Tag: Corporate and Commercial

COVID-19: Entry into the Emirates of Dubai and Abu Dhabi

On 12 September 2020, the UAE Ministry of Health and Prevention (MoHAP) reported 1007 new COVID-19 cases in the UAE. With the number of cases rising both within the UAE and in most other countries, the UAE government has reiterated the importance of adhering to preventive guidelines and has further placed safeguards, particularly in Abu Dhabi, to ensure that those traveling to the UAE are confined to prevent the transmission of the virus.

 

Currently, individuals traveling to Abu Dhabi from outside the UAE must first update the details of their visas on the website of Federal Authority of Identity and Citizenship (ICA) and confirm their entry to the UAE. (The same is true of passengers arriving in the UAE via airports other than those in Dubai). An instant response message from the ICA with a “green status” indicates that the entry has been confirmed by the ICA. A message with a “red status” indicates that the request to enter the UAE has been rejected and the applicant must wait for a few days to re-apply. Travelers who are not UAE nationals or holders of UAE residence visas are not permitted to enter. Following receipt of the “green status” message, the traveler can proceed to book a flight and comply with any additional requirements of the airline. Most important, a negative COVID-19 PCR (Polymerase Chain Reaction) test result must be provided at the airport and must not have been taken more than 96 hours prior to departure. The test result must be printed and be either in English or Arabic. The test must be conducted at a UAE government approved testing center.

 

Upon arrival at Abu Dhabi airport, travelers will be tested again for COVID-19. Unlike in Dubai, passengers arriving from certain jurisdictions (no published list is as yet available) are made subject to a mandatory institutional quarantine of 14 days (irrespective of the test results, whether positive or negative) at a government facility. The traveler is also mandated to wear a tracker provided by the health officials. After 12 days of the 14-day quarantine, travelers are required to re-test themselves and with the confirmation of a negative test result (usually received by message) they are permitted to return the tracker and formally end the quarantine. Additionally, upon entry, travelers are required to sign an undertaking at Abu Dhabi airport to comply with the rules and guidelines of the UAE authorities and also to install the AlHosn App to assist the authorities in contact tracing.

 

Last month, the Dubai government announced that travelers by air to Dubai are required to first obtain approval online from the General Directorate of Residency and Foreigners Affairs in Dubai (GDRFA). Travelers (those having a Dubai residence visa) must now apply for the approval via the new smart platform of GDRFA Dubai on https://smart.gdrfad.gov.ae/ and provide the details of their visas. Travelers must submit to the airline and the airport a printed negative COVID-19 PCR test result in English or Arabic which again must not have been taken more than 96 hours prior to departure. Upon arrival, travelers will be tested again at the Dubai airports. Post-arrival, a home-quarantine is mandatory in Dubai until the results of the PCR test are obtained, if negative. However, a traveler who tests positive must self-quarantine for 14 days from the time of arrival in Dubai. Similar to Abu Dhabi, a signed undertaking and a declaration to abide by the rules and install the DXB Smart App, a contact tracing app, must be submitted at the time of arrival at Dubai airports. Unlike Abu Dhabi, foreigners without UAE residence visas may enter the UAE via Dubai’s airports.

 

Within the UAE, those traveling into Abu Dhabi from any other Emirate must also provide a negative PCR test result or a negative DPI test (Diffractive Phase Interferometry) both conducted no earlier than 48 hours prior to their entry into Abu Dhabi. Individuals who will then stay in Abu Dhabi for six consecutive days or more must also take a PCR test on the sixth day of each visit to the Emirate.

 

The UAE government has further reiterated that failing to comply with the rules and guidelines shall attract heavy fines and can also lead to criminal prosecution if the offense is repeated. ■

Recent Amendments to the Commercial Agency Law

As many will know, Federal Law 18 of 1981 (the Commercial Agency Law; or CAL) regulates agency, distributorship and franchise relationships in the UAE, regardless of the nomenclature used to describe them.  The CAL requires that all commercial agency agreements be registered with the UAE Ministry of Economy and further offers the distributor (termed an “agent” under the CAL) protection from termination (and a guarantee of exclusivity) once a commercial agency agreement is so registered in accordance with the CAL.

