New cost relief measures implemented by UAE authorities in response to COVID-19

The UAE authorities have taken a number of measures to reduce the costs that businesses are facing during the current crisis. We now report on some of the measures that have been introduced, current as of 12:00 noon on Thursday, 16 April 2020.

 

Abu Dhabi Department of Economic Development (ADDED) Administrative Resolution No. 92 of 2020

 

On 14 April 2020, the ADDED issued Administrative Resolution No. 92 of 2020 on the Reimbursement of 20 per cent of the Rent Value for the Restaurant, Tourism and Recreational Sectors in Abu Dhabi (Resolution) with immediate effect.

 

The Resolution applies to rents of the following establishments anywhere in Abu Dhabi:

 

• restaurants, coffee shops, cafeterias, and outlets selling prepared meals;

 

• all entertainment establishments;

 

• all tourism and recreational establishments; and

 

• all desert resorts and tourist parks.

 

The Resolution applies to rents collected from the period of 1 October 2019 until 31 March 2020 as well as rents from both existing and new contracts, regardless of the date of conclusion of the contract, that will be collected from 1 April 2020 until 30 September 2020.

 

In the event rents consist of a fixed rental portion plus a percentage of revenue portion, the Resolution will apply to the fixed portion only.

 

If a particular landlord has filed suit or applied for a provisional remedy against a tenant and wishes to withhold the 20 per cent refund, then it must make a request to the ADDED supported by a judgment in its favour attaching such refund.

 

Commercial Vehicle Registration in Abu Dhabi

 

The authorities in Abu Dhabi have also announced that owners of commercial vehicles may renew vehicle registration free of charge until the end of 2020. This measure will be applied retroactively to any renewals completed after 16 March 2020.

 

The Federal Tax Authority’s (FTA) Extension of the Tax Period

 

The FTA has announced the extension of Excise Tax returns for the month of March. Excise Tax filings for the months of March and April are now due no later than Sunday, 17 May 2020. Excise Tax is levied on specific categories of goods, such as tobacco products and sweetened beverages.

 

Dubai Multi Commodity Center (DMCC) Business Support Package

 

The DMCC announced a comprehensive package which includes discounts and waivers for DMCC’s existing member companies, as well as new companies looking to set up. Measures in the package, which will apply from 1 April 2020 until 30 June 2020 (unless stated otherwise) and complement the various economic initiatives announced by the UAE Government, include the following range of discounts and waivers:

 

For existing DMCC member companies

 

• 100 per cent waiver for late licence renewal penalties

 

• 100 per cent waiver for all flexi desk and DMCC business centre penalties until the end of 2020

 

• 100 per cent waiver of the office sharing permit fee

 

• 100 per cent waiver of the company reinstatement fees

 

• 30 per cent discount on licence renewal

 

• Waiver of outdoor area rents for JLT retailers with existing contracts, where DMCC is the building owner/landlord

 

• Waiver of rent for two months for commercial establishments impacted by the latest Dubai Economy directive requiring a temporary closure, where DMCC is the building owner/landlord

 

• A three-month suspension of rent for flexi desk and DMCC business centre tenants renewals or monthly/quarterly instalment with no discount

 

For new registrations, and companies already in the process of registering in DMCC

 

• 80 per cent reduction on the total company set up fee if shareholders are residents of JLT

 

• Up to 50 per cent reduction on the total company set up fee, along with a flexi desk for one year

 

• Flexible payment options for new DMCC business centre tenants

 

• Complete digital process for business set up from the comfort of home

 

Jebel Ali Free Zone’s Payment Flexibility Plan (JAFZA)

 

JAFZA has created a payment flexibility plan for DP World, UAE Region’s Parks and Zones that include JAFZA, National Industries Park and Dubai Auto Zone to help businesses sustain, and maintain their cash flow as they navigate through this challenging season of COVID-19.

 

The plan enables all businesses operating in JAFZA’s parks and zones to defer their rental payments for two months, and pay with easier instalments effective from 1 April 2020. To avail this plan, businesses need to apply online seven days prior to the cheque due date.

 

Rescheduling Rental Payments in Sharjah

 

Through an announcement on 5 April 2020, Sharjah Chamber of Commerce and Industry called on property owners in the Emirate of Sharjah to adopt the same approach as that of the Sharjah government in delaying rent payments of those affected by COVID-19, especially in the case of commercial properties. This was in addition to a recently adopted stimulus package by the Sharjah government to support the interests of the government and private institutions.

