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&oYv&.A ~;J t~ ;JJt,fI]FEDERAL NEGARIT GAZETA

OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETIDOPIA

ll9""11'~ ~OD:r cfl1'C ?;'%

h"tll Mlfl-(}~ ?)~ .,.1 Iitf1QSibYe~ No. 27

ADDISAaABA-2'"July,2002OJ\. :rf" k f ~.e..t-ft ce )~"''P)lt"''''fce &T 11t\. h

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tryarlifi). CONTENTS'

hCP~cfl1'CUit/liH1!! ~.9"" Proclamation No. 280i2002fh. 1oll:rOD1:r nCP~ 1~ lii'f.%f:E~ Investment Proclamation ,..: ' Page 1768

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PROCLAMATIONNO. 280/2002RE-ENACTMEMENTOF TIlE

INVESTMENTPROCLAMATION

WHEREAS, the encpuragement and promotion ofinvestmenthas become necessary so as to aCceleratetheeconomicdevelopmentof the country and to unprove the

livingstandardsof itspeoples; ,

WHEREAS,in additionto that of domestic investors, itis deemed essentialto widen the scope of participl!tionofforeign investorsand to facilitateconditiorts"thereof with aviewto enhancingthe country's investmentactivities;

WHEREAS,thesystemof administrationof investmentneedsto be transparentand efficient;

WHEREAS,to theseends, it has.become n~sary torevisethe existinglawon investments;

NOW,TIffiREFORE,m accordancewith Article 55(1)of the Constitutionof th~Federal Democratic Republic ofEthiopia,it is herebyproclaimedas follows:

PART ONE

General,

1. Short TicJe

ji. h~C C/)ll This Proclamation may be cited as the "Investment

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2. Definitions

In this Proclamation, unless the context requiresotherwise:

1) "Investment" means expenditure of capital by aninvestorto establisha new enterpriseor to expandorupgrade one that already exists;

2) "Enterprise" means an undertaking establishedforpurposes pf gainingprofit;

3) "Capital" means local or foreign cWTency,./

negotiable instrumentS, machinery or equipment,buildings, initial working capital, property rightS,patent rightS,or other business assetS;

4) , "Investor" means a dornestic or foreign investorhaving invested in Ethiopia;

5) Domestic Investor" means an Ethiopian or aforeign national permanently residing in Ethiopiahavingmadean investment,and includesthe Gover-nment, public enterprises as well as a foreignnational, 'Ethiopian by birth and desiring to be:con~dered as a domestic investor;

6) "Foreign 'Investor" means a foreign or anenterpriseownedby foreignnationals,having'inves-ted foreign capital in Ethiopia.- and includes anEthiopian permanently residing abroad andpreferring treatmentas a foreign investor;

7) "Foreign Capital" means capital obtained fromforeign sources,and includes the re-investedprofitsand dividendsof a foreign investor;

8) "Expansionlup~g" means increasingin value,by more than 25%, the full production or servicecapacity of an existing enterprise, be it in variety,volume, or"both, through additional investmentmade to the extent determined in regulations to be

issuedfor the implementationof this Proclama~;9) "Appropriate Investment Organ" means the

EthIopian Investment Authority, (hereinafterrefecredto as the "Authority"), established underthisProclamationor the executiveorganof a Regionempowered to issue investmentpermitS;

10) "Public Enterprise" means an undertaking, whollyowned by the Federal or Regional governmentestablishedto carry out manufacturing,distribution,service rendering or other economic and relatedactivitiesforjain;

11) "Government" means the Federal Governmentor aRegional Government;

12) "Region" means any of those specified underArticle 47(1) of ~e Constitution of the FederalDemocraticRepublicof Ethiopia ang,forthe purposeof thisProclamation,includes the Addis Ababa CityAdministration and the Dire Dawa AdministrativeCouncil.

13) The prbse "export-oncntcd non-equity basedforeign' enterprise collaboration" means a 100%export-orientedconttactu.a1ammgement between adomesticinvestorandforeignenterpriseinwhichtheforeign ent.elpriseprovides. among others. all orsome of the following:

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Federal Negarit Gazeta - No.27 r- July,2002-Page 1770

(a) guranteedexternalmarket access,(b) exportproductand production know-how;(c) exportmarketingknow-how;(d) exportbusinessmanagementknow-how;(el raw materials and intermediate ,inputsneeded for

exportproduction.

