endowments – Syria Report

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Katerji Restores Carlton Citadel Hotel in Old Aleppo

26-11-2024/in HLP, News /by Rand Shamaa

In November, the company Reviving Old Aleppo LLC commenced restoration work on the Carlton Citadel Hotel in Aleppo. The company had signed a contract with the Ministry of Tourism in February 2020 to invest in the hotel project but only managed to obtain the necessary permits at the end of 2023.

Reviving Old Aleppo LLC, whose bylaws were approved by the Minister of Domestic Trade and Consumer Protection under Decision No. 2862 in October 2019, is a company specialising in importing, exporting, and trading building materials; maintaining and restoring buildings, roads, and facilities; designing and executing interior and exterior decorations; and establishing and managing commercial complexes and malls. The company’s founding partners are Ahmad Mohammad Adnan Al-Shehabi and Ahmad Ghazal Ghazal. According to its bylaws, the company is prohibited from building, selling, or trading in residential properties of any kind.

Local sources in Aleppo told The Syria Report that Reviving Old Aleppo LLC is affiliated with Katerji Group Holding. This claim is supported by various indicators, including a January 2022 video by the Aleppo-based Facebook page “Sada FM Syria,” introducing the company as part of the Katerji Group Holding.

Brothers Baraa and Hussam Katerji, along with some of their companies, have been under U.S. sanctions since 2018 for “facilitating oil shipments and financing for the Syrian regime” and acting as intermediaries between the Syrian regime and ISIS in oil deals. Through companies like Arfada Oil, Arman Hotel Management and Tourism, and AA Syria for Towers, the Katerji Group operates in sectors ranging from engineering and oil to tourism and construction. Baraa Katerji served as the chairman of Katerji Group Holding until he was killed in an Israeli airstrike near the Syrian-Lebanese border in July 15.

The Carlton Citadel Hotel, rebranded this year as Arman Citadel Hotel, overlooks the Aleppo Citadel and is located near the historic Khan Al-Shouneh. It is a 20-minute drive from Aleppo International Airport and within walking distance of the citadel, old markets, the Umayyad Mosque, the Museum of Popular Arts and Traditions, and several traditional hammams, making it a significant attraction for tourists.

In February 2020, Naila Shahoud, the head of the Directorate of Tourism in Aleppo, told the official local newspaper Al-Jamahir that the investment contract included rebuilding and operating the hotel under a Build-Operate-Transfer (BOT) system for 40 years, with an annual investment fee of 16 percent of the hotel’s yearly revenues. The reconstruction involves restoring the destroyed sections to their historical condition and adding a complementary building in harmony with Aleppo’s heritage. The project’s implementation timeline was set at five years, with plans for the hotel to be a five-star establishment featuring 80 rooms and four restaurants.

Ms Shahoud added that, alongside encouraging investor interest, the project aims to motivate local residents to restore and return to their homes around the citadel and old city.

The building hosting the Carlton Citadel Hotel dates back to the early 19th century and was originally built as a courthouse on endowment land. However, the 1822 earthquake destroyed the building. Between 1883 and 1897, the site was developed into the “Hamidian Strangers’ Hospital” with funds from donors and inaugurated in 1900 by the Ottoman governor of Aleppo, Jamil Pasha. The hospital included 32 rooms, two large halls, two lounges, and a pharmacy. Over the years, it became a national hospital, a nursing school, and later a health institute in 1988. In 2011, the Ministry of Tourism converted the building into a four-star hotel with 90 rooms, 180 beds, and 584 restaurant seats. The Carlton brand is, in Syria, the property of Shamra Hotels and Resorts Investment Company, which is affiliated with the Attar Group, and is not related to an international chain.

It remains unclear how the property transitioned from endowment ownership to state property under the Ministry of Tourism. This is notable because endowment properties are neither state-owned nor privately held, despite originally being donated by individuals.

After opposition forces took control of parts of Old Aleppo in mid-2012, regime forces and Iranian militias transformed the Carlton Citadel Hotel into a military base due to its strategic vantage point over opposition-controlled neighbourhoods. On May 8, 2014, the opposition group Islamic Front detonated mines planted through tunnels beneath the hotel, partially destroying it. Subsequent shelling in 2015 further damaged its foundations.

