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New Commercial Company Law & LLC

The New Commercial Companies Law of United Arab Emirates (UAE) that is Federal Law No. 2 of 2015 became effective from July 1, 2015 replacing the old Federal Law No. 8 of 1984. The objective of the new law is to regulate the companies in UAE as per international norms related to governance rules, the protect the shareholders, encourage foreign investment and to promote the corporate social responsibility on the part of companies along with contributing to the development of the working environment and capacities of the UAE and its economic position. 

Conflicts & Uncertainty

The changes in the new Commercial Companies Law (CCL) contained many improvements and modifications on the old Federal Law No. 8 of 1984.

There were debates due to uncertainty of Article 104 of New UAE Commercial Companies Law. As per the said Article all the provisions applicable to Joint Stock Companies (JSC) of the Federal Law No. 2 of 2015 are also applicable to Limited Liability Company (LLC). Thus, leading to different interpretation and conflict as to the application.

Recently,Ministry of Economy (MOE) has issued Ministerial Resolution 272 of 2016 effective from 29

April 2016 providing the application of the Article 104 and clarifying the issues faced by the businesses in UAE in interpretation.

List of Joint Stock Company’s provisions that will apply to an LLC

Directors’ liability

As per the Article 6 of the new CCL all the members of the Board of Directors are required to act in the interest of the Company first and within the Authority granted to them.Further the obligations and duties of the Board and executive management is required to be mentioned in the Articles of Association of the companies.

Audited accounts and Accounts filing

As per Article 10 of the new CCL states that the company shall prepare and maintain proper Books of accounts and follow the international accounting principles and standards for the same. 

Auditor provisions

The provision 7,8 and 9 in relation to Auditor is applicable to both JSC and LLC.

To comply with the CCL article 7 and 8 a company is required to appoint one or more auditors for one renewable year. Also, the auditors have the right of access to all Company books, registers and documents etc.. Also, the auditor is required to send a copy of the report to the competent authority in case the company’s management fail to enable them to perform duties. And as per Article 9 the Audit is required to present an Annual Report to the General Meeting and is considered responsible for the correctness of all information presented in said report.

Right to call a general meeting

Article 12 has been made applicable to LLC also. The said Article states that if a shareholder holding 20% or more share capital in the company he may submit an application for the calling of the General Meeting, that must be called within 5 days. Also, if any shareholder is holding 10% or more of the company shares may submit an application accompanied by supporting documents for the calling of the General Meeting to an urgent meeting.

List of Joint Stock Company’s provisions that will not apply to an LLC

Financial assistance

The MOE Resolution clearly clarifies that thefinancial assistance prohibition as provided in Article 222 will not apply to LLCs.

Director remuneration

The Article 169 in reference to Director remuneration as applicable to JSC have been made non-applicable to the LLC Company.

Related party transactions

Articles 152(1) and (2) in relation to the prohibition on related party transactions, are also not applicable to LLCs.

Board formation and composition

The restriction as to accepting nomination as a director in Article 147 and to the upper limit for the number of board appointments an individual may hold as provided in Article 149 are now not applicable to LLCs. Thus, an LLC Director can act as Director for a number of companies without having any upper limit for the same.

Restrictions on powers of the directors

The Article 154 of the CCL provides for restrictions applicable to JSC directors’ powers – the same are not applicable to LLC directors.

Conclusion

After the Federal Law No. 2 of 2015 the MOE said Resolution 272 of 2016 specifically provides a list of provisions concerning Joint Stock Companies that applies to LLCs. Also, the Article 3(1) of the MOE Resolution specifically sets out provisions applicable to JSC that will be applicable to LLCs, to the extent do not conflict with the nature of LLCs. Further the clarification, resolution puts burden on the shareholders and general managers to be conversant with the new rules so that can implement them to their companies.

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  • Article

DIFC proposed New Law for Electronic Transactions

The DIFC is aiming to soon enact New Electronics Transactions Law with the objective of facilitating various electronic transactions, to eliminate barriers thereto which are cause of uncertainties over writing and signature requirements, and further for promotion of development of the legal and business infrastructure required for implementation of secure electronic transactions in DIFC and last but not least helping establishment of uniformity of rules, regulations and standards in relation to authentication and integrity of electronic records in DIFC. Below is a brief synopsis of the proposed “Electronic Transactions Law, DIFC Law No. 2 of 2016:

Electronic Contracts

In the said law DIFC provides that, such electronic records shall be acceptable as enforceable contract and be used in proceeding before court as evidence. Further law provides that an offer and the acceptance of an offer may be expressed by means of Electronic Communications for the formation of a valid contract.

