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 By DMLF Team

The Commercial Code of Ethiopia Proclamation No. 1243/2021, the Commercial Registration and Business Licensing Proclamation No. 980/2016 (as amended by Proclamation No. 1150/2019), the Commercial Registration and Business Licensing Council of Ministers Regulation No. 392/2017 (as amended) and most importantly the Commercial Registration, Licensing and Post Licensing Inspection Directive No. 935/2022 govern the commercial and business transactions of Ethiopia. This brief article is about the requirements for transfer of business or business organizations.

What is Business?

The Commercial Code of Ethiopia Proclamation No 1243/2021 defines business in what it contains. A business consists mainly of goodwill. A business may consist of other incorporeal elements such as: a) the trade name; b) trademark and any other designation under which the trade is carried on; c) the right to lease the premises in which the trade is carried on; d) intellectual property rights; e) Such special rights as attach to the business itself and not to the trader. A business may consist of corporeal elements such as equipment or goods. On the other hand, A business may normally not include the assets and debts of the trader, with the exception of the right to the lease of the premises. 

What is a Business Organization?

A business organization is an association established through a memorandum of association by persons who bring together contributions for the purpose of undertaking an economic activity in cooperation and of participating in the profit. Nonetheless, a joint venture is formed by an agreement concluded among members that is not disclosed to third parties.The following are types of business organizations: 1/ General partnership; 2/ Limited partnership; 3/ Limited liability partnership; www.abyssinialaw.com 90 4/ Joint venture; 5/ Share company; 6/ Private limited company; 7/ One person private limited company. 

Transfer of Business or Business Organization

The Commercial Registration, Licensing and Post Licensing Inspection Directive No. 935/2022 provides the required documentation for transfer of business or business organization. In order to transfer a business/ business organization by sale or lease, the following documents are required to be submitted: a) an agreement authenticated by a body authorized by law; b) a tax clearance certificate related to the previous business license; and  c) a license issued in the name of the previous owner shall be returned. 

The trader to which the business/business organization/ is transferred by lease or sale shall obtain a business license in his name by submitting a copy of the newspaper or the link of the  newspaper where it is a digital newspaper, having nationwide circulation as evidence. Provided however, if the trader to which the business/business organization/is transferred is already engaged in the same business, he may cause the business to be registered as a branch. If he is not engaged in the same business, he shall obtain a business license on the basis of the previous commercial registration. 

Where the business to be transferred is a business organization, a minute authenticated by a body authorized by law that shows the unanimous agreement of the members to transfer the same shall be submitted. Moreover  an agreement authenticated by a body authorized by law and a tax clearance certificate related to the previous business license  shall be submitted. Then the license issued in the name of the previous owner shall be returned. 

 Where the business is to be transferred to business organization, the memorandum of association of the organization to which a transfer is to be made and a minute authenticated by a body authorized by law which indicates that the transfer is adopted by members with voting rights representing two third (2/3) of the shares of the organization present at the extraordinary meeting is required. An investment permit shall also be submitted where the person to whom the business/business organization/ is being transferred is a foreigner or a business organization in which a foreigner is a member. A verification shall also be made whether the area of investment is open for foreign investors as well. 

You may contact us at info@dmethiolawyers.com for your legal assistance.

By Dagnachew Tesfaye, Managing Partner at DMLF

Introduction

This article summarized the cassation decision of the Federal Supreme Court Cassation Division on File No 220042 rendered on 9/12/2022. The case has been between Applicant W/ro Hana Solomon Zenebe and Respondents (1) W/ro Asnakeh Wolde G/mariam and (2) Yeka Sub city Land Development and Management Bureau. The case concentrates on the application of the procedure of the Federal Administrative Proclamation No 1183/2020 on administrative decision making process before any request of cancellation of title deed certificate in courts of law.

Federal First Instance Court

The case was first filed to the Federal First Instance Court. The applicant was the plaintiff and the respondents were the defendants. The applicant in an amended claim presented on 28/4/2021 requested the court for revocation of title deed certificate issued by the 2nd respondent to the first respondent on a property located in Yeka Sub city W.06 House No 1168 plot size 692sq.m. The applicant claimed she acquired the property through donation from her late mother. However, the applicant argued the 2nd respondent gave illegally a title deed certificate to the 1st respondent on the 692sq.m on 3/2/2012 with title deed No. Yeka/172834/04. Thus the applicant requested the court for revocation of the title deed certificate.

The 1st respondents gave a statement of defense arguing that the respondent acquired the property through inheritance of her late father and brother. Thus the claim of the applicant is not supported by evidence and the request for revocation of the title deed should be dismissed.

The 2nd respondent has also given a statement of defense. The second respondent argued that it gave the title deed certificate based on Directive 17/2006 and following the right steps including posting a request for any opposition to come forward. There was nobody that came opposing the issuance of the title deed certificate. It further argued that it issued the title deed certificate having seen the necessary documents of the 1st respondent. On the other hand, the 2nd respondent said to the court that the applicant doesn’t have vested interest on the property under question.

The Federal First Instance Court has heard witnesses and seen the file from the land administration office. The court reached the conclusion that the title deed certificate granted to the 1st respondent should not be revoked and made a judgment in favor of the 1st respondent.

Federal High Court

The applicant has appealed to the Federal High Court. However, the appellate court did not accept the appeal.

Federal Supreme Court Cassation Division Three Judges

The Applicant presented an application to the Federal Supreme Court Cassation division stating the lower courts committed fundamental error of law in their ruling of her case. As a result the applicant requested the dismissal of the lower court’s decisions due to the reason that the lower courts did not investigate the necessary files concerning the property and corresponding evidence to the property properly.

