ESG Global Vision

Corporate governance policy

In force as of 14 December 2005

Individuals and corporate entities in the public and private sectors

Pursuant to this Convention, Egypt became obliged to commit and apply a number of anti-corruption measures that include strengthening AML practices, ensuring compliance of public and private sectors, criminalizing bribery, unjust enrichment and abuse of position.

In line with the above, Egypt has been actively engaged in introducing several laws and regulations combating corruption, some of which, already existed before signing the Convention.

Corporate governance policy

In force as of 23 May 2002

Financial institutions and non-financial professions (i.e. real estate brokers, merchants of precious metals and stones, lawyers and accountants carrying out particular transactions) and businesses (i.e. gambling casinos, in addition to businesses/professions as determined by the Prime Minister)

In accordance with its international obligations, Egypt introduced the AML law which sets out the general legal framework of AML laws and combating terrorism funding practices in Egypt.

The law exists to criminalize and combat money laundering by preventing the transferring, generating, using, managing, replacing, etc. of funds originating from criminal activity and to prevent the disguise of the source of funds connected with illegal activity. An original crime under the law is defined as any act constituting a misdemeanor or a crime pursuant to Egyptian law whether committed inside or outside of Egypt (if it is criminalized by both countries). The law established the Anti-Money Laundering Unit affiliating with the Central Bank of Egypt, which is the competent body generally overlooking AML practices.

Financial institutions and non-financial professions and businesses, as defined under the law, are supervised by the unit and are required to abide by an increasing number of AML compliance measures, including KYC due diligence obligations and the appointment of designated AML compliance officer.

Sanctions for violating the law include significant financial penalties and imprisonment.

Corporate governance policy and non-financial disclosures

In force as of 2 February 2021

Companies listed on the Egyptian Stock Exchange, and companies and individuals carrying out non-banking financial activities

This FRA decree imposes more strict AML measures on entities carrying out financial non-banking activities and EGX listed companies.

Measures include: (i) preparing an internal procedural guide on AML to be submitted and approved by the FRA to ensure proper application of actions relating to AML and combating terrorism funding (ii) retaining clients’ records for at least 5 years following the business relationship (iii) appointing an AML officer to be approved by the FRA and who meets the criteria required by the FRA (iv) reporting obligations of suspected operations and (v) committing to guidelines on identifying suspicious operations.

Corporate governance policy and non-financial disclosures

In force as of 15 July 2020 

Companies carrying out financial non-banking activities

This decree introduces general corporate governance rules that companies carrying out non-banking financing activities must comply with, in order to remain licensed by the FRA.

These include, (i) constitution and operation of the Board of Directors (which must include female representation under the said decree) (BOD) (ii) committees to be formed by the BOD (iii) transparency, disclosure and reporting requirements (the BOD annual report under this decree must disclose the company’s policy with respect to its environmental/social responsibility) (iv) internal supervision and appointment of internal audit systems to ensure protection of confidential data and abidance by governance and FRA rules to reducing risks and protect customers.

Corporate governance policy

In force as of 2 August 2021 - there is a grace period until 31 December 2022 for companies to comply with the new requirements

Egyptian companies listed on the Egyptian Stock Exchange

The decree imposes a new requirement on companies listed on the Egyptian Stock Exchange. The amendment requires that EGX listed companies and regulated companies must raise the percentage of women on their board to 25% or have at least two women as members of the board. 

Corporate governance policy 

In force as of 2 August 2021 - there is a grace period until 31 December 2022 for companies to comply with the new requirements

Egyptian companies carrying out non-banking financial activities

The decree imposes a new requirement on companies carrying out non-banking financial activities. The amendment requires that companies carrying out non-banking financial activities must raise the percentage of women on their board to 25% or have at least two women as members of the board.

Corporate governance policy 

Announced 23 March 2022 - there is a grace period until 31 December 2022 for companies to comply with the new requirements

Six Egyptian federations for entities working in non-bank financing activities

The decree imposes a new requirement on the six Egyptian federations. The amendment requires that the six Egyptian federations must raise the percentage of women on their board to 25% or have at least two women as members of the board.

