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    • Chapter 16: AML/CFT Compliance

      • Introduction

        Global efforts to prevent the abuse of financial systems to launder money or finance terrorist activities is extremely important. This chapter provides standards that every Licensed Person must follow at all times in order to protect the Licensed Person from abuse by money launderers and/or terrorist financiers. The Licensed Person must ensure that its Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) Compliance is in line with applicable Laws and Regulations of the UAE regarding Criminalization of Money Laundering (“AML/CFT Laws and Regulations”).

      • 16.1 Compliance Program

        1. 16.1.1The Licensed Person must carefully design, document and effectively implement its compliance program based on standards under Paragraphs 16.2 to 16.30 of this Chapter at a minimum; and
        2. 16.1.2The Licensed Person must implement additional AML/CFT procedures, systems, controls and measures as appropriate to the risk profile of its business.
      • 16.2 ML/FT Risk Assessment

        1. 16.2.1The Licensed Person must identify, assess and understand the money laundering and financing of terrorism (ML/FT) risks associated with its business on a regular basis;
        2. 16.2.2The Licensed Person must implement a ML/FT risk assessment methodology as appropriate to the nature, size and complexity of its business;
        3. 16.2.3Money laundering and terrorist financing risks associated with the following parameters of the Licensed Person must be assessed at a minimum:
          1. a)Customer Risk;
          2. b)Counterparty Risk (i.e. foreign correspondent banks, financial institutions, agents, etc.);
          3. c)Product Risk;
          4. d)Jurisdictional Risk or Country Risk; and
          5. e)Delivery Channel Risk or Interface Risk.
        4. 16.2.4The Licensed Person must identify and assess ML/FT risks based on additional parameters that may be relevant to the nature, size and complexity of its business before entering into any business relationships;
        5. 16.2.5In assessing ML/FT risks, the Licensed Person must have the following in place:
          1. a)Documented risk assessment methodology, process and findings;
          2. b)Determine the level of overall risk, acceptable level of risk and mitigating measures to be applied to minimise the impact of risks;
          3. c)Keep risk assessments up-to-date through periodic reviews; and
          4. d)Establish appropriate mechanisms to provide information on risk assessments to the Central Bank and to Examiners, whenever required.
        6. 16.2.6The Licensed Person should also be guided by the results of the National Risk Assessment in conducting its own ML/FT risk assessments which will be issued by the competent authority in the UAE in future; and
        7. 16.2.7The Licensed Person must identify and assess the ML/FT risks that may arise in relation to the development of new products and services including new delivery mechanisms and the use of new or developing technologies for both new and existing products, as follows:
          1. a)Undertake the risk assessment prior to the launch or use of such products, services and technologies;
          2. b)Take appropriate measures to manage and mitigate risks;
          3. c)Notify the Banking Supervision Department of the product and its risks, risk mitigation measures; and
          4. d)Obtain a Letter of No Objection from the Banking Supervision Department prior to launching the product.
      • 16.3 AML/CFT Policies and Procedures

        1. 16.3.1The Licensed Person must introduce a comprehensive and documented AML/CFT Policy, based on its ML/FT risk assessment in accordance with Paragraph 16.2 of this Chapter, which must be the foundation of its compliance function;
        2. 16.3.2The AML/CFT Policy must clearly define the roles and responsibilities of the Manager in Charge, Compliance Officers, Compliance Committee and employees in relation to AML/CFT compliance. The AML/CFT Policy must also provide for regular and timely reporting to the Board of Directors (or to the Owner/Partners where there is no Board of Directors) regarding ML/FT risks and the culture/values to be adopted within the business of the Licensed Person to prevent money laundering, terrorist financing and related crimes;
        3. 16.3.3The AML/CFT Policy must affirm the roles and responsibilities of the Board of Directors (if any) and of the Owner/Partners/Shareholders in relation to implementing a robust compliance program across the business of the Licensed Person;
        4. 16.3.4Effective AML/CFT Procedures must also be implemented for employees to follow while they carry out their day to day responsibilities in order to ensure that ML/FT risks are mitigated in the day to day operations of the Licensed Person;
        5. 16.3.5The AML/CFT Policy and Procedures must be based on the UAE’s existing AML/CFT Laws, Regulations, Notices and the Standards as well as international best practices and guidance notes from the FATF, MENAFATF, EGMONT Group and other similar bodies;
        6. 16.3.6The AML/CFT Policy and Procedures must be approved by the Manager in Charge, the Compliance Officer and by the Board of Directors (or by the Owner/Partners where there is no Board of Directors);
        7. 16.3.7The AML/CFT Policy and Procedures must be reviewed and updated, annually at a minimum, to make it consistent with all applicable Laws, Regulations, Notices, the Standards and other international best practices and to make it effective in mitigating the existing as well as emerging ML/FT risks;
        8. 16.3.8Copies of the AML/CFT Policy and Procedures must be held in all licensed premises and must be accessible to all employees at all times; and
        9. 16.3.9The AML/CFT Policy and Procedures must be circulated among all employees upon the completion of periodical reviews.
      • 16.4 Appointment of the Compliance Officer

        1. 16.4.1The Licensed Person must appoint a Compliance Officer who must be given the specific responsibility of managing its AML/CFT compliance function;
        2. 16.4.2The Compliance Officer of the Licensed Person must:
          1. a)be a member of Senior Management;
          2. b)report directly to the Board of Directors (or to the Owner/Partners where there is no Board of Directors);
          3. c)be provided with sufficient resources including time, systems, tools and support staff depending on the nature, size and complexity of its business; and
          4. d)be provided with unrestricted access to all information related to products or services, business partners, correspondent agents, remittance partners, customers and transactions.
        3. 16.4.3The following are some of the major responsibilities of the Compliance Officer (the list is not exhaustive):
          1. a)Design an appropriate AML/CFT compliance program for the Licensed Person to remain compliant with applicable AML/CFT Laws, Regulations, Notices, the Standards and international best practice at all times;
          2. b)Establish and maintain appropriate AML/CFT policies, procedures, processes and controls;
          3. c)Ensure day-to-day compliance of the business against internal AML/CFT policies and procedures;
          4. d)Act as the key contact point regarding all AML/CFT related matters/ queries from the Central Bank and any other competent authorities;
          5. e)Receive suspicious transaction alerts from employees and analyze them to take appropriate decisions to report all suspicious cases to the FID;
          6. f)On-going monitoring of transactions to identify high-risk, unusual and suspicious customers/transactions;
          7. g)Submit Suspicious Transaction Reports to the FID in a timely manner;
          8. h)Cooperate with and provide the FID with all information it requires for fulfilling their obligations;
          9. i)Develop and execute AML/CFT training programs considering all relevant risks of ML/FT and financing illicit organizations including the ways/means for addressing them;
          10. j)Provide necessary reports to the Board of Directors (or to the Owner/Partners where there is no Board of Directors) on all AML/CFT issues, on a quarterly basis at a minimum;
          11. k)Arrange to retain all necessary supporting documents for transactions, KYC, monitoring, suspicious transaction reporting and AML training for the minimum period for record retention as per Paragraph 16.24 of this Chapter;
          12. l)Conduct regular gap analysis between the Licensed Person’s existing AML/CFT Procedures and current Laws, Regulations, Notices and the Standards of the UAE in order to determine the extent of the Licensed Person’s level of compliance;
          13. m)Propose actions required to address gaps, if any; and
          14. n)Prepare Bi-Annual Compliance Reports in accordance with Paragraph 16.25 of this Chapter.
        4. 16.4.4The Compliance Officer must have the following qualifications and experience at a minimum:
          1. a)If the Licensed Person is in possession of a Category A License:
            • •A minimum of three (3) years of experience in AML/CFT compliance, audit or risk management within any financial institution(s).
          2. b)If the Licensed Person is in possession of either a Category B or Category C License:
            • •A minimum of eight (8) years of experience in AML/CFT compliance, audit or risk management within any financial institution(s); or
            • •A minimum of five (5) years of experience in AML/CFT compliance, audit or risk management within any financial institution(s) and possess a specific certification related to AML/CFT compliance.
          3. c)Examples of specific certifications related to AML/CFT compliance includes ACFCS, CFE, ICA Diplomas, CAMS or any other certification associated with financial crime control or AML/CFT compliance which is acceptable to the Central Bank; and
          4. d)The Compliance Officer, in all above cases, must possess sound knowledge of all applicable AML/CFT Laws, Regulations, Notices, the Standards and other relevant international best practices.
        5. 16.4.5Grace Period to comply with Paragraph 16.4.4 of this Chapter:
          1. a)A Licensed Person, who has obtained the license to carry out Exchange Business prior to the date of issuing the Standards, must comply with the requirements of Paragraph 16.4.4 of this Chapter on or before 31st December 2018; and
          2. b)Regardless of the grace period under Paragraph 16.4.5 (a) of this Chapter, the Central Bank reserves the right to instruct any Licensed Person to comply with the requirements of Paragraph 16.4.4 of this Chapter at any time prior to 31st December 2018, if it deems it necessary.
        6. 16.4.6Employment Type and Residential Status of the Compliance Officer:
          1. a)The Compliance Officer must be a full time employee of the Licensed Person;
          2. b)The Compliance Officer must not engage in any part time employment or act as a consultant outside the business of the Licensed Person;
          3. c)The Compliance Officer must be a resident in the UAE; and
          4. d)A foreign national must be under the employment visa of the Licensed Person when employed as a Compliance Officer.
        7. 16.4.7Conflict of Interest in Multiple Roles:
          1. a)The role of Compliance Officer must not be combined with any other functions of the Licensed Person.
        8. 16.4.8Reporting Lines and Independence:
          1. a)The Compliance Officer must directly report to the Board of Directors (or to the Owner/Partners where there is no Board of Directors); and
          2. b)The Compliance Officer must have authority to act without any interference from the Manager in Charge or other employees of the Licensed Person.
        9. 16.4.9Prior Approval for Appointment:
          1. a)A Letter of No Objection must be obtained for appointing a Compliance Officer by submitting the following documents to the Banking Supervision Department:
            • •Letter from the authorized signatory of the Licensed Person seeking the Letter of No Objection from the Central Bank;
            • •Duly completed APA Form (Refer to Appendix 5 for this Form) along with all required supporting documents; and
            • •Undertaking letter from an authorized signatory of the Licensed Person confirming the binding commitment of the Compliance Officer and the Licensed Person to comply with Paragraphs 16.4.6, 16.4.7 and 16.4.8 of this Chapter.
          2. b)The Central Bank shall conduct a fit and proper test on the proposed Compliance officer of the Licensed Person. The Central Bank reserves the right to:
            • •interview the proposed Compliance Officer as part of the fit and proper test, if it deems it necessary; and
            • •issue or decline the approval for the proposed Compliance Officer.
          3. c)In case the prior approval is rejected by the Central Bank, the Licensed Person must propose a new Compliance Officer within the timeline provided by the Central Bank in the Letter of Rejection. If a specific timeline is not provided in the Letter of Rejection, then the Licensed Person must propose a new Compliance Officer within a period of one hundred and eighty (180) calendar days from the date of Letter of Rejection; and
          4. d)Full details of the Compliance Officer must be provided to the FID via email to: cbuaeamlscu@cbuae.gov.ae (Refer to Notice Number 1401/2010 issued by the Central Bank on 16th March 2010).
        10. 16.4.10Resignation of the Compliance Officer and Notification to the Central Bank:
          1. a)The Licensed Person must notify the Banking Supervision Department, within five (5) working days, in case the Compliance Officer resigns or vacates the office in any other manner with reason thereof via email to: info.ehs@cbuae.gov.ae;
          2. b)The Licensed Person must appoint a permanent replacement, within a period of one hundred and eighty (180) calendar days from the date when the position of the Compliance Officer falls vacant, after obtaining a Letter of No Objection from the Banking Supervision Department (Refer to Paragraph 16.4.9 of this Chapter for more information); and
          3. c)The Alternate Compliance Officer must be available to ensure the continuity of the AML/CFT compliance function during the period when the Compliance Officer’s position is vacant.
        11. 16.4.11Outsourcing of Compliance Function:
          1. a)The Licensed Person must not outsource the role of the Compliance Officer nor the entire compliance function under any circumstances. However, the Licensed Person is permitted, under certain circumstances, to outsource some specific AML compliance tasks after obtaining the Letter of No Objection from the Banking Supervision Department. Please refer to Paragraph 9.1.2 (a) of Chapter 9.
        12. 16.4.12Removal of the Compliance Officer:
          1. a)The Central Bank reserves the right to remove the Compliance Officer of a Licensed Person at its sole discretion;
          2. b)The Licensed Person, in such cases, must comply with Paragraph 16.4.10 (b) of this Chapter; and
          3. c)The Central Bank reserves the right to communicate or not to communicate reasons to the Licensed Person for its decision to remove the Compliance Officer.
      • 16.5 Appointment of the Alternate Compliance Officer

        1. 16.5.1The Licensed Person must appoint an Alternate Compliance Officer to strengthen the AML/CFT compliance function subject to the following conditions:
          1. a)The Alternate Compliance Officer must be a full time employee of the Licensed Person;
          2. b)The Alternate Compliance Officer must not engage in any part time employment or act as a consultant outside the business of the Licensed Person;
          3. c)The Alternate Compliance Officer must be a resident in the UAE;
          4. d)A foreign national must be under the employment visa of the Licensed Person when employed as an Alternate Compliance Officer;
          5. e)The Alternate Compliance Officer must directly report to the Compliance Officer or to the Board of Directors (or to the Owner/Partners where there is no Board of Directors) during the absence of the Compliance Officer;
          6. f)The Alternate Compliance Officer must have authority to act without any interference from the Manager in Charge or other employees of the Licensed Person;
          7. g)If the Licensed Person is in possession of either a Category B or Category C License, the role of its Alternate Compliance Officer must not be combined with any other function of the Licensed Person; and
          8. h)If the Licensed Person is in possession of a Category A License, the role of its Alternate Compliance Officer may be combined with any other function of the Licensed Person which does not create any conflict of interest.
        2. 16.5.2Prior Approval for the Appointment:
          1. a)A Letter of No Objection must be obtained for appointing an Alternate Compliance Officer by submitting the following to the Banking Supervision Department:
            • •Letter from the authorized signatory seeking the Letter of No Objection from the Central Bank;
            • •Duly completed APA Form (Refer to Appendix 5 for this Form) and supporting documents; and
            • •Undertaking letter from the authorized signatory of the Licensed Person confirming the binding commitment of the Alternate Compliance Officer and the Licensed Person to comply with Paragraphs 16.5.1 (a) to (g) of this Chapter.
          2. b)The Central Bank shall conduct a fit and proper test on the proposed Alternate Compliance officer of the Licensed Person. The Central Bank reserves the right to:
            • •interview the proposed Alternate Compliance Officer as part of the fit and proper test, if it deems it necessary; and
            • •issue or decline the approval for the proposed Alternate Compliance Officer.
          3. c)In case the prior approval is rejected by the Central Bank, the Licensed Person must propose a new Alternate Compliance Officer within the timeline provided by the Central Bank in the Letter of Rejection. If a specific timeline is not provided in the Letter of Rejection, then the Licensed Person must propose a new Alternate Compliance Officer within a period of one hundred and eighty (180) calendar days from the date of Letter of Rejection; and
          4. d)Full details of the Alternate Compliance Officer must be provided to the FID via email to cbuaeamlscu@cbuae.gov.ae (Refer to Notice Number 1401/2010 issued by the Central Bank on 16th March 2010).
        3. 16.5.3Resignation of the Alternate Compliance Officer and Notification to the Central Bank:
          1. a)The Licensed Person must notify the Banking Supervision Department, within five (5) working days, in case the Alternate Compliance Officer resigns or vacates the office in any other manner with reasons thereof via email to: info.ehs@cbuae.gov.ae; and
          2. b)The Licensed Person must appoint a permanent replacement, within a period of one hundred and eighty (180) calendar days from the date when the position of the Alternate Compliance Officer falls vacant, after obtaining a Letter of No Objection from the Banking Supervision Department (Refer to Paragraph 16.5.2 of this Chapter for more information).
        4. 16.5.4Removal of the Alternate Compliance Officer:
          1. a)The Central Bank reserves the right to remove the Alternate Compliance Officer of a Licensed Person at its sole discretion;
          2. b)The Licensed Person, in such cases, must comply with Paragraph 16.5.3 (b) of this Chapter; and
          3. c)The Central Bank reserves the right to communicate or not to communicate reasons to the Licensed Person for its decision to remove the Alternate Compliance Officer.
      • 16.6 Continuous Professional Development Programs (CPD)

        1. 16.6.1The Compliance Officer, Alternate Compliance Officer and other employees of the AML/CFT Compliance Department must undergo a minimum of forty eight (48) hours external training in AML/CFT compliance every year; and
        2. 16.6.2Participation in any one or a combination of the following is acceptable in relation to CPD programs in this context:
          1. a)AML/CFT conferences or meetings or workshops whether inside or outside the UAE;
          2. b)face to face training by external agencies whether inside or outside the UAE;
          3. c)training by industry associations or regulatory bodies; and
          4. d)Web based training.
      • 16.7 Know Your Customer (KYC) Process