The three judges of the Cassation Division after examining the applicant’s application, found merit in the fact that proportionality and measurement of the land holding, evidence presented from AA City Land Administration and Development Buauea on the matter were disregarded by lower courts. Thus the applicant’s case has merit for further examination and the application is seen by five judges of the Cassation Division.

Federal Supreme Court Cassation Division of Five Judges

Consequently, the respondents were invited to present their responses on the application of the applicant and on the accepted merit of the applicant’s case as reiterated by the cassation division three judges. The 1st respondent presented her written response. The 1st respondent argued that the AA City Land Development and Management opposes the way the applicant acquired her title deed certificate and not the one in question. Therefore the lower court decision has no basic error of law and should confirm the lower court’s decision.

The 2nd respondent on his part argued that the title deed certificate issued for the 1st respondent and for that matter for the applicant were as per the AA Land Development and Management Bureau. The Applicant’s claim is not about inheritance but cancellation of title deed certificate, and such a request cannot be entertained by this court. Hence the 2nd respondent requested for the lower court’s decision to be confirmed.

The Applicant also gave a counter-response. The applicant contends by strengthening her application.

The Cassation Division rendered its judgment based on the Federal Administrative Procedure Proclamation No 1183/2020. The court stated that the applicant’s application was presented to the lower court at the time when the Administrative Procedure Proclamation was effective. The Proclamation provides the procedure for how administrative decisions are requested and how dissatisfied persons on an administrative decision can take the matter to court.

In the case at hand, the applicant requested for revocation of the title deed certificate. The power to give or cancel title deed certificates rests upon the land administration office. Cancellation of  title deed certificate is an administrative decision. For such matters, administrative decisions have to be sought first. If there is a complaint on the administrative decision, Article 43 and 44 of the Administrative Procedure Proclamation provide for complaint procedure. If still there is dissatisfaction , then an appeal to the Federal High Court can be adhered to. However, the applicant has come to court without exhausting available remedies as indicated in the Proclamation. Previously, the Cassation Division had rendered on File No 220582 on 5/7/2022 a similar decision. Therefore, the Federal First Instance Court should have first evaluated the case as to whether it has jurisdiction to see revocation of title deed certificate in light of the Proclamation and dismiss the case for lack of jurisdiction. The appellate court should have also said the lower court doesn’t have jurisdiction to entertain a case of revocation of title deed certificate and corrected the error. Thus, the Cassation Division dismissed the Federal First Instance Court and appellate courts’ decisions. The Cassation Division reserved the right for the applicant to follow up her case based on the procedure of the Proclamation.

Conclusion

The request of revocation of title deed certificate is a matter of administrative decision. As an administrative decision, the procedure of how administrative decisions are requested, complained and appealed are stated in the Federal Administrative Procedure Proclamation No 1183/2020. One cannot present such a matter directly to court without exhausting the necessary remedies and a lower court should reject such a claim for matters of jurisdiction.

Though the final conclusion of the Cassation Division is correct, there is a discrepancy between what the cassation division three judges frame as an issue and the conclusion reached by the five judges of the Cassation Division. Article 28(3) of the Federal Court  Proclamation No 1234/2021 provide as follows ‘’ When the Cassation Division to which the application is referred concludes upon examination of the application that the case has a merit, it shall frame issue and send the same with the Cassation application and summon to the respondent to reply in writing.’’ This shows the fact that the 5 judges of the Cassation Division will not be limited and deterred by the framed issue of the 3 judges of the Cassation Division. For the disputant parties, the fact that the 5 judges of the Cassation Division may go beyond the framed issue, will leave these parties not know where the case will be headed. As a result the disputing parties shall be pushed to write and argue their response and counter response beyond the ‘framed issue or issues’.  Indirectly, ‘framing an issue’ will become unnecessary. This will contradict the law.

For any inquires on Ethiopian law, you may contact us at info@dmethiolawyers.com

By Mahlet Mesganaw, Partner at DMLF

Introduction

The Ethiopian Civil Aviation Authority (ECAA) is the authority that regulates and licenses operators of aerodromes. Civil Aviation Proclamation No 616/2008 and its amendment Proclamation No 1179/2020 mandate ECAA with the power among others to review and issue license, certificate or other legal documents to the applicant where it finds satisfactorily that the applicant is ready to operate an aerodrome. To implement the mandate, in September 2022, ECAA has come up with Procedure for the Application and Issuance of Airstrip/Heliport Permit, Approval and Business Licence( the ‘Procedure’ hereafter). In this article a look on the objective of the Procedure, who are eligible to invest and the procedures and requirements needed shall be discussed briefly and a conclusion shall follow.

Aim of the Procedure

The aim of the Procedure is to promote the development of Airstrips and Heliports by private investors. The Procedure intends to establish an efficient and transparent process for application and issuance of airstrip/heliport investment permit, construction & operation approval.The number of standard airports has to increase. Thus private sector  involvement for expansion of small airports as an investment is believed to expedite the overall growth of the country.

Who Could Invest in Airstrip/Heliport?

Any Ethiopian national above the age of 18 and/or domestic investor as defined by Investment Proclamation No.1180/2020 are eligible for investment permit application for airstip/heliport construction and operation. Any domestic investors interested in engaging on Airstrip/Heliport operation for commercial purposes are eligible to apply. Domestic investor as defined by the Investment Proclamation No 1180/2020 Article 2(5) include  ‘’a) An Ethiopian National; b) An Enterprise incorporated in Ethiopia and wholly owned by Ethiopian National; c) The Government; d) a Public Enterprise  e) a cooperative society established as per the relevant law; f) A Foreign National or Foreign Enterprise treated as domestic investor as per the relevant law or international treaty ratified by Ethiopia; g) An Enterprise incorporated in Ethiopia jointly between any of the investors specified … paragraphs (a) to (f) of this Article; h) A Foreign National or Foreign Enterprise accorded a domestic investor investment permit as per laws….i) Descendant of a foreign national specified under Sub-article (5) paragraph (h) of this Article, provided that this applies only in respect of investments specified in the same Sub-article.’’ According to this Procedure, Foreign investors either alone or in collaboration with domestic investors are excluded from the construction and operation of airstrip and heliport. 

