The Federal law in the UAE

Student Name: Waleed Mohamed Student ID: 1106047 Course: Business Law 104

Introduction:
1

The United Arab Emirates is a federation situated in the Arabian Peninsula. Also, UAE is usually shortened as The Emirates, because it contains sub seven emirates. Despite Dubai being its largest city, the UAE has its capital at Abu Dhabi. Its oil reserves are huge, considered the sixth largest such reserve on Earth. Therefore, such a rich country should be controlled by a strong constitution, and UAE laws do not fail at this chapter. Despite the fact that UAE laws stipulate that UAE has a constitution and a president, it is not considered a monarchy nor a republic. In fact, it is a federation of seven monarchies, ruled by emirs. Those are considered having absolute power within the borders of their emirates. However, the President is considered the head of the state and the Prime Minister the head of government. They are chosen by the Supreme Council according to UAE laws, but in reality, their political position is rather hereditary, as always the Shiekh of Abu Dhabi is the president, while the Shiekh of Dubai is prime minister. Also, the prime minister is usually vice president too. UAE laws are considered rather liberal when compared to other Arab states, such as Saudi Arabia. The country has a federal law, but Sharia is used as reference regarding family laws. This paper will provide a definition of the federal laws and the implication of it in the UAE, with illustrating some of the articles of the federal laws regards the labor and economy.

Definition of Federal laws:

2

Federal law is the body of law created by the federal government of a country. A federal government is formed when a group of political units, such as states or provinces join together in a federation, surrendering their individual sovereignty and many powers to the central government while retaining or reserving other limited powers. As a result, two or more levels of government exist within an established geographic territory. The body of law of the common central government is the federal law. This is the case of the UAE, it has federal laws spread in the 7 emirates. UAE Federal Laws issued by the Government of United Arab Emirates from 1971 to 2011. The federal laws in the UAE covers many areas in the UAE political, social and economic issues. Federal law in the UAE includes protecting the rights and punishing for crimes.UAE laws legally protect human rights, as well as social development. This includes the right to equality, liberty and the presumption of innocence in legal procedures ( until proven guilty, of course ).

UAE federal law of labor: With respect to laws concerning employment, all labor matters are regulated by Federal Law No. 8 for 1980 on Regulation of Labor Relations. The law provides specific guidelines for employer-employee relationships and provides protections to employees. The Ministry of Labor and Social Affairs is charged with applying the law across all the UAE's nationstates. Some main items covered in the federal labor law are; hiring, firing, leave, rights. 1) Hiring employees: When hiring an expatriate, permission must be obtained from the Ministry of Labor and Social Affairs. An application must completed and submitted to the ministry to begin the approval process. Certain employers must also submit a bank guarantee to the ministry this guarantee acts as a security toward the termination and repatriation costs of the foreign employee. If approved, the employer must then offer a contract to the potential employee. The employment contract must meet the ministry's requirements and should include the following: date when employment begins, amount of agreed wages, duration of the
3

contract, description of the job to be performed and location of employment. The contract must be dated and should specify any limits, if applicable. The ministry has standard employment contracts that can be simply filled in. If hiring a UAE national, however, permission from the ministry is not required and no written contract is necessary. It's illegal to hire any child under the age of 15 for employment purposes. However, young children and teenagers over the age of 15 can be hired for an acting role, for instance. Under such circumstances, permission must be obtained from the ministry, which will require the presentation of the following documents: a birth certificate, parental consent and a doctorissued certificate indicating physical fitness for the job. If a birth certificate is unavailable, an age-estimation certificate must be obtained from a doctor and submitted to the ministry. Additionally, authorized children cannot be employed to work at night, in hazardous conditions, for more than six hours per day, on holidays or in overtime situations. 2) Leaves: All employees are entitled to annual leave. An employee of more than a year can take up to 30 days of annual leave. On the other hand, an employee that has worked for more than six months but less than a year can take two days' leave for every month of service. The employer must pay normal wages and any applicable allowances during the annual leave. Some other leaves which employees can also take paid days off on national holidays, which include: National Day (one day), Eid al-Adha and Waqf (three days), Gregorian New Year's Day (one day), al-Isra and al-Miraj (one day), Eid al-Fitr (two days), Hijri New Year's Day (one day) and Prophet Mohammed's Birthday (one day).

