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Business Law in Palestine

A Brief Profile

The Palestinian Autonomous Area (PA) consists of the West Bank and the Gaza Strip. They have a combined area of about 6,160 sq km, a population of four million and a service-oriented economy. Private sector activity dominates the economy accounting for about 85% of GDP. The PA does not have a history of government ownership of large sectors of the economy. After the signing of the Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip on 28 September 1995 (Interim Agreement), the Palestinian Interim Self-Government Authority (Palestinian Authority) assumed responsibility for most key spheres in the public life of the PA including trade and investment. Local-level government in the PA is comprised of 29 municipalities and 96 village councils.

The PA encourages foreign investments. There are no capital gains or capital transfer taxes in the PA. An Encouragement of Investment Law provides exemption from taxes and offers other incentives for PA-approved domestic and foreign investment. The law also prohibits expropriation and nationalization of approved foreign investments. Although repatriation of investment capital is allowed under this law, there are no PA laws as yet concerning exchange controls. In April 1995, the United States extended Generalized System of Tariff Privileges (GSP) to the PA. Over 4,500 locally-made products may enter the US duty-free under the GSP system. The European Union has a preferential trade agreement with the PA similar to that of the GSP program as does Israel. Although there are no foreign trade zones in the PA, the Palestinian Authority, Israel and international donor community are considering establishing industrial zones in the PA to stimulate local economic activity and employment. Current plans envisage individual zones containing 200,000-600,000 sqare meters of industrial and commercial construction, and employing 5,000 to 10,000 workers when fully developed. International firms will be invited to establish plants for industrial, service and commercial enterprises. The management of the zones will probably offer investment incentive and tax relief packages. The estimated cost of site infrastructure required for each zone will be about $20-25million. As yet there is no Palestinian currency and the Israeli Shekel, the Jordanian Dinar and the US Dollar are legal tender. The PA has a high proportion of relatively young and skilled workers, and the labor force numbers around 400,000. Many Palestinians were trained outside the area are familiar with foreign business practices. Arabic is the spoken language. Business people in general and most heads of larger companies speak English well.

 

Historical Overview

Having always lived under another authority, at no stage in their history have Palestinian been free to make their own laws. This has changed with the assumption of the Palestinian Authority in the West Bank and the Gaza Strip as a result of the Interim Agreement. According to Article XVIII.2 of the Interim Agreement “the Council [the Palestinian Interim Self-Government Authority] has the power, within its jurisdiction as defined in Article XVII of this Agreement, to adopt legislation.” Sub section 3 of the said Article XVII states that “the Council has, within its authority, legislative, executive and judicial powers and responsibilities, as provided for in this Agreement.” The laws in force in the PA emanate from five historical periods.

1.   The Ottoman Period, 1517-1917
      The two areas of Ottoman law that remain relevant to the study of the PA law are in civil matters and land. The Ottoman Civil Code, or Mejelle, was first published in 1869. Though many of its 16 books have been replaced by laws passed during subsequent periods, the Mejelle continues to serve as a partial basis for several areas of law in the PA including contract, property law and agency. The same pattern can be discerned in land law.

2.   British Rule, 1917-1948

     The British military occupation of Palestine, which began with the entry of the Egyptian Expeditionary Force into Palestine in 1917, ended in 1920 when the Civil Administration was established. In 1922 the league of Nations placed the country under a British Mandate. Article One of the Mandate vested the Mandatory Government with full powers of legislation and of administration, subject to limitations by the terms of the Mandate.
     According to Section 46 of the Palestinian Order-in-Council, 1922, the jurisdiction of the Civil Courts shall be exercised in conformity with the Ottoman Law in force in Palestine on 1 November 1914… Since taking control and until its end in 1948, the Mandatory Government was active in issuing laws, referred to as ordinances, that came to govern most aspects to life of the inhabitants of Palestine. All ordinances and government regulations and notices were published in an official gazette in three languages: Arabic English and Hebrew. The Revised Edition of the Laws of Palestine of 1934 were published in three bound volumes. The bulk of the law now in force in the Gaza Strip and part of the law still in force in the West Bank remains the law that was promulgated during this period. In the Gaza Strip, many laws continue, to be the laws passed by the Government of the British Mandate.

