Parliament to discuss law on providing insurance for EgyptAir's Russia flights

Gamal Essam El-Din , Monday 28 Mar 2022

Egypt's parliament will convene on Tuesday and Wednesday after a two-week hiatus, where it will discuss a law on providing insurance to EgyptAir to offset the difficulties faced by the company amid the Ukraine crisis.

 Egypt s parliament
Egypt s parliament

Topping the agenda of debate on Tuesday is a government-drafted law allowing the finance minister to provide the country's national airline EgyptAir with an insurance guarantee covering risks – such as wars and hijacking – that it might face due to operating flights to and from Russia. The draft law was approved by the House's Budget Committee on Sunday.

A report prepared by the Budget Committee said that the EgyptAir Holding Company "has recently faced a number of crises, at the top of which is the breakout of the coronavirus pandemic in 2020, which had a disastrous impact on the world transport industry."

The reports explained that the Russia-Ukraine war has led to the European Union imposing sanctions against Russia that include banning European insurance and reinsurance companies from providing insurance or paying compensations to certain Russian individuals or entities. The report added that EgyptAir has stopped its flights to Russia since 2 March due to the EU sanctions.

The report explained that the European Union law forced Egypt's Misr Insurance Company to stop providing insurance to EgyptAir's flights to and from Russia.

"Due to this, EgyptAir tried to seek alternative insurance from Russian companies, but they declined on the grounds that they cannot cover non-Russian airlines," said the report. "In the end, EgyptAir asked the government to allow the Ministry of Finance give it the insurance necessary to help it operate flights to and from Russian airports."

The report said the insurance provided by the finance ministry will help EgyptAir meet the obligations which might arise from operating flights to and from Russian airports.

The Budget Committee's report said the draft law is in line with Article 127 of Egypt's 2014 constitution, which states that "the executive authority may not obtain a loan or funding or engage in a project that is not listed in the approved state budget which entails expenditure from the state treasury within a subsequent period, except with the approval of the House of Representatives."

The draft law includes three articles. The first allows the finance minister – on behalf of the republic – to provide insurance for the risks that EgyptAir may face due to operating flights to and from Russia. Article 2 states that the insurance cover will begin from the date of the law going into effect and until insurance companies change their positions and approve providing EgyptAir with the necessary insurance that covers its flights to and from Russia.

However, the Budget Committee decided to change Article 2 to state that the finance minister shall provide EgyptAir with a one-year renewable insurance cover upon approval from the cabinet.

The House's agenda of debate on Tuesday also includes a legislative amendment to the NGO law, which was approved by the Senate on Sunday, that would give a one-year grace period for NGOs to legalise their status in the country.

The House will also discuss another government-drafted law regulating the construction and development of Damietta seaport's second container station (Tahya Misr), including the works of using and operating the station.

The House is also scheduled to discuss a law on giving employees not covered by the civil service law a financial bonus in April, increasing incentives to state and public sector employees and raising civilian and military pensions.

The House's agenda on Tuesday also includes putting three laws up for a final vote. The laws cover the safety of ships, regulating commercial brokerage, and fighting irregular migration.

On Wednesday, the House will discuss two foreign agreements, the first of which is on an American grant to stimulate trade and investment in Egypt. The second is between Egypt and sub-Saharan African countries on fighting terrorism.

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