Despite the fact that a clear definition of a security agent does not exist under Syrian legislation, the legal concept can be found in public laws and applicable banking regulations.
The emergence of the role of local banks as security agents is strictly related to what the Syrian legislator has defined as foreign loans of foreign financing. The term foreign loan was first defined under Investment Law 10/1991 and was revised under Investment Promotion Law 8/2007 replacing law 10. Licensed investors are obliged to declare all funding sources in the investment licence application submitted to the Syrian Investment Agency (SIA) whether from their own resources, a local loan or a foreign loan.
The concept of a foreign loan was further regulated under Prime Minister's Decision No 4 dated 31/12/2007, which gave local banks a role similar to that of a security agent in international project financings. Decision 4 requires the local bank to register the foreign loan granted to a project licensed under any investment promotion law (Law 8/2007 as well as tourism and real-estate development laws) and the investor is requested to inform the bank (through which he will receive disbursements of the loan in foreign currency to finance his project and through which he will repay the principal and interest in foreign currency) about the foreign loan. The bank is required to inform the SIA and Central Bank of Syria about the foreign loan.
Local Syrian banks have assumed the role of security agents under a number of project finance transactions in Syria whereby the financing parties appoint the local bank as a security agent and the investor issues an irrevocable administrative power of attorney, empowering the security agent to take necessary steps to effect execution of registration of all securities required under the loan agreement.