        1. 16.7.1The Licensed Person must carry out KYC process for its customers in order to confirm who its customers are, and to ensure that the funds involved in their transactions are originating from legitimate sources and used for legitimate purposes;
        2. 16.7.2The Licensed Person must apply an appropriate KYC Process for its customers depending on the ML/FT risks associated with each customer or transaction; and
        3. 16.7.3There are three different types of KYC Processes that must be applied based on the ML/FT risk associated with a customer. These are:
          1. a)Customer Identification (CID) Process;
          2. b)Customer Due Diligence (CDD) Process; and
          3. c)Enhanced Due Diligence (EDD) Process.
      • 16.8 Customer Identification (CID) Process for Natural Persons

        1. 16.8.1The Customer Identification (CID) process, in accordance with Paragraphs 16.8.2 to 16.8.5 of this Chapter, must be applied for natural persons who carry out “foreign currency exchange” transactions of value between AED 3,600 and AED 35,999.75. Please refer to Paragraph 16.13.1 of this Chapter for KYC process to be applied for natural persons who repeatedly exchange foreign currency of value below AED 3,600 per transaction;
        2. 16.8.2The Customer Identification process is the verification of the original identification documents of the customer who is a natural person and systematically recording basic customer information in the Point of Sale system;
        3. 16.8.3The Licensed Person must not accept any identification document (ID) other than one from the below list (in the order of preference) with an exception provided under Paragraph 16.13.2 of this Chapter:
          1. a)Emirates ID; or
          2. b)Passport with valid visa; or
          3. c)GCC National ID for GCC nationals.
        4. 16.8.4Customer’s full legal name, residential status, mobile number, nationality, date of birth, ID type (whether Emirates ID, Passport or GCC national ID) and ID number must be recorded in the Point of Sale system;
        5. 16.8.5The following customer information must be printed on the transaction receipt:
          1. a)Full legal name;
          2. b)Residential status (whether UAE Resident or UAE Non-Resident);
          3. c)Mobile number;
          4. d)Nationality;
          5. e)ID type (whether Emirates ID or Passport or GCC national ID); and
          6. f)ID number.
      • 16.9 Customer Due Diligence (CDD) for Natural Persons

        1. 16.9.1The Customer Due Diligence (CDD) process, in accordance with Paragraphs 16.9.2 to 16.9.11 of this Chapter, must be applied for a natural person who carries out the following transactions:
          1. a)Foreign currency exchange transactions, either one off or multiple in ninety (90) calendar days, of value between AED 36,000 and AED 99,999.75; and
          2. b)Money transfers, whether inward or outward, of value between AED 1 and AED 74,999.75.
        2. 16.9.2Customer Due Diligence (CDD) is the process where additional information about the customer, who is a natural person, is collected via a customer onboarding process in accordance with Paragraph 16.9.3 of this Chapter;
        3. 16.9.3The Licensed Person must create a customer profile by recording the customer information in its Point of Sale system and then provide a permanent “Unique Identification Number (UIN)” to the customer. The customer must be allowed to carry out transactions at the branch(es) of the Licensed Person only by using the Unique Identification Number. The Licensed Person must also comply with Paragraph 16.13.12 of this Chapter at all times;
        4. 16.9.4The following customer information, at a minimum, must be captured in the Point of Sale system in addition to the verification of the original ID in accordance with Paragraph 16.8.3 of this Chapter:
          1. a)Full legal name;
          2. b)Residential status (whether UAE Resident or UAE Non-Resident);
          3. c)Address in the UAE (for UAE Residents);
          4. d)Temporary address in the UAE and the permanent address in the home country (for UAE Non-Residents);
          5. e)Mobile number;
          6. f)Email, if available;
          7. g)Date of Birth;
          8. h)Nationality;
          9. i)Country of Birth;
          10. j)ID type (whether Emirates ID or Passport or GCC national ID);
          11. k)ID number;
          12. l)ID place of issue;
          13. m)ID issue date;
          14. n)ID expiry date;
          15. o)Profession; and
          16. p)Expected annual activity (i.e. expected annual value and number of transactions for future transaction monitoring).
        5. 16.9.5Area or district, city, Emirate or state or province and country must be recorded in the Point of Sale system as part of the address. The Licensed Person is expected to record the P.O Box number, house number/name, apartment or room number, building number/name, street name in the system wherever practically possible;
        6. 16.9.6A copy of the ID must be retained from the original identification document which must be certified (i.e. certified copy) as “Original Sighted and Verified” under the signature of the employee who carries out the customer due diligence process;
        7. 16.9.7The UIN given to a customer by a Licensed Person must be unique in nature and the same UIN must not be assigned to more than one customer. The same customer must not be given more than one UIN by a Licensed Person. Appropriate validation rules must be implemented in the system to comply with this requirement;
        8. 16.9.8The customer profile must be reviewed and updated either annually or upon the expiry of the Identification Document whichever comes first. The original ID as per Paragraph 16.8.3 of this Chapter must be verified and its certified copy must be held in the records during the review of a customer profile;
        9. 16.9.9Information on the “source of funds” and “purpose of transaction” must be captured in the Point of Sale system for each transaction that undergoes the CDD process;
        10. 16.9.10The below customer information must be printed on the transaction receipt, at a minimum:
          1. a)Unique Identification Number (UIN) of the customer;
          2. b)Full legal name of the customer;
          3. c)Address in the UAE (required when the customer is a UAE Resident) - P.O Box number and street (if available), city, Emirate;
          4. d)Permanent address in the home country (required only when the customer is a UAE NonResident) - P.O Box number and street (if available), city, state or province, country;
          5. e)Mobile number;
          6. f)Nationality;
          7. g)ID type (whether Emirates ID or Passport or GCC national ID);
          8. h)ID number;
          9. i)ID place of issue;
          10. j)ID issue date;
          11. k)Method of payment (whether cash or cheque, etc.);
          12. l)Source of funds;
          13. m)Purpose of transaction; and
          14. n)Beneficiary’s name and bank account details (wherever applicable).
        11. 16.9.11The receipt must be signed by the customer and must be retained in the records along with all KYC supporting documents in accordance with Paragraph 16.24 of this Chapter.
      • 16.10 Enhanced Due Diligence (EDD) Process for Natural Persons

        1. 16.10.1During the Enhanced Due Diligence for natural persons, the source of funds and purpose of transaction must be verified and confirmed in accordance with Paragraphs 16.10.2 to 16.10.5 of this Chapter in addition to the CDD process as per Paragraph 16.9 of this Chapter;
        2. 16.10.2Below are the thresholds for the Enhanced Due Diligence for natural persons:
          1. a)Foreign currency exchange transactions of value equal to or above AED 100,000:- Evidence for the source of funds (example: bank statements) must be collected for verification in case the customer pays cash. Complete information of the purpose of the transaction must be collected. Appropriate evidence must be collected for the verification of the purpose of transaction in case there is any doubt or suspicion about the information provided by the customer;
          2. b)Outward money transfers of value equal to or above AED 75,000:- Evidence for the source of funds (example: bank statements) must be collected for verification if the customer pays cash. Complete information on the purpose of the transaction must be collected. Appropriate evidence must be collected for the verification of the purpose of transaction in case there is any doubt or suspicion about the information provided by the customer; and
          3. c)Inward money transfers of value equal to or above AED 75,000:- Full information for the source of funds and the purpose of transaction must be collected and recorded. Appropriate evidences must be collected for the verification of the purpose of transaction in case there is any doubt or suspicion about the information provided by the customer.
        3. 16.10.3The following customer information must be printed on the transaction receipt, at a minimum:
          1. a)Unique Identification Number (UIN) of the customer;
          2. b)Full legal name of the customer;
          3. c)Address in the UAE (required when the customer is a UAE Resident) - P.O Box number and street (if available), city, Emirate;
          4. d)Permanent address in the home country (required only when the customer is a UAE NonResident) - P.O Box number and street (if available), city, state or province, country;
          5. e)Mobile number;
          6. f)Nationality;
          7. g)ID type (whether Emirates ID or Passport or GCC national ID);
          8. h)ID number;
          9. i)ID place of issue;
          10. j)ID issue date;
          11. k)Method of payment (whether cash or cheque, etc.);
          12. l)Source of funds;
          13. m)Purpose of transaction; and
          14. n)Beneficiary’s name and bank account details (wherever applicable).
        4. 16.10.4The receipt must be signed by the customer and must be retained in the records along with all KYC supporting documents in accordance with Paragraph 16.24 of this Chapter; and
        5. 16.10.5The Licensed Person must give special attention to transactions by natural persons who are visitors in the UAE. The Licensed Person may decide to perform the Enhanced Due Diligence on such customers regardless of their transaction value in case there is any doubt or suspicion about the information provided by such customers.
      • 16.11 Enhanced Due Diligence (EDD) Process for Legal Entities

        1. 16.11.1The EDD process, in accordance with Paragraphs 16.11.2 to 16.11.11 of this Chapter, must be applied for a customer at the time of onboarding (i.e. prior to entering into any business relationship), if it is a legal entity. The EDD must include verification of the identity of the legal entity (i.e. its licenses, incorporation documents, etc.) and identification of its ultimate beneficial owners;
        2. 16.11.2The Licensed Person must verify appropriate documents and retain copies to confirm information under Paragraph 16.11.3 of this Chapter. The following process must be followed at a minimum while onboarding a legal entity as a customer:
          1. a)An appropriate KYC Questionnaire of the Licensed Person must be completed and signed by the legal entity;
          2. b)Ownership structure of the legal entity must be collected including the purpose and nature of the intended business relationship;
          3. c)Collect copies of valid permissions/licenses of the entity from competent authorities to carry out the business (examples: certificate of incorporation, trading license or equivalent, license issued by the Central Bank or other competent authorities where applicable, etc.). Certify these copies as “Original Sighted and Verified” by the employee of the Licensed Person who carries out the KYC process after the verification of originals;
          4. d)Licensed Person must carry out a ML/FT risk assessment on business activities of the legal entity by visiting its business location. Also, carry out a risk assessment of its customers;
          5. e)Original identification documents (in accordance with Paragraph 16.8.3 of this Chapter) of Ultimate Beneficial Owners (UBO) must be verified and retain the copies after certification by the employee of the Licensed Person as “Original Sighted and Verified”;
          6. f)Collect the list of authorized signatories and verify their original identification documents (copies to be certified as “Original Sighted and Verified” and must retain in the records);
          7. g)Assess and record the expected annual activity (annual value and number of transactions for future transaction monitoring);
          8. h)Authorization letter must be taken for representatives of the legal entity who carry out transactions on its behalf;
          9. i)Verify original identification documents of representatives, who have authorization to carry out transactions, in accordance with Paragraphs 16.8.3 and 16.9.6 of this Chapter (copies to be certified as “Original Sighted and Verified” and must retain in the records). Such representatives must be UAE residents. The relationship of such representative with the legal entity must be established;
          10. j)Apply sanction checks and internet searches on the name of the legal entity, Ultimate Beneficial Owners, group companies, subsidiaries and the names of representatives of the legal entity who are authorized to carry out transactions on its behalf;
          11. k)Apply FPEP checks on Ultimate Beneficial Owners and where the Ultimate Beneficial Owner is a FPEP, the Licensed Person must collect the information about the source of wealth of such UBO; and
          12. l)Both the Manager in Charge and the Compliance Officer must approve the business relationship with legal entities. Where an Ultimate Beneficial Owner is FPEP, the business relationship with such legal entity must be established only after obtaining approval of the Board of Directors (or of the Owner/Partners where there is no Board of Directors).
        3. 16.11.3The following information about the customer, which is a legal entity, must be recorded in the Point of Sale system, at a minimum, to create the customer profile and the “Unique Identification Number” (UIN) after completing the Enhanced Due Diligence process under Paragraphs 16.11.1 and 16.11.2 of this Chapter:
          1. a)Full legal name of the entity;
          2. b)Residential status (whether incorporated/operating within the UAE or outside the UAE);
          3. c)Address (P.O Box, Shop No., Building name, Street, City, Emirate, Country);
          4. d)Phone numbers;
          5. e)Fax number;
          6. f)Email;
          7. g)Date of establishment;
          8. h)ID type (whether trade license or the equivalent);
          9. i)Trade license (or the equivalent) number;
          10. j)Trade license (or the equivalent) place of issue;
          11. k)Trade license (or the equivalent) issue date;
          12. l)Trade license (or the equivalent) expiry date;
          13. m)Type of business of the entity;
          14. n)Names and ID details, such as ID types and ID numbers, of Ultimate Beneficial Owners of the entity;
          15. o)Names and ID details, such as ID types and ID numbers, of persons authorized to carry out transaction on behalf of the entity; and
          16. p)Expected annual activity (i.e. expected annual value and number of transactions for future transaction monitoring).
        4. 16.11.4The Licensed Person must collect appropriate documents to verify and confirm the source of funds, purpose of transaction and the commercial/economic reason for each transaction by legal entities;
        5. 16.11.5The following customer information must be printed on the transaction receipt, at a minimum:
          1. a)Unique Identification Number assigned to the entity (UIN);
          2. b)Full legal name of the entity;
          3. c)Address (P.O Box, Shop No., Building name, Street, City, Emirate, Country);
          4. d)Phone number;
          5. e)Name and ID number of the person representing the legal entity to carry out transactions on its behalf;
          6. f)Country of incorporation;
          7. g)ID type (whether trade license or the equivalent);
          8. h)Trade license (or the equivalent) number;
          9. i)Trade license (or the equivalent) place of issue;
          10. j)Trade license (or the equivalent) issue date;
          11. k)Trade license (or the equivalent) expiry date;
          12. l)Method of payment (whether cash or cheque, etc.);
          13. m)Source of funds;
          14. n)Purpose of transaction; and
          15. o)Beneficiary name and bank account details (wherever applicable).
        6. 16.11.6The receipt must be signed by the representative of the legal entity who carries out the transaction on its behalf and must be retained in the records along with all KYC supporting documents in accordance with Paragraph 16.24 of this Chapter;
        7. 16.11.7The Enhanced Due Diligence must be repeated and the customer profile, including the supporting evidence as per Paragraph 16.11.2 of this Chapter, must be updated annually at a minimum. The Licensed Person must ensure that copies of valid licenses are available in the records at all times. The Enhanced Due Diligence must also be repeated whenever there is a change in the profile of the customer, such as any change in the ownership of an entity;
        8. 16.11.8The Enhanced Due Diligence in accordance with Paragraph 16.11.2 of this Chapter must also be undertaken before entering into below types of business relationships:
          1. a)Foreign correspondent banking arrangements, such as those with banks, exchange houses or any other financial institutions, for the purpose of money transfer services;
          2. b)Money transfer arrangements with instant money transfer service providers;
          3. c)Hedging arrangements with local or foreign institutions;
          4. d)Arrangements to import or export banknotes from/to foreign institutions, such as Banks, exchange houses or other financial institutions outside the UAE; and
          5. e)Arrangements with local or foreign entities to offer special products/services.
        9. 16.11.9All business relationships under Paragraph 16.11.8 of this Chapter must be approved by the Compliance Committee of the Licensed Person;
        10. 16.11.10While undertaking Enhanced Due Diligence as per Paragraph 16.11.8 of this Chapter on entities located outside the UAE, the Licensed Person may:
          1. a)visit the business locations of entities which are located in high risk countries in order to carry out risk assessment as per Paragraph 16.11.2 (d) of this Chapter (i.e. no site visit is required when such entities are located in low or medium risk countries);
          2. b)apply 20% (instead of 5% as per the definition under Appendix 1) in order to identify the Ultimate Beneficial Owners provided that it is a regulated banking institution and 10% (instead of 5% as per the definition under Appendix 1) in all other cases; and
          3. c)collect copies of the identification documents of Ultimate Beneficial Owners on a risk sensitive basis which are certified as “Original Sighted and Verified” by the Compliance Officer of such foreign entities, in case the verification of original documents by the Licensed Person is practically impossible.
        11. 16.11.11The Licensed Person must not enter into any business relationship with a Shell Company or a Shell Bank.
      • 16.12 Transactions by Societies

        1. 16.12.1The Licensed Person must not accept societies such as Co-operative Societies, Charitable Societies, Social or Professional Societies as customers unless they produce a certificate signed by H.E Minister of Community Development confirming their identities and permitting them to collect donations or to make money transfers out of the UAE;
        2. 16.12.2Enhanced Due Diligence in line with 16.11 must be carried out before entering into any business relationship with societies; and
        3. 16.12.3Business relationships with societies must be approved by the Board of Directors (or by the Owner/Partners where there is no Board of Directors) of the Licensed Person.
      • 16.13 Additional Provisions on CID, CDD and EDD