3.   The West Bank, 1948-1967

     Between 1948 and 1950, the West bank including East Jerusalem came first under the military and later under the civilian administration of the Hashemite Kingdom of Jordan. Military Proclamation Number 2 of 1948 provided for the application in the West Bank of laws that were applicable in Palestine on the eve of the termination of the Mandate. On 2 November 1948, the military rule was replaced by a civilian administration by virtue of the Law Amending Public Administration Law in Palestine. Number 17 of 1949. Section 2 of this law vested the King of Jordan with all the powers that were enjoyed by the King of England, his ministers and the High Commissioner of Palestine by the Palestine Order-in-Council, 1922. Section 5 of this law confirmed that all laws, regulations and orders that were applicable in Palestine until the termination of the Mandate would remain in force until repealed or amended.

     After the first general elections in 1950, the Joint Jordanian Parliament, with 20 members from the East Bank and 20 from the West Bank of the Jordan, met with a Jordanian Senate and unanimously declared the unification of both banks of the Jordan into one state called the Hashemite Kingdom of Jordan. On 8 January 1952 a new Jordanian Constitution came into force. Article 25 of the Constitution provided that legislative power would be vested in the National Assembly and the King. The National Assembly would consist of a Senate and Chamber of Deputies.

     By 1967, the National Assembly has passed laws on many subjects including commerce, labor, criminal law and procedure (including evidence), arbitration, companies, taxation, private and public law, banking, public and local administration, social welfare, health and education. Some of the British mandate laws remained applicable in the West Bank only and were not subject to any amendment, e.g., the Civil Wrongs Ordinance, 1944, dealing with torts. The Ottoman Land Code as well as the Civil Code (the Mejelle) also remained in force. But many of their provisions were amended or replaced by subsequent Jordanian legislation. All laws, regulations and public notices made during the Jordanian period were published in an official gazette. Matters of personal status continued to be within the exclusive jurisdiction of religious courts. The regular courts assumed jurisdiction over such matters only in exceptional instances.

4.   Gaza Strip, 1948-1967

     After 1948, the Gaza Strip came under Egyptian control but was never annexed to Egypt. Egyptian Ministerial Order Number 274 issued on 8 August 1948 vested an Egyptian Administrator-General with all the powers of the High Commissioner. According to Order Number 6 issued on 1 June 1948, the Administrator-General declared that all laws in force during the Mandate would continue to be applicable in the Gaza Strip. From November 1956 to March 1957 the area came under Israeli military rule during which the Israeli Area Commander issued several orders which were annulled by the Egyptian Administrator-General, who upon re-assuming control in March 1957, declared that all laws and regulation in force prior to the Israeli invasion of 1956 would continue to be in force. On 25 November 1955, the Basic Law of Gaza was issued by the Prime Minister of Egypt. According to Section 23 of this law, a legislative council was established to pass laws to which were then to be approved by the Administrator-General of the Gaza strip. On 5 March 1962, a new constitution of the Gaza Strip was issued by the President of the United Arab Republic (a short-lived confederation between Egypt and Syria) confirming the legislative Council. In its brief existence (1955-1967), the Council made many regulations and passed several laws relating to labor, the professions, matters of personal status and the Moslem Religious Courts. But the bulk of the laws remained intact.

5.   The Israeli Military Administration, 1967-1993

     Israeli Military Commanders assumed authority over the West Bank and the Gaza Strip on 7 June 1967. In Proclamation Number 2, the Commander of the West Bank declared that the laws in force in the territory (the West Bank) on 7 June 1967 would remain in force to the extent that they did not contradict this proclamation or any other proclamation or order issued by the Area Commander or changes arising out of the establishment of the Authority of the Israeli Defense Force in the Territory. By virtue of Section 3, the Area Commander assumed all executive, legislative and judicial powers. A similar proclamation was issued in the Gaza Strip on the same date.