And thus, the contract shall not be denied validity or enforceability solely because an Electronic Communication was used during the process. When a proposal to enter, a contract is made through electronic communication addressed to more than one specific party, also a proposal that makes use of interactive application for placement of order by use of the information system – is considered an invitation to make offers and indicates that the party to be bound in case of acceptance.

When a contract is formed because of the interaction of natural persons and automated message system is considered valid and enforceable.

The time and place of dispatch of electronic communication:

  • Time when it leaves an information system under the control of the originator
  • In another case the time when the electronic communication is received.

The time and place of dispatch of electronic communication:

  • When it becomes capable of being retrieved by the addressee at an address designated by the addressee.
  • capable of being retrieved by the Addressee and he becomes aware that the Electronic Communication has been sent the address as requested.

Electronic Signatures

Legal recognition to the electronic signature has been given where DIFC law requires signature of any person, or provides for consequence if the document or record is not signed. Also, it has been clarified that an electronic signature is deemed to identify the relevant person and the person’s intention of been satisfied in respect of the data in the electronic records.

Also, the electronic signature is admissible as evidence in court as an evidence and considered as valid.

Electronic Records & Retention

All electronic records have been given legal recognition for validity and enforceability. The electronic record shall certify the DIFC law for requirement to be written or in writing and if it preserves a record of the information contained the same can be reproduced in tangible form.

Where the parties have agreed to conduct a transaction by Electronic means and a party is required to send or deliver information in writing to the other party – the requirement is satisfied if the information is provided or sent in an electronic communication capable of retention by the Addressee at the time of receipt and reproducible in tangible Form.

The Electronic Record preserves a record of the Information contained therein along with the capability to reproduce the same in tangible form. And it must be retained in the format in which it is originally created. For example, if DIFC law requires the retention of a cheque, the requirement for retention is fulfilled, if Electronic Record of the information on the front and back of the cheque is maintained.

Conclusion

The new law does not provide or prescribes for penalty at the same time it should be noted that the DIFC Electronic Transactions Law excludes the use of electronic records, electronic contracts and electronic signatures in reference to all types of powers of attorney, wills and trusts, affidavits or affirmations including the sale, purchase or long term lease of real property.

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  • Article

5 highlights of the new Pharmacy Law in Oman

Introduction

The sultanate of Oman has enacted a new pharmacy law to regulate the pharmacy practices in Oman in March, 2015. The royal decree 35 of 2015 promulgates the “Pharmacy Law” repealing royal decree 41 of 1996 making significant amendments regarding foreign investments in Pharmacy sections. This article aims to highlight major provision of new Pharmacy law in Oman.

Key Issues

  1. As per the provision made by Article 11 mandates all pharmacies to have at least one of its partner to be an Omani national pharmacist. All the existing pharmacies will now have to look out for an Omani pharmacist to join their board to comply with this regulation and the application for new pharmacies should comply with this for getting the license.
  2. As per another provision the medicines can now be dispensed by the individuals holding prescribed educational qualification from a recognized university and licensed to act as a pharmacist by the competent authority. The pharmacist license will be granted for a maximum period of two years and can be renewed after that.
  3. The new law also provides for limiting the number of pharmacies an individual may open and the number of branches any brand pharmacy can open and hold ownership rights. It will help to increase fair competition and better pricing structures for the consumers.
  4. The new law reduces the duration for which a license can be issued from five years to two years.
  5. New law also prohibits sharing profits between pharmacist and physician from prescription medicines charges. This is a welcome move as it will help in providing cost effective medicines to the citizens and the money-making cartels will be abolished.

Conclusion

The new law will help to curtain monopoly and create more opportunities for Omani nationals, but at the same time, it may face criticism for the reluctance of foreign investors for investment in pharmacy industry of Oman. Article 11 of the law states that it aims to protect Omani nationals from unscrupulous competition in the industry and protect their rights in business and employment opportunities in pharmaceutical sector. The results of this new law will show their colors in their own time.

