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Major Aspects of the New Foster Family Law: the Case of Ethiopia

By Dagnachew Tesfaye, Founder and Partner at DMLO

Email: dagnachew@dmethiolawyers.com

Introduction

The Ministry of Women, Children and Youth Affairs (MoWCYA) has come out with a registered directive Directive No 48/2020 namely Directive on Foster Family and Domestic Adoption Services. In this brief article, an attempt shall be made to see what foster care child support looks like only. Domestic adoption process and procedure shall be dealt in another article.

General Provisions

The preamble says foster care is introduced in this directive to fulfill the promise of the government. The government promised to support vulnerable children locally. Foster care is one of the local support programs. The directive declares that it generates its powers from the ratified Child Right Convention and African Charter on the Rights and Welfare of the Child. Thus, before indulging into the details of the Directive, it is important to see the definitions given to foster family care, who a vulnerable child is and who are the institutions to implement the foster care directives.

The scope of the Directive is to apply on appropriate Federal Government institutions and charity organizations authorize to perform foster and adoption services as per the Federal Government. Based on this directive, regions and city administration may prepare their own directive taking in to account their context.


Definitions

‘Foster family Care’ is one of alternative to providing support and care to children lost their family or vulnerable children. It is a ‘temporary alternative program’. Foster family care can be either for short or long period. The responsibility of the foster family shall be to properly raise the foster child by fulfilling the basic necessity. The support and care cover the psychological and physical health of the child. These responsibility must be completed until the child is re-unified with their biological parents or placed to other permanent alternative program.

‘Vulnerable Child’ is a child whose survival and development is jeopardize by certain circumstances and therefore in need of alternative care services. Those includes: a. Abandoned Children; b. Single or double orphan; c. Non-orphan whose parents are unable to support the child due to illness, physical disability and mental impairment; d. Street children; e. Children living in orphanage; f. Abandon children due to their biological parents displacement; g. Children who are not getting support from their biological parents due to economical deprivation; and h. Children neglected by their biological parents.

‘Institution’ means a government or charity organizations which have an authority and license from federal government to perform domestic adoption and foster care service.


Registration and Eligibility


The first thing to do is registration. Registration at the institution as an interested foster family. The institutions shall have responsibility to prepare registration form to be filled by potential families. The registration must also include the foster family needs, including age, gender, health status and other conditions of the child.

The registered foster care family should fulfill eligibility requirements. The registered foster family must have Ethiopian nationality and solely reside in Ethiopia permanently. They should be above 25 years of age. Unless and otherwise there is no option, the child must only be given to married persons. Priority shall be given to a family who reside in the area where the foster child resides. Family must duly approve their willingness by written consent to foster the child. Family shall have sufficient economical capacity to raise the child. Foster family should be a person who has not convicted by a court of competent jurisdiction for offenses related children. Family must have medical certificate that enables them to raises the child.

Home Study


After making sure that the eligibility requirements are fulfilled, before the concerned authority placed the child to foster family, a home study shall be done. The concerned organ shall assess the foster family by attending home visits to acknowledge their psycho-social and economic conditions in accordance with the check list.

Evidences Concerning the Foster Family

The foster family should produce Ethiopian nationality identification card, birth certificate, medical certificate, police clearance certificate, marriage certificate and income evidences. Medical certificate should confirms they are completely free from transferable or uncured deceased so as to confirm their health capability to properly raise child.

Evidences Concerning the Child

Once the status of the foster family is assessed and completed, then the status of the child shall follow. General information of the child namely gender, age, language, religion (for a child capable of expressing himself/herself), place of birth and other related information, residential address of the child, birth certificate of the child, family status of the child (abandon, single or double orphan) and other related status shall be organized. The child physical, mental, psychological and health status, educational status of a child, economical status of a child, (for example acquiring property through inherits or grant) shall also be identified. If the child is found abandoned, name and address of the person who found the child, date, place and other related information’s must be organized.

Training

Training to the foster family shall be given by the government organ or the institution. Such training mainly consists of proper upbringing and securing children right and other related subjects.

Matching, Attachment and Bonding

The next step is matching. After organizing the evidences of both the foster family and the child, the INSTITUTION shall made matching the child with suitable family.

Then creating attachment and bonding shall follow. Matching and bonding involves introducing physically the child with the foster family, the biological children of the foster family with the child, taking the child to the village of the foster family so as to allow him to be adapt with the community shall be done.

Foster Care Agreement

Once the bonding activity is carried out, legally binding agreement shall be made between the institution and the foster family. If an agreement is signed between the charity institution and the foster family, the concerned governmental institution shall also sign as a witness. After the agreement is concluded, in order to protect economic and social rights of the child, the foster family may present its petition of guardianship to the competent court of law.


Support and Follow up


After the placement is done, the concerned institution shall provide continuous support and follow up to ensure the right and welfare of the child is reasonably maintained.

Transition

Transition of foster care service to other alternatives may be implemented. If the biological parents exist while the child is given to the foster family and if the biological parents are capable of raising their child, reunification with biological parents shall be performed by foster care institution.

Termination of Agreement
If the foster family commit child labor, physical or psychological violence, sexual harassment, or any exploitation has been committed by a family member or by others, then if such incidents confirmed by the concerned institution, without the prejudice of legal liability, the contract will be terminated.

Conclusion

To sum up, the MoWCYA has come out for the first time with binding details of foster care implementation procedure. From the registration of interested foster family to required assessments and documents, to signing a foster care contract agreement has been stated under Directive 48/2020. It is a commendable act in the right direction. Publicly announcing of the Directive and effectively implementing the Directive for the benefit of the vulnerable children are equally important steps.

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7 Major Highlights on Civil Society Organizations Registration Proclamation

By Dagnachew Tesfaye

Email: dagnachew@dmethiolawyers.com


Civil Society Organizations are administered by the Organizations of Civil Societies Proclamation No.1113/2019 (hereafter the Proclamation) done on March 12/2019 to be effective from the date of publication in the Federal Negarit Gazette. This brief article attempts to show major highlights of the Civil Society Organization Registration Proclamation. The article is divided into seven parts. Part one shall deal with definitions. Part two shall look upon types of local organization, with emphasis on two of those types. Part three and four shall deal with the requirements for registration of local and foreign civil society organizations. And part five to seven shall state the effects in terms of rights, responsibilities and income generation benefits to such registered civil organizations. A brief conclusion shall follow.


Local and Foreign Organizations

The Proclamation defines local and foreign organizations. “Local Organization” are defined as a civil society organization formed under the laws of Ethiopia by Ethiopians, foreigners resident in Ethiopia or both. Here foreigners resident in Ethiopia are granted the right to establish local organizations. On the other hand “Foreign Organization” is defined as a non-governmental organization formed under the laws of foreign countries and registered to operate in Ethiopia.

Types of Local Organizations

Two or more persons may establish Local Organization. Here on the Article 17 of the Proclamation there is a reference to ‘Indigenous Organization’. There is no definition of Indigenous Organization in the Proclamation. However, the Amharic version of Article 17, which is the prevailing one in terms of interpretation, refers indigenous organizations as ‘Local Organizations’.


There are five types of Local Organizations. These are a/ An Association b/ A Board-led Organization c/ A charitable Endowment d/ A charitable Trust and e/ A Charitable Committee. For the purpose of this article, a focus shall be made on the first two i.e. on an association and a board-led organizations.

An Association and Board-Led Organization

An Association is an organization formed by five or more members and governed by a General Assembly as the supreme decision-making body. For the purpose of this Proclamation, association shall include professional associations. The organizational chart of an association will have a General Assembly at the top and then in hierarchy Executive Committee, Manager, Auditor and other departments as may be necessary. Details regarding the structure and governance of an Association will be determined by the associations internal rules.

One the other hand a board-led organization can be formed by two or more founders. The board is the supreme organ. The Board shall have a minimum of five and a maximum of thirteen members. The first board members shall be designated by the founders. The term of service and appointment procedures for subsequent board members shall be prescribed by the rules of the organization. Here the unique nature of Board-led organization is that persons who are related by consanguinity or affinity with the officers of the organization may not be board members. The organizational chart of a board-led organization shall have a manager accountable to the Board and necessary staff as may be necessary. The particulars shall be determined by the rules of the organization.