     These first two proclamations have been followed to date by 1,430 military orders in the West Bank and 1,120 in the Gaza Strip. In November 1981, the Area Commanders of the West Bank and the Gaza Strip issued orders establishing a Civil Administration (Order 947 in the West and 725 in the Gaza Strip) to administer the civilian affairs of the Palestinian inhabitants in the area. Thereafter, civilian affairs covered in the appendix to the military order establishing the civil administration were administered by the Head of the Civil Administration, an Israeli military officer, appointed by the Area Commander. Matters defined as military as well as all residual powers remained under the direct administration of the Area Commander.
      After 1967, several Israeli laws were applied to the Palestinian inhabitants in the area through military orders such as laws dealing with insurance, traffic and value added tax. These are almost identical to the Israeli laws on the same subject. Other existing laws were retained and in many instances amended by the military legislation.

6.   The Palestinian Interim Self-Government Authority

     The Declaration of Principals (DOP) signed between Israel and the Palestine Liberation Organization on 13 September 1993 set the terms for interim arrangements. In Article One, the two parties agreed that the aim of the Israeli-Palestine negotiations within the current Middle East peace process was, among other things, to establish a Palestinian Interim Self-Government Authority consisting of an elected council (the “Council”) for the Palestinian people for the West Bank and the Gaza Strip for a transitional period not exceeding five years. This would lead to a permanent settlement based on UN Security council Resolutions 242 and 338. On 28 September 1995, the Interim Agreement on the West Bank and the Gaza Strip (Interim Agreement) was singed. This Agreement superseded all other agreements signed between the two parties after the Declaration of Principals. According to Article 1.1 of the Interim Agreement, Israel shall transfer powers and responsibilities as specified in this Agreement from the Israeli military government and its Civil Administration to the Council. According to Article 1.5, the Civil Administration in the West Bank will be dissolved after the inauguration of the Council, and the Israeli military government shall be withdrawn.

     The Palestinian Council exercises territorial jurisdiction over some area of the West Bank and the Gaza Strip. The Israeli settlements are excluded from its jurisdiction. It exercises functional jurisdiction over the various powers and responsibilities transferred under the Interim Agreement including commerce and industry, taxation, banking and monetary matter, education, health, insurance, labor, land registration, legal administration, postal services, social welfare, telecommunications, transportation, and local government. According to Article XVII.2.c., the territorial and functional jurisdiction of the Council will apply to all persons, except for Israelis, unless otherwise provided for in the Agreement. This Article also stipulates that in accordance with the DOP, the jurisdiction of the Council will cover the West Bank and Gaza Strip territory as a single territorial unit except for (a) issues that will be negotiated in the permanent status negotiations, and (b) powers and responsibilities not transferred to the Council. Within the matters over which the Council has jurisdiction, it has the power to adopt legislation (Article XVIII.2) Legislation includes primary and secondary legislation including basic laws, laws, regulations, and other legislative acts (Article XVIII.1).

     Since it assumed power, the Palestinian Authority has issued over fifty laws and regulations which have been published in sixty issues of the Palestinian Gazette until the end of 2005.

 

III.  Court Structure

      Although the courts in the PA continued to be open to the public after 1967, they passed through a period of greatly reduced activity during the years from 1988 to 1995. This was mainly due to the refusal of the police to assist the courts in the execution of jurisdiction. After the Palestinian Authority assumed control in the PA area according to the Interim Agreement, local Palestinian police have been appointed who have resumed regular cooperation with the courts. As a result the level of court activity has increased substantially.

     There are two categories of courts in the West Bank and the Gaza strip: regular courts special tribunals. In the West Bank the regular courts include Magistrates’ Courts established in every subdistrict and a Court of First Instance established in every district. The Court of Appeal now sits in Ramallah. It also sits as a High Court of Justice and hears appeals against administrative decisions by the public sector. According to Article VIII of the Israeli-Palestinian Interim Agreement on the West Bank and Gaza Strip, any person or organization affected by any act or decision of the Ra’ees (President) of the Executive Authority, who believes that such act or decision exceeds the authority of the Ra’ees or of any member of the Executive Authority, or is otherwise incorrect in law or procedure, may apply to the relevant Palestinian Court of Justice for a review of such activity or decision.