Foreign Direct Investment in the UAE: The approval of the positive list

Background

 

On 23 September 2018 Federal Decree-Law 19 of 2018 regarding Foreign Direct Investment (the FDI Law) was issued. Through the FDI Law the foundations were laid for the relaxation of the 51 per cent UAE national ownership requirement for companies incorporated onshore in the UAE. Whilst the FDI Law set out a negative list of 13 activities for which an increased level of foreign ownership would not be permissible, it did not provide the positive list of activities for which an increased level of foreign participation would be allowed. Instead, the FDI Law stated that a resolution would be issued specifying a positive list along with the Emirate(s) within which a foreign direct investment company (FDI Company) may be established. The FDI Law also stated that this resolution would address the following matters:

 

a) the legal form of the FDI company;

 

b) the permitted percentage ownership by the foreign investor (whether 100 per cent or a lower percentage);

 

c) the minimum share capital of the FDI Company;

 

d) any restrictions and conditions including relating to the Emiratisation of the workforce of the FDI Company; and

 

e) the incentives available to the FDI Company.

 

The FDI Law also stipulated that the relevant licensing authority would specify the conditions and procedures required to establish and licence an FDI Company.

 

Subsequent to the issuance of the FDI Law, we reported in our Legal Alert dated 17 July 2019, that a statement had been issued by the Prime Minister confirming that a positive list of activities under the FDI Law had been approved. The positive list was published in the local press however until now it had not been included in the Official Gazette.

 

Cabinet Resolution No. 16 of 2020 (the Resolution)

 

The Resolution was published in the Official Gazette dated 31 March 2020 and is stated to come into effect on the day following its publication. Pursuant to the Resolution, a positive list of activities has been approved. The positive list contains 122 activities in the agricultural, manufacturing and services sectors. The Resolution also stipulates the following:

 

a) that the FDI Company may be a limited liability company or a private joint stock company (including a single  shareholder limited liability company or private joint stock company);

 

b) the minimum share capital of the FDI Company (which is linked to the activity that it will conduct);

 

c) the restrictions and conditions attached to certain activities (such as the obligation to utilise modern technology);  and

 

d) that the minimum level of Emiratisation of the workforce of an FDI Company will be determined by the Ministry of  Human Resources and Emiratisation.

 

Ministry of Economy – Foreign Investor Guide

 

The Ministry of Economy has also published a detailed guidance in the form of a Foreign Investor Guide which, amongst other things, sets out the step by step process for the incorporation of an FDI Company in the UAE. The guide also specifies that it is possible for an existing company to apply to be converted into an FDI Company. Helpfully, the guide also includes the relevant licensing application form. ■

 

* * * *

 

Afridi and Angell’s corporate department has extensive experience in advising on foreign direct investment and corporate restructuring matters. Should you have any questions with respect to the Resolution or the implications of the Resolution on your business, please contact the author or your usual Afridi & Angell contact.

New measures implemented by the UAE authorities in response to COVID-19 (13 April 2020)

Below is a summary of key new measures and initiatives that have been implemented by various UAE authorities since 9 April 2020 and the time of this inBrief, 6:00 p.m. on Monday, 13 April 2020.

 

Commercial Activity

On 13 April 2020 the Dubai Department of Economic Development issued a circular on the re-opening of some commercial activities and emphasised that these activities must continue to comply with preventive guidelines, including operating only between the hours of 8:00 a.m. and 8:00 p.m., adhering to sanitisation and social distancing measures, and obtaining movement permits. The commercial activities stated in this circular include meat trading, fruit and vegetable trading, fish trading, mills and nut trading, coffee and tea trading, and chocolate and sweets trading.

 

Free Zones

 

Jebel Ali Free Zone (JAFZA) reinforces UAE Cabinet Resolution No. 24 of 2020

 

On 9 April 2020 JAFZA announced various measures reinforcing UAE Cabinet Resolution 24 of 2020. The measures include:

 

• All national and expatriate employees must immediately inform the Ministry of Health and Prevention (MOHAP), Ministry of Interior or Dubai Health Authority (DHA) about any suspected cases of COVID-19 infection that they come across or become aware of and allow the authorities to investigate and examine the suspected patient and take necessary measures to ensure the wellbeing of the community.

 

• Any person is prohibited from publishing, republishing or circulating health related information or guidelines that are not officially announced and approved by MOHAP or DHA, or share information that violates what has been officially announced through any form of media.

 

• Any person caught sharing and distributing false, misleading or unofficial information related to COVID-19 faces a fine of AED 20,000 (doubled for repeat offences) pursuant to Article 6 of the UAE Cabinet’s Resolution 24 of 2020.

 

• All suspected cases of COVID-19 must be reported to DP World’s Command & Control Centre.

 

Dubai Financial Services Authority’s (DFSA) 2020 Reporting Requirements

 

On 9 April 2020 the DFSA sent a letter to all Senior Executive Officers of authorised firms detailing various reporting requirements which may be eligible for extension. While the DFSA maintains an expectation that authorised firms exercise reasonable efforts to meet the existing deadlines set out in GEN 8.2.6, requests may be submitted on a case-by-case basis for extensions of this deadline. Authorised firms should access the DFSA e-Portal to submit the relevant forms for DFSA’s consideration. Requests can be made by authorised firms with financial year-ends from 31 December 2019 to 31 March 2020 (both days inclusive).