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  • Article

3 categories of Cybercrime Laws and its penalties in Kingdom of Saudi Arabia

Introduction

Cybercrime in the simplest terms can be defined as the crime committed by using the internet and/ or electronic devices.  An attempt to access the secretive and personal/ financial information about an individual or business, promoting or doing unlawful activities through internet, defamation of an individual or business through social media are some of the common examples of cybercrimes. The internet has become an integral part of everyone’s daily life for its innumerable advantages, but at the same time it is the biggest threat as it allows a lot of people to have access to confidential information. All the countries around the world have their own laws to deal with such crimes and this article aims to highlight major provisions of Anti Cybercrime law of the Kingdom of Saudi Arabia (KSA).

The Law

The Anti-Cybercrime Law of KSA was promulgated by Royal decree no. M/17 on 26th March, 2007. The governing text of the law is in Arabic and the law contains sixteen articles. Like all laws in the Kingdom, the basis of this law is Shariah which protects right to privacy for everyone and prohibitions of any invasions thereon.

With the increased spread of social media in the past couple of years, the number of cybercrimes has also gone up. Sometimes, many social media users are not even aware that they are doing a crime and sometimes, the users commit cybercrimes, believing the regulatory authorities won’t be able to catch them. However, hiding from regulatory authorities at KSA in not so easy. Many arrests and prosecutions, including social media celebrities have been reported in the Kingdom for cybercrimes in the recent past. The paragraphs below shall highlight different types of cyber crimes and penalties for these crimes under the KSA Law.

We shall divide the cybercrimes in three categories for better understanding based on penalties for them.

Category 1 : This category shall include the following crimes:

  1. Gaining illegal access to any data or system or computer to blackmail or coercion;
  2. Defamation of any legal or natural person;
  3. Invading the privacy of an individual

Penalties : Any person who commits above mentioned crimes shall be liable to payment of fine up to 500,000 Saudi Riyals or imprisonment for up to one year or both of them.

Category 2 : This category shall include unauthorized access or hacking of social media accounts and the persons found guilty shall be punishable with imprisonment of up to four years or a fine of 3,000,000 Saudi Riyals.

Category 3 : This category shall include the following:

  1. Crimes related to publication, transmission or storage of any material that is inconsistent with public policy, morality, religious value of the nation;
  2. Publishing Pornography;
  3. Promotion or distribution of Narcotics or hallucinatory materials

Penalties : Any person who commits above mentioned crimes shall be liable to pay of fine up to 3,000,000 Saudi Riyals or imprisonment for up to five year or both of them.

Complaints

A person who is a victim of cybercrime can file his complaint at the nearest police station or to the appropriate authority at the Ministry of Internal Affairs if the crime comes under category 3 mentioned above. A charge sheet shall be prepared by appropriate authority once a complaint is registered and the suspect is identified. The case will then be forwarded to the criminal court.

Final word

Anti Cyber Crime law of KSA is a legislation designed to protect the privacy of the individuals and punish the criminals for invading privacy of an individual or doing any other activity oppose to the public policy, religion or morality of the Kingdom. However, it is important to note that ignorance of law is no excuse. If an individual commits any crime without knowing that they are committing a crime cannot walk freely on this ground. The social media users should guard their actions to ensure they will not land in jail for committing a cybercrime in ignorance and criminals should expect their meetings with lawyers very soon.

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  • Article

Six Laws on Consumer Privacy in GCC

Introduction

Before understanding the importance of the consumer privacy in today’s scenario, one must know the meaning of this both two terms. There has been rapid changes & development in the technology and their implications. Consumer privacy refers to the protection of the personal data and protection of any kind of communication between people through a post, telegraph, verbal or any other means of the communication. However, this is mentioned in the laws of every country that the privacy of the communication is the fundamental rights of the consumer. Let us understand the laws on the consumer privacy in UAE.

Right to Privacy

Analyst of the UAE on Consumer Secrecy mentioned that the right to privacy preserves in the Constitution of United Arab Emirates and this leads to analyzing data protection issues. However, Article 31 says: “Freedom of communication by post, telegraph or other means of communication and the secrecy thereof shall be guaranteed in accordance with law.’ As per article 31 the protection of data in the digital era is not mentioned in the constitution of the UAE, privacy is mentioned only in relation to post and communicate.

Certainly, around Gulf Region they mentioned that the constitution of the UAE law includes fundamental rights to privacy is ornamentation as it just mentioned about the post and communication, privacy is an important concern in relation to doing business in the Middle East.