3. Scope of Application

Theprovisionsof thisProclamatinshall notbe applicableto investments in. the prospecting, exploration anddevelopmentof miniralsand petroleum resources.

PART TWOInvestment Objectives,Areas andIncentives

4. Investment Obje<;tivesof the Federal DemocraticRepublic of EthiopiaThe objectives of the investment policy of the FederalDemocratic Republic of Ethiopia are designed to im-prove the iiving standards of the peoples of Ethiopiathrough the realization of sustainable economic andsocialdevelopment.' the particulars of which are thefolloWIng:1) to acceleratethe country's economic development;2) to exploit and develop the immense natural resour-

ces of the country;3) to develop the domesticmarket through the growth

of production,productivity,and services;4) to increaSe foreign exchange earnings by en-

couraging expansion in volume and variety of thecountry's export products and servi~ and theimprovement of their quality as well as to saveforeign exchange through production of importsubstitutingproducts;

5) to encouragebalanced development and integratedeconomicactivityamongthe Regions and to streng-then the inter-sectorallinkages of the economy;

6) to enhance the role of the private sector in theacceleration of the development of the country'seconomy;

7) to render foreign invesnnent play its proper role inthe country's economicdevelopment;

8) to create wide employment opportunities forEthiopians and to "foster the transfer of technicalknow-how,of managerial skills, and of technologyrequiredfor the progress of the country.

5. Areas of Investment Reserved for the Government orJoint Investment with the GovertJ11Jent

1) The followmg investment areas are exclusivelyreserved for the Government:

(a) Transmissionand supply of electrical energythrough the Integrated National Grid System:and

(b) Postal services with the exception of courierservices.

2) Investorsshallbe allowed to invest in the followingareasonly injoint venturewith the,Government;(a) Manufacturingof weapons and ammunition;

and(b) Telecommunicationservices.

6. Areas of mvestmelJtResDved for Domestic mvestors

Areas of investmentexclusively reserved for Ethiopiannationalsand other domestic investors shall be specifiedby regulationsto be issued by the Council of Ministers.

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FederalNegarit Gazeta L No; 27 '2"''July.'2002--pageTl771

7. RegardingInvestmenfs to'beui1iJertiJC~i1iiffdintVenturewith the Gdvernment

The Supervising Authority of Public Ehtctpri:>~'5shallreceive investmentproposals. submitted by;anY1'rivateinvestor intending to invest in joint venture with thegovernment;it shall submit sameto the Minist{yofTradeand IndustryfO,rdecisionand, upon approval: designate apublicc;nterpriseto invest as partner in the joint invest-ment.

8. Areas of Investment Open forForeign Investors

AU areas of investment. othef-than those exclusivelyreserved,under thisProclamation.for the Govj:I11Il1~ntor

, ,Ii:' ; " ,,' ,'" ," ", " ',' ,

joint venture with the Government or for. Et;b,i9piannationals or other domestic investors which shall be

specified by regulations to be issued by the 'CounCilof,Ministers, shall be'open for foreign'investors.

9. Investment Incentives. . ~ ,

1) Areas of investment specifiedby reg':llationsto beissued by the,Council 6f~sters pursuant ~ptheinvestment objectives stated under Article 4 of thisProclamationshall be eligible for investment incen-, ~ "

tives. .

2) The regulationsto be issued pursuap.tto Sub Article(1)of thisArticle sh311determinethe type and extent

. .\.' '<

of entitlementto incentives."} ,

PARW THREE

Forms of Investmentand Capital

Requirements for FIJreignInvestors

10. Forms of Investment

1) Invegtments may be effected in one of thefollowingforms: ,1(a) Sole proprietorship;(b) Business' organizations incorporated in

Ethiopia or aproad;(c) Publ!c Enterprise esta~lished iri accordance

with'the relevant law;'(d) CoopeI1i!iyeSo<:;ieties,formed, in a.c:cordance

with the relevant law. .

2) Any business org~ti,on specifi~ under SubArticle (1) (b) of this Article,~balll;>c:registered in

accor~ce withthe CommercialCode or any other. relevant law. .

CapitaJRequirementsfor ForeignInvestor.

1) Any foreign investor; to be allowed to investpursuant to this Proclamation. shall l1e,requiredtoallocate a minimum capital of lPO,OOOUS dollarsfor a single investmentproject

2) Notwiths~ding the pro\jsionsQ(.Sub Article (1)of this Article, the II1inimum9l1'i1a1required of aforeign investor investing;j9intly, with domesticinvestors shall 1:)e,6Q.OOOU5dollars.