 

The following reports may be considered for extension:

 

Report Name  Rule reference  Current Requirements 
Annual Financial Statement’s Auditor’s Report GEN 8.6.1 (a)

GEN 8.6.2

Within four months of the financial year end.
Annual Regulatory Return Auditor’s Report GEN 8.6.2 (b)

GEN 8.6.2 / AUD App1

Within four months of the financial year end.
Annual Client Money Auditor’s Report GEN 8.6.1 (c)

GEN 8.6.2 /AUD App2

Within four months of the financial year end.
Annual Insurance Monies Auditor’s Report GEN 8.6.1 (d)

GEN 8.6.2 /AUD App3

Within four months of the financial year end.
Annual Safe Custody Auditor’s Report GEN 8.6.1. (e)

GEN 8.6.2/AUD App4

Within four months of the financial year end.
Annual Controllers Report GEN 11. 8. 12 Within four months of the financial year end.
Annual IRAP Report PIB 10.3.2 (1), (2) and (3), A10.1 of APP 10 Within four months of the financial year end.
Annual ICAAP Report PIB 10.4.2 (1), (2) and (3) and A10.2 of APP 10 Within four months of the financial year end.
Actuarial report on general insurance business PIN 6.5.5 Within four months of the Insurer’s reporting date.
Actuarial investigation report on long-term insurance business PIN 6.5.5 Four months from the Reference Date of actuarial investigation.
Annual Shari’a Review Report IFR 3.6 Within 14 days after receipt.
Annual Funds Return CIR 9.4.2(1)(a) Within 14 months after the end of each annual accounting period.

 

Economic Stimulus

 

Ajman Crown Prince announces new package of economic incentives

 

On 8 April 2020 the Ajman Crown Prince announced a second package of economic incentives. The package includes initiatives aimed at supporting the real estate sector including eliminating administrative fines for every violation of real estate registration renewals and postponement of payment for fines and penalties until the end of the current year for all businesses in the Emirate.

 

It also includes initiatives aimed at supporting the Emirate’s foreign trade and customs as well as tourism sectors including the possibility of paying customs duties with easy payments within 90 days, extending the free period for storing containers from 10 to 20 days, reducing container insurance fees by 50 per cent for each container until 30 June 2020, the exemption for hotel and tourism establishments from registration fees until the end of the current year, eliminating hotel cancellations penalties, and postponing payment of hotel and tourism fines due at the end of the current year.■

Electronic signatures in the UAE: what you need to know

With the UAE in virtual lockdown and the majority of businesses required to operate remotely, an increasing number of documents are required to be signed electronically. Although electronic signatures were not commonly used prior to the onset of COVID-19 in the UAE, the legal framework for the use of electronic signatures has been in place for quite some time.

 

The UAE Federal Law

 

The principal piece of legislation which governs the use of electronic signatures in the UAE is Federal Law No 1 of 2006, also known as the Federal E-Commerce Law (E-Commerce Law). The E-Commerce Law provides that, subject to certain exceptions which we discuss below, if the law requires any statement, document, record, transaction or evidence to be written, then an electronic document or record shall satisfy any such requirement subject to certain requirements prescribed by the E-Commerce Law (Article 6).

 

Article 18 of the E-Commerce Law provides that a person is entitled to rely on an electronic signature, provided such reliance is reasonable. In order to determine whether reliance is reasonable in any given context, the following circumstances need to be considered:

 

(a) the nature of the underlying transaction that the electronic signature was intended to support;

 

(b) the value or importance of the underlying transaction, if this is known to the party relying on the electronic signature;

 

(c) whether the party relying on the electronic signature had taken appropriate steps to determine the reliability of the electronic signature;

 

(d) whether the party relying on the electronic signature took appropriate steps to ascertain whether the electronic signature was supported or was reasonably expected to have been supported by an electronic attestation certificate;

 

(e) whether the party relying on the electronic signature knew or ought to have known that the electronic signature has been compromised or revoked;

 

(f) any agreement or course of dealing between the party that provided the electronic signature, or any trade usage or practice which may be applicable; and

 

(g)  any other relevant factor.

 

The documents which may not be signed electronically are as follows:

 

(a) Transactions and issues relating to personal law such as marriage, divorce and wills;

 

(b) Deeds of title to immoveable property;

 

(c) Negotiable instruments;

 

(d) Transactions involving the sale, purchase, lease (for a term of more than 10 years) and other disposition of immoveable property and the registration of other rights relating to immoveable property;

 

(e) Any document legally required to be attested before a notary public; and

 

(f) Any other documents or transactions exempted by provision of law.

 

Article 11 of the E-Commerce Law provides that an offer or the acceptance of an offer may be expressed, in whole or in part, by electronic communication, and that a contract is not invalid or unenforceable solely by reason that electronic communication was used in its formation.

