Legal Consultations at the UAE Federal National Council - H&Z Law Firm

Dr. Hisham Fawzi’s comments on the federal draft law concerning companies in the UAE – Part Three

H&Z Law — Sat, 22 Jun 2024 14:24:56 +0000

Notes of Counselor Dr. Hisham Fawzy on the Federal Law Draft Regarding Companies in the UAE – Part Three

Chairman:

“.2 Except for the transfer of a partner’s share by inheritance or by court order, the company must rectify its status within three months from the date of notification; otherwise, the company shall be considered dissolved, and the partners therein shall be jointly and severally liable for the company’s debts and obligations arising from the date of the increase in the number of partners.”

There is an amendment; the term “bequest” has been deleted from this clause as it was considered an exception as a type of voluntary transfer of ownership. Therefore, the amendment is solely the deletion of the word “bequest.”

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

Your Excellency, we indeed proposed this text to the committee, and it is useful because individuals can transfer ownership voluntarily. For example, I can sell to fifty people and take them to court, and we proposed the idea to the committee, but it did not receive acceptance. However, it is beneficial, thank you.

Chairman:

So the proposal is: “Except for the transfer of a partner’s share by inheritance or by final court order, it relates to involuntary transfer of ownership,” finalized, linked to a person who has debts, thereby being arrested and receiving a court order, and the Ministry was unwilling to intervene in these details, so they did not accept this proposal, and the matter ended with its rejection…

Chairman:

Okay, now, counselor, tell us the sentence so that we can place it with this clause.

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

“Except for the transfer of a partner’s share by inheritance or by final court order relating to involuntary transfer of ownership,” thank you.

Chairman:

Okay, we finished with the bequest, and now, counselor, why was it canceled?

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

Combining final and stayed is not allowed; the word “stayed” suffices.

Chairman:

The word “stayed” means the end of matters, and as for canceling the bequest?

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

Let us finish with the matter. Point, Your Excellency; as for involuntary transfer of ownership, is it approved or not?

Chairman:

Not approved.

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

As for the bequest, it remains a voluntary act, Your Excellency, because you choose the bequest, which means you can leave fifty people a bequest; you do not choose death but choose the bequest, so if the number of partners increases in the sale, if they are increased, you must rectify your status. Therefore, the bequest takes on the effect of the sale and the Committee’s view is correct, thank you.

Chairman:

That is, by deleting the bequest? So, does the Council and the Government agree to delete the word “bequest”?

(Agreement)

Chairman:

“.2 Each partner may request the return of the share provided in item (1) of this article within thirty days of the director being notified of the agreed price, and in the event of disagreement on the price, the share is valued by one or more technical and financial experts knowledgeable about the share’s subject chosen by the competent authority upon request submitted by the retrieval applicant at their expense.

There is an amendment: deleting the letter “و” [waaw] at the beginning of the phrase, in addition to improving the formulation by adding the word “on the value” instead of “on the price.”

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

Your Excellency, for a limited liability company, it is not a monetary company and it is not a personal company. It is a blend between the two, where it collects on one end the funds and on the other end the people, and aspects of the people’s company in it include the impossibility of dealing with the provisions unless the partners grant them an opportunity to be reclaimed. Therefore, we were particularly careful about the expressions where we said the case of disagreement over value, not price, and thank you.

Article (29) became Article (21)

The post of manager in the company is free

“.1 Unless the company’s founding contract or appointment decision stipulates otherwise, the general assembly dismisses the manager by decision, whether the manager is a partner or non-partner, and the court may dismiss the manager based on a request by one or more partners in the company if the court finds a valid reason for dismissal.”

Without amendment.

Chairman:

Thank you, Brother Rashid, please, Mr. Counselor, with regard to the responsibility of managers in the company, there is the appointment contract, and Brother Rashid says, “Unless the company’s founding contract or the appointment contract”?

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

Yes, so that it is consistent with the second item.

Article (94) became Article (29)

Powers of the Supervisory Board

“The supervisory board shall examine the company’s books and documents, and may require managers at any time to submit a report on their management. This board monitors the budget, annual report, and profit distribution, and provides a report on this matter to the general assembly of the partners at least five days before its meeting.”

Without amendment.

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

Regarding the proposal of Mr. Member Rashid Al-Sharaqi, we believe that the text as it is is better. The text says, “The supervisory board shall examine the company’s books and documents, and may require managers at any time to submit a report on their management …” This sentence is clear as it is, followed by “… This board monitors the budget …” In monitoring, this action is legal and “this board” is the legal agent, and so it is important to mention here, and for this reason, the formulation received is better.

As for the authorization and it is, “The supervisory board shall examine or authorize whoever sees fit to examine the company’s books …” It is a good idea, Mr. President, and thank you.

Chairman:

The sentence needs re-formulation, so we are not going to say, “The supervisory board shall examine or authorize the books …” How would he authorize the books, so it must be reformulated if you want to include this meaning, please, Mr. Counselor.

Dr. Hisham Mohamed Fawzy (Legal Counsel to the Council):

The text should read: “The supervisory board shall examine or authorize others to examine the company’s books…” Thank you.

Chairman:

Thank you, Brother Counselor, for your clarification.

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/71fbc0d7-ffed-4258-8147-0d2aa380e6b3.pdf

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Dr. Hisham Fawzi’s comments on the federal draft law concerning companies in the UAE – Part Two

H&Z Law — Fri, 21 Jun 2024 10:12:00 +0000

The second part of the project law on federal companies in the UAE, along with the notes of Dr. Hisham Fawzi:

Excellency, the Chairman:

“.3 The company may retain an electronic copy of the originals of any documents and papers deposited and preserved with it according to the controls issued by a decision of the Minister.”

Reason for introducing this clause: This clause was added to accommodate international indicators regarding the ease of corporate operations by facilitating shareholders’ recourse to litigation and the speedy availability of information and documents during trials. It also aligns with the governance principle within the framework of rapid information exchange to preserve shareholders’ rights without delay. The amendment came to complement and confirm the provisions of the Electronic Transactions and Commerce Law.

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Excellency, the President, the matter is simple, and the answer is in Article (331), which states: “Except for the mutual termination company, do not hear in denial and no legal excuse once the three years have elapsed lawsuits arising before the liquidator due to liquidation acts and lawsuits arising before partners or managers of the company or board members or auditors due to their functions,” so the period is three years and it is very reasonable for a five-year period to retain records, thank you.

Excellency/Sultan Juma Al Shamsi:

The Proposed Text: “If agreed in the company contract to deprive one of the partners of profit or exempt him from loss … We want to add the following … Or receiving a fixed benefit for his share in the company” If they lost or earned, he is committed to a fixed interest rate, thank you.

Excellency, the President:

Please, the legal advisor.

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

The truth is that this addition does not harm, and it is called “the condition of the lion,” meaning that profit or a fixed percentage can be stipulated, so it can be useful, and it is also permissible to hear the opinion of the ministry, thank you.

Excellency, the President:

Please, the government advisor.

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

My point is that this is void, we affirm the void, meaning this is a third case of void, and Your Excellency says void, and we say the same thing too, thank you.

Excellency, the President:

Please, Your Excellency the Minister.

7/2/15 Page 099 of 272

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Excellency, this means that we must include other cases as well, thank you.

Excellency, the President:

If the Ministry’s point of view is that profit also includes these, please, the government advisor.

Dr. Ayman Hekal: (Legal Advisor at the Securities and Commodities Authority)

Excellency, sometimes there are joint-stock companies that issue types of shares eligible for them, so when we come to joint-stock companies, we find a text saying that the Cabinet may issue other types of shares other than ordinary shares, and these shares may be eligible for a fixed interest. The share may give a fixed interest but cannot sell the share. There are other types of shares that conflict with this article, so if we find an issue that it is prohibited or void to obtain a fixed interest, it means that I will not allow – basically – a certain type of shares to be issued, so we cannot add this issue to the article, thank you.