Documents Required for Registration of Local and Foreign Organization

An application for registration by Local Organization shall be signed by the founders and should contain the following particulars: a) the minutes of the formative meeting indicating the names, addresses and citizenship of the founders; b) copy of the identity card or passport of the founders; c) the name of the organization and its logo, if it has one; d) the objectives of the organization and its intended sector of operation; e) the Region where it intends to operate; f) the rules of the organization approved by the founders; and g) the organization’s address.

On the other hand an application for registration of a foreign organization shall, in addition to the conditions mentioned from a-g above, be accompanied with the following documents: a) duly authenticated certificate of registration showing its establishment from its country of origin; b) duly authenticated resolution of its competent organ to operate in Ethiopia; c) duly authenticated power of delegation of the country representative; e) letter of recommendation from the embassy in which the charity is incorporated or in the absence of such by a competent authority in the country of origin from Ministry of Foreign Affairs of Federal Democratic Republic of Ethiopia and; f) a work plan for a minimum period of two years.

Effects in Terms of Rights

The Proclamation provides that any organization which registered upon fulfillment the registration requirements provided in the Proclamation : a/ shall have legal personality; b/ can sue, be sued and enter into contracts; c/ without prejudice to laws that require special license, can operate in the sector of its choice; d/ to own, administer and transfer movable and immovable property. However, the proceeds from the disposal of the property may not be transferred as donation for the benefit of members or to another activity which is not its mission; and the Organization which transfer property shall inform to the Agency within 15 days; e/shall have the right to engage in any lawful activity to accomplish its objectives; f/ local organizations shall have the right to operate in Ethiopia or abroad, or implement objectives having global, regional or sub regional nature; g/ can implement project activities on its own or to provide financial and technical support to other organizations; h/ may propose recommendations for the change or amendment of existing laws, policies or practices, or issuance of new laws and policies of those which have relationship with the activities they are performing. However, unless it is permitted with an other law Foreign Organizations and Local Organizations which are established by foreign citizens which are residents of Ethiopia may not engage in lobbying political parties, engage in voters education or election observations; i/ foreign organizations may implement project activities or work in partnership with Local Organizations by providing financial, technical or in kind support; j/ to the extent possible, Foreign Organizations by working in partnership with local and Governmental Organizations, can give support to build the capacity of Local Organizations; o) shall have the right to move its properties from one region to another region or city administration, unless the Project Agreement states that such properties may not be transferred because they are necessary for the sustainability of a specific project it is implementing; p) have the right to engage in any lawful business and investment activity in accordance with the relevant trade and investment laws in order to raise funds for the fulfillment its objectives. However, the profit to be obtained from such activities may not be transferred for the benefit of members; q) shall have the right to solicit, receive and utilize funds from any legal source to attain its objective; r/shall get a written approval of the Agency to open a bank account. The Agency shall respond to requests for such approval within five days from receipt of the request; s/ all financial transactions shall be performed through a bank account opened by an Organization in its name; t/ all banks have the obligation to provide the bank statement of accounts held by any Organization to the Agency when requested. w/ the Bank Account transaction can be done in the context of the Organization rules; x/ no organization may employ a foreign national who is not given work permit under the relevant laws. Notwithstanding the stipulation above, a foreign organization shall not be barred from appointing a foreign national as its country representative; y/ foreign nationals other than the country representative may only be hired if the office granting work permit verifies that the work cannot be performed by Ethiopians. z/ some provisions of the law will not apply to foreign nationals who are not salaried employees but come to Ethiopia to professionally contribute by working as volunteers for a period not exceeding one year.

The Responsibilities

As there are rights and benefits, corresponding responsibilities are laid down on the Proclamation. The responsibilities include a/ an organization shall make the necessary efforts to ensure that its activities help to bring about sustainable development, contribute to the democratization process, promote the rights and interests of its members or enhance the profession they are engaged in; b/ an organization which is established for the benefit of the general public or third parties shall ensure that its activities take into account the interests of women, Children, persons with disabilities, the elderly and others exposed to threat or vulnerable groups of the society; c/ an organization cannot engage in sectors which require additional permit by law without getting the necessary permit from the relevant government bodies; d/ in performing their duties all members, officers and employees of the Organization have the responsibility to give primacy to the Organization’s interest and take the necessary precaution to avoid conflict of interest; e/the Administrative cost of an Organization established for the benefit of the general public or that of third Parties may not exceed twenty percent of its total income. For the purpose of this provision, “Administrative Expense” shall mean expenses which are not related to the project activities of an organization but are necessary to ensure the continuity of an Organization and related to administrative activities, and shall include: salaries and benefits of administrative employees; purchase of consumables and fixed assets and repair and maintenance expenses related to administrative matters; office rent, parking fees, audit fees, advertisement expenses, bank service fees, fees for electricity, fax, water and internet services; postal and printing expenses; tax, purchase and repair of vehicles for administrative purposes, and procurement of oil and lubricants for the same; insurance costs, penalties and attorney fees. However the Agency may issue Directives regarding organizations exempted from the application of 20% administrative expense rule.

Income Generation Related Benefits

Though civil organizations are established for non-profit making endeavor, in exceptional circumstances such organizations are granted the right to generate income. The income generating activities are granted and operated in the following situations: a/ an organization which engages in income generating activities in may do so by establishing a separate business organization (company), acquiring shares in an existing company, collect public collections or operating its business as a sole proprietorship; b/shall open a separate bank account and keep separate books of account for its business in accordance with the relevant commercial and tax laws; c/ the relevant tax, commercial registration and business licensing, and investment laws shall be applicable to income generation activities under this provision; e/ the income that is generated from income generating activities will be used to cover administrative and program costs of the organization; f/ the income and resources that are acquired from income generating activities shall not be transferred or shared for the benefit of members or workers of the organization; g/ when the organizations collect public collections, they shall inform to the Agency; and h/ an organizations engaged in income generating activities based on this Article shall inform to the Agency within fifteen days.

Conclusion

The Civil Society Proclamation has made registration of civil society organizations easier. The Proclamation incorporated several benefits of registration. Income generation benefit is one of the major benefits. Employment of foreigners shall follow work permit procedures. However foreign citizens are allowed to occupy the position of country representatives. Other foreign nationals can serve up to one year non-salaried professional volunteer position. The Proclamation is a game changer for civil society organisations in a positive way.

Key and New Additions on the Investment Regulation of Ethiopia

By Dagnachew Tesfaye

The Investment Regulation No.474/2020 (hereafter the Regulation) was enacted following the Investment Proclamation No 1180/2020. It was done on the 2nd day of September 2020, to be effective on the date of publication in the Federal Negarit Gazette.

The Regulation is divided into eight parts that cover investment areas, investment permit, acquisition of existing enterprise and transfer of investment projects under implementation, procedure for suspension and revocation of investment permits, registration of technology transfer and collaboration agreements, condition for owning a dwelling house, provision of one-stop service, training and transfer of knowledge and skill to Ethiopian employees and repealed and inapplicable laws.

Any foreign investor can investment in investment areas that are not listed and reserved for a) joint investment with the Government, b)investment areas reserved for domestic investors, and c) investment areas reserved for joint investment with domestic and foreign investors.

This approach is a major shift from the previous investment regulation. The previous investment regulation lists down exhaustively areas of investment open for foreign investors. Foreign investors could not invest outside the listed investment areas. Now foreign investors can invest in all other areas of investment except those reserved for the joint investment with government and joint investment with domestic investors or areas of investment reserved for domestic investors.

“Domestic Investor” has been defined under the Investment Proclamation No 1180/2020 as an Ethiopian National; or an Enterprise incorporated Ethiopia and wholly owned by Ethiopian National; or the Government; or a Public Enterprise; or a cooperative society established as per the relevant law; or a Foreign National or Foreign Enterprise treated as domestic investor as per the relevant law or international treaty ratified by Ethiopia; pr an Enterprise incorporated in Ethiopia jointly between any of the investors specified above; or a Foreign National or Foreign Enterprise accorded a domestic investor investment permit as per laws which were in effect when the permit was issued and continues to operate in Ethiopia, provided that this applies only in respect of investments that are operational at the time of enactment of this Proclamation; or descendant of a foreign national that is accorded investment permit provided that this applies only in respect of investments specified in the same Sub-article;

On the other hand, on the same Investment Proclamation a ''Foreign Investor” has been defined as a Foreign National; or an Enterprise in which a Foreign National has an ownership stake; or an Enterprise incorporated outside of Ethiopia by any investor; or an Enterprise established jointly by any of the investors mentioned above ; or an Ethiopian permanently residing abroad and preferring treatment as a Foreign investor;

Areas of investment open for any investor to invest JOINTLY with the Government are: manufacturing of weapons, ammunition and explosives used as weapons or to make weapons, import and export of electrical energy, international air transport services, bus rapid transit services and postal services excluding courier services.