 

The E-Commerce Law makes provisions for electronic signatures created using a “signature tool” which is defined by the Federal Law as a “system or electronic information designed independently or in participation with other electronic systems and information to set down an electronic signature…”. It also recognizes the concept of a “secure signature” or a “protected signature” (Article 17) which is an electronic signature for which:

 

(a) the electronic signature is attributable to the person that provided it;

 

(b) it is possible to verify the identity of the person providing the signature;

 

(c) the person providing the signature had control of the tool through which the signature was provided; and

 

(d) the electronic signature is linked through secure electronic means to an electronic message.

 

In order to increase the reliability of another party’s electronic signature, it is prudent to  ensure that the other party’s signature is witnessed by two witnesses who also sign and provide their contact information, under the testamonium “The above signatory is known to me and I confirm that the above signature is genuine”.

 

The E-Commerce Law regulates “protected signatures” and service providers that provide secure e-signature verification services.  The use of such services and service providers gives a greater level of security, but is not essential for an electronic document or e-signature to be valid in law.  If you are interested in pursuing the secure signature route, there are currently two validly licensed providers of such services in the UAE (Dark Matter and Adobe).

 

The UAE Civil Procedure Law (as amended) recognises the authenticity of e-signatures, and specifically provides that an e-signature has the same validity as physical signatures. Although there is no system of binding precedent in the UAE, a number of judgments rendered by the Dubai Court of Cassation have recognized the validity of electronic signatures.

 

Dubai Law and Dubai International Financial Centre (DIFC) Law

 

The position set out above relates to UAE Federal Law. Where Dubai Law is concerned, the provisions of the Dubai Law No.2 of 2002 (Dubai Electronic Transactions Law) applies. The provisions of this law are based on the E-Commerce Law and reflect the E-Commerce Law on matters such as reasonableness criteria and protected signatures.

 

The position with respect to the DIFC is set out in the DIFC Law No. 2 of 2016 (Electronic Transactions Law). Article 21 of the Electronic Transactions Law recognises the use of e-signatures where a document is required to be signed. Article 22 of the law provides that an e-signature is deemed to identify the relevant person and to indicate that person’s intention in respect of the Information contained in the Electronic Record provided that the type of e-signature used is as reliable as appropriate for the purpose for which the document or record was generated or communicated, in the light of all the circumstances, including any relevant agreement.

 

As with the Federal E-Commerce Law, the Electronic Transactions Law provides that e-signatures cannot be used for certain types of documents (Article 8 read with Schedule 2):

 

(a) The creation, performance or enforcement of a power of attorney.

 

(b) The creation, performance or enforcement of a declaration of trust (with the exception of implied, constructive and resulting trusts) and any provision in the Trust Law 2005 (DIFC Law No. 11 of 2005, as amended) requiring information to be written or in writing.

 

(c) The creation and execution of wills, codicils or testamentary trusts.

 

(d) The creation, execution and use of affidavits or affirmations as evidence in court proceedings pursuant to rule 29 of the Rules of the DIFC Courts.

 

(e) Transactions involving the sale, purchase, lease (for a term of more than 10 years) and other disposition of immovable property and the registration of other rights relating to immovable property.

 

The Board of Directors of the DIFC has the power to issue regulations extending, waiving or modifying the list of matters for which e-signatures cannot be used. It appears that this was done recently in relation to the creation of DIFC wills, which according to a recent press release of the DIFC Wills Service Centre can now be created with the use of e-signatures.

 

Importantly, the Electronic Transactions Law that parties may agree to exclude the application of e-signatures or impose additional requirements. E-signatures are admissible as evidence where evidence of a signature is required in proceedings (Article 24).

 

From a practical perspective, it is important that commercial parties:

 

(a) Revisit their contracts to ensure there is no impediment to using electronic signatures (particularly where DIFC law is applicable);

 

(b) Agree authentication procedures with their counterparties to identify/verify signatures; and

 

(c) Take steps to upgrade IT security and limit the risk of becoming victims of fraud, hacking and other electronic crimes. ■

Measures implemented by the Dubai International Financial Centre (DIFC) in response to COVID-19

Below is a summary of key relief and operational measures implemented by the DIFC since 1 April 2020 and the time of this inBrief, 6:00 p.m. on Saturday, 11 April 2020.

 

Dubai Financial Services Authority (DFSA) announces relief measures

 

On Tuesday, 7 April 2020, the DFSA announced a number of relief measures to support their clients during this time of stress and uncertainty. These measures are aimed at both new firms setting up in the DIFC as well as existing authorised firms.