 

Until recently, it was the case that in order to be registered as a commercial agent under the CAL, the proposed agent had to be either a natural person holding UAE nationality, or a body corporate ultimately wholly owned by UAE nationals.

 

On 28 May 2020, UAE Federal Law 11 of 2020 (the CAL Amendment) introduced certain amendments to the CAL. Most notably, the CAL Amendment extends the types of legal persons that can be registered as commercial agents to include the following:

 

a) a public joint stock company incorporated in the UAE; and

 

b) a private company (for example, a limited liability company) wholly owned by a UAE public joint stock company.

 

The CAL Amendment provides that to the extent an application for registration of a commercial agency is submitted by an entity falling within either (a) or (b), the requirement under the CAL for a body corporate commercial agent to be wholly owned by UAE nationals will not apply. Instead, such an applicant can qualify for registration under the CAL provided its capital is ultimately owned at least 51% by UAE nationals.

 

Amongst the objectives of the CAL Amendment is to encourage established family owned trading businesses in the UAE to list on the UAE public markets, thereby improving the depth and breadth of the UAE equity capital markets. The CAL Amendment is therefore an important (and arguably revolutionary) change and removes a key impediment to commercial agents registered under the CAL from seeking access to outside equity through the UAE public markets.

 

The CAL Amendment contemplates the issuance of regulations to be issued by the UAE Ministry of Economy and thus we anticipate additional clarity to the UAE commercial agency regime in the near future.■

 

UAE Foreign Direct Investment Law vs GCC Customs Exemption

As reported in our inBrief of 15 April 2020, Federal Decree-Law 19 of 2018 on Foreign Direct Investment (the FDI Law) permits majority foreign investment in certain business sectors and activities. Although majority ownership is attractive, it is not the only factor that a potential foreign direct investor should consider. One additional factor is whether the proposed business would qualify for the 5% GCC customs duty exemption that is discussed below. Customs-exempt access to the larger GCC market could be a critical factor to the success of a business.

 

FDI Law

Any company incorporated under the FDI Law is subject to the restriction stated in Article 8(1) of the FDI Law.

 

Article 8(1) of the FDI Law states as follows:

 

Article 8 – Benefits offered to Foreign Direct Investment Projects

 

  • Foreign Direct Investment companies licensed hereunder shall be subject to the law on the treatment of national companies within the limits prescribed by the legislation in force in the United Arab Emirates and the international agreements to which the United Arab Emirates is party.

 

The legislation in force in the UAE and the international agreements to which the UAE is party would include the measures taken by the UAE pursuant to the GCC Economic Agreement and the GCC Common Customs Law. The GCC, formally known as the Cooperation Council of the Arab States of the Gulf, includes as members Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

 

Unified Economic Agreement 1981

 

Since the formation of the GCC in 1981, national treatment for goods produced in a GCC member state has been accorded by the other GCC member states only if certain ownership and value-added criteria are satisfied. Specifically, Article 3 of the Unified Economic Agreement 1981 states as follows:

 

1. For products of national origin to qualify as national manufactured products, the value-added ensuing from their production in Member States shall not be less than 40% of their final value as at the termination of the production phase. In addition, Member States citizens’ share in the ownership of the producing plant shall not be less than 51%.

 

2. Every item enjoying exemption hereby shall be accompanied by a certificate of origin duly authenticated by the appropriate government agency concerned.

(emphasis added)

 

This requirement that GCC citizens own no less than 51% of the manufacturing facility in question remains in effect today. Therefore, exports of a company formed under the FDI Law with non-GCC ownership in excess of 49% would not be eligible for national treatment when exported to another GCC member state.

 

Economic Agreement 2001

 

Although the Unified Economic Agreement 1981 was replaced by the Economic Agreement 2001, the national ownership requirement stated above was kept in effect. Article 1 of the Economic Agreement 2001 states as follows:

 

Article 1 – The Customs Union

 

Trade between the GCC member States will be conducted within the framework of a customs union that will be implemented no later than the first of January 2003. It shall include, at a minimum, the following: … 5. Goods produced in any Member State shall be accorded the same treatment as national products. 