Investment areas RESERVED for DOMESTIC investors include banking, insurance, microfinance excluding capital goods finance business, transmission and distribution of electrical energy through integrated national grid system, primary and middle level health services, wholesale trade, petroleum, petroleum products, wholesale of own products produced in Ethiopia, excluding wholesale of electronic commerce; retail trade excluding retail of own products produced in Ethiopia, import trade excluding liqudified petroleum gas and bitumen, export trade of raw coffee, khat, 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, pension services excluding those that are star-designated, restaurant, tearoom, coffee shops, bars, nightclubs and catering services excluding star designated national cuisine restaurant services, travel agency, travel ticket sales and trade auxiliary services, tour operation, operating lease of equipment, machinery and vehicles, excluding industry specific heavy equipment, machinery and specialized vehicles; transport services excluding railway transport, cable-car transport, cold-chain transport, freight transport having a capacity of more than 25 tons and transport services reserved for joint investment with the government or domestic investors; making indigenous traditional medicines, producing bakery products and pastries for domestic market, grinding mills, barbershops and beauty salon services, smithery 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 machinery and medical equipment, aircraft ground handling and other related services, saw milling, timber manufacturing and assembling of semi-finished wood products; medical services, customs clearance service, brick and block manufacturing, quarrying, lottery and sports betting, laundry services excluding those provided on industrial scale, translation and secretarial services, security services, brokerage services, attorney and legal consultancy services, and private employment agency services excluding such services for employment of seafarers and other similar professionals that require high expertise and international experience and network.

Lastly investment areas reserved for JOINT investment with domestic and foreign investors are feight forwarding and shipping agency services, domestic air transport services, cross country public transport services 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 such as motion picture and video recording, production and distribution and finally accounting and auditing servises.

However a foreign investor jointly investing with a domestic investor on the above listed businesses cannot own more than 49% of the share capital of the newly formed joint investment company.

Therefore, except areas of investment reserved for joint investment with the Government, or investment areas reserved for domestic investors, or investment areas reserved for joint investment with domestic and foreign investors, the rest are open to foreign investors to invest.

Major Contents of the New Investment Law in Ethiopia

By Dagnachew Tesfaye

Ethiopia has adopted a new investment law. The Proclamation is called the Investment Proclamation No.1180/2020(hereafter the Proclamation). It was done on April 2,2020 to be effective on the date of publication in the Federal Negarit Gazettee.
Purposes of the Proclamation: The major purposes of the proclamation are to increase the role of private sector investment in all sectors of the economy, to create fast track economic framework, to increase export performance, expand employment opportunity, to increase and diversify foreign investment inflow and transfer technology, skill and knowledge, to link foreign and domestic investments in broader areas, to promote equitable distribution of investments among the regions of Ethiopia, to leverage foreign capital to promote the competitiveness of domestic investors, to put in place an efficient system to implement the National Investment Objectives and such system to be transparent, predictable, and efficient for investment attraction, retention and expansion.