Excellency, the President:

So, brothers, do you agree with this item as it is without amendment?

(Agreement)

Excellency, the rapporteur:

Article (29) became Article (41)

Illustrative profits

“.1 It is not permissible to distribute illustrative profits to partners or shareholders, and the board of directors or whoever acts on its behalf is responsible before the partners or shareholders and the company’s creditors for this action.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Excellency, the first item talks about illustrative profits, the second item talks about distributing profits contrary to the provisions of the law, even if they are actual profit numbers because they are supposed to enter the legal reserve, and the third item says “does not deprive the partners or shareholders of profits …” So the best title for the title is “Company Profits” and not “Illustrative Profits,” and thus it is possible to amend the title here from “Illustrative Profits” to “Company Profits,” thank you.

Excellency, the President:

Does the Council agree to this proposal for the article title?

(Agreement)

Excellency, the rapporteur:

Article (41) became Article (47)

Access to records maintained by the registrar

“Subject to the provisions of this law, the interested parties may request from the registrar the following: .1 A copy of the data contained in the records maintained by the registrar.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

This is a legal term, Excellency President, and the stakeholders are exactly like this, and the ministry determines them under the supervision of the judiciary if there is a problem, thank you.

Rapporteur:

Article (47) became Article (42)

Fees payable to the Ministry and the Authority

“The Council of Ministers issues, based on the proposal of the Minister and in coordination with the Ministry of Finance, a decision on the fees due to be paid by companies for the activities carried out by the Ministry and the Authority within the framework of implementing the provisions of this law.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Excellency, the clear answer to that is that the Constitution clearly states that taxes are by law, which are the amounts received by the state without performing any service, while fees may be based on a law, and the Constitution Article is clear on that, and the law allowing the imposition of the fee has been issued, so the law must set the rule and allow the administrative entity to impose it, and this is what happened in this article, and therefore the article is sound and constitutional, thank you.

Rapporteur:

Article (11) became Article (11)

Competing business for company business

“.1 The joint partner is not allowed without the (consent) of the remaining partners to practice for himself or for others an activity that competes with the company or to be a joint partner in another company.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Excellency, the consent is a condition for survival, and this condition when forming the company cannot be, and at any time he cannot be, so at the time of forming the company, he cannot be a joint partner at all, and after the formation of the company, he cannot enter into another company and be a joint partner, because the guarantee will decrease by (21%), because he has become a guarantor for another company and thus you want to protect the guarantee, thank you.

Rapporteur:

“.2 The manager is not allowed to engage in an activity similar to the company’s activity without written permission from all partners renewed annually.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

The truth is that this issue will face us in many articles, so you cannot put a title for each article covering all the items listed under the article, so we put a title covering most of the items that agree in the field of the title, thank you.

Excellency, the President:

And now, does the Council agree to this item as provided by the government?

(Agreement)

Rapporteur:

Article (14) became Article (11)

Acceding partner

“If a partner joins the company, he is responsible with the remaining partners in solidarity for all his money about the company’s obligations before joining it, provided that the company discloses them to him in advance as he is also responsible with the remaining partners in solidarity for all his money about the company’s obligations following his joining it and any agreement between the partners, including the disclosure mentioned otherwise is not admissible against others.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Excellency, this is a correct note, the meaning is clear, “and every agreement between the partners otherwise” applies to all “is not admissible against others,” and thank you.

Excellency, the President:

And now, does the Council and the government agree on the article with this amendment?

(Agreement)

Rapporteur:

“.1 If the company consists of two partners and one of them withdraws, the other partner may within six months from the date of withdrawal registration in the commercial register enter a new partner or more into the company instead of the withdrawn partner, otherwise the company is considered dissolved as a matter of law.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

The withdrawal, Your Excellency President, “unless he has registered the withdrawal” is the recall, as it does not record the commitments and registers the withdrawal, thank you.

Rapporteur:

Article (15) became Article (12)

Situations in which the company is dissolved

“.1 The company is dissolved in any of the following situations: (a) The agreement of the partners is to dissolve it, provided that the agreement of all partners is obtained and the decision is not made more than two months after the date of conclusion of the agreement to dissolve it.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Excellency, this is a correct note, “between the partnership” does not come and if the contract or document cannot be subject to the state, and if it is not also a document, the person who joins is not named, thank you.

Rapporteur:

Article (16) became Article (12)

Cancelling the company

“.1 The company is cancelled by a decision of the court, and the reasons for the cancellation and the distribution of its assets shall be established by the law.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

This is a legal term, Excellency, and this is the reason, and if there is a problem, the court will be in charge, thank you.

Rapporteur:

Article (18) became Article (15)

Preparation of the final account

“.1 The partners shall prepare a final account within a maximum period of three months from the date of dissolution of the company and its announcement, and this account must be published in two local newspapers, and the partners shall bear the costs thereof.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

This is a legal term, and “and the partners are responsible” is a financial term, and thank you.

Rapporteur:

Article (19) became Article (16)

Representation of the company after dissolution

“.1 After the dissolution of the company, the partners may not engage in any transaction that leads to the completion of the dissolution process and the distribution of its assets, except for transactions necessary to complete the dissolution process, and the partners are prohibited from carrying out acts of competition, either directly or indirectly, with the company.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

This is a legal term, Excellency President, and the company is a financial term, and thank you.

Rapporteur:

Article (20) became Article (17)

Distribution of the remaining company funds

“.1 After the liquidation of the company’s assets and the payment of its debts, the remaining funds shall be distributed among the partners in proportion to their shares, unless the contract provides otherwise.”

Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

And the phrase “and the partners are responsible for it” is a financial term, and thank you.

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/71fbc0d7-ffed-4258-8147-0d2aa380e6b3.pdf

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Dr. Hisham Fawzi’s comments on the federal draft law regarding companies in the UAE – Part One

H&Z Law — Thu, 20 Jun 2024 09:43:06 +0000

Dr. Hisham Fawzi’s observations on the federal law project concerning companies in the UAE – Part 1

As part of the committee’s review of its studies on the draft law, it has concluded the following:

Retaining the Title of the Draft Law: The committee suggests keeping the title of the draft law as is, without changing it to “Commercial Companies” as per the current law’s naming convention. This is to avoid legislative gaps regarding civil companies, as the current regulation does not cover many aspects such as decision-making processes, partners’ right to transfer their shares, other partners’ right to reclaim the sold share, and the procedure for amending the company’s contract. The scope of the draft has been broadened to include all civil or commercial companies, with an added safeguard ensuring the law’s applicability to civil companies and avoiding adverse effects like declaring bankruptcy.
Rectifying Constitutional Defects: Provisions that were found to violate the constitution have been adjusted to make them constitutional. This includes empowering the administrative body to reconcile only concerning imposed fines, refraining from initiating criminal cases except upon its request to the public prosecution after reconciliation attempts fail, and making necessary amendments in this regard.
Elimination of Holding Companies: All texts related to holding companies have been removed from the project. The deficiencies of such companies outweigh their advantages, necessitating their elimination to prevent their misuse in contravention of the law.
Board Member Definition: The term “board member” includes the president as a member in the original articles of the project, with governance standards applicable to all. However, this does not preclude the president from having specific provisions when explicitly stated, as in Article 129.
Securities and Commodities Authority: The authority to issue decisions has been transferred to the authority’s board of directors to enhance collective work and decision accuracy.
Timeframe Adjustments: The specified time periods for taking actions have been changed from days to working days to extend the permissible period for taking action.
Nature of Partner’s Contribution: Specifying the nature of the partner’s contribution confirms that their share in the company cannot be considered labor unless they are a solidarity partner.
Minimum Requirement Exemption: The minimum requirement for establishing a public joint-stock company has been reduced to five founders for the case of transforming an existing company into a public joint-stock company, with the cancellation of Article 277 concerning the investment company.
Investment Funds Authority: Investment funds are assigned the conditions and regulations issued by the Securities and Commodities Authority, affirming their personal and financial independence.
Legal Personality: The legal personality of the company is confirmed in the principle of company transformation.
Authority Deletion: The competent authority in Article 292 regarding approval of mergers has been deleted, along with any ministry jurisdiction in Article 298 concerning violation of merger rules and procedures.
Foreign Company Agent: Article 331 has been amended to prevent foreigners from holding the position of foreign company agent.
Accounting Records: Article 323 imposes penalties for not keeping accounting records for up to two years, with a stricter penalty in the following article for failure to keep records for the specified period, replacing penalties to eliminate contradictions and impose the severest penalty for the severest violation.
Temporal Limitation: A temporal limitation has been set to avoid absoluteness, with the addition of the phrase “within the five years preceding the appointment decision” in Article 313 concerning liquidation appointment.
Article 278 Amendment: Article 278 has been amended to confirm the company’s legal personality.
Authority Deletion (Repetition): The competent authority in Article 292 regarding approval of mergers has been deleted, along with any ministry jurisdiction in Article 298 concerning violation of merger rules and procedures.
Foreign Company Agent (Repetition): Article 331 has been amended so that foreigners are not allowed to hold the position of foreign company agent.
Cancellation of Article 277: Article 277 concerning investment companies has been canceled because its name overlaps with others and has no direct relevance to the type of activity.

