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The UAE Ministry of Economy is in the process of developing new laws as part of modernizing the legislative system and enhancing the business environment in line with the UAE Strategic Vision for 2021.
The new laws will cover foreign investment, competition, certificate of origin, arbitration, industry affairs regulation, amendment of industrial ownership, anti- commercial fraud, auditors profession regulation and companies law. The competition law will lay down the mechanisms governing healthy competition in business while the law of commercial arbitration will plug the gaps in the existing one.
The new laws seek to address the existing gaps in commercial regulations and arbitration and promote efficiency, transparency and investor confidence in the business sector. "The UAE is revamping its legal system to reflect the changes in the global economic landscape and maintain its competitive edge as a centre of business. It is a thorough process that will fulfill specific conditions and will require a lot of time, research and consensus among all parties involved," said Sultan Saeed Al Mansouri, Minister of Economy.
Al Mansouri said passing the laws involves several steps. First, the ministry will seek the Cabinet's permission in forming the law, and the first draft will be shared with all parties concerned in the government and private sectors. The draft law is then sent to the Cabinet for approval and to the Legal Technical Committee at the Ministry of Justice that amends the draft in co-ordination with the Ministry of Economy.
The law will then be referred to the Ministerial Legal Committee to be discussed and amended. It will then be transferred to the Cabinet for revision and approval. After this, it will go to the Federal National Council for discussions and approval and to the Ministry of Presidential Affairs for issuing it officially.
The proposed foreign investment is envisaged to unify legislations for foreign investments and includes required exemptions and guarantees for investment projects. It is planned to ensure investors the rights in managing their projects. It also reduces cost through customs exemption rates and the investment window services, which facilitate procedures of licensing, insurance and flexible capital transfer and effective mechanisms for resolving disputes.
The certificate of origin law aims to re-organise legislations related to certificates of origin in order to specify the origin of the homeland of the commodity and will allow the ministry to impose fines and penalties on incorrect documents and data.
Analysis and Forecast: Decreasing Risk
This is a long overdue but nonetheless important step. The collapse of Dubai has sent all sorts of wrong signals that undermined the position not only of Dubai, but of the UAE. Minister Al Mansouri, who knows the internal workings of both Dubai and Abu Dhabi, has taken a very important step in moving the UAE government towards making the country more attractive to foreign investors, in the face of increasing competition from neighboring states. The measures are also important in that they harmonize laws within the UAE federation.
The measures are vital as they address the issue of monopolies. This particular aspect will undoubtedly find stiff local opposition. However, it is important in keeping in line with commitments the UAE made to the World Trade Organization.
If the ambitious measures proposed are approved, which is by no means taken for granted, the UAE would have leaped forward in consolidating its leadership position as the GCC’s most attractive market.