Telecom Sector – Middle East

In Telecom context the issues are more than hacking and cybercrime the regulations in every region generally focus on the protection of telecom licensees then personal data. Let us understand how different region includes the laws and regulation of the Telecom sector and its privacy on the data.

UAE: Article 12 of the UAE Telecommunications Regulatory Authority’s Consumer Protection Regulations includes provisions on the subscriber’s details. The Licensee is obliged to take cautious steps to prevent secrecy of the subscriber’s information and their disclosures. They should take all the steps against risks, destruction, leakage, inappropriate use, modification, or unauthorized use. They must limit the information shall not be used in unauthorized way which includes violation of the regulations of the law. However, they must note that the information can be available to the third party or any affiliates who are involved in the provision of the telecommunications services ordered by the subscribers. Whereas it is necessary to provide the details to the third party it is necessary to take all the reasonable steps to protect the information and it should be used only for the purpose for which it is shared and for the marketing.

QATAR: Article 52 of the Qatar Telecommunications Law mentions (and articles 91 and 92 of the associated by law) mention that consumers have right to have their information corrected or removed from the data if it is not as mentioned by the consumer or shared with the service provider. Service providers obliged to use the information shared by the consumer in authorized manner they must use the information or published the information other than mentioned by the consumer.

OMAN: Regulation no.  113 of 2009 issuing Regulations on Protection of the Confidentiality and Privacy of Beneficiary Data mentioned that the Service provider must notify to consumer when the data is used for any unauthorized purpose and which might can affect their reputation as well as they cannot send the information abroad for the subscribed telecommunication services without approval of the Oman Telecommunications Regulatory Authority.

BAHRAIN: The privacy and confidentiality section of the Bahrain TRA’s consumer protection guidelines mentioned general restriction on the service provider by calling information and general notes to protect the personal information of the consumers. Consumers are protected from the illegal use of the information any unauthorized and unsolicited use of the information. Service providers are obliged to use the information provided by the consumers to provide telecommunication services.

SAUDI ARABIA: Article 3(8) of KSA Telecoms Law mention that Service providers are obliged to maintain the public the interest and protect interest of the public and maintain confidentiality of the communication and information.

KUWAIT: Kuwait is still in the process of establishing the Telecom Law.

Conclusion

As Per various studies and GCC e – commerce market Consumer Privacy should be mentioned as a fundamental right in the Telecom law because consumer trust issues can be highly avoided if the data on the consumers and their information can be protected.

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  • Article

Jordan Foreign Investment Regulations updates

Introduction

The Jordanian economy is majorly based on the investments from various Gulf countries as the country do not possess rich natural resources unlike neighboring countries. But, these investments have seen a sharp downfall due to the global slowdown and fall in oil prices. Jordan has introduced various investment laws during this period to gain the confidence of international investors and attract more investment in the country. The introduction of new regulations for Organizing Non-Jordanian investment during the last year is another important attempt to attain the objective of maximized foreign investment in Jordan. This article aims to highlight major provision of these regulations.

Major Provisions

The new regulations (Regulation no 77 of 2016) have been published in the official gazette on 16 June, 2016 replacing the old regulations (Regulation no. 47 of 2000). The prime objective for issuing these regulations is to design a specific framework for regulating and governing the economic activities foreign nationals shall be allowed to take in the country either wholly be foreigners or in partnership with nationals and to restrict participation of foreign investors in certain regulated activities.

As per the provisions of Article 3 of the new regulations a foreign investor may undertake any activity either wholly owned by himself or in partnership with Jordanian if it does not contravene with the public orders or morals, national security and public health.

Article 4 and 5 of the new regulation provides list of economic activities that can be undertaken only by Jordanians or foreign investor participation of less than 50 percent. Activities like maritime maintenance and maritime health services are included in this list.

Article 6 of the new regulations sets out the list of activities in which no foreign investment will be allowed. Activities like sale and trading of weapons, fireworks, crafting and handicraft activities form part of this list.

Article 9 of these regulations empowers the council of ministers to increase the limit for an ownership stake of foreign investor if these companies are not involved in the business mentioned therein.

The new regulations also remove the requirement of minimum share capital contribution for foreign investors. However, non-Jordanian investors will not be allowed to take advantage of this amendment.