UAE federal law of economy: To reinforce its leading position as a major hub for international trading activities and improve the overall performance of the national economy, the UAE has always been keen
4

to develop its legal system in line with international standards since the formation of the union in 1971. The rapid pace of economic development in the country has also necessitated a constant upgrade of the federal legislative framework with the government closely working with a number of international organizations and institutions to modernize the country's economic legislations. On the other hand, Abu Dhabi, which leads the national efforts to expand and diversify the country's vital economic sectors, has long realized the importance and huge benefits of a healthy legislative environment for a prosperous economy. Considerable attention is being devoted to the Emirate's local legal system which already guarantees investors a stable and safe atmosphere to invest their money.

1) Combating Fraud and Deceitful Commercial Transactions When it comes to commercial transactions, the Ministry of Economy and Commerce considers many conditions and behaviors fraudulent and deceitful in business dealings pertaining to foodstuff, medical drugs, agriculture crops, natural products or any other materials intended for sale to humans and/or animals. The conditions for fraud and deceit include any variation in the commodity agreed upon. This could be a fictitious type of product, or discrepancies in the origin, source, pricing or quantity. Fraud may also be applicable in cases where products have been adulterated or an attempt to adulterate products is detected. The Federal Law No. (4) of 1979 on combating commercial fraud punishes offenders with a jail term of not more than two years and a fine between AED 500 and 10,000 or any thereof.

Depending on the particular crime committed, anyone who deceives or attempts to deceive another party by means of fraud may be punished. Anyone possessing fraudulent and/or deceitful products may also be punishable under this law.

2) Commercial Agent Guide Federal Law No. (18) of 1981 concerning the Organization of Commercial Agencies (Commercial Agencies Law), issued by Late Sheikh Zayed bin Sultan Al Nahyan on August 11, 1981, clarifies all terms and conditions for commercial agent activities. A foreign company which does not want to have a direct presence in Abu Dhabi or acquire a license can practice a business activity in the Emirate by appointing a commercial agent. This will enable the company to sell its products and services in the UAE. Commercial agents can be UAE nationals or UAE companies. They have the right to sell and distribute the foreign company's products or services exclusively within a designated area by the virtue of a mutual agreement. The Commercial Agencies Law was amended several times. The most important changes were introduced with Federal Law No. (14) of 1988, which was issued by Late Sheikh Zayed bin Sultan Al Nahyan in December 26, 1988.

Commercial Companies Law Federal Law No. (8) of 1984 or the commercial companies law in the UAE, was issued by Late Sheikh Zayed bin Sultan Al Nahyan and published in the Official Gazette No 137 of April 1984. The major amendments to this law include Federal Law No (1) of 1984, Federal Law No (13) of 1988, Federal Law No (15) of 1998 and Federal Law No (4) of 2000.

One of the latest and important amendments to this law was issued on August 10, 2009 by HH Sheikh Khalifa bin Zayed Al Nahyan, UAE President abolishing the minimum capital requirement of AED 150,000 for setting up a limited liability company (LLC) in the UAE, which was widely seen as a significant step for the small and medium enterprise sector. The provisions of this law apply to commercial establishments that are either incorporated in the UAE or have their activities based in the country. The law stipulates that the nationality of every company established in the country must be the UAE. Companies established in the free zones which are governed by special rules and regulations related to special economic zones are exempt from the provisions of this law. With the exception of acquiring the nationality of the country, the law does not apply to companies that operate in drilling, excavation, marketing and transport of oil and companies that produce, transport and market electricity, gas and desalinated water, as well as the companies which are excluded by the a resolution. The law defines a company as a contract under which two or more individuals commit themselves to contributing to a business venture aimed at making profits by providing their share of money or efforts or run under a profit / loss sharing basis.