In the Proclamation, 'Investment' has been defined as expenditure of capital in cash or in kind or in both by an investor to establish a new enterprise or to acquire in part or in all, to expand or upgrade an existing enterprise. 'Capital' is also defined as local or foreign currency, negotiable instrument, machinery or equipment, building, working capital, property right, intellectual property right or other tangible or intangible business assets. 'Investor' is defined as a domestic or foreign investor who has invested capital in Ethiopia. 'Domestic investors' are defined to include among others a foreign national or foreign enterprise treated as domestic investor as pr the Ethiopian law or international treaty Ethiopia has ratified or a foreign national or foreign enterprise accorded a domestic investor investment permit earlier and continues to operate in Ethiopia and descendants of a foreign nationals. 'Export- oriented non-equity based foreign enterprise collaboration' is defined as a collaboration formed by a contractual agreement between a domestic investor and foreign enterprise in which the foreign enterprise provides among others guaranteed external market access, know-how of production of products for export, export business management know-how, export marketing know how and strategies for the supply of raw materials and intermediate inputs needed for export products.
Scope of the Investment Proclamation: The scope of application of the investment proclamation is in all investment sectors in Ethiopia except prospecting, exploration and development of minerals and petroleum.
Powers of EIC: The Ethiopian Investment Commission(here after Commission) is assigned the power to issue, renew, amendment, substitution, replacement and cancellation of investment permits, the issuance of investment permits and the expansion or upgrading permits for wholly foreign owned investments or joint investments by domestic and foreign investors, foreign nationals who are treated as domestic investors and investment areas that are eligible for incentives by a domestic investor. Sectors of investment in air transport services, the generation or transmission or distribution of electric power and the provision of communication services shall be carried out by the Ethiopian Civil Aviation Authority, the Ethiopian Energy Authority and the Ethiopian Communication Authority respectively representing the Commission. These later Authorities shall submit to the Ethiopian Investment Commission a quarterly report regarding services they rendered through delegated powers, and further study potential sector specific investment strategies and engage in investment promotion works. Regional investment organs shall administer investments, that are outside the scope of the Commission or Authorities mentioned above.
Areas of Investment: Areas of investment open to an investor as a principle are any area of investment that are not contrary to law, moral, public health or security. Except areas of investment reserved for joint investment with the government or domestic investors and for joint investment with domestic investors, all other areas of investment shall be open to foreign investors. The list of areas of investments by joint investment with the government or domestic investors, or joint investment with domestic investors or areas of investment open for foreign investors may be revised from time to time by the EIC Board.
Joint Investment with the Government or PPP: The government body assigned to receive interested private investors proposals in areas of joint investment with the government, as public-private partnership, shall be the Public Enterprises Holding Administration. The Agency shall follow procedures under the law and upon approval, designate a public enterprise or establish a new project company to invest as partner in the joint investment.
Forms of Enterprises: Investments may be carried out in the form of sole proprietorship, enterprises established in Ethiopia or abroad, public enterprises established with the relevant law and cooperative societies formed in accordance withe the relevant law. Any investment enterprise established abroad and registered in Ethiopia and all other enterprises registered in Ethiopia shall be governed by the Commercial Code of Ethiopia.
Minimum Capital Requirement: A foreign investor to be allowed to invest shall be required to allocate a minimum capital of USD 200,000.00(Two Hundred Thousand USD) for a single investment project. Where the foreign investor jointly invests with a domestic investor, the minimum capital requirement shall be USD 150,000.00(One Hundred Fifty Thousand). However, if the investment areas is in architectural or engineering works or related technical consultancy services, technical testing and analysis or in publishing works, the minimum capital investment shall be USD 100,000.00(One Hundred Thousand) or USD 50,000.00(Fifty Thousand) if the investment is made jointly with a domestic investor. The minimum capital requirement shall not apply to foreign investors re-investing his profits or dividends generated from his existing enterprise in any investment area open for foreign investors or persons elected as members of board of directors following the change of a private limited company to share company or a foreign investor buying the entirety of an existing enterprise owned by a foreign investor or the shares therein. Any foreign investor bringing investment capital into Ethiopia, need to registered it within one year and the obtain a certificate of registration. Such copy of certificate shall be sent to the National Bank of Ethiopia by the appropriate investment organ.
Investment Permit: foreign investors, domestic and foreign investors investing jointly, investors investing as domestic investors, domestic investors who invest in areas eligible for incentives and who seek to be beneficiary of such incentive and an investor seeking to expand or upgrade an existing investment which is eligible for incentives and the investor seeks to be beneficiary of such incentive shall obtain investment permit. However, a foreign national of Ethiopian origin treated as a domestic investor shall have the right to invest without acquiring investment permit in areas not eligible for incentives or in areas eligible for incentives by waiving his right to claim incentives. Also a foreign investor seeking to buy an existing enterprise in order to operate it in its current state or to buy shares of an existing enterprise shall obtain prior approval from the EIC. The Commission shall not deny or delay the approval without sufficient cause. Nevertheless, no investor is allowed to hold domestic and foreign investor permits simultaneously.
An investment permit is subject for renewal annually until the investor commences marketing his products or services. Once a business licence is acquired, the shall be no need to renew investment permit. The renewal request should be sough within one month after the end of a period of one year for which the permit was valid. Unless the investment organ is convinced of a sufficient cause for delay in commencing or completion of the investment project, the investment permit will be revoked within two years.
Transfer of investment project in the implementation phase: an investor wishing to transfer to another investor a project which is under implementation shall submit his request to the investment organ and obtain approval. The investment organ shall not deny or delay the approval without sufficient cause.
Any investor who is issued an investment permit shall submit a quarterly progress report and provide information concerning his investment whenever requested.
Technology Transfer Agreement: Any investor concluding a technology transfer agreement shall register such agreement with the EIC. Unregistered technology transfer agreement shall have no legal recognition with the EIC.
Collaboration Agreement: Any domestic investor who concludes, in respect of export, a collaboration agreement with a foreign enterprise who does not contribute capital shall have the agreement registered with EIC. A collaboration agreement that is not registered shall have no legal recognition with the EIC.
Investment Incentives: areas of investments, types and amount of investment incentives shall be determined by regulation.
Immovable Property Ownership: a foreign investor or a foreign national treated as domestic investor shall have the right to own immovable property necessary for his investment. Whereas, if such an investor who owns large investment may be allowed to own one dwelling house. The details of the later part shall be decided by a regulation. Immovable property as used in this provisions does not include land and the ownership of immovable property shall apply to investors who invested prior to the adoption of this proclamation.
Expropriation: the government may expropriate any investment for public interest, in conformity with requirements of the law, on a non-discriminatory basis, with adequate compensation corresponding to the prevailing market value paid in advance.
Remittance of Funds: a foreign investor shall have the right in respect of his investment to remit in convertible currency at the prevailing exchange rate on the date of transfer profits and dividends, principal and interest payments on external loans, payments related to technology transfer agreements, payments related to collaboration agreements, proceeds from the transfer of shares or conferral of partial or total ownership of an enterprise to another investor, proceeds from sale, capital reduction or liquidation of an enterprise and compensation paid on expropriation. Expats employed for investments carried out pursuant to this Proclamation whose permanent residence is outside of Ethiopia may remit their salaries accruing from their employment. However, a domestic investor investing jointly with foreign investor shall not be allowed to remit funds earned from the investment out of Ethiopia.
External Loan: An investor may acquires a loan from outside of Ethiopia for his investment and operate a foreign currency account in a bank in Ethiopia for the purpose of its investment following the directives of the National Bank of Ethiopia (NBE).
Expat employment : an investor may employ duly qualified foreigners for his investment in positions of higher management positions including chief executive officer, chief operation officer and chief finance officers as necessary, supervision, trainers and other technical professions. However, foreigners may be employed only when it can be ascertained that Ethiopians possessing similar qualification or experience required by the sector are not available.
Work Permits of Expats: The work permit of top management foreign workers shall be renewed without being required to comply with the conditions specified in this article in respect of other foreign workers. A work permit may be issued for a cohabiting spouse of any investor and a foreign worker employed. A work permit for employment in certain positions may be issued for up to three years and renewed every year. However an investor who employs foreigners shall be responsible for replacing within a limited period of time such foreign workers by Ethiopians by arranging and providing the necessary training. Renewal of work permit shall be done after ascertaining the non-availability of Ethiopian workers with similar qualification and of the concrete measure taken by the investor to train Ethiopian replacements. Where it is ascertained that a foreign worker is no longer required for the position he is employed, the EIC may decide not to renew or to cancel the work permit.
Visa Services: EIC or a delegated investment organ may facilitate the processing of visa application of foreigners coming into Ethiopia for investment purposes and that of the families (spouses, children and parents) of investors undertaking investments in Ethiopia. Visa may be issued to an investor intending to enter into Ethiopia, from a country that is not his home country, for investment purposes based on a support letter the EIC may offer. An owner or shareholder of an investment under this proclamation may be issued a five-year multiple visa based on the confirmation by the EIC. The general manager, board member or top management of an investment enterprise in Ethiopia and the Parent or holding company of the Enterprise may be issued a three year multiple entry visa based on confirmation by EIC. No single stay of any foreigner entering Ethiopia using multiple entry visa may exceed 90(Ninety) days.
One Stop Service: EIC or regional investment organs shall provide one-stop services to investors by coordinating relevant agencies and synchronize their daily functions.
Complaint Procedure in EIC: Any grievance shall be resolved using speedy, equitable and efficient procedure. Any investor who has grievance shall have the right to submit it to the appropriate investment organ. Such grievance shall follow the administrative chain and get final administrative decision. A written copy of the administrative decision shall be given to investor within 7(Seven) working days from the date from the date of the decision. If the investor has a grievance against the final administrative decision of EIC, then he can submit a complaint to EIC Board within 30(thirty) working days from the date the investor becomes aware of such decision. Then the Board shall give its decision within 90(Ninety) working days from the date of submission of the Complaint and a written Board decision will be given to the investor within 7(seven) working day.
Complaint procedure against Executive Bodies: An investor shall have the right to submit a complaint to the EIC against final administrative decision of any federal government executive body where such decision significantly affects the investment. The Federal executive body shall give to investor within 7(seven) working days a written copy of the final decision. The investor then has 30(thirty) working days to submit the final administrative decision to EIC. EIC shall engage with the government body and propose a recommended solution in writing within 30(thirty) days from the submission of the complaint. A written copy of the proposed solution shall be given to the investor within 7(seven) working days from the date the recommended solution is tabled. Still the investor may file a complaint to EIC Board against the EIC's recommended solution, or the the solution is not accepted by the government body. The complaint to the Board should be presented within 30(thirty) working days from the date the investor is notified of the recommended solution or learns that the government body rejected the recommended solution. The Board shall then give its decision within 90(Ninety) working days. Any Federal government body has a duty to comply with and execute in accordance with the decision of the Board.
Dispute Settlement: without prejudice to the right of access to justice through a competent body with judicial power, any dispute between an investor and the Government involving investments effected pursuant to this Proclamation will be resolved through consultation or negotiation. The Federal government may agree to resolve investment disputes involving foreign investments through arbitration. Where a foreign investor chooses to submit an investment dispute to a competent body with judicial powers or arbitration, the choice shall be deemed final to the exclusion of the other.
Investment Administration Organs: The investment administration organs include the Ethiopian Investment Board, the Ethiopian Investment Commission, the Federal Government and Regional sState Administrations Investment Councils and the Investment Administration organs established pursuant to Regional laws.
Members of the Ethiopian Investment Board are 13(thirteen) including the Prime Minister as chairperson, a government official designated by the Prime Minister as Vice Chair person, EIC Commissioner and Secretary, Eight core or investment related government officials, two private sector representatives.
Council: a council for the cooperation and coordinated administration of investment between the Federal government and Regional state administrations is established by this Proclamation. Members of the Council include the Prime Minister or in his absence the Deputy Prime Minister as chairpersons, Presidents of all regions and Mayors of the Addis Ababa and Dire Dawa City Administrations, EIC Commissioner and heads of investment organs of all Regions and Addis Ababa and Dire Dawa City Administrations and other members designated by the Prime Minister as necessary.
Coordination with Regional States: the Commission shall work in close cooperation with Regional Stat Investment Administration organs and other stakeholders with a view to creating a uniform, coordinated and efficient national investment administration system. Standing regional state investment Desks shall be established.
Provision of Land: Regions shall handle land requests for investments in the manufacturing, agriculture and other sectors in an efficient manner and shall establish a transparent and predictable system for the handling of such requests. Regions shall identify and classify land to be used for investment projects, organize such land centrally under one Regional State Administration body and transfer the information to the appropriate investment organs. The EIC shall coordinate the Regional State Administration and appropriate investment organs to facilitate and follow through the efficient handling of such requests. Regions shall respond to land allocation request of an investor for manufacturing within 60(Sixty) days and 90(Ninety) days where the investment is in other sectors.

Transitory Provisions: rights and entitlements bestowed pursuant to Investment Proclamation no 769/2012 as amended and Regulations and Directives issued there under shall remain applicable in respect of investments approved prior to the coming into force of this Proclamation.

Duty to Observe: all investors have a duty to observe laws of the country and shall give due regard to social and environmental values.