Conclusion

The new regulations enhance business opportunities for Jordanians by removing the limits for minimum subscribed share capital and allow foreign participation in several activities to promote sustainable development for the nation. At the same time the new regulations do not compromise on the issues related to security and safety of the nation by restricting foreign participation in these activities. This is a welcome step and it shall help the Jordan to achieve the desired objectives.

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  • Article

Five Registration practices to protect Trademark

Introduction

 

The Trademark is the term is being used more frequently in today’s scenario. First, let us understand what is a trademark, the basic definition of trademark says “A Trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises. Intellectual property rights are protected trademarks. A Trademark is a sign or word or it can be anything which is used for goods & services or article of the enterprise which distinguishes it from anyone else or from competitors. Trademarks used for the services are also called service marks. Trademark owner refers to the person who has introduced the product or services it can be individual, business organization or any legal entity. A Trademark may be located on product as a sign or on the logo of the company.

Importance of Trademark

 

As we understood that trademark gives a life to a product or services as it makes them stronger to stand out in the market from any other products or services. Therefore, one should be very cautious while selecting the trademark as it must be different and unique which does not already exist in the market. Selection of the trademark should be done after considering all aspects, details and information about the product as it gives it the identity in the market. If it is common or does not stand out then it will be difficult to capture interest, enjoy exclusive rights and create goodwill in the competitive market. Another aspect to be kept in mind while selecting the trademark that it should be well-defined, meaning it should be clearly related to the product or services.

Registration of Trademark

 

  1. Once the selection of trademark is done owner(company or individual) should start the process of registration to obtain the ownership of the same.
  2. The application of the registration shall be submitted with the concerned authority. The authority examines the correctness of the trademark whether it is unique and does not resemble with the existing trademarks.
  3. Valid registration should be obtained and it should be renewed on a timely basis to enjoy the rights and goodwill.
  4. Enforcement of the Trademark should be checked on a timely basis to avoid any violation of the rights and unauthorized use of the trademark to ensure the trust in the quality of the product and services.
  5. To achieve the desired results of the trademark and to enjoy rights owner must deploy resources to monitor the market regarding advertising and marketing activities of the goods and services, to avoid the violation of the same by the third parties.

 

Conclusion

 

As per various studies done by the economists, the global market is very competitive today and to survive in such market one should follow the above-mentioned practices to protect trademarks.

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Everything you need to know about Insurance Brokerage in UAE
  • Article

Everything you need to know about Insurance Brokerage in UAE

Insurance brokerage profession can be carried on only after obtaining License to practice insurance activities in the UAE as a Company or a Branch or an Insurance Agent of Foreign Company. All Insurance Broker in the UAE is subject to resolution 15 of 2013 including amendment thereto from time to time. Under Federal Law No. 6 of in 2007 the Insurance Authority (IA) was set up as a separate legal personality for regulating and supervising the insurance sector in the United Arab Emirates (UAE).

The License is issued by the Insurance Authority (IA) is valid for One (1) year from the date of issuance and expiring at the end of December of the same year along with prescribed payment for renewal. Also, IA has a discretionary power to suspend the Insurance Broker license for carrying the activity in case completed application for license renewal not submitted.


Criteria for Insurance Brokerage Licensing

The companies must satisfy the following criteria to be eligible for issuance of license by the IA:

  • Must be a company incorporated in the UAE and registered under the Commercial Companies Law having paid up capital of AED 3 million Dirhams or more and with the object of practicing the insurance Brokerage activity.
  • A foreign Company having its branch or a branch of a financial Free Zone registered under the commercial law of UAE and having paid up capital of AED 10 million Dirhams or more.
  • A Letter of Guarantee produced by a bank and A professional indemnity insurance policy in favor of the IA.
  • The appointment of the technical and administrative staff required for practicing the activity.
  • Provision of a suitable headquarters, software and technical systems required to practice the activity.
  • Must have an internal control system to ensure proper application of law, regulations, instructions, resolutions and circulars issued thereunder from time to time by the IA.
  • Submission of the agreement concluded between the license applicant and a bank operating in the UAE concerning the account designated to the practice of Insurance Brokerage.
  • Full payment of the prescribed fees must be made and comply with any additional conditions or requirements determined by the IA.


Application for approval to practice the Insurance Brokerage business needs to be submitted to the IA in the prescribed Form along with required documents and supporting thereto. After submission of the application the IA issues the decision of approving or rejecting the application for license within a maximum period of 20 working days.On approval of the application the Insurance Broker is registered in the IA’s Insurance Brokers Register.

