Domestic Adoption Document Requirements

By DMLO in Collaboration with Adoption Advocates Organization(AAO)

Domestic adoption is one way of helping vulnerable children. Domestic adoption document requirements is set out under Foster Family and Domestic Adoption Services Directive No 48/2020. The document requirements are the following:


Interested prospective adoptive families need to register at the institution. The ‘institution’ is a government or charity organization which have the authority and licence from the Federal government to perform domestic adoption and foster care service. The institution will normally include government or licensed private orphanages. The prospective adoptive family should clearly indicate on the registration form the age, gender, health status and other circumstances of the child they want to adopt.

Evidences Compiled for the Child
The evidence compiled for the child include birth certificate, medical certificate, short profile of the child containing the picture of the child as well as the pictures of the guardian or custodian of the child.

Documents Compiled for the Adoptive Parents
The adoptive family shall come up with documents including medical certificate, birth certificates, marriage certificate, income statements, police clearance letter, home study, passport size photographs and id cards or passport copies. Manner of organizing these documents has certain requirements indicated in the Directive.

Adoption Agreement
Adoption agreement signed by the guardian of the child and the adoptive parents or their legal agents. The adoption agreement should show the date of execution of the adoption agreement, the parties to the agreement, the full name, age, sex of the child, clear provisions that contain consent for giving and receiving the adoption, signed by the parties, witnessed by at least two witnesses and stamped with the passport size picture of the child.

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

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

By Dagnachew Tesfaye, Founder and Partner at DMLO

Email: dagnachew@dmethiolawyers.com


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.


‘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 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 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.


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.

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

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.


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.

Three EIC Delegated Authorities

By Dagnachew Tesfaye, Partner at DMLO

The Investment Proclamation No 1180/2020 on Article 4 delegates part of the power of the Ethiopian Investment Commission(EIC) to issue investment permits to three different authorities. These delegated authorities are assigned to administer foreign investment in those areas representing EIC. The objective to delegate part of the power emanates from the fact that these sectors require specific technical knowledge to filter investors and regulate the investment. The three EIC delegated authorities are the Ethiopian Civil Aviation Authority, the Ethiopian Energy Authority and the Ethiopian Communication Authority. A look at each of the delegated powers to these authorities shall be the focus of this brief article.

The Ethiopian Civil Aviation Authority

The Ethiopian Civil Aviation Authority (ECAA) is re-established by Civil Aviation Proclamation No 616/2008 as an autonomous government organ having its own legal personality. One of the powers of the ECAA is to license and regulate the operations of air services and general aviation services. The issuance, renewal, amendment, substitution, replacement and cancellation of investment permits, and the issuance of investment expansion or upgrading permits for air transport services requested by foreign investors shall be done by the ECAA.

The Ethiopian Energy Authority

The issuance, renewal, amendment, substitution, replacement and cancellation of investment permits, and the issuance of investment expansion or upgrading permits for the generation and transmission or distribution of electric power  requested by foreign investors shall be carried out by the Ethiopian Energy Authority (EEA) representing EIC. The Energy Proclamation No 810/2013 envisions the establishment of the Ethiopian Energy Authority by regulation to be issued by the Council of Ministers. Energy related licensing procedures are listed in detail under Council of Ministers Energy Regulation No 447/2019. In addition to the powers entrusted to EEA from its own regulation, EEA received delegated powers from EIC to administer and issue investment permits for foreign investors interested in engaging in the electric power generation sector.

The Ethiopian Communication Authority

The Ethiopian Communication Authority is established under Article 3 of the Communication Service Proclamation No 1148/2019. The ECA is empowered under its establishment proclamation to issue licences and supervise operators of communication services and amend, renew, suspend or revoke licences. Similarly ECA received a delegated power from EIC to issue, renew, substitute, replace and cancel investment permits, and the issuance of investment expansion or upgrading permits for provision of communication services for foreign investors.

Reporting and Coordination

The ECAA, the EEA, and the ECA shall submit to the EIC a quarterly report regarding services rendered through their Delegated Powers. The three authorities shall also  coordinate with EIC to undertake studies identifying sectoral potentials, and sector specific investment development strategies, and engage in investment promotion works.