UAE Trademark Law Federal Law No. (37) of 1992 on trademarks, or trademark law, was issued by Late Sheikh Zayed bin Sultan Al Nahyan who recognized the importance and benefits of trademark protection for a prosperous local economy. The law, which was amended by Law No. (19) of 2000 and Law No. (8) of 2002, provides protection for registered trademarks in the UAE and aims to safeguard the interests of both businesses and consumers in the country. The law includes the definition of trademarks, signs that cannot be registered as trademarks, trademark registration and cancellation procedures, transfer of ownership and mortgage of trademarks, licensing others to use trademarks, penalties for trademark law infringement and general and transitory provisions
7

Emirates Securities & Commodities Authority and Market Law Federal Law No. (4) of 2000 concerning the Emirates Securities & Commodities Authority and Market establishes the Emirates Securities & Commodities Authority (SCA) and regulates the activities of securities and commodities markets in the UAE. The law was issued by Late Sheikh Zayed bin Sultan Al Nahyan on January 29, 2000 and has been amended by Federal Law No. (25) of 2006 and Federal Law No. (6) of 2009 According to this law, securities are shares, bonds and notes issued by joint stock companies, bonds and notes issued by the Federal Government, local governments, public authorities and institutions in the country, or any other locally or internationally acceptable financial instruments issued by SCA. The law recognizes a broker as a legal entity authorized under the provisions of this law to practice brokerage business in the securities and commodities market. Organization and Protection of Industrial Properties Federal Law No. (31) of 2006, which amended Federal Law No. (17) of 2002 and Federal Law No. (44) of 1992, regulates and protects industrial patents, drawings, models and practical know-how in the UAE. The law, which contains 74 separate articles, was issued by Late Sheikh Zayed bin Sultan Al Nahyan to protect industrial property and encourage industrial innovation which is imperative for economic growth in the UAE. The Industrial Property Department in the Ministry of Economy is responsible for granting industrial patents and beneficial use certificates in the country. The law defines a patent as the Protection Deed granted by the Industrial Property Department in the country to an invention. The industrial model is defined as any innovative three-dimensional shape which gives a special appearance and may be used as an industrial or craft product. An industrial drawing, according to this law, is any innovative configuration of lines or colors that generates a product which may be used as an industrial or craft product.
8

The law also covers practical know-how which it defines as the information, data or knowledge earned from experience in a profession of technical nature and practically applicable.

Conclusion: The UAE government puts a significant amount of time, study and efforts goes into the development process of laws and legislations to ensure their compatibility and relevance to the general economic and social conditions of the country. Preparation of laws takes a series of procedures and discussions involving several federal and local government bodies.

The Department of Legal Affairs in the Ministry of Economy is responsible for developing federal laws and legislations related to economy, commerce and investment. The department is tasked with the formulation of draft bills, amendments, ministerial resolutions, ministerial and administrative decisions and circulars related to economic and commercial activities in the country. It also participates in the meetings of the Technical Committee for Legislation at the Ministry of Justice. The department reviews Memoranda of Association and basic statute of private joint-stock companies and gives legal opinion on them. Other responsibilities of the department include giving observations on agreements, treaties and resolutions regarding the GCC trade laws and the economic and trade agreements to be concluded with the Arab nations. So, process of creation federal laws and the development of the existing ones has moved through stages to reach its best condition to serve for the UAE community.

References:

1. http://www.economy.ae/English/DoingBusinessUAE/Pages/default.aspx

2. http://business.abudhabi.ae/egovPoolPortal_WAR/appmanager/ADeGP/Business? _nfpb=true&_pageLabel=p_business_homepage_hidenav&lang=en

10

3. http://www.uaeinteract.com/news/default.asp?ID=33

11