18 New Labor Proclamation 1156/2019 Additions

1. Definitions

“Sexual harassment” means to persuade or convince another through utterances, signs or any other manner, to submit for sexual favor without his/her consent.
“Sexual violence” means sexual harassment accompanied by force or an attempt thereof.

2. Scope of Application
3(1). Without prejudice to Sub-Article (2) of this Article, this Proclamation shall be applicable to employment relations based on a contract of employment that exist between a worker and an employer including recruitment process.
3. Probation
11(3). When the parties agree to have a probation period, the agreement shall be made in writing; in such a case, the probation period shall not exceed 60 working days beginning from the first date of employment.
4. Prohibited Acts
14(2)g). Conduct meeting during working hours in disregard to the time assigned by the collective agreement or without obtaining the permission of the employer; h) Commit sexual harassment or sexual violence at workplace;
i) Physically abuse anyone in a work place.
5. Tardiness
27. 1/ Unless otherwise determined by a collective agreement, a contract of employment shall be terminated without prior notice only on the following grounds :
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;
6. Absence
27/1/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;
7. Performance test
28(2) Any loss of capacity of work referred to in SubArticle (1) (a) of this Article shall, unless otherwise provided by a collective agreement, be verified by a periodical job performance evaluation.
8. Termination without prior notice by Employee
32(1) (b) Where the workers has been a victim of sexual harassment or sexual violence by the employer or a managerial employee;
9. Severance payment
39(1)d. Where the worker resigned due to sexual harassment or sexual violence by the employer or managerial employee; or where such act was committed by a coworker and the incident was reported to the employer but the latter failed to take appropriate measure in due time;
10. Compensation
41(2) However, where the termination is based on Article 32 (1) (b) the worker shall, in addition to severance pay, be entitled to compensation of his daily wage multiplied by ninety. This provision shall also apply to a worker covered by the relevant pension law.
11. Employee to pay compensation to Employer
45. 1/ A worker who terminates his contract of employment in disregard of the provisions of Article 31 or 35(2) of this Proclamation shall be liable to pay compensation to the employer.
2/ However, the compensation payable by the worker in accordance with Sub-Article (1) of this Article shall not exceed 30 days’ wages of the worker and be payable from the remaining payment due to the worker.
12. Deduction from Salary more than 1/3
59. 1/ The employer shall not deduct from, attach or set off the wages of the worker except where it is provided otherwise by law or collective agreement or work rules or in accordance with a court order or a written agreement of the worker concerned.
2/ Unless the worker expresses his consent in writing, the amount that may be deducted at any one time, from the worker’s wage shall in no case exceed one-third of his monthly wage.
13. Overtime Payment
68/ 1/ In addition to his normal wage, a worker who works over-time shall be entitled at least on the following rate of payments:

a) In the case of work done between 6:00 a.m. in the morning and l0:00 p.m. in the evening, at the rate of 1.5 multiplied by the ordinary hourly rate;

b) In the case of night time work between 10 p.m. in the evening and 6 a.m. in the morning, at the rate of 1.75 (one and three fourth) multiplied by the ordinary hourly rate;
14. Weekly Rest
69/4/ Notwithstanding the provisions of Sub Article (1) of this Article, where the nature of his task did not enable the worker to make use of his weekly rest day, the employer shall grant 4 working days of rest in a month.
15. Annual Leave
77(1) A worker pursuant to this Article shall be entitled to uninterrupted annual leave with pay. Such leave shall in no case be less than:
a) Sixteen (16) working days for the first year of service;
b) Sixteen (16) working days plus one working day for every additional two years’ service.
16. Paternity Leave
81/2/ A male employee shall be entitled to three consecutive days paternity leave with full pay
17. Leave for events
81/3/ A worker shall be entitled to leave without pay for up to five consecutive days in the case of exceptional and serious events. However, such leave may be granted only twice in a budget year.
18. Maternity Leave
88/3/ A pregnant worker shall be granted a period of 30 consecutive days of leave with pay of pre-natal leave and a period of 90 consecutive days of leave post- natal.

Foreign National Ethiopian Origin Identification Card

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.

Ethiopian National Dialogue Commission

By Dagnachew Tesfaye, Partner DMLO
On December 29,2021, the FDRE House of People’s Representative has approved into legislation by a majority vote the establishment of National Dialogue Commission by Proclamation No.1265/2021. The Commission is tasked with implementing inclusive dialogue on national issues for the creation of national consensus and establishment of common grounds.

Major Diaspora Favorable Ethiopian Laws

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

Investment Businesses Open for Foreign Investors in Ethiopia

              

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

Major Points on Federal Courts Court-led Mediation Directive

By Dagnachew Tesfaye, Attorney-at-law at DMLO

Introduction

The Federal Supreme Court(FSC) has issued Federal Cours Court-led Mediation Directive No 12/2021 effective as of December 27/2021. The Directive provides procedure of court-led mediation, structural organization of court-led mediation, principles of mediation, and about mediators and their fees. Few core contents of the court-led mediation will be dealt here below.

Structural  Organization of Court-led Mediation

There shall be a Court-led Mediation Committee organized under the FSC with 9(nine) members with mandates to oversee the whole court-led mediation process and particularly duties and responsibilities and disciplinary matters. The Committee shall engage in presenting recommendations for improvement of the court-led mediation.

Court-led Mediation Coordination Office shall be established in the FSC, FHC and FFIC. The Coordination Office in the FFIC and FHC shall be accountable to their respective presidents and are subordinate to the one in the FSC. Each coordination office shall have coordinators and relevant employees. 

There will also be Court-led Mediation Centers at FHC and FFIC branches. These centers shall have mediation officers and mediation secretaries. 

Finally, the FSC shall organize a Court-led Mediation Roster that registers interested and qualified mediators. The registered mediators shall pay an annual fee of ETB 750 as a membership fee and for initial registration ETB 300.

Court-led Mediators

Court-led mediators could be employees of the court who have taken mediation training. Any other person whose name is entered in the FSC Roster as a mediator can also be a mediator. Not only lawyers but also engineers, psychologists, agricultural professionals, medical professionals can be included in the FSC Roster. For lawyers, a first degree in law and 5(five) years relevant experience and for non-lawyers 10(Ten) years relevant experience is required. Both lawyers and non-lawyers should take a training of 80 hours in mediation and obtain certification. The idea of certification entails the establishment of not only mediation training centers but also ADR training centers. These centers can be private or governmental. It is part of making Addis Ababa as the hub for arbitration and mediation centers in Africa.

The fee for the mediator in principle is the agreed amount by the parties to the case. However, when the mediator is the employee of the court, the mediator shall not be paid mediation fee. Whenever there is no agreement on the fee by the mediator and the parties, the standard mediation fee arrangement as attached to this Directive shall apply. The manner of payment of the fee by the parties is that each party shall divide equally the fee and pay. To whom the parties pay the fee is not clear. Since it is court-led mediation, probably the parties pay directly to court and not personally to the mediator. The mediator who is registered in the roster of the FSC has the obligation to do at least two pro bono court-led mediation cases in a year.

Procedure of Court-led Mediation

New cases that are subject for mediation shall be referred to mediation before oral hearing is conducted on the cases. Civil cases that are subject to automatic court-led mediation are labour cases, commercial cases, construction cases, family cases, succession cases, contract cases and extra-contractual cases. Nevertheless, bankruptcy cases, cases in which the government or public enterprise are parties to the case as a plaintiff, defendant or intervening party, cases that have public interest in them, cases in which the judge thinks court judgment should be passed on the cases, consensual divorce and consensual division of property after divorce shall not be referred to court-led mediation.

Not only new cases, but cases that are pending with a judge can also be referred to court-led mediation if the judge thinks there is a possibility of resolving the case through court-led mediation.

The parties to the case are at liberty to choose a mediator from the Mediation Center before the date assigned for mediation. If there is no agreement, the Coordinator shall assign one mediator from the roster or assign a mediator from those employees of the court that are hired for mediation purposes.

On the date of appointment of mediation and afterwards, the mediator is obliged to conduct the mediation following mediation principles and mediation procedures. Non appearance of both parties or one of the parties at the time of assignment for agreement has the consequences of payment of ETB 1000 cost. To whom this cost is paid is not specified. The cost is paid to the court or to the appearing party if any or that of the mediator has to be cleared out.  

