The e-Signature in Algeria

The e-Signature in Algeria

The e-Signature in Algeria

The business practice across the world witnessed a transformation that affected mainly the electronic transactions.

 Hence, electronic signature was adopted by many companies worldwide, since it is considered the best and safest tool to secure documents online: In fact it is widely used mainly for multinational business-to-business sales contracts, non-disclosure agreements, video conference electronic attendance sheet for general assembly et cetera. 

On that regard, Algerian legislation established procedures for the recognition of the e-Signature, where a third party called “the provider” is responsible for its identification and authenticity, but also established heavy sanctions (imprisonment up to 3 years and a fine up to 200.000 DA) for the provider in case of the absence of the required authorisation.

 More so, the subscribers are sanctions with the same sanctions in case of false statements to obtain the certificate. 

Therefore, economic operators should strictly follow procedures and refer to authorised parties to ensure the safety of their e-Signatures.

What is e-Signature according the Algerian Law ?

Handwritten signature can only be useful and safe to a certain extent nowadays. 

Article 323 ter of the Algerian civil code provides that the e-Signature is legally bidding in an equivalent way as handwritten one. 

In fact, the e-Signature is a collection of data in an electronic form joined or logically linked to other electronic data, for the purpose of authentication of documents online. 

It can take many forms, including digital signature, biometric signature, and electronic pen signature. 

The article mentioned above set specific conditions and requirements that must be met in e-Signature, for example its strict association with the platform, the fact that the owner of the signature has complete control over it, and this signature cannot be modified nor changed.

Under these conditions, the e-Signature is accepted as evidence in the same way as a traditional one.

How is the certification of the e-Signature done according to the law 15-04 ?

The law 15-04 concerning the electronic signature and certification established a set of procedures to ensure the authenticity of the e-Signature.

 The e-Signature of digital or paper documents requires a third party whose main function is to create a secure electronic transaction platform, and play the role of a trusted broker between the owners of the signatures, confirming the identity of the parties and determining their eligibility to sign.

In addition, it ensures the integrity of the data circulating, and this process is defined as electronic certification. 

The provider of such platform is required to obtain an authorisation to do so from the Economic Authority for Electronic Certification established under the Post and Telecommunications Regulatory Authority, any provider lacking such authorisation can be sanctioned pursuant to the aforementioned law.

This Authority has the duty to publish a list containing the authorised providers.

The provider is required to release to the subscriber a certificate attesting the digital signature.

Therefore, the economic operators should strictly deal with providers approved by the concerned authority and present in the mentioned list but; also, they should obtain and store the certificate proving the authenticity of the document.

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Holding a General Assembly during the Covid-19 crisis

Holding a General Assembly during the Covid-19 crisis

The deadline for holding the annual General Assembly for the companies is getting close, but the coronavirus outbreak threatens to disrupt the normal course of their holding

Directors and general managers are trying to assess the feasibility of holding the general assembly when it is necessary to maintain a physical distance and when the transportations are highly decreased, if not completely suspended.

However, not holding the general assembly also leads to potential risks and liabilities, not being able to approve the financial statements, appoint new directors, and allocating the dividends, etc. This situation can hinder the strategic development of the company.

What are the available alternatives for the companies to attend the general assembly during this period of lockdown?

The obligation to hold the general assembly and the legal risks of its cancellation

The law requires that general assembly intended to approve the annual accounts of companies must be held within six months after the end of the fiscal year, according to article 676 of the commercial code.

In view of the current circumstances, the president and managing directors are confused to whether cancel or postpone the meeting due to “force majeure” events.

However, this reason cannot justify alone the cancellation of the general assembly, especially if we are in presence of shareholder’s agreement explicitly instructing that the general assembly must be hold within a fixed term.

Especially with the silence of the law which does not qualify the pandemic until now as a case of force majeure.

In addition, the article 815 of the commercial code provides with criminal liabilities in case the General Assembly is not hold within the provided deadline.

Despite the current situation, the company must find a solution to hold the General Assembly and avoid criminal and administrative sanctions.

