Proposed Law To Regulate Technology Transfers in Egypt

Abstract

Last year, in a relatively limited-circulation periodical,l the United Nations published an English translation of a proposed Egyptian law to regulate transfers. This draft legislation (the Code) had been initiated at least as early as 1981, and is the end product of an ad hoc committee consisting of representatives from the Investment Authority, the General Organization for Industrialization, the Academy of Scientific Research and Technology, and the Council of State. Among the most significant aspects of the Draft Code are provisions which give the Egyptian government centralized regulatory control on a wide range of agreements whereby technology is transferred to Egyptian parties. Many foreign companies are (or plan to be) involved in the Egyptian market through licensing arrangements and/or technical assistance agreements, under which such foreign companies provide expertise and know-how to Egyptian parties. If the Oraft Code were enacted) many (if not most) of such agreements would be subject to additional government regulation. The Draft Code borrows heavily from the theories and terminology of the UNCTAD draft code on transfer,2 and we understand that transfer laws in other countries, such as India, Mexico and the Philippines, were examined during the preparation of the Draft Code. It is unclear whether any of the impetus for the Draft Code was created by the economic rationalization movement in Egypt and the baclrlash from the perceived abuses of Egypt's open door policy. It appears clear, however, that the ad hoc committee concluded that greater scrutiny should be given to transfers. Apparently the committee also concluded that Egypt had previously received inadequate or inappropriate technology, at least in some instances. In that regard, the Draft Code could be supported by many of the critics of the current Egyptian regulations on transfer, which generally allow parties significant latitude to negotiate the terms and conditions of their contracts. The Draft Code also could reflect some of the tensions and resulting debate (both within the Egyptian government and the private sector) on the question of the future role of government in the Egyptian economy.