On 29th October 2017, Sheikh Mohammed Bin Rashid, Vice President and Prime Minister of UAE and Ruler of Dubai issued Law No. 14 of 2017 governing endowments, outlining the structure of charitable activities in the emirate and institutionalizing the regulation, management, protection and operation of endowments. A second Law No.17 of 2017 was also issued at the same time to formalize the role of the Mohammed Bin Rashid Global Centre for Endowment Consultancy, launched in early 2016.
Law No. 14 is in alignment with the country’s vision regarding charity and humanitarian efforts and details a comprehensive legal framework in order to preserve the significant history Endowments have had in the Arab world as community developing tools. It aims to promote Awqaf and endowments.
The law was drafted as a collaborative effort between the Mohammed Bin Rashid Global Centre for Endowment Consultancy, the Supreme Legislatives Committee and the AMAF. It authorities the Dubai Awqaf and Minors Affairs Foundation (AMAF) and the Mohammed Bin Rashid Global Centre for Endowment Consultancy (GCEC) to issue licenses for waqf establishment and also assigns them the responsibility of creating a governance system for the licensed endowment institutions, which includes the operational mechanisms of the institutions, management, obligations and penalties in the case of violations of terms of licensing. The law also authorizes the Mohammed Bin Rashid Global Centre for Endowment Consultancy to grant the Dubai Endowment Sign to institutions, companies or individuals that have contributed through sustainable waqf-related initiatives based on the concept of innovative endowment and as per standards approved by the MBRGCEC. The AMAF are responsible for overseeing and monitoring waqf establishments.
As per the law, the Dubai Endowment Sign recipients shall be granted preference in government procurement, hence incentivizing potential endowers as governmental agencies shall consider the Sign as an additional criterion when choosing contractors as long as other requirements have been met.
The new law entitles the MBRGCEC to provide consulting services for organizations and individuals in accordance with international best practices, identify sectors that waqf can support, enhance understanding of Awqaf and endowments by conducting research and studies, organizing conferences and workshops and signing strategic partnership agreements with specialize organizations. It also assigns the Board of Trustees of the MGBRCEC the responsibility of appointing a Secretary-General, making void any other piece of legislation that contradicts or challenges its articles.
The law defines the various endowments provisions including its creation, types and conditions. The law prescribes the conditions of an endowed party, the effects of an endowment and the party to which the property shall be endowed to. It also defines endowment custody including the appointment of a custodian for management of endowment, requirements of being a custodian and their respective rights and obligations. The law also sets out the procedures related to investing and replacing Waqf. The new law has been stressed to be instrumental for community development in its ability to address and provide for the local community needs and will create an incentivizing environment allowing for endowments to contribute to various social, scientific, cultural and environmental fields, as stated by Sheikh Mohammad. The new law promotes the ongoing benefits of endowments as financial assets for businessmen and the private sector, simultaneously stressing the core principle of endowments as sustainable community development measures. The law hopes to construct an environment wherein endowments and contributions to different fields such as education, culture, environments, sports and health are encouraged. It facilitates the Mohammed Bin Rashid Global Centre for Endowment Consultancy support for Dubai’s vision to become a global humanitarian hub, aiming to cater to the community needs at local, regional and international levels. As per Law No. 14, endowments are subject to Federal Law No.5 of 1985 without undermining the terms and conditions set forth by the grantor or otherwise by the AMAF and MBRGCEC. The law does not conflict with nor challenge the newly proposed trust law and foundation law, that the Dubai International Financial Centre, DIFC, has opened a public consultation program for in October. The law will be published in the Official Gazette and will be considered valid from the date of issuance.
First, a new Egyptian law governing the taking of security over movable assets was passed in November 2015 (i.e. the law no. 115 of 2015). The new movable securities law introduced the principle of non-possessory collateral security. Its broad scope includes movable assets as well as intangible assets such as receivables, credit notes and intellectual property rights.
According to the respective Executive Regulations, issued in December 2016, the Egyptian Financial Supervisory Authority will establish an electronic online-based registration system for all pledges established under the new law to be registered and published.
However, the registration of a pledge agreement is not mandatory and a lack of registration will not render the pledge void. Still, registration of a pledge will grant the creditor a secured first rank security over the pledged asset. Furthermore, the pledged asset will be excluded from the debtor's insolvency estate thus providing even better security to the pledgee, provided the respective pledge under the new law has been perfected and registered before the commencement of the insolvency proceedings.
In January 2017 the new Turkish law on movable property pledges in commercial transactions (i.e. the law no. 6750) entered into force. The new legislation's principal aim is to facilitate small and medium sized enterprises' access to financing solutions that come with little interference with business operations as well as minimal financial burden with regard to commercial collateral.
The two most important changes in the legal framework for commercial pledges pertain to its scope:
While formerly only financial institutions, sales enterprises operating on credit and cooperatives could act as a pledgee and only the owner of a commercial enterprise was allowed to enter into a pledge agreement as a pledgor, the new law substantially widens the personal scope of commercial pledges. Under the new law pledge agreements are namely divided into two distinct groups with regards to the personal scope. First, where a financial institution accepts a pledge as collateral, merchants, small traders, farmers, producer organizations and self-employed persons may act as pledgee. Secondly, merchants and small traders may enter into pledge agreements with each other. This means, that commercial pledge agreements are no longer restricted to contractual relationships vis-à-vis financial institutions, but can be utilized in an extensively broader spectrum.
The second amendment to the scope of commercial pledges deals with the assets that are qualified as pledgeable. Formerly, pledge agreements were strictly limited to specific assets such as commercial titles and trade names as well as local equipment assets. Under the new legal regime the scope of pledgeable assets includes all of the pledgor's tangible and intangible assets.
Turkey will also establish a new Pledged Movable Property Registry that will be responsible for the receipt and validation of the respective written pledge agreement as well as for registration, monitoring and facilitating an increased transparency of commercial pledges.
The United Arab Emirates (UAE) have created a new legal regime regarding the pledge of movables as security for a debt which entered into force in March 2017 (i.e. the law no. 20 of 2016). As opposed to the situation in most other middle eastern jurisdictions, the notion of disembodied pledges as well as pledges over movable and intangible assets is not entirely new to the Emirates' jurisdiction. Pledge agreements with such scope had been introduced to the UAE's law in 1993 by the Commercial Transactions Law (i.e. the law no. 18 of 1993) already. Still, the new law makes commercial pledges easier to handle by broadening the scope of admissible assets significantly and simplifying the procedures for pledges.
The scope of the new law covers any movable asset, tangible or intangible, existing or in the future.
Furthermore, the most important procedural step for creating a pledge over and asset will be registration of the pledge with the Security Registry. Once this registry is established – presumably on an electronic basis – no execution of an agreement before a notary public will be necessary anymore, as it was under the Commercial Transactions Law.
The law will be published in the Official Gazette and will be considered valid from the date of issuance.
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