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UNITED ARAB EMIRATES
FEDERAL LAW NO.18 OF 1981
CONCERNING THE ORGANIZATION OF COMMERCIAL AGENCIES |
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Commercial Agent Guide |
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We Zayed Bin Sultan AI-Nahyan, President of the United Arab Emirates.
Pursuant to the provisions of the Provincial Constitution, the Federal Law No. 1 of 1972 concerning the authorities of ministries and the powers of ministers and, the laws amending thereof:
And on presentation by the Minister of Economy and Commerce;
And approval of the Council of Ministers and the Federal National Council;
And on the assent of the Federal Supreme Council;
Hereby enact the following Law as under: |
| ARTICLE 1 |
ARTICLE 12 |
ARTICLE 23 |
| ARTICLE 2 |
ARTICLE 13 |
ARTICLE 24 |
| ARTICLE 3 |
ARTICLE 14 |
ARTICLE 25 |
| ARTICLE 4 |
ARTICLE 15 |
ARTICLE 26 |
| ARTICLE 5 |
ARTICLE 16 |
ARTICLE 27 |
| ARTICLE 6 |
ARTICLE 17 |
ARTICLE 28 |
| ARTICLE 7 |
ARTICLE 18 |
ARTICLE 29 |
| ARTICLE 8 |
ARTICLE 19 |
ARTICLE 30 |
| ARTICLE 9 |
ARTICLE 20 |
ARTICLE 31 |
| ARTICLE 10 |
ARTICLE 21 |
ARTICLE 32 |
| ARTICLE 11 |
ARTICLE 22 |
ARTICLE 33 |
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ARTICLE 1 |
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In the implementation of the provisions of this Law the following terms and wording shall bear the meanings defined against them:
State : The state of United Arab Emirates.
Concerned Authority : The Ministry of Economy and Commerce. (hereinafter referred to as the Ministry).
Committee : The Commercial Agencies Committee formed under article 27 hereof.
Commercial Agency : The representation of principals by an Agent to distribute, sell, offer, exhibit or present a commodity or service within the State in return for commission or profit.
Principals : The Producer or Manufacturer within or without the territories of the State, the Exporter or Exclusive Distributor accredit by the producer provided that the producer shall not, himself, exercise the act of marketing. |
| ARTICLE 2 |
| Commercial Agencies activities shall be exercised within the State by Nationals of the United Arab Emirates alone whether they are individuals or companies owned in total by such nationals. |
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ARTICLE 3 |
| Commercial Agencies activities shall not be exercised in the state save by those who have their names down in the Commercial Agents Register kept by the Ministry for the purpose. Any Commercial Agency not recorded in such register shall not be recognized nor shall any suit related thereto be filed with any court of Law. |
| ARTICLE 4 |
| For legality of agency registration an agent shall directly be connected with the principals through a written authenticated agreement. |
| ARTICLE 5 |
| Principals may seek the services of one single agent in the State being one unit or may otherwise seek services of one agent in each Emirate or one agent in a group of Emirates conditional that the distribution of commodities and services subject matter of such agency be restricted to such agent within the agency region. |
| ARTICLE 6 |
| A Commercial Agency Agreement shall be considered concluded for the mutual interests of signatories thereto. |
| ARTICLE 7 |
| An agent shall be entitled to commission on transactions concluded by the principals themselves or through others in the region assigned for the agent's activities, even though such transactions may not be reached as a result of the latter's efforts. |
| ARTICLE 8 |
| It shall not be permissible for principals to terminate an agency agreement unless there exists a reason justifying such termination even though life of the agreement may be limited to a certain period Re-registration of the agency in the Commercial Agents Register in the name of other agent shall not be permitted unless the previous agency has been dissolved through mutual consent of both the agent and the principals or else have existed certain fundamental causes convincing the permanent committee formed under article 27 hereof. |
| ARTICLE 9 |
| If an agency has been withdrawn at a time improper or on account of circumstances beyond control of the agent a claim for damages may be placed with the principal. Abuse of rights necessitating appropriate compensation shall imply the act of refusal by the principals to renew the agency agreement on expire date of the original period if, the agent proves that his activities have conducted to apparent success in the distribution of the principal's products or in the promotion of sales thereof and, that non-renewal of agreement causes damages to him or causes him to forfeit the anticipated fruits of his endeavors, unless otherwise, the principal prove that the agent has committed an error justifying non-renewal. |
| ARTICLE 10 |
Applicant shall submit his application for registration in the Commercial Agents Register on a specified form prepared at the Ministry together with supporting documents. Application shall include the names of the agent and the principal, their addresses, assets, goods and services subject matter of the Commercial agency activities, region of agency, and the dates of effect and expire of the agreement.