Remarks by Dr. Hisham Mohamed Fawzi (Legal Advisor to the Council): Excellency, Mr. President, even as we read the introduction of the definitions article, we find it states: “In applying the provisions of this law…” From a technical perspective, when considering whether a specific definition needs to be added, we look at whether this term appears in the provisions following this article. Upon reviewing the entire law, you will not find the terms “sibling” or “ally,” thus there is no need to define them. Therefore, thank you.

Would you like to proceed with the second item, Mr. Chairman? Oh, sorry, Mr. Chairman, Ms. Amal, do you have anything to add?

Her Excellency Dr. Amal Abdullah Al Qubaisi (First Deputy President): Excellency, Mr. President, with due respect to the point raised by Member Ahmed Al Shamsi, I specifically mentioned that we know that at the beginning of each chapter or specific section, the definitions of companies were mentioned. However, between mentioning the types of these companies in detail from the definitions and the remaining articles related to the principles of companies, the names of companies were mentioned without their definitions in the introduction of the article talking about them. This is one. The second part, which we discussed, is civil or professional companies, for which there is no definition at all. Therefore, this is very necessary. This is the Companies Act, and we will include them in it, so we must define them here. Where is the definition of civil or professional companies mentioned? Also, what Rashid Al Shariqi mentioned, yes, there was a previous definition in the committee’s basic proposal for free zones, and now there is no definition for free zones. This must be specified. This definition was mentioned in the Financial Free Zones Act, and also in Article 121 of the Constitution, which stipulates this law. Therefore, I think it is preferable to specify it here, especially since civil and professional companies have no definition at all. If we want this law to include them and to be under its umbrella, we must define them. Thank you.

Mr. President: The floor is yours, Dr. Hisham.

Dr. Hisham Mohamed Fawzi (Legal Advisor to the Council): Mr. President, this is indeed a good idea. If we include these definitions, all issues regarding law divisions will be clear. Now, from the beginning, we will know that the companies addressed by the law are “partnership companies,” “simple recommendation companies,” “liquidation,” “public and private joint-stock companies,” and companies of special form. This will give us a complete idea of the law’s division. Perhaps if we include them in the definitions article, it would be appropriate even if we keep them in their place as well. Thus, we take the existing definition in the article inside the law and place it in the definitions article, keeping both. This achieves both goals: from the moment you read the beginning of the law, you understand its details. Then, when delving into the details, we also have the existing definition. Thank you.

Mr. President: Thank you. Now, does the Council agree to the second item? Mr. Ahmed Al Amash, please.

Her Excellency Dr. Amal Abdullah Al Qubaisi:
Mr. President, with all respect to the point raised by Member Ahmed Al Shamsi, I specifically mentioned that we know that at the beginning of each chapter or specific section, the definitions of companies were mentioned. However, between mentioning the types of these companies in detail from the definitions and the remaining articles related to the principles of companies, the names of companies were mentioned without their definitions in the introduction of the article talking about them. This is one. The second part, which we discussed, is civil or professional companies, for which there is no definition at all. Therefore, this is very necessary. This is the Companies Act, and we will include them in it, so we must define them here. Where is the definition of civil or professional companies mentioned? Also, what Rashid Al Shariqi mentioned, yes, there was a previous definition in the committee’s basic proposal for free zones, and now there is no definition for free zones. This must be specified. This definition was mentioned in the Financial Free Zones Act, and also in Article 121 of the Constitution, which stipulates this law. Therefore, I think it is preferable to specify it here, especially since civil and professional companies have no definition at all. If we want this law to include them and to be under its umbrella, we must define them. Thank you.

His Excellency / Ahmed Mohammed Rahma Al-Shamsi:
Or should we say – Your Excellency the President – before the two clauses “without violating the provisions of this law, this law shall not apply to companies established outside… and therefore… the Cabinet issues” should we place it as a primary condition and beneath it the first and second clauses, so at the beginning of the discussion we say: “without violating the provisions of this law: .1 this law shall not apply to companies established in free zones” and then “.2 the Cabinet issues… if the legal advisor formulates it, we can resolve this ambiguity, thank you.

Your Excellency the President: Thank you, Ahmed, but I think it’s clear from the context. Please proceed, Your Excellency the Counselor.

Professor / Dr. Hisham Mohammed Fawzi: (Legal Advisor to the Council)
It is effective, Your Excellency the President, when you read the article, Clause .1 talks about “the application of provisions if… if it wishes to conduct its activities outside the free zone” we are stuck with its laws or regulations whether they allow or not, this is a matter specific to it, so the proposal at this point is to say: “if it wishes to conduct its activities outside the free zone”, and the second part we were discussing relates to how to eliminate the contradiction, because half of the members understood that the Cabinet would issue exemption decisions, and the other half understood that the decisions the Cabinet would issue relate only to registration and recording, thus to confirm the meaning we want, we say: “In accordance with Clause .1 of this law, the Cabinet shall issue a decision specifying the conditions to be considered for the registration of companies operating”, so what do we consider? We consider that these companies, if they operate outside the free zones, will be subject to the law – as you mentioned, Your Excellency – thank you.

Excellency the Rapporteur:

Article 7 has been amended to become Article 2

Definition of a company

“.1 A company is a contract whereby two or more persons commit to participate, each with a share of capital or work, and to share in the resulting profit or loss.”

Without amendment

Your Excellency the President:

Does the Council approve this clause as proposed by the government? The floor is for Mr. Marwan Bin Ghalita.

His Excellency Marwan Ahmed Bin Ghalita:

Your Excellency the President, I wonder, is it possible to read the clause as follows: without the word “economic”:

“.1 A company is a contract whereby two or more persons commit to participate in a project aiming to achieve profit…” So I propose deleting the word “economic” because as we see in Clause 2, we separated the issue of “economic”, and there are many things that will enter into the issue of projects, so if we say “project” and delete Clause 2, does this align with the law? I don’t know what the opinion of the Ministry and the advisors is, because in Clause 2 we said that the economic project refers to commercial, financial, industrial, agricultural, real estate, professional, or other economic activities, so can we delete it and stick to the phrase “a project aiming to achieve profit…” This is my first intervention, and I have another one, thank you.

