The law, which was approved by the House's Budget Committee on Sunday, allows the finance minister to provide EgyptAir with an insurance guarantee covering risks – such as wars and hijacking – that it might face due to operating flights to and from Russia.
Fakhri El-Fiqi, chairman of the House's Budget Committee, read out a report on the law, saying 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."
El-Fiqi 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.
El-Fiqi 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 El-Fiqi, adding that "in the end, EgyptAir asked the government to allow the Ministry of Finance give it the insurance guarantee necessary to help it operate flights to and from Russian airports."
El-Fiqi said the insurance provided by the finance ministry will help EgyptAir meet the obligations that 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 law 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, including accidents resulting either from normal flight conditions or due to wars or hijacking. The law also states that the insurance guarantee will begin from the date the law goes into effect and for two years, or when the cabinet declares it concluded.
Parliament speaker Hanafi Gibali also announced that the government has decided to withdraw amendments to the income tax law for further study. The draft law, which would impose a new tax on the sale or handling of real estate properties or construction land contracts, was rejected by MPs in a plenary session on 22 February upon the grounds that it places financial burdens on citizens.
Speaker Gibali indicated that due to MPs' rejection of the amendment, it will be referred back to the Budget Committee to study it and take MPs' remarks into account.
At the end of Wednesday's debate, speaker Gibali announced that the House's next plenary sessions will be held on 17 April.