 

Regulatory relief measures for new firms setting up in the DIFC include:

 

• More time to complete the application and authorisation processes

 

• A 50 per cent reduction in application fees for the remainder of 2020 and flexibility in requirements for permanent premises

 

• A waiver of registration fees for domestic funds for the remainder of 2020

 

Regulatory relief measures for existing authorised firms include:

 

• An extension of time for filing a number of returns and reports

 

• Additional time, where reasonable, for submitting annual accounts and financial statement auditors report (with the exception of reporting entities)

 

• Flexibility in meeting authorised individual obligations

 

• A waiver of fees for applications relating to authorised individuals

 

• Temporary relief from capital requirements

 

• A waiver of fees for applications for waivers and modifications and all automated late return fees for the remainder of 2020

 

• A waiver of the listing fees for new SME issuers in the DIFC for the remainder of 2020

 

In addition, the DFSA has agreed to extend policy consultation periods as well as the time periods within which entities must meet new requirements.

 

Click here to access a copy of this announcement on the DFSA website.

 

DIFC Courts

 

While DIFC Courts’ (the Courts) employees are operating on a work-from-home remote basis, the Courts is fully operational with no interruption to service. Remote access is available to all services through the Courts’ fully integrated digital eCourt platforms including e-Registry, e-Bundling and e-Hearings.

 

Practitioners and Courts’ users are encouraged to email the e-Registry for all enquiries. They are also encouraged to take advantage of the e-Bundling platform which is available through the e-Registry. Hearings will be conducted by judges remotely via teleconference or video conference, as appropriate.

 

Doors of the Courts and Registry offices will remain physically closed until 26 April 2020 (or, pending further notice).

 

DIFC Wills Service Centre

 

Through a press release on 5 April 2020, the DIFC Courts confirmed that it has developed a new system for the registration of Wills via video conference. The new system allows the testator and two witnesses to join on the video conference call from different locations. The system also allows an approved Will to be directly uploaded on the system and to be signed electronically.

 

Upon booking the appointment, the testator will have to upload the following documents:

 

1. Approved draft Will

 

2. Clear copy of the testators’ passport (and Emirates ID if applicable)

 

3. Clear copy of the witnesses’ ID’s (passport or any other form of ID; front and back if using Emirates ID)

 

4. Signed and dated Guardianship Witness Statements (if applicable)

 

The Will to be registered should be sent at least two working days before the appointment. All information of the Will should be complete as they cannot be added once the Will has been uploaded except the signature sections for the testator and witnesses. The Will will be electronically signed during the video conference.

 

All Will registrations can be booked on the appointment portal.

 

DIFC Business Stimulus Initiative

 

On 1 April 2020 the DIFC has announced a new Business Stimulus Initiative (Initiative) in line with Dubai Government’s economic stimulus programme. The Initiative took effect on 1 April 2020 for a period of three month until 30 June 2020. Relief measures contained in the Initiative include:

 

• All lease payments are deferred for three months with a six-month payment plan.

 

• Annual licensing fees for new entities that submit the Application for Incorporation / Registration during the three-month period from 1 April 2020 until 30 June 2020 will be waived.

 

• A 10 per cent discount of the total license renewal fee for all DIFC registered entities that are due for renewal during the three-month period from 1 April 2020 to 30 June 2020. The discount does not include data protection fees and DFSA fees (if applicable).

 

• A reduction of freehold transfer fee from 5 per cent to 4 per cent, for all properties within the DIFC jurisdiction, for sale or purchase of property (or any part thereof) that takes place within the period from 1 April 2020 to 30 June 2020 where the transfer is registered with the DIFC Registrar of Properties within 30 days, at the latest, after the expiry of the said three-month period.

 

More on the DIFC Business Stimulus Initiative and a list of FAQs can be accessed here.

New measures implemented by the UAE authorities in response to COVID-19 (7 April 2020)

Below is a summary of key new measures and initiatives that have been implemented and announced by various UAE authorities since 6 April 2020 and the time of this inBrief, 6:00 p.m. on Wednesday, 8 April 2020.

 

Commercial and Government Activities

 

Dubai extends closure of commercial activities

 

On Tuesday, 7 April 2020, the Department of Economic Development (DED) announced in a statement on Twitter that Dubai has extended the closure of commercial activities until 18 April 2020 in line with the National Disinfection Programme and Stay Home initiatives to curb the spread of the Coronavirus (COVID-19). During this period, vital and exempted support sectors will continue to operate as described in our previous inBriefs.

 

The DED announces the extension of Circular on closure of Government Transactions Centres

 

The DED announced today in a statement on Twitter that the Circular issued on 25 March 2020 on the closure of Government Transactions Centres is extended until 18 April 2020 in line with the National Disinfection Programme and Stay Home initiatives. During this time, government services will continue to be accessible through Smart channels.

 

Free Zones

 

Dubai Financial Services Authority (DFSA) announces relief measures

 

On Tuesday, 7 April 2020, the DFSA announced a number of relief measures to support their clients during this time of stress and uncertainty. These measures are aimed at both new firms setting up in the DIFC as well as existing authorised firms.