A source from Reviving Old Aleppo LLC told The Syria Report that the project spans 7,000 square metres, and is set to create around 1,000 job opportunities “breathing new life into Aleppo’s historic centre”. However, the project faced prolonged delays due to mismanagement within Aleppo’s city council, disagreements with the Directorate of Old Aleppo, the Old Aleppo Protection Committee, and the technical committee of the city council. According to the source, the company took four years to secure the construction permit, despite the contract stipulating a five-year implementation period. The project site was handed over to the company in April 2020, but bureaucratic hurdles and deliberate stalling from official entities delayed the project’s start.

In late 2022, Baraa Katerji personally intervened with the Minister of Tourism to pressure the city council to approve the initial project plans. Despite this, the council did not grant the construction permit until late 2023. According to the source from Reviving Old Aleppo, the Katerji Group accuses unnamed entities of exerting pressure on the council and the Old Aleppo Directorate of delaying the permit issuance.

The company has renamed the hotel from Carlton Citadel to Arman Citadel. If completed, the hotel will join other Katerji Group-operated hotels in Aleppo, including Arman Hotel in New Aleppo, Lorus Hotel in the Mohafaza neighbourhood, and the Quattro Hotel in the Martini neighbourhood, which is expected to open in November 2024.

Explained: The Endowments Law in Autonomous Administration Areas

20-02-2024/in Analysis & Features, HLP /by Rand Shamaa

The General Council for the Autonomous Administration in North and East Syria (AANES), acting as a parliament, issued Endowments Law No. 13 on November 15, 2023. The law aims to oversee all religious activities, develop Islamic education, regulate fatwas, and supervise religious rituals.

In the law’s second and third chapters, Articles 13-27 outline the principles for managing the finances and properties of awqaf (endowments), their disposal, and investment strategies. It also establishes guidelines for leasing endowments properties or parts thereof alongside the rights of the beneficiaries. Furthermore, it sets rules for the judiciary when considering disputes related to leasing, disposal, and restoration of such properties.

Endowments Law No. 31 of 2018 regulates the Ministry of Endowments’ role in managing and investing such properties in regime-controlled areas. According to Law No. 31, endowment properties are special; they are neither state-owned nor privately owned, although they primarily originated from private donations. Such properties include mosques, Sufi lodges, schools, libraries, cemeteries, shrines, and mausoleums.

However, in areas under the control of the AANES, endowment properties were managed by a special body – called the Authority of Muslim Scholars – from 2014 until the issuance of Law No. 13 of 2023.

According to the new law, any dealings with endowment properties in areas under the AANES require approval from the Democratic Islamic Conference, acting as a Ministry of Endowments that oversees religious work, its regulations, judgments, fatwa issuance, and religious education. According to Article 1 of Law No. 13, the Conference is an independent legal entity with financial autonomy, followed by committees and the Department of Endowments and Endowment Assets. The Department of Endowments is the locally competent committee derived from the Conference, while Endowment Assets include both movable and immovable properties allocated for public benefit according to Islamic law provisions.

The Democratic Islamic Conference, through its Endowments Department, is now responsible for managing endowment funds, setting necessary regulations, preserving them, and taking measures for their optimal development and investment. It also takes administrative actions to remove encroachments and violations on these funds.

According to the law, endowments include all endowment funds and properties and all things that were or have become integral parts of the endowment property or its appurtenances or necessary accessories to it. These properties must be registered with the Endowments Administration.

The law clarified that financial rights due to the endowment from others do not become statute-barred and are considered a privileged debt, collected according to the public funds collection law. No right of prescription applies to endowment properties. The law further clarified that anyone occupying or utilising an endowment property, partially or entirely, without a valid contract documented with the Endowments Department is considered an encroacher and violator of the property. The law affirmed that the Endowments Department’s collection of occupation fees for an endowment property does not constitute a contract for the violator on the property.

Law No. 13 of 2023, in its Article 14, confirmed the prohibition of selling endowments or transferring them and forbidding their inheritance, mortgaging, or even insuring them. Conversely, Article 52 of Law No. 31 of 2018, applied in regime-controlled areas, allowed the ministry and the Central Endowments Council to sell properties or, mortgage them or exchange one endowments property for another, which contradicts the fundamental principle of endowments that prohibits selling and dealing such funds outside the purpose for which they were established.

