Tag: Corporate and Commercial

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. ■

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. ■

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. ■

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. ■

The UAE continues to implement new measures on a daily basis to curb the spread of COVID-19. Those measures are being adopted, announced and implemented at a very rapid pace. For ease of reference, we present here a summary of the key measures that have been implemented by various UAE authorities between 18 March 2020 and the time of this inBrief, 9:00 a.m. on Friday, 3 April 2020.

 

Remote Working System

 

Government:

 

The Federal Authority for Government Human Resources (FAHR) has activated the remote working system for all governmental authorities with effect from 29 March 2020, such that a maximum of 30% of the total workforce are physically present in the premises.

 

It has therefore become a new norm for UAE governmental authorities to close its doors to the public and adopt (if such means were not available already) electronic means for receiving applications of, and processing, governmental services. For instance, the UAE Ministry of Foreign Affairs and International Cooperation (MOFA) no longer accepts physical submissions of documents to be attested. Such attestation services must now be applied for online, and Emirates Post will arrange the delivery of documents between the applicant and MOFA.

 

Inquiries to governmental authorities are now generally by phone call or emails. Where governmental officials are required to witness signatures, the common practice is the use of video conferencing (as is the case for DIFC Wills Service Centre for the execution of wills, and the Abu Dhabi Judicial Department, for the notarisation of documents).

 

This FAHR restriction however does not apply to certain sectors, such as (but not limited to) energy, telecommunications, health, security, postal services, and identity and citizenship.

 

Private Sector:

 

The Ministry of Human Resources and Emiratisation (MOHRE) promulgated Ministerial Resolution 281 of 2020 regulating the Remote Work in Private Establishments during the Period of Application of Precautionary Measures to Curb the Spread of Novel Coronavirus, which sets out guidelines that private entities must adhere to. Such guidelines include (among others):

 

• ensuring that a maximum of 30% of the total employees are physically present at the workplace and applying remote working system to all employees that are not required to be physically present at the workplace;

• restricting customers to 30% of the total seating capacity;

• having screening devices at the entrance to take the temperature and check symptoms of employees on a daily basis twice (when entering the premises and when exiting the premises); and

• the requirement for private entities to report any workers with COVID-19 or suspected cases.

 

Similarly, pursuant to Circular 14 of 2020 issued by the Abu Dhabi Global Market (ADGM), ADGM – registered entities are required to ensure that a maximum of 30% of the total employees are physically present at the workplace and apply remote working system to all employees that are not required to be physically present at the workplace. Certain businesses however are exempt from this restriction, which include (among others): supermarkets, grocery stores, pharmacies, hospitality and food establishments (delivery only) and cleaning services.

 

Notwithstanding MOHRE’s resolution above, the Dubai Department of Economic Development (DDED) has directed that all private entities implement remote working system for 80% of the total employees until 9 April 2020, which DIFC, JAFZA and DMCC free zones have also required of their respective registered entities.

 

Penalties

 

To curb the spread of COVID-19, the UAE authorities have promulgated laws, and issued official statements, clarifying the penalties for those who do not comply with the preventative measures imposed by the concerned authorities.

 

Cabinet Resolution 17 of 2020 requires a person to not violate such preventative measures. Article 2 of this Cabinet Resolution authorizes the UAE Ministry of Interior and the Police (among others) to ensure that the public complies with such measures and apprehend violators.

 

Violators will be subject to penalties set out in Attorney General Resolution 38 of 2020, Cabinet Resolution 17 of 2020, Federal Law 14 of 2014 on Combating Communicable Diseases (as COVID-19 is declared by the UAE Ministry of Justice to be a communicable disease), and any other law which may be applicable.

 

To date, the Dubai Police has arrested a European national for posting a video that defied UAE authorities’ instructions for social distancing. This case has been referred to the Federal Public Prosecution for Information Technology Crimes.

 

Furthermore, the UAE authorities have been targeting entities that have taken advantage of the COVID-19 situation and carried out business practices to the detriment of the consumers.

 

The DDED has so far issued 35 warnings, nine violation notices on shops, fines on nine pharmacies and two pharmaceutical suppliers for inflating the prices of products (such as hand sanitizers, masks and detergent products).

 

Based on the results from accredited lab tests conducted on 102 samples of hand sanitizers, the Dubai Municipality has withdrawn six hand sanitizers from the market after discovering that they were not compliant with the approved specifications.

 

The Abu Dhabi Department of Economic Development (ADDED) has issued a decision to take disciplinary actions against companies that increased the prices of food and medical equipment without justification. Such actions include (amongst others) imposing a fine of AED 250,000 (for the first violation) to AED 2 million (for repeated violations), temporarily closing down violating facilities, as well as temporarily and permanently suspending licenses.