     The structure of regular courts in the Gaza Strip follows more closely English law with the first degree court being Magistrate Courts, then District Courts, and finally a Supreme Court which can sit as a Court of Appeal or a High Court of Justice. The newly passed Courts Law number 5 of 2001 as amended provides in Article 23 that the High Court shall be constituted of (1) a court of cassation,and, (2) a High Court. The jury system is used neither in the West Bank nor in the Gaza Strip.

     Personal status cases including succession, guardianship and matrimonial matters are heard by religious courts, Sharia Courts have jurisdiction over Moslems while Ecclesiastical Courts have jurisdiction over Christians. Religious courts have two degrees, first instance and appeal. Municipal courts hear violations of municipal regulations. Other special tribunals hear objections against tax assessment and pension claims of civil servants.

     With respect to service of documents between Israel and the PA, the two sides have agreed in Article IV of Annex IV to the Interim Agreement, as follows:
     (a)      Israel and the (Palestinian) Council will be responsible for the service of legal documents, including subpoena, issued by the judicial organs under the responsibility of the other side; and
     (b)      Documents served by one side in the territory under the responsibility of the other, shall be accompanied by a translation into the official language of the other side.

     They have also agreed in sub-section 2 of the same Article to make arrangements for taking evidence from witnesses, as necessary, when such evidence is sought in connection with proceedings conducted by the judicial organs under the responsibility of the other side.

     As to the enforcement of judgments, Israel and the Palestinian Authority have agreed in sub-section 3 of the same Article as follows:

     a. Israel and the Council will enforce judgments rendered by the judicial organs under the responsibility of the other side, provided that the judicial organ concerned has the jurisdiction to render the judgment and further provided that the enforcement is not contrary to public policy./ The execution officer under the responsibility of each side shall execute such judgments as if rendered by their own judicial organs.
     b. In executing any judgment against Israelis, the Palestinian execution offices may issue orders (e.g., attachments, receivership, eviction) against Israelis property within the territory. The Palestinian Police shall effect the execution of such orders jointly with the Israeli Police, which undertakes to respect the said orders. This subparagraph does not relate to attachments effected by the service of documents without requiring any physical actions, such as attachments of bank accounts.
     c. Without derogating from the civil jurisdiction of the Palestinian courts and judicial authorities in accordance with Article III, imprisonment orders against Israelis, and orders restraining Israelis from traveling abroad (excluding interim orders before a judgment was given) shall only be issued by Israeli execution offices and effected by the Israeli police.

 

IV. Law Journals and Case Reports

      The Jordanian Bar Association had published a monthly law journal since January 1953 containing articles on the law and the decisions of the courts of cassation civil and criminal cases as well as the decisions of the Jordanian High Court of Justice. Although precedents are not binding on West Bank courts, judges refer to the precedents of the Jordanian courts and follow them. In the Gaza Strip two volumes of selected judgments of the courts of appeal and the High Court of Justice are available, the first covering the period 1967-1972 and the second from 1973-1993. Many others compilations of decisions of the courts and indexes of judgments are also available.

 

V. The Legal Profession

      All registered lawyers in the PA may appear before the courts, prepare cases, carry out transactions in the various official departments and submit trademark and patent registration. The law requires public companies to be represented by a lawyer. Lawyers may only notarize the signature of their clients on special powers of attorney given to them to represent their clients before the courts or to carry out other legal work on their behalf. Otherwise notarization is undertaken through a Notary Public, an official of the court under the Notaries Public Law, 1952. Qualifications required to practice law include obtaining a law degree from a recognized law school and completion of two years training at a lawyer’s officeand pass a qualifying examination before they are admitted to the bar.

     There are more than 2,500 qualified lawyers practicing in the West Bank and the Gaza Strip. Most obtained their law degrees from universities in Egypt, Lebanon, Syria, and more recently, Jordan. Judges do not undergo special training.

 

VI. Commercial Law

     In the West Bank, the Jordanian Commercial Code of 1966 replaced the Ottoman Commercial Code as well as the British Mandate Bankruptcy Ordinance. In the Gaza Strip the Bankruptcy Ordinance continues to be in force.