To conclude the EIC has delegated part of its power to administer foreign investment in Ethiopia to other three organs of the government. The three organs of the government that represent EIC in issuing investment permits and regulation of the same are the Ethiopian Civil Aviation Authority on air transport services, the Ethiopian Energy Authority on generation and transmission or distribution of electric power and the Ethiopian Communication Authority on communication services. These organs of the government shall report to EIC quarterly regarding services rendered.

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Few Basic Federal Court Etiquette and Procedures For the General Public

By DMLO Team

The Federal Supreme Court has issued a directive namely Federal Courts Courtroom Etiquettes Directive No 13/2022. The Directive aims to put court rooms as formal places that require a certain high standard of behavior from those that visit the court and the courtroom. The Directive will be enforced after three months from May 16,2022. Here are few of the etiquettes enlisted in the Directive.

Pre-courtroom Procedure:

  • When  arriving at the courthouse, check the daily hearing list for the courtroom. The checklist shall contain the file number, name of the parties, the type of case, reason for the adjournment and time. Such a checklist shall be posted on notice board or can be seen on television screen. The Directive lacks to indicate what to do  if the matter in which you are interested is not on the list. Normally clients will ask a member of the court staff to direct them to the counter where someone can look up where and when the matter is being heard.
  • Be on time. Because people entering and exiting the courtroom can be very distracting, you may be required to wait outside of the courtroom until an appropriate break in the proceedings opens up so that you may go inside the courtroom.
  • When the courtroom is open, please find a seat in the gallery. Standing is generally not permitted in courtrooms.
  • When the judge enters the courtroom, everyone in the room must rise to show respect. Please rise and remain standing until the bailiff or court room assistant  invites you to be seated.
  • Before arriving at the courthouse, make sure you do not have any pocket or utility knives or anything else that may be considered a weapon. These items may be confiscated, and you may be denied entry into the courthouse.

Inside the courtroom:

  • Courts shall start in the morning at 9:30AM and in the afternoon at 2:00 PM. However, the Directive lacks to mention the existence of  lunch break, as well as a morning and an afternoon break. Probably the timing of these breaks are left for the discretion of the judge.
  • The judge entertains cases as per the case flow management directive. The checklist is not the governing sequence of how cases are heard one after the other. The Directive needs to include to show consistency as to time of adjournment and case flow management of the judge, so that customers know as per the sequence on the checklist, their case shall be called.
  • Turn off your cell phone or pager before entering the courtroom. Members of the public are not permitted to use electronic devices  (e.g. cell phones, cameras, recording devices etc.) in courtrooms unless the presiding judge orders otherwise. The use of electronic devices in the courtroom to Counsel, parties, and members of the media subject to certain conditions and restrictions shall be subject to the order of the judge..
  • Speak in a voice audible for the judge, the courtroom or the opposing party or council.
  • Proper dressing attire has to be followed. The dressing code has to be formal rather than casual. It is forbidden to wear a closing that depicts criminal conduct or contain offensive writings or posts that can negatively influence the court proceedings. 
  • Remain silent throughout the proceedings. If you need to speak to someone, please step outside the courtroom.
  • No food or beverages are allowed in the courtrooms except water..
  • Hats or headwear are not permitted except for religious reasons. Please also remove your sunglasses before entering the courtroom (unless they are required due to a medical condition).
  • You must stand whenever you speak to the judge or the judge speaks to you.
  • When you are addressing a judge, you should call him or her “Your Honor Judge” or ‘’Honorable Court’’.
  •  Do not sit in a manner that forbids movement for others by stretching your legs, sitting on a table or places used to block movement to the stage of the judge.
  • It is prohibited to be intoxicated or be under the influence of drugs and enter the courtroom.
  • Those who have cough or flu need to wait outside till their name is called or ask permission to be given priority.
  • Do not interrupt the judge while he/she is speaking.
  • Do not interrupt to go out while the judge is reading charge, sentencing, judgment, decree or hearing of witnesses.

In General the judge or court staff are responsible for maintaining security and decorum in the courtroom. One has to comply with any direction that the judge courtroom staff  give you. If you fail to comply with any such direction, you may be asked to leave the courtroom.

Family Leave: the Ethiopian Labour Law Perspective

By Mahlet Mesganaw, Founder and Partner at DMLO

Family leave refers to leave allowed for family events such as birth of a child, conclusion of marriage, funeral and exceptional and serious events. A look at the Ethiopian Labour Law on family leave shall be the focus of this brief article.