        1. 16.13.1The Licensed Person must apply the CID process in accordance with Paragraph 16.8 of this Chapter for a natural person who repeatedly exchanges foreign currency (example: once in a week) of value below AED 3,600 per transaction;
        2. 16.13.2The Licensed Person may accept a Seaman’s Pass/ID in order to complete the KYC Process, instead of acceptable IDs listed under Paragraph 16.8.3 of this Chapter, from natural persons who carry out the following transactions:
          1. a)Foreign currency exchange transactions of aggregate value up to AED 35,999.75 per week; and
          2. b)Money transfer transactions of aggregate value up to AED 27,000 per week.
        3. 16.13.3The Licensed Person, while accepting transactions under Paragraph 16.13.2 of this Chapter, must apply the CID process in accordance with Paragraph 16.8 of this Chapter for foreign currency exchange transactions and the CDD process in accordance with Paragraph 16.9 of this Chapter for money transfer transactions (except Paragraph 16.8.3 of this Chapter) at a minimum;
        4. 16.13.4The Licensed Person must apply the EDD process that is effective and proportionate to the ML/FT risks, including obtaining the approval of the Manager in Charge and the Compliance Officer, for establishing business relationships or one-off transactions with:
          1. a)FPEPs (Refer to Paragraph 16.20 of this Chapter);
          2. b)customers from high risk jurisdictions as identified by FATF and/or similar bodies;
          3. c)unusually complex transactions or those which have no clear economic or legal purpose;
          4. d)UAE Non-Resident customers; and
          5. e)transactions which the Licensed Person considers as high risk.
        5. 16.13.5The Licensed Person must conduct the EDD process for a customer, irrespective of the value of transaction, if it has reasonable ground to suspect that the customer is engaging in money laundering or terrorist financing. In case the suspicion continues to exist even after the EDD, the Licensed Person must immediately report such cases to the FID in accordance with Paragraph 16.21 of this Chapter;
        6. 16.13.6The Licensed Person must also conduct the EDD on its existing customers, if:
          1. a)there is a material change in the nature or ownership of a customer who is a juridical person;
          2. b)there is doubt about the reliability or adequacy of information previously obtained in relation to the customer; or
          3. c)there is any other reason that the Licensed Person deems it appropriate.
        7. 16.13.7If it is unable to verify the customer’s identity using reliable and independent sources of data or information, the Licensed Person must:
          1. a)immediately terminate any relationship with the customer; and
          2. b)consider whether it should make a suspicious transaction report to the FID.
        8. 16.13.8The Licensed Person must be able to demonstrate to the Central Bank Examiners that the KYC Process that has been applied is appropriate in view of its risks related to the money laundering, terrorist financing or related financial crimes;
        9. 16.13.9The Licensed Person must carry out the CDD process for every pre-paid card customer in addition to introducing appropriate velocity controls to monitor the activity of the customer based on the number of cards purchased (whether non-reloadable or reloadable) or number of times reloaded (where it is a reloadable card). These transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts;
        10. 16.13.10The customer using automated machines (i.e. Kiosks) for executing transactions must have the Unique Identification Number (UIN) issued by the Licensed Person. In such cases, the Licensed Person must ensure that the customer is not given privileges to add new beneficiaries for conducting money transfers via such Kiosks directly. The Licensed Person must also set a maximum limit, which shall not exceed AED 3,600 per transaction for money transfers via such machines. In any case, the total value of money transfers by a customer via such machines shall not exceed AED 10,000 per month. All such transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts;
        11. 16.13.11The Licensed Person must comply with the instructions and conditions that are stated in the Letter of No Objection issued by the Banking Supervision Department for special products or services;
        12. 16.13.12The Licensed Person must implement appropriate measures/controls to ensure that the Unique Identification Number issued to a customer is being used only by that customer at all times. The Licensed Person may consider the following to comply with this requirement:
          1. a)Verification of the original ID as per Paragraph 16.8.3 of this Chapter prior to accepting transactions from a customer; or
          2. b)Issue ID/Membership/Loyalty Cards that contain the basic customer details (such as name, date of birth, nationality, UIN etc.) including a recent photograph and such original cards must be verified prior to accepting transactions from customers; or
          3. c)Introduce appropriate biometric systems.
        13. 16.13.13 Natural persons, who do not have a valid visa to stay in the UAE, must not be permitted to carry out transactions unless they are in the grace period upon cancellation or expiry of the residence permit or on amnesty;
        14. 16.13.14The Licensed Person must understand the purpose and intended nature of the business relationship and obtain further information in higher risk situations;
        15. 16.13.15 The Licensed Person must have measures/controls in place for conducting on-going due diligence to determine whether transactions are consistent with the profile of the customer;
        16. 16.13.16 The Licensed Person must comply with wire transfer rules as specified in FATF Recommendation 16 for originating institution, beneficiary institution and intermediary institution, as applicable, notwithstanding the amount involved; and
        17. 16.13.17 The Licensed Person must apply the following KYC process for a customer who exchanges low denomination currency notes to larger ones:
          1. a)Customer Due Diligence (CDD) process, in accordance with Paragraph 16.9 of this Chapter, must be applied for a natural person when the value of such transaction is between AED 36,000 and AED 99,999.75;
          2. b)Enhanced Due Diligence (EDD) process, in accordance with Paragraph 16.10 of this Chapter, must be applied for a natural person when the value of such transaction is equal to or above AED 100,000;
          3. c)Enhanced Due Diligence (EDD) process, in accordance with Paragraph 16.11 of this Chapter, must be applied in case the customer is a legal entity irrespective of the value of such transaction; and
          4. d)If there are any reasonable grounds to suspect money laundering and/or terrorist financing, the Licensed Person must file a Suspicious Transaction Report (STR) with the FID, irrespective of the value of such transaction. Please refer to Paragraph 16.21.2 of this Chapter for more information on suspicious transaction reporting.
      • 16.14 Third Party Transactions

        1. 16.14.1A transaction is treated as a third party transaction when it is carried out by a person (hereafter known as ‘the representative’) on behalf of another natural person or a legal entity (hereafter known as ‘the beneficial owner of funds’). The Licensed Person must not accept third party transactions except in cases that are mentioned under Paragraphs 16.14.2 to 16.14.6 of this Chapter;
        2. 16.14.2The Licensed Person may accept the transaction by a natural person on behalf of another natural person subject to the following conditions:
          1. a)The representative must produce a duly executed Power of Attorney (PoA) from the beneficial owner of funds to carry out such transactions. Where there is no PoA, the beneficial owner of funds must issue a letter authorizing the representative to carry out transactions on his/her behalf. The beneficial owner of funds must visit the Licensed Person to sign such letter of authority, the validity of which shall not exceed two (2) years from the date of issue;
          2. b)The letter of authority must refer to the type of transactions (whether currency exchange or money transfer) which the representative is authorized to carry out on behalf of the beneficial owner of funds as well as the identification details of both parties. The letter must also include the beneficiary details in the case of a money transfer transaction;
          3. c)The signature of the beneficial owner of funds in the letter of authority must be verified against that in the passport or the Emirates ID;
          4. d)The representative and the beneficial owner of funds must both be resident in the UAE;
          5. e)Original identification documents of both parties must be collected and verified in addition to retaining the copies of such identification documents certified as “Original Sighted and Verified”;
          6. f)The beneficial owner of funds must undergo the CDD process in accordance with Paragraph 16.9 of this Chapter. The EDD process must be applied, when applicable, in accordance with Paragraph 16.10 of this chapter;
          7. g)All transactions must be recorded in the system against the Unique Identification Number of the beneficial owner of funds. Name and ID details of the representative must also be recorded in the Point of Sale system;
          8. h)The names of both parties must be subjected to the sanction/FPEP screening. In the case of money transfer transactions, the beneficiary’s name as well as the name of beneficiary bank must also be appropriately screened;
          9. i)The name of the representative must be printed separately on the transaction receipt in addition to the information of the beneficial owner of funds in accordance with Paragraph 16.9.10 or 16.10.3 of this Chapter, whichever is applicable; and
          10. j)All such transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts.
        3. 16.14.3The Requirement under Paragraph 16.14.2 of this Chapter is not applicable, where the transaction is carried out by a natural person on behalf of another natural person who is either working as domestic helper (examples are: house maid, cook, servant, cleaner, etc.) or unable to visit the licensed premises due to the inherent nature of their work/living conditions, subject to the following conditions:
          1. a)The representative must produce a letter signed by the beneficial owner of the funds authorizing the representative to carry out transactions. This letter of authority must refer to the type of transactions (whether currency exchange or money transfer) which the representative is authorized to carry out on behalf of the beneficial owner of funds as well as the identification details of both parties. The letter must also include the beneficiary details in the case of a money transfer transaction;
          2. b)The total value of transactions, whether foreign currency exchange or inward/outward remittance, shall not exceed AED 24,000 during a rolling three hundred and sixty five (365) days from the date of the first transaction for each beneficial owner of funds;
          3. c)The representative and the beneficial owner of funds must both be resident in the UAE;
          4. d)Original identification documents of both parties must be collected and verified in addition to retaining the copies of such identification documents certified as “Original Sighted and Verified”;
          5. e)The representative must undergo the CDD process in accordance with Paragraph 16.9 of this Chapter. The EDD process must be applied, when applicable, in accordance with Paragraph 16.10 of this Chapter. The Licensed Person is expected to take all measures practically possible to confirm that such transactions are genuine without leaving any chance for doubt or confusion for misuse of this arrangement;
          6. f)All such transactions must be recorded in the system against the Unique Identification Number of the representative. The name and ID details of the beneficial owner of funds must also be recorded in the Point of Sale system. The SMS notifications in accordance with Paragraph 4.9 of Chapter 4 must go directly to the beneficial owner of funds;
          7. g)The names of both parties must be subjected to sanction/FPEP screening. In the case of money transfer transactions, the beneficiary’s name as well as the name of beneficiary bank must also be appropriately screened;
          8. h)The name of the beneficial owner of funds must be printed separately on the transaction receipt in addition to the information of the representative in accordance with Paragraph 16.9.10 or 16.10.3 of this Chapter, whichever is applicable;
          9. i)All such transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts; and
          10. j)In case of any doubt or confusion regarding the documents submitted or information provided by the representative, the Licensed Person must insist the beneficial owner of funds to personally visit the Licensed Person to complete the KYC process. If the beneficial owner of the funds refuses to visit the Licensed Person, the relationship must be terminated and the case must be reported to the FID immediately where necessary.
        4. 16.14.4Transactions by a natural person on behalf of another legal entity in the UAE falls under the scope of the EDD Process under Paragraph 16.11 of this Chapter. The conditions under Paragraph 16.14.5 of this Chapter must be applied where the remittance transactions are for importing goods or payment for services;
        5. 16.14.5Remittance transactions from legal entities in the UAE for importing goods or payment for services (i.e. trade related transactions), must only be accepted subject to the below conditions:
          1. a)Enhanced Due Diligence (Please refer to Paragraph 16.11 of this Chapter) must be completed for each legal entity before onboarding the customer;
          2. b)The Licensed Person must establish the commercial/economic reason for each remittance transaction;
          3. c)The Licensed Person must ensure that supporting documents, such as Invoices, are in the name of the legal entity in the UAE and the goods are destined for the UAE;
          4. d)The names of all parties involved in the transaction such as names of remitter (i.e. legal entity), its Owner/Partners/Shareholders, authorized person who carries out the transaction (i.e. the representative) and beneficiary must undergo sanction/FPEP screening for each transaction;
          5. e)Preference must be given to settle such transactions through a bank, either by cheque or via bank transfer, instead of accepting cash;
          6. f)The Licensed Person must collect the original Bill of Lading/Airway Bill for the post transaction (i.e. after executing such transactions) verification, whenever the same is issued. A copy of the original Bill of Lading/Airway Bill certified as “Original Sighted and Verified” under the signature of the employee who carries out the KYC Process must be retained;
          7. g)The Licensed Person must also track the movement of such goods using an appropriate container/vessel tracking system when the settlement of the underlying transaction is in cash. Appropriate logs and evidences must be maintained by the Licensed Person for such tracking;
          8. h)All such transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts; and
          9. i)The authorized person who carries out the transaction (i.e. the representative) on behalf of the legal entity must be a resident in the UAE.
        6. 16.14.6Where a legal entity in the UAE (i.e. the remitter) which remits on behalf of another entity outside the UAE (i.e. beneficial owner of funds) who imports goods or pays for services, the Licensed Person must accept such transactions subject to the below conditions:
          1. a)The Licensed Person must undertake the EDD on the remitter which must be in accordance with Paragraph 16.11 of this Chapter;
          2. b)The Licensed Person must also undertake the EDD on the beneficial owner of funds;
          3. c)There must be at least one shareholder or partner common to both entities (i.e. legal entity in the UAE and the entity outside the UAE);
          4. d)In case, there is no shareholder or partner common to both entities, then there must be a legally valid agreement between the remitter and the beneficial owner of funds, authorizing the remitter to carry out such transaction;
          5. e)All documents related to the incorporation of the entity outside the UAE (i.e. beneficial owner of funds) and the agreement between both the parties must be appropriately attested by relevant authorities in the respective foreign country and in the UAE;
          6. f)The name of the beneficial owner of the funds and its Owner/Partners/Shareholders must be captured in the POS system in addition to the required information of the remitter as per Paragraph 16.11.3 of this Chapter. Names of all parties involved in the transaction such as names of the remitter, beneficial owner of funds, Owner/Partners/Shareholders of both entities, authorized person who carries out the transaction (i.e. the representative) and beneficiary must undergo sanction/FPEP screening for each transaction;
          7. g)The Licensed Person must establish the commercial/economic reasons for each remittance transaction;
          8. h)The Licensed Person must ensure that supporting documents, such as invoices, are in the name of the beneficial owner of funds and the goods are destined for the home country of the beneficial owner of the funds;
          9. i)Preference must be given to settle such transactions through bank, either by cheque or via bank transfer, instead of accepting cash;
          10. j)The name of beneficial owner of funds must be printed on the receipt in addition to the information of the remitter as per Paragraph 16.11.5 of this Chapter;
          11. k)The Licensed Person must collect the original Bill of Lading/Airway Bill for post transaction verification whenever it is issued. A copy of the original Bill of Lading/Airway Bill certified as “Original Sighted and Verified” under the signature of the employee who carries out the KYC Process must be retained;
          12. l)The Licensed Person must track the movement of goods via an appropriate container/vessel tracking system in all cases of such remittance transactions. Appropriate logs and evidences must be maintained by the Licensed Person for such tracking;
          13. m)All such transactions must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts;
          14. n)In case of any doubt or confusion regarding the documents submitted or information provided by the beneficial owner of funds, remitter or representative, then the Licensed Person must exit the relationship and the case must be reported to the FID immediately; and
          15. o)The authorized person who carries out the transaction (i.e. the representative) on behalf of the legal entity in the UAE must be a resident in the UAE.
        7. 16.14.7The Licensed Person must not accept any transactions from a natural person, who is acting in personal capacity, on behalf of any foreign entity or a natural person who is a UAE Non-Resident.
      • 16.15 Declaration Regarding Importing of Cash (DRIC)

        1. 16.15.1The Licensed Person must comply with the Cash Declaration Regulations dated 09th January 2011 and any subsequent amendments thereto;
        2. 16.15.2The Licensed Person must collect and retain the original DRIC if the customer exchanges the full amount as stated in the DRIC;
        3. 16.15.3In case the customer exchanges only part of the total amount stated in the DRIC, then the actual amount of currency exchanged by the Licensed Person must be endorsed on the original DRIC under the signature of the employee who carries out the KYC process and under the official stamp of the Licensed Person. In such cases, the original DRIC can be returned to the customer, but its copy after endorsement must be retained with the Licensed Person;
        4. 16.15.4In case the amount of any partial exchange is endorsed on a DRIC, the Licensed Person who accepts such DRIC must exchange only the balance of the amount of currencies to ensure that the total amount of currency exchanged by the customer using the same DRIC does not exceed the total value stated in the DRIC; and
        5. 16.15.5The DRIC form collected from a customer must not be treated as evidence for the source of funds or the purpose of a transaction. Appropriate due diligence procedures must be conducted and supporting documents as evidence for the source of funds or purpose of transaction must be collected whenever and wherever necessary.
      • 16.16 Recruitment and Know Your Employee (KYE) Process

        1. 16.16.1The Licensed Person must implement an appropriate recruitment and Know Your Employee process for hiring employees in accordance with Paragraph 8.2 of Chapter 8.
      • 16.17 AML Training