3) Theminimumcapitalrequired of a:foreigninvestorinvesting ~~ areas; of ~ngiIleeting,,architectural.

. acco~ting.. and audit se~~, pl'Ojec,tpStudiesorbusine5$.and,pumagem~J,1t,consu1tancy,servi~orpublishing shaJ,lbe:

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I' "")~ T~'" AS '11~ 1\.,41-0,1t\:ft1Je~"f-4""'-

..(" '", ',' "

(a) '50,000 US dollars ,if tfie investnient is madewhoUyort\.11isown; . ,

(b) 25,000 US dc511arsifthe investment is madejointly,with1iomesticinvestors~

4) Aforeigninvestor:' .

(a) re-inv~stinghispr06t,Sor dividends.;pr,(b) exportingat least 75% ofpis outpu.ts1.shallnot berequjred to alloCatea minimum"capital.

5) Any 'f~reigo investor 'having brought 'investmentc~pitaliJ;ltothe cO\lnt;rysh~ have reg~t6fed same attheNanonalBankof Ethiopiaandobtain acertificateof reg~straiion. ' ' . '" '"" , "

: PARTFOUR ., ': InvestmentPermit '." , "

12. ReqlJirerpt;Dt of Permit'1) The 'foJlowj.nginvestors shall be required to obtain

, \'''' ..

investmentpermits:" (a) 'ForeignInvestors; .

, (b) -Foreignnationals, excluding Ethiopians.by. birth, takenfor domestic.investors pursuant to

Article2(5) of this Proclamatioh;, ,(c) Domestic investors investing in areas eligible

, f~r inceQtiyes; . ,

(d) Bomestic and foreign investors making invest-ments in partnerships. "

2) NotwithstandingArticle2(1) of this Proclamation,aforeign investor intending to buy an existirigcnter-prise in order to operate it as it stands or to buy sharesin an existingenterpIisesh~ have..to op~ priorappro.valfrom the Authority.A ,requestfor suchapprovalshall~ decidedupo~within 10 daysofreceipt of an application accompanied by completeinformation.' . ".

3) The provisions of this Article mall not affect the, rightof an investorof Ethiopiannatlon8Ior foreign

national, an Ethiopian by birth taken for domesticiavestOr,intending to invest, in confomutyw~th therelevant laws'of the country, in areasnot eligiblefor

.,incentives or, waiving his right of. entitlement in'those areaseligible for incentives.

13. Application for Investment perinitAn'~pplication'forinvestmentpermit shall'-bcmade in a.fO;9Jl:dfsigD~for,sucl1,;purposeand 'subp)itted to theappropriate inv~~ent organ together with thefollqwingjpfo~on:. -1) the'projectprqf1Ie;'2) a list' ot"the type and quan~tj. of machinery and

equipment intended iobe exempted from importduti~'andtues; , , ' ' . ,.

3) incase ola business organizatiolf, the memorandumand articlesof association;

4) jn the, caseotexpansion or upgradin& a briefdescriptiQn of "saIIle and the implementationprogramme; .

, S).. ill the. case :of planned ,employment ,of expatriatestaff, ~ith .Jl\~..,exception of, top, managementpositionS, a s~cmcnt Qn~~ tiIne sbedule for theirreplacement 'by Ethiopipns and the trainingprograin dcsigne4 for ~uch repl~ment;

, 6) i"'pOwer'of attom~i ilCtht'ease ofan applicationmade through an agent; and '

7) other relevant'.infonDationretaDnj to the par-ticUlars of dle'lproject.., ,I" :

"

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1..'4' '''~11 ",~.,.,.

FederalNeglQ'itGazeta- No. 27r'July, 2002-Page 1m

14. IS$lPU1ceof lDvestmen.tPt:rmit1) Upon receiving.an application for investment per-

mit made in full compliance with the provisions ofArticle 13 of this Proclamation. and after ascer-.taining, within ,10 days, that the intended invest--ment "activity compiles with the conditionsstipulated in the regulations and directives to beissued to implement, this Proclamation, the ap-propriate investment organ shall issue an invest-ment permit to the applicant.

2) An investment permit shall contain the following:(a) the name, nationality and address of the

irtvestor, .

