With technical and financial support from the World Bank and donor agencies, Jordan has embarked on a campaign that aims at introducing new laws to the country's legal system and overhauling existing laws with the objective of creating a better environment that is conducive to foreign investments.

The government of Jordan has commissioned experts to assist in the drafting of laws and regulations in the areas of customs, securities, competition (antitrust), international trade and secured financing.

Law & Arbitration Centre is acting as co-counsel to the Government of Jordan and The World Bank on a number of these laws. The firm has been engaged to participate in the drafting of the Securities Law, Secured Financing and Leasing Law and the Protection of Domestic Production (International Trade) Law.

Securities Law

The new Securities Law will replace the existing Amman Financial Market Law. The Amman Financial Market, which was founded in 1978, performs the roles of regulator and exchange at the same time. The new legislation will create a Securities Commission and allow for the creation of a securities exchange that is privately owned by the licensed brokerage firms in Jordan. The new legislation is also introducing new vehicles for investment such as investment companies and mutual funds. It will also help create a more transparent and fair market for securities and tighten the rules on disclosure and insider trading.

Secured Financing and Leasing Law

This law will be introduced for the first time in Jordan. It is meant for this law to expand the capital market in the country and make new methods of financing available to investors, especially foreign ones who have complained for a long time about the lack of sophistication in the Jordanian capital and money markets. For decades, creditors had to settle mainly for real property as collateral for their debts. It was not practical or feasible to attempt securing obligations through personal property, intangibles and future assets. The new legislation will create a mechanism whereby lenders and other credit providers can take security over virtually all types of tangible and intangible personal property. It will be possible to protect security interests in such personal property through a national registration system similar to the one established in the United States under Article 9 of the Uniform Commercial Code (UCC).

Protection of Domestic Production Law

This law aims at providing local producers with temporary relief against serious injury or even the threat of serious injury caused by increased imports. Local producers may ask the government to impose or increase tariffs or to impose quantity restrictions on such imports for a limited period of time. The legislation is consistent with the WTO guidelines and requires local producers to provide the government with concrete plans on how they propose to adjust to the increase in imports during the period of protection. As this type of legislation is producer-driven, local producers are expected to take an active part in utilizing its provisions for their benefit. This law comes at a time when Jordan is about to embark on negotiations for the purpose of joining WTO and while tariffs and trade barriers are being lowered or lifted in the process of liberalizing Jordan's economy.

It is expected that the above laws will pass through parliament by the end of the year.

This article is prepared for the general information of interested persons. It should not be acted upon in any specific situation without appropriate legal advice.

For more information regarding this article or any of the matters discussed herein, please contact Thamer A. Obeidat at Telephone (962 6) 672222, Facsimile (962 6) 699222 or E-mail thamer@go.com.jo