        1. 16.17.1The Licensed Person must provide comprehensive AML/CFT compliance training to all employees including its Manager in Charge, functional heads, Directors of the Board and Owner/Partners/Shareholders. The Licensed Person is required to coordinate with the FID regarding such training;
        2. 16.17.2The AML/CFT compliance training must be provided to all new joiners within thirty (30) calendar days from the date of joining. The new joiners must not be allowed to serve any customer independently until they have successfully completed such training. Refresher training must be provided to all employees at regular intervals;
        3. 16.17.3The frequency of refresher AML/CFT compliance training may be determined based on the ML/FT risk exposure of each employee. Employees who deal directly with customers, products or services must be trained at least annually at a minimum;
        4. 16.17.4Refresher training must also be provided whenever there are changes in the AML Laws, Regulations, Notices, the Standards or the Licensed Person’s AML policy/procedures;
        5. 16.17.5Appropriate processes must be implemented to periodically assess the AML/CFT awareness of employees and repeat training must be planned based on the result of such assessment process;
        6. 16.17.6Appropriate AML/CFT training registers must be maintained in order for the Central Bank Examiners to verify the training history of each employee;
        7. 16.17.7Evidence for all trainings conducted such as, the training policy, training materials, training register, training plan, training schedules, assessment sheets, training certificates, etc. must be retained for the verification by the Central Bank Examiners;
        8. 16.17.8The AML/CFT training materials must be reviewed and updated at regular intervals or whenever there are changes in the AML Laws, Regulations, Notices, the Standards and the Licensed Person’s AML Policy/ Procedures; and
        9. 16.17.9The AML/CFT training materials must cover, at a minimum:
          1. a)Money laundering and terrorist financing, definitions, typologies as well as recent trends;
          2. b)ML/FT risks associated with the products and services offered by the Licensed Person;
          3. c)AML/CFT policies and procedures including the highlights on recent changes;
          4. d)The regulatory responsibilities and obligations of employees under AML/CFT Laws, Regulations, Notices and the Standards;
          5. e)Description of Know Your Customer process and its importance;
          6. f)Due Diligence measures and procedures for monitoring transactions;
          7. g)Sanction screening and FPEP screening procedures;
          8. h)Red flags to identify unusual transactions or transaction patterns or customer behaviours;
          9. i)Processes and procedures of making internal disclosures of unusual transactions;
          10. j)Roles of the Compliance Officer and Alternate Compliance Officer including their full contact details;
          11. k)Tipping off;
          12. l)Record retention policy;
          13. m)Reference to industry guidance and other sources of information;
          14. n)Emerging ML/FT risks and measures to mitigate such risks;
          15. o)Penalties for non-compliance with the AML/CFT Laws, Regulations, Notices and the Standards; and
          16. p)Disciplinary procedures to be applied on employees for not adhering to the AML Policy and Procedures.
      • 16.18 Transaction Monitoring

        1. 16.18.1The Licensed Person must continuously monitor transactions on a risk-sensitive basis which must consist of the following:
          1. a)Scrutinizing the transactions concluded by a customer to ensure that transactions are consistent with the Licensed Person’s knowledge of the customer, the customer’s business, risk profile, the source of funds and where necessary, source of the customer’s wealth; and
          2. b)Reviewing the records of a customer to ensure that documents and information collected using KYC measures and ongoing monitoring for the customer are kept up-to-date and relevant.
        2. 16.18.2The Licensed Person must introduce automated systems and tools to support transaction monitoring appropriate to the nature, size and complexity of its business;
        3. 16.18.3The monitoring systems must be configured to identify abnormal/unusual transactions, patterns of activities or behaviours of customers by defining sufficient number of rules and parameters within the system. Special attention must be given to third party transactions while defining rules and parameters;
        4. 16.18.4Information related to the expected annual activity collected at the time of customer onboarding process must be used to assess any deviations or unusual behaviours/patterns;
        5. 16.18.5All abnormal/unusual transactions must be investigated and supporting records must be retained for the minimum retention period as per Paragraph 16.24 of this Chapter; and
        6. 16.18.6After investigation of abnormal/unusual transactions, if reasonable grounds are established to suspect money laundering, terrorist financing and/or financing of illicit organizations, such transactions must be reported to the FID immediately. Please refer to Paragraph 16.21.2 of this Chapter for further information.
      • 16.19 Sanction Screening

        1. 16.19.1Appropriate systems must be introduced for real time screening, as part of the KYC process, on all parties involved in a transaction against all applicable sanction lists (i.e. the UN sanction lists and the names contained in the ‘search notices’/‘search and freeze notices’ issued by the Central Bank);
        2. 16.19.2Written processes and procedures for the escalation and clearing of potential sanction matches must be introduced;
        3. 16.19.3The logs/records related to the clearing of potential sanction matches must be available in the system for five (5) years;
        4. 16.19.4The UN sanction lists must regularly and automatically be updated within the Point of Sale/computer systems of the Licensed Person preferably without any manual intervention. Addition and deletion of names in the UN sanction lists must be immediately updated by the Licensed Person as and when such changes are announced by the UN Security Council. Appropriate logs must be maintained in the system to confirm such updates;
        5. 16.19.5In case the name of a customer is an exact match (i.e. a true match) to a name or names in the UN sanction lists or ‘search and freeze notices’ issued by the Central Bank, the Licensed Person must immediately freeze the funds of that customer. The Licensed Person must immediately inform the FID along with the details of the customer and the amount of funds frozen for further instructions. The Licensed Person must not defreeze such amounts without obtaining a confirmation from the FID;
        6. 16.19.6In case the name of a party to a transaction is an exact match to a name or names in ‘search notices’ issued by the Central Bank, the Licensed Person must immediately follow the instructions provided in such notices; and
        7. 16.19.7Sanction screening must be applied in the below cases:
          1. a)In the case of foreign currency exchange transactions, the customer’s name must be screened against the sanction lists;
          2. b)In the case of money transfer transactions, the Remitter’s name and Beneficiary’s name as well as the name of beneficiary bank must be screened against sanction lists;
          3. c)Where the transactions are conducted by a legal entity, the name of the authorised person who carries out the transaction (i.e. the representative) must be screened against sanctions lists in addition to the name of the entity and its Ultimate Beneficial Owners. The Licensed Person, where applicable, must also comply with Paragraph 16.19.7 (b) of this Chapter; and
          4. d)The Licensed Person must also comply with the sanction screening requirements, in the case of third party transactions, as required by Paragraph 16.14 of this Chapter.
      • 16.20 Foreign Politically Exposed Person (FPEP) and Head of International Organization (HIO) Checks

        1. 16.20.1The Licensed Person must implement appropriate systems and tools to determine whether a customer, who is a natural person or the beneficial owner of a juridical person, is a FPEP or HIO or family members or associates of such a person. The Licensed Person must also carry out a periodic review of existing customers to determine if any of them is a FPEP or HIO or a family member or associate of such a person;
        2. 16.20.2Where a natural person is found to be a FPEP or a family member or associate of a FPEP, the Licensed Person must carry out Enhanced Due Diligence to establish business relationship and to conduct transactions accordingly. In addition to this, the Licensed Person must also take reasonable measures to determine the source of funds and collect the information regarding the source of wealth of such customers, if it deems it necessary;
        3. 16.20.3Where a natural person is found to be a HIO or a family member or associate of a HIO, the Licensed Person must assess the level of risks involved and must conduct Enhanced Due Diligence to take measures as appropriate, in case the risk is considered High for ML/FT;
        4. 16.20.4Approval from the Compliance Officer and the Manager in Charge must be obtained before processing any transaction in the Point of Sale system for a natural person who is a FPEP and for high risk HIO;
        5. 16.20.5The Licensed Person must refer to Paragraphs 16.11.2 (k) and (l) of this Chapter for requirements while entering into business relationships with juridical persons (i.e. legal entities) owned by FPEPs; and
        6. 16.20.6All transactions by a FPEP or HIO or by an entity where the Ultimate Beneficial Owner is a FPEP or HIO must be closely monitored by the Compliance Officer. The systems must have the capability to support monitoring of such transactions and must generate necessary exception reports and alerts.
      • 16.21 Suspicious Transaction Reporting

        1. 16.21.1Internal disclosure requirements:
          1. a)The Licensed Person must implement procedures, controls, systems and tools for its employees to internally disclose all suspected cases of money laundering or terrorist financing directly to the Compliance Officer or to an appropriate member of the compliance department without any interference from the Manager in Charge or any other employee of the Licensed Person;
          2. b)All internal disclosures must be thoroughly investigated to confirm if there are reasonable grounds for suspicion;
          3. c)If the investigation of an internal disclosure does not reveal reasonable grounds for suspicion, then the Compliance Officer may decide either to close the case or keep it open for future monitoring; and
          4. d)The Compliance Officer must retain documentary evidence regarding all internal disclosures, details of investigations undertaken and reasons for closing a case or keeping the case open for future monitoring under watch list or for reporting to the FID.
        2. 16.21.2External Reporting to the FID:
          1. a)As a primary requirement of submitting Suspicious Transaction Reports (STR), the Licensed Person must obtain access to the online STR reporting portal of the Central Bank. The Licensed Person may contact the FID or the Banking Supervision Department for appropriate guidance to obtain access to the STR reporting portal;
          2. b)The Compliance Officer must report all cases where there are reasonable grounds to suspect money laundering, terrorist financing and/or financing of illicit organizations to the FID including any attempted transactions by suspicious customers;
          3. c)Procedures and controls must be implemented to ensure timely reporting of suspected cases to the FID;
          4. d)The Licensed Person must comply with all directions of the FID in relation to STRs submitted to them;
          5. e)The Licensed Person must keep appropriate records of STRs reported to the FID; and
          6. f)The Licensed Person must freeze the funds involved in any suspicious transactions related to terrorism, terrorist organizations, foreign terrorist fighters or for terrorism purposes and immediately report to the FID without any delay.
      • 16.22 Tipping Off

        1. 16.22.1Tipping off is prohibited and is a punishable criminal offence. The Licensed Person or its employees must not inform customers or any persons or third parties, either directly or indirectly, that their transactions are subject to monitoring, are under investigation or have been reported to the FID as suspicious transactions; and
        2. 16.22.2The Compliance Officer must ensure that all employees of the Licensed Person are aware of the consequences of tipping off such as penalties and imprisonment. Sufficient AML/CFT training must be provided to all employees to avoid tipping off.
      • 16.23 Employee Behaviour

        1. 16.23.1The Licensed Person must watch out for its employee’s behaviour, such as, an employee whose lifestyle cannot be supported by his/her salary or an employee who is reluctant to take a vacation or is associated with unusually large numbers of transactions, etc.
      • 16.24 Record Retention

        1. 16.24.1All documents/records related to transactions such as transaction receipts (except the receipts as per Paragraph 16.8.5 of this Chapter), KYC, Customer Due Diligence and Enhanced Due Diligence must be retained for a minimum period of five (5) years from the date of transaction;
        2. 16.24.2Records, in the context of Paragraph 16.24.1 of this Chapter, include electronic communication and documentation as well as physical, hard copy communication and documentation;
        3. 16.24.3Records retained by the Licensed Person must be sufficient to permit the reconstruction of individual transactions;
        4. 16.24.4AML training registers, training plans, AML training materials and other evidence for providing AML training must be retained for a period of five (5) years from the date of training;
        5. 16.24.5Supporting documents for the transaction monitoring and investigations carried out on unusual transactions must be retained for a minimum period of five (5) years;
        6. 16.24.6All documents related to STRs including internal disclosures by employees must be retained for a minimum period of five (5) years from the date the STR was reported. In case the matter is subject to litigation in a court or under investigation by an enforcement agency, the supporting documents related to such transactions or STR must be retained until the final verdict is received from the court or until the Licensed Person is notified that the investigation is completed; and
        7. 16.24.7Any other records to demonstrate compliance with the AML/CFT Laws, Regulations, Notices and the Standards must also be retained.
      • 16.25 Bi-Annual Compliance Report

        1. 16.25.1The Compliance Officer must prepare Bi-Annual Compliance Reports (i.e. reports for the six (6) months period ending on 30th June and 31st December of the respective financial year) in order to assess the effectiveness of the Licensed Person’s AML/CFT policies, procedures, systems and controls to prevent money laundering and terrorist financing;
        2. 16.25.2Bi-Annual Compliance Reports must be submitted within one (1) month from the end of each reporting period to:
          1. a)the Compliance Committee; and
          2. b)the Board of Directors (or the Owner/Partners where there is no Board of Directors).
        3. 16.25.3Bi-Annual Compliance Reports must cover at least the following:
          1. a)Assessment of ML/FT risks associated with the business of the Licensed Person and the effectiveness of its Policies, Procedures, Systems and Controls;
          2. b)Summary of the gap analysis between the AML/CFT Program of the Licensed Person and existing AML Laws, Regulations, Notices and the Standards as well as the actions taken by the Compliance Officer to bridge or resolve such gaps;
          3. c)Details of AML/CFT breaches highlighted in the most recent Central Bank examination report and the reports by Internal/External Auditors;
          4. d)The number of internal suspicious disclosures made by employees and the number of cases investigated, closed, kept open for future monitoring or reported to the FID as STRs during the reporting period;
          5. e)The number of suspicious transactions detected and reported to the FID via independent transaction monitoring by the Compliance Officer during the reporting period;
          6. f)Changes in the AML/CFT policies and procedures reviewed and the details of any AML/CFT policy or procedures newly introduced during the reporting period;
          7. g)Statistics on total employees, new joiners during the reporting period, number of employees trained and the number of employees not trained (if any) including reasons for not training employees;
          8. h)Areas where the AML/CFT training programme must be improved and proposals made to enhance the training;
          9. i)Recommendations to the Manager in Charge and the Board of Directors (or to the Owner/Partners where there is no Board of Directors) for the improvement of the AML/CFT function of the Licensed Person;
          10. j)Details of Compliance Officer’s requests for additional human resources, systems, controls, tools and technology changes for the attention of the Board of Directors (or of the Owner/Partners where there is no Board of Directors);
          11. k)An action plan to improve the AML/CFT compliance function for the next six (6) months along with the current status of similar action plan for previous six (6) months; and
          12. l)The conclusion of the Compliance Officer about the effectiveness of the existing AML/CFT function of the Licensed Person.
        4. 16.25.4The Bi-Annual Compliance Report must be approved by the Board of Directors (or by the Owner/Partners where there is no Board of Directors); and
        5. 16.25.5A copy of the Bi-Annual Compliance Report must be submitted to the Banking Supervision Department and the FID along with comments from the Board of Directors (or from the Owner/Partners where there is no Board of Directors) within four (4) months from the end of each reporting period.
      • 16.26 Independent Audit/Agreed-Upon Procedures on AML/CFT Compliance Function

        1. 16.26.1The Compliance officer’s function must undergo regular audit by the Internal Auditor. Internal audit findings must be reported to the Board of Directors (or to the Owner/Partners where there is no Board of Directors);
        2. 16.26.2External Auditors must perform Agreed-Upon Procedures on the AML/CFT Compliance function annually and report their findings directly to the Board of Directors (or to the Owner/Partners where there is no Board of Directors). The Licensed Person must submit a copy of this report to the Banking Supervision Department within four (4) months from the end of each financial year; and
        3. 16.26.3The Board of Directors (or the Owner/Partners where there is no Board of Directors) must ensure that appropriate actions are taken by the Compliance Officer, Manager in Charge and other functional heads to resolve findings of internal and external auditors in a timely manner.
      • 16.27 Uploading of Remittance Data and Responding to Central Bank Queries

        1. 16.27.1The Licensed Person must upload remittance data to the Central Bank Remittances Reporting System on a daily basis. Remittance data must be uploaded before the end of the next business day; and
        2. 16.27.2The Licensed Person must also introduce appropriate systems and tools to enable immediate responses to the enquiries received from the Central Bank (example: Search or Freeze notices) and other competent authorities in the UAE.
      • 16.28 New or Developing Technologies and Products and Transactions

        1. 16.28.1The Licensed Person must pay special attention to any ML/FT risk that may arise from new or developing technologies, products or transactions that may favour anonymity and take measures to prevent the use of such products to launder money or finance terrorism.
      • 16.29 Role of the Compliance Committee

        1. 16.29.1Please refer to Paragraph 6.9.3 of Chapter 6 for the roles and responsibilities of the Compliance Committee.
      • 16.30 Scope of the Standards

        1. 16.30.1The standards under this Chapter shall apply to all Licensed Persons and their branches, offices and subsidiaries operating in the UAE as well as their employees, Board of Directors, Owner/Partners/Shareholders; and
        2. 16.30.2The standards under this Chapter also apply to all branches and subsidiaries of the Licensed Person operating in foreign jurisdictions where the AML/CFT compliance requirements are less stringent than that contained in this Chapter.
      • 16.31 Relationship with Other Documents

        1. 16.31.1AML/CFT Standards of this Chapter must be read in conjunction with the following Laws and Regulations of the UAE:
          1. a)Federal Law number 4 of 2002 regarding Criminalization of Money Laundering;
          2. b)Federal Law Number 9 of 2014 regarding amendment of some provisions in Federal Law number 4 of 2002;
          3. c)Decree Number 38 of 2014 Regarding the Executive Bye Law of the Federal Law number 4 of 2002;
          4. d)Notice No. 24/2000 issued on 14th November 2000 and its subsequent amendments;
          5. e)Notice No. 1401/2010 issued on 16th March 2010; and
          6. f)Any other Notices, Circulars or Regulations issued hereafter by the Central Bank of the UAE on AML/CFT compliance.
    • Regulations for Classification of Loans and Determining Their Provisions

      C 28/2010 Effective from 11/11/2010
      This Circular has been repealed and replaced by Circular No. 3/2024 regarding Credit Risk Management Regulation.
      • Amendments of The Federal Law No. (6) of 2007 on Establishment of the Insurance Authority & Organization of Insurance Operations

        • Amendments of the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities

          • Federal Decree-law No. (26) of 2021 To amend certain provisions of Federal Decree-law No. (20) of 2018 ON ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM AND FINANCING OF ILLEGAL ORGANISATIONS

            Effective from 13/9/2021

            We, Khalifa Bin Zayed Al Nahyan, President of die United Arab Emirates,

            Having perused the Constitution,

            - Federal Law no. (1) of 1972 on Competencies of the Ministries and Powers of the Ministers and its amendments,

            - Federal Law no. (3) of 1987 Issuing the Penal Code and its amendments,

            - Federal Law no. (35) of 1992 Issuing the Penal Procedures Code and its amendments,

            - Federal Law no. (14) of 1995 on fighting narcotics and psychotropic substances and its amendments,

            - Federal Law no. (4) of 2000 on the Emirates Securities and Commodities Authority and Market and its amendments,

            - Federal Law no. (8) of 2004 on the Financial Free Zones,

            - Federal Law (13) of 2004 on the Supervision of Import/Export and Transit of Rough Diamonds and its amendments,

            - Federal Law no. (1) of 2006 on the Electronic Commerce and Transactions,

            - Federal Law no. (39) of 2006 on the International Judicial Cooperation on Criminal Matters,

            - Federal Law no. (51) of 2006 Combating Crimes of Human Trafficking and its amendments,

            - Federal Law no. (6) of 2007 on the establishment of the Insurance Authority and the regulation of its operations and its amendments,

            - Federal Law no. (2) of 2008 on the National Societies and Associations of Public Welfare and its amendment,

            - Federal Law no. (6) of 2010 on the Credit Information, and its amendment,

            - Federal Law no. (5) of 2012 on the Prevention of Information Technology Crimes and its amendments,

            - Federal Decree-Law no. (5) of 2013 on weapons, ammunitions, explosives and military equipment and its amendment

            - Federal Law no. (7) of 2014 on Combating Terrorism Offences,

            - Federal Law no. (2) of 2015 on Commercial Companies and its amendments.