Maternity Leave

Maternity leave refers to leave available to the mother for the birth of a child to be taken just before, during and immediately after child birth. The Ethiopian Labour Law grants a total of 120 consecutive days of maternity leave. The 120 consecutive days are divided into pre-natal leave of 30 consecutive days and post-natal leave of the remaining 90 days. Where a pregnant worker does not give birth within the 30  days of her pre-natal leave, the pregnant worker is entitled to an additional leave until her giving birth. However, if birth takes place before the expiry of the pre-natal leave, the 90  days of postnatal leave shall commence. Here the Ethiopian Labour Law on Article 88 Sub-article 3 and 4 interprets parental leave and postnatal leaves in sub-article 3 in consecutive days and on sub-article 4 in working days. The writer is of the opinion that the principle of maternity leave rests on Sub-article 3 of Article 88 which refers to prenatal and postnatal in consecutive days. Thus, sub-article 4 should be read in the same manner as consecutive days and not working days. 

The Ethiopian Labour law does not restrict the leave for pregnant mothers only for prenatal and postnatal birth. In addition to prenatal and postnatal leaves, the pregnant employee is granted leave for medical examination connected with her pregnancy with the condition that she present a medical certificate. Moreover a pregnant worker shall, upon the recommendation of a physician, be entitled to a leave with pay.

Paternity Leave

Paternity leave refers to the leave granted only to the father for the birth of a child. A father employee shall be entitled to three consecutive days paternity leave. The Labour Law does not contain conditions to extend these three consecutive days if the birth of the child doesn’t happen on the assigned days. Also the paternity leaves are consecutive days and not working days.

Leave for Marriage

Leave for marriage refers to the conclusion of marriage as legally recognized by law. The husband or wife employee is granted three working days of leave. Leave for honeymoon or customary invitations of the brides by different family members after the conclusion of marriage are excluded.

Leave for Funeral

Leave for funerals refers to leaves when close family members die. The Ethiopian Labour Law restricts family ties to  spouse, descendants, ascendants, brother, sister, uncle, aunt, relative whether by consanguinity or affinity. The employee facing such deaths of family members  is entitled to 3 working days of leave.  Such leave does not extend to close neighbors, friends, or as the customary association ‘Edir’ requires attendance for burial or serving lunch or dinner.

Serious and Exceptional Leave

A worker shall be entitled to leave  for up to five consecutive days in the case of exceptional and serious events. What is an exceptional and serious event? The Ethiopian Labour Law does not give a definition of it. What is included in serious and exceptional events may be determined by and between the employer and employee, work rules or conditions of work and on disagreement by the Ethiopian Labour Courts. However, such leave may be granted only twice in a budget year.

What percentage of earnings is received during the types of leave?

Except the serious and exceptional leave that will be taken without pay, the rest of the leaves are taken with full payment of wages.

To sum up the Ethiopian Labour Law contains family leaves that include maternity, paternity, leave for funeral, marriage and exceptional and serious events. The leaves for marriage and funeral are granted in terms of working days while the leaves for maternity, paternity and serious and exceptional  leaves are taken in consecutive days. The full salary is paid for the leaves for maternity, paternity, leave for marriage and funeral whereas serious and exceptional leave is granted without pay.

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Ten Non-Arbitrable Subject Matters: the Case of Ethiopia

By Dagnachew Tesfaye, Founder and Partner at DMLO

A case is non-arbitrable means the subject matter of the dispute falls outside the scope of being resolved by arbitration. Thus non-arbitrability precludes a tribunal from exercising jurisdiction over certain cases. Had an arbitration panel exercised jurisdiction on non-arbitrable subject matters, the resulting award may be set aside or denied recognition and enforcement.

The governing legislation in Arbitration as of April 2021 is the Arbitration and Conciliation Working Procedure Proclamation No 1237/2021(the Proclamation).

Hence  non-arbitrable subject matters are identified and listed in non-exhaustive way in Article 7 of the Proclamation. The ten non-arbitrable cases are the following: 1/ Divorce, adoption, guardianship, tutorship and succession cases; 2/ Criminal cases; 3/ Tax cases; 4/ Judgment on bankruptcy;  5/ Decisions on dissolution of business organizations; 6/ All land cases including lease; 7/ Administrative contract, except where it is permitted by law; 8/ Trade competition and consumers protection; 9/ Administrative disputes falling under the powers given to relevant administrative organs by law; 10/ other cases that are termed not arbitrable under the law. 

