trust of the trust property. The Civil Code on Article 527 provides that the power of the trustee on the property which forms the object of the trust are those of the owner. However, being owner-in-trust does not include disposal of an immovable property or donation of a trusted property. For disposal of immovable property, the court has to grant the greenlight without prejudice to any contrary provision in the grantor’s wish. With this in mind, administration of a trust property means keeping the assets safe and sound. Administration might involve collecting income, keeping proper books and accounts, filing tax and reporting the financial conditions to the beneficiaries. The Civil Code on Article 525 also states that the trustee shall administer the trust like a prudent and cautious businessman. The trustee is obliged not to mix the trust with his personal property. The trustee shall represent the trust in court proceedings. Beneficiaries have no say in the administration of the trust property. The remuneration for the administration of the trust is the payment that is promised in the constituting document of the trust by the grantor.

Investment of Trust

Each trust has a specific goal that it is created to achieve. The grantor states the purpose through the terms he puts into the trust constituting document. A trustee is responsible to administer the trust like prudent and cautious businessmen. The trust’s aim might be to guarantee a steady and growing flow of income for the beneficiaries over a long period of time. Then passing of sufficient funds for the next generation. The trustee’s decision on how to invest the trust are the defining criteria in which he is selected as a trustee in the first place. The trustee’s investment has rewards as well as risks. The risks however have to be acceptable risks. The trustee has the responsibility to turn over the property in the trust to the remaindermen (future generation) in as good or better condition than when he acquired it.

Distribution of the Trust

The trustee has the responsibility to distribute the income earned by the trust in accordance with the trust constituting document. Similarly, the beneficiaries may claim from the trustee profits which according to the terms of the trust agreement, accrue in the beneficiaries favor. The trust constitution document may mention when and how the trustee makes income distribution. This is  a contentious area between the trustee and beneficiary. Based on the contention in distribution of trust, there are two types of trusts: simple trusts and complex or discretionary trust. Those trusts that order the trustee to give all of the income received by the trust each year to beneficiaries are called simple trust. Whereas if the trustee is granted with discretionary power to decide whether to pay to beneficiaries all, some or none of the income received by the trust each year is known as complex or discretionary trust. The trustee therefore has to be fully aware of the grantor’s original purpose in creating the trust and the current purposes of the trust, if these have changed over time.

Termination of the Trust

A trust shall terminate on the expiry period fixed by the grantor of the trust. In addition to this, termination of trust may be requested by the beneficiaries to court. Given the circumstances of the case satisfies the court, the court may order termination of a trust. Upon termination of the trust, the property which formed the trust together with documents shall be handed over by the trustee to the persons who are entitled to it in terms of the act of the constitution of the trust.

Conclusion

Private trust law of Ethiopia provides clear rules on how the complex relationship between the grantor of the trust, the trustee and beneficiary are handled. The goal is to create a smooth functioning team between trustee and beneficiary for a common goal of long term family wealth preservation. The development in the private trust law will lead up to private trust company formations which are established to provide fiduciary services to single or multiple families.

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By Mahlet Mesganaw, Partner at DMLO

The Ethiopian Public Health Institute has issued a Revised Directive to Provide for the Prevention and Control of the Covid-19 Pandemic Directive No 882/2022(this Directive hereafter). This Directive has repealed the previous directive on prohibited activities and imposed duties for the Prevention and Control of Covid-19 Pandemic No 803/2021. This Directive shall be effective as of April 1,2022. A brief overview of the contents of the Directive shall follow here below.

This Directive has established a task force. The task force shall function at the Federal level. The Directive requires formation of a similar task force at the regional level. The federal task force is chaired by the Deputy Prime Minister. The secretariat of the task force is the Ministry of Health. The task force is composed  of 9 Ministries, two commissions, the Press Secretariat of the Prime Minister and the Ethiopian Public Health Institute. The main task of the task force includes providing directions on implementation of periodic guidelines on procedures of various preventive measures considering the prevalence of the disease. The task force also has the objective of promoting and implementing scientifically proven techniques for the prevention of spread of the Covid-19 pandemic. The task force is accountable to the Prime Minister.

The implementation of accustomed precautionary measures of wearing face masks, isolation and adequate ventilation and personal hygiene are still there. In addition to these, there are duties imposed on employers. Employers are duty bound to fully vaccinate their employees against Covid-19 where these institutions are service providers like banks, health facilities, hotels, transport providers, law enforcement agencies and other service providers whose employees are susceptible to Covid-19 pandemic.

Any international traveler above the age of 12 coming through international airports of the country and enter Ethiopia shall bring the certificate of negative RT-PCR (Laboratory diagnosis of Covide-19 through molecular techniques) test done 72 hours or three days before departure or Ag-RDT (Antigen based Rapid Diagnostic Test) negative test up to 24 hours before arriving to Ethiopia or a certificate of recovery from Covid-19 within 90 days or evidence that shows he is fully completed the Covid-19 vaccine.

A diplomat who fails to fulfill the requirement of a test or vaccination may enter Ethiopia by being tested at the airport. If the test result is positive or refuses to take the test, he shall isolate himself for 7 days.

For returnees, if they do not have test results or fully vaccinated evidence, then they can enter the country by taking Ag-RDT at the airport. If positive, the normal isolation process shall be implemented.

Meeting or conference organizers are duty bound to ensure that meeting attendees wear face masks, air ventilation is available, and hygienic materials are accessible. Similarly, organizers and competitors of sport events must undergo fully Covid-19 vaccination or obtain a certificate of Ag-RDT negative test result done no more than 24 hours or negative RT PCR test done no more than 72 hours or three days.

Conclusion

The Directive No 882/2022 is a revised version of the previous Directive No 803/2021. The aim of the new Directive is to decrease the economic, social and psychological impact on the community as a result of lessons gathered from the execution of the previous Directive.This Directive basis itself on the current situation of the pandemic given Covid-19 vaccination being available free by the Ethiopian government.

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