            - Federal Law no. (11) of 2015 on the supervision of trading and stamping of precious metals and stones,

            - Federal Law no. (7) of 2017 on Tax Procedures,

            - Federal Decree-Law no. (7) of 2017 on Excise Tax,

            - Federal Decree-Law no. (8) of 2017 on the Value Added Tax,

            - Federal Decree-Law no. (14) of 2018 regarding the 'Central Bank and the Organization of Financial Institutions and Activities, and its amendment

            - Federal Decree-law No. (20) of 2018, on anti-money laundering and combating the financing of terrorism and financing of illegal organizations

            - And based on the proposal made by the Minister of Finance and the approval of the Cabinet,

            Have promulgated the following Decree-Law:

            • Regulation Amending the Regulations regarding Licensing and Monitoring of Exchange Business

              C 19/2021 Issued on 5/12/2021
              • Housing Loans granted to Beneficiaries of the Home Finance Program of SZHP

                After greetings,

                Please be advised of the following:

                First: In line with Article (5) of the Regulations Regarding Mortgage Loans (Circular No. 31/2013), the Central Bank has decided, in agreement with the Sheikh Zayed Housing Programme (SZHP), as follows:

                1. To increase the debt burden ratio (DBR) to 60% for the beneficiaries of the Home Finance Program of SZHP;
                   
                2. To grant the UAE nationals, with long-term loans, the flexibility to obtain housing loans of SZHP, after ascertaining their ability to repay within the DBR limit of 60%;
                   
                3. Banks may increase the DBR for retirees and senior UAE nationals to 50% so that they can benefit from SZHP housing loans, after ascertaining their ability to repay, within the DBR limit of 50%, and obtaining no-objection from them to raise the monthly deduction from 30% to 50% against the housing loan; and
                   
                4. To cancel the requirement that the borrower contributes to the down payment of 15% for the beneficiaries of the Home Finance Program of SZHP, for the amount of the loan profits/interest of which are explicitly guaranteed and paid by the federal government.
                   

                Under the following conditions:

                1. That the property to be constructed/purchased through financing is the first house for the UAE national and to be used for his personal residence;
                   
                2. That the UAE national shall, if the loan amount exceeds the amount profits/interest of which are explicitly guaranteed and paid by the federal government, pay the difference in the down payment to cover the required 15% from his own resources and not from other sources of borrowing; and
                   
                3. That all other requirements mentioned in the above Regulation and its amendments are complied with.

                Second: Since the federal government guarantees and pays the profits/interest on the above home finance, banks may apply 0% risk-weight for the capital adequacy calculation for loan amount profits/interest of which are explicitly guaranteed and paid.

                Yours faithfully,

                • Amendments to Regulations re Licensing and Monitoring of Exchange Business

                  RES 61/6/2016 Effective from 25/8/2016

                  Chairman of the Board

                  Having perused the provisions of Union Law No. (10) of 1980 concerning the Central Bank, the Monetary System and Organization of Banking;

                  Board of Directors' following Resolutions:

                  1. Resolution No. 31/2/1986 issued on 16/7/1986, regarding organization of the foreign exchange profession in the UAE.
                     
                  2. Resolution No. 123/7/92 issued on 29/11/1992, regarding regulating of money changing business in the UAE.
                     
                  3. Resolution No. 204/7/98 issued on 03/11/1998.
                     
                  4. Resolution No. 15/2/2013 issued on 12/03/2013, regarding new requirements for licensing of money changing business in the UAE.
                     
                  5. Resolution No. 77/7/2013 issued on 27/10/2013, regarding Regulations re Licensing and Monitoring of Exchange Business.
                     
                  6. Resolution No. 104/8/2015 issued on 21/12/2015, regarding postponement of the implementation of certain requirements of Regulations re Licensing and Monitoring of Exchange Business.

                  Circular No. 24/2000 - Regulation concerning Procedures for Anti-Money Laundering and its amendments.

                  The Central Bank's Board of Directors has issued the following resolution:

                  • Introduction

                    Central Bank of the United Arab Emirates, after due consultation with banks operating in the United Arab Emirates, has revised the basis of Classification of Loans and their Provisions, which is in line with the International Prudential Standards. This review will also serve as a catalyst in depicting a truly realistic financial position of banks and other financial institutions.

                    • Clause (1)

                      To replace the wording of the articles no. (1), (2), (6), (9), (12), (13), (14), (15), (17), (19), (22), (23), (25), (26), (28), and (29) of the aforementioned Federal Decree-Law No. (20) of 2018, to be as follows:

                      • Introduction

                        Through this Regulation, the Central Bank is amending Article 3(c) of the Exchange Business Regulation. This amendment also replaces the previous amendment to Article 3(c), contained in Article 1 of Central Bank Board of Director’s Resolution 61/6/2016.

                        • Article One:

                          The texts of paragraph (c) of Article (3) and paragraph (a) of item (2) of Article (4) of Board of Directors Resolution No. 77/7/2013 shall be replaced with the following texts:

                          • Article (1)

                            In application of the provisions of the present Decree-Law, the following terms and expressions shall have the following meanings assigned to them unless the context requires otherwise:

                            State: United Arab Emirates

                            Ministry: Ministry of Finance

                            Minister: Minister of Finance

                            Central Bank: Central Bank of the UAE

                            Governor. Governor of Central Bank

                            Committee: National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organizations

                            Unit: Financial intelligence Unit

                            Supervisory Authority: Federal and local authorities which are entrusted by legislation to supervise financial institutions, designated non-financial businesses professions, Virtual Asset Service Providers and non-profit organizations or the competent authority in charge of approving the pursuit of an activity or a profession in case a supervisory authority is not assigned by legislations.

                            Law-enforcement Authorities: Federal and local authorities which are entrusted under applicable legislation to combat, search, investigate and collect evidences on the crimes including AML/CFT crimes and financing illegal organizations.

                            Competent Authorities: The competent government authorities in the State entrusted with the implementation of any provision of this Decree Law.

                            Predicate Offence: Any act constituting a felony or misdemeanor under the applicable laws of the State whether this act is committed Inside or outside the State when such act is punishable In both countries.

                            Money Laundering: Any of the acts mentioned in Clause (1) of Article (2) of the present Decree-Law.

                            Financing of Terrorism: Any of the acts mentioned in Articles (29, 30) of Federal Law no. (7) of 2014.

                            Illegal Organizations: Organizations whose establishment is criminalized or which exercise a criminalized activity.

                            Financing Illegal Organizations: Any physical or legal action aiming at providing funding to an illegal organization, or any of its activities or its members.

                            Crime: Money laundering crime and related predicate offences, or financing of terrorism or Illegal organizations.

                            Funds: Assets, whatever the method of acquisition, type and form, tangible or intangible, movable or Immovable, electronic, digital or encrypted, Including local and foreign currencies, legal documents and instruments of whatever form, including electronic or digital form that proves ownership of such assets, shares or related rights and economic resources that are assets of any kind, including natural resources, as well as bank credits, cheaques, payment orders, shares, securities, bonds, bills of exchange, letters of credit, and any interest, profits or other incomes derived or resulting from these assets, and can be used to obtain any financing or goods or services.

                            Virtual Assets: A digital representation of the value that can be digitally traded or transferred, and can be used for payment or investment purposes, and otherwise, as specified in the Executive Regulation of this Decree-Law.

                            Proceeds: Funds generated directly or Indirectly from the commitment of any felony or misdemeanor including profits, privileges, and economic interests, or any similar funds converted wholly or partly into other funds.

                            Means: Any means used or intended to be used to commit a felony or misdemeanor.

                            Suspicious Transactions: Transactions related to funds for which there are reasonable grounds to believe that they are earned from any felony or misdemeanor or related to the financing of terrorism or of Illegal organizations, whether committed or attempted.

                            Freezing or seizure: Temporary attachment over the moving, conversion, transfer, replacement or disposition of funds in any form, by an order issued by a competent authority.

                            Confiscation: Permanent expropriation of private funds or proceeds or instrumentalities by a ruling issued by a competent court.

                            Financial Institutions: Anyone who conducts one or several of the financial activities or transactions defined In the Executive Regulation of the present Decree Law for the account of /or on behalf of a client.

                            Designated Nonfinancial Businesses and Professions: Anyone who conducts one or several of the commercial or professional activities defined in the Executive Regulation of this Decree Law.

                            Non-Profit Organizations: Any organized group, of a continuing nature set for a temporary or permanent time period, comprising natural or legal persons or not for profit legal arrangements for the purpose of collecting, receiving or disbursing funds for charitable, religious, cultural, educational, social, communal or any other charitable activities.

                            Legal Arrangement: A relationship established by means of a contract between two or more parties, including but not limited to trust funds or other similar arrangements.

                            Client: Any person involved in or attempts to carry out any of the activities specified in the Executive Regulations of this Decree Law with one of the financial institutions or designated nonfinancial businesses and professions or Virtual Asset Service Providers

                            Beneficial Owner: The natural person who owns or exercises effective ultimate control over the client or the natural person on whose behalf a transaction is being conducted or, the natural person who exercises effective ultimate control over a legal person or legal arrangement, whether directly or through a chain of ownership, control or other indirect means.

                            Virtual asset service providers: Any natural or legal person, who practices any activity of commercial business, conducts one or more of the activities of virtual assets specified in the Executive Regulation of this Decree-Law, or the operations related there to for the benefit or on behalf of another natural or legal person.

                            Transaction: All disposal or use of Funds or proceeds including for example: deposits, withdrawals, transfer, sale, purchase, lending, swap, mortgage, and donation.

                            Registrar: The entity in charge of supervising the register of commercial names for all types of establishments registered In the State.

                            Customer Due Diligance (CDD): The process of identifying or verifying the Information of a Client or Beneficial owner, whether a natural, legal person or a legal arrangement, the nature of its activity, the purpose of the business relationship, the ownership structure, control over it for the purpose of this Decree-Law and its Executive Regulation.

                            Controlled Delivery: The process by which a competent authority allows the entering or transferring of illegal or suspicious funds or crime revenues to and from the State for the purpose of Investigating a crime or identifying the identity of Its perpetrators.

                            Undercover Operation: The process of search and Investigation conducted by one of the judicial impoundment officer by impersonating or playing a disguised or false role in order to obtain evidence or information related to the Crime.

                            • Article (3): Application for Licence

                              c) 1. An undertaking to provide, in case the application is approved, a bank guarantee drawn in favor of the Central Bank issued by a bank licensed in the UAE, provided that the guarantee value at any point of time shall not be less than the higher of the following:

                              1. 100% of the minimum paid-up capital required as specified in Paragraph (a) of Article (4.2) of these Regulations, or
                                 
                              2. 5% of the monthly remittance average value of the previous financial year, with a maximum of AED 75,000,000 (Seventy Five Million).

                              2. In the case of carrying on payment of wages activity, the value of payments using WPS shall be restricted to the bank guarantee drawn in favor of the Central Bank according to the Standards issued as indicated in Article (11) bis of these Regulations.

                            • Article (2)

                              1. Any person, having the knowledge that the funds are the proceeds of a felony or a misdemeanour, and who wilfully commits any of the following acts, shall be considered a perpetrator of the crime of Money Laundering:
                                 
                                1. Transferring or moving proceeds or conducting any transaction with the aim of concealing or disguising their Illegal source.
                                   
                                2. Concealing or disguising the true nature, source or location of the proceeds as well as the method involving their disposition, movement, ownership of or rights with respect to said proceeds.
                                   
                                3. Acquiring, possessing or using proceeds upon receipt
                                4. Assisting the perpetrator of the predicate offense to escape punishment
                              2. The crime of Money Laundering is considered as an independent crime. The punishment of the perpetrator for the predicate offence shall not prevent his punishment for the crime of Money Laundering
                                 
                              3. Proving the illicit source of the proceeds should not constitute a prerequisite to sentencing the perpetrator of the predicate offence
                              • Article (4.2): Conditions for Granting of Licence

                                1. Paid-up capital of the Licensed Person is not less than AED 2,000,000 (Dirhams two million) for carrying on purchase, sale and exchange of foreign currencies in the form of bank notes, coins and travelers cheques, and not less than AED 5,000,000 (Dirhams Five Million) for carrying on remittance business within and outside the UAE in addition to sale and purchase of foreign currencies and travelers cheques, and not less than AED 10,000,000 (Dirhams Ten Million) for carrying on payment of wages through connecting to the Central Bank's system in addition to remittance business and sale/purchase of foreign currencies and travelers cheques, and not less than AED 50,000,000 (Dirhams fifty million) if the legal status of the Licensed Person is a Limited Liability Company (L.L.C), regardless of the activity.
                              • Article (6):

                                1. Without prejudice to the provisions of Article (5) of this Decree-Law, no criminal proceedings shall be Instituted against the perpetrator of money laundering, financing terrorism, or financing of illegal organizations in accordance with the provisions of this Decree-Law except by the public prosecutor or his delegate
                                2. The Public prosecutor or his delegate and the competent court as the case may be shall issue a decision to take the necessary procedures to protect the intelligence Information and the means and methods of obtaining such information or Instruct the competent authorities to protect the witnesses, or the undisclosed sources, the accused or other parties involved in the case if there is a serious threat to their safety.
                              • Article (9):

                                Central Bank of the UAE shall establish an independent “Financial Intelligence Unit” to which suspicious transaction reports, Information on all financial institutions and designated nonfinancial businesses and professions Virtual Asset Service Providers shall be sent exclusively for consideration, analysis, and referral to the competent authorities, either automatically or upon request The Financial Intelligence Unit shall have competence over the following:

                                1. Requesting financial Institutions and designated nonfinancial businesses and professions. Virtual Assets Service Providers and the competent authorities to submit any information or further documentation related to received reports and information and other information deemed necessary for Financial intelligence Unit to perform its duties on schedule and in the form determined by the Unit.
                                   
                                2. Exchanging information with its counterparts in other countries, with respect to Suspicious Transactions Reports or any other information to which the Financial Intelligence Unit has exclusive access or is the exclusive recipient, whether directly or Indirectly, according to international agreements to which the State is a party or bilateral agreements signed by the Financial Intelligence Unit with its counterparts governing bilateral cooperation or conditional upon reciprocity, the financial intelligence unit may communicate to its counterparts its findings derived from the use of the information provided by its counterparts and the results of the analysis conducted based on this information. Such Information shall be used only for the purposes of combating the crime and shall not be disclosed to third parties without the Financial Intelligence Unit’s permission.
                                   
                                3. Establishing a database or a special register to record all available information and to implement data privacy and data security procedures to protect this information including procedures for handling, archiving transferring and accessing the data, and make sure that access to its premises, its database and its technology systems is restricted.
                                   
                                4. Any other competencies to be specified in the Executive Regulation attached to the present Decree-Law.
                              • Article (12):

                                The Committee shall have the following competences:

                                1. Preparing and developing a national strategy to combat crime and proposing related regulations, policies and procedures in coordination with the competent authorities, and monitoring their implementation.
                                   
                                2. Determining and assessing the risks of the crime on the national level.
                                   
                                3. Coordinating with the relevant authorities and referring to related international sources of information in order to identify high-risk countries in addition to the countries that their combat systems in relation to money laundering and financing of terrorism are weak, Moreover, to identify the necessary countermeasures to be taken and other measures commensurate with the degree of risk, and instructing the supervisory authorities to ensure the adherence to the required due diligence procedures by financial institutions, designated nonfinancial businesses and professions, virtual asset service providers and non-profit organizations which are under their supervision in order to implement the said measures.
                                   
                                4. Facilitating the exchange of information and coordination among the various bodies represented therein.
                                   
                                5. Collecting and analyzing statistics and other information provided by the Competent Authorities to assess the effectiveness of their Regulations on combating Money laundering. Terrorism financing and financing of illegal organizations.
                                   