(b) the investment activity; and(c) the region in which the investment is to be

made.3) A holder of an investment permit shall not be

required to obtain a business license. until com-pletion of project implementation and the commen-

.

cement of production or of rendering of service.4) An investment permit may not be transferred to

another person without the prior authorization of

"

the appropriate investment organ.5) Wher;e an investment permit is transferred to

another person or where any change occurs in itscontent, it shall be submitted to the appropriateinvestment organ and amended accordingly.

15. Renewal of Investment Permit1) An investment permit shall be renewed annually

until the investor commences the marketing of hisoutput or services; provided, however, the investorshall submit progress reports on the implementationof thc?project, to the appropriate investment organ,at the end of every six months.

2) An application for renewal of an investment permitshall be submitted at least a month before the end ofa period of one year for which the permit remainsvalid.

3) The appropriate investment organ shall renew theinvestment permit, where satisfied, as to .the exis-tence of sufficient cause for the delay in thecommencement or completion of implementation ofthe project

16. Suspension or Revocation of Investment Permit1) Where an investor violates the provisions of this

Proclamation or regulations or directives issued toimplement ~s' Proclamation, the appropriateinvestment organ may suspend the invest;mentpermit until the investor takes due correctivemeasures.

2) The(appropriate investment organ may revoke aninvestment permit where it is ascettai11edthat:

'(~) the investor obtained the permit fraudulentlyor by submitting false' information orstatements;

(b) the investor has transferred the permit toanother person without the . authorization ofthe appropriate investment organ;

(c) incentives granted are misused pr illegallytransferred to another person;

(d) the investor has failed,witboutaood cause, torenew the permit ill IDCOrdaDcewith ArticleIS of this Proclamation. '

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, ,~Negarlt ~ta-No. 27'~,July.2002~Page1774V"" , , i,' \, , '

3), " The ;q)prOpQateinves~l)t. organ ,shall: prior to, suspendingor~vokinga,perDut.notifytheinvestor

in Writingas to the caUseSforuitcing'such action and ,

allow him a period otone montbto present his viewsthereon.

4) The appropriate.investmentorgan shall suspend'orrevoke~e pefII1itwher; thein:,estorfails torespondwithinthetime limitprescribedin Sub-Article(3)ofthis Articleor presentsunacceptablejustifiCation. '

5) Upon suspension.or revocation bf 'an investmentpermit. the investor sh~l, immediately lose en-titlementto ,all benefits. '

6) Upon revocation of an invesnnent pennit. theinvestorshallreturnwithin6 monthsall the benefitshe wasgr~ted.

7)"' An investment pemiit may not be suspended orrevoked by any prgan O,therthan the appropriateinvesnnentorgan.~ayingissuedsame. "',.

. "

17. Right toAppealAninvestorwhohasa grievanceagainstadecisionof anappropriateinvesnnentorganmay,within30days fromreceiptof the decision.appeafto'theFederalInvesnnentBoardor to the concernedorganof a RegionalGovern-ment, as may be apPf9priate.

PART FIVE

Transferof Technology,Loan~,Uti~onof ForeignCziJrency,andRemittance of Funds

18. TechnologyTransferAgreementsJ) WhereaDinvestorintendstoconclude~technology

transfer 'agreement related to his investment, heshallsubmitsameto the Authorityfor approvalqdregistration. '

2) WheretheAJ,Jthorityreceivesa technologytransferagreement pursuant to Sub ArlEla (1) of thisArticle.it shallgiveitsdecisionthereonsubsequentto the necessaryevaJuationin accordancewith the,Co~cil of ~~Regu~tionS No. 121/1993.

19. Loans and UtilizationofForeigo Currency'1) An 'inyestor who acquires an external loan shall

h~vesuc;:hloanregisteredwiththeNationalBankofEthiopia hi accordance w~th'the directives of theBank. ' ,

2) , For transactionsrelated to theirinvestment.foreign ,investors shall be allowed to open and operate

" " foreipcurrency accou,otSinautho~ localbanksin accordancewit,bdirectives9f the NationalBankofE~opia.