(emphasis added)

 

However, the Economic Agreement 2001 preserved the earlier GCC ownership and value-added criteria. Specifically, Article 32 of the Economic Agreement 2001 stated as follows:

 

Article 32 – Precedence of the provisions of the Agreement

 

1. The provisions of this Agreement shall prevail if found in disagreement with local laws and regulations of the Member States.

 

2. This Agreement shall supersede the GCC Economic Agreement signed in 1981 AD (1402 AH), and the provisions contained herein shall supersede equivalent provisions set forth in bilateral agreements (between member states).

 

3. Until the GCC Customs Union is established, the provisions of Article 3 of the GCC Economic Agreement signed in 1981 AD (1402 AH) shall continue to be applied. The percentage of the added value provided for in said Article may be amended by a decision of the Financial and Economic Committee.

(emphasis added)

 

Common Customs Law of the GCC States

 

The foregoing requirements were not changed with the introduction of the GCC Customs Union, agreed in 2007 and implemented in the UAE pursuant to Federal Decree 85 of 2007 (the Common Customs Law). Article 9 of the Common Customs Law states as follows:

 

Goods entering the country shall be subject to the customs tax by virtue of the unified customs tariff and the determined fees, except for those exempted by virtue of the present law or under the Unified Economic Agreement among the countries of the Gulf Cooperation Council (GCC) or any other international agreement within the framework of the Council.

(emphasis added)

 

Thus, the Common Customs Law referred to the Economic Agreement 2001, which in turn referred to Article 3 of the Unified Economic Agreement 1981, which contained the familiar GCC ownership and value-added criteria.

 

Accordingly, formation of a company in the UAE under the FDI Law is not sufficient to grant the exports of that company Customs-free access to the rest of the GCC. Instead, the GCC ownership requirement stated in Article 3 of the Unified Economic Agreement 1981, meaning that products of a 100% foreign owned company would be ineligible for exemption of the 5% customs duty when shipped to other GCC member states. ■

DIFC – Innovation License

The Dubai International Financial Centre (DIFC) has recently launched a new type of license called an “Innovation License”. An Innovation License is available to technology and innovation start-ups for a select number of activities including technology, research and development and software houses. An Innovation License is not appropriate for start-ups who wish to conduct regulated financial activities for which a license from the Dubai Financial Services Authority is required.

 

Applicants will need to ensure compliance with all the laws of the DIFC as applicable to any other entity established in the DIFC.

 

The licensing fee for an Innovation License has been significantly subsidized to USD 1,500 per annum. As per the DIFC’s current policy, this subsidy in the licensing fee is available for the first four years and the standard licensing fee of USD 12,000 per annum shall apply thereafter.

 

A start-up will have the flexibility to lease an independent office or a co-working space/flexi desk. The number of visas which can be sponsored by the start-up will depend on the type and size of facility leased.■

 

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Afridi & Angell’s corporate department works with many DIFC companies and has extensive experience in advising such companies. Should you have any questions with respect to the innovation licence or more generally on DIFC companies, please contact one of the authors, Danielle Lobo (partner) or Saurbh Kothari (senior associate) or your usual Afridi & Angell contact.

Economic Substance Notification – Deadlines

The UAE has introduced Cabinet Resolution 31 of 2019 (as amended) (the Economic Substance Regulations) which apply to UAE onshore and free zone entities that undertake, and earn an income from, any of the Relevant Activities (listed below):

 

  • Banking Business

 

  • Insurance Business

 

  • Investment Fund Management Business

 

  • Shipping Business

 

  • Holding Company Business

 

  • Lease-Finance Business

 

  • Distribution & Service Centre Business

 

  • Headquarters Business

 

  • Intellectual Property Business

 

The Regulatory Authorities (as determined by Cabinet Resolution 58 of 2019) are now requesting the submission of Economic Substance Notifications in accordance with Article 8(1) of the Economic Substance Regulations on the part of entities that are required to do so under the Economic Substance Regulations.

 

The following are the filing requirements and deadlines that are released by some of the Regulatory Authorities.