Application Procedure

Airstrip/Heliport investment process commences by applying simultaneously to ECAA and to the Ethiopian Investment Commission (EIC). The interested party will submit the following documents: a) Completed application form of EIC; b) Completed application form of ECAA and other documentation as detailed in the Application Form. The Application Form indicate details such as rights held in relation to the site, written evidence to show permission has been obtained for the site to be used by the applicant as an airstrip or heliport and Environmental Impact Assessment for the development of Airstrip/Heliport approved by the appropriate authority; c) Certificate of Principal Registration; d) Original and necessary copies of valid identity card or passport of the applicant; e) Two passport size photographs taken within six months, which shows the clear identity of the applicant; and f)Where the application is submitted by an attorney; original and copy of power of attorney given by all of the founders, copies of valid identity card or passport of the attorney and the manager. 

Approval to Build, Operate and Registration

When the Applicant has met the necessary aerodrome and flight operation standards of the site, then ECAA shall give a green light to build. ECAA shall inspect the completion of the construction for compliance and upon satisfaction issue Compliance Certificate. Then when the requirements of safe air navigation are met, ECAA shall issue an approval to operate. Consequently, the airstrip or heliport which successfully obtained approval to operate shall be registered.

Business License Issuance and Renewal

The Commercial Registration and Licencing Proclamation No 980/2016 on Article 21(4) (d) provides air transport services and other aviation service business licenses to be issued by relevant government organs. ECAA is  the authority duly mandated to issue business licenses for aviation related services. Thus the Procedure authorizes ECAA for issuance of business license for airstrip or heliport and the renewal of the same by ECAA.

Conclusion

The participation of the domestic private sector including regional governments or city administrations in the construction and operation of airstrips and heliports will give multiple benefits not only to the investors but also to the economy. The ECAA Procedure, though not a Directive, has put transparent procedure as to the regulatory, administrative and technical activities needed to build, operate and register airstrip and heliport.

For your investment inquires on airstip/heliport, you may contact us at info@dmethiolawyers.com

By DMLF Team

One of the issues in the promulgation of the Administrative Procedure Proclamation was the fact that Directives were not accessible to end users. Moreover, directives were not issued in a timely manner and due such fact administrative tasks were kept on hold. The Federal Administrative Procedure Proclamation No 1183/2020 (the Proclamation) is issued to address these and other issues. The Proclamation defines Directives on Article 2(2) as ‘’a legislative document that is issued by an administrative agency based on delegation of Power bestowed upon it by the Legislator which affects people’s Rights and Interests’’. Thus Directives are laws. In the  hierarchy of laws Directives can be put as the lowest form of legislation after Proclamation and Regulation. Directives are issued by administrative agencies and the Proclamation defines Administrative Agencies as ‘Executive Organ of the Federal Democratic Republic of Ethiopia duly established by law and includes the Executive Organs of City Administrations accountable to the Federal Government.(Article 2(1)).

When should a Directive be Issued?

If the Directive is mandatory, the administrative agency has to adopt a directive indicated in the  mother law  within 90 days. The aim is to prevent procrastination by administrative agencies in coming up with a working Directive. If the Directive is not mandatory, the administrative authority should ratify within a reasonable period of time. In any case, an administrative authority cannot deny service or shy away from giving an administrative decision for failure on the part of an administrative agency to issue Directives legally empowered to adopt. 

Filing of Old Directive 

All administrative agencies, within three months after the coming into force of this Proclamation, are obliged to file Directives they have adopted previously. The agencies should send copies to the Federal Attorney General(now the Ministry of Justice). The Proclamation came into force around April 2020. Thus all administrative agencies by now are assumed to have duly filed their existing directives with  the Ministry of Justice. Otherwise a directive that has not been filed this way may not be enforced. For newly adopted directives as per the Proclamation,  the administrative organ should send the copies of the Directive and accompanying explanatory statement to the Ministry of Justice. The Ministry will give a serial identification number and record the Directives.  Then the Ministry will  immediately inform the administrative agency about the status of registration.  

Accessibility of Directives

Customers or interested parties have access to the Directives online or can acquire them in hard copy. The Ministry of Justice and the administrative organ shall post directives on their own website. In addition to this, the administrative organ should print and disseminate the registered Directive to Governmental and other Stakeholders.  Any person who is interested can request to have a look and observe the Directive in the office of the administrative organ or may get a copy of the directive subject to payment of expenses. Otherwise a directive that has not been posted on the website of the administrative agency  may not be enforced. 

To sum up, administrative agencies are obliged to timely enact directives, follow the legislative procedure indicated in the Proclamation, file old and new  Directives to the Ministry of Justice and upon registration, post them on their websites. Failure to file to the Ministry or failure to post the Directives on their websites shall render the Directive or directives unenforceable. Impliedly Administrative agencies including the Ministry of Justices are required to have working websites and Directives and other relevant laws governing their administrative tasks should be posted on those websites. Administrative agencies leaders should make their agencies abide by the Administrative Procedure Proclamation and guarantee transparency and accountability.

For your legal inquiries you may contact us at info@dmethiolawyers.com

By Mahlet Mesganaw, Partner at DMLF

The Ethiopian Labour Proclamation No 1156/2019(hereafter the Proclamation)  governs the private sector employer-employee relationship. According to this labor Proclamation, employment relationships might be terminated in three ways namely  by operation of the law, by agreement of the employee and employer and by the initiation of either the employer or the employee. A brief look on each of these employment termination conditions shall be the focus of this article.