20. "Remittance9f Funt!s,I), ,Agy,foreigninvestoI§b~lhave the right. in respect

of an approv~ i~Ye.s~cnt.to make the followingremittancesout of Ethiopia in convertibleforeignCtUTetlcyaftbe prevailingrate of exchange on thedate of reniittaBce:, ' ,

(a)' Profits ,and dividends accruing ~m invest-ment; , ,",

, ' ' (b) ,Principal and interest payments on externalloans;, '

(c) ~ayments related to a technology transfer. '. agreement registered in accordance with this

Proclamation; .,, (d) ~ from the,saJeor liq.pdationof an

, enterprise;, . , '

'(e) ProCeedsfrom the'trailsfer' of>sbares or of, partialownershiPof lDenteipriseto a domes-

tic investor.

i

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~ Neprit GIpta- No.27~ July,2002-P1p 177~~ . 't ' " ," ..!. '

2) ~ emp~~ed iD a,nen~~ maylmlit,IDCODvatiblefcriign ~nc:y;'~es and otherpaymen~.lccruiDgfrom ~eir emplQ~ent in accor-dance With the foreip exchange ~regylationsordireCtivesof the country.

.

PART SIXl11vestment Guarantees

lUJdProtections

21. InvestmelJt GUJI1'1UJ~ lUJdPioft:ctions",

. . 1) No investmentmay be expropriatedor nationalizedexcept when required by the public.interest andth~n, only in compliance with.th~,requirementsofthe law. , '

:Z) Adequate compensation. corresponding to theprevailing market value,,shallbe paid inadvanceincase of ,~xpropriation or. nationalization of aninvestment for public interest.

3) Anyforeign investormay remitcomoensationoaidto him, pursuant to this Articl~,out of Ethiopia inwnvertibl~.foreign cUITency.

PART SEVENbJvestment Ad1ziiDjstration

22. Investment Admipjstration Organs

The admini~tration of investment shall be carried out

1hrou~ the following organs: ,

1) The MiniStryof'Trade"andIndustry; ,

2) The Investment Soant;3) The Authority;4) Regional.investment organs to be defined by the

l.wI of the respectiveregion.

23. Jurisdiction

1) The administration of iDvestrnentin respect of thefollowing shall be wider the'jUrisdictionof theAuthority:(a) investment'madeby foreign investor;(b) investmentmade by foreignnationaltakenfQr.

domestic investor; .(c) investment made, in areas eligible for incen-

tives by domestic inves~orwho is requiredtoobtain business license from concerned

. federal organs; .

(d) joint investment ,by qomestic and foreigniDvestor.

2) Investments other than those referred to in SubArticl~ (1) of this Article. s~all fall under thejurisdiction of regional investmentorgans.

3) The granting of incentives by way of exemotions, from import taXes and. customs,duties shall fall

under the exclusivejurisdiction of the MinistryofRevenues. ,c',, .

4) Where aDinvestorwith a permitfromtheAuthorityor a regional investment organ appliesfor incen-tives of exemption from imPorttaXesand customsduties, the Authority or the regional investmentorgan shall, after examiDingand ascertainingitsacceptabilitywtihin5 days,transmittheapplicationto the Ministry of Revenues together with thenecessary infonnation. The Ministry of Revenuesshall give itJ decision within 7 days of receipt ofsuch complete iDformation.

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, "f" ", ",>'" " ',''I ; f.''\. 'C<h

r~~~AIH1-f~ ft 1.1.:'"'6h~ il1\drtil.,.Ij,I:;" ! 24. One-StopShopService '" ",,':,::' .:'iI

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:1;J'1~;ffl~~H-rf~l1Dl)m+I1\~ ",;1."''''11) legIstrapon of bu~mess ?rgamzatfbnS' as requIred

;ob.:lJ ~~Ji'&~Am- tP!~~fl."t:) op(lm-rlj 0..,1: ~n1er the rel:~~~ laws, ~han,~w~t\1'respect.to.:.~'\ae-+1d,..,..;rt,-nf"t~1\h;f"T9I",)f U--&-/A 111~estorSholdm~ '~ny,estIhe?t,pe~ts;:.be c.amed

:t];\ :~~fff;}r.1:,~M'!f. fh/A/A ~il~2\~ "'illt-r1 ?ut by.theAuthonry or, by.a, reglona11nv~stmentO~tDhAh(}~~"'Q~,O;llt\P'/AII)~J!Jj',.9'" Oh/A/A organ as may be 'appr°J».1ate. repres~ntmg ~e

, ~i, :fh::)iiAT~-rht:t"+'f,hlj4JIjh-" compe~nt lFederal or RegIOnal executive bodies

,"', , " ',,' .' ',' ." ' respective y.