1.     Negotiable Instruments

     The Bills of Exchange Ordinance, 1929 continues to be in force in the Gaza Strip. Modeled after the English law, this lucid ordinance defines a bill of exchange as an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person, or to bearer.

     Negotiation of bills is defined in the following terms:
     (a)   bill is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder of the bill;
     (b)   bill payable to bearer is negotiated by delivery; and
     (c)   bill payable to order is negotiated by the endorsement of the holder completed by delivery.

     Valuable consideration for a bill includes any consideration sufficient to support a simple contract or an antecedent debt or liability. Bankers checks and promissory notes are also covered by the law. The latter are defined as an unconditional promise in writing made by one person to another signed by the maker, engaging to pay on demand or at a fixed or determinable future time a sum certain in money, to, or to the order of, a specified person or to bearer. According to the law a thing is deemed to be done in good faith… where it is in fact done honestly, whether it is done negligently or not.

     Bills of exchange, bankers checks and promissory notes are dealt with in Part three of the Jordanian Commercial Code. According to the Jordanian Civil Procedure Law, summary procedures exist for dealing with promissory notes. Chapter four of the Commercial Code deals with bankruptcy. Some sections of this code were amended by Israeli military orders to render the provisions of the Code in line with Israeli law.

2.     Securities

     The following options are some of the more commonly used methods for securing loans under the law on force in the PA:

2.1.     Mortgage of real or immovable property

     Real property including land and anything built on it may be mortgaged as security for a debt. Such mortgage must be registered at the Land Registry. Mortgage deeds of chattels signed before a Notary Public are considered enforceable documents. Whereas movable property in general is mortgaged at the Notary Public, mortgages of vehicles must be registered at the Transport Department. Mortgages of shares in joint stock companies must be registered at the register of shareholders at the company’s headquarters and in the case of companies whose shares are traded at the Palestine Securities Exchange, also with the Exchange.

2.2.     Notorial deeds

     Securities for loans made in writing before the Notary Public may be in certain cases enforceable directly at the Execution Department of the Court without need for instituting legal proceedings to prove the loan. Notorial deeds are commonly used in the PA for securing loans.

2.3.     Negotiable instruments

     Bills of exchange, promissory notes and postdated checks may be used to guarantee loans. The law pertaining to these has already been discussed.

3.     Corporate Entities

     Four types of legal entities can exist under the laws in force in the PA: Cooperatives and charitable organizations (local and foreign); and partnerships and companies (local and foreign). According to the Jordanian Companies Law, 1964, which is still in force in the West Bank, two kinds of companies exist. Private companies, which have between two and fifty shareholders and a minimum share capital of 2,000 Jordanian Dinars, may not allow public subscription to their shares. Public companies whose share may be subscribed to by the public have a minimum of seven shareholders and a minimum share capital of 30,000 Jordanian Dinars. In the Gaza Strip, the British Mandate ordinances on partnerships and companies remain in force, and closely resemble English law.

     The law in the PA requires all foreign entities doing business in the PA to register as a foreign company, obtain local address for service and certified powers of attorney appointing a local representative, and also a lawyer.

     After the Israeli occupation in 1967, a new companies’ Register was opened which assured continuity with the earlier Register by inviting all companies in existence before 1967 to re-register within six months. Thousands of private and public companies are registered in the companies Register in the Gaza Strip and the West Bank. Joint ventures between Palestinians and overseas corporations have become more common over the past ten years.

     A greater interest among the public to subscribe to public companies has been in evidence over the past three years with the shares of some public companies being over-subscribed five times.

     In the Interim Agreement Israel and the Palestinian Authority agreed to allow persons or legal entities of the other side to register companies in its Register. (Article 23.3.b. of Appendix I of Anne III). Separate laws also exist for Chambers of Commerce and industry, insurance and commercial agencies. No separate law, however, exists for international trade. According to Article 103 of the Jordanian constitution, “In matters of a civil or commercial nature with in accordance with international usage are governed by the law of another country, such law shall be applied in the manner designated by the law,”

     International trade practices and law are therefore applicable here. Precedents exist which also provide an important source regarding the law on this subject.