Your Excellency the President:

Please proceed, Your Excellency the Counselor.

Professor / Dr. Hisham Mohammed Fawzi: (Legal Advisor to the Council)

No, Your Excellency the President, we cannot delete this and stop at the word “project”, the whole issue is that to avoid civil liability or to involve civil companies. However, we must be clearer in defining what constitutes an economic project in Clause 1, broadly referring to it, and then providing details in Clause 2. And of course, if civil companies will not enter or this issue is suspended, we will have to correct this issue. This is among the third articles that deserve amendment if we exclude civil companies, but so far they are still considered to be included and the matter remains pending, thank you.

His Excellency, the Chairman:

“.2 Exception from the provisions of Clause 1 of this Article by the Cabinet upon the proposal of the Minister in coordination with the competent authorities:

A. To issue a decision specifying the category of activities limited to citizens of the State.

B. To issue a decision specifying the forms of companies, activities, or categories that may be fully owned by a foreign person or where the share of the foreign partner may exceed forty-nine percent of the capital of the company.”

No amendments.

His Excellency, the President:

Does the Council approve Clause 2 of this Article as proposed by the Government?

His Excellency, the President:

Please, Counselor.

Dr. Hisham Mohamed Fawzi (Legal Counsel at the Council):

Your Excellency, the exception stated is as follows: “Companies exempted from the provisions of this law under special federal laws,” thus the entire company can be exempted under law. The exception may also cover a specific part of the company, namely the ownership by foreigners that cannot exceed 49%. Therefore, a law allowing foreigners to own 51% can be issued, making this text effective, but concerning Clause (B) and not Clause 1, which relates to the category of activities limited to citizens of the State. The wording can be changed here to respect that the citizen is the origin, so we say: “that a foreigner may not engage in,” in paragraph (A) of the first clause.

As for paragraph (B) of this clause, it can be deleted based on Article 3, thank you.

His Excellency, the President:

Thank you. Your Excellency, please.

Dr. Hisham Mohamed Fawzi (Legal Counsel at the Council):

Your Excellency, the intended meaning is after establishing the company and before commencing the activity, as it is not reasonable for these committees to exist before the establishment of the company. Therefore, the meaning proposed by the Honorable Member is the most accurate in terms of language, and the wording would be as follows: “and upon these companies after their establishment and before commencing their activities obtaining the approval of the Shariah Supervisory Committees.” If we include the word “internal,” perhaps it would be better to confirm that it is internal supervision and not external. If the Ministry agrees to that, then we all agree, thank you.

His Excellency, the Chairman:

“.1 If the partner’s share is his work, all earnings resulting from this work shall belong to the company unless otherwise agreed, with consideration to what is stipulated in the Copyright and Related Rights Law and the Industrial Property Regulation and Protection Law for Patents, Designs, and Models.”

Page 079 of 272

There is an amendment adding the last sentence to the paragraph and this legal link number (17) for the year 2112 with patents.

His Excellency, the President:

Does the Council and the Government agree to this clause with this amendment?

(Agreed)

His Excellency, Sultan bin Saeed Al Mansouri (Minister of Economy):

Your Excellency, concerning the proposal, I suggest that we begin the sentence as follows: “with consideration to what is stipulated in the Copyright and Related Rights Law and the Industrial Property Regulation and Protection Law for Patents, Designs, and Models, if the partner’s share is his work…” and then continue the paragraph, or perhaps all of this should be in the preamble because the texts of the laws, Copyright and Related Rights Law and Industrial Property Regulation and Protection Law for Patents, Designs, and Models are all supposed to be in the preamble, thank you.

His Excellency, the President:

Your Excellency, please proceed.

Dr. Hisham Mohamed Fawzi (Legal Counsel at the Council):

Your Excellency, Minister’s first proposal is very precise in terms of legislative drafting. When excluding laws, you put them at the beginning of the clause, i.e., in Clause Four, you say: “with consideration to such and such… if the partner’s share…” because you are referring to other laws and not this law. Therefore, the Minister’s proposal is the best, thank you.

His Excellency, the Chairman:

“.2 If the partner’s share in the company is represented by shares, his creditor, in addition to the rights referred to in Clause (1) of this Article, shall file a lawsuit before the competent court to sell these shares to obtain his share of the proceeds from the sale.”

No amendments.

His Excellency, the President:

Thank you, Mr. Ahmed Al Zaabi, please proceed.

His Excellency, Ahmed Ali Al Zaabi:

Thank you, Your Excellency, in the second paragraph, in the case of selling the partner’s share represented by shares, wouldn’t this reduce the company’s capital and thus affect the overall capital? Therefore, there might be an issue, thank you.

His Excellency, the President:

Thank you. We will get clarification from the Counselor.

Dr. Hisham Mohamed Fawzi (Legal Counsel at the Council):

Your Excellency, if you notice, the paragraph says “represented by shares,” it refers to joint-stock companies, which are fundamentally meant for selling shares. Therefore, the creditor stepping into the shoes of the debtor is very appropriate, and everyone buys and sells in this company, but the capital remains unchanged whether by sale or by the creditor taking the debtor’s place, thank you.

His Excellency, the President:

Thank you, Mr. Ahmed Al Shamsi, please proceed.

His Excellency, Ahmed Mohamed Rahma Al Shamsi:

Your Excellency, the Counselor has already stated what I was going to say. The sale process is the transfer of shares from one person to another, while the company’s capital remains unchanged, thank you.

His Excellency, the President:

Thank you. Now, does the Council agree to this clause and the article as a whole?

(Agreed)

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/71fbc0d7-ffed-4258-8147-0d2aa380e6b3.pdf

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Participation of Legal Advisor Dr. Hisham Fawzi in the Federal Draft Law on Combating Commercial Fraud in the UAE

H&Z Law — Wed, 19 Jun 2024 12:12:39 +0000

Federal Draft Law of 2014 on Combating Commercial Fraud

As submitted by the Government:

“We, Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates,

After reviewing the Constitution, Federal Law No. (1) of 1972 regarding the competencies of ministries and the powers of ministers, and its amended laws,”

Amendment:

Replace the phrase “and its amended laws” with “and its amendments” for the following reasons:

Replacing the phrase “and its amendments” with “and its amended laws” for greater accuracy in light of what the Federal National Council has recently adopted, especially when the law has only one amending law.

Justifications for the Amendment:

The phrase “and its amendments” can imply one or more amending laws, while the phrase “and its amended laws” in the plural form implies more than one amending law.

This change will be made to all laws mentioned in the preamble of the draft law where the phrase “and its amended laws” appears.

Discussions in the Session:

His Excellency the President:

Are there any comments on the first paragraph of the preamble as amended by the committee? The floor is to His Excellency the Minister.

Dr. Hisham Muhammad Fawzi (Legal Advisor to the Council):

Linguistically, the amendment is correct. In the Holy Quran, Prophet Moses said: “Would you exchange what is better for what is less?” The letter “b” always comes before what you seek, and thank you.

Dr. Hisham Muhammad Fawzi (Legal Advisor to the Council):

When we say “and its amended laws,” if there is only one law that amended this law, we would be referring to it in the plural form when the amendment is singular. But when we say “and its amendments,” it includes both meanings: plural and singular. This phrase is more precise, thank you.

On Oversight of Free Zones:

Dr. Hisham Muhammad Fawzi (Legal Advisor to the Council):

It is agreed that criminal matters apply to free zones, so anyone who commits a crime such as murder, theft, or forgery is subject to federal laws. This law is derived from the Penal Code, where a provision in the Penal Code dealt with product fraud. As a result, it is subject to exceptional oversight.

Article (13):

“Anyone who attempts to commit the crime of commercial fraud shall be punished with imprisonment for a term not exceeding one year and a fine of no less than ten thousand dirhams and not more than one hundred thousand dirhams, or by either of these two penalties.”