Technical and Administrative Staff

Further, Insurance Broker is continuously required to have the technical staff to practice the licensed activity and must at least appoint at least one specialized employee to assume the jobs of General Manager, operation Manager, Internal Auditor for each license type having the required qualification, experience.

The individual appointed as technical and administrative staff for the insurance brokerage company must fulfill the following conditions:

  • a natural person enjoying full capacity.
  • Needs to be of good conduct and behavior and has never been sentenced for a freedom restricting punishment in a moral turpitude crime without being rehabilitated.
  • Anytime judged bankrupt without being rehabilitated, or has not stopped the payment of his commercial debts.

Also, the Insurance Broker is required to notify the IA of appointment, Alteration, transfer or modification or termination, if any within a period of sixty days.


Obligations of the Insurance Broker

  • Within (3) months from the date of obtaining the license to make written internal bylaws, and provide a copy thereof to IA.
  • Continuous review and updating of the internal control system to ensure proper application of the Law, regulations, instructions, resolutions and circulars issued by the IA.
  • Creating an Operational Guide for risk management and to update and review periodically the same and as per the applicable rules in this regard.
  • Developing of a professional code of conduct for employees; and supervising and organizing their undertakings to ensure compliance with the Law.
  • In terms of place or organizational, technical or administrative aspects the Insurance Broker and their branches must be independent from any other party.
  • Co-operation and coordination with the internal controller, for enabling them to perform the assigned tasks and notifying the IA of any violation.
  • To dismiss the internal controller except by a decision of the board of directors or management board of the Insurance Broker.

Also, apart from, above regulations set certain obligations which the insurance broker must comply towards the IA, Customers and insurance companies.

Even though the UAE law has provided for the role and responsibilities of the Insurance Broker, recently Dubai Court has held the Insurance Broker to be liable for payment of recoveries to an insurance company from a reinsurance company.

Conclusion

Generally, Insurance Broker are not liable for the default of the insurance companies or the customers. Thus, IA by regulating the license issued makes business safer for clients in the UAE, ultimately protects the national economy; supports the economic development; encourages fair and effective competition; and provides the best insurance services with appropriate coverage at affordable rates in the insurance market of UAE.

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  • Article

3 major regulations for distribution of pharmaceuticals in the GCC region

Introduction

The GCC healthcare market in one of the fastest growing industry in the region and still have enough potential for future growth at the same or higher rate considering various ongoing mega projects supported by the respective Governments as part of their long-term strategy to streamline the issues related to health care of the residents. Further, GCC population is expected to grow by an annualized rate of 3% between 2015 and 2020. The increasing population, rising affluence of residents in the region and prevalence of lifestyle diseases are expected to create a larger demand of healthcare facilities in the region. Therefore, lots of private players are seeking access to reach the healthcare markets in the GCC to take advantage from the opportunities available. This article aims to highlight major regulations for distribution of pharmaceuticals in the regions.

Establishing the Presence

A foreign manufacturer or distributor of healthcare and pharmaceutical products can access the countries by two ways, either by establishing a local presence in the relevant country for trading and distributing the products or appointing a local agent in the relevant country for this purpose. It is understandable that both the options would have their own pros and cons. Appointing a local agent will definitely be a simpler option in comparison to establishing a presence, but specific recommendation shall depend only upon the preference of the foreign manufacturer.

Regulation in United Arab Emirates (UAE)

As mentioned above, both the growing population and rising standard of living of residents shall result in higher demand for pharmaceutical products. Therefore, many of the worlds’ largest players have already entered in UAE markets to utilize the opportunities the country offers and many other are in the process of doing so.

    1. As per the provisions of federal laws of UAE no pharmaceutical or medical product can be distributed in UAE before their registration with Ministry of Health and Prevention of UAE. The application for registration of the product should be filed jointly by the foreign manufacturer and its local authorized representative. He shall be legally authorized to act on behalf of manufacturer in the UAE and shall have legal obligations and responsibilities of manufacturers.
    2. In case of distribution of pharmaceuticals is being done through a local agent, the importing party should be an individual or entity established in the UAE and should possess a valid license to import medical products. The companies, which are wholly owned by foreign nationals are not allowed to import medical products, however, the entities registered with local and foreign shareholders can obtain a license of importing medicines and pharmaceuticals subject to foreign ownership restrictions.
    3. The entities wholly owned by UAE nationals can register their agreements with the Ministry of Economy of UAE (MoE) to take advantage of benefits and protection offered by MoE for agreements registered under agency law of the country.