.1.; QAP'AII)). f~:J\:. ,}rl"CT~f,tf1- fUl1-r oucp~ 2) -The'Authority shalt register andrender,R one-stop

1t!1.C?-h,~~ ''''~ ;1C OT1'" .hh1C (Doil'f' service to export-ooented non-equity based foreign111\Vl1+T, .;1C f~~C~T(Do1 -r1111C'1- ~OU" ente~ri,se~9UaJ:>o;a~ons.:

"lRA\fcilA:11: "C)h/A,'iltlj"'~/AIS 3) The Authorit5'-andregional investmentorg<i11sshallf' fl1\P'AII)).lj fh/A/A h.111qt,r'1t ,~il,,-r OtltJ carry out their functions under Sub ArtiC5,le'(I)of

L:>d<'ifdIJ'~,~t~,r?tp;il1t1"''''JA/ fT~t\hT(Do1 T'1l1C ' this ArtiCle in c~rftpliarice witIl'the relevant laws:11t~~~w:-,~t~"''111 '''T~' ';1111-oouh-t-/A thereof. "

~lflj A'" " ' 4) The A.uthorityor ategionalmvestment organ shall

J~;:IlM"'7,~m~AIJ1jr fh/A~ ~'1X"-r0u'-r hil/A issu~ a .license within 5 ?ays ~fterrece~vi~g anOlf.tJ "'1"'''' ouU'l-rr+dlt\-r f~1: 'f'.r<I: apphcanon pursuanno thesArtIcle. and IS in full

~"'111111~~,~:ODU'l-r .,..,./A+I).+C1ItLtO~ conformitywith the requirements,of the relevant+'1-r (Doil1'l.J'~1 f,(aIl).:\11 ' , ! ,law. , , '" . (

,c( )''iJ'' 25.. .TnmsmissiolJ oflDform~tion onlJJvcstment

I'~t m('kJ}ii/trt-~TI:~~Jf9l1-111Ac"U''''''i\f.i: . . Each regional inve~tmentorg~ shall tr~smit to the

,\~~:~}f.J'ftfAAiifJ\:.?iiil""I18"-r' hil/A 'hl\h/Ah- AUthority' infonriationcompiled "with respect to the,..::JLif.oolft~!j>h","flK'!Afk'},nil-rl1D1;" ')~/A,f+mlj"'~ ,'JoJ, ,," ."J';' ","" "'." ,

. :,::"If"-~se~1j£;ltM1Ah-h..1,iill;",Qlt1-r r:~"},"'il:J>(&' , 07~our~:PQ~n~a1 an~ mvestment 9fP~~mnes of the

,i ;,"f""II~~(~71'Of<m..h~Q1\P'/AtI};). .J'h,T~~ oi-AIS ,~.egiQn..as we~1,as, ,periodic.repoqs on investment ac-~["!;;2 \(U;tivitiestherein.

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.

'> PARTEIGHT, 2 . .. TheInvestmentBoard,

26.. ,"lvfein,bCrs of0e ~Qard' " "1) The number,of membersbf the investmentBoard

\ " shall be detefmined.,byGOvernment. '

,: 2) The"Minister ofTI1lde.an4'Iiidii~tryshall be the, '.' C:l13.irp~rsdn of thelnveStme"n~ Bd;U:Q.

3).. The, meIPbers of the BOard shall be: drawn from,~ ' Gov~mm~~t ~dpriva~ s~to;~. .,'

4[, c~e< Dirt;:ctor General' of the Auth9rity shall be amember of the Board.

5) The'Boatdshall have its oWn "S&retariat. The, .,.powers and duties of" th~ Secretariat shall bedetermined by the internal rule of procedures of the

f' ",Board. ,'.'\ ". ' '" .'

.27. "Powers and Duties of the Board "

Th~,Board shall'i .1) supervise'1'Jl(~ follow up, as $,e'superior authority.

. th~~implementati°tl ,ot this Eroclamation and the" activities oftheAuth()~ty; " .2) qecideon poliqy issues,:CU1sIugin connection with

the implementation of tq~s Proc1am~tion;,3), issue,diI:ectives neces~ary.JprJhe implelIlentation of

this Proflamatipn ~Q regplati°?Isissued hereunder;4}, submit,. as ,necessary. axrie.,pdIri.entson investment

q:entiv~, tq ti1e C:OUttcij()fMIDisters for approval;

.'~l.S) d~ip,e 09. app~als,~)~bmitfed.t() itpy f~veslors against'. decisions ,ofUte Authority;'. .,' .

