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New Dubai law to boost treasury
Staff Report / 17 December 2009
DUBAI — His Highness Shaikh Mohammed bin Rashid Al Maktoum, Prime Minister and Vice President of the UAE, in his capacity as the Ruler of Dubai, issued a law on Thursday ordering government-linked companies to transfer surplus revenue to the emirate’s treasury. The law also seeks to improve control of public spending and transparency.
“The law requires government departments which enjoy fiscal independence as well as government-related companies to transfer surplus revenues to the public treasury as public revenues. The law also aims to regulate government departments’ public spending and control government revenues, as well as to provide an accurate database for revenues and expenditures,” a statement on Shaikh Mohammed’s website said. ›› turn to page 30
The law states that government entities are required to abide by a number of controls, criteria, and procedures that seek to rein in public spending and control government income and provide an accurate database about their income and spending. Government entities have to transfer their income to the government’s public treasury account, and they are prohibited from retaining any part of their income or spending it on their activities or investments or utilizing it, according to the new legislation, the statement said.
The new law, Number 35 of 2009, replaces Law Number 18 of 2006 and requires all government entities to provide the government with their annual budget, which must be approved by the Supreme Fiscal Committee. The law also forces financially-independent government companies to transfer their surpluses to the public treasury.
The new law allows the companies re-invest profits and revenue surpluses before transferring them to the public treasury, with the approval of the Supreme Fiscal Committee and in consultation with Investment Corporation of Dubai, which oversees the emirate’s investment portfolio.
The new law stipulates the following:
1- Regulating the preparation of annual budgets of all governmental bodies, including those whose annual budgets are listed in the Government’s budget, those who enjoy fiscal independence or those entities who receive financial support from the Government.
2- Governmental entities should abide by a number of controls, standards and procedures aimed at controlling public spending and governmental revenues, providing exact data on their revenues and spending. Governmental entities which enjoy fiscal independence are also governed by the new law which requires them to provide full data on their annual budgets, closing accounts and will have to rely on their own financial revenues and may only receive funds from the general budget in the form of loans that have maturity dates. The annual budgets of those entities have to be approved from the Dubai Supreme Fiscal Committee.
3- Governmental entities have to relay their revenues to the government’s general budget and may not use, hold or spend any part of them on their own activities, investments.
4- Governmental entities which enjoy fiscal independence as well as governmental entities have to relay surplus revenues to the government’s treasury as they are considered public revenues. The Law, with the approval of the Supreme Fiscal Committee and in coordination with Investment Corporation of Dubai, allows for re-investing profits and surpluses revenues prior to relaying them to the government’s treasury. Full financial data on these profits and surpluses have to be provided to the Dubai Department of Finance so that they are listed among the government’s public revenues.
5- The Law requires governmental entities with annual budgets listed in the Government’s budget to transfer, to the Dubai Department of Finance, all and any funds lodged by clients in the form of refundable deposits or any other form, as per the relevant instructions to be issued by the Department.
H.H Sheikh Mohammed Bin Rashid Al-Maktoum also issued Law No. 34/ 2009 replacing Law No. 10/ 2006 on setting up the Dubai Export Development Corporation.
The new law is part of Dubai Government’s plans to further develop its legislations to cope with the rapid changes and new developments as well as to comply with the best relevant international practices. The new law aims to further strengthen Dubai’s status as a global economic export and re-export hub. The provisions of Law 34/ 2009 will contribute to building Dubai’s export capabilities, develop its relevant programs, increase its exports, contribute to opening new foreign markets as well as strengthen existing markets to facilitate the access of products and services of companies licensed in Dubai to those markets.
The new law tasks the Dubai Export Development Corporation with the following:
1- Implementing programs and initiatives aimed at increasing and marketing exports.
2- Revising and analyzing the realities of Dubai’s exports as well as determining and tackling barriers to growth.
3- Providing commercial data and technical advise to exporting entities.
4- Developing and implementing initiatives aimed at raising awareness of export sector as well as the developments related to international trade.
5- Helping companies and entities develop their own capabilities to market their products at foreign markets.
Law No. 34/ 2009 also stipulates the setting up of an export marketing program aimed at increasing Dubai’s exports and market the products and services of licensed companies and entities operating in the emirate.
Sheikh Mohammed Bin Rashid also issued Decree No. 58/ 2009 approving the statute of Dubai International Arbitration Centre. The new law replaces the current statute which was approved by Law No. 10/ 2004.
The new decree aims to revise the effective legislations in Dubai so that they keep pace with the new global developments and comply with the best practices adopted by advanced nations in the areas of resolving disputes through alternative approaches.
The changes which the emirate and the whole world recently had faced created an urgent need to re-consider the statute of the center so that it to increase its responsiveness to these changes as well as its effectiveness in carrying out its role in resolving disputes speedily though determined and simplified methods to further contribute to the development of Dubai’s investment environment. The decree stipulates amendments to the center’s procedural rules, alternative methods of settling disputes etc to regulate its technical, organizational and financial structure as well as increase its productivity, efficiency and effectiveness.
With inputs from Wam
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