Abu Dhabi (WAM)
His Excellency Abdullah bin Touq Al Marri, Minister of Economy, said the new federal draft law regulating the work of commercial agencies stipulates that the commercial agent must be a citizen of the UAE, whether he is a natural person, an individual or a is a legal person. person “a corporation” except in the case of public limited companies, in which case he must. The share of citizens in it should not be less than 51%, indicating that this serves national companies and paves the way for family businesses that allow commercial agencies to convert into public limited companies.
His Excellency Abdullah bin Touq, who yesterday coincided with the discussion of the Federal National Council in its session of the Draft Federal Law on the Regulation of Trade Agencies and the Draft Federal Law on Cooperatives, explained that 40 years have passed since the current law, which commercial agencies in the country registered only 6,000 agencies, which is a modest number in view of its capabilities. He stressed that the new draft law will create more opportunities for citizens to register new agencies, as it is primarily about free movement of agencies between citizens of the country and will allow the access of new citizens to the activities of commercial agencies, which is not allowed by the current law because it imposes a restriction on the exit from the office, whereby the termination of the agency contract is mortgaged with the consent of both parties rd , even if the term of the power of attorney stated in the contract has expired.
Bin Touq pointed out that this restriction posed great challenges for many international companies to enter the country’s markets with commercial agencies, and they resorted to being satisfied with distribution contracts, which means missed opportunities for the entry of new national companies to the activities of the agency. His Excellency said the new draft law provides that the contract terms between the agent and the principal are respected in recognition of the principle of the Sharia Contracting Contract, including the termination clause of the agency contract so that the agency contract can be terminated at the end of term unless the two parties desire renewal and continuity in accordance with the legal terms they accept with the provision of legal guarantees Existing agencies in the event of termination of the proxy contract and grant fair compensation for damages to the current agent, even if the contract expires in accordance with the rules and deploy detailed legal mechanisms to regulate the flow of exit and transfer of assets related to the trade office and fair compensation.
His Excellency pointed out that the new draft law would bring about a fundamental shift that would take the commercial agency model to a new level in line with best international practices, and that businessmen and investors would agree on the terms of contracts and agreements to be entered into between and for a balanced relationship between the parties of the Agency. The business environment, diversity and competitiveness of the country’s economy, improves the attractiveness of the national business environment for investment through the agency model, enhances positive competition in the local market, and increases consumer satisfaction through the diversity of the existing agencies.
His Excellency clarified that the most prominent axes and guidelines included in the new draft law include the creation of specific cases for the termination of the commercial agency agreement, and certain controls and provisions regarding the termination of the commercial agency agreement or non-renewal, in addition clarification of the mechanisms and methods for the use of arbitration in disputes and the mechanism for the formation of the Trade Agencies Committee, in addition to the replacement of criminal sanctions by administrative sanctions.
The axes and guidelines also include integrated mechanisms and procedures to ensure smooth entry of goods related to commercial agencies and continuity of consumer access to these goods in the event of conflicts and disputes between the parties of the agency, in addition to giving existing and temporary commercial agencies a transition period to adjust their terms and sign new contracts with customers.
Regarding the draft federal law on cooperatives, His Excellency Abdullah bin Touq Al Marri said that the cooperative sector is one of the most important sectors for promoting economic diversification and meeting the demands of sustainable economic and social development. housing, sports cooperatives and even health and education.
His Excellency clarified that the new draft law allows for the establishment of various forms of cooperatives in the country and takes advantage of the economic and development opportunities offered by this vital sector and works to increase its contribution to GDP as the cooperatives currently in the country most of them represent consumer cooperatives and their contribution to output does not exceed gross domestic product is 1%.
He said: “Through the new law, we look forward to developing the cooperative sector, diversifying its forms and expanding the base of its shareholders, in a way that creates new economic opportunities, enhances the flexibility and diversification of the economic The state’s model improves, and serves the development trends for the next phase.”