His Excellency Ahmed Ali Al-Zaabi:

The definition of an attempt is not specified, which may cause an issue. A comprehensive definition of attempting commercial fraud or providing service in such cases should be included.

Dr. Hisham Muhammad Fawzi (Legal Advisor to the Council):

The attempt is defined in the Penal Code as starting to execute an act with the intent to commit a felony or misdemeanor if it is stopped or its effect fails. All laws do not define the attempt because the attempt is included in the Penal Code, and mentioning the attempt in this law is sufficient.

Article (15) as submitted by the Government:

“Anyone who possesses, with the intention of trading, adulterated, spoiled, or counterfeit goods, knowing their adulteration, spoilage, or counterfeit nature, shall be punished with imprisonment for a term not exceeding one year and a fine of no less than thirty thousand dirhams and not more than one hundred and fifty thousand dirhams, or by either of these two penalties.”

This Article has been deleted:

There is no need to reduce the penalty for possession with the intention of trading. Deletion will subject this case to similar cases considered as commercial fraud, and thus it will be subject to the more severe penalties stipulated in Articles (12) and (14).

His Excellency Sultan Juma Al Shamsi:

I suggest keeping this penalty so that the judge has the authority to choose between the severe and the lenient penalty.

Dr. Hisham Muhammad Fawzi (Legal Advisor to the Council):

According to the Penal Code, there is a principal perpetrator and an accomplice, both of whom are punished with the penalty of the principal perpetrator without the need for additional texts. The acts are criminalized according to what is stated in the law, thank you.

Article (17):

“In the case of conviction for a crime specified in Article (14) of this law, the court must, in addition to the prescribed penalty, order the confiscation or destruction of the food, drugs, crops, products, and tools used. The court may order the publication of the judgment at the convict’s expense in two local daily newspapers, one of which is in Arabic.”

His Excellency the President:

Does the Council approve this article as amended by the committee?

(Approved)

Source:
https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/41abf86d-4eba-4d81-9cf0-f65285ef6270.pdf

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The participation of Legal Advisor Dr. Hisham Fawzi in the Federal Law Draft on National and Reserve Service in the UAE

H&Z Law — Mon, 03 Jun 2024 13:36:43 +0000

Federal Law Draft on National and Reserve Service

Excellency, the Rapporteur:

Article Three

“New articles numbered 42 bis, 54 bis, and 44 bis are added to Federal Law No. 11 of 1992, which read as follows:

Article 42 bis

A “Case Management Office” shall be established by a decision from the Minister of Justice or the head of the local judicial authority, each according to their jurisdiction, at the headquarters of the competent court, and the decision will define the office’s operating system.

The Case Management Office shall be composed of a head and a sufficient number of court employees, both legal and non-legal, under the supervision of the head of the competent court.

The Case Management Office is tasked with preparing and managing the case, including registering it, notifying parties, and exchanging memoranda and documents, as well as expert reports between the parties.

The competent judge may fine the delaying party as stipulated in Article 41 of this law.

If the case includes a formal objection by one of the parties, an urgent request, a request to add a party not originally addressed in the case, or if the defendant fails to appear after being duly notified, or if the proceedings are interrupted by law due to the death of one of the parties, loss of legal capacity, or the removal of the representative who was handling the case, the Case Management Office shall refer the case to the competent judge after setting a session to decide on any of these matters. The judge may then return the case to the Case Management Office to complete the necessary preparations for the case as appropriate.”

No amendments.

Excellency, the President:

Now, we move to the two articles that were postponed. Mr. Ahmed, please proceed.

Excellency / Ahmed Ali Al Zaabi:

The two articles are with the esteemed advisor, Your Excellency.

Excellency, the President:

Please proceed, esteemed advisor.

Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Regarding Article 3/152, we agreed to keep the committee’s opinion as it is, so the article remains unchanged: “The judgment shall be announced according to the procedures stipulated in Article 4 of this law,” and we delete the phrase “and the period shall run for those notified of the judgment.” Thank you.

Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

In Article 155, the idea is that we have improved the method of notifying the case according to Article 4. We made the notification primarily to the residence, then to the place of residence, then to the place of work, and as a last resort to any human. If none of these are available or if delivery is refused or impossible, the notification shall be made via email, fax, or registered mail. If these methods are not available, other methods shall be used. Article 4 clarified the idea of posting or publishing the notification, posting at the last known residence, or publishing. This is the general rule in Article 4. The remaining issue in Article 155 is the notification of the appeal. We referred it and decided that the notification shall be according to Article 4 because if we improved the way of notifying the case, what’s the use if you get a judgment and cannot enforce it? Will you just frame it? You want to enforce a judgment for a million dirhams, so the successful handling by the committee and the government was excellent. The remaining issue is how to handle the problem of notifying the appeal. We referred it to Article 4: “The appeal shall be notified according to the procedures stipulated in Article 4 of this law.” This is the general appeal for all individuals, this is clause 1.

Clause 2: Let’s assume you notified the plaintiff or the appellant; they should have provided their address in the lawsuit or the appeal document. The government’s request, which we agreed upon and hope the council agrees, is that we first refer not to Article 4, which governs all cases except these, but to the address stated in the lawsuit or the appeal document. If not found, then refer to Article 4. This is the wording I will read, Your Excellency.

“2. If the respondent is the plaintiff or the appellant and has not specified an address in the initial lawsuit document or the appeal document, and this information is not clear from other documents in the case, the appeal shall be notified according to the procedures stipulated in Article 4 of this law.”

Therefore, Article 4 is a fallback, but the original reference is to the address. This is very good. Thank you.

Excellency, the President:

Thank you. Now, does the council and the minister agree on this amendment?

(Agreed)

Source:

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/1ab2dcb1-a08a-4603-8ec0-70f81cbd7de3.pdf

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Participation of Advisor Dr. Hisham Fawzi in the Federal Draft Law Regarding Quran Memorization Centers in the UAE

H&Z Law — Mon, 03 Jun 2024 13:21:22 +0000

Federal Draft Law Regarding Quran Memorization Centers

Honorable Rapporteur:

Article (14) as presented by the government:

“It is prohibited for the centers to undertake the following:

Collecting donations and alms, including zakat, for the purpose of spending them in the centers or disposing of them in any way.
Holding lectures, seminars, and religious lessons without obtaining approval from the relevant authority as appropriate.
Using the centers for purposes other than those designated.
Engaging in any activity that violates the provisions of this law.
Printing books and publications related to the centers’ activities without prior approval from the relevant authority.”

Committee Amendment: The article became Article (15) and states:

“It is prohibited for any center to undertake the following:

Collecting donations and alms, including zakat.”

Justification: The committee deleted the clause “for the purpose of spending them in the centers or disposing of them in any way” from this item to ensure the prohibition is comprehensive.

Honorable President:

Does the council agree on the first item as amended by the committee?

Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

In truth, Honorable President, administrative penalties such as warning or alerting or cancellation are considered sufficient. We should not include fines here because there are other criminal penalties, which would result in multiple criminal penalties. Therefore, fines should be deleted here because other criminal penalties are stipulated elsewhere, and they cannot both be imposed together. Therefore, it was necessary to delete this in this case. Thank you.

Dr. Mohammed Matar Salem Al Kaabi (Chairman of the General Authority of Islamic Affairs and Endowments):

Honorable President, esteemed members, this matter is very important for the centers, and we have consulted legal experts who informed us that fines are considered administrative penalties and not criminal penalties requiring the procedures of prosecution and the public prosecution stipulated in the Code of Criminal Procedure. That is first. Secondly, for example, the Ministry of Labor imposes fines on violating establishments. The decision is ultimately up to you. Thank you.

Honorable President:

Please proceed, advisor.

Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Honorable President, in truth, the council has a long-standing consistent opinion that fines are considered criminal penalties, shifting the burden of proof from the public prosecution to the defendant. This is not permissible, and it would enforce the decision even through physical coercion without awaiting a trial. There are many reasons we have explained for this matter. Thank you.

Honorable Rapporteur:

Item (2) as amended by the committee:

“2. The president has the right to suspend any licensed center that practices a violation or assign someone deemed suitable to manage it temporarily, or close any establishment practicing an activity subject to the provisions of this law without a license.”

Honorable President, should I read the justification? It is long.

Honorable President:

No need for that. Now, does the council and the government agree on this item as amended by the committee? The floor is open to Mr. Hamad Al Rahoumi.

Mr. Hamad Ahmed Al Rahoumi:

Honorable President, I believe the correct phrasing is “and assign” not “or assign”. Thank you.

Honorable President:

Yes, it is not a matter of choice, so it should be “and assign” not “or assign”. Does the council and the government agree on this item as amended? Please proceed, advisor.

Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Honorable President, in truth, the correct phrasing is “or assign” not “and assign”. The clause states: “The president has the right to suspend any licensed center that practices a violation or assign someone deemed suitable to manage it temporarily…”. Thus, the president has the right to either suspend the center temporarily or assign someone else to manage the center temporarily. It is a matter of choice in this case. Thank you.

Honorable Rapporteur:

Penalties

Article (18) as presented by the government:

“The imposition of penalties stipulated in this law does not preclude any more severe penalties prescribed by any other law, nor does the imposition of any disciplinary sanctions stipulated in this law prevent the imposition of the penalties stipulated in this law or any other law when necessary.

Anyone who practices any of the activities stipulated in this law without a license or permit shall be punished by imprisonment for a period of no less than two months and a fine not exceeding fifty thousand dirhams or either of these penalties.”

Committee Amendment: The article became Article (19) and was divided into two clauses, stating:

“1. Anyone who practices any of the activities stipulated in this law without a license or permit shall be punished by imprisonment for a period of no less than two months and a fine not exceeding fifty thousand dirhams or either of these penalties.

The imposition of penalties stipulated in this law does not preclude any more severe penalties prescribed by any other law.”

Justification: The article was divided into two clauses to facilitate understanding.

The penalty was placed in the first clause, while the non-preclusion of any more severe penalties was placed in the second clause.

The deleted phrase, “nor does the imposition of any disciplinary sanctions stipulated in this law prevent the imposition of the penalties stipulated in this law or any other law when necessary”, was removed because it is unnecessary, as it is a basic principle assumed in all laws that disciplinary sanctions do not substitute for the imposition of criminal penalties for the same act.

Honorable President:

Does the council and the government agree on this article as amended by the committee? The floor is open to the Chairman of the Authority.

Dr. Mohammed Matar Salem Al Kaabi (Chairman of the General Authority of Islamic Affairs and Endowments):

Honorable President, if possible, I propose adding the following phrase: “…and the relevant authority may refer serious violations to the public prosecution for investigation,” if you find it appropriate. Thank you.

Honorable President:

Please read the proposed text slowly.

Dr. Mohammed Matar Salem Al Kaabi (Chairman of the General Authority of Islamic Affairs and Endowments):

The proposed addition is: “…and the relevant authority may refer serious violations to the public prosecution for investigation.” Thank you.

Honorable President:

Please proceed, advisor.

Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Honorable President, this addition is not legally necessary because a criminal violation must be referred to the public prosecution. However, this addition implies discretion, and this matter is not discretionary but mandatory; any criminal violation must be referred to the public prosecution. If someone teaches without a license or establishes a center without a license, it becomes mandatory to refer the case to the public prosecution. Additionally, there are judicial officers whose job is to document the violation. Thank you.

Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Honorable President, the solution is very simple and is found in the following article, which states: “Employees designated by a decision from the Minister of Justice in agreement with the president shall have the status of judicial officers to document what occurs in violation of the provisions of this law and the regulations issued pursuant thereto, within their jurisdiction.” This is a well-established principle in the state that judicial officers are responsible for detecting and reporting crimes. We cannot state in a specific law that serious violations are reported, as any criminal violation, serious or minor, must be reported. Judicial officers are responsible for this, and failure to do so makes them accountable to the public prosecution. Thank you.

Honorable President:

So, judicial officers perform this task within the framework of the law. Now, does the council and the government agree on this article as amended by the committee?

(Approved)

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/f2675177-eb84-4677-9ab1-07fb554929b4.pdf

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Participation of Advisor Dr. Hisham Fawzi in the Draft Law Regarding the Exploitation, Protection, and Development of Living Aquatic Resources in the United Arab Emirates

H&Z Law — Mon, 03 Jun 2024 12:49:04 +0000

Federal Draft Law Amending Federal Law No. (23) of 1999 on the Exploitation, Protection, and Development of Living Aquatic Resources in the United Arab Emirates

Honorable Secretary:

Newly introduced clause (2) by the committee states: “2. Erecting barriers in fishing waters that alter the pattern of water currents or obstruct the movement of aquatic life, or filling or dredging the seabed or shores, or removing, exploiting, or dredging marine grasses, except with a license necessitated by the public interest issued by the competent authority in coordination with the ministry.”

Honorable President:

Please proceed, Mr. Advisor.

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Honorable President, regarding the first paragraph which states: “… any materials or methods specified by the executive regulation,” there is an existing original article in the law, which is Article (23), addressing this matter. It states: “Fishing is prohibited using absolutely banned fishing tools or equipment, or using tools or equipment prohibited at certain times or in specific areas, or according to specific specifications, or for certain types of living aquatic resources. The executive regulation specifies the tools and equipment used in fishing, and the tools and equipment that are restricted or prohibited from use.” Therefore, this is already covered under Article (23), making the addition unnecessary. Hence, as proposed by the committee, it is better to avoid redundancy. Thank you.

Honorable President:

So, Honorable Minister, this is already included in Article (23) of the same law, making it unnecessary here. Please proceed with the second clause, Mr. Advisor.

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Regarding the second clause newly introduced by the committee, this clause addresses fishing waters. According to the definition, fishing waters include territorial waters, which may extend up to (211) miles from the coast. Thus, it pertains to all waters, not just the coast. Thank you.

Honorable President:

Please proceed, Honorable Minister.

Dr. Rashid Ahmed bin Fahd (Minister of Environment and Water):

Honorable President, I disagree with the advisor because this clause specifies the prohibited actions. The clause specifically names nylon material, and we argue that other materials or methods may need to be prohibited in the future. Therefore, we should not close the door because this is a law. If we only ban nylon and someone uses a new material that is not nylon, they could argue that they are not violating the law. Why restrict it unnecessarily?

Honorable President:

Therefore, we keep the proposed addition by the Honorable Minister, which is: “… or any other materials or methods specified by the executive regulation or by a decision of the ministry.” … The phrasing is important, Honorable Minister. Please read it to us again. Proceed.

Dr. Rashid Ahmed bin Fahd (Minister of Environment and Water):

The proposed phrasing as mentioned before: “… or any materials or fishing methods specified by a decision of the ministry” because these matters are subject to change. Thank you.

Honorable President:

Please proceed, Mr. Advisor.

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

The article I mentioned, Honorable President, which is Article (23) of this law, states: “… and the tools and equipment that are restricted or prohibited from use …

Honorable President:

No, no, we are now discussing Article (26) regarding the first clause. Let’s focus a bit. The first clause states: “The following is prohibited: fishing using bottom trawling nets or fixed bottom nets, or using lights, or using nets made of nylon material,” and the Honorable Minister added at the end of the clause: “… or any other materials or fishing methods specified by a decision of the ministry.” Does the council agree with this proposal? Mr. Sultan Al Shamsi, you have the floor.