Financial reporting

Announced 23 March 2022 - there is a grace period until 31 December 2022 for companies to comply with the new requirements

Egyptian Companies carrying out financial non-banking activities of issued capital (or net ownership rights) of not less than EGP 100,000,000 

The decree provides that Companies carrying out financial non-banking activities with an issued capital (or net ownership rights) of not less than EGP 100,000,000 must comply with annual disclosure requirements with regard to their ESG sustainability practices. The disclosures should be included in the annual report prepared by the board of directors and attached to the financial statements in accordance with Annex (1) of the decree.  

Companies of a higher issued capital (i.e. not less than EGP 500,000,000) are required to comply with disclosure requirements on the financial effects of climate change (Task Force on Climate-Related Financial Disclosure TCFD) in the annual report prepared by the board of directors and attached to the annual financial statements, in accordance with Annex (2) of the decree.

Financial reporting 

In force as of 17 July, 2021.  There is a grace period until the end of 2022 to comply with disclosure requirements. NB such companies must provide the FRA with quarterly updates of the steps taken to implement the disclosure system as of 1 January 2022.

Egyptian companies listed on the Egyptian stock exchange

The decree obliges Listed Companies to comply with annual disclosure requirements regarding their ESG sustainability practices. The disclosures should be included in the annual report prepared by its board of directors, attached to its financial statements in accordance with the Annex (1) of the decree. In addition to the above obligation, Listed Companies of a higher issued capital are required to comply with disclosure requirements on financial effects of climate change (Task Force on Climate-Related Financial Disclosure TCFD) in its annual report prepared by its board of directors and attached to the annual financial statements, in accordance with Annex (2) of the decree.

Environmental policy

In force as of 4 February 1994

Everyone

General law that regulates the preservation and maintenance of the environment in Egypt.

The law introduced several measures, including requiring certain establishments to submit a mandatory environmental review as part of the approval process for operating certain projects. These establishments are required to maintain records showing the impact of the establishment’s activities on the environment. Furthermore, establishments (industrial and others) are required to ensure that air pollution, noise pollution, radiation, emissions (caused by the burning of fuel, etc.) do not exceed maximum permissible levels under the law while carrying out their activities. It is also prohibited to dispose of, recycle or treat garbage and solid wastes, as well as to spray pesticides or any other chemical compound, unless it is accordance with particular measures.

The law offers both incentives and penalties (including fines and imprisonment) for compliance/ non-compliance.

Environmental policy

In force as of 10 October 2020 

Egyptian businesses carrying out disposal/recycling activities of hazardous and non-hazardous waste

The law regulates the disposal of hazardous and nonhazardous waste. It incentivizes and encourages garbage collectors, small companies, private contractors, and recycling centers to join the formal economy.

The law requires a special license to be obtained from the competent authority for the integrated management of nonhazardous and hazardous waste and substances. The license is assignable subject to the approval of the competent authority. Demolition and construction licenses require evidence that the applicant has contracted with a licensed entity for the disposal of demolition and construction waste.

Pursuant to the law, certain businesses specialized in recycling demolition/construction waste and safe disposal of industrial waste, in addition to businesses using recyclable resources, benefit from a system of incentives.

Consequences of failure to comply include financial penalties and imprisonment.

Environmental policy

In force as of 31 July 1983 

Everyone

Preservation of nature reserves, wildlife, marine life or plant life. Nature reserves in Egypt are determined by a Prime Ministerial decree. The law provides examples of acts that are considered damaging to nature reserves that include the hunting and killing of wildlife/marine creatures and polluting soil, water or air in nature reserves.

Consequences of breach include financial fines and imprisonment.

Environmental policy

In force as of 26 September 1982 

Everyone

This law addresses the preservation of the Nile and different water streams in Egypt.

The law prohibits the disposal of waste in water streams without obtaining a license from the Ministry of Water Resources and Irrigation, and in line with specified standards. It also prohibits the construction of establishments that dispose of waste in water streams unless  permitted by the relevant ministry.

The penalties under this law include financial fines and imprisonment.

Environmental policy

In force as of 1 June 2017  

Investors that are natural or legal persons, whether Egyptian nationals or foreigners, who carry out investment activities in Egypt.