The mediation has to be completed within 30 days of the commencement of the court-led mediation. Prolongation for an additional 20 days is possible if there are sufficient reasons to do so.

The participating parties to the court-led mediation are the parties themselves or their duly assigned proxies with special power of attorney to mediate. The Attorney’s role is limited. The attorney can participate in the proceeding and only speak at the end of the mediation upon the permission of the mediator. Whether the Attorney can advise his client on legal matters to enable his client to reach agreement is left silent here as the focus is on the mediator and the mediation process. The possibility of an attorney of the client receiving a special power of attorney to mediate is not a closed option. Since a special proxy to mediate is a possibility, attorneys may take up the mediation on behalf of their clients.

If the parties reach an agreement, the mediator  shall prepare the agreement. The mediator shall make sure the agreement is read for the parties and both parties sign them. The Coordinator shall prepare a cover letter and send the agreement for the approval of the court. Whether the judge has the discretion to reject the agreement is not clearly mentioned, but since agreements are approved as per the Civil Procedure Code, the judge shall make sure the agreement is not contrary to law and morals. In those cases that agreement is not reached, the mediator shall return the file back to the court through the Coordinator.

Place of Mediation

The court-led mediation can be conducted in a designated place chosen by the Court-led Mediation Committee that is outside of the court. However, in all other circumstances, the place of court-led mediation shall be inside the offices of the different branches of the FFIC and FHC mediation centers. Here the question raised will be the unavailability of space suitable for mediation, how to conduct the mediation of multiple cases assigned by different judges at the same time and how to manage individual mediator’s case loads.

Principles of Mediation

The mediator should show professional competence, due diligence and secure quality of the mediation process. In doing so the mediator has to assure confidentiality, equality between the parties, neutrality and assist the parties reach an agreement by themselves.

Conclusion

The court-led mediation Directive is issued following the Federal Court Proclamation No 1234/2021 Article 55(2) whereby the FSC is assigned the task to issue a directive to implement the Proclamation. The rules indicated in Article 45-48 of the Proclamation on court-led mediation are now elaborately detailed for easier execution by this Directive. The Directive has established organs to implement the tasks of court-led mediation. Mediators are required to undergo training and strictly follow basic mediation principles. Court-led mediation shall benefit in resolving issues between parties in a short amount of time and as a result reduce the courts’ caseloads.

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Highlights of Foreign Currency Allocation: NBE Directive

                     

By Luwam Chalachew, Legal Assistant at DMLO

Introduction 

The National Bank of Ethiopia pursuant to the authority vested to it by Article 20(3) &27(2) of the National Bank of Ethiopia Establishment Proclamation no.591/2008, has issued a new directive concerning transparency in foreign currency allocation and foreign exchange management. The Foreign Currency Allocation and Foreign Exchange Management Directive No FXD/77/2021 has entered into force on December 1/2021. The main objectives of this Directive is in order ensure efficient and proper allocation of foreign exchange. And in order to ensure that foreign exchange is allocated in a transparent and sound manner to priority and other economic sectors without opening a room for rent seeking behavior and malpractice. The Directive requires each bank to have transparent and sound foreign currency allocation and foreign exchange management guidelines or procedure manual which shows the accountability of each employee of a bank involved in the foreign exchange transaction. For effective implementation, the Directive stipulated  powers and functions of different organs. A brief look into responsibilities of different organs of a bank and foreign currency allocation priority areas shall be made here below.

Responsibility of Board of Directors of a Bank

Responsibilities of the board of directors of a bank are stipulated under Article.3 of the Directive. Among these responsibilities, the board is responsible to develop a foreign exchange operation management guideline in line with the NBEs directives. The board is also responsible to review the bank’s overall foreign exchange exposure at least once a month in order to ensure that it is maintained at prudent levels and is consistent with available resources. In evaluating and controlling these operations the board has the responsibility to ensure that adequate resources, both technical and human are available. The board also has the responsibility to create reporting and compliance mechanisms to establish rules.

Responsibility of Executive Management of a Bank  

The executive management of a bank is responsible to maintain records which are sufficient to determine at all times the bank’s compliance with its own internal foreign exchange transaction policies and procedures. The management should avail any information and documentation when requested by National Bank. The executive management should also maintain a daily record showing close of business in foreign exchange. It should also ensure that proper reporting procedures are put in place between the head office and its branches on daily foreign exchange operations. Regarding the bank’s foreign currency open position and outstanding balances, the executive management should reconcile foreign exchange transaction accounts at least every month diligently and with due consideration to the need to provide timely information to the National Bank. Generally the executive management should establish effective internal controls to monitor and control the overall foreign exchange operation.

Responsibility of Internal Audit   

The internal audit in each bank shall conduct at least one audit semi-annually and make surprise checks when necessary to test compliance with the foreign exchange operations guidelines. The auditor shall report the findings to the respective bank’s board as well as senior management of the bank and a copy of the internal report shall be submitted to the Foreign Exchange Monitoring and Reserve Management Directorate of the National Bank at the same time of the submission of the report to the board of management. 

Foreign Exchange Allocation and Priorities 

The Directive laid out foreign exchange allocations and priorities in three categories. The Directive also stipulated import items and payments are to be served on a first come first served basis.

The directive put a first priority to pharmaceutical items, medicine, input for manufacturing of pharmaceuticals and laboratory reagents. It also adds input for manufacturing of edible oil and liquefied petroleum gas that has not been listed in the previous directive. The reason for listing pharmaceutical inputs, edible oil inputs and fuels in the first priority is in order to mitigate shortage of foreign currency in those sectors.

As second priority, inputs for agriculture and inputs for manufacturing including fertilizer, seed, pesticide and chemicals shall follow. 

Third priority includes motor oil and lubricants, agricultural inputs and machineries, pharmaceutical products, manufacturing industries request for procurement of machineries, equipment, spare parts, and accessories, import of nutritious food for babies, spare part for construction machineries for own use by construction companies whose total values not exceeding  USD 50,000 and educational materials. Profit or dividend transfer, transfer of excess sales of foreign airlines and sales from share and liquidation of companies by FDI are also categorized under the third priorities. 

The Directive also stipulated that the total foreign currency allocated for imports listed in the three categories shall not be less than 50 percent of the total foreign currency allocated for all imports of goods and services at any time. In this case the bank is obliged to surrender the difference to the National Bank every month within the first working days of the next month. 

Conclusion 

The NBE Directive No FXD/77/2021 has been anticipated to enable the NBE to carefully manage its scarce reserve in foreign exchange and ensure its efficient and proper allocation. To do that the Directive laid core responsibilities to management of each bank. For easier implementation and management, priority sectors have been identified in line with the economic wheel of the country.

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One Key Aspect of Employment Law: Probation Period

By Luwam Chalachew, Legal Assistant at DMLO

Introduction 

Probation period is a fixed period of time that employees are exempt from certain rights. Most importantly, the absence of notice period required for termination of contract and payment of compensation as well as severance payment after termination. From the employer point of view, probationary period is used to evaluate the workers performance, skill, abilities, and personality. Also whether the employee can engage with the existing organizational culture. And from an employee’s point of view, probationary periods are there to see if the employee enjoys working for the employer and whether the employee is a suitable match for their skills and abilities required for the job. Generally the probationary period allows both employee and employer to see if they are a good fit and to make things easier if they need to terminate the contract. We will see in this article the probation period from the employer as well as employee point of view as envisaged under the Labour Proclamation of Ethiopia Proclamation No 1156/2019.

Importance of Probationary Period  

From the employers perspective, probation periods are important as they help employers to be sure they have made the right recruiting decision and to take action more quickly if they feel the new employee is not suitable for the role. These reduce the expenses of keeping employing someone who is unsuitable for the job. Probation enables the employer to replace the unsuitable employee more swiftly.

Probation Period under the Ethiopian Labor Proclamation

The previous Labor Proclamation no.377/96 was replaced in 2019 by the new Labor Proclamation No.1156/2019 (hereinafter the Labor Proclamation).

Few changes are introduced regarding the probation period under the new proclamation. These include one the length of probation period was extended from 45 consecutive days to 60 working days and two the new Labour Proclamation specifies the beginning date of probation period under Article 11(3) which is the first date of employment while the previous proclamation was silent about this. 