6) determine service fees",,. to,~ charged by theAuthority;. '" '

7) apprQvethe annual work program $1ct'l?udgetof thei\uthooty; .' '; . ..;u, ,".

8) public1y:~o~ i1:1\I~torsof,qir&tives iiissues fromtimeto'time; " "1'

9) whenever it deems necessary{d~itJ.e<Qn'neworadditiQnal incentives, other than w~i~prqvidcd

',fQfundertheInv~.stm~tIncenfives'~."atiQns andsubmit same to ,the;Q:>u~fil;ef .Minis~ fOf ap-proval.

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I. AnL"1." 1Pt..,.7f"f1,e.~"-;rAd

FederalNegaritOazeta- No.27. ~ July, 2002--Page 1m

28. Meetingsof theBoard1) TheBoardshallmeet regularlyonce in a month.

However,it may hold extra-ordinarymeetingsatanytimewhennecessary. ."

2) Thereshallbe a quorum wheremore than halfofthemembersarepresentat meetingsof theBoard.

3) Decisions of the Board shall be passed by amajorityvote.however,thechairpersonshallhavea castingvotein caseof a tie.

4) Withoutprejudicetotheprovisionsof thisAnicle,the Board shall draw up its own rules ofprocedure.

PAR T NINE

TheInvestmentAuthority29. Re-estabJishment

1) TheInvestmentAuthorityis herebyre-establishedasan autonomouspublic institutionhaving legal per-sonality;

2) TheAuthorityshallbe accountabletotheInvestmentBoard.

30, PowersandDutiesof theAuthorityThe authorityshall:

1) serve as a nucleus for matters of investment andpromote,coordinateand enhanceactivitiesthereon;

2) initiateandsubmittothe Boardpolicyand implemen-tationmeasuresneededto create a conduciveinvest-mentclimatefor both domesticand foreign investorsand follow up the implementation of same uponapproval;

3) collect,compile,analyzeanddisseminateinformationon the resourcepotentialof the country and on theinvestmentopponunitiesit offers, promote concreteinvestmentprojects,provide, upon request, match-makingserviceofpossiblejoint investmentpartners;

4) organize, with a view to helping promote invest-ment, such activities as exhibitions, training and.seminarslocallyor abroad as may be c1Aa~giveadvisorysupportto investors; .

S) realize liaison and coordination between investors,public offices, Regional Governments and otherrelevantorgans,witha viewto enhancinginvestment.

6) prepareanddistributepamphlets,brochures,fiIrnsandothermaterialsthathelpenhanceinvestment;

7) issueinvestmentpermitsinaccordancewithArticle23of thisProclamation;

8) monitorthe implementationof investmentprojectsforwhichithasissuedpermitsandensurethatthetermsofthe investmentpemiitsare compliedwith;

9) approveand registertechnology transferagreementsrelatedto investments;

10) negotiatebilater~ investmentpromotionand protec-tion treaties for conclusion between Ethiopia and,othercountriesand sign same uponapprovalby theCouncilof Ministers; .

II) give adviceand technicalsupport to regional invest-mentorganswitha viewto buildingup theircapacity;and

12) performsuchotherfunctionsas mayhelp to promoteandenhanceinvestment.

31. Organizationof theAuthority

The Authorityshallhave:1) a Director General and a Deputy Director

Generalto beappointedby theGovernment;and2) the necessarystaff.

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Fe<kral N~Jarit"Gazeta - No.27 2- Juiy.2002-Page 1778

32.' Powers and Duties of the Director General1) The Director General shall be the Chief Executive

Officer .ofthe Authority and, as such shall, subject tothe general directives of the Board, direct andadfuinister the activities of the Authority,

2) Without limiting the generality of Sub Article (1) ofthis Article. the Director General shall:

(a) exercise the duties of the Authority specified inArticle 30 of this Proclamation;

(b) employ and administer the personnel of theAuthority in accordance with the Federal CivilService Law; ,

(c) prepare and subInit to the Board the workprogram and budget of the Authority and im-plement same upon approval;

(d) effect expenditure in accordance with the budgetagpcoved for the Authority;

(e) represent the Authority in all its dealings withthirdpanies;and .