 

Labour-Related Matters

 

To provide some relief for employers facing diminishing revenues, MOHRE promulgated Ministerial Resolution 279 of 2020 on Employment Stability in Private Sector during the Period of Application of Precautionary Measures to Curb the Spread of Novel Coronavirus. This resolution details a number of measures which employers in the private sector may progressively resort to during the current period, and only applies to employers registered with MOHRE with respect to their non-UAE national employees. Measures that are permitted by the Resolutions are: working remotely, paid leave, unpaid leave, temporary salary reduction during the relevant period; permanent salary reduction. An employer with a surplus of non-UAE national employees may register the details of these employees in an online Virtual Labour Market maintained by the MOHRE to inform potential employers of their availability.

 

UAE citizens in the private sector that are affected by the COVID-19 situation will be subject to Ministerial Resolution 280 of 2020 establishing the Committee concerned with the Stability of the Situation of UAE Citizens in the Private Sector, also promulgated by the MOHRE. The Committee shall develop a set of support packages to ensure that UAE citizens remain in the labour market. It will also examine termination cases between UAE citizens and their employers received by the Customer Happiness Centres to determine an appropriate support mechanism for such UAE citizens.

 

Functioning of the Courts

 

It appears that the Execution Court in Abu Dhabi will suspend eviction actions, attachment of bank accounts, and other specific measures for two months. This appears to be a move designed to give temporary relief to debtors.

 

Travel Restrictions

 

The entry of all of valid UAE visa holders currently outside of the UAE shall remain suspended for a further renewable period of two weeks from 2 April 2020.

 

All inbound and outbound passenger flights and transit of airline passengers in the UAE remain suspended. In spite of these restrictions, on 2 April 2020, Emirates Airlines have received approval to fly passengers outbound from the UAE to certain destinations from 6 April 2020. Initial flights are to commence from Dubai to London (Heathrow), Frankfurt, Paris, Zurich and Brussels.

 

Visa-Related Matters

 

The UAE Cabinet has approved the extension of residence permits expiring on 1 March 2020, for a renewable period of three months without any additional fees upon renewal. The Cabinet has also waived the administrative fines associated with the infractions relating to services provided by the Federal Authority of Identity and Citizenship (FAIC) for a renewable period of three months, with effect from 1 April 2020.

 

The UAE Ministry of Health and Prevention (MOHAP), MOHRE and FAIC have exempted employees with expired work permits from carrying out medical tests in order to renew their UAE work permits and residence visas.

 

DIFC:

 

At present, original passports will not be required for the visa application, visa renewal and visa cancellation process as UAE residence visas will not be stamped on applicant’s passports.

 

DMCC:

 

• DMCC Authority has de-activated the option to apply for a visa outside the country.

• For the purpose of visa cancellation, original passports will no longer be required for employees who are outside the UAE for more than three months, outside the UAE with an expired visa or inside the UAE.

 

Economic Stimulus

 

Various stimulus packages have been announced to alleviate businesses in the UAE to date:

 

1. HH Sheikh Mohammed Al Maktoum approved an additional AED 16 billion stimulus package, raising the total to AED 126 billion.

2. As of 25 March 2020, the UAE Cabinet approved the following measures (among others) that seek to alleviate retail, hotel and industrial sectors:

• Reduction of water and electricity bill of shopping malls, commercial shops, hotels, hotel apartments and plants by 20% for a period of 3 months starting from April 2020, which would amount to AED 86 million.

• Deferred payments for paying water and electricity connection installation fees up to six months.

• A waiver of 20% of the electricity connection fees for a period of three months from April 2020.

 

3. The UAE Central Bank has launched a comprehensive Targeted Economic Support Scheme of AED 100 billion (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.

 

4. The ADDED has recently waived the payment of fines for violations committed by entities registered in Abu Dhabi amounting to AED 246,653,900. Such fines are fees associated with carrying out economic activities such as (but not limited to): late license renewal fees, penalties for non-compliance with terms and conditions of a facility, penalties for carrying out activities outside the scope of the licensed activity.

 

5. The DMCC has announced the roll-out of a Business Support Package to support DMCC-registered entities, with effect from 1 April 2020. The Package will apply until 30 June 2020 (unless stated otherwise) and shall include (among others):

 

• 100% waiver for late license renewal penalties;

• 100% waiver of all penalties imposed in relation to Flexi Desk and DMCC Business Centre (applicable until the end of 2020); and

• 30% discount on license renewal fees.

 

6. The DIFC will introduce a series of fiscal easing initiatives over the next three months from 1 April 2020 to 30 June 2020, such as (but not limited to):

 

• Waiver of annual licensing fees on new registrations during the next three months.

• 10% discount of renewal fees for existing license holders in the DIFC that are due for license renewal between 1 April 2020 to 30 June 2020.

• Deferred payments for all properties owned by DIFC Investments Ltd for a period up to six months from 1 April 2020.

 

Measures were also taken by developers to alleviate costs associated with real estate, such as deferring or waiving lease payment and waiving administrative fines. To date, Nakheel, Al Zarooni Group and Wasl Asset Management Group have implemented relief measures for their customers.