                                6. Representing the State in International forums related to AML/CTF.
                                   
                                7. Proposing the Regulation covering the work of the Committee, and submitting it to the Minister for approval.
                                   
                                8. Any other matters referred to the Committee by Competent Authorities in the State.
                                   
                              • Article (13):

                                The Supervisory Authorities shall, each within the scope of its competence, carry out supervision, monitoring and follow up to ensure compliance with the provisions provided for in the present Decree-Law and its executive regulation, regulatory decisions in addition to any other related decisions and shall have in particular, the following competences

                                1. Conduct a risk assessment on the likelihood of the perpetration of a Crime within the financial institutions, designated nonfinancial businesses and professions, and activities of virtual assets and activities of virtual asset service providers and non-profit organizations
                                   
                                2. Conduct Control and audit inspections over financial institutions, designated nonfinancial businesses and professions, virtual assets service providers and non-profit organizations, both remotely and on site.
                                   
                                3. Issue the decisions related to the administrative penalties in accordance with the provisions of this Decree-Law and its Executive Regulation, the grievance mechanism, and keep statistics of measures taken and penalties Imposed.
                                   
                                4. Any other competencies stipulated in the Executive Regulation of the present Decree-Law
                              • Article (14):

                                1. Without prejudice to any more severe administrative penalty provided by any other legislation, the Supervisory authority shall impose the following administrative penalties on the financial institutions, designated nonfinancial businesses and professions, and virtual assets service providers and non-profit organizations in case they violate the present Decree-Law and its Executive Regulation or regulatory decisions in addition to any other related decisions:
                                   
                                  1. Warning
                                     
                                  2. Administrative fine of no less than AED 50,000 (fifty thousand dirham) and no more than AED 5,000,000 (five million dirham) for each violation.
                                     
                                  3. Banning the violator from working in the sector related to the violation for the period determined by the supervisory authority.
                                     
                                  4. Constraining the powers of the Board members, supervisory or executive management members, managers or owners who are proven to be responsible of the violation Including the appointment of temporary supervisor.
                                     
                                  5. Arresting Managers, board members and supervisory and executive management members who are proven to be responsible of the violation for a period to be determined by the Supervisory Authority or request their removal.
                                     
                                  6. Arrest or restrict the activity or the profession for a period to be determined by the supervisory authority
                                     
                                  7. Cancel the License.
                                     
                                2. Except for paragraph (g) of Clause (1) of this Article, The Supervisory Authority may upon imposing the administrative penalties, request regular reports on the measures taken to correct the violation.
                                   
                                3. In any case, the Supervisory Authority shall publish the administrative penalties through various means of publication.
                              • Article (15):

                                The Financial institutions and designated nonfinancial businesses and professions in addition to the virtual assets service providers shall, upon suspicion or if they have reasonable grounds to suspect a transaction or funds representing all or some proceeds, or suspicion of their relationship to the Crime or that they will be used regardless of their value, to inform the Unit without delay, directly and provide the Unit with a detailed report Including all the data and information available regarding that transaction and the parties involved, and to provide any additional Information required by the Unit, with no right to object under the confidentiality provisions.

                                However, Lawyers, notaries, other legal professionals and independent legal auditors shall be exempted from this provision if the information related to these operations have been obtained subject to professional confidentiality

                                The Executive Regulation of the present Decree-Law shall determine the rules, controls and cases of the obligation to report suspicious transactions

                              • Article (17):

                                All authorities shall abide by the confidentiality of the information obtained in relation to suspicious transaction or the crimes provided for in this Decree-Law, and such information may not be disclosed except to the extent necessary for use in investigations, prosecutions or cases in violation of the provisions of this Decree-Law.

                              • Article (19):

                                1. Competent Authorities shall give priority to requests for international cooperation related to countering money laundering and combating terrorism financing and ensure prompt handling of those requests and take efficient measures to ensure the confidentiality of the information received
                                   
                                2. In application of the present Decree-Law, the request for international cooperation shall not be rejected based on any of the following grounds:
                                   
                                  1. That the crime involves tax and financial affairs
                                     
                                  2. That the crime is political or related to politics.
                                     
                                  3. That the confidentiality provisions apply to financial Institutions and designated nonfinancial businesses and professions without prejudice to the legislations applicable in the State.
                                     
                                  4. That the request is connected to a crime under investigation or Judicial prosecution in the UAE unless the request win impede on the investigation or prosecution.
                                     
                                  5. Any other cases mentioned in the Executive Regulation hereof.
                                     
                                3. The rules, controls and procedures governing international cooperation are contained in the Executive Regulation of this Decree-Law
                              • Article (22):

                                1. Any person who commits or attempts to commit any of the acts set forth in Clause (1) of Article 2 of this Decree-Law shall be sentenced to imprisonment for a period not exceeding ten years and to a fine of no less than (100,000) AED one hundred thousand and not exceeding (5,000,000) AED five Million or either one of these two penalties.
                                   
                                2. A temporary imprisonment and a fine of no less than AED 300,000 (three hundred thousand dirham) and no more than AED 10,000,000 (ten million dirham) shall be applied If the perpetrator of a money laundering crime commits any of the following acts:
                                   
                                  1. If he abuses his influence or the power granted to him by his profession or professional activities
                                  2. If the crime is committed through a non-profit organization
                                  3. If the crime is committed through an organized crime group
                                  4. In case of Recidivism
                                     
                                3. An attempt to commit a money laundering offense shall be punishable by the full penalty prescribed for it
                                   
                                4. A life imprisonment sanction or temporary imprisonment of no less than (10) ten years and penalty of no less than AED 300,000 (three hundred thousand dirham) and no more than AED 10,000,000 (ten million dirham) is applied to anyone who uses Proceeds for terrorist financing.
                                   
                                5. A temporary imprisonment sanction and a penalty of no less than AED 300,000 (three hundred thousand dirham) and no more than AED 10,000,000 (ten million dirham) shall be applicable to anyone who uses the Proceeds in financing illegal organizations.
                                   
                                6. The Court may at the request of the Attorney General, his delegate, or on its own initiative commute or exempt from the sentence imposed on the offenders if they provide the Judicial or administrative authorities with information relating to any of the offenses punishable in this article, when this leads to the disclosure, prosecution, arrest the perpetrators or seizure Its proceeds.
                              • Article (23):

                                1. A penalty of no less than AED 500,000 (five hundred thousand) and no more than AED 50,000,000 (fifty million dirham) shall apply to any legal person whose representatives or managers or agents commit for its account or its name any of the crimes mentioned In this Decree-Law
                                   
                                2. If the legal person is convicted with terrorism financing crime or financing illegal organizations, the court will order its dissolution and closure of its offices where its activity is performed.
                                   
                                3. Should a legal person is convicted of any of the crimes stipulated In Clause (1) of Article (2) or Article (8) of this Decree-Law, the court may prevent him from practicing his activity for a specified period, or cancel the license, restriction or registration to practice activity.
                                   
                                4. Upon issuance of the indictment, the court shall order the publishing of a summary of the judgment by the appropriate means at the expense of condemned party
                                   
                              • Article (25):

                                Imprisonment for no less than one year and a penalty of no less than AED 100,000 (one hundred thousand dirham) and no more than AED 500,000 (five hundred thousand dirham) or any of these two sanctions shall apply to anyone who notifies or warns a person or reveals any transaction under review in relation to suspicious transactions or being investigated by the Competent Authorities or to investigate them or any Information related to a violation of the provisions of Article (17) of this Decree-Law

                              • Article (26):

                                1. The court shall, once the perpetration of the crime is verified, confiscate the following:
                                   
                                  1. Funds subject matter of the crime, proceeds and instrumentalities.
                                  2. Any funds owned by foe perpetrator with an equivalent value to the funds, Proceeds and instrumentalities mentioned in paragraph (a) of this clause if it fails to confiscate those funds

                                If it is not possible to rule for the confiscation of funds, proceeds or instrumentalities due to their failure to seize them or because they are related to the rights of bona fide third parties, the court shall pass a fine equivalent to its value at the time of the crime.

                                1. The confiscation shall be Imposed Irrespective of whether the funds, Proceeds, or Instrumentalities are owned by or in possession of the perpetrator or a third party without prejudice to the rights of third party acting in good faith
                                   
                                2. The fact that the offender is unknown, lack of his criminal responsibility, or the criminal case for a crime punishable under the provisions of this Decree-Law is elapsed does not preclude the competent court from ruling on its own or at the request or the Public Prosecution, as the case may be, to confiscate the seized funds, proceeds and instrumentalities if it is proven mat they are related to the same.
                                   
                                3. Without prejudice to the rights of bona fide third parties, any contract or act where the parties, or any one of them or otherwise are aware that such contract or act aims at impacting the ability of the competent authorities to enforce the seizure, freezing or the execution of the confiscation order, shall be void
                              • Article (28):

                                Imprisonment of no less than a year and no more than (7) seven years, or a fine of no less than AED 50,000 (fifty thousand dirham) and no more than AED 5,000,000 (five million dirham) shall be applied to any person who violates the instruction issued by the Competent authority in the State for the implementation of the directives of UN Security Council under Chapter (7) of UN Convention for the Suppression of the Financing of Terrorism and Proliferation of Weapons of Mass Destruction and other related decisions

                              • Article (29):

                                1. If any foreigner is convicted of a money laundering crime or any felonies mentioned in this Decree-Law, and is given a sanction restricting his freedom, he must be deported from the UAE
                                   
                                2. Without prejudice to Clause (1) of this article, if any foreign person is convicted for other criminal offences provided hereunder this Decree-Law, and is given a sentence restricting his freedom, the court may decide to deport him from the UAE or order him to be deported instead of Imposing a sanction restricting his freedom
                                   
                                3. The criminal case shall not be subject to the statute of limitations for money laundering or financing terrorism or illegal organizations crimes. The sanctions shall not lapse with time or with the lapse of any related civil legal cases due to statute of limitations
                                   
                                4. This Decree Law shall not prejudice the provisions of refereed Federal Law (7) of 2014
                                   
                                5. The Financing of Illegal organizations is considered a crime if its purpose is to undermine the internal security of the State or its vital interests thereof and terrorism financing crime and the offense punishable in Article (28) of this Decree-Law are considered as crimes Intended to undermine the internal and external security of the State
                        • Objectives

                          The objective of this set of Regulations is to identify a framework suitable for evaluating the loans and advances portfolio, in line with standards adopted by Basel Committee and international best practices. The same should be applied for suspension of interest.

                          • Clause (2)

                            New articles bearing the numbers (16) bis, (25) bis, and (26) bis shall be added to the aforementioned Federal Decree-Law No. (20) of 2018, as follows:

                            • Scope

                              This Regulation applies to all Licensed Persons to which the Exchange Business Regulation applies.

                              • Article Two:

                                A new Article No. (11) bis shall be added to the Board of Directors Resolution No. (77/7/2013), as follows:

                                • Article (16) bis:

                                  1. Any natural or legal person may not engage in the activities of virtual assets service providers or any of the financial activities without a license, registration or registration, as the case may be, from the competent supervisory authorities.
                                     
                                  2. For the purposes of this Decree-Law, the Executive Regulations shall regulate the obligations of virtual assets service providers.
                                  • Article (11) bis: The Standards of the Regulations Regarding Licensing and Monitoring of Exchange Business "the Standards".

                                    The Central Bank shall issue the following Standards:

                                    1. Licensing and Continued Obligations Standards
                                    2. Management of the Business and Governance Standards
                                    3. Risk Management and Security Standards
                                    4. Anti-Money Laundering Compliance Standards
                                    5. Customer Protection Standards
                                    6. Appendices

                                    Appendix 1: Definitions

                                    Appendix 2: Applicable Laws, Regulations and Notices

                                    Appendix 3: List of Compulsory Reports and Forms

                                    Appendix 4: Non-Compliance Charges

                                    The Standards are an integral part of the Regulations Regarding Licensing and Monitoring of Exchange Business, and all Licensed Persons shall adhere to the provisions of the Standards once circulated and come into effect

                                  • Article (25) bis:

                                    Imprisonment for no less than (3) three months and a penalty of no less than AED 50,000 (fifty thousand dirham) or any of these two sanctions shall apply to whoever possesses, conceals or performs any operation of funds when there is sufficient evidence or presumption of the illegality of its source.

                                    Upon conviction, the court shall rule for confiscation in accordance with the provisions of Article 26 of this Decree-Law.

                                  • Article (26) bis:

                                    Imprisonment for no less than six months and a penalty of no less than AED 200,000 (two hundred thousand dirham) and no more than AED 5,000,000 (five million dirham) or any of these two sanctions shall apply to anyone who violates the provisions of Article (16) bis of this Decree-Law

                              • Classification of Loans

                                Banks, finance companies and investment companies shall establish and maintain regular procedures for classifying loans and advances they extend to their customers, in a way that would allow them to monitor and identify such loans and advances that manifest features of weakness. For this purpose, loans and advances should be classified within levels (1) to (5), according to their conditions and per usual banking standards, as follows:-

                                • clause (3)

                                  Any provision that violates or conflicts with the provisions of this Decree-Law shall be revoked

                                  • Objective

                                    The objective of this Regulation is to amend Article 3(c) of the Exchange Business Regulation in order to enhance the regulatory and supervisory framework for Exchange Business in the United Arab Emirates.

                                    • Article Three:

                                      This Resolution shall be published in the official gazette in both Arabic and English Languages and become effective from date of publication, and shall be communicated to whomsoever is concerned for implementation.

                                      • 1. Normal Loans

                                        These are loans and advances which bear normal banking risk, whereby information available to the bank assure repayment as agreed.

                                      • 2. Watch-List Loans

                                        These are loans and advances which show some weaknesses in the borrower’s financial condition and credit-worthiness, requiring more than normal attention but not allocation of provisions.

                                      • 3. Sub-Standard Loans

                                        These are loans which may lead to incurring of some loss due to adverse factors (financial, economic, legal, political or managerial) which may hinder repayment, or due to weakening of security. Normally, this category includes loans and advances in which payment of principal is in arrears beyond 90 days. In such case, a provision of 25% of total loan balance is required.

                                      • 4. Doubtful Loans

                                        These are loans whose full recovery seems doubtful on the basis of information available, leading, generally, to a loss of part of these loans (when the financial position of the customer is not sound and securities are not sufficient). In such case, a provision of 50% of total loan balance is required.

                                      • 5. Loss Loans

                                        These are loans where the bank has exhausted all courses of action available but failed to recover anything, or where there is a possibility that nothing shall be recovered. In such case, a provision of 100% of total loan balance is required.

                                    • Interest in Suspense

                                      All accrued interest, as in the following cases, should be credited to a special account, to be opened within bank’s records (for the concerned loan) under the name “interest in suspense account” and not to ‘profit and loss account’:-

                                      1. Where the risk relating to the loan or advance has been identified and provision made.
                                         
                                      2. Where due interest is in arrears for a period beyond 90 days. (Banks may suspend interest after a shorter period, if deemed appropriate).
                                      • clause (4)

                                        The present Decree-Law shall be published in the Official Gazette to be entered into effect on the day following the date of publication

                                        The original decree-law is signed by H.H. Sheikh:

                                        • General Remark Regarding Levels of Grading

                                          It should be noted that in the matter of grading an account, its classification and consequently deciding on the extent of the required provisions, there is no substitute for mature judgment, based on the expertise and knowledge, as some of the characteristics mentioned under (3), (4) and (5), which are generally considered an indication of weakness, do not necessarily apply to all cases. However, a bank must be able to give convincing reasons for not classifying a particular loan and consequently not setting aside the necessary provisions, in view of the position of the loan or advance and the creditworthiness of the borrower. Such reasons should be convincing to the Central Bank, whenever requested.

                                          • Article (2): Amendment to the Exchange Business Regulation

                                            2.1 Article 3(c) of the Exchange Business Regulation is hereby deleted and replaced with the following text:

                                            “1. An undertaking to provide, in case the application is approved, and prior to issuing a license, an unconditional and irrevocable bank guarantee drawn in favour of the Central Bank, issued by a Bank licensed by the Central Bank or an unconditional and irrevocable deposit of unencumbered cash funds held in an account at the Central Bank in lieu thereof. The value at any point of time of either of the above, shall not be less than the higher of either:

                                            a) one hundred (100) percent of the minimum Paid Up Capital required as specified in Article (4.2)(a) of these Regulations; or

                                            b) five (5) percent of the full amount equal to the average monthly remittance value of the previous financial year.

                                            2. In the case of carrying on payment of wages activity, the value of payments using WPS shall be restricted to the bank guarantee drawn in favour of the Central Bank according to the Standards for the Regulations Regarding Licensing and Monitoring of Exchange Business.”.

                                          • Overdraft Accounts

                                            In case of overdrafts, banks should be in a position to show evidence that interest earned can be considered real; such evidence should satisfy the Central Bank when requested for. In all other cases, interest should also be kept in suspense, particularly:-

                                            1. When there is doubt regarding payment of interest and/or it has not been paid after 90 days of due date.
                                               
                                            2. When due interest on other accounts of the same customer (or group) other than overdraft account has been actually suspended.
                                               
                                            3. When the outstanding is consistently in excess of the agreed upon limit or when the account is in debit although there is no sanctioned facility.

                                            In case of bad overdraft accounts, banks are not allowed to capitalize interest, or to extend new loans to portray that the account is performing.