In the event a Commercial Agent happens to be a Commercial company the application for registration shall include the details provided for in addition to the name of the company, type, address of its headquarters and its capital. |
| ARTICLE 11 |
| The Ministry shall within 15 days from date of application, give its ruling on the application and, if such application is acceptable the agent shall be awarded an accredited certificate evidencing his registration with the Ministry. Resolution of such approval together with related details shall be published in the Official Gazette and, a notification to that effect shall be served to the Departments of Municipalities, Customs, Federation of Chambers of Commerce and Industry, and the respective Chambers concerned. |
| ARTICLE 12 |
| In the event the conditions of registration herein provided for are not fulfilled the Ministry may reject the application for registration submitted provided that the basis of rejection shall be explained and notification to that effect be served to the applicant concerned with a copy of the resolution by registered with acknowledgment mail. Applicant may within a period of 60 days from date of notification challenge the decision before a judicial Court of Law. |
| ARTICLE 13 |
| A Commercial Agent, his attorney or heirs in case of his death, shall apply to the Ministry of effect in the Register whatever alterations or amendments that may occur to the details herein provided for and, in accordance with the specified conditions within a maximum period of 60 days from date of such occurrence of alterations or amendments. |
| ARTICLE 14 |
| A Commercial Agent, his attorney or heirs in case of death shall in the event of abrogation or expire of agency agreement submit an application to the Ministry attached with supporting documents asking for cancellation of registration within a minimum period of 60 days from date of abrogation, death or expire. The Ministry shall in the event of having evidence justifying the cancellation of the agency effect cancellation after summoning those concerned by registered with acknowledgment letter to appear within a maximum period of 60 days and, in case of failure to attend re notify them likewise to attend within a further maximum period of 60 days. In the event they further fail to attend the Ministry may unilaterally and at its discretion cancel the registration. |
| ARTICLE 15 |
| A Commercial Agent shall in the event of forfeiting any of the eligibility qualifications herein stipulated apply to the Ministry for cancellation of his registration in the Commercial Agents Register within a maximum period of 60 days from the date of the cause of cancellation of registration has materialized. The Ministry shall, thereupon, effect such cancellation from the Register. The Ministry shall if ascertained of the existence of such causes, unilaterally and at its discretion write off such registration in accordance with the terms and conditions provided for in the second clause of the previous articles. |
| ARTICLE 16 |
| Supporting documents of application for registration, modification or cancellation shall be attached and the Concerned Authority may entertain such application and instruct the applicant to provide further necessary documents if so required. |
| ARTICLE 17 |
| The Ministry shall notify the Departments of Municipalities, Customs, Federation of Chambers of Commerce and Industry and Chambers of Commerce and Industry in the State of the Agent's names written down in the Commercial Agencies Register and of whatever alterations, modifications or cancellations that may occur vis-à-vis registration within a period of thirty days from date of such registration modification or cancellation. |
| ARTICLE 18: FUNCTIONS |
| Any interested party shall be entitled to acquire from the Concerned Authority an extract from the registration sheet of the Register or otherwise to obtain a non-registration certificate there from. |
| ARTICLE 19 |
| Executive rules and regulations for implementation of this Law shall specify the fees due for payment on application for registration in the Commercial Agents Register, for effecting any alterations or modifications of details therein, so also the fees due on obtaining officials extracts from the register sheets. |
| ARTICLE 20 |
| Commercial Agents standing at the time of enforcement of this Law shall apply within six months from date of effect for having their names down in the Register in accordance with terms and conditions herein provided for. Those commercial agents who do not satisfy the specified conditions shall get their postures modified in accordance with the provisions hereof within a period of one year from date of effect. A commercial agency failing to satisfy the stipulated conditions herein required, within the period provided for in the previous clause shall he considered to have expired by Law. |
| ARTICLE 21 |
Commercial Agents shall keep ample stocks of spare parts, tools, materials, accessories and fittings necessary for the maintenance of durable goods.