 

Sterilisation

 

MOHAP has implemented the National Disinfection Programme, with effect from 26 March 2020 and ending on 5 April 2020 (unless stated otherwise). Sterilisation has been taking place in public areas from 8pm to 6am the following day (the Sterilisation Period). The public is urged to stay home during this period; individuals can only leave their homes if:

 

(i) it is absolutely necessary to buy essential supplies, such as food and medicine (Essential Tasks), or

(ii) they work in vital sectors, such as (among others) energy, telecommunications, health, security, law enforcement,

 

and will have their personal and work ID verified and checked.

 

Restrictions and Temporary Suspension on Businesses

 

The temporary suspension on certain businesses remain, which include (among others) commercial centres, shopping malls, restaurants and cafes (except takeaway services), gyms, etc. However, online stores and e-commerce options can remain operational.

 

Food retail outlets (such as supermarkets, cooperatives, grocery stores) and pharmacies, bakeries, car workshops, laundries, technical and electrical service providers, food delivery and transport services, and banks can remain open. These businesses are required to place clear signage on the floor to ensure that individuals stand 1.5 metres apart.

 

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As stated above, new measures are expected to continue to be adopted, announced and implemented at a very rapid pace. Afridi & Angell has been following and will continue to follow official sources for further updates.■

 

Significant responsibility for ensuring compliance with directives to stop the spread of the Covid-19 virus has been delegated to the law enforcement authorities of the UAE. Last week, the Cabinet promulgated Resolution No. 17 of 2020, requiring all natural and juristic persons to comply with the measures mandated by the concerned authorities to combat Covid-19. The Resolution moreover states that failure to comply would be treated as a violation of law exposing the offender to penalties, including responsibility to bear the costs of any remedial measures, closure of premises, and fines. Investigations and prosecutions are assigned to a bureau in the Federal Ministry of Interior that was created last year by Resolution No. 73 of 2019 of the Minister of Interior on the Establishment of the Federal Prosecution for National Emergency, Crisis and Disasters. Finally, Resolution No. 17 of 2020 delegates to the Attorney General the power to determine the relevant violations and fines.

 

The UAE Attorney General published that list of violations and fines on Thursday, 26 March 2020, in the form of Resolution No. 38 of 2020.

 

The Resolution, taking effect from the date of its promulgation, provides for the following fines:

 

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
3	Failing to close an educational institution, movie theatre, gym, nightclub, commercial center, outdoor market, park, leisure centre, cafe, shopping mall, restaurant or the like, or receiving any visitors in any of such facilities in violation of the instructions. Failing to adhere to measures for the opening of public parks, beaches, gyms, public swimming pools, and hotel swimming pools. Failing to temporarily suspend sailing cruises.	AED 50,000 for whoever is in  charge of the facility, closure of the facility, and a fine of AED 500 for each visitor
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 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
7	Failing to take precautionary measures for the crew of accommodation vessels.	AED 10,000
8	Leaving home for unnecessary reasons, or for purposes other than work or the purchase of basic needs.	AED 2,000
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 3,000
10	Exceeding the maximum permitted number of passengers in a car by more than three persons.	AED 1,000 for the vehicle’s driver
11	Failing to wear medical facemasks in closed places or failing to observe the safe distance between individuals.	AED 10,000
12	Failing to take sterilisation procedures in means of public transport.	AED 5,000
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

 

Over the weekend, the Ministry of Interior made a statement clarifying the requirement to wear a medical facemask, stating that it applied only to persons suffering from chronic illnesses or with flu symptoms.

 

The Resolution further provides that the penalty shall be doubled upon repetition of the violation, and that the violator shall be referred to the Federal Prosecution for National Emergency, Crisis and Disasters if the violation is committed for the third time. The Federal Prosecution for National Emergency, Crisis and Disasters is entrusted generally with the task of implementing the provisions of the Resolution, and of investigating and taking action in respect of all offenses under Federal Law No. 14 of 2014 on the Prevention of Communicable Diseases and its Implementing Regulations. ■

This serves as an update to the section “Restriction on Travel / Transportation” in our inBrief (Recent measures implemented by the UAE authorities in response to COVID-19) dated 18 March 2020.

 

The UAE Ministry of Foreign Affairs and International Cooperation (MOFA) has announced:

 

1. With effect from 01:00 (UAE time) on Thursday 19 March 2020, the temporary suspension on UAE entry visas now also applies to holders of passports from visa-exempt countries. The suspension on holders of passports from visa-exempt countries shall continue until a medical clearance process is activated in the country of departure. Diplomatic passport holders remain exempt from this suspension as of now.

 

2. With effect from 12:00 (UAE time) on Thursday 19 March 2020, holders of valid UAE visas currently outside of the UAE will not be able to enter the UAE for a renewable period of two weeks. They are requested to contact the UAE diplomatic missions in their current locations for the necessary support to facilitate their entry into the UAE. ■