Amendment of Law No. 75 dated 27/10/2016

Official Gazette

148 Official Gazette - No. 2 - 13/01/2022

Law No. 260 Amendment of the Sole Article of Law No. 75 Dated 27/10/2016 (Cancellation of Bearer Shares and Share Warrants)

The Chamber of Deputies has approved, and the President of the Republic promulgates the following Law:

Article One: The text of Item 1 of the Sole Article of Law No. 75 dated 27/10/2016 (Cancellation of Bearer Shares and Share Warrants) is amended as follows: «Notwithstanding any other provision, joint-stock companies (including limited partnerships by shares) are prohibited from issuing bearer shares and share warrants after this Law enters into force.

Furthermore, companies whose shares include bearer shares or share warrants must replace the bearer shares and share warrants issued prior to the promulgation date of this Law with registered shares, in accordance with Item 3, within a period of three years from the date of publication of this Law. They must also amend their articles of association in accordance with the aforementioned provisions within the same maximum deadline.»

Article Two: This Law shall take effect upon its publication in the Official Gazette.

Beiteddine, 5 January 2022 Signature: Michel Aoun

Promulgated by the President of the Republic Prime Minister Signature: Najib Mikati

Statement of Reasons Whereas Law No. 75 dated 27/10/2016 (Cancellation of Bearer Shares and Share Warrants) prohibited joint-stock companies (including limited partnerships by shares) from issuing bearer shares and share warrants after its entry into force (i.e., on 3/11/2016). It simultaneously required companies, whose shares include bearer shares or share warrants, to replace the bearer shares and share warrants issued prior to the promulgation of said Law with registered shares, in accordance with Item 3, within a one-year period from the effective date of the Law. In addition to amending their articles of association in accordance with the foregoing within a maximum deadline of the first meeting of the General Assembly of Shareholders.

Whereas Item 3 of the Sole Article of Law No. 75/2016 aforementioned imposed penalties and measures on holders of bearer shares or share warrants who did not exchange their shares within a one-year period from the effective date of the Law, including what is noted in Paragraph (3) of said Item, namely: «transfer of ownership of unexchanged bearer shares or share warrants to the name of the Lebanese State, after two years from the effective date of this Law», i.e., practically on 3/11/2018.

Whereas the aforementioned Law stipulated notifying holders of shares in joint-stock companies that had previously issued bearer or share warrants, of the obligations prescribed therein, through publication in the Official Gazette and three local newspapers, and on the company’s website (if available), but without diligent efforts to confirm notification. Consequently, regarding a specific individual, it was deemed sufficient for the person to be considered notified merely upon publication in the Official Gazette and three local newspapers.

Whereas the aforementioned measures, which modify existing legal conditions and affect acquired rights, are likely to have caused, and indeed have caused, significant harm to shareholders of those companies, particularly expatriate and/or non-resident ones, who find it difficult to follow and consult the Lebanese newspapers and Official Gazette, whose distribution is limited to paying subscribers, unlike what was recommended by Law No. 28 on the Right of Access to Information dated 10/02/2017. Not to mention the consequences arising for the rights of a bearer share holder if deemed automatically notified, including loss of ownership and the passage of time on their right to object, or even the impossibility of challenging a Law that has become effective and binding. With due reminder, if necessary, of the special circumstances under which the repeated expedited Law No. 75/2016 was issued alongside a package of other laws dubbed «Necessity Laws» in the absence of effective procedural authority and a President of the Republic for over two years.

149 Official Gazette - No. 2 - 13/01/2022

Law No. 261 Determining the Conditions for Equivalency of the French-American Curriculum to the Lebanese General Secondary Education (Baccalaureate) and Settling the Status of Students from Previous Years

The Chamber of Deputies has approved, and the President of the Republic promulgates the following Law:

Article One: The study of a student enrolled in the French-American Curriculum class in Lebanon shall be considered equivalent to the Lebanese General Secondary Education (Baccalaureate) if the student meets the following conditions:

1. Having obtained permission from the Equivalency Committee of the General Directorate of Education to continue foreign curriculum studies in Lebanon, based on Law No. 29 dated 17/12/1973 (Non-equivalency of non-Lebanese certificates...), before completing Grade 12 studies of this curriculum.
2. Having successfully completed Grade 12 (Grade 12) studies within a sound academic sequence, in a private school operating under a legal license in Lebanon.
3. Having undergone an evaluation examination conducted by a specialized academic organization assessing educational acquisitions for students following the pre-university American curriculum, and having achieved a total score determined by an executive decision issued by the Minister of Education and Higher Education, based on the proposal of the Equivalency Committee of the General Directorate of Education.
4. Determined by a decision of the Minister of Education and Higher Education, based on the proposal of the Equivalency Committee, are the global academic organizations that conduct recognized evaluation examinations with globally accepted results.
5. Having successfully completed thirty credits during their French-American curriculum studies, according to the mechanism determined by an executive decision issued by the Minister of Education and Higher Education, based on the proposal of the Equivalency Committee of the General Directorate of Education.

Article Two: None of the thirty credits completed by the student in the French-American curriculum shall be excluded, and effective procedural authority has been granted to a President of the Republic for over two years. Whereas the transfer of shares to the State in the manner proposed by the aforementioned Law deprives many holders of transferred or non-movable rights registered under the name of the transferring company of their rights, wealth, and livelihoods that they have worked hard to obtain, which sometimes constitute their sole estate, especially considering the current difficult economic, financial, and monetary conditions in the country. Thus, qualitative notification that disregards principles and rights, given the importance of this procedure and its closely related subject matter, is flawed by a fundamental defect likely to affect the right of private property guaranteed by the Preamble and Article 15 of the Lebanese Constitution, which stipulate that «Property is under the protection of the Law; no one may be deprived of their property except for reasons of public utility, in cases stipulated by law and after fair compensation.» As well as the principle of equality in rights and duties among all citizens without distinction or preference, as stipulated in Paragraph (c) of the Preamble and Article 7 thereof. Moreover, based on all the foregoing and as an aside, it is impermissible to link the execution of a procedure under penalty of losing the right to a limited and short forfeiture period of two years, which is adopted as an exception in prevailing civil laws to the ten-year statute of limitations (Article 349 of the Law of Obligations and Contracts). It is worth noting that the Income Tax Law implemented by Legislative Decree No. 144 dated 12/06/1959, with its amendments, addressed a similar matter by providing a longer statute of limitations and forfeiture period (five years), considering in Article 9 (supplementary to Article 350 L.O.C.) that the State is ultimately entitled to fifty percent of what falls under the five-year statute of limitations from the amounts and securities specified in that article. Accordingly, it was required, and remains required, based on the foregoing, to adopt a five-year statute of limitations and forfeiture period. Therefore, considering the seriousness of the resulting consequences and safeguarding the fundamental rights and guarantees recognized for citizens, before executing the transfer process and the final loss of rights as well as the difficulty or even impossibility of restoring matters to their previous state, we submit the attached Law proposal, hoping that the honorable Chamber of Deputies will deliberate and approve it.