 

Regulatory relief measures for new firms setting up in the DIFC include:

 

• More time to complete the application and authorisation processes

 

• A 50 per cent reduction in application fees for the remainder of 2020 and flexibility in requirements for permanent premises

 

• A waiver of registration fees for domestic funds for the remainder of 2020

 

Regulatory relief measures for existing authorised firms include:

 

• An extension of time for filing a number of returns and reports

 

• Additional time, where reasonable, for submitting annual accounts and financial statement auditors report (with the exception of reporting entities)

 

• Flexibility in meeting authorised individual obligations

 

• A waiver of fees for applications relating to authorised individuals

 

• Temporary relief from capital requirements

 

 

• A waiver of fees for applications for waivers and modifications and all automated late return fees for the remainder of 2020

 

 

• A waiver of the listing fees for new SME issuers in the DIFC for the remainder of 2020

 

Click here to access a copy of this announcement on the DFSA website.

 

Health and Safety

 

Guidelines for construction workers and transportation permit

 

On Tuesday, 7 April 2020, the Dubai Municipality has issued a guidance document covering the precautionary measures to be followed in residences, buses and construction sites, as well as a document including a permit to transport construction workers in Dubai. The guidelines which were drafted by the Health & Safety Department and Building Control Department and include such measures as increased frequency of disinfection and cleaning, limited gatherings, and social and physical distancing of two  metres, have been structured to assist the owners or operators of labour accommodations to take preventive steps and counter the spread of the COVID-19 outbreak. ■

New measures implemented by the UAE authorities in response to COVID-19 (6 April 2020)

Below is a summary of key new measures, as well as clarifications on previous measures we reported on, that have been implemented by various UAE authorities since 5 April 2020 and the time of this inBrief, 6:00 p.m. on Tuesday, 7 April 2020.

 

Clarification on the movement of employees of exempted categories during the extended National Disinfection Programme and Stay Home initiatives

 

In our inBrief dated 6 April 2020 we reported that employees of “vital sectors” are permitted to leave their house at any time of the day to commute to work, and that employees of exempted “support sectors” are permitted to commute to work between 8:00 a.m. and 2:00 p.m. The Ministry of Human Resources and Emiratisation clarified that these employees are not required to get a movement permit to commute back and forth from work. However they must obtain a letter from their employers confirming their movement to and from work.

 

A further clarification by the Department of Economic Development (DED) was issued through Circular No. 10 of 2020 issued on 6 April 2020. In the circular the DED reiterated the above measures and added that employees at corporate offices and headquarters (as opposed to public-facing personnel) of both local companies and multi-national corporations in vital and exempted support sectors may commute back and forth from work between the hours of 8:00 a.m. and 2 p.m. without receiving customers. Once again, these corporate offices and headquarters must adhere to the 30 per cent of the total workforce capacity guideline, and employees must observe the necessary precautionary measures with regard to sanitisation and social distancing.

 

Additionally, the DED clarified that suppliers of building materials and A/Cs to the construction and contracting sectors are considered  as  an  activity  under  the Supply Chain sector which is exempted from obtaining the movement permits. However, they shall operate with the same guidelines as employees of corporate offices and headquarters in vital and exempted support sectors.

 

Company Reporting

 

Taking into account that annual general meetings of public joint stock companies fall within the period of government restrictions on meetings and gatherings, the Securities & Commodities Authority (SCA) announced on 2 April 2020 the following extensions of deadlines for local public joint stock companies, listed foreign companies, companies licensed by the SCA and local investment funds registered with the SCA:

 

• Disclosure of 2019 audited annual financial statements and reports are extended for an additional period of 45 days ending on 15 May 2020. Local public joint stock companies and local private joint stock companies listed with the stock exchange shall publish their 2019 audited annual financial statements concurrently with the announcement of their annual general meeting.

 

• Disclosure of 2020 interim financial statements for the period ending 31 March 2020 are extended until the intended deadline for disclosure of the interim financial statements for the period ending 30 June 2020.

 

Abu Dhabi Courts

 

Pursuant to Circular No. 7 of 2020 issued on 23 March 2020, with regards to continuity of the judicial process during the COVID-19 period, the Abu Dhabi Courts announced that all first instance and appellate judicial departments and case preparation offices, should be guided by the following procedures:

 

Matter Procedure
Cases being deliberated before the Courts of First Instance and the Courts of Appeal that are not ready for pronouncement of judgment. To be postponed for a period of no less than 30 days with notification sent by a text message to the parties’ phone numbers.
Cases being deliberated before the Courts of First Instance and the Courts of Appeal that are ready for pronouncement of judgment. To remain scheduled for pronouncement of judgment and for judgment to be pronounced and recorded, and with notification sent by a text message to the parties’ phone numbers.
Cases that were scheduled for pronouncement of judgment on a date prior to the date of this Circular. All courts shall pronounce and record judgment.
Judges deciding on urgent matters (civil, commercial, labour and personal status departments). Judges will work remotely from their places of residence and will adjudicate registered urgent applications submitted to them in addition to the cases that were set for adjudication on a date prior to the date of this Circular.