The arbitrability and non-arbitrability of cases used to be governed by provisions of the Civil Code, Civil Procedure Code and other laws of Ethiopia. However Article 78 of  the Proclamation repealed Article 3325-3346 of the Civil Code that deals with Arbitral Submission. In addition to that, Civil Procedure Code Articles 315 to 319(Arbitration), 350,352,355-357 (Appeal on arbitral awards)and 461 (Enforcement of foreign arbitral award ) are repealed. Nonetheless Articles 351,353,and 354 of the Civil Procedure Code are left un-repealed. Any other laws that are inconsistent with respect to matters provided in the Proclamation are also repealed.

To sum up, the controversies in determining what cases are arbitrable and what cases are non-arbitrable are settled for the most part by Arbitration and Conciliation Working Procedure  Proclamation No 1237/2021.

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The House of Federation: Interpretation of the Constitution

By Mahlet Mesganaw, Partner at DMLO

The House of Federation (HoF) of the FDRE is one of the legislative organs of the government of Ethiopia. One of the major powers of the HoF is to decide on constitutional interpretation and constitutional disputes. New developments and gaps in the power to interpret the constitution by the HoF shall be the focus of this article.


The HoF is composed of representatives of Nations, Nationalities and Peoples. Each Nation, Nationality and People shall be represented in the HoF by at least one member. For each additional one million of its population, one additional representative shall be selected for each Nation and Nationality. Members of the HoF will be elected by State Councils. Article 62(1) of the FDRE Constitution provides the powers and functions of the HoF. One of the powers and functions of HoF is the power to interpret the constitution. Proclamation No 251/2001 was the governing law detailing the powers and functions of the HoF for the past 20 years till this Proclamation was repealed and replaced by  a Proclamation to Define the Powers and Functions of the House of Federation Proclamation No 1261/2021.

Interpret the Constitution

The HoF has the constitutional power to interpret the constitution. All constitutional disputes shall be decided by the HoF and not courts. To help in the interpretation of the constitution, the HoF is constitutionally granted power to organize the Council of Constitutional Inquiry(CCI). Hence CCI is established as a constitutional organ under Article 82(1) of the FDRE Constitution. The CCI has 11 members. The President and Vice President of the Federal Supreme Court serve as President and Vice-President to the CCI. CCI shall carry on the investigation of constitutional disputes and submit its recommendation to the HoF.

Recommendation and Appeal 

Article 7 of Proclamation No 1261/2021 states that the HoF shall render a final decision on recommendations by CCI that a certain matter requires constitutional interpretation. The HoF may establish a committee drawn from its members to investigate the draft proposal of the CCI. In the case where the CCI rejects a particular matter saying the matter does not deserve constitutional interpretation, such a decision is appealable to the HoF. The HoF committee may be mandated to decide whether an appeal made against a decision of the CCI should be presented to the general meeting of the HoF or not. The HoF by itself or using a committee will render a final decision on the appeal. Such an appeal has to be brought to the HoF within 180 working days. Cases concerning crimes against humanity, cases concerning rights of Nations, Nationalities and Peoples or issues relating to division of power cannot be barred by period of limitation.

Decision Making Time Limit

The FDRE Constitution on Article 83(2) provides the time limit the HoF has to decide on constitutional disputes presented to it. The HoF is required to decide on constitutional dispute cases within 30(thirty) days from the date of receipt of recommendation by the CCI. Similar time limit has been incorporated in the repealed Proclamation No 25/2001. However, the latest Proclamation No 1261/2021 is silent. The latest proclamation indicates the fact that the HoF shall decide constitutional disputes in a short time without mentioning the 30 day time limit.

Stay of Execution

Stay of execution order is included in the latest proclamation. Stay of execution order was not incorporated in the repealed proclamation. When the HoF believes that there will be irreparable damage to an applicant requesting constitutional interpretation, a stay of execution could be ordered. The authority to order a stay of execution is the Speaker of the HoF and not the President of the CCI as it customarily requested.