Sultan Jumaa Al Shamsi:

Honorable President, it should be specified by a decision or by the executive regulation. Also, Honorable President, it should include both methods and equipment because it is possible that the nets themselves might be made of a non-prohibited material, but the method used for fishing is prohibited. Therefore, it is important to emphasize both the method and the equipment. Thank you.

Honorable President:

The intent is methods or materials. Proceed, Honorable Minister.

Dr. Rashid Ahmed bin Fahd (Minister of Environment and Water):

It is important to mention “or any methods or materials.” Thank you.

Honorable President:

Please proceed, Mr. Advisor.

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Regarding the second clause provided by the government, which states: “The executive regulation specifies the methods, specifications, and controls for fishing tools and equipment and the necessary licenses for them,” it was deleted by the committee because it is covered under Article (23) of this law. With the amendment of the first clause and also not deleting this clause and the existence of Article (23), it would seem like we are repeating the same meaning perhaps three times. Thank you.

Honorable President:

Please proceed, Honorable Minister.

Dr. Rashid Ahmed bin Fahd (Minister of Environment and Water):

Honorable President, Article (23) discusses equipment, and here we are talking about methods and materials, so there is no problem with that.

Honorable President:

No problem, Honorable Minister. We will add to the first clause both methods and equipment. Please proceed, Mr. Advisor.

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

In this case, we add only methods, Honorable President, and leave the other article for equipment and tools. Thank you.

Honorable President:

Proceed, Honorable Minister.

Dr. Rashid Ahmed bin Fahd (Minister of Environment and Water):

We proposed “methods or materials.” Thank you.

Honorable President:

So, does the council agree on the first clause as proposed by the Honorable Minister?

(Agreed)

Honorable President:

And now does the council agree on the second newly introduced clause by the committee? Please proceed, Honorable Minister.

Dr. Rashid Ahmed bin Fahd (Minister of Environment and Water):

What I mentioned applies to the first clause. As for the second newly introduced clause by the committee…

Honorable President:

In fact, regarding the second newly introduced clause, the members insist on it. Proceed.

Dr. Rashid Ahmed bin Fahd (Minister of Environment and Water):

If the members insist on it, we propose an amendment to remove the ambiguity. We suggest adding at the end of the clause the phrase “… in accordance with the relevant regulatory legislation.” This is to clarify that there are existing regulatory legislations. For example, Law (24) addresses the environmental impact of any project anywhere in the country, whether on an island, on land, or at the coast. Therefore, we propose – if the council insists on keeping this clause, which we believe is unnecessary – to add the phrase I mentioned at the end of the clause, “… in accordance with the relevant regulatory legislation.” Thank you.

Honorable President:

Mr. Rashid Al Shreiki, the Honorable Minister now proposes adding a phrase at the end of the newly introduced clause so it would read: “… except with a license necessitated by the public interest issued by the competent authority in coordination with the ministry, and in accordance with the relevant regulatory legislation.” Please proceed.

Rashid Mohammed Al Shreiki:

Honorable President, doesn’t the Honorable Minister think that this could create confusion regarding which law prevails? Is it the Environmental Protection Law or the current law which specifically protects living aquatic resources? Thus, this specific law might restrict the general provisions of the Environmental Protection Law, causing confusion. However, if the council believes that this addition will not cause confusion, I personally have no issue with it. Thank you.

Honorable President:

Mr. Advisor, will there be any confusion if we add the phrase proposed by the Honorable Minister?

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

In fact, if the word “license” is understood to comply with the relevant regulatory legislation, it means we are talking about the license, so there is no problem with that. I believe the phrase becomes correct: “… except with a license necessitated by the public interest issued by the competent authority in coordination with the ministry, in accordance with the relevant regulatory legislation.” Here, the phrase does not talk about barriers but about the license, meaning when issuing a license, it should comply with other legislations. So there is no harm in that. Thank you.

Honorable President:

So, does the council agree on this clause as amended?

(Agreed)

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/f2675177-eb84-4677-9ab1-07fb554929b4.pdf

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Dr. Hisham Fawzi’s Participation in Recommendations on Emiratisation in the Government and Private Sectors in the UAE

H&Z Law — Mon, 03 Jun 2024 12:35:41 +0000

Recommendations on Emiratization in the Government and Private Sectors

Honorable / Musabah Saeed Al Ketbi (Committee Chair)

Addressing the wage gap, which constitutes a major obstacle to employing citizens in the private sector.
Developing incentivizing initiatives, financial and service facilities to encourage citizens to invest in medium and small projects, with these projects prioritized strategically in government policies.
Directing federal ministries and entities to include financial allocations in their annual budgets for implementing Emiratization policies, plans, and programs in coordination with the Ministry of Finance.
Mandating all federal government entities to integrate with the “Bayanati” system of the Federal Authority for Human Resources.
Reviewing the pension law and amending provisions related to benefits granted to employees in the private sector compared to the federal and local government sectors, aiming to bridge the gap in pension benefits between the two sectors.
Providing material and moral incentives to private sector establishments committed to Emiratization decisions.

Honorable President:

Are there any comments on these six recommendations?

Honorable / Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

There is no issue from the financial free zones as they are already subject to Emiratization and others. There are only two zones, one in Dubai (DIFC) and a new one in Abu Dhabi. The original problem is with the industrial free zones, so this matter needs a constitutional amendment to remove the word “financial” and subject all zones to federal jurisdiction.

Honorable President:

So, brothers, as the Honorable Advisor mentioned, instead of the word “amendment,” it should be “implementation” because this is subject to federal legislation, thus not accommodating citizens there. Does the council agree to replace “amendment” with “implementation”? Because the zones are already under federal authority…

Honorable / Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

The issue, Your Excellency, is that we have two zones, one financial and this is a federal matter, and the other industrial or non-financial, which is a local matter. Therefore, to issue recommendations for non-financial zones requires a constitutional amendment. So, if your concern is only about financial zones, there is no issue originally. The committee’s intent is regarding non-financial zones, which are a local matter, but we can phrase it as “taking necessary actions to subject all free zones to Emiratization policies and plans,” leaving the necessary actions in a general format, including constitutional amendment and so forth.

Honorable President:

What wording do you suggest, Honorable Advisor?

Honorable / Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

“Taking necessary actions to subject all free zones to Emiratization policies and plans.”

Honorable President:

What does the council think of this statement? This encompasses all, financial and non-financial zones, and you are interested in non-financial zones again, Honorable Advisor.

Honorable / Dr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

“Taking necessary actions to subject all free zones to Emiratization policies and plans.”

Honorable President:

Does the council agree to this amendment?

(Agreed)

https://almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/4931b254-db04-40f0-819f-3a9419597cb7.pdf

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Dr. Hisham Fawzi’s Participation in the Federal Draft Law on Food Safety in the UAE

H&Z Law — Mon, 03 Jun 2024 08:28:17 +0000

Federal Draft Law on Food Safety

Honorable Secretary:

Article (9): Obligations of the Food Establishment Manager

“Considering the provisions of the Consumer Protection Law, the food establishment manager is committed to the following:

Implementing food safety systems based on the hazard analysis approach approved by the state.
Ensuring the health, safety, and suitability of food for human consumption.
Facilitating the tasks of the competent officer during their work in monitoring, inspection, and auditing.

Session Transcript 12 – Cycle 4 – Term 15 Page 156 of 206

Providing the appropriate records requested, reflecting compliance with this law and the regulations and systems issued pursuant to it.
Training and qualifying employees in the field of food health and safety according to approved standards.

No amendments.

Honorable President:

Does the council agree to these provisions as presented by the government?

Honorable President:

Please proceed, Honorable Advisor.

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Indeed, Honorable President, the amendment aimed to leave the registration to the entities that will be specified by the executive regulations. This was the committee’s intention, but the justification was omitted, so the difference was not noticed. Therefore, the phrase “and its entities” was added. Thank you.