(f), prepare and subrnitto the Board reports on theperformaance and financial operations of theAuthority.

3) The Director General may, to the extent necessaryfor the efficient performance of the functions of theAuthority, delegate part of his powers and duties toother officials as well as employees of the Authority.

33. Source of FundThe spurces of the fund of the Authority shall be:

(a) budgetary allocations made by the FederalGovernment;

(b) income, assistance and grants obtained fromany other sources.

34. B,ooks of Accounts

1) The Authority shall keep complete and accuratebooks of accounts.

2) The accounts and financial documents of theAuthority shall be audited annually by the AuditorGeneral or by auditors designated by him.

PART TENAfiscellaneous Provisions

35. Allocation()f Land1) . Where a Regional Government receives an ap-

plication for,the allocation of land for an approvedinvestment, it shall, on the basis of the Federal and itsown laws, deliver within 60 days, the required landto the investor.

2) The Region shall allocate land for investmentactivities and transmit information on suchallocatiops to the appropriate investment organ.

3) Each Region shall, in the allocation of land. giveprioritY'to approved investments.

4). The appropriate investment organ shall, incooperation with the concerned regional executiveorgans, facilitate and follow up the allocation of landfor approved investments.

36. Employment of Expatriates1) Any investor may employ duly qualified expatriate

experts required for the operation of his business,, 2) An investor who employs expatriates pursuant to

Sub Anicle (1) of this Article, shall be responsiblefor replacing, within a limited period, such expatriatepersonnel by Ethiopians by arranging the necessarytraining thereof.

3) Notwithstanding the provisions of Sub-Articles (1)and (2) ,of this Article, a foreign investor uponobtaining the prior consent of the Authority shall,withou.t any restriction, have the right to recruite~patriate employees on top mamagement positionsof an enteq>rise of which he is the sole or majorOWDCf'or shareholder.

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Federal Negarit Gazeta - No.272M July,2002-Page 1779, , .

., ' ,

37. Po~igIJNaiionaJs TakCllforDomestic Investors1) Rights and'iprivilegesas well,as restric:ionssolely

relatingto foreign investors..shallnotbeapplicableto\ '. .

a foreign national who in've'stsin Ethiopia beingtaken for a dome'sticinvestor.

2) A foreign ,national,excluding an Ethiopianby binh.taken for a domestic investor shall declaresame by

fiUing in a form designed for such purpose by the

Authoriry,and submit it to~etherwithhisapplicationfor inves~ent permit'

38. '.OWnershipof Immovable PropertY. .1) NotWithstandingthe provisions of Articles 390-393

of the Civil Code, a foreign national taken for adomestic investoror aforeign investorshallhave theright to own a dwelling house andother immovable

, property requisite for ,his investment.2) . The provisionsof Sub;,Article(1)of thisArticleshall

include those whohaVeinvestedpriortothe issuanceof this'Proclamation.

39. Duty to Provide Infonnadon'Any executive organ of the Federal or a RegionalGovernment shall have the dutYto proyide informationrelating to investment whenever so requested by ap-propriate investment organ. ' .

40. RepeaJedLa ws1) The Investment Proclamation No. 37/1996 (as

amended) is hereby repealed. '

2) No law,regulation,directiveor practiceinconsistentwith thisProclamation shall haveeffectwithrespect

to matters provided for in this Proclamation.

41. TransitoryProvisions1) NotWithstandingthe provisionsof Article40, incen-

tives provided for irl the Investment ProclamationNo. 37/1996 (as amended and inreguhitions anddire~tivesissued thereundershall remain applicablein ~spect of inves~ent approved prior to the:issuanceof this Proclamation.

2) Where an investor, eligible' for incentives under

IpvestmentProclamationNo. 37/1996(asamended),opts instead to be a beneficiary of incentivesproviqed for in this Pro.c1amationam!in regulationsto be issued hereunder,he may notify the approriate

, inyestmentorgan andbe entitled thereby.42. Effective Date

This Proclamationshallcomeinto forceas of the 2/111day

of July, 2002. , .

Done at Addis Ababa, this 2'" dayofJuly, 2002.

GIRMA WOLDE GIORGIS. .PRESIDENT OF THE FEDERAL

DEMOCRATICREPUBUC OFETHIOPIA

;: -nC71'i 1\1\"tiJofoI"U.~' :1-+110

~ERHANENA SEL.AM'RlNTU-lO ENTERPRISE