 

 Who?   How?
The form must be submitted via:		  Deadline 
 Onshore Entities

UAE onshore entity undertaking any Relevant
Activity(ies)

 The Ministry of Economy’s website:
https://www.economy.gov.ae/English/
economic-substance/pages/regulations.aspx		  30 June 2020

Dubai Multi Commodities Centre (DMCC)All DMCC entities		  The DMCC entity’s DMCC Portal.  30 June 2020

Dubai Development Authority (DDA)DDA entities undertaking any Relevant Activity(ies)		  The DDA entity’s AXS Portal.  30 June 2020

Dubai International Financial Centre (DIFC)All DIFC entities		  The DIFC entity’s DIFC Portal.  30 June 2020

Abu Dhabi Global Market (ADGM)All ADGM entities with a financial year ending
31 December 2019		  Email to economicsubstance@adgm.com  30 June 2020

Jebel Ali Free Zone Authority (JAFZA)JAFZA entities undertaking any Relevant Activity(ies)		  Email to jafza.lease-license@jafza.ae  30 June 2020

Sharjah International Airport Free Zone (SAIF)All SAIF entities		  The SAIF Zone website:
https://portal.saif-zone.com/AppRecordMP.
aspx?bo=1165&EditMode=New&templateID
=16		  30 June 2020


Penalties

Entities that:

 

(a) fail to submit the Notification by the deadline set out above
or
(b) knowingly provide inaccurate information to the Regulatory Authority

 

shall be subject to an administrative penalty ranging between AED 10,000 to AED 50,000 in accordance with Article 11 of the Economic Substance Regulations. Furthermore, the entities shall be deemed to have not met the requirements under the Economic Substance Regulations.

 

With respect to DIFC entities, failure to submit the ESR notification shall also result in an additional penalty of USD 25,000 in accordance with Article 31 and Schedule 2 of the DIFC Operating Law 7 of 2018.

 

It is therefore prudent that UAE entities take a “substance over form” approach to carefully assess their businesses and see if they undertake, and earn any income, from any Relevant Activity. The fact that the commercial license of a UAE entity does not state a Relevant Activity does not automatically mean that the UAE entity is not undertaking any Relevant Activity.

 

Afridi & Angell is able to assist with the business assessments and the filing of Economic Substance Notification forms. ■

Recent measures implemented in Abu Dhabi in response to COVID-19

On 30 May 2020, the Abu Dhabi Media Office posted through Twitter that the Department of Government Support has eased restrictions on some activities and issued a set of guidelines for working from and visiting government entities in Abu Dhabi.

 

The guidelines below come into effect from today, 1 June 2020, and are limited to individuals between the ages of 12 and 60. All individuals must follow preventive measures including social distancing (ensuring two-metre distance from other individuals), wearing face masks and adhering to the daily National Disinfection Programme timing in Abu Dhabi (from 10:00 p.m. until 6:00 a.m. the following morning).

 

I.        Easing restrictions on some activities in Abu Dhabi

 

  • Capacity at malls and mall restaurants is increased to 40 percent.

 

  • Hotel beaches, museums and restaurants outside malls to reopen at 40 percent capacity.

 

  • Outdoor and singular sports activities including horseback riding, cycling, cricket, running, golf, tennis, and sailing will resume.

 

II.     Guidelines for working from and visiting government entities in Abu Dhabi

 

  • No more than 35 percent of office staff will be allowed to work in government offices.

 

  • Paperwork should be avoided.

 

  • Face masks and gloves are to be worn at all times.

 

  • Prayer rooms and shared areas are to remain closed.

 

  • Glass barriers must be installed to keep a distance between employees and customers.

 

  • Before leaving home, government employees in Abu Dhabi have been asked to take their temperature and avoid public transportation networks.

 

  • Once at work, their temperature will be taken again and a QR code scanned.

 

  • Employees who live with people who have tested positive for Covid-19, or who show symptoms, are exempt from having to return to offices, as are those who suffer from chronic underlying health conditions or who need to care for family members.

 

Restrictions on movement in and outside Abu Dhabi

 

Subsequently, on 31 May 2020, the Abu Dhabi Media Office posted restrictions announced by the Emergency, Crisis and Disaster Management Committee on movement in and outside the Emirate.

