ARP,Al-Horra,Popular Front,Habib Essid,Mohamed Ennaceur,Slim Chaker,Nidaa Tounes,Law on Banking and Financial Institutions,IMF

Approval of Law on Banks and Financial Institutions Ruled Unconstitutional on Procedural Grounds

Tags: , , , , , , , ,

Image: Minister of Finance Slim Chaker speaks to the Assembly of the Representatives of the People (ARP) on May 11, 2016 | Source: ARP Facebook

Tunisia's Constitutional Review Authority ruled that the approval of a bill on banks and financial institutions by the Assembly of the Representatives of the People (ARP), just under two weeks ago on May 11, was unconstitutional on procedural grounds.

 According to the ARP deputies who filed the appeal, the draft law on banks and financial institutions had been rushed through the ARP's finance committee and its submission to a plenary session of the ARP two weeks ahead of schedule, deprived the ARP's deputies of the constitutionally mandated timeframe to adequately review the legislation. The draft law on banks and financial institutions was pushed up on the ARP's agenda in order to obtain passage of the bill ahead of a ruling on a 2.9 billion USD loan by the 's (IMF) Executive Board. The draft law on banks and financial institutions was the second of two economic reforms, after a law strengthening the Central Bank's independence was approved by the ARP in April, whose passage was presented by of Prime Minister Habib Essid, in an effort spearheaded by Minister of Finance Slim Chaker, as fulfillment of a precondition agreed to by Tunisia for approval of the IMF loan package. When the bill on banks and financial institutions was reviewed and accepted unanimously and in its entirety by the ARP's finance committee on May 5th, the President (Speaker) of the ARP, Mohammed Ennaceur, on May 10th proposed clearing the plenary session's scheduled debates on other draft laws in order to obtain approval of the bill on banks and financial institutions approved ahead of May 13th, when the IMF's Executive Board was expected to rule on a 2.9 billion USD loan package to Tunisia. The bill on banks and financial institutions had been scheduled for debate on May 24th. The bill was then introduced into a plenary session of the ARP on May 11th and approved by a vote on May 12th. In the days afterwards thirty seven ARP deputies from the Al Horra and the Popular Front parties signed a motion challenging the constitutionality of the passage on procedural grounds. Although the schedule change was approved by a majority of the ARP deputies present, according to ARP rules of procedure deputies are to be granted 48 hours' notice before a bill is introduced to a plenary session, rendering the vote approving the schedule change invalid. The Constitutional Review Authority which held a meeting on Tuesday, May 24, and decided to accept the appeal from the Al-Horra and Popular Front ARP deputies in both form and content. After the Central Banking reform passed by only two votes as parties within the coalition government failed to coordinate or control their deputies within the ARP, Prime Minister Essid expressed his 'disappointment' at the parties of the coalition government to follow through on agreements. Essid was not the only one exasperated by the lack of party discipline, Fadhel Ben Omrane, the chairman of President 's Nidaa Tounes party's parliamentary bloc and a member of the ARP's finance committee, resigned as party whip and from his position on committee on May 9, in the midst of the bill on banks and financial institutions' fast tracking. Ben Omrane stated he “had no control over the deputies.” and also mentioned his inability to reign in absentee deputies and the deputies own inability to fulfill their election promises as the reasons for his resignation from Nidaa's parliamentary leadership. The razor thin margin of the Central Bank law's approval and the discord within Nidaa's bloc served jolted the governing parties into an efficiency rarely seen in the ARP and in fast tracking approval it seems they broke the ARP's constitutionally mandated speed limit. The President of the Constitutional Review Authority, Khaled Ayari, told Tunis Afrique Presse (TAP) on Tuesday that President Beji Caid Essebsi had been informed of the decision.  It is the first time a bill has been deemed unconstitutional on such grounds since the adoption of the 2014 Constitution, it is believed that President Essebsi will now have to resubmit the bill to the ARP in order for it to be reviewed and voted upon under the appropriate legislative procedures. Mongi Harbaoui, deputy president of ARP, said told Mosaique FM also on Tuesday that the ARP leadership had not yet received the decision of the Constitutional Review Authority, and no date has been set for the reintroduction of the bill. Although the Popular Front boycotted both the plenary session and the now nullified vote on the bill, the bill obtained the approval of 115 of the 135 deputies present for the vote in the 217 seat ARP, or an outright majority regardless of the boycott. Whether votes will change when the bill, which includes two hundred plus articles, including articles providing for the creation of a deposit insurance fund, loosening of the laws governing the establishment of banks, bankruptcy of financial institutions and the regulations on Islamic finance, is reviewed under further scrutiny remains to be seen. The IMF's Executive Board, on Friday, May 20, approved a 4 year USD 2.9 billion loan to Tunisia “to support the country’s economic and financial reform program.”