Rules on Decision Making

The repealed proclamation requires unanimous vote for passing a decision on constitutional interpretation cases. The latest proclamation however is silent on the subject. The FDRE Constitution on Article 64(1) states the fact that all decisions of the HoF require the approval of a majority of members present and voting. Thus it is fair to assume that constitutional interpretation cases will be decided not by unanimous decision but by majority vote of members present and voting.

Execution of Decision

The decision of the HoF on constitutional interpretation comes into effect as of the date of passing of the decision except when the decision itself states otherwise. However, when a given law is termed unconstitutional, the party that issues the law is given three month to amend, change or repeal the law in question. The time period used to be six month in Proclamation No 251/2001, which now is reduced to 3 months. The latest proclamation included a follow up procedure in that the concerned government body to amend, change or repeal the law has a duty to communicate the HoF in writing that it amends, changes or repeals the law in question. The House shall follow up the execution of its decision. For that matter Article 22(1) of Proclamation 1261/2021 states that the final decision of the HoF on constitutional interpretation shall be obligatory.

Binding Effect

The repealed Proclamation No 251/2001 on Article 11 provides that the House’s constitutional interpretation shall have the general effect which therefore shall have applicability on similar constitutional matters that may arise in the future. Such a binding nature of the interpretation is broad enough to oblige not only courts but also the House itself. Nonetheless, the latest proclamation that repealed Proclamation 251/2001 is silent on the subject matter. There is no clear mention that an interpretation on a constitutional matter will have applicability to similar constitutional matters that may arise in the future.


Pending cases before the HoF are required not to be publicized. Press release or publication of such pending cases by any media including social media is prohibited unless it is for research or study purposes. However when it comes to final decision, Proclamation No 1261/2021 includes the need for publication in a journal and release in media outlets of the decision of the HoF on constitutional interpretation. The publication shall be done in languages of the Federal government, Regional states and English.


The enactment of Proclamation No 1261/2021 is to fill implementation gaps and incorporate new developments. The HoF experience in tackling constitutional interpretation issues has brought to its attention the need to include additional procedures like stay of execution and follow up of its decisions in amending, changing or repealing laws in different government organs. Interpretation of constitutional matters affecting the supreme law of the land has to be given weight and dissemination of information on changes made necessary to reach all Nations, Nationalities and Peoples of Ethiopia.

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Young Workers: Prohibited Working Conditions

By Dagnachew Tesfaye, Partner at DMLO

The Ethiopian Labour Proclamation No 115/2019 incorporates general working conditions of young workers from Article 89-91. Young workers are those natural persons between the age of 15-18 years. It is prohibited to hire persons below the age of 15 years. In line with Article 89 Sub Article 4 of the Labour Proclamation, the Ministry of Labour and Social Affairs (now the Ministry of Labour) has issued as of August 24,2021 a registered Directive No 813/2021 (the Directive)  that lists activities that are prohibited for young workers. A previous directive  issued in April 2013 on the Lists of activities prohibited for young workers is repealed by this Directive. A look at those prohibited activities for young workers shall be the focus of this article.

Prohibited Activities

Around fourteen activities are listed as prohibited jobs for young workers. These include:transporting persons and goods by land, air, and water and fishing; lifting, pulling heavy goods or works related to these in ports and warehouses; works directly related to electric power generating stations, transmission lines, and power distribution centers;  subterranean works like deep mineral extraction, stone quarries, or related works; work on high places on scaffolding, moving materials up or down using machines, or moving materials from one place to another on cranes and lifts using electric or motorized energy.

The list goes on to include work in undertakings that produce alcohol, tobacco or other substances that induce addiction or are poisonous; work in extremely cold places, warehouses, freezers; work in extremely hot places; jobs that expose young workers to harmful ionizing and non-ionizing radiations like x-rays, ultra-violet rays, gamma rays etc; work in production areas that use dangerous and poisonous chemicals like arsenic, lead, cadmium, manganese, cyanide and other such metallic substances and solvents; works which produce or utilize explosive and incendiary substances and elements; jobs which involve preparation, mixing, or spraying of various pesticide and herbicide chemicals; jobs which bring the worker into direct contact with biological hazards like fungi, bacteria, and viruses that cause contagious diseases and jobs that can harm the physical, mental, and psychological well-being of young workers. 