 

Movement between regions within Abu Dhabi (Abu Dhabi, Al Ain, and Al Dhafrah) as well as in and out of the Emirate of Abu Dhabi is banned for a period of one week starting tomorrow, 2 June 2020. The ban includes all residents including UAE nationals.

 

Exemptions from this movement restriction are available for employees of vital sectors, chronic disease patients visiting hospitals and the transportation of necessary goods.

 

Residents in each region are allowed to move within their region in line with the daily National Disinfection Programme timing in Abu Dhabi (from 10:00 p.m. until 6:00 a.m. the following morning). ■

 

Post Eid al Fitr Reopening Guidelines and Easing of Movement Restrictions

On 26 May 2020, Dubai Economy published the “Post Eid al Fitr” reopening Guidelines which took effect from Wednesday 27 May 2020 and include updates to the protocols for the wholesale and retail trade including salons and barbershops as well as valet parking. The Guidelines also provide tailored reopening protocols for cinemas, kids salons, auction houses, outsourced government service centres, and various entertainment sectors.

 

The Guidelines include the following:

 

  • Offices in Dubai will be allowed to reopen with 50 percent of their headcount capacity.

 

  • Salons and barbershops will be allowed to reopen with 50 percent of their staff and customer capacity.

 

  • Malls and retails outlets will be allowed to increase their staffing and customer occupancy levels from the current 30 percent to 70 percent and they will be allowed to remain open from 6:00 a.m. until 10:00 p.m.

 

  • The Dubai Metro will operate from 7:00 a.m. until midnight from Sunday to Thursday and from 10:00 a.m. until midnight on Fridays.

 

  • Intracity buses will now operate from 6:00 a.m. until 11:00 p.m., with essential trips (to hospitals only) permitted on these buses between 11:00 p.m. and 6:00 a.m.

 

  • Intercity buses will continue to be suspended until further notice.

 

All individuals must follow preventive measures including social distancing (ensuring two-metre distance from other individuals) and wearing face masks.

 

On 27 May 2020 the Crown Prince of Dubai and Chairman of the Executive Council announced that 50 percent of all Dubai government employees will resume working from their offices today, Sunday 31 May 2020, and the remaining will do so on 14 June 2020.

 

Return to work of private sector employees will be implemented in accordance with the reopening Guidelines as discussed above, with 100 percent private sector employees’ return to work pending further announcement.

 

The UAE also announced on Friday 29 May 2020 that starting from Saturday 30 May 2020 the daily National Disinfection Programme across the UAE except in Dubai will begin at 10:00 p.m. until 6:00 a.m. the following morning. In Dubai, timing of the sterilisation programme was changed on 27 May 2020 and runs from 11:00 p.m. until 6:00 a.m. the following morning. ■

Revised Measures in Response to COVID-19: Sterilisation and opening timings and an updated list of violations and fines

Timings

 

On 18 May 2020, the UAE government announced the following timings with effect from today, 20 May 2020:

 

 

  • the National Disinfection Programme will take place between 08:00pm (not 10:00pm) to 06:00am the following day.

 

  • working hours of butchers, mills and cafes will be from 06:00am to 08:00pm.

 

  • commercial centres and malls will be open from 09:00am to 07:00pm (with new opening hours to be announced after the upcoming Eid.) People over 60 years old and children below 12 years old will continue to be denied access to these premises.

Retail stores, cooperatives, groceries, supermarkets and pharmacies will remain open for 24 hours, seven days a week during the National Disinfection Programme.

 

List of Violations and Fines

 

On 18 May 2020, the Emergency, Crisis and Disasters Prosecution Department of the Public Prosecution announced an updated list of the violations and fines that were originally set out in Resolution 38 of 2020. The changes take effect from 18 May 2020.

 

The list below follows the numbering of Resolution 38 of 2020. Some violations and fines have remained the same, others have been revised, and new violations have been introduced. For ease of reference, the new changes and additions are in red.

 

The list of violations and fines under Resolution 38 of 2020 appeared in our previous InBrief dated 29 March 2020.

 

No.