Termination of contract of Employment by the Operations of the Law 

The conditions under which a contract of employment is terminated by operation of the law are provided under Article 24 of the Proclamation. The grounds for termination by the law include a) on the completion of the work where the contract of employment is for a specified work; b) up on the death of the worker; c) up on the retirement of the worker in accordance with the relevant law; d)when the undertaking ceases operation permanently due to bankruptcy or for any other cause; and e) when the worker is unable to work due to partial or total permanent incapacity. Hence the existence of these five conditions guarantee the termination of the employment by operation of the law.

Termination of Contract of Employment by Agreement

The second way to terminate a contract of employment is by agreement of the employee and employer.  The employee and employer may terminate their contract of employment by agreement.  However, such an agreement cannot override the right  an employee has under the labour law. Thus any agreement by the employee to  waive any of his rights under the law shall have no legal effect. The legal format requirement for termination of employment by agreement is to make the agreement to terminate the employment relationship  in writing. Otherwise oral agreement shall not be effective and binding on the employee.

Termination of Contract of Employment by the Initiation of the Parties

The third way of termination of an employment contract is by the initiation of the employer or the employee. The major parties to an employment agreement are the employer and employee. Either the employer or the employee may seek the termination of the employment contract. Thus we shall see the legal requirements and conditions under which the employer or employee initiates the termination of their contract of employment here below.

A)Termination of Contract of Employment by the Employer:  An employer is entitled to terminate a contract of employment either without prior notice or with prior notice. Article 26 of the Labour Proclamation provides the principle under which a contract of employment is terminated by the employer. The article states ‘’a contract of employment may only be terminated where there are grounds attributed to the worker’s conduct or with objective circumstances arising from his ability to do his work or the organizational or operational requirements of the undertaking’’ . Thus termination of contract of employment by the employer can be executed either without prior notice or with prior notice. 

i)Termination of Contract of Employment by the Employer without Prior Notice: The conditions under which an employer can terminate a contract of employment without prior notice i.e automatically when these conditions happen include the following a) unless the reason for being late is justified by the collective agreement, work rule or contract of employment, being late for duty eight times in six months period while being warned in writing of such a problem; b) absence from duty for a total five days in six months period while being warned in writing of such a problem; and where the absence cannot be classified in any of the leaves provided under the Proclamation; c) deceitful or fraudulent conduct in carrying out his duties; d) Misappropriation of the property or fund of the employer with intent to procure for himself or to a third person unlawful enrichment; e) performance result of a worker, despite his potential, is persistently below the qualities and quantities stipulated in the collective agreement or determined by the agreement of the parties; f) being responsible for brawls or quarrels at work, having regard to the gravity of the case; g) conviction for an offence where such conviction renders him incompatible for the post which he holds; h) being responsible for causing damage intentionally or through gross negligence to any property of the employer or to another property which is directly connected with the work of the Undertaking; i) commission of any of the prohibited acts under Article 14 (2) of this Proclamation namely Intentionally commit in the workplace any act which endangers life or property;  take away property from the work place without the express authorization of the employer; making use of falsified document or an attempt thereof; to use drugs prohibited by law or use alcoholic beverges and have impared physical and mental status at the work place; except for HIV/AIDS test, refuse to submit himself for medical examination when required by law or by the employer for good cause; refuse to observe safety and accident prevention rules and to take the necessary safety precautions;  conduct meeting during working hours in disregard to the time assigned by the collective agreement or without obtaining the permission of the employer; commit sexual harassment or sexual violence at workplace; and physically abuse anyone in a work place; j) absence from work due to a court sentence passed against the worker for more than Thirty days; k) commission of other violations stipulated in a collective agreement as grounds for terminating contract of employment without notice. These detailed conditions to terminate an employment contract by employer without prior notice are exhaustive. However, a collective agreement may include or exclude these conditions and the law gives priority to the conditions mentioned in the collective agreement.

 Where an employer terminates a contract of employment without prior notice as per the conditions laid down above, the employer is required to render to the employee a written statement specifying the reasons for and the date of termination. The right of an employer to terminate a contract of employment without prior written notice has a period of limitation. The employer should take the decision to terminate within thirty working days from the date the employer knew the existence of a ground for the termination. Otherwise, the ground for termination without prior notice shall lapse after thirty working days.

ii)Termination of contract of Employment by Employer with Prior Notice: The following two grounds guarantee good cause to  termination of employment of contract by employer with prior notice. The first ground as stated in Article 28(1) is ‘’.. the loss of capacity of, and situations affecting, the worker.’’ The second ground that constitutes good cause is attributable to the organizational or operational requirements of an undertaking. 

With regard to the first ground, i.e. loss of capacity of the employee or the situation affecting the employee that substantiate as a good cause for termination with notice include: a) The worker’s manifest loss of capacity to perform the work to which he has been assigned; and his lack of skill to continue his work as a result of his refusal or inability to make use of an opportunity of training arranged by the employer to upgrade his skill or after having been trained, his inability to acquire the necessary skill; b) The worker is, for reasons of health or disability, permanently unable to carry out his obligation under the contract of employment; c) The worker’s unwillingness to move to a locality where the undertaking relocates; d) The post of the worker is canceled for good cause and the worker cannot be transferred to another job position.(Article 28(1)). However, to protect the employee and to impose a duty of proof on the employer, the condition under which the employee manifests loss of capacity to perform work referred as (a) above needs to be verified by a periodical job performance evaluation. 