                                            The pretense process may be noted when banks show that the reason for the balance increase of these accounts is due to (a) withdrawals, (b) debit entries resulting from interest on the same overdraft or other loans, where repayments are rare for a period of (6) months.

                                            • Article (3): Obligation to notify the Central Bank of breach of regulatory obligations

                                              3.1 Any Licensed Person, which breaches or is likely to breach any regulatory obligation in this Regulation must immediately notify the Central Bank in writing.

                                            • Provisions for Personal Consumer Loans

                                              1. Where installments are in arrears for (90) days:
                                                 

                                                a provision of 25% of loan balance will be made.

                                              2. Where installments are in arrears for (120) days:
                                                 

                                                a provision of 50% of loan balance will be made.

                                              3. Where installments in arrears exceed (180) days:
                                                 

                                                a provision of 100% will be required.

                                              • Article (4): Enforcement & Sanctions

                                                4.1 Violation of any provision of this Regulation and any accompanying Standards may be subject to supervisory action and sanctions as deemed appropriate by the Central Bank.

                                                4.2 Any Licensed Person not meeting the requirements of this Regulation upon its coming into force, may be subject to business restrictions until fully compliant with the requirements of Article 3(c) and must obtain written approval from the Central Bank on an agreed plan setting out clear time frames and deliverables in order to reach full compliance.

                                              • Provisions for Car Loans

                                                1. Where installments are in arrears for (90) days:
                                                   

                                                  a provision of 25% of loan balance will be made.

                                                2. Where installments are in arrears for (120) days:
                                                   

                                                  a provision of 50% of loan balance will be made.

                                                3. Where installments in arrears exceed (180) days, and the sale of the car is hindered for any reason:
                                                   

                                                  a provision of 100% will be required.

                                                • Article (5): Interpretation of Regulation

                                                  5.1 The Regulatory Development Division of the Central Bank shall be the reference for interpretation of the provisions of this Regulation.

                                                • Provisions for Credit Cards

                                                  1. Where balance due is in arrears for (90) days:
                                                     

                                                    a provision of 25% of loan balance will be made.

                                                  2. Where balance due is in arrears for (120) days:
                                                     

                                                    a provision of 50% of balance will be made.

                                                  3. Where balance in arrears exceeds (180) days, and it became unfeasible to reach a settlement with the client, or that he left the country without leaving assets which cover the loan balance or part of it:
                                                     

                                                    a provision of 100% will be required.

                                                  • General Provisions

                                                    In addition to the specific provisions, banks should make general provisions for unclassified loans and advances equal to 1.50%, of the risk weighted assets as per Basel – 2, such provisions must be built over 4 years. Federal government loans and loans of companies owned and/or guaranteed by federal government as well as direct loans of local governments and loans of companies guaranteed by local governments will be exempted.

                                                    • Federal Law No. 5 of 2012 Amending Some Provisions of the Federal Law No. 6 of 2007 concerning the Establishment of the Insurance Authority and Organization of its Operations

                                                      We, Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates

                                                      Having perused

                                                      • The Constitution;
                                                         
                                                      • The Federal Law No. (1) of 1972 concerning the Functions of Ministries and Powers of Ministers and the amending laws thereof;
                                                         
                                                      • The Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority and Organization of its Operations;
                                                         
                                                      • The Federal Law by Decree No. (5) of 2011 concerning the Organization of Boards of Directors, Boards of Trustees and Committees in the Federal Government; and
                                                         
                                                      • Based on the recommendation of the Minister of Economy, the approval of the Cabinet and the Federal National Council, and ratification of the Supreme Council of the Union,

                                                       

                                                      We promulgated the following law:


                                                      Article (1)

                                                      The provisions of Articles (9) and (19) of the Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority and Organization of its Operations shall be replaced with the following provisions:


                                                      Article (9):

                                                      The Authority shall have a board of directors composed of a chairman and a number of directors to be appointed under a Cabinet resolution. The nominees for the Board membership must not have any type of conflict of interest in their membership, throughout the membership term. The resolution to form the Board shall determine the number, remuneration and term of office of the directors.

                                                      In its first meeting, the Board shall elect from its members a Vice Chairman to substitute the Chairman in the event of his absence or if the Chairman is incapacitated.


                                                      Article (19):

                                                      * The revenues of the Authority shall be comprised of the following resources:

                                                      1. Any monies allocated for the Authority by the Government.
                                                         
                                                      2. The fees collected by the Authority.
                                                         
                                                      3. The gifts, grants, donations and aid that are compliant with the Authority's objectives as accepted by the Board.
                                                         
                                                      4. Any other resources approved by the Board.


                                                      Article (2)

                                                      All provisions in contradiction or in conflict with the provisions of this Law shall be repealed.


                                                      Article (3)

                                                      This Law shall be published in the official Gazette, and shall come into force on the following day to the date of its publication.

                                                      • Article (7): Publication & Effective Date

                                                        7.1 This Regulation shall be published in the Official Gazette in both Arabic and English and shall come into effect one month from the date of publication.

                                                      • Provisions for Off-Balance Sheet Items

                                                        Banks are also required to make appropriate provisions for any off-balance sheet items which are doubtful and will certainly become liabilities.

                                                      • Cases Which Qualify for Reducing Provisions and/or Crediting Interest in Suspense

                                                        1. Where a loan shows significant improvement, its classification may either be amended or cancelled, according to the case. And where classification has improved or the loan becomes unclassified due to improvement in borrower’s positions and his repayment became regular, then part of the provisions may be credited to the profit and loss account.
                                                           
                                                        2. Any payment received from the borrower to repay a loan, whose interest was in suspense, may be considered part of interest in suspense. An equivalent to this amount may be credited to profit and loss account, provided that due and full repayment of the remaining outstanding is not subject to any doubt.
                                                      • Share Values

                                                        With regard to reduction in the value of mortgaged shares, kindly refer to adopted accounting treatment, per International Accounting Standards.

                                                      • Investment Values

                                                        With regard to reduction in the value of investments (including real estate), kindly refer to adopted accounting treatment, per International Accounting Standards.

                                                      • Provision Deduction Periods

                                                        All banks and other financial institutions are required to make provisions (specific and general) required for this regulation and deduct them from the profit and loss account at the end of each quarter and not delay them till the end of the financial year.

                                                        Banking Supervision and Examination Department should issue a manual to clarify how banks and other financial institutions should comply with terms of these regulations including submission of reports to the Central Bank.

                                                        Banking Supervision and Examination Department should also issue another manual for its examiners to explain the regulatory procedures relevant to these regulations.

                                                        As such, Circular No. 313 dated 20/12/1984 is hereby cancelled with effect from the date of issuance of these regulations.

                                                        This regulation shall be communicated to the concerned parties for implementation thereof, and shall come into effect from date of its issue.

                                                        This regulation shall be published in the official gazette in both Arabic and English.

                                                        Yours faithfully,

                                                      • Federal Law No. (3) of 2018 on the Amendment of certain Provisions of Federal Law No. (6) of 2007 Concerning the Establishment of the Insurance Authority & Organization of its Operations

                                                        We, Khalifa Bin Zayed Al-Nahayan, the President of the United Arab Emirates,

                                                        - Having pursued the Constitution;
                                                        - Federal Law No. (1) of 1972, concerning to the Competencies of the Ministries and Powers of the Ministers and its amendments;
                                                        - Federal Law No. (5) of 1975 concerning the Commercial Register;
                                                        - Federal Law No. (26) of 1981 concerning Marine Commercial Law and its amendments;
                                                        - Federal Law No. (5) of 1985 concerning the promulgation of Civil Transactions Law and its amendments;
                                                        - Federal Law No. (3) of 1987 concerning the promulgation of Penal Code and its amendments;
                                                        - Federal Law No. (11) of 1992 concerning the promulgation of The Civil Proceedings Law and its amendments;
                                                        - Federal Law No. (35) of 1992 concerning the promulgation of The Criminal Proceedings Law and its amendments;
                                                        - Federal Law No. (21) of 1995, concerning Federal Traffic Law and its amendments;
                                                        - Federal Law No. (1) of 2006 concerning the Electronic Commerce and Transactions;
                                                        - Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority & Organization of its Operations and its amendments;
                                                        - Federal Law No. (2) of 2008 concerning the National Societies and Associations of Public Welfare;
                                                        - Federal Law No. (2) of 2015 concerning Commercial Companies and its amendments;
                                                        - Federal Decree Law No. (9) of 2016 on Bankruptcy;
                                                        - Federal Law No. (14) of 2016, concerning Offences and |Administrative Sanctions in the Federal Government; and
                                                        - Based on the proposal made by the Minister of Economy and the approval of the Cabinet and the Federal National Council and as ratified by the Federal Supreme Council,

                                                        Have promulgated the following Law:

                                                         

                                                        Article One

                                                        Articles numbers: (1), (23), (25), (28), (35), (41), (95), (99) and (110) of Federal Law No. (6) of 2007 referred to herein shall be replaced by the following texts:

                                                        Article (1):

                                                        The following words and phrases shall bear the meanings indicated beside each of them unless the context provides otherwise:

                                                        State: The United Arab Emirates.

                                                        Ministry: The Ministry of Economy.

                                                        Minister: The Minister of Economy.

                                                        Authority: The Insurance Authority established by virtue of the provisions of the law herein.

                                                        Board: The Insurance Authority's Board of Directors.

                                                        Chairman: The Chairman of the Board.

                                                        Director General: The Director General of the Insurance Authority.

                                                        Company: The insurance company incorporated in the State and the foreign insurance company licensed to carry out insurance activities in the State either through a branch, or through an insurance agent.

                                                        Insurer: Any insurance company incorporated in the State or foreign company licensed to carry out insurance operations in the State according to the provisions of the Law herein.

                                                        Insured: The person who has concluded an insurance contract with the company.

                                                        Insurance Agent: The person approved and authorized by the company to carry out insurance operations on its behalf or on behalf of any branch thereof.

                                                        Insurance Policy (Insurance Contract): The insurance document (policy) concluded by the insurer and insured containing the terms and conditions of the contract between the two parties, their obligations, and rights or the rights of beneficiary of the insurance and any endorsements therein.

                                                        Re-insurer: Any re-insurance company incorporated in the State or foreign re-insurance company licensed to carry out insurance operations inside the State or a foreign re-insurance company outside the State.

                                                        Insurance Broker: The person who independently intermediates in insurance and reinsurance operations between the insurance or re-insurance Proposer on one side and any insurance or reinsurance company on the other side and receives for his efforts commission from the insurance company or the re-insurance company with which the insurance or re¬insurance has been concluded.

                                                        Surveyor & Loss Adjuster: The person who examines the damages occurred to the subject matter of the insurance, and assesses them.

                                                        Insurance Consultant: The person, who studies the insurance requirements for his clients, gives advice in respect of the suitable insurance coverage, assists in preparing insurance requisites and receives for his efforts remuneration from his clients.

                                                        Actuary: The person who estimates values of the insurance contracts, policies and the related accounts.

                                                        Insurance-related Professions: Any person licensed by the Authority to practice any of the activities of Insurance Agent, Actuary, Insurance Broker, Surveyor & Loss Adjuster, Insurance Consultant or any other insurance-related profession that the Board decides to regulate.

                                                        Register: The register of insurance companies or insurance agents.

                                                        Data: All data and information (both paper and electronic) relating to any insurance activity, including data related to individuals who can be identified, directly or indirectly.

                                                        Branch: The branch of the company that carry out insurance operations in its name.

                                                        Authorized Manager: The person appointed by the foreign insurance company to manage its branch in the State.

                                                        Beneficiary: The person who acquired the rights of the insurance contract at inception or these rights has been legally transferred thereto.

                                                        Technical Provisions: The provisions which the insurer must deduct and maintain to meet the insured's accrued financial obligations pursuant to the provisions of the law herein.

                                                        Solvency Margin: The surplus in the value of the company's real assets over its liabilities that enables it to fulfil its obligations in full and to pay the required indemnities right away when they befall due without impeding the company operations or weakening its financial position.

                                                        Minimum Guarantee Fund: The amount that equates one third of the required solvency margin or the amount determined by the Board whichever is the greater.

                                                        Auditor: The accounts' auditor licensed to practice work in the State.

                                                        Person: Any natural or legal person.


                                                        Article (23):

                                                        The Board shall issue on a recommendation by the Director General the bylaws, regulations, instructions and decisions pertinent to the insurance operations including:

                                                        1. The Solvency Margin and the Minimum Guarantee Fund, provided the same shall not be less than one third of the Solvency Margin taking the international standards into consideration,
                                                        2. The basis of calculating the Technical Provisions,
                                                        3. The Re-insurance criteria,
                                                        4. The basics of investing the Company’s assets,
                                                        5. Determining the company's assets that meet the accrued insuring obligations.
                                                        6. The accounting policies to be adopted by the company and the requirired forms to prepare reports, financial statements and presentation thereof.
                                                        7. The principles of organizing accounting books and records of each of the companies, Agents, and Brokers and determining the data to be contained in these books and records.
                                                        8. The records which the company shall be obliged to organize and maintain as well as the data and documents shall be made available to the Authority.
                                                        9. The rules of professional practice and code of ethics
                                                        10. Anti-Money laundering and combating terrorism financing in the insurance activities in collaboration with the pertinent bodies.
                                                        11. The rules governing ownership in insurance companies’ capitals, pursuant to the provisions of the Federal Law pertinent to Commercial Companies.

                                                         

                                                        Article (25):

                                                        1. The company may not combine both Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations.

                                                        2. Exception to what is stipulated in paragraph (1) of the article herein, an existing company licensed to practice the two types of insurance prior to the promulgation of this Law may combine Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations, provided that it will comply to do the following:

                                                        (a) Complete separation between Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations in terms of technical, financial, technological, administrative and legal procedures and the relevant requirements in terms of technical, administrative and financial staff, with the exception of the Director-General of the company.

                                                        (b) Preparation of all reports and financial statements required by the Law herein, the instructions and decisions of the Board on a consolidated total basis, and on the basis of the separation between Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations.

                                                         

                                                        Article (28):

                                                        1. Insurance policies concluded in the State shall be written in Arabic and a faithful translation into another language may be attached therewith, and in case of differences over the interpretation of the policy the Arabic text shall prevail.
                                                        2. The policy's articles exempting the company from the liability shall be written in bold letters and different colour and must be acknowledged by the insured.
                                                        3. Insurance policies may be issued electronically, in accordance with the circumstances and conditions established by a decision by the Board.
                                                        4. Exception to paragraph (1) of the article herein, the Director-General may exclude certain insurance policies from the condition of writing them in the Arabic language.

                                                         

                                                        Article (35):

                                                        The company licensed to carry out insurance operations after the implementation of the provisions of the Law herein shall appoint or approve a registered actuary within a month as from date of granting the license thereto, provided reporting the same to the Director General within a month as from date of appointing or approving the actuary. The companies licensed prior to implementing the provisions of the law herein shall adjust their situation in accordance with the provisions of the Article herein within three months as from date of implementing the provisions of the law herein.

                                                         

                                                        Article (41):

                                                        The Authority shall conduct periodical inspection on the insurance and re¬insurance companies to ensure the soundness of their financial situations, and their compliance with the provisions of the law and the technical basis of carrying out the insurance and re-insurance operations. Should the Director General come to know through such inspection or vide sufficient information that one of the following incidents took place, then he shall ensure soundness of such information:

                                                        1. (a) The company did not fulfil its obligations, or it's likely to fall short in doing so or the company is unable to continue its operations.
                                                        2. (b) The company violated the provisions of the law herein, bylaws, regulations, instructions or the decisions issued pursuant thereto.
                                                        3. (c) The company's procedures needed to reinsure the risks accepted by it are inadequate or the company didn't make these procedures, with the exception of the insurance-related professions.
                                                        4. (d) The company has lost one of the required terms and conditions for licensing or registration to carry out the insurance activity.
                                                        5. (e) The company's total losses exceeded (50%) of its paid-up capital.
                                                        6. (f) The company ceased its operations for more than one year without justifiable cause or legitimate reason.

                                                        2. Should the Director General became evident that the said information is correct he shall ask the company to take certain procedures to rectify its position within the period he shall determine, and in case the company failed to do so, the Director General shall refer the matter to the Board to take the necessary actions to rectify these situations; including:
                                                        (a) Request from the company or the main office of the foreign insurance company, as appropriate, to take the necessary action to correct the administrative situations, including the disqualification of the Director-General, the Authorized Manager or any senior official.

                                                        (b) Disqualification of the Chairman of the Board of Directors or any member of the Board that proves accountability for the current status of the Company.

                                                        (c) Dissolving the Company's Board of Directors and appointing a provisional neutral administrative committee of experienced individuals to take its place and appointing a chairman for the committee and a deputy thereof. The functions and competencies of the committee shall be determined for a period not exceeding six months, extendable for a period not exceeding one year in cases where this is required. The company shall be liable for the fees of the committee as determined by the Authority and upon accomplishment of the committee's mission a new Board of Directors shall be elected in accordance with the provisions of the Commercial Companies Law.

