Abu Dhabi (WAM)
His Excellency Abdullah bin Touq Al Marri, Minister of Economy, said that the new federal draft law regulating the work of commercial agencies stipulates that the commercial agent be a citizen of the UAE, whether he is a natural person “an individual” or a legal person “a company” except in the case of public joint stock companies, in which case he must The share of citizens in it shall not be less than 51%, indicating that this serves national companies and opens the way for family businesses that own commercial agencies to have the possibility of transforming into public joint stock companies.
His Excellency Abdullah bin Touq, coinciding with the discussion of the Federal National Council in yesterday’s session of the draft federal law on regulating commercial agencies and the draft federal law on cooperatives, explained that 40 years have passed since the current law, during which commercial agencies in the country registered only 6,000 agencies, which is a modest number in light of the capabilities He stressed that the new draft law will create more opportunities for citizens to register new agencies because it deals primarily with the freedom of agency movement among citizens of the country and will allow the entry of new citizens into the activity of commercial agencies, which is not allowed by the current law because it puts A restriction on the exit from the agency, where the termination of the agency contract is mortgaged with the consent of both parties, even if the term of the power of attorney specified in the contract has expired.
Bin Touq pointed out that this restriction created 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 represents lost opportunities for the entry of new national companies into the agency’s activity. His Excellency said that the new draft law stipulates respecting the contractual terms between the agent and the principal 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 its term, unless the two parties desire renewal and continuity in accordance with the legal conditions they accept with the provision of legal guarantees Existing agencies in cases of termination of the power of attorney contract and granting fair compensation for damage to the current agent even when the contract expires in accordance with the rules and setting up detailed legal mechanisms to regulate the flow of exit and transfer of assets related to the commercial agency and fair compensation.
His Excellency pointed out that the new draft law would achieve a fundamental shift that would raise the commercial agency model to a new level in line with the best international practices, and would allow businessmen and investors to agree on the terms of contracts and agreements signed between them and ensure a balanced relationship between the agency’s parties. The business environment, diversity and competitiveness of the country’s economy, enhances the attractiveness of the national business environment for investments through the agency model, achieves greater levels of positive competition in the local market, and enhances consumer satisfaction through the diversity of existing agencies.
His Excellency clarified that the most prominent axes and directions included in the new draft law include the creation of specific cases for the termination of the commercial agency contract and stipulated controls and provisions regarding the termination of the commercial agency contract or non-renewal, in addition to clarifying the mechanisms and methods of resorting to arbitration in cases of dispute and the mechanism of forming the Commercial Agencies Committee, in addition to the replacement of Penal sanctions with administrative ones.
The axes and directives also include integrated mechanisms and procedures to ensure the smooth entry of goods related to commercial agencies and the continuity of consumers’ access to them in cases of conflict and litigation between the agency’s parties, in addition to giving existing and fixed-term commercial agencies a transitional period of time to adjust their conditions and reach new contracts with clients.
With regard to the draft federal law on cooperatives, His Excellency Abdullah bin Touq Al Marri said that the cooperative sector represents one of the important sectors for promoting economic diversification and meeting the requirements of sustainable economic and social development. Between production, consumer, financial, housing, sports cooperatives, and even in the fields of health and education.
His Excellency clarified that the new draft law allows the establishment of various forms of cooperatives in the country and take advantage of the economic and development opportunities offered by this vital sector and work to enhance its contribution to the GDP, as the cooperatives currently existing in the country represent most of them consumer cooperatives and their contribution to the output does not exceed The 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 state’s economic model, and serves the development trends for the next stage.”
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