The second ground relates  to the organizational or operational requirements of an undertaking. As per Article 28(3) such an organizational or operational requirement constitute good causes for the termination of a contract of employment with prior notice when  a) any event which entails direct and permanent cessation of the worker’s activities in part or in whole resulting in the necessity of a terminating a contract of employment; b) ‘….fall in demand for the products or services of the employer resulting in the reduction of the volume of the work or profit of the undertaking and thereby requiring termination of a contract of employment; c) a decision to alter work methods or introduce new technology with a view to raise productivity resulting in termination of a contract of employment.  

B) Termination of Contract of Employment by the Employee: Similar to an employer, an employee is entitled to terminate his/her employment contract either with prior notice or without prior notice. We shall look at each of them briefly. 

i)Termination of Contract of Employment without prior notice: The employee can terminate his employment of contract without prior notice and such termination is considered as justified  where a) the employer has committed any act contrary to human dignity and morals or other acts punishable under the Criminal Law against the worker; b)  the workers has been a victim of sexual harassment or sexual violence by the employer or a managerial employee; c) In the case of imminent danger threatening the worker’s safety or health, where the employer, having been made aware of such danger, failed to act within the time limit in accordance with the early warning given by the competent authority or appropriatetrade union or the worker himself to avert the danger; d) the employer has repeatedly failed to fulfill his basic obligations towards the worker as prescribed under this Proclamation, collective agreement, work rules or other relevant laws. However, the employee cannot orally quit his work. The employee has to inform the employer in writing the reasons for termination and the date on which the termination is to take effect. In addition to the above, the employee’s right to terminate his contract of employment in accordance without prior notice shall lapse after fifteen working days from the date on which the act occurred or ceased to exist. 

ii)Termination of Contract of Employment by Employee with Prior Notice: without prejudice to  conditions mentioned as good cause for termination without notice, any employee who has completed his/her probation period may, by giving thirty days prior notice to the employer, terminate his/her contract of employment. 

To sum up, the Ethiopian Labour Proclamation 1156/2019 incorporates termination of employment conditions either by operation of the law, by the agreement of the parties  or by the initiation of the employer and employee. Where the majority of termination of employment occurs as a result of initiation by employer or employee, the law has put rules of conditions of termination with prior notice or without prior notice. What the law considers justified causes of termination of employment has also been exhaustively included in the labour law for both the employer and employee to take action accordingly. 

For labour related legal issues you may contact us at info@dmethiolawyers.com

By Dagnachew Tesfaye, Managing Partner at DMLF

The Ethiopian Constitution Proclamation No 1/1995 under Article 36 Sub-Article 5 provides the obligation of the state as follows: ‘’the state shall accord special protection to orphans and encourage the establishment of institutions which ensure and promote their adoption.’’ The Ethiopian government assumed a duty to support organizations that care for orphans. Such orphans need to be supported to the extent of adoption. The constitutionally recommended solution is not foster care or institutional care but adoption. This is because adoption, unlike foster care or institutional care, is a permanent solution. The Constitution chose adoption for purposes of guaranteeing permanent solutions to problems of orphans. Adoption is a legally framed family creation mechanism next to blood relationship and marriage. Thus the Ethiopian Constitution is propagating that orphan children should be placed back into the family unit through adoption.

Following the Constitution, the House of Peoples’ Representative enacted the Revised Family Code Proclamation No 213/2000. The Revised Family Law from Articles 180-196 incorporates detailed rules on who can be adopted and who can adopt, the rights of family of origin and orphanages, what procedure to follow when the adopter is a foreigner and finally the principle of non-revocability of approved adoption.

The implementation of the law led to the establishment of several public and private orphanages and adoption agencies. Many vulnerable children including orphans and abandoned children have benefited through adoption by Ethiopians, foreign nationals of Ethiopian origins and foreigners.

The Ethiopian government claimed that foreigners adopting Ethiopian children has resulted in an identity crisis that affects the adopted children psychologically and socially.  As a result, the government coined a policy namely  FDRE National Children’s Policy. The National Children’s Policy envisages the shift from inter-country adoption to a focus on domestic alternative care options. To fulfill the policy goal, the Ethiopian government promulgated the Revised Family Code Amendment Proclamation No 1070/2018. The preamble of this Proclamation states the fact that the Proclamation is needed to harmonize the Revised Family Code with the National Children’s Policy. This is the sole preamble in the Proclamation. The content of Proclamation is short. It simply deletes the articles that incorporate ‘foreigner’ from the Revised Family Code. Consequently,  Article 193 and 194(3)(d) of the Revised Family Code are declared deleted. With this, foreigners adopting Ethiopian children were reported to have been banned, though there is no clear indication in the Proclamation that the intention is to ban inter-country adoption.

Following the reported ban on inter-country adoption, the Ministry of Women, Children and Youth Affairs came up with a directive namely Directive on Foster Family and Domestic Adoption Services No 48/2020. The directive provides detailed rules and procedures on foster care and domestic adoption.

Foreigners of Ethiopian origin kept fighting the prohibition on them from adopting Ethiopian children. Their legal fight bears fruit. The reported ban on all ‘foreigners’  from adopting Ethiopian children has been found to have basic errors of law. The Amendment Proclamation No 1070/2018 to the Revised Family Code was subjected to interpretation by the Federal Supreme Court and found out to incorporate fundamental error of law. The Federal Supreme Court on Cassation File No 189201 Volume 24 on March 11,2020, gave a binding legal decision about the ban and said that the ban on foreigners adopting Ethiopian children is not applicable to foreigners of Ethiopian origin. Such a decision by the Federal Supreme Court is a binding precedent to all levels of the federal and regional courts.