Cases and appeals that are being deliberated and that are not ready for adjudication will be postponed for a period of no less than 30 days, with notification sent by a text message to the parties’ phone numbers.

Cases being deliberated before the Courts of First Instance and the Courts of Appeal. Case management offices shall postpone these cases and hearings for a period of no less than 30 days starting from the date of this Circular, with notification sent by a text message to the litigants. All cases ready for pronouncement of judgment will be referred to the concerned panels without the presence of the litigants.
Filing of civil, commercial, labour, and personal status cases, appeals, grievances, writs on petition and other grievances. The presiding judges of the courts shall instruct the presiding officers of the relevant registries that they must accept the filing of cases, appeals and grievances (ex parte orders in civil, commercial, labour and personal status cases and other grievances) if missing the filing deadline would result in rejection of the same or loss of rights.

 

Free Zones

 

In line with various government directives on staying home and avoiding meetings and gatherings, as well as the extended national disinfection programme implemented by Dubai’s Supreme Committee of Crisis and Disaster Management, Jebel Ali Free Zone (JAFZA) announced through a circular on 5 April 2020 the reduction in physical presence in JAFZA and asked all customers of JAFZA to work remotely and cancel or postpone all in-person meetings.

 

JAFZA also announced on 5 April 2020, through a separate circular, the temporary closure of medical fitness exam centres.

 

Economic Stimulus

 

As we reported in our inBrief dated 3 April 2020, the UAE Central Bank (CBUAE) has launched a comprehensive Targeted Economic Support Scheme (TESS) to contain the repercussion of COVID-19, with immediate effect. The purpose of TESS is to provide temporary relief from payments of principal and interest on outstanding loans for all companies and retail customers in the UAE affected by COVID-19.

 

In addition to TESS, the CBUAE issued on Sunday, 5 April 2020, a joint guidance for banks and finance companies on the application of International Financial Reporting Standard 9 (IFRS 9) during the COVID-19 pandemic. The guidance was issued in cooperation with the Financial Services Regulatory Authority (FSRA) and the Dubai Financial Services Authority (DFSA).

 

The guidance, developed collectively by the authorities, provides practical solutions for banks and finance companies in managing the impact of the current economic uncertainty on expected credit loss, while remaining compliant with IFRS 9 and promoting consistency of approach.

 

The overriding objective of the guidance is to ensure that financial reports are based on up to date estimations of the risks faced by banks and finance companies, while recognising the magnitude of support measures implemented by the authorities, and acknowledging that the decision-making process related to IFRS 9 application will need to be adjusted in the current environment.

 

Travel Restrictions and Early Leave Initiative

 

The Ministry of Human Resources and Emiratisation, in cooperation with the Federal Authority for Identity and Citizenship, the Ministry of Foreign Affairs and International Cooperation, the General Civil Aviation Authority, and the National Emergency Crisis and Disasters Management Authority, launched the Early Leave initiative on 5 April 2020.

 

The initiative enables residents who work in the private sector and wish to return to their home countries to do so during the period of precautionary measures undertaken in the UAE to contain the spread of the new coronavirus, COVID-19.

 

Movement Permits in Dubai 

 

In our inBrief dated 6 April 2020 we reported that Dubai’s Supreme Committee of Crisis and Disaster Management mandated that the general public obtain a permit prior to any departure from the person’s residence.

 

Our own staff have visited the website where residents can apply for a movement permit. Since the mode of transport is requested on the form, it is therefore intuitively implied that pedestrians and cyclists also require a movement permit.

 

There was some ambiguity in terms of requirement of a permit in situations where the destination (e.g. grocery store or pharmacy) is within a very short walking distance from the resident’s home or located in the resident’s building or housing complex. Our own interpretation is that regardless of the mode of travel and distance, it will all be considered as “stepping out of the house” for which a permit will be required. The aim of the permit is to limit movement and hence the spread of coronavirus. Any action to the contrary could be treated by the authorities and the police as an offence. ■

New measures implemented by the UAE authorities in response to COVID-19

This supplements our inBrief dated 3 April 2020, which reported on measures implemented by the UAE authorities in response to COVID-19 up to 9:00 a.m. that day. Many new measures have been introduced since then. We now report on new measures taken up to 9:00 a.m. on Monday 6 April 2020.

