- Khalid Mahmoud- CARNAGIE
The Egyptian state’s seizure of Muslim Brotherhood funds undermines the rule of law and may further discourage organizations and businessmen from criticizing the regime.
On September 11, Egypt’s Committee for Inventory, Seizure, and Management of Terrorist Funds announced that it had seized assets belonging to 1,589 Muslim Brotherhood supporters or alleged sympathizers, as well as 118 companies, 1,133 NGOs, 104 schools, 69 hospitals, and 33 websites and TV channels with alleged ties to the banned organization. These confiscated assets—as much as 60 billion Egyptian pounds ($3.4 billion) according to some reports—were transfered directly to the Egyptian Treasury. This unprecedented move against the organization indicates that the Abdel Fattah el-Sisi regime is finally going after the Muslim Brotherhood’s funds and assets, which total an estimated 300 billion Egyptian pounds ($16.7 billion).
This decision was somewhat expected after the Sisi regime passed Law 22 in April 2018 regulating the seizure of terrorist assets. This law made it legal for the state to transfer assets to the treasury, rather than simply freezing and managing assets, as it had done before. It also established the independent Committee for Inventory, Seizure, and Management of Terrorist Funds, which has exclusive authority to enforce court orders against any entity or person belonging to a terrorist group. Although some parliamentarians argued while discussing the bill that members of the committee should be named by Supreme Judiciary Council to ensure its autonomy, the presidency kept this authority to appoint its members.
Building on the Terrorist Entities Law issued by Sisi in February 2015, which included groups that aim to “undermine public order” in its broad definition of terrorist entities, the April 2018 law enabled this committee to employ the broad, vague definition of terror against whomever they want, and consequently seize their property without any due process.
Many known Brotherhood figures both in Egyptian jails and in exile were targeted by the seizure order—including former president Mohamed Morsi, who is on trial on charges of having colluded with Hamas and other foreign organizations, Supreme Guide Mohammed Badie, deputy Supreme Guide Khairat al-Shater, and prominent leaders Mohammed El-Baltagy, Mohammed Saad al-Katatni, and Yusuf al-Qaradawi. However, in its statement, the committee also accused the Brotherhood of having concealed its control over other entities, using this as justification to pursue other targets with tenuous or alleged links to the organization. According to the committee, the Brotherhood has relinquished ownership over companies, schools, hospitals, medical centers, and NGOs but retained a majority share of these companies, pocketing a large percentage of the profits to bankroll Brotherhood-linked militant groups such as the Arms of Egypt Movement (HASM) and Liwaa al-Thawra, violent groups aimed at causing chaos and panic that emerged in Egypt after the military took power in July 2013.
Authorities confiscated the assets of many pro-Brotherhood individuals who have run their businesses for decades without running afoul of the law, and although many were already on trial or in exile, no evidence or court ruling has proven that their assets were obtained illegally. Rather, the seizure was due to the owners’ political and religious leanings and their disputes with the Sisi regime. In addition, a number of business owners with no known Muslim Brotherhood ties were also affected, such as Abdel-Nasser Saad Ajaaj, owner of Mecca Software, which produces Islamic-themed multimedia content for children, or Alaa Abdullah Zayed, a real estate investor with no history of political activity. Controversially, the committee’s allegations are not based on any investigations, nor have those involved been given a chance to defend themselves.
The seizure of assets appears to be a response to the Brotherhood’s release on August 14 of a ten-point initiative to help Egypt escape from the “dark tunnel.” This declaration included demands to reinstate Mohamed Morsi as president five years after being ousted from power and to hold free and fair elections overseen by an independent judicial body—all of which the Sisi regime saw as a slap in the face that could not be ignored. Such occasional reconciliation initiatives, created under the misguided belief that Sisi cannot afford not to make a deal with the Brotherhood, have always included Sisi stepping down as a precondition, which is of course a non-starter. President Sisi feels that his legitimacy is heavily dependent on the fight against the Brotherhood and terrorism, and he constantly plays on fears that the Egyptian state will collapse into chaos to drum up support. The asset seizure therefore perpetuates the narrative that the Brotherhood is still plotting to take over the state through its hundreds of schools and businesses.
However, the strongest and most compelling incentive for the assets seizure is the government’s own financial needs. Since the Egyptian pound was floated in November 2016, the regime has been doing its utmost to collect more revenue so it can reduce its budget deficit and repay its foreign debts. Desperate for funds to tackle the economic crisis, the government has been amending legislation to enact subsidy cuts, raise interest rates to attract investment, and impose new taxes and fees.
On September 3, Sisi met with Prime Minister Mostafa Madbouly and Minister of Finance Mohamed Moeit to study new ideas to increase state revenue, cut debt, and balance the budget. The fact that the asset seizure was implemented eight days later suggests this was one of the ideas floated. But this decision could backfire by spooking investors, who now have proof that their assets can be confiscated without a court ruling if they run afoul of the government.
Whatever the reasons behind the seizure of billions of dollars in civilian assets, the move highlights how far the executive branch has encroached on the judicial branch despite Sisi’s self-proclaimed respect for the rule of law and the separation of powers. The Sisi-appointed committee to confiscate funds is merely the latest example of the executive branch becoming both judge and jury, with no one able to override Sisi’s decisions. For instance, the Judicial Authority Law of April 2017 that gave the president the right to appoint the heads of the top judicial bodies in Egypt, including the Court of Cassation, which is the highest court of appeals.
Moreover, although the committee claims it collected proof the funds were being used to finance terrorism, it has not opened any trials where it might present this evidence, which is blatantly unconstitutional. Article 33 of the constitution stipulates that “the State protects ownership,” while Article 35 specifies that “private property may not be sequestrated except in cases specified by law, and by a court order.” Abdel-Moniem Abdel-Maqsoud, an attorney on the defense team for several Muslim Brotherhood leaders already on trial, said on September 27 that he had filed an appeal of the seizures in the Cairo Court of Urgent Matters, which will be heard as early as October 14.
The decision also further restricts NGOs’ margin of freedom in Egypt, out of fear they could also face a crackdown and seizure, particularly as the May 2017 law regulating NGOs imposes strict fines and up to five years in jail for organizations that “breach national security, public order, or public morals.”
This article was translated from Arabic.
Khalid Mahmoud is an Egyptian journalist focusing on politics and human rights.