Explained: The Management and Investment of Confiscated Assets

On April 4, the Council of Ministers issued Decision No. 16, containing the executive instructions for Law No. 26 of 2023, related to the Disposal of Movable and Immovable Properties Confiscated under a Final Judicial Ruling, under the name “Special System for the Management and Investment of Confiscated Assets.” Law No. 26 of 2023 concerns the management, investment, and transfer of ownership of movable and immovable assets confiscated from those convicted by a final court ruling issued by any competent court dealing with felonies or terrorism, in accordance with various preceding laws.

Distribution of Responsibilities among Ministries

The special system, issued by Decision No. 16, consists of six chapters comprising 23 articles and was published in Part I of Issue 15 of the Official Gazette on April 16, 2024. The system assigns the responsibilities and tasks of implementing Law No. 26 of 2023 among the government ministries. It assigns the Ministry of Agriculture and Agrarian Reform the task of managing and investing in lands outside of zoning plans, while the Ministry of Finance is tasked with managing and investing in properties within zoning plans, as well as movable assets. The system requires the Ministry of Justice and the Military Judiciary Administration to send certified copies of final non-appealable court rulings to the Ministries of Finance and Agriculture for the necessary procedures.

Decision No. 16 also mandates the Ministry of Justice to circulate judicial rulings on the confiscation of convicts’ properties through the National System for Provisional Seizure Orders to facilitate the execution process on those properties. The National System for Provisional Seizure Orders is an electronic system launched by the Ministry of Communication and Technology in 2018, in collaboration with the Ministries of Finance and Justice, and with the participation of the entities involved in issuing and executing these orders. These entities include the Ministry of Transport, the Central Organisation Financial Control, the Combating Money Laundering and Terrorism Financing Commission, the General Directorate of Cadastral Affairs, the General Directorate of Customs, and the banks. The scope of the system includes all precautionary measures such as provisional seizure, compulsory insurance, and asset freezing, which restrict the disposal of ownership and are issued by the competent authorities as a precautionary measure to safeguard public assets. This means that after the issuance of final, non-appealable court rulings that include the confiscation of convicts’ assets, the Ministry of Justice circulates these rulings through the National System for Provisional Seizure Orders, allowing them to be converted from provisional to executive seizures.

The Ministries of Agriculture and Finance are responsible for following up on the execution of final court rulings that confiscate properties and registering them under the name “Syrian Arab Republic” or in the official records of confiscated assets, regardless of which judicial authority issued those rulings. The official records of confiscated assets are detailed registers containing information about these assets, their descriptions, the actions taken regarding them, and proposals for their management and investment.

Investment of Confiscated Properties

Decision No. 16 requires the General Directorate of Public Revenues under the Ministry of Finance and the General Commission for the Management and Protection of State Properties, established by Law No. 43 of 2023 and affiliated with the Ministry of Agriculture, to maintain detailed records of confiscated properties. These records should include information about the properties, their descriptions, the actions taken regarding them, and proposals for their management and investment.

Each of the Ministries of Finance and Agriculture, within their respective areas of responsibility, is to form a special committee for the management and investment of confiscated properties. These committees are tasked with proposing ways to manage and invest in these properties and protect them from damage. Specifically, the committee formed by the Ministry of Finance is responsible for managing and investing in movable properties and properties within zoning boundaries, while the committee of the Ministry of Agriculture is responsible for managing and investing in lands outside of zoning boundaries.

Additionally, the ministries can invest in, lease, or sell the confiscated properties according to the provisions of current laws, such as the Contracts Law No. 51 of 2004, the Investment Law No. 18 of 2021, the Real Estate Sales Law No. 15 of 2021, the State Property Law No. 252 of 1959, the Trade Law No. 33 of 2007, and others.

Decision No. 16 also allows the Ministers of Finance or Agriculture to transfer confiscated properties to other public entities upon their request, provided they explain their need for these properties. The committee for the management and investment of confiscated properties in each ministry will study the proposal and submit it to the minister, who will then forward it to the Prime Minister for a final decision. If the transfer of ownership is approved to an administrative public entity, the transfer is done free of charge. However, if the transfer is to an economic public entity, that is, a state-owned company, that entity is required to pay a fee determined by the Prime Minister for the benefit of the public treasury.

Other public entities can request the allocation of confiscated properties from the Ministries of Finance or Agriculture in the same manner as property transfer. Allocation involves placing these properties at the disposal of a public entity for a specified period and purpose, after which the properties must be returned. The Prime Minister can cancel the allocation if the public entity violates the specified conditions.

According to Decision No. 16, the revenue generated from the management and investment of confiscated properties is directed to the public treasury and deposited into a special account for confiscated assets. The Ministries of Finance and Agriculture are required to submit regular reports to the Cabinet detailing the status of the investment and management of confiscated properties, the profits achieved, and any difficulties encountered.

When transferring property ownership to the name “Syrian Arab Republic,” third-party claims such as lawsuits, mortgages, or seizures noted on the property record are disregarded. Consequently, any claims made by third parties on the confiscated property are considered futile.

Confiscation of a Company or Store

If the confiscated properties include a store or a company, they remain subject to the regulations governing them, whether company law, commercial law, or tax laws, to ensure the rights of the treasury. The Ministry of Finance appoints a representative to oversee the management and investment of the store or company, or the confiscated share thereof. This representative submits their report and recommendations on the process.

The Committee for the Management and Investment of Confiscated Assets within the Ministry of Finance is responsible for identifying the companies and stores, and the type and scale of the commercial activities they engage in, to make appropriate investment decisions. The Minister of Finance has the authority to propose changes to the legal structure of the confiscated company, merge it with another company, liquidate it, withdraw from it, or sell the confiscated share.

It should be noted that if the confiscated property is a share in a real estate property or a store, this can negatively impact the remaining partners due to the restrictive measures imposed by Decision No. 16. The encroachment on the ownership of the remaining partners might compel them to relinquish their shares for less than their market value. Decision No. 16 does not address the rights of the partners and fails to establish any rules to protect their interests.