 Violation Fine
1
  • Violating an order for mandatary hospitalisation.
 AED 50,000
2*
  • Failing to abide by home quarantine or re-testing instructions.
 AED 50,000
  • Failing to abide by quarantine instructions at private quarantine facilities or re-testing instructions.
 AED 50,000
2 bis*
  • Failing to install a smart application or carry an electronic tracking device for home quarantine cases.
  • Destroying, losing or disrupting the network of electronic tracking device for home quarantine cases.
 AED 10,000

The offender will also bear the cost of the electronic device, if lost or damaged.
  • Hacking, destroying, deleting, damaging or changing the program of the smart application or electronic tracking device.
  • Illegally obtaining data or information in the smart application or electronic tracking device.
 AED 20,000

The offender will also bear the cost of all damages.
  • Failing to notify the relevant contact centre, without an acceptable excuse, that the electronic tracking device is lost, damaged or malfunctioned within 24 hours of such event.
 AED 10,000
3
  • Violating the closure or operating hours of an educational institution, movie theatre, gym, nightclub, commercial center, outdoor market, park, leisure centre, cafe, shopping mall, retail shops, gardens, beaches, public swimming pools, hotel swimming pools, and restaurant (the Facilities).
  • Receiving any visitors in any of the Facilities in violation of the instructions.
 AED 50,000 for the owner of a shopping centre and closure of the facility for one month.

AED 5,000 for the owner of a retail shop outside a shopping centre.
  • Failing to install thermal cameras, or taking any other precautionary measures as required by the relevant authorities, at any of the Facilities.
 AED 20,000
  • Failing to temporarily suspend sailing cruises.
  • Violating procedures or measures imposed by the relevant authorities when resuming the operations of sailing cruises.
 AED 10,000
4
  • Violating prohibitions or restrictions on gatherings, meetings, private and public celebrations, and on gathering or being present at public locations, private farms, or agricultural estates.
 AED 10,000 for whoever invites or organises the same, and AED 5,000 for participants.
5
  • Violating measures of the Ministry of Health & Prevention regarding those coming to the UAE from countries infected by any communicable diseases.
 AED 5,000 (which was previously AED 2,000). 
6
  • Failing to take the appropriate health procedures regarding the regulation of markets, roads, and other public locations exempt from temporary closure.
  • Failing to implement an order for removal of any temporary structure or the disposal of goods, clothes, or other items are believed to have been contaminated or potentially contaminated with any disease agent and cannot be disinfected.
 AED 3,000
  • (Applicable to accredited health laboratories) Failing to link the data of tested individuals to relevant authorities
 AED 20,000
  • Failing to clean and sterilise equipment, devices, machines within establishments as per the instructions of the relevant authority.
 AED 5,000
  • Violating instructions of the relevant authority relating to cleanliness and personal hygiene practices of workers within establishments or shared housing accommodations.
 AED 1,000
  • Failing to use chemicals (for cleaning, sanitisation and disinfection purposes) or any other material as per the instructions of the relevant authority.
 AED 1,000
  • Failing to preserve the health and safety and prevent spread of communicable diseases as per the decisions and instructions of the relevant authority.
 AED 2,000
7
  • Failing to take precautionary measures for the crew of accommodation vessels.
 AED 10,000
8 (This fine under Resolution 38 of 2020 is cancelled.)
9
  • Violating the provisions of the Implementing Regulations for the Law on the Prevention of Communicable Diseases as regards the burial or transport of the body of any person who dies from a communicable disease.
 AED 5,000 (which was previously AED 3,000). 
10
  • Exceeding the maximum permitted number of passengers in a car by more than three persons. (This does not apply where members of the same family or second-degree relatives are in a car.)
 AED 3,000 for the  driver (which was previously AED 1,000).
  • Using a vehicle to transport goods, objects or other items against its authorized purpose and in violation of health and safety regulations.
 AED 5,000 and the vehicle will be impounded for a month.
11
  • Failing to wear medical or cloth facemasks in closed public places, shopping centres, public transportation, crowded public areas, high traffic areas, or private vehicle.
 AED 3,000 (which was previously AED 10,000).

 
  • Failing to wear medical or cloth facemask at a company, workplace, housing accommodation.