 

Sterilisation and Stay Home Initiative

 

Dubai’s Supreme Committee of Crisis and Disaster Management (the “Committee”), in coordination with the Command and Control Centre for Combating COVID-19, introduced a sterilisation and Stay Home programme on Thursday 26 March 2020. The programme took effect between the hours of 8:00 p.m. and 6:00 a.m. the following day and remained in place thereafter. On Saturday, 4 April 2020, the programme was extended and expanded so as to enforce a 24-hour round-the-clock restriction on the movement of people and vehicles across all areas and communities in Dubai for a period of two weeks, subject to renewal. Persons who leave their residences under the expanded programme must wear masks and gloves at all times and observe the safe distance policy.

 

Exemptions

 

1. The General Public – members of the general public are allowed to leave their residences in limited circumstances. Only one member of each household may leave the residence at one time, and then only for the following essential purposes:

 

• buying food from food supply outlets and medicine from pharmacies;

• attending to doctors’ appointments at hospital, clinics and other healthcare services providers; and

• COVID-19 tests.

 

A member of the general public who wishes to leave his or her residence for any other purpose must obtain a movement permit for such purpose, available through an online application.

 

On Sunday, 5 April 2020, the Committee announced a further expansion of the movement restriction, mandating that any member of the general public must obtain a movement permit prior to any departure from the person’s residence.

 

2. Vital Sectors – employees working in the below vital sectors are permitted to leave their house at any time of the day to commute to work:

 

• Healthcare services (hospitals, clinics and pharmacies)

• Food supply outlets (Union Cooperative outlets, supermarkets, groceries)

• Delivery services (food and medicine)

• Restaurants (operations limited to home deliveries only)

• Manufacturers of medicines and providers of healthcare and medical supplies

• Industrial sector (only vital industries)

• Industrial supply chain for services and basic commodities

• Water and electricity sector, petrol and gas stations and district cooling services

• Telecommunications sector

• Media sector

• Airports, airlines, ports, shipping

• Customs duty and border crossings

• Public and private security services

• Municipality services and public and private service providers involved in garbage collection, sewage management and general cleaning and sanitation

• Private and government sector organisations involved in combating the coronavirus (COVID-19)

• Public transport (buses and taxis only; metro and tram services will be suspended)

• Construction sector, subject to obtaining a permit from Dubai Municipality and the Permanent Committee for Labour Affairs

3. Support Sectors – employees working in these sectors are permitted to commute to work between 8:00 a.m. and 2:00 p.m.:

• Banking and financial services (banks and exchange centres)

• Social welfare services

• Laundry services (for permitted outlets)

• Maintenance services

 

Clarification of Ministerial Resolution No. 281 of 2020 on the Regulation of Remote Work in Private Sector Establishments (Resolution)

 

On Sunday, 5 April 2020, the Ministry of Human Resources and Emiratisation issued a clarification to Article 3 of the Resolution by specifying activities that are exempt from the provisions in Article 1. These activities are:

 

• Infrastructure projects including road and bridge works, water supply and sewerage, power networks and telecommunications, construction sites, construction and contracting companies, and engineering consultancies.

• Catering companies: cooperatives and food sale outlets.

• Energy companies: oil companies, oil refineries, power plants, gas and fuel stations.

• Education sector: schools, universities and colleges.

• Financial sector: banks, money exchange companies, and cash transport firms.

• Food industry: manufacturing and distribution of food.

• Hospitality sector: hotels, restaurants and catering companies.

• Sterilisation and cleaning products factories, medical supplies factories, and cleaning companies.

• Health sector: hospitals, pharmacies, pharmaceutical factories, clinics and all medical services.

 

Article 1 of the Resolution states that the number of workers in a private establishment or the number of customers at a service centre shall at no time exceed 30 per cent of the total number of workers or customer seating capacity. ■

Ministerial Resolution No. 281 of 2020 – Testing of employees

As we reported earlier in our inBrief dated 3 April 2020, Ministerial Resolution No. 281 of 2020 (the “Resolution”), promulgated by the Minister of Human Resources and Emiratisation on 29 March 2020, contains a requirement that all employers must test their employees for symptoms of COVID-19 at least twice a day, upon entering and upon leaving the workplace. The requirement is contained in Article 2(b) of the Resolution.

 

Employees are to be checked for temperature and for other symptoms of the Corona virus.

 

Our firm has made inquiries to contacts in the Ministry of Human Resources and Emiratisation (MOHRE) on the scope of this requirement. The Resolution in general discusses employers of labourers who are transported from workers’ accommodation to construction sites and back. However, the MOHRE contacts with whom we spoke uniformly advised us that the testing requirement applies generally, even to office workers.

 

It is our impression that compliance with this requirement is not widespread, and that the authorities’ enforcement efforts have been otherwise engaged so far. Moreover, with the enhanced restrictions on movement in Dubai that were introduced on 4 April 2020, the issue could well be moot for many employers. However, it is our firm’s advice that, in an abundance of caution, employers should now be testing those employees who continue to report to the workplace, and that other employers should prepare to do the same once the current restrictions on movement come to an end. ■