Hence such a binding decision by the highest court of the land made inter-country adoption by foreigners of Ethiopian origin possible in the courtroom. However, inter-country adoption by foreigners of Ethiopian origin requires the administrative and executive organ of the Federal Government and the concerned organ of the foreign country to work in consortium. 

The FDRE Ministry of Foreign Affairs together with its embassies and consular offices is required to handle issues of foreigners of Ethiopian origin in the adoption process. The Ministry should elaborate the possibility and permissiveness of inter-country adoption by foreigners of Ethiopian origin to the foreign government concerned organs or their embassies located in Addis Ababa. Some of  these foreign countries  require prior approval for foreigners of Ethiopian origin before they commit to adopt an Ethiopian child. To get this prior approval, these foreign countries need to be notified of the option for adoption being opened up for foreigners of Ethiopian origin. The ambiguous news that Ethiopia has banned foreigners from adopting Ethiopian children is later clarified by rule of law that the ban is non-applicable to foreigners of Ethiopian origin. This information should be clearly amplified by the Ministry of Foreign Affairs and our embassies. Moreover the Ministry should  give support in authentication of documentations of foreigners of Ethiopian origin in their adoption process. On the other hand, the FDRE Ministry of Women and Social Affairs is the organ of the government concerned about Ethiopian children care and adoption. The Ministry should render support to court approved adoption decisions in getting the necessary vital records such as birth certificates and passports.

Foreigners of Ethiopian origin could be single parent or married couples. When they are married couples, one of them could be foreigners of Ethiopian origin or both of them could be foreigners of Ethiopian origin. The place where foreigners of Ethiopian origin live could be in Ethiopia or elsewhere. The adoption requested could be relative or kinship adoption or adoption from orphanages or adoption by step dad or step mom. The adopted child could be an orphan or an abandoned child or vulnerable child or the child of the other spouse. The fear of identity crisis, which has been the core source for banning inter-country adoption will be non-existent when the adoptive parents or at least one of them is a foreigner of Ethiopian origin.

Therefore, the Ethiopian Constitution encourages adoption. The Federal Supreme Court of Ethiopia, as the highest court of the land, by interpretation allowed foreigners of Ethiopian origin to adopt Ethiopian children. Proclamation No 1070/2018 doesn’t ban foreigners of Ethiopian origin from adopting Ethiopian children. So long as the adoption serves the best interest of the child, the executive organs of the government of Ethiopia should pave the way to realizing that goal. It is their constitutional duty.  The FDRE Constitution on Article 36 sub-article 2 provide as follows: ‘’In all actions concerning children undertaken by public and private welfare institutions, courts of law, administrative authorities or legislative bodies, the primary consideration shall be the best interests of the child.’’

For any adoption related inquiries you may contact us at info@dmethiolawyers.com

By Dagnachew Tesfaye, Managing Partner at DMLF

Overseas Employment is governed by Ethiopia’s Overseas Employment Proclamation No 923/2016 and it’s amendment Proclamation No 1246/2021. This Proclamation No 923/2016 came into force repealing the Employment Exchange Service Proclamation No 632/2009. Nowadays many countries in the world are looking for skilled and non-skilled immigrant workers for job openings in many different sectors. This brief article will look into the major contents of the Proclamation and it’s amendment and a brief conclusion shall follow.

The aim of the Proclamation as is seen from its preamble is to ensure the rights, dignity and safety of Ethiopian workers overseas. Accordingly, the Proclamation mentions three (3) ways in which employment overseas could be conducted. These are first through public employment exchanges, second is through private agencies and third is through direct employment. 

Public employment exchange service is an overseas employment service conducted through government to government. The Ethiopian government organ responsible for public employment exchange is the Ministry of Labour and Skills (formerly Ministry of Labour and Social Affairs). The Ministry of Labour and Skills (the Ministry) will provide recruitment  and placement services to government organizations in recipient countries based on government to government agreement. The tasks the Ministry undergo include interviewing and selection; causing medical examinations; approval of employment contracts, provision of pre-employment and pre-departure orientations, facilitation of departure of employed workers and other similar services. The Ministry is required by the Proclamation to undertake a deposit into the Foreigner Employers’ Guarantee Fund of USD$ 100 per worker from the foreign employer. The aim is for covering claims of workers that may arise from breach of contract of employment.

The second form of overseas employment exchange service is through a private employment agency. Private Employment Agency or Agency is defined in the Proclamation as ‘’any person other than a Government body, which makes a worker available to an overseas employer by concluding a contract of employment with such a worker.’’ Thus a Private Employment Agency can be a sole proprietor or a business organization.  Engagement in the  business of private employment agencies is permitted for Ethiopian nationals, foreign nationals of Ethiopian origin or foreigners. However the later two I.e. Foriegn nationals of Ethiopian origin and foreigners can engage in overseas employment together with Ethiopian nationals for skilled manpower. The minimum paid up capital should be not less than ETB 1,000,000 (One Million Birr) for fully Ethiopian owned agency. Foreign nationals of Ethiopian origin can own up to 25% of the shares. These 25%shares shall not be less than 2,000,000(Two Million Birr). Whereas when the member of the company is a foreigner, he can own only up to 20 % whereby the value in Birr shall not be less than 2 million Birr. In addition to this, one of the eligibility requirements for a private employment agency is to deposit a financial guarantee of USD$100,000 (mandatory in USD for foreigners and foreign nationals of Ethiopian origin) or its equivalent in Ethiopian Birr (for Ethiopias) in a blocked account. The purpose of such a guarantee is to ensure the protection of the rights and safety of deployed workers.

