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Principals and agents should be aware of the procedural update in connection with the Commercial Agencies Law. Ministerial Decision No. 565 of 2017 for the Issue of the Executive Bylaws of the Law No. 13 of 2016 Concerning the Regulation of Commercial Agencies was enacted in late 2017 to provide further insight into how the agency registration process should function.
One significant improvement is the validity period for the registration certificate. One or two-year registration periods were typically granted for agency agreements by the Ministry of Commerce — Commercial Agencies Department, without regard for agencies with terms beyond the one or two-year period. Meaning five or ten-year agencies, would need to be renewed every two years, although the initial term of the agreement had not expired.
However, with the implementation of the revised agency law and ministerial decision, any registration for a new agency or renewal of existing agency shall reflect the term period specified in the contract. For example, if you have an agency agreement effective from July 2016 for a five-year term, and the Ministry gave you a two-year registration certificate, you should submit your renewal/extension now. The Ministry will then provide a registration certificate for the remainder of your five-year term.
If the agency agreement is terminated at any time during the term, then the registration will be canceled when the agent or principal submits the request for cancellation along with supporting documentation. Such requests should be submitted within three months of the termination date.
Further if there is an auto renewal provision in the agency agreement, then the registration shall be renewed by a letter from the agent for the duration of the renewal term period.
This decision will definitely ease the process for long term agencies that would have been required to renew on an annual basis.
By Najmah Mateese Brown, Esq.