Agreement of Probation Period

Probation period is not a mandatory procedure. It is made when the parties agree to have a probation period. Silence about it doesn’t amount to presumption of probation period.  According to Article 11(3) of the Labor Proclamation, if the parties agree to have a probation period, the agreement shall be made in writing. And the length of the probationary period shall not exceed 60 working days starting from the first date of employment. The length of the probationary period is limited in that the probation period cannot be extended by agreement beyond 60 days.

Reemployment by the Same Employer

According to Article 11(2) of the Labour Proclamation, a worker re-employed by the same employer for the same job shall not be subjected to probation. In this case a worker who is reinstated to a position in the same organization in the same area doesn’t have to serve a probationary period.

 Rights and Obligations of Probationary Workers

During probation period, probationary workers shall have the same rights and obligations that a worker who has completed his probation period possesses unless the law or work rules or collective agreement provides otherwise.

Termination of Probation Period 

According to Article 11(5) of the Labour Proclamation, if the worker during his probation period proves to be unfit for the post, the employer can terminate the contract of employment without notice.  In this case the law is silent on the grounds to evaluate the fitness of the worker to the post. So it seems it is left for the employer to decide.  Evaluation of fitness goes beyond competence and may include personal characteristics of the employee. In making the evaluation, the employer may use subjective as well as objective criteria to determine the workers fitness to the post.  If the worker proves to be unfit for the post, the employer may terminate the contract of employment without notice. Unlike termination of a normal contract of employment, the employer is not obliged to pay severance payment or compensation while terminating the contract of employment during the probation period.

The worker may also terminate the contract of employment without notice during his probation period.

Unlawful termination  

One case in which termination of contract of employment during probation period may be unlawful is termination based on the grounds listed under Article 26(2) (d) of the Labour Proclamation. This includes termination of contract of employment based on the workers nation, sex, religion, political outlook, marital status, race, color, family responsibility, pregnancy, disablement or social status. If termination is made based on these grounds, the termination will be unlawful.  

End of Probation Period 

Length of probation is fixed as it is stipulated under Article 11(3) of the Labour Proclamation. So according to Article 11(7) of the Labour Proclamation,  if a worker continues to work after the expiry of the fixed period, a contract of employment for the intended period or type of work shall be deemed to have been concluded from the beginning of the probation period. 

Conclusion

Generally the probation period is a fixed period which allows both employee and employer to see if they are a good fit for the job. During the probation period, both employee and employer can terminate their contract of employment without giving notice. And the employer is not expected to pay severance payment or compensation.

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Conditional Dissolution of Marriage and Period of Limitation for Partition of Common Property: Cassation Decision

By Luwam Chalachew, Legal Assistant at DMLO
Email: info@dmethiolawyers.com
Introduction
This article summarizes the decision of the Federal Supreme Court Cassation Division decision regarding conditional dissolution of marriage and period of limitation for demanding partition of common property of spouses after divorce. The case has been between applicant Mrs. Almaz Leshe VS respondent Mr. Bekele Belachew on Vol.19 File No. 102662 on April 15/2008.
Regional First instance court
The case was first brought to Amhara Region Debre Berhan First Instance Court by the applicant. The issue first provided under the statement of claim of the applicant was that the applicant and respondent were married and lived together for 40 years but due to disagreements between them since 2006 E.C the applicant petitioned for a divorce and partition of common property.
The respondent on his statement of defense accepted the fact that they were married but he states that the applicant left the house and they were living separately since she left him 19 years ago and he objected by raising the period of limitation as preliminary objection and for the defence the respondent argued there are no common properties to be shared among them. Finally the regional First Instance Court after hearing both parties decided that the marriage was dissolved 10 years ago and closed the case citing period of limitation.
Appeal to the High Court and Application to Regional Cassation
The applicant appealed to the Semen Shewa Zone High Court opposing the decision of the First Instance Court. But the court did not accept the application. The case was also brought to the Regional Supreme Court Cassation Division. The Cassation bench also dismissed the case stating that there is no basic error of law.
Review by the Federal Supreme Court Cassation Bench
On application the Cassation framed an issue on the appropriateness of decision of lower courts that ordered marriage of applicant and respondent is dissolved conditionally. The Cassation first examines the lower court’s decision. And the reasons of the lower court to conclude that the marriage of applicant and respondent dissolve conditionally were due to the fact that they were living separately since 1987E.C. The high court also accepted this fact.
The Federal Cassation bench states that the First Instance Court bases its decision on Federal Supreme Court Cassation decision file no.31891 i.e. living separately for a long period of time will result on the dissolution of the marriage between spouses conditionally even though court didn’t approve on this matter as it is also stipulated under Article 2(1) of Proclamation no.454/1997. There is also a binding decision of the Federal Supreme Court Cassation decision on file no. 679224 which states the fact that if obligations of cohabitation, support and assist each other are in place, merely physical separation of spouses does not dissolve the marriage.
The Cassation also examined the case in line with its former decisions on file no. 14290, 20983, 31891 and 67924. Applicant and respondent got married and have children but it is witnessed that they were living separately since 1987. Accordingly, the Cassation reasoned that according to Amhara Regional Family Code Article 61 spouses owe each other respect, support and assistance during their marriage time. So this thing was not in place between the parties due to the space between them for a long period of time. So the Cassation concluded that marriage of applicant and respondent was dissolved conditionally since 1987. Regarding partition of common property, the Cassation stated that application for partition of common property should be closed by period of limitation as long as it is not brought within 10 years according to the relevant Cassation decisions mentioned above. Generally the Cassation concluded that there is no basic error of law.
Conclusion
The main idea of marriage is about cohabitation, respect, assisting and supporting each other. So spouses who live separately for a long time without the intention of getting back together and in the absence of the obligation to respect, support and assist each other the marriage is presumed to be dissolved conditionally. Regarding application for partition of common property it will be barred by a 10 years period of limitation.
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Departure of New Commercial Code of Ethiopia on Formation of Share Companies