The last form of overseas employment exchange is through direct employment. Direct employment is defined in the Proclamation as an ‘’employment relationship between an employer and a worker without the involvement of a Government organ or an Agency’’. However, contrary to the definition, the Proclamation indicates the involvement of the Ministry for approval of direct employment. Article 6 states the fact that the Ministry may permit direct employment on grounds of ”…a) where the employer is a staff of an Ethiopian Mission; b) where the employer is an International organization; and c) where the job seeker acquires a job opportunity by his own accord in job positions other than house maid services.” Those employers who are entitled to undertake direct employment are required to deposit a foreign employer’s guarantee of USD$100 per worker into the Foreigner Employers’ Guarantee Fund administered by the Ministry.

In general the Proclamation prohibits no overseas deployment of workers without a certificate of occupational competence. The educational requirement of completion of 8th grade has been left out in the amendment Proclamation. Similarly the amendment Proclamation changed the requirement of mandatory existence of bilateral agreement with receiving state for deployment of overseas workers. Deployment of overseas workers is allowed to countries where there is bilateral agreement or as the case may be a Memorandum of Understanding with the receiving country. However, where there is no bilateral agreement or MoU, if the employment agency managed to acquire job opportunities for skilled workers, the government may render green light to proceed by signing an agreement with the receiving country’s company.

Moreover, the employer is obliged by law to buy from the domestic market insurance for life and disability for the benefit of the worker deployed overseas. Other than domestic workers, skilled workers who are employed overseas through an agency shall pay the agency an amount of one month salary over four payment periods.

In conclusion, Ethiopia’s Overseas Employment Proclamation and amendment are enacted with the purpose of protecting the rights, dignity and safety of Ethiopian workers abroad. The vehicles through which employment overseas were conducted include public employment exchange, private agencies and direct employment. The Proclamation was amended in its several parts which begs the question that rather than amendment, a new Proclamation could have been valid. Nowadays, the need to migrate and work overseas has expanded in terms of skills and recipient countries. The government needs to take proactive measures and sign and execute as many bilateral agreements as possible. There is a need to devise a way to work through the Proclamation to meet the timely needs of millions of Ethiopians who wish to migrate overseas and work.

You may contact us for employment related inquiries at info@dmethiolawyers.com

By Dagnachew Tesfaye, Partner at DMLF

The Labour Proclamation No 1156/2019 (the Proclamation hereafter) has introduced a new dispute resolution mechanism namely ‘Social Dialogue’. This concept of Social Dialogue was not known and was non-existent in the previously repealed Labour Proclamation No 377/2003. Only conciliation and arbitration were the two known  alternative dispute settlement mechanisms. Now in addition to conciliation and arbitration, social dialogue is included as one form of alternative dispute settlement mechanism pertaining to labour issues.

Social Dialogue is defined in the Proclamation as a process of information exchange, dialogue or negotiation of bilateral or tripartite nature between employer and employee or involving the government on economic and social issues of mutual interest towards arriving at common understanding.

The Ethiopian Government has given due attention to the concept of social dialogue by incorporating social dialogue in the preamble of the Proclamation. The second paragraph of the Preamble of the Proclamation provides ‘it has been found necessary to lay down a working system that guarantees the rights of workers and employers to freely establish their respective associations and to engage, through their duly authorized representatives, in social dialogue and collective bargaining, as well as to draw up procedures for the expeditious settlement of labour disputes, which arise between them.(underline included for emphasis).

Employers and employees or their respective associations namely trade unions or employers associations, federation or confederations may introduce social dialogue into their employment agreements, work rules, collective agreements in order to legally prevent and resolve labour disputes amicably.

Therefore the introduction of social dialogue as one form of ADR for labour issues is a significant endeavor for the Ethiopian legal regime.  This new concept of social dialogue needs action for its implementation and realization of the benefits that come with it.

For any labour related questions you may contact us at info@dmethiolawyers.com

By Dagnachew Tesfaye, Partner at DMLF

The Ethiopian Ministry of Finance has issued a Directive namely a Directive to Provide for the Application of Tax Incentives for Expansion/Upgrading of Investment No 941/2023(the Directive).

The Directive aims to benefit those investors who use their resources or profits back into expanding or upgrading their investment. The tax benefits are twofold namely income tax exemption and exemption from custom duties. The investor who expands or upgrades his existing enterprise shall receive:

•income tax exemption on income obtained from the expansion or upgrading, and

•import duty free those capital goods necessary for expanding or upgrading of the existing enterprise.

The criteria for receiving exemptions in income tax or customs duty rests on the fact that the expansion or upgrade increases in volume at least 50% and above of the attainable production or service rendering capacity of the existing enterprise. Alternatively the investor will benefit from the tax exemption when the expansion or upgrade increases in variety by at least 100% by introducing new production or service rendering lines of the existing enterprise.

For your investment inquiries you may contact us at info@dmethiolawyers.com

By Mahlet Mesganaw, partner at DMLF

Email: mahlet@dmethiolawyers.com

Introduction 

Visas are one way of attracting tourism and foreign direct investment into a country. The ease of obtaining visas through online application has been a positive shift. This will have an impact in ease of doing business for investors. However, to witness investors flock into the country, it requires continuous engagement in making visas more attractive. Thus in this article we shall see the visas from the investment side, the industrial park side and the immigration regulations side. A brief conclusion shall end the article.

Investment 

The Ethiopian Investment Commission(EIC) or a delegated investment organ is assigned by the Investment Proclamation No 1180/2020 to facilitate the processing of visa applications of foreigners coming into Ethiopia for investment purposes. Not only the investors themselves but also that of the families of the investors (spouses, children and parents) shall receive similar treatment.

An owner or shareholder of an investment undertaken pursuant to the Investment Proclamation, may be issued a five-year multiple visa. There is one condition involved i.e. the EIC has to provide a confirmation.