The available legal options to facilitate the holding of the general assembly

Actually, many companies seem to opt for virtual meetings, without the physical presence of the shareholders by videoconference.

However, in order to enjoy this option, it must be explicitly mentioned in the Statutes and in any case, it should follow strict rules and requirements.

The convocation of the Assembly by the management body within the prescribed deadlines must be respected and served by registered letter, as well as by email with acknowledgment of receipt.

An electronic attendance sheet has to be established and signed electronically. In addition, the minutes of meeting of the Assembly should follow the same rules.

Furthermore, it is possible to appoint a proxy to represent a shareholder in the Assembly (and here, please note that only shareholders can be represented and not directors).

Shareholders are empowered to give proxy to another shareholder to attend the general meeting and approve decisions on their behalf, in accordance with article 581 of the Commercial Code.

Finally, if the statute allows it, the General Assembly and the decisions concerning the items present in the Agenda can be taken by written consultation, according to article 556 and 580 of the commercial code.

Meanwhile, the GA decisions must be taken by respecting the conditions of attendance sheet, minutes of meeting and the voting rights of the attendants.

Otherwise, it can expose the directors to penalties provided in the article of the commercial code.

How the directors should proceed?

Concretely, in the silence of the legislator and since no delay for the summoning of the Assembly has been resolved so far, the administrators are obliged to organize it within the deadlines specified by law. Another option, provided by art. 676 of the Commercial Code, is to postpone the hold of the Assembly, through a formal procedure.

The Directors should submit a request to the competent territorial Court, asking for such an extension of the deadline for holding the Assembly, duly justifying the reasons.

Notwithstanding the outcome of the request, directors should act proactively and try to hold it in the original deadline or the one allowed by the Court to set aside the potential risks and liabilities, as well as penalties, while complying with the safety and health measures.

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INDEMNIFICATION FOR SUSPENSION OR FORCE MAJEURE IN PUBLIC CONTRACTS IN ALGERIA

INDEMNIFICATION FOR SUSPENSION OR FORCE MAJEURE IN PUBLIC CONTRACTS IN ALGERIA

INDEMNIFICATION FOR SUSPENSION OR FORCE MAJEURE IN PUBLIC CONTRACTS IN ALGERIA

Unlike several other Countries, which went for an explicit declaration of Force Majeure, Algeria opted for setting aside fines and penalties for delays in the Public Contract, through an Instructions to the Wali sent by the Prime Minister on 15th of April.

Such Instruction legitimated an option already undertook by several Public Contracting bodies: the suspension of the contracts through an ODS d’arret

Which challenges are the foreign companies facing now in Algeria?

Indeed, the commercial operators active in the framework of Public Contracts in Algeria are suffering heavy losses due to the actual circumstances and in complying with the necessary measures taken by the Government in order to fight the spreading of Covid-19. 

That is represented mainly in major unexpected costs, direct and indirect damages and the ongoing expenses even in case of suspension of the activities, usually represented mainly by wages and banking fees. 

The effects of suspension in a Public Contract

Here, we have to refer mainly to art. 34 of the CCAG (Cahier clauses administratives générales) providing that in case of suspension of the works imposed by the contracting Party, the contractor has the right to receive a compensation on the prejudice duly proven.

It is worth to note that only strictly direct damages are usually kept in account. Again, if the suspension will last in total (even in case of the addition of multiple periods of suspensions) more than one year, the contractor will have the additional right to terminate the contract. 

It is essential not to wait until the end of the crisis. Indeed, it is the duty of the contractor to notify promptly the contracting party about the prejudices suffered, under a short deadline and in the prescribed forms.

And what if a Company already invoked Force Majeure?

Although in the practice, the results of the two options can be assimilated (no liability for the delay and compensation, persistence of the duty to pay the dues originated before the occurrence), it is worth to note that there could be a conflict between the remedies for suspension provided by the CCAG and the contractual provisions. Indeed, the Force Majeure clause of a contract could provide the contractor with broader categories for indemnification.