 

 AED 5,000 for the employer or owner of company, establishment or worker’s accommodation.

AED 500 for the employee.
  • Failing to observe the safe distance between individuals.
 AED 3,000 (which was previously AED 10,000). 
  • Failing to take necessary measures to ensure social distancing and permitting overcrowding and assembling within establishments, cafes, restaurants, beaches, gyms, public swimming pools, hotel pools.
 AED 5,000 for the owner of such facilities. 
  • Exercising, taking part in sports or recreational activities in open places or hotel beaches, walking or gathering in gardens or public places in violation of the preventative measures imposed by the relevant authority.
 AED 3,000
  • Violating the maximum number of employees allowed within a facility, commercial establishment or workplace.
 AED 3,000 for the owner of the company or establishment. 
12
  • Failing to take sterilisation procedures in means of public and private transport.
 AED 5,000 for the manager of the company or establishment. 
13
  • Approaching or going to healthcare facilities in cases other than the prescribed ones.
 AED 1,000
14
  • Refusing to undergo a medical test upon demand.
 AED 5,000
  • Re-taking a laboratory test for Coronavirus at accredited health laboratories within two weeks without a valid reason
 AED 1,000
15
  • Leaving home or travelling during the curfew times announced by the relevant authority for a reason other than to buy food and medicine and to attend to health emergencies.

(This is not applicable to employees within the vital sectors who are permitted to move during curfew times, which includes medical, technical and administrative personnel working within governmental and private health facilities.)

 AED 3,000
16
  • Violating the ban on transferring workers between Emirates. (This is not applicable to workers of exempted categories.)
 AED 10,000 for the owner of the company or establishment and driver of the private vehicle. 
(Applicable to workers within the exempted category)

  • Exceeding the maximum capacity imposed by the relevant authority (being half capacity of vehicles) when transporting workers between Emirates or within an Emirate.
  • Failing to wear masks, and social distance when boarding and disembarking from the vehicle.
 AED 5,000 for the owner of the company or establishment

AED 500 for the employee or worker. 
17
  • Carrying on private lessons at home, or public or private places (with direct contact), whether for or without compensation.
 AED 30,000 for the individual offering, organizing and mediating private lessons. 

AED 20,000 for the owner of the private place where the private lesson was held. 
18
  • Collecting, copying, broadcasting, disclosing, publicizing, transmitting or circulating health data or information of individuals that tested positive, are undergoing treatment or examination with the health authorities.

 

  • Cancelling, deleting, destroying, or altering any such data or information.
  

 

AED 20,000

 

 
  • Violating information security standards approved by government or private health facilities.
 AED 5,000

 

Violators of Article 2 and 2 bis (marked with an asterisk (*) above) will be referred to the Emergency, Crisis and Disasters Prosecution Department of the Public Prosecution to be charged for a criminal offence under Article 40 of the Federal Decree Law 2 of 2011 on the Establishment of the National Emergency and Crisis Management Authority. The penalty of such offence is imprisonment for a period not exceeding six months, or a fine not exceeding AED 100,000, or both.

 

The Attorney General has the authority to order the publication of the pictures and name of violators in media sources as it deems necessary. ■

 

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The ADGM Companies Regulations 2020

The Abu Dhabi Global Market has announced amendments to its Companies Regulations. The Companies Regulations 2020 (2020 Regulations) repeal the Companies Regulations 2015 (as amended). We have summarised below the key changes under the 2020 Regulations.

 