In addition to the owner or shareholders of an investment enterprise, the General Manager, Board Member and top Management of an Enterprise and when it is a branch office,  the top management of the parent or holding company of the enterprise shall be issued a three year multiple entry visa. Similarly the EIC confirmation is a prerequisite.

No single stay of any foreigner entering Ethiopia using multiple entry visas issued as mentioned above cannot exceed ninety (90) days. 

The EIC shall work in cooperation with the Immigration, Nationality and Vital Events Agency and other appropriate government bodies for the proper implementation of these visas for investment. 

Investors in the Industrial Parks 

Industrial Park Regulation No 417/2017 incorporates favorable visa terms for investors in industrial parks. There are multiple entry visas or residence permits valid for up to five years. These visas are issued for owners or shareholders of an industrial park developer or enterprise. For industrial park service providers, managers, board members and senior experts employed by foreign investors, up to three years long visas are made available. An assurance from EIC is a prerequisite to issue these visas for five or three years.

Immigration Regulation 

The Immigration Regulation No 114/2004 incorporates different types of visas. These include diplomatic, service, business, immigrant, tourist, transit, and student visas. The writer will look at each of the visa types in brief.

Diplomatic visas are issued for ambassadors, diplomatic agents, attaches and consular representatives who are assigned in foreign embassies, permanent missions and consular posts in Ethiopia and to their spouses. This visa also extends to officials, having diplomatic status, of international and regional organizations having their seats in Ethiopia, and to their spouses. Also foreigners holding diplomatic passports and coming to or transiting through Ethiopia for government business shall be granted diplomatic visas.

The precondition to acquiring a Diplomatic visa is when a diplomatic note from the department of foreign affairs, embassy or consular posts of the requesting state or from the concerned international or regional organization has been presented. 

The second type of visa is a service visa. Service visas are issued for permanent employees of foreign embassies, permanent missions and consular posts in Ethiopia who are holding service passports and to members of their families. In addition to these employees, international civil servants assigned in international or regional organizations having their seats in Ethiopia and to members of their families will acquire the service visa. Last but not least, foreigners holding service passports and coming to or transiting through Ethiopia for government business and the family members of persons issued with diplomatic visas are granted service visas. Similarly Service Visas shall be issued only where a diplomatic note from the department of foreign affairs, embassy or consular post of the requesting state or from the concerned international or regional organization has been presented.

Thirdly, Business visas will be issued to foreigners who are coming to Ethiopia for investment activities and to expats coming for employment in any activity. Business visas are also issued for personnels coming for various activities to be carried out in accordance with an agreement entered into with a foreign government, an international or regional organization or non-governmental organization. Similarly a business visa is issued for humanitarian service personnels wishing to engage in services without remuneration and for people participating in symposia, exhibitions, workshops and similar activities to be held in Ethiopia or for training. Last but not least, business visas are issued for foreigners coming for study,research and for mass media activities. 

Business visas could be issued for single or multiple entry.

The Ethiopian Immigration and Citizenship Service renders online Business visa service. There are 9 different categories of visas within Business Visa. These include Journalist Visa-JV, International organizations (Embassies work visa)-RI, Investment Visa-IV, Government Insitutions Short Task Visa-GIV, NGO work visa-NV, Conference Visa-CV, Ethiopian Government Employment Visa-GV, Foreign Business Firm Employment Visa-WV and Ethiopian Private Business Firm Work Visa-PE.

The fourth type of visa is Immigrant Visa. Immigrant visas will be issued to the following for foreigners who have been adopted by Ethioians or who have valid marriages with Ethiopians and are coming to reside in Ethiopia, and to members of their families. More so family members of foreigners holding permanent resident permits in Ethiopia or for foreigners coming to reside in Ethiopia without either being engaged in any gainful activities or becoming public burden, and to members of their families, immigrant visas could be issued.

Tourist visa is the fifth type of visa. Tourist visas can be obtained online. Tourist visas shall be issued to foreigners who are coming to visit Ethiopia. A tourist visa may be issued for single or multiple entry. Any foreigner who has entered Ethiopia by a tourist visa may not be allowed to work in Ethiopia.  

Tourist Visas are required for all foreign visitors to Ethiopia, with the exception of few neighboring nationals. In addition to online visa service, one can get tourist visas upon arrival. Nationals of 33 countries are now allowed to receive their tourist visas on arrival in Ethiopia. The list includes Argentina, Australia, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Japan, Republic of Korea, Kuwait, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Russian Federation, South Africa, Spain, Sweden, Switzerland, Taiwan, United Kingdom and United States.

In sixth place is Transit Visas. Transit visas are issued to a foreigner who is traveling to another country across Ethiopia. A transit visa may be issued for either single or double transit. 

Finally in seventh place one can find student visas. Student visas will be issued to a foreigner who is coming to Ethiopia for education or training. Prior to the issuance of a student visa, the applicant will be required to produce evidence showing her admission to an educational or training institution in Ethiopia and the financial means to cover her educational and accommodation expenses. 

Validity periods of diplomatic and service visas will be determined in accordance with directives to be issued by the Ministry of Foreign Affairs of Ethiopia. However 

validity periods of other visas are determined in accordance with directives to be issued by the Ethiopian Immigration and Citizenship Services.

Conclusion 

The Ethiopian visas need to aim in line with the laws of attracting investment and tourism into the country. Any hurdles, being bureaucratic or untimely validity periods, need to be revised. Long and attractive visas aimed at investors worth a certain amount need to be introduced. Ethiopian Visas have to be vibrant and proactive with the economic development of the country. Ethiopia visas should not be eyed as difficult to obtain or renew. Bureaucratic hurdles and criminal vindictive handling in customer service requires rethinking.

For all your Ethiopian visa inquiries you may contact us at info@dmethiolawyers.com