Again, there could be some remedies provided by some Bilateral Investment Treaties (BITs), where Algeria undertook to grant full protection and security to the investors in case of Force Majeure events, leading potentially to an extension of the categories of the prejudices subject to indemnification.

In addition, the BIT prohibits treatment less favorable than that offered to national or third-party foreign investors.

Furthermore, it is worth to underline that with the issuance of an ODS d’Arret, all the works in the scope of a contract will be suspended, while under Force Majeure, only the obligations set forth in the contract which result impossible to perform will be targeted.

In that case, we highly suggest proceeding with an assessment in order to understand how the different provisions will relate and coordinate each other, with the aim to obtain the most satisfactory result.

Which solutions in case the contractual conditions became too burdensome?

Besides the recognition of actual and direct damages thanks to the provisions of CCAG, it is worth to underline that if the balance of the contract is altered and became, if not impossible, extremely burdensome, it could be possible to ask the contracting Party for it rebalance.

This could claim under the general theory of public contracting, but also based on the international principle of hardship, briefly enounced under art.

107 of the Civil Code. In that case, normally the unit prices could be increased until the neutralization of the disequilibrium. 

In order to have higher chances to invoke successfully such right, the respect of formalities, especially during the crisis, must be absolute and a company should prepare a pertinent detailed file in compliance with the local usages.

Indeed, one of the requirements is to prove that an excessive burden has been met and not only a higher, but tolerable burden, since in this latter case it will be considered implicit to the entrepreneurial risk and it will not entitle to any compensation.

So how a Company should proceed now?

We highly suggest now to be proactive and promptly perform several actions. In particular, you should draft a detailed report of the prejudices suffered, proceed with the draft and notification of formal letters and communication, within the deadlines, with a particular attention to the wording and in compliance with the local usages.

In addition, it is worth to understand if your specific case falls into the scope of a Bilateral Investment Treaty. Again, it is suggested to assess which are the remedies provided for Force Majeure in the executed contracts.

Finally, in case the contract became too burdensome and the conditions changed dramatically, it would be useful to claim for a rebalance.

In lack of the respect of all the provided deadlines, formalities and local usages, it is likely that a request for indemnification will be set aside.

Navigating the impact of

Covid-19 on your Business

The decisions you make today could be scrutinized for years to come

BOOK YOUR FREE CONFCALL NOW to understand your overall risk position

BLACKLISTING FRAUDULENT OPERATORS

BLACKLISTING FRAUDULENT OPERATORS

COMMERCIAL LAW: BLACKLISTING FRAUDULENT OPERATORS

What does the Algerian Law provide if a seller is subject to a serious breach of contract combined with fraudulent acts?

Algerian law provides both criminal and civil penalties for operators that are considered to commit a fraud during a commercial transaction.

In fact, it is not rare that foreign and local companies may have a sale contract with a buyer or contractor who does not show any signs of unreliability at the early stage, but by the time comes the payment, it appears that the latter is a fraudster or commits a fraud.

Actually, according to the Executive Decree n° 13-84 laying down the arrangements for organizing and managing the national fraudster file, and the Law n°18-18 ( budget law of 2019), the fraud or the fraudulent acts are characterized by fraudulent procedures carried out, voluntarily, with the aim of evading, in whole or in part, the duties or for obtaining, unduly, any advantage and intended to give the appearance of sincerity to actually inaccurate statements.  Indeed, according to the Algerian Law, the fraudsters are the ones who committed serious infringements with the tax, commercial, customs, banking and financial laws and regulations as well as the lack of legal deposit of the balance sheet. Thus, the fraudsters are listed within a national file called FNF “Fichier National des Fraudeurs”.

 The National Fraudsters File, managed by the services of the General Department of Taxes, is supplied by the authorized services of Customs, Taxes, Commerce and the Central Bank of Algeria.  The database of the file is transmitted, at each update, to the tax services and the Customs for the follow-up of the domiciliation of foreign trade operations; public procurement tenders; request for tax, customs and commercial benefits; administrative facilitation and issuance of tax status attestations; etc. Furthermore, in the absence of regularization of their situation, these companies are excluded from foreign trade operations and from submission to public contracts.