The law regulates investment plans/systems and provides incentives for investors that wish to undertake investment activities in Egypt.

The law offers a discount on the taxable net profits of investment projects that depend on or produce renewable energy. The discount is in the form of a 30% discount off the investment costs of said project.

Anti-bribery

In force as of 15 October 1937 

The Law applies to everyone. However, anti-bribery provisions apply to public sector officials, in addition to some private sector employees (e.g. BOD members in joint stock companies which the State is contributing in their capital) 

The EPC is the general law that regulates criminal violations in Egypt including anti-corruption and bribery.  

The law is very wide and imposes harsh penalties. Under the EPC, any promise or gratuity is considered a bribe. As a result of its broad definition, any gifts or hospitality can typically be perceived as bribes and expose the giver, receiver or intermediary to penalties. Gifts which are clearly not intended to incite the recipient to act against his/her duties will not be considered as bribes. However, the law is so wide that it may be difficult to prove that a gift was not intended as a bribe, in particular if a public official is involved. This law applies to public sector employees and some of the private sector employees (i.e., if the State or a public authority is contributing in their capital, in any quantity whatsoever).

Social policy

In force as of 21 January 2021

Egyptian companies carrying out non-banking financial activities.

The decree explicitly prohibits companies carrying out non-banking financial activities from discriminating between their clients on the basis of gender. In order to achieve this, such companies are obliged to develop and implement policies that are more gender inclusive, to accommodate the needs of female as well as male clients including low income and under educated persons, the elderly and persons with special needs.

The decree obliges companies to create a specialized unit or department to study and examine customer complaints and determine the means through which these customers can file a complaint. The compliance unit of the FRA   investigates complaints in breach of this decree.

Social policy

In force as of 2014

All citizens

The Egyptian Constitution lays out several articles that intend to battle discrimination in its various forms.

Article 9 provides that Egypt is obliged to grant equitable opportunities to all its citizens, without discrimination.

Article 11 provides for gender equality, and grants women the right to hold public posts and high management positions in Egypt, and appointment in judicial bodies and entities without discrimination. The state commits to the protection of women against all forms of violence and ensures women empowerment.

Article 102 which was amended in 2019, states that at least a quota of 25% of the House of Representatives seats are to be held by women.

Social policy

In force as of 29 March 1996 

Everyone

This Law sets out the necessary rules regarding the protection of children and their welfare.

It sets out various restrictions regarding child labour, including the prohibition of  employment of children below the age of 15 and training for children below the age of13. However, subject to a special decree by the governor, children ranging between the ages of 13 to 15 can be engaged in seasonal jobs that do not harm their health or affect their growth or studying. Employers engaging children in work need to abide with a number of requirements, including limiting work to a maximum of 6 hours per day and abiding with reporting obligations.

The law further provides for other provisions to accommodate working mothers and the wellbeing of infants including  paid maternity leave for 3 months and several other rights.

Breaching the above obligations towards children engaged in work or working mothers results in financial fines. Endangering children in a more general sense is penalized by fines and imprisonment.

Social policy

In force as of 19 February 2018

Everyone

This law grants facilitations, rights and more empowerment to persons with disabilities.

In addition to many other rights, pursuant to the law, the government grants persons with disabilities job opportunities that match their skills, while ensuring the availability of facilities that enables their safe and efficient engagement. The law additionally requires public and private employers who have 20 or more employees to hire a quota of at least 5% of persons with disabilities.  Tax incentives are granted both to persons with disabilities and employers (who hire more than the 5% quota).

In 2018 the law was amended to penalize bullying persons with disabilities.

Breaching the obligations under the law subjects the violators to a wide range of sanctions that range from financial sanctions to imprisonment.

Social policy

In force as of 20 April 2021 

Women and their employers 

This decree imposes restrictions on women working underground in mines and quarries, subject to few exceptions.

It also restricts women from working in certain fields during pregnancy and breastfeeding periods, due to the danger it may impose on the mother and child. During such periods women can alternatively carry out administrative jobs.

The decree is being reviewed regularly by the gender equality and economic woman inclusion unit.

Establishments that do not undertake the necessary precautions to eliminate risks associated with work become subject to partial/full shut down by the competent administrative authority.