Weight Limits

Weight limits are categorized under continuous work and non-continuous work. Continuous work has been defined as  uninterrupted and repetitive work that causes physical stress. Consequently, for activities that are fully manual: for continuous work: 7 kgs and for non – continuous work: 11 kgs. Where the activity is wholly manual, but involves climbing up and down a slope: for continuous work: 5 kgs,  for non – continuous work: 9 kgs. Where the movement is on a onewheel barrow: where the floor is bumpy and not smooth: 16 kgs and where the floor is smooth: 20 kgs.


The prohibited activities shall not be applicable to Youth who are engaged in training and practice under educational and vocational institutions authorized and supervised by the given authority which have responsibility. 

Limits of Hours of Work

Normal hours of work for young workers shall not exceed seven hours a day. It is prohibited to assign young workers on night work between 10 p.m. and 6 a.m,  overtime work and work done on weekly rest days or work done on Public Holidays.


The Labour Proclamation and  the Directive has been issued in order to protect young workers from serious occupational injuries or damages to their health in the course of their work. It is prohibited to assign young workers on work, which on account of its nature or due to the condition in which it is carried out endangers their lives or health. The responsibility is laid upon  the employer to implement the Directive.

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Major Additions to Private Organization Employees Pension Law

By Mahlet Mesganaw, Partner at DMLO

Ethiopia has enacted as of March 18,2022 new Private Organization Employees’ Pension Proclamation No 1268/2022(the current Proclamation). This new proclamation has repealed the Private Organization Employees’ Pension Proclamation No 715/2011 and its amendment Proclamation No 908/2015(together referred to as previous proclamations). The major additions to the new proclamation shall be the focus of this article.

Private organization Employee

In the previous proclamations, employees engaged in cotton collection,sugar cane cutting and such other similar works were explicitly excluded from being covered by the proclamation. Now in the current pension proclamation, the exclusion of these types of employees has not been indicated. Thus the definition on who is a private organization employee shall make the distinction as to who is covered and who is not. Private organization employee is defined as ‘any private organization employee who has been a salaried person employed in a private organization for less than 45 days for definite or indefinite period of time or piece of work including managerial employees’.

From Agency to Administration

The authority that administers the private organizations employees pension and social security was organized under an Agency. Now in the current proclamation the authority is changed from Agency to Administration. This is in line with Article 12 of the Proclamation 1263/2021 that deals with the Definition of Powers and Duties of the Executive Organs. Hence the government administrative body that is entrusted to administer the private organization employees pension and social security is the Private Organization Employees Social Security Fund Administration. 

No Option for Provident Fund

The previous proclamation allows employees to choose from pension schemes or the provident fund or agree to be covered by the pension proclamation. Now the new and current proclamation states that ‘all employees who have provident fund or any other scheme called by any other name before the coming into force of this proclamation shall be covered by this proclamation’. As a result the only scheme for private organization employees is the pension scheme provided in the new proclamation and no other. The Administration may issue details by a directive.

Non-applicability to Sole Owners

The current and previous proclamations are applicable to employees of private organizations who are Ethiopian nationals. Nonetheless, domestic workers and employees of governmental international organizations and foreign diplomatic missions were excluded from the current and the previous pension proclamations. However the current proclamation added one more exclusion i.e. sole owner’s managers or employees or sole owner’s. Thus the private organization employees pension proclamation is not applicable to sole owners’ managers or employees or sole owners.

Pension Contribution Collection

The previous proclamation indicates the collection of the pension to be done by bodies to be delegated by the Agency on Article 11(4) of the proclamation. However the current proclamation specified the delegated body. The government body to collect pension contributions is the for the federal government the Federal Ministry of Revenue and for regions the Regions Revenue Authority or any authority legally established for the collection of revenue and tax.

Collection of Pension Contribution

Specific power to sell through tender the property of the private organization who failed to pay the pension contribution has been modified to be handled by a directive to be issued by the Administration in the current proclamation.


Priority over any debt of pension contribution payment is elaborated by the current proclamation as having priority because it emanates from law, agreement or court decision or over any payment of debt.

Liability of General Manager

The new pension proclamation added the liability of the General Manager of a private organization which has been dissolved, divided or amalgamated for unpaid arrears pension contribution.

Investment of Pension Fund

Specific mentioning of investment of pension funds in treasury bonds and other profitable and reliable investments was indicated in the previous proclamation. Now the current proclamation indicates investments as  ‘profitable and reliable areas’ only. The new proclamation leaves the specific wording of treasury bonds. Who decides on the investment has been previously left to be determined by the directive to be issued by the Ministry of Finance and Economic Development. However, now the current proclamation assigned the task  to the Administration Management Board.