4.     Encouragement of Investments

     The Palestinian Authority committed to encouraging foreign investment in the area of the PA. Towards this end, it had issued the Encouragement of Investments Law. The law establishes the Palestinians Higher Agency for the Encouragement of Investment which can grant up to five years of full exemptions from taxes and duties for projects with a paid-up capital of more than $500,000. Shorter term exemptions are available for projects with smaller capital. All investors, both local and foreign, may repatriate their capital and profits. The law also guarantees all investments against nationalization, expropriation and confiscation.

5.      Agencies and Imports

     Agencies and distributorships are subject to special contracts. A public Register had recently been established for the registration of agencies or distributorships. Agency and distributorship contracts are very common and are fully recognized and protected by the law.

     Licenses for imports are only required for goods related to health, food, transportation and fuel. The documents required for companies importing goods include the following:-

     (a)   certificate of incorporation for companies.
     (b)   certificate of foreign trade dealings obtained from the Ministry of Economy, Trade and Industry.
     (c)   pro forma invoice with the estimated value of goods to be imported; and,
     (d)   an import license as applicable.

 

VII. The Law of Contract

     The principles of contracts that apply in the PA are similar to the principles prevailing in English common law with some significant differences: consideration is not a necessary element in a contract, but offer and acceptance are. Separate agency and distributorship contracts are required to be made for the PA since it has its own separate legal status.

     The main source of the law of contract is the Ottoman Civil Law (the Mejelle) codified in 1858 and providing the principals upon which the law is based. The Mejelle deals with such questions as the nature of contracts, the manner in which they are formed, the consent and capacity of the contracting parties as well as their form and classification.

     Since the codification of the Mejelle, a number of specific laws have been passed which brought about significant changes to the law of contract.

     The precedents of the Court of Cassation constitute an important source for the elaboration and interpretation of the law of contracts. In decision number 45 of 1954 court held that it has absolute authority to interpret the provisions of the contract and determine the intentions of the parties. The court argued that the contract constitutes the law made by the parties and it is the duty of the court to interpret it as it does any law. The precedents of the Court of Cassation, which constitute an important source of the law of contracts, have been published monthly without interruption since 1952. After 1967, precedents of the court of appeal in Ramallah have been published in summary form.

     During the Israeli military administration, only minor changes were made to the law of contract. These included changes to contracts of insurance, bills of exchange and labor to bring them more in line with Israeli law and practice.

 

VIII. The Law of Civil Wrongs (Torts)

     In 1944 the High Commissioner for Palestine issued the Civil Wrongs Ordinance, an ordinance to define and amend the law of civil wrongs. The law became effective on 15 July 1947 and remains in force today. The Civil Wrongs Ordinance codified the main principles of the English law of tort. Thus negligence is defined as:
     (a)   doing some act which in the circumstances a reasonable prudent person would not do, or failing to do some acct which in the circumstances such a person would do; or
     (b)   failing to use such a skill or to take such care in the exercise of a profession, trade or occupation as a reasonably prudent person qualified to exercise such a profession, trader or occupation would in the circumstances use or take in relations to another person to whom the person doing or failing to do the act or failing to use such skill or to take such care as aforesaid owes a duty in the circumstances not to do or fail to use such skill or to take such care, as the case me be..

     The concept of duty of care developed through English court precedents has been fully introduced through this law. In similar manner other aspects of the English law of torts have been introduced through the law. These include private and public nuisance, passing-off, fraud, unlawfully causing breach of contract, unlawful detention of property, conversion, trespass to immovable property, assault, false imprisonment, defamation and injurious falsehood.

     Before the coming to force of the Civil Wrongs Ordinance, resort was made to the Mejelle for cases of civil wrongs. However the Mejelle did not recognize the principle of negligence. Most cases therefore related to damage to property but not to personal injury.

 

IX. Intellectual Property Law

     Trademarks, tradenames, patents and designs are recognized and protected under the law in force in the PA. Separate registers exist in the West Bank and the Gaza Strip for trademarks, patents and designs. Continuity with the pre-67 registration was assured by inviting all registered owners of intellectual properties to re-register their claims. The date of the initial registration was considered as the date of registration of the intellectual property. Publication of applications is carried out through separate journals which are published irregularly. Thousands of applications have been submitted and fully registered since 1967.