Companies Regulations 2020 Effect of amendment
Section 3 One of the ways in which a restricted scope company can be incorporated is if the founding members are a group of people who are from the same family (as approved by the Registrar). What constitutes being a member of the same family has been broadened under the 2020 Regulations to include grandchildren, great grandchildren and adopted children (and their spouses).
Section 450 This section now clarifies that a financial institution which is a FinTech Participant will not be excluded from the small companies’ exemption from audit.
Part 23 (sections 778 – 783) The regulations now use the term “confirmation statement” as opposed to “annual return”. The contents of the confirmation statement and the timelines for delivery of the confirmation statement remain the same.
Section 937 The amendments to the regulations state that the Registrar will continue to authenticate paper copy documents with an official seal however the amendments clarify that electronically generated documents will not require to be sealed.
Section 940 The right to request a certificate of incorporation has been amended under the 2020 Regulations such that all certificates of incorporation will now be electronically generated as opposed to signed and authenticated by the Registrar. However, a request can still be made for a paper copy certificate of incorporation and such request may be subject to a fee as determined by the Board of Directors of the Abu Dhabi Global Market (Board).
Section 960 Continuing the theme under section 940 of the 2020 Regulations, electronic as opposed to paper copies of publicly available information on the register will be made available by the Registrar on request. If a request for a paper copy of such information is required, the provision of such information may also be subject to fees as imposed by the Board.

 

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Afridi & Angell’s corporate department works with many ADGM companies and has extensive experience in advising such companies. Should you have any questions with respect to the changes under the 2020 Regulations or more generally on ADGM companies, please contact the author, Danielle Lobo (partner), or your usual Afridi & Angell contact. ■

DMCC Employment Guidelines during the COVID-19 Precautionary Measures Period

The DMCC Authority recently passed DMCC Guidelines 1 of 2020 (DMCC Guidelines) setting out what actions DMCC employers can take with respect to their employees during the COVID-19 Precautionary Measures Period.

 

DMCC entities can:

 

• Request employees to work remotely and implement means to monitor them (without infringing their privacy). Working remotely does not however apply to key employees working in Vital Industries. “Vital Industries” are the key industry sectors as announced by the Supreme Committee of Crisis and Disaster Management from time to time, which are eligible for a work-related movement permit (now required for movement around Dubai between 10:00 p.m. to 6:00 a.m.), available from the Dubai Police website. The Supreme Committee of Crisis and Disaster Management was established under the leadership of the Commander of the Dubai Police pursuant to Dubai Decree 22 of 2006 and Dubai Rule 14 of 2006. For the Vital Industries, please see the list of Vital Sectors and Support Sectors in our InBrief dated 6 April 2020.

 

• Place employee(s) on paid leave without employee’s consent.

 

• Temporarily reduce employee’s basic salary for a defined period (which must be mutually agreed). In spite of this temporary reduction, the employee’s end of service gratuity will remain unaffected, and will continue to accrue according to the employee’s basic salary prior to the temporary reduction.

 

• Place employee(s) on unpaid leave for a period (which must be mutually agreed).

 

• Collect and share employee’s personal data with competent UAE authority (if requested) as reasonably required for the health, safety and wellbeing of their employees.

 

DMCC employers are discouraged from filing absconding reports against terminated employees who may be facing delays in cancelling their visas during the COVID-19 Precautionary Measures Period.

 

Where the DMCC Guidelines are silent, the DMCC entities shall remain subject to the UAE Labour Law. In contrast, the DMCC has not made DMCC entities subject to the requirements of Ministerial Resolution 279 of 2020 (on employment stability in the private sector) and Ministerial Resolution 281 of 2020 (on maintaining safe places of work), either in the DMCC Guidelines or on its website. Accordingly, the specific requirements imposed in those Resolutions would not apply to DMCC entities, unless the DMCC decides at a later date to make them applicable. For details of these Resolutions, please see our InBriefs dated 1 April 2020, 3 April 2020 and 6 April 2020 and our Legal Alert dated 6 April 2020.

 

As to accessing office premises of DMCC entities, the DMCC Authority has followed the decision of the Supreme Committee of Crisis and Disaster Management dated 23 April 2020 whereby a maximum of 30% of the workforce of all organisations would be allowed to work from the office premises. For more details of this decision, please see our InBrief dated 26 April 2020. DMCC entities based in the DMCC Business Centre (i.e., those with flexi desks, serviced desks or serviced offices leased from DMCC Business Centre) (Business Centre Members), however, are additionally subject to the recently issued DMCC Business Centre Health & Safety Policy, which restrict them to having one employee present at the office unit at any one time (and such employee must not be 60 years and older, or pregnant, or have chronic diseases). Such employee must also undergo thermal scanning available in designated areas within the DMCC Business Centre facility. ■

 

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