Honorable President:

So, there is no need to add the phrase “to the competent authority”…

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Yes, there is no need for the competent authority because, according to the committee’s opinion, they want to leave the matter to the executive regulations, which will specify it later. Thank you.

Honorable President:

So, there is no need to reinsert the phrase “to the competent authority.” Please proceed, Mr. Ali, to clarify your second remark.

Mr. Ali Issa Al Nuaimi (Council Monitor):

The second point, Honorable President, is found on page (44) where clause number (5) was deleted because it was included in clause (2) of the same article. However, clause (2) of the same article was also deleted. Therefore, I believe that in this case, the justification must be amended to read “included in clause number (3).” Thank you.

Honorable President:

The procedure is clear – it is just an error in the justification. Now, does the council agree on clauses (1) to (5) of Article (9) as presented by the government?

(Agreed)

Honorable Secretary:

Clause (11) newly introduced by the committee states:

“11. Providing any detailed information to the ministry, concerned authorities, or competent authorities regarding the food handled in the establishment.”

Honorable President:

No, the differentiation is made, Honorable Secretary. Here it concerns the manager of the food establishment, while there it concerns the feed establishment. Since the feed establishment and the food establishment are different, please proceed, Honorable Advisor.

Mr. Hisham Mohammed Fawzi (Legal Advisor to the Council):

Honorable President, the title of the article should reflect its content. I believe the title is very appropriate, which is the Obligations of the Food Establishment Manager. Therefore, it speaks about what is relevant to the food establishment. The following article discusses what is relevant to the feed establishment. Thus, I think the amendment is unnecessary, and it is better to keep the article as it came from the committee. Thank you.

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/ff55207e-f321-4d30-9bdd-9d7952fd0264.pdf

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Dr. Hisham Fawzi’s Participation in the Federal Draft Law on the Establishment of the Federal Customs Authority in the UAE

H&Z Law — Mon, 03 Jun 2024 08:14:13 +0000

Proposal for a Federal Law Establishing the Federal Customs Authority

Chairman “In proxy”:

Original text:

.9 Managing and operating the customs departments at the state’s entry points if any of them request it.

Without modification and now numbered 10.

Honorable President:

Does the Council approve this paragraph? Please, Your Excellency Minister.

His Excellency / Obaid Humaid Al Tayer: (Minister of State for Financial Affairs – Chairman of the Board of the Federal Customs Authority)

Thank you, Your Excellency President, for clarifying to His Excellency Member Khalifa Al Suwaidi, we agree to use the competent authorities, but it has not been defined in the introduction…

Honorable President:

Please, the rapporteur.

Honorable / Ahmed Obaid Al Mansouri: (Committee rapporteur “in proxy”)

I did not hear for the intervention, Your Excellency President.

Honorable President:

Please, Your Excellency Minister.

His Excellency / Obaid Humaid Al Tayer: (Minister of State for Financial Affairs – Chairman of the Board of the Federal Customs Authority)

As for the competent authorities, we have no problem mentioning the competent authorities and unifying them as competent authorities, but if your esteemed council sees the need to define them, we have no objection or they can be implicitly known as competent authorities, this is for clarification, thank you.

Honorable President:

Please, the rapporteur.

Honorable / Ahmed Obaid Al Mansouri: (Committee rapporteur “in proxy”)

If the Council deems it appropriate, there is no objection.

Professor / Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Your Excellency President, basically we need a definition when there are federal competent authorities and local concerned authorities, but in this law we have only one competent authority and thus there is no ambiguity, and in the committee we thought of putting the definition but ended up not needing it because there is no duplication, meaning there is no federal authority called a competent authority or a local authority, but if there is an inclination from the council to define it, the definition mentioned by His Excellency the Minister is excellent and there is no problem with it, thank you.

Chairman “In proxy”:

Original text:

.13 Establishing and implementing a centralized mechanism in coordination with governmental departments for collecting and distributing customs duties with Gulf Cooperation Council countries in accordance with the applicable laws and treaties in this regard.

Committee amendment:

.14 Establishing, adopting, and implementing a centralized mechanism in coordination with governmental departments for collecting and distributing customs duties with Gulf Cooperation Council countries in accordance with the applicable laws and treaties in this regard.

Rationale: To emphasize finality.

Professor / Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Chairman “In proxy”:

” .6 Appointing employees of the authority from special, first, experts, and consultants according to the effective regulations of the authority “.

Without modification.

Professor / Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Your Excellency President, the essence of the saying in this matter is that the human resources law list is just a list issued by a decision of the cabinet as a desire to unify these authorities, and in front of me on the screen (25) federal authorities like the General Civil Aviation Authority, Emirates Real Estate Corporation, Federal Authority for Pensions and Social Insurance, Federal Customs Authority, and others, all of these are subject to the human resources law list to have a unified system without differences in salaries, systems, and so on. We know the existence of this list, but it is just a list and not a law, and when we came to discuss this law, we thought to leave this text to give some distinction to the authority in matters stipulated by the law including the issue of appointment, but unless there is no text in the law – of course – it will be subject to the human resources law list because the law can contradict the list but the list cannot contradict the law, so now we have two options: either to give the authority distinction in terms of appointments and the text remains as stated by the government, or if we say according to the systems applied in the authority of human resources or according to the human resources law list, when we returned to this list we found that it stipulates the appointment of the general manager and executive director, and gave the authority to determine a schedule with powers in other positions, so if we said appointment according to the schedule or according to the authority’s system, perhaps the authority’s system would contradict this text and give – for example – the power to the executive director, and in this case there would be a contradiction, and I would like to point out here that there is no constitutional violation in either of the two options, so it is permissible to take either of the two options, meaning that it is permissible to give the authority distinction or to make it like the rest of the independent authorities, so the vote will be either to delete the clause completely or to remain as stated by the government without modification, but modifying it to be in accordance with the human resources law list would have a contradiction because if the minister was given this authority and the human resources authority did not give it to the head of the authority, this would be a contradiction, so the solution is to vote on deleting the clause or leaving it as stated by the government without modification, thank you.

Honorable President:

Gave the authority to the council, and here the head of the authority replaces the council, let us see the proposed text by the brother consultant, please.

Professor / Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

In fact, there is a very simple text that could be a solution to this issue, which is found in defining the council, the beginning of Article (151) states: “The council issues tables of powers and administrative responsibilities related to this regulation,” so what is the definition of the council?…

Honorable President:

Do you mean the council regarding the independent authorities? Please.

Professor / Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

Yes, Your Excellency President, the council regarding the (35) independent authorities, so the definition of the council is “the council: the board of directors or the board of trustees of the federal entity or their representatives,” and therefore here we will consider the head of the authority as representing the council because this is the first authority in the history of the state that does not have a council but has a president, and with this interpretation, we can extract the powers and there will be no problem, I do not see a clear legal problem in it, thank you.

Honorable President:

Therefore, the proposal submitted by the members that the text of this clause should be as follows: “Appointing employees of the authority from special, first, experts, and consultants according to the human resources law list applicable in the independent federal authorities in the government” is correct? Please.

Professor / Dr. Hisham Mohamed Fawzi: (Legal Advisor to the Council)

I prefer that the text be limited to the appointment until the word “and consultants” because the phrase “according to the human resources law list…” might contradict the list for any reason, and thus there may be a violation, and the truth is that we can leave this phrase on the basis that if the interpretation is that the head of the authority is meant “or their representatives,” if the Minister does not object that the head of the authority represents the council in this authority because this is the first authority in the state that does not have a council but has a president, there is no problem with that, and thank you.

https://www.almajles.gov.ae/Pages/download.aspx?FileUrl=FncEparURL/ed37ad31-e410-4273-a351-0eef87ea13c8.pdf

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