Commercial Agency in GCC

The commercial agencies in GCC are established to protect the rights of their nationals like blocking imports of specified pharmaceuticals by third parties. Qatar allows its register commercial agent to submit a request to ban the importation of products from a foreign manufacturer without any notice to the foreign manufacturer if he terminates or not renew the agency agreement. Therefore, it is important for a foreign manufacturer to take advice from qualified law practitioner about the local laws before entering into an agreement for distribution if his products in a particular GCC country.
If you are looking to expand your business in GCC or set up your company in GCC,  you can reach us on [email protected]

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Why Mobile Banking Regulations is the need of the hour in Egypt

Introduction

With the advent and popularity of smartphones, mobile and internet banking have gained acceptance and popularity from people around the world and today it is the most common and user friendly way of banking. It offers a wide range of banking operation at the fingertips for account holders and save them from standing in long queues and waiting for the help desk operator to take their calls for their day to day banking needs. Most of the high-street banks around the world offer these facilities and customers also prefer to choose them. Egyptian markets are also no exception to this trend. Many Egyptian banks are keen to attract more customers in the competitive race by offering mobile banking facilities. However, the laws in the country do not provide for any specific regulations to address the issues involved in mobile banking. Mobile banking transactions and identity verification for the same in Egypt are governed by the regulations and circulars issued by the Central Bank of Egypt (CBE).

The Legal Framework

On 2nd February, 2010 the board of directors of CBE has issued a decision for regulating the mobile payment services offered by banks in the country. Further, on 14th April, 2011 Anti money laundering unit has announced additional compliances need to be complied by the banks offering electronic payment facilities. Proper measures for identification of customers and service providers should be observed and all required documents need to be submitted by each customer. The banks are also responsible to establish proper systems to protect the confidentiality of data available to them regarding their account information of customers and clients. They should maintain stringent confidentiality norms and restrict themselves or their staff from disclosing any information.

Existing Scenario

The CBE has prescribed norms for mobile banking and maintaining confidentiality of client’s account information, but as aforesaid, there is no specific law in Egypt to deal with various aspects of mobile banking and service providers. The regulations of CBE may not be full proof to address the risks involved.

The rapid diffusion of mobile banking has exposed grey areas in existing regulations and have led to the need to strengthen risk controls to address various policy issues including protection of customers’ finances and information related to financial data.

The Information Technology Industry Development Agency Law of Egypt issued as Law no. 14 in 2005 have stated that E-signatures, E-documents and electronic messages shall bear the same effect as signatures, physical documents and official or unofficial messages have in civil, commercial and administrative transactions under the provisions of Evidence Law.

The above-mentioned decision of the CBE states that the bank and mobile banking service providers shall maintain the highest security standards of encryption and authentication of user’s identity. Further, a process of double check and authentication must be followed, using phone number a PIN to originate an instruction for payment. The decision further adds that the PIN must satisfy the requirements laid down in the decision.

The decision and the CBE regulations require the information technology operating the internet and mobile banking transactions, must use intruder detection systems, firewalls, surveillance and system integrity checking in place to ensure complete protection of user and customer data. It is important to note here that CBE is empowered to check and inspect any part of the system to ensure its compliance with specified measures.

The CBE regulations also require mobile service payment providers to set up limits for daily and monthly transactions. It also prescribes to enter a written agreement with each customer for dealing with disputed transactions. A form for the same shall also be available at the website of the bank.

Missing Regulatory Compliances

The Egyptian government is encouraging the payments through electronic means continuously which shall result in larger penetration of internet and mobile banking service providers and a demand for regulations to deal with the complexities involved therein. Therefore, there is a pressing need to amend the existing regulations and have a more specific regulatory system for emergence of e-financing in Egypt.

The Bottom Line

Recent developments in the country significantly impact the electronic payment systems in the country. The announcement of a partnership between Egypt and Master Card which is expected to serve 54 million Egyptians for e-banking shall call for more explicit regulations. The financial authorities shall have enough systems to keep a check on the service providers and ensure safety and protection of financial data related to customers.

If you are looking to expand your business in Egypt or set up your company in Egypt, you can reach us on [email protected]

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