However, despite the previous mentioned means, implemented by the authorities, in order to frame this kind of behaviors, and discourage fraudsters, foreign exporters still face the issue of no payment.

Meanwhile, if a Seller ever faced this kind of situation, in dealing with a defaulting buyer in Algeria, there is a fast procedure aiming to recover the due amount. Indeed, Seller can seek for a debt recovery, if the debt fulfils the required conditions (a determined amount, due, payable and ascertained in writing). Here, the first solution is to go before the Court for a payment injunction, where the judge issues an order to the debtor to proceed with the recovery of his debt within a deadline.

BLACKLISTING FRAUDULENT OPERATORS

Thus, our Law Firm deals with such cases on daily basis, by handling the procedure of the debt recovery from the first step before the Court till the last step before the bank. In addition, we can obtain the blacklisting of fraudulent contractor before the competent authorities.

PRACTICAL LEGAL GUIDE

" Doing business in Algeria 2019"

Provide you with an overview of the applicable legal framework in Algeria for international business transactions

NEW RULES OF IMPORTATION FOR TELEPHONY PRODUCTS AND CERTAIN HOUSEHOLD APPLIANCES

NEW RULES OF IMPORTATION FOR TELEPHONY PRODUCTS AND CERTAIN HOUSEHOLD APPLIANCES

NEW RULES OF IMPORTATION FOR TELEPHONY PRODUCTS AND CERTAIN HOUSEHOLD APPLIANCES

The note of the Ministry of Finance No. 189/CC/MF/2019 of the 29/09/2019 provides explicitly for the substitution of the cash payment for the importation which concerns household appliances and telephony products in CKD/SKD, with a payment delayed of 9 months, for a maximum of 1 year. Furthermore, it imposes the application of the FOB (Free on Board) Incoterms to the transaction, where it is mandatory for the seller to use an Algerian maritime transportation service, where available. Such provision will impact on the international transportation companies heavily.

A new framework potentially targeting other sectors in the near future

 

The new legal framework, especially concerning the adoption of FOB terms, is deemed to be extended to other sectors in the near future (potentially within the end of 2019), as mentioned in the Note of the Ministry of Finance No. 189/CC/MF/2019.

First, it is worth to note that it is unusual in the international practice (but common in the local usages) to release a Note, which is the lowest source in the hierarchy of Law, to adopt policies that have a large impact on the market and provides for important amendments.

Thus, it is likely that the provision inserted thereof will be implemented and, probably, enhanced in the Budget Law 2020, to be released in January.

Entering into its content, if the delayed payments of minimum 9 months should not affect the certainty of the payments, because a Letter of Credit will be opened in advance, with the combination of the FOB terms, it will influence negatively the cash flow of the Seller.

 In fact, not only the Seller will receive the payments after a minimum of 9 months and a maximum of 1 year after the exportation, but also it is bound to pay the transportation fees up to the Port of delivery, perform the exportation procedures, including custom clearance and the payment of Custom duties and taxes.

Furthermore, it is important to note that all of the aforesaid should be paid in local currency (DA).
For what concerns the transfer of the risks, it will take place upon the boarding of the goods into the freight, prior chosen by the Buyer.

It is worth to mention that the amendment of such rules is in any case in compliance with the International practice, being the FOB terms the Incoterms 2010 most adopted terms and leading statistically to less number of issues and disputes in the transaction.

New rules of importation

Finally, it is worth to mention that in absence of a date when the provisions set forth by the Note will entry in force, we have to assume that it is immediately enforceable. Concerning the application of the provisions, we believe that they should not affect the transactions whose bank domiciliation is already opened at the day of issuance, but it will depend by the interpretation given by each Banking Institution.

PRACTICAL LEGAL GUIDE

" Doing business in Algeria 2019"

Provide you with an overview of the applicable legal framework in Algeria for international business transactions

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