     Protection of intellectual property is assured through a system of appeals. The first is to the Registrar and thereafter it is to the Court of Appeal sitting as a High Court of Justice. Passing-off is considered illegal under the Civil Wrongs Ordinance, 1944. It is also considered a criminal offense under the Jordanian Merchandise Acts Law, 1953.

     According to the Interim Agreement, each side (i.e., Israel and the Palestinian Authority) shall use its best efforts to adopt in its legislation standards of protection of intellectual property compatible with those in the GATT Agreement on Trade Related Aspects of Intellectual Property (Article 23.4.b.1 of Appendix 1 to Annex III). Intellectual property is defined in the same article to include, geographical indications and undisclosed information. In sub-article C each side undertook to recognize the copyright and related rights in original “literary and artistic works,” including in particular, musical works, computer programs and audio and visual recordings, legally originating in the areas under the jurisdiction of the other. Sub-article E states:

     (a)    In view of the free movement of industrial goods between Israel on the one hand and the West Bank and Gaza Strip on the other, each side when processing applications submitted by any resident or legal entity of the other side for the registration of patents, industrial designs, trade marks and geographic indications (hereinafter “Registered Rights”), shall expedite the examination process including publication for objections, for Registered Rights existing and in force in both areas, on the date of the transfer of powers and responsibilities in the sphere of legal administration; and
     (b)    In the event of a dispute between the registration of Registered Rights in Israel and their registration in the West Bank and Gaza Strip, the registration of each side will apply in the areas under its jurisdiction.

 

X. The Law of Real Property

     Five categories of land are recognized according to the land code which was promulgated in 1858 and which in part continues to be applicable. Of these, land in full private ownership is referred to as Mulk. According to a 1953 Jordanian law, all lands falling within municipal boundaries were turned into Mulk. Little practical differences remained between land falling in the Mulk category and lands of the other three categories of Miri, Mawat and Metruke. The fifth category of Wakf lands or land dedicated to a pious purpose can be generally compared to lands that are the subject to a trust in English law although substantial differences exist between the two categories of land. Over a third of the land in the West Bank is fully registered and the public from the survey department. The law required all transactions in land, whether or not they have been fully registered, to take place in the Land Registry, still called the Tabu (Turkish for land). Land may be mortgaged as security for loans.

 

XI. Labor Law

     In 2000, the Palestinian Authority has passed a new Labor Law which became applicable in 2001 to both the West Bank and the Gaza Strip. The labor laws in force offer protection for workers against arbitrary dismissal. Workers have the right to sick leave, to paid vacations and compensation for work injuries and disablements. Employees must insure workers against work injuries. Any terms in a labor contract which falls below the standard provided for in the labor law is considered null and void. By the end of 2005, no minimum wage has been set by the law.

     The labor laws does not apply to civil servants or municipal workers who are subject to special laws and regulations. A large body of precedents interpreting the Labor Law exists.

 

XII. Conclusion

     At the time of writing two legal systems continued to be operative in the two areas of the PA, the West Bank and the Gaza Strip. Different registers of companies and trademarks remained operative in each of these areas.
     Work was being done at the time of writing to draft unified laws, to unify official fees and merge the companies and trademarks registers. None of this has yet been accomplished.
     It is not uncommon for different areas within the same legal entity to be subject to different legislations. When the West Bank was merged with the East Bank to form the Hashemite Kingdom of Jordan, the two areas were subject to different laws. By 1967 the process of the unification of the laws was still incomplete. The Civil Ordinance of 1947, for example, applied in the West Bank but not in the East Bank.
      The political will to carry out the merger of the laws between the West Bank and the Gaza Strip as well as its pace are very much linked to the final status negotiations. These began on 4 May 1996 between Israel and the PA, continued for a few years and were then suspended.. With the end of the transitional period and the conclusion of the final status talks between Israel and the PA, the fate of the areas of the West Bank and the Gaza Strip will be decided. Their laws will then reflect the shape that the final settlement shall take.

A. F. & R. Shehadeh Law Firm

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