Law No. 13 of 2023 stipulates that leasing endowment properties or parts thereof can only be done through auction, according to its provisions. However, the law includes no texts or provisions regarding the auction process. Meanwhile, Law No. 31 of 2018 allowed the leasing of endowment properties through auction, requiring the lessee to pay the cash equivalent determined by the auction, in addition to paying the annual rent specified in the contract, with a commitment to increase the rent according to the percentages specified in the book of conditions and the contract.

Law No. 13 of 2023 permits the leasing of endowment properties by mutual agreement based on a decision from the Democratic Islamic Conference if the lessee is a public entity. All leases of endowment properties are renewable for a period not exceeding ten years, with the lessee obliged to increase the rent according to specified ratios.

Ministry of Endowments Removes Some Endowment Rights from Properties

28-02-2023/in HLP, News /by Rand Shamaa

On December 21, 2022, the Ministry of Endowments issued Decision No. 1104, which removed some endowment rights registered in the Land Record for certain real estate properties. In return, the owners are to pay five percent of the current value of these properties to the ministry’s directorates.

The real estate targeted by Decision No. 1104 is not endowment properties. Instead, they simply have endowments’ rights listed as their legal classification or as a note on their Land Records, which does not impose any restrictions on the rights of the property owners, who are entitled to sell and transfer ownership of the properties. Meanwhile, endowment classifications remains in place within their records.

Actual endowment properties have a special legal status, belonging neither to the state nor to individuals. Owners of such properties may not do as they wish with them, but instead they must go to the benefit of the people. Ownership may not be transferred to others because they are considered to be “governed by God”. Endowment properties include mosques, hospices, tawhid religious centres, schools, libraries, cemeteries and shrines.

The endowment rights removed by Decision No. 1104 are tithes, sultani (dominion) rights, alomara rights and annual remunerations. These were among the dividends paid to the Ottoman state for the usufruct of some properties, some of which have no real endowment origins. Tithes were one-tenth the output endowments lands, paid by those properties’ beneficiaries. Meanwhile, sultani and alomara endowments were historically applied to Amiri lands distributed by the Ottoman wali governors, given that some benefits were classified as endowments.

Likewise, these were not endowment properties, and beneficiaries entitled to dispose of them had to pay annual fees to charitable organisations or to the endowment administration to benefit from them. Finally, the annual remunerations were “endowments” of a yearly sum to be paid by beneficiaries of a given property as an annual donation to a person or mosque, according to the wishes of the original property owners.

During the short-lived United Arab Republic between Syria and Egypt in 1958-1961, the endowment system was regulated, and some endowment rights were abolished as those properties were not originally endowment properties, but Amiri lands belonging to the state whose benefits were halted. For example, Endowments Properties Law No. 189 of 1960 stated that endowment authorities no longer had the right to collect sultani and alomara endowments because they were not endowment properties. Two years earlier, Law No. 174 on Tithes and Lump-Sum Returns cancelled the right of endowment institutions to collect these annual payments. And Jurisprudence No. 60 of 1961 affirmed that notes on such rights in the Land Registry were no longer valid, including those listing tithes, sultani payments, alomara payments and annual remunerations.

In essence, the Ministry of Endowments’ recent Decision No. 1104 contradicts the contents of Laws No. 189 and 174 and judicial jurisprudence. This is because the ministry is not entitled to collect payments in return for the removal of non-original endowment rights, which previous laws had already canceled.

Decision No. 1104 removes those rights only after collecting a sum equivalent to five percent of the current value of the properties in question, as determined by the relevant financial entities. According to the decision, the property owners in zoned areas could pay that five percent sum, or register in the name of the relevant endowments directorate a share equivalent to five percent of the current value of those properties.

The concerned endowment directorates handle the cancellation of these endowment rights after confirming the completion of these payments, which then serve as revenue to benefit those directorates.

In practice, nothing changes for the owners of these properties after the endowment rights are removed, as they were not already paying endowments for them. The only thing that changes is cancelling those rights from the Land Records.