Retirement Age

The retirement age of an employee of a private organization shall be 60 years based on the date of birth registered when he was employed for the first time. The retirement age of 60 has been there in Proclamation No 715/2011 and it is copied in the new proclamation as well.

Service beyond Retirement Age

In calculating the period of service, the period of service beyond retirement age lawfully retained in service would have been considered in the previous proclamation. Now in the current proclamation, lawfully being retained in service beyond retirement age is left out. In other words service beyond retirement age would not be considered as a period of service.

Assessment of Employment Injury by Medical Board

Assessment of employment injury by one medical board could be sent to be evaluated by another medical board. The previous proclamation was silent on  what to do if there exists  conflicting assessment results. The current proclamation gave an indication of a solution to the gap. The Administration is given the task of determining the acceptance of the medical board assessment.

Pension Adjustment

Pension adjustment has been reduced to 3(three) years by the current proclamation from every 5(five) years by the previous proclamation.

Period of Limitation

In the current proclamation, any claim for payment of arrears of pension benefit or payment of gratuity is barred by a 5(five) year period of limitation. The period of limitation used to be 3(three) years in the repealed proclamation.

Responsibility to Digitalize

The Administration is tasked with a new responsibility to collect and digitalize data.

Criminal Liability

The Previous proclamation contains a penalty for unwillingness to submit evidentiary documents and obstruction to result in punishment with rigorous imprisonment not exceeding 5 years and a fine not exceeding Birr 10,000. Now the current proclamation deleted the 5 years imprisonment and Birr 10,000 penalty and  left the penalty to be determined by the relevant provisions of the criminal law of Ethiopia.

To sum up, the new and current private organization pension proclamation has incorporated few additions  with the aim of strengthening and improving the pension scheme and pension fund to the benefit of citizens.

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Recent Laws on Investment in Tourism

By Dagnachew Tesfaye, Partner at DMLO

Post-Covid ease of travel restriction will attract tourists to enjoy the amazing landscape, diverse culture and natural beauty of Ethiopia. Additional mesmerizing parks are on the way. The more internal conflict and instability subside, the more the increase in tourism investment. The laws regarding establishment of tourism investment in Ethiopia will be the focus of the article.

Investment in Tour Operations

According to the Investment Regulation No 474/2020, Article 4(12) tour operations are reserved for domestic investors. However the previous investment regulation i.e. Investment Incentives and Investment Areas Reserved for Domestic Investors Council of Ministers Regulation No 270/2012 divided tour operations into two. These were grade 1 tour operations and tour operations below grade 1. Consequently, the previous investment regulation allowed foreign investors to invest in grade 1 tour operations. Whereas tour operations below grade 1 were reserved for domestic investors. The previous regulation  is repealed by the current Investment Regulation on reserved investment areas. Therefore, tour operation has been limited to investment by domestic investors only. New entrants of foreign investors cannot engage in tour operations.

Tourism as a Priority Sector 

The Ethiopian Government has given tourism a priority. The Government invested a lot of capital in developing new tourist destinations and restructured the regulator to focus on tourism. The Ministry of Tourism(MoT) has been restructured from the Ministry of Culture and Tourism to the Ministry of Tourism under Definition of Powers and Duties of the Executive Organ Proclamation No 1263/2021. According to this Proclamation, the Ministry has been given several powers and duties. Among the powers one can mention the power to issue licenses, unless such power is clearly given to other organs, to investors who provide services in tourism to more than one region or where the law provides, to tourism service providers conducted by forign investors. 

In conclusion, the Ethiopian Government is eyeing tourism as a sector that is going to positively impact the economy. The Government is hugely invested  in developing new tourist destinations and their infrastructures. Whereas, the investment in tour operation is reserved to domestic investors under the current Investment Regulation. The previous Investment Regulation allowed foreign investors to invest at least in grade 1 tour operations. Flow in foreign currency and foreign tourists from around the world would have been increased if new foreign investment entrants to tour operations are allowed to invest in tour operations. The intention of the Government on the one hand and the law on tourism investment seems to contradict. This should call for amendment of the law on investment areas allowed for foreign investors in tourism investment.

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