Lydia Kedir and Dagnachew Tesfaye
Email: info@dmethiolawyers.com
Introduction
The new Commercial Code Proclamation 1243/2021 comes with some changes in the formation area of share companies. The new Commercial Code uses the same definition of the old Commercial Code(1960) on share companies: ‘A share company is a company whose capital is fixed in advance and divided into shares and whose liabilities are met only by the assets of the company.’ Hence we discuss here some of the departures of the new Commercial Code from its predecessor only in the formation stage of a share company.
Nominal value of Shares
The minimum capital of ETB 50,000(Fifty Thousand) for formation of a share company remains the same between the old and new Commercial Code. However the par value of each share, says the new Commercial Code, should not be less than ETB 100(hundred). In the old Commercial Code, the par value of shares used to be not less than 10(ten) Ethiopian dollars.
Distinction between Founders and Promoters
The old Commercial Code gives the name and status of a founder to any person, even though outside the company, who has initiated plans or facilitated the formation of the company. Now in the new Commercial Code a person( both artificial or natural) who initiates the formation of a company by public subscription, invites persons to join the company by preparing prospectus or in general acts with the view to realizing the formation of the company is called promoter. The new Commercial Code provides in detail what the liability of promoters are and special benefits allocated to promoters. Under the new Commercial Code, the name ‘founder’ is narrowed down to those individuals who establish a share company as between themselves without offering shares for public subscription. Article 252(2) of the new Commercial Code obliges the number of founders of a share company not to be less than five.
Redacting Article of Association
The old Commercial Code provides both memorandum of association and articles of association as formation documents of a share company. Whereas in the new Commercial Code, only memorandum of association is accepted as the formation document of the share company. Article of association is left out.
Valuation and Verification of Contribution in Kind
The old Commercial Code used to put a report of valuation of the in-kind contribution by a subscriber to be made by experts appointed by the Ministry of Commerce and Industry. Such valuation shall be verified within six month from the date of the formation of the company by directors and auditors. Now in the new Commercial Code, it is stated that the person who made the contribution in kind will provide an expert valuation report. The requirement of an appointed expert from the Ministry is left out. The verification process became a two step process. The promoters and formation auditor shall verify the valuation of contribution in kind first. This happens before the meeting of subscribers takes place. And then the board of directors and auditors shall verify the valuation in kind within six months from the date of registration of the company. Where the company under formation is not established by public subscription, the founders of the company shall verify the report of the expert. Similarly the second step of verification happens within six month from the date of registration of the company by the board of directors and auditors.
Signatories and Contents of Prospectus
Prospectus is a document prepared for serving the purpose of an offer for subscribers. The prospectus used to be signed by founders in the old Commercial Code. In the new Commercial Code, the prospectus is signed by all the promoters. The prospectus added few contents to the previous code. The prospectus will contain the anticipated time within which the formation of the company is to be completed and the company acquires legal personality. The law on Article 259(1)(g) second sentence of the new Commercial Code stipulates that under any circumstance, the time set for the compilation of the formation of the company shall not exceed five years. The prospectus should include bank details opened in the name of the company under formation in which payments are required to be deposited.
Auditing Requirement before Calling of Meeting of Subscribers
The old Commercial Code did not have the requirement of auditing before the meeting of subscribers. The meeting of subscribers will be called when the time for making an application for shares has expired. Now in the new Commercial Code, before the meeting of subscribers is called, the promoters are obliged to verify by an external auditor as to the fulfillment of the requirements of the formation of the company. The audit shall look into the fact that the promoters meet the requirement set by the law, full subscription of the capital of the company is made, contribution in kind is valued by experts and it is correct, deposit of cash collected from subscribers in the bank account opened in the name of the company is made and any other requirement set out by law or the memorandum of association of the company. Such an audit report shall be presented by the auditor to the meeting of subscribers for their approval.
Powers and Duties of Meeting of Subscribers
The new Commercial Code included as powers and duties of the meeting of subscribers the right to approve the reports of the promoters and formation auditors. The meeting will also determine the shares in the profits allocated to the promoters. In the old Commercial Code, the resolution of subscribers’ meetings was required to be signed by the founders. Now in the new Commercial Code, resolutions of subscribers’ meetings shall be drawn up and signed by all the promoters or founders and members of the board of directors that were elected at the meeting.
Who Registers the Company in the Commercial Register?
The old Commercial code was silent as to who goes to register the company at the commercial register. Now under Article 265(2) of the new Commercial Code, the registration of the company shall be effected by the promoters or as appropriate, the founders or any other person having a power of attorney form the promoters or founders.
Accompanying Documents for Registration in the Commercial Register
The new Commercial Code avoided the articles of association as an accompanying document for registration and included an audit report regarding valuation of contribution in kind and company formation. The rest of accompanying documents namely authenticated memorandum of association, prospectus where the company is formed by public subscription and resolution of meeting of subscribers will be submitted.
Action Period for Non-Compliance
The entry into the commercial register without complying fully, results in the endangerment of the interests of creditors or shareholders, the latter may request for dissolution of the company or any other appropriate measure from the court. Such a request has to be taken within three months from the date of registration in the commercial register, as per the old Commercial Code. Such a period of action for non-compliance is extended to one year by the new Commercial Code.
Conclusion
The departures in tasks and responsibilities, documents requirements and period of actions of the new Commercial Code from the old Commercial Code in the formation process of a share company contribute to clarity and easier implementation procedure. Many of the old Commercial Code concepts and ideas are still maintained, which shows that the old Commercial Code has proven effective in the formation stage of share companies throughout the test of time.

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DMLO

Core Points on the State of Emergency

By Mahlet Mesganaw, lawyer and founder, DMLO
Email: mahlet@dmethiolawyers.com

Introduction
The government of Ethiopia has issued a State of Emergency Proclamation no 5/2021, effective as of November 2nd 2021 to last for six month. The scope of application is the whole country. The main purpose of the State of Emergency(SoE) is to avert the imminent threats against the existence of the nation which cannot be averted by regular law enforcement mechanisms posed by TPLF and its affiliates and outside forces. The HoPR on May 6,2021 has categorized TPLF and Oromo Liberation Army(OLA)-Shene as terrorist organizations. This brief article will cover core contents of the SoE Proclamation.

The Establishment of Command Post
The SoE has established a command post with a duty to execute the SoE Proclamation. The Command Post shall be spearheaded by the FDRE Head of the Defence Force and report to the Prime Minister. The Command Post shall have the power to issue directives to implement the SoE. Accordingly, till this date two directives were issued. The first directive Directive No 1/2021 is on the organizational structure of the Command Post. The second directive is Directive No 2/2021 is on the procedure of issuance and acquisition of temporary id cards.

Prohibited Acts
It is prohibited to disseminate information that empowers the terrorist groups, encourages the activities of the terrorist group or terrorizes civilian population. It is prohibited to render monetary, information, material or moral support, directly or indirectly to terrorist groups. Public gathering and demonstration without the permission of the Command Post or any other delegated authority is prohibited. It is prohibited to carry and move around firearms without permission. Residents are prohibited from moving around without carrying identity cards, passports or any other similar identity card. It is prohibited to disrupt the activities of any essential service or production sector or carry out acts of economic sabotage. Finally one of the prohibitions is against abuse of power. It is prohibited to engage in abuse of power with the intent to gain an illicit benefit under the pretext of enforcing the SoE Proclamation or detaining deliberately without reasonable suspension.

Non Derogable Rights and Use of Proportional Force
The Command post shall respect non-derogable rights listed under Article 93(4) of the FDRE Constitution during the enforcement of the SoE. Among the non-derogable rights the first one is Article 1 of the Constitution which embodies the nomenclature of the state i.e. The Federal Democratic Republic of Ethiopia. The second human right provision that is non-derogable right is prohibition against Inhuman Treatment indicated under Article 18 of the Constitution. Accordingly, everyone has the right to protection against cruel, inhuman or degrading treatment or punishment. No one shall be held in slavery or servitude. Trafficking in human beings for whatever purpose is prohibited. No one shall be required to perform forced or compulsory labour. The right to equality is the other non-derogable right. Article 25 of the Constitution declares that all persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall guarantee to all persons equal and effective protection without discrimination on grounds of race, nation, nationality, or other social origin, colour, sex, language, religion, political or other opinion, property, birth or other status. Finally Article 39 of the Constitution i.e the Rights of Nations, Nationalities, and Peoples unconditional right to self determination, including the right to secession and the right to speak, to write and to develop its own language; to express, to develop and to promote its culture; and to preserve its history are non-derogable rights during the enforcement of the SoE.

The security forces can be ordered by the Command Post to use proportional force for the execution of the SoE measures provided in the Proclamation.

State of Emergency Measures
The State of Emergency measures include ordering the deployment of armed forces in any part of the country to maintain peace and security. The Command Post can order citizens whose age are fit for military service and who are in possession of firearms to take military training and take orders for military missions. In case those with firearms are unable to be deployed, they will be required to hand over their firearms. It can order curfew, closure of public transportation or any means of transportation. It can arrest without a court warrant upon reasonable suspicion and also search any person’s house, premise and vehicle upon reasonable suspicion that he/she cooperates with terrorist groups. It can order the closure of a given street or service giving institution for a certain period of time. It can give an order for persons to remain in a certain place or prohibit them from entering or evacuating from a given place for a certain period of time. It can partially or fully suspend local administrative structure and replace administrations with civilian or military administrations in parts of the country where there are serious security threats. The Command Post can order the regulatory authority to suspend or permanently cancel licences of civil society organizations, mass media or journalists which have been suspected of providing direct or indirect, moral or material support to terrorist organizations.

Suspended Laws
Without prejudice to diplomatic immunities enshrined under the Vienna Convention on Diplomatic Relations, substantive and procedural laws inconsistent with the SoE Proclamation remain suspended during the implementation of the Proclamation. In addition to that any judicial organ shall have no authority till the expiry of the enforcement of the SoE Proclamation.

Criminal Liability
Whoever violates the provisions of the SoE Proclamation or directives issued in accordance with the Proclamation shall be punished with simple imprisonment of upto 3 years or depending on the gravity of the offence rigorous imprisonment of up to ten years or if the violations entails grave punishment in other laws, such punishment shall apply. Even after the expiry of the SoE, violations of the SoE Proclamation and directives committed during the course of the SoE will cause criminal liability in accordance with ordinary criminal procedure rules.

Conclusion
The State of Emergency Proclamation has been issued to protect the sovereignty and territorial integrity of the country and its people. The severity of the threat is imminent and the government has to protect the well being of its people. Using the regular law enforcement mechanism will not avert the imminent threat posed against the existence of the nation. Given the gravity of the situation, every person needs to know and abide by each and every provision of the State of Emergency Proclamation and directives issued in accordance with the SoE Proclamation.

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