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| ARTICLE 22 |
He who exercises commercial agencies activities contrary to the provisions of this Law shall be fined an amount of not less than five thousand Dirhams. Clerical Department of the Court of Jurisdiction shall notify the Concerned Authority, the Federation of the Chambers of Commerce and Industry and the Chambers of Commerce and Industry in whose purview the agent has embarked on practicing business, of the judgment immediately it is passed.
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| ARTICLE 23 |
No person shall import any commodities, products, manufactured goods, materials or any other merchandise being subject matter of a commercial agency registered within the State in the name of another person with the purpose of trading without prior consent of the agent. The Concerned Authority shall upon the request of the Agent detain those imports while still in ports or in the warehouse of the importer pending adjudication.
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| ARTICLE 24 |
Without prejudice to any more severe penalty provided for in the penal code or any other punitive statute a fine of not less than five thousand Dirhams shall be inflicted upon any person who commits any of the following offenses:
Deliberately submits to the Concerned Authority or any other official authority false information concerning registration, cancellation or remarking in the Commercial Agents Register, if such false information consequently led to registration, cancellation or remarking in contravention to provisions herein the Court shall, in addition to passing the specified penalty, order that the registration, remarking or cancellation, as the case may be written off and the judgment shall be published in the Official Gazette.
Records through publications or commercial correspondence or publishes in any media of information contrary to factual truth, that he is commercial agent of any natural or judicial person or, that he is agent of such person for the discharge, sale or distribution of certain goods, products, materials or the like. The Court shall in all such cases, order the correction of details according to respective conditions on dates fixed by the Court itself. The judgment shall be published in the Official Gazette. |
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ARTICLE 25 |
| He who acts in contravention to article 21 hereinabove shall be subject to a fine to be decided by Courts of Law. |
| ARTICLE 26 |
| Further to penalties herein provided for the Court of jurisdiction may order the closure of the commercial agents' premises and the concerned Authority may decide the reopening of such premises on request tendered by the concerned party if the causes of closure are eliminated or for liquidation purposes. |
| ARTICLE 27 |
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A) (Commercial Agencies Committee) shall be formed by decree issued by the Minister in the following manner:
Representative of the Ministry nominated by the Minister.
Representative of the Municipal Council in each respective Emirate nominated by the Chairman of the Municipal Council or else by the authority empowered to issue trade licenses.
Representative of the Chamber of Commerce and Industry of each respective Emirate nominated by the President of the Chamber from among the members of the Board of Directors.
Representative of the Municipal Secretariat nominated by the Secretary General.
Representative of the Federation of Chambers of Commerce and Industry nominated by the Secretary General. |
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ARTICLE 28 |
The Committee shall be competent to adjudicate any dispute emanating from a commercial agency. In the course of fulfilling its tasks the Committee may avail itself of the assistance of those whom it deems appropriate through a written assignment. Divulging particulars they happen to know on account of their commission shall be strictly forbidden.
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| ARTICLE 29 |
Officials commissioned to control the implementation of this Law shall have the right to look into the documents and papers appertaining to the agency appointment, to register in the Register Book for the purpose of recording whatever contravention to the provisions hereof and the executive rules and regulations thereof have occurred and shall subsequently refer the matter to the competent authorities of investigation and legal prosecution.
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| ARTICLE 30 |
| A decree shall be issued by the Minister of Economy and Commerce appointing the names of officers referred to in the previous article herein above. Such officers shall strictly be forbidden from divulging any particulars they happen to know ex-officio in the event these particulars be of confidential nature. Offender shall be subject to disciplinary measures without prejudice to civil or criminal liability. |
| ARTICLE 31 |
| This Law shall supersede any other provision. |
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ARTICLE 32 |
| The Minister of Economy and Commerce shall execute this Law and issue rules, regulations and resolutions necessary for execution thereof. |
| ARTICLE 33 |
| This Law shall be published in the Official Gazette and shall come into force six months from the date of publication. |
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| Issued at the Presidential Palace, Abu Dhabi, on 11th Shawwal 1401 A.H. Corresponding to 11th August 1981 A.D. |
Zayed Bin Sultan Al-Nahyan
President of U.A.E. |
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(Translated by the Commercial Agencies Department, Chamber of Commerce & Industry, Abu Dhabi) |
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