                                                        (d) Taking the necessary action to merge the company into another according to the provisions of the Commercial Companies Law.
                                                        (e) Ceasing or cancelling the company's license.
                                                        (f) Restructuring the company.
                                                        (g) Preventing the company from concluding any more insurance contracts or preventing it from practicing a particular type or types of insurance.
                                                        (h) Setting upper limit for the premiums total amounts received by the company for issuing insurance policies.
                                                        (i) Retaining assets in the State equal in value to the company's total net obligations accrued from its operations in the State or a certain percentage of their value as determined by the Board based on the recommendation of the Director General.
                                                        (j) Restricting the company's involvement in any of its investments activities associated with the solvency margin or compeling it to liquidate its investments in any of these activities to serve this purpose, unless such action would cause damage to the company as decided by the expert specialized in this field.
                                                        (k) Appointing an independent observer member from outside the Authority to attend meetings of the Board of Directors of the company and participate in the discussions without having a vote during taking the decision and the Board shall determine his competencies and fees.
                                                        (l) Liquidating the company.

                                                        3. The provisions stipulated in paragraph (1) and (2) of the article herein shall apply to Insurance Related Professions to the extent appropriate to the nature of these professions.

                                                         

                                                        Article (95):

                                                        Exception to the legislation in force in the State, the due debts and obligations of the company subject to liquidation shall be paid according to the following order:
                                                        1. The due entitlements of the staff and employees for the last four months.
                                                        2. The liquidator’s fees, costs, expenditures and the loans he obtained.
                                                        3. The rights of insured and beneficiaries of insurance policies. The liquidator shall be obliged to allot the company's assets that represent the technical provisions required to be retained in accordance with the provisions of the law herein to pay these liabilities and any amounts acquired by the company according to any arrangements of reinsurance shall be deemed part of the technical provisions.
                                                        4. The rights of the other debtors by order of preferences according to the laws in force.
                                                        5. The rights of the shareholders.

                                                         

                                                        Article (99):

                                                        1. The insurance companies, reinsurance companies and insurance-related professions subject to the provisions of the law herein shall establish a professional association to be called "Emirates Insurance Association" that shall have a legal personality and all the insurance companies operating in the State shall be members of the Association. The Association shall form independent committees for the different insurance activities carried out by the members.

                                                        2. The Association shall prepare Articles of Association issued by the Chairman after the Board’s approval under which it shall determine the Association's functions, duties, its relation with the Authority, formation of its committees for different insurance activities, provisions and procedures of its general assembly, formation of its Board of Directors, meetings of each one of them, affiliation fees, annual subscription fees, code of conduct, disciplinary procedures against the members and other related affairs.

                                                         

                                                        Article (110)

                                                        1. The insurance company shall manage insurance claims in accordance with the legislation in force and the provisions of the insurance policies, pursuant to the following procedures:

                                                        (a) Issuing a decision concerning any insurance claim in accordance with the instructions of professionals rules and code of conduct and ethics.

                                                        (b) In case any insurance claim is fully or partially denied, the Company must clarify the reasons for its decision in writing.

                                                        (c) In case of a dispute in relation to a claim, the concerned person may submit a written complaint to the Authority, which in turn may request clarification from the Company.

                                                        (d) In case the complainant has objection on the clarifications provided by the company, he may request that the dispute be referred to the Committee established pursuant to article No. (110).

                                                        2. One or more committees that will be concerned with resolving the disputes arising out of insurance contracts, operations and services shall be formed. The committee (s) shall have the competency to request any official papers or documents and to counsel experts, as well as hearing of witnesses and any other alternatives that need to be used to resolve the disputes before them.

                                                        3. Cases resulting from the disputes arising out of insurance contracts, operations and services shall not be accepted, if such disputes are not brought before the committees established in accordance with the provisions of paragraph No. (2) of the article herein.

                                                        4.The concerned party shall have the right to appeal against the decisions of the committees before the competent first instance court within thirty days of the day following their notification of the decision, otherwise the decision shall be deemed final and enforceable.

                                                        5. The Board shall issue the necessary decisions concerning the composition of the committees established in accordance with the provisions of paragraph No. (2) of the article herein, their competencies, powers, their work system, fees of its members and hired experts, types and classes of insurance for which insurance disputes are resolved before these committees, and other related matters.

                                                         

                                                        Article (2)

                                                        New articles shall be added to the referred herein Federal Law No. (6) of 2007, with the numbers: (23) bis (1), (23) bis (2), (41) bis (1), (41) bis (2) and (41) bis (3), and shall read as follows:

                                                        Article (23) bis (1)

                                                        The Authority may compel those practicing insurance activities of certain types and classes, but not others, and determine the terms, conditions and applicable tariff rates, as well as regulating the rights and obligations of the related parties.

                                                        Article (23) bis (2):

                                                        The Authority may establish funds that have independent legal personality for the purpose of protecting and compensating persons. The Board shall issue a decision to determine how to establish these funds, their objectives, funding, as well as risks covered under these funds, and benefits in case those risks have occurred.

                                                        Article (41) bis (1):

                                                        1. Subject to the provisions of the Law concerning Offences and Administrative Sanctions in the Federal Government, the Authority has the power to impose administrative fines on insurance companies, reinsurance companies and insurance-related professions.

                                                        2. The Cabinet shall issue a decision to determine the offences for which the fines referred to in paragraph (1) of the article herein shall be imposed.

                                                        Article (41) bis (2):

                                                        1. The Director-General shall designate any expert, consultant, actuary or auditor for the purpose of conducting an inspection or audit.

                                                        2. Inspectors and auditors appointed by the Director General shall be given all necessary authorities to enable them to carry out their duties, including:

                                                        (a) Accessing records, registers, statements and internal audit reports. As well as collecting information and requesting necessary clarifications from the insurance company, reinsurance company, insurance-related profession and the members in respect of the insurance operations they carry out. In addition to obtaining prints or copies of records, registers and statements.

                                                        (b) Collecting the necessary information and clarifications from the members of the group of insurance company or reinsurance company in relation to all records, operations and activities relating to the insurance company.

                                                        (c) Collecting the necessary information and clarifications from any third party that has a relation with the insurance company, reinsurance company or the insurance-related profession concerning the subject matter of auditing.

                                                        Article (41) bis (3):

                                                        Any insurance company, reinsurance company or insurance-related profession, or any of their managers or employees shall not:

                                                        1. Prevent, intercept or obstruct any person appointed by the Director General to carry out inspections or audits pursuant to the law herein.

                                                        2. Conceal any data, registers or books requested by the Director General or the person appointed by him to perform the inspection or auditing duties.

                                                        3. Issue any misleading statements or give any inaccurate data, registers or books.

                                                         

                                                        Article (3)

                                                        The current Articles of Association of the Emirates Insurance Association stipulated in article (99) of the Federal Law No. (6) of 2007, referred to herein shall continue to remain in force without prejudice to the provisions of the law herein until the new Articles of Association is issued by the Authority, within six months from the effective date of this law.

                                                        Article (4)

                                                        Paragraph (3) of article (24) and the articles from (100) to (108) of Federal Law No. (6) of 2007, referred to herein shall be cancelled.

                                                        Article (5)

                                                        Any provision in conflict or contradiction with the provisions of the Law herein shall be cancelled.

                                                        Article (6)

                                                        This Law shall be published in the Official Gazette and shall take effect as of the following day of its publication.

                                                      • Decretal Federal Law No. (24) of 2020 on the Amendment of Certain Provisions of the Federal Law No. (6) of 2007 on Establishment of the Insurance Authority & Organization of Insurance Operations

                                                        We, Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates,

                                                        Having perused the constitution;

                                                        - Federal Law No (1) of 1972, Regarding Jurisdictions of Ministries and Powers of Ministers, and amendments thereto;
                                                        - Federal Law No. (6) of 2007 On Establishment of the Insurance Authority & Organization of Insurance Operations and the amendments thereto;
                                                        - Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities and the amendments thereto;
                                                        - Decretal Federal Law No. (26) of 2018 On Public Finance;
                                                        - And based on the approval of the Cabinet,

                                                        Promulgated the following Decretal Law:

                                                        • Article (2)

                                                          1. The word (Authority “IA”) shall be replaced by the phrase “The Central Bank”, wherever mentioned in Federal Law No. (6) of 2007 referred to herein.
                                                          2. The word (Minister) shall replaced by the word “Chairmen”, wherever mentioned in Federal Law No. (6) of 2007 referred to herein and in the bylaws, regulations and resolutions issued in implementation thereof.
                                                          3. The phrase (The Director General) shall be replaced by the phrase (The Governor of the Central Bank) wherever mentioned in Federal Law No. (6) of 2007 referred to herein and in the bylaws, regulations and resolutions issued in implementation thereof.

                                                        • Article (3)

                                                          1. The definitions of (The Ministry), (The Minister), (The Director General), (The Authority ”IA”) shall be deleted from Article (1) of the Federal Law No. (6) of 2007 referred to herein.
                                                          2. Subject to the provisions of Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities and the Amendments Thereto, Articles number (6), (7), (8), (9), (10), (11). (12), (13), (14), (15), (16), (17), (19), (20), (21), (22), (120), (121), and paragraph (c) of Article (119) of Federal Law No. (6) of 2007 referred to herein shall be cancelled.
                                                          3. Any provision contravening or conflicting with the provisions of this Decretal Law shall be cancelled.
                                                        • Article (4)

                                                          This decretal law shall be published in the Official Gazette, and shall come into force as from 02/01/2021,

                                                      • Decretal Federal Law No. (1) of 2020 amending of some provisions of the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities

                                                        We, Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates,

                                                        Having perused the constitution;

                                                        Federal Law No (1) of 1972, Regarding Jurisdictions of Ministries and Powers of Ministers, and amendments thereto;

                                                        Decretal Federal Law No (14) of 2018, Regarding the Central Bank & Organization of Financial Institutions and Activities, and amendments thereto;

                                                        And based on what was presented by the Minister of Finance, the approval of the Cabinet.

                                                        Promulgated the following Decretal Law:


                                                        Article (1)

                                                        The text of Articles (12) of the aforementioned Decretal Federal Law No (14) of 2018 shall be replaced by the following texts:


                                                        A member of the Board of Directors shall satisfy the following conditions:

                                                        1. 1) Be of UAE nationality.
                                                        2. 2) Have experience in economic, financial or banking affairs.
                                                        3. 3) Not have been declared bankrupt or failed to repay his debts.
                                                        4. 4) Not have been convicted, of a felony or a misdemeanor involving moral turpitude or dishonesty, unless rehabilitated.
                                                        5. 5) Not an active minister, excluding the Chairman of the Board of Directors.
                                                        6. 6) Not a member of the Federal National Council.
                                                        7. 7) Not holding any position, a job or board of directors’ membership of any institution licensed by any of the Regulatory Authorities in the State or by any of the regulatory authorities in the Financial Free Zones.
                                                        8. 8) Not a controller or auditor of accounts of a Licensed Financial Institution, nor owner, agent, or partner in any accounts audit firm.


                                                        Article (2)

                                                        Any provision that contradicts or conflicts with the provisions of this law shall be repealed.


                                                        Article (3)

                                                        This Law shall be published in the Official Gazette, and shall come into force from the date of its issuance.

                                                      • Decretal Federal Law No. (25) of 2020 Regarding the amendment of some provisions of the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities

                                                        We, Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates,

                                                        Having perused the constitution;
                                                        Federal Law No (1) of 1972, Regarding Jurisdictions of Ministries and Powers of Ministers, and amendments thereto;
                                                        Federal Law No (7) of 1999, Regarding Pension Law and Social Insurance, and amendments thereto;
                                                        Federal Law No (6) of 2007, Regarding Establishment of The Insurance Authority & Organization of its Business, and amendments thereto;
                                                        Federal Decree Law No (11) of 2008, Regarding Human Resources on Federal Government, and amendments thereto;
                                                        Decretal Federal Law No (14) of 2018, Regarding the Central Bank & Organization of Financial Institutions and Activities, and amendments thereto;
                                                        Federal Decree Law No (26) of 2019, Regarding Public Finance;
                                                        And based on the approval of the Cabinet.

                                                        Promulgated the following Decretal Law:


                                                        Article (1)

                                                        The definition of “The Regulatory Authorities in the State” mentioned in Article (1) of the aforementioned Decretal Federal Law No (14) of 2018 shall be replaced by the following definition:

                                                        The Regulatory Authorities in the State: “The Central Bank, the Securities & Commodities Authority”.


                                                        Article (2)

                                                        The text of Articles (4), (15), (23), (74), and (136) of the aforementioned Decretal Federal Law No (14) of 2018 shall be replaced by the following texts:


                                                        Article (4):

                                                        The Central Bank aims at achieving the following objectives:

                                                        1. 1) Maintain stability of the national Currency within the framework of the monetary system.
                                                        2. 2) Contribute to the promotion and protection of the stability of the financial system in the State.
                                                        3. 3) Ensure prudent management of the Central Bank’s Foreign Reserves.
                                                        4. 4) Provide appropriate environment to develop and enhance the role of the insurance industry in insuring people, property and responsibilities against risks to protect the national economy, encourage fair and effective competition, provide the best insurance services at competitive prices and coverage, and localize jobs in the insurance market.

                                                        For the purpose of achieving its objectives, the Central Bank shall undertake the following functions and jurisdictions:

                                                        1. a. Draw up and implement monetary policy while considering the State’s general strategy.
                                                        2. b. Exercise the privilege of Currency issuance.
                                                        3. c. Organize Licensed Financial Activities, establish the foundations for carrying them on, and determine the standards required for developing and promoting prudential practices in accordance with the provisions of this decretal law and international standards.
                                                        4. d. Set up appropriate regulations and standards for protection of customers of Licensed Financial institutions.
                                                        5. e. Monitor the credit condition in the State, in order to contribute to the achievement of balanced growth in the national economy.
                                                        6. f. Manage foreign reserves to maintain, at all times, sufficient foreign currency assets to cover the Monetary Base as per the provisions of this decretal law.
                                                        7. g. Regulate, develop, oversee and maintain soundness of the Financial Infrastructure Systems in the State, including electronic payment systems, digital currency, and Stored Value Facilities.
                                                        8. h. Regulate, develop and oversee the insurance sector and business, and propose and implement regulating legislation in this regard
                                                        9. i. Receive requests for establishing and opening branches and representative offices for insurance and reinsurance companies, insurance agents and the professions associated therewith, and issuing the necessary licenses for them in accordance with the regulating legislation in this regard.
                                                        10. j. Protect the rights of the insured and the beneficiaries of the insurance business and monitor the financial solvency of insurance companies to provide adequate insurance coverage to protect these rights.
                                                        11. k. Work to raise the performance and efficiency of insurance companies and oblige them to the rules and ethics of the profession to increase their ability to provide better services to the beneficiaries of insurance, and to achieve positive competition among them.


                                                        Article (15):

                                                        The Board of Directors shall, within the limitations imposed by the provisions of this decretal law, exercise all powers required for achieving the objectives for which the Central Bank has been established. The Board of Directors shall, in particular, exercise the following:

                                                        1. 1) Issue regulations, rules, standards, instructions and business controls to perform its functions and jurisdictions, and take all measures and actions necessary to enforce the provisions of this decretal law.
                                                        2. 2) Establish and oversee implementation of polices for deployment and management of the Central Bank’s Own Funds and assets.
                                                        3. 3) Decide on matters relating to issuance of the Currency and its withdrawal from circulation.
                                                        4. 4) Issue regulations relating to organization of Licensed Financial Activities and decide on related matters, including regulations and procedures relating to supervision and oversight thereof, and determine conditions and rules for granting licenses to Licensed Financial Institutions to carry on Licensed Financial Activities and authorizations to undertake Designated Functions.
                                                        5. 5) Issue regulations, rules, standards, instructions, and work controls for insurance, reinsurance, insurance agents, and the professions and activities associated therewith.
                                                        6. 6)Establish regulations and standards for protection of customers of Licensed Financial Institutions.
                                                        7. 7) Issue regulations, controls, and procedures for encountering money laundering and combating terrorism financing and unlawful organizations.
                                                        8. 8) Take necessary actions, procedures and impose administrative penalties against any Person violating the provisions of this decretal law, and regulations issued in implementation thereof.
                                                        9. 9) Approve rules and regulations for maintaining integrity and efficiency of Financial Infrastructure Systems licensed, established, developed, or operated by the Central Bank.
                                                        10. 10) Approve risk management and compliance policies at the Central Bank.
                                                        11. 11) Approve Central Bank’s bylaws, issue the organizational structure and the administrative, financial and technical regulations, and determine powers and competencies, within the limitations of the provisions of this decretal law.
                                                        12. 12) Approve human resources policies at the Central Bank.
                                                        13. 13) Approve rules for the Central Bank institutional governance, including a set of rules and regulations aimed at achieving performance quality and excellence, in line with the Government’s strategic plans and objectives.
                                                        14. 14) Decide on loans and advances granted to the Government, in accordance with the provisions of this decretal law.
                                                        15. 15) Approve settlements and reconciliations relating to Central Bank’s businesses.
                                                        16. 16) Approve the Central Bank’s annual budget and any variations thereof during the year.
                                                        17. 17) Approve the Central Bank’s annual final accounts and the amount of net annual profits.
                                                        18. 18) Regulate the mechanism of objections related to the insurance activity in accordance with the regulating legislations in this regard.
                                                        19. 19) Deal with all other matters deemed within its powers, and are conducive to achievement of the objectives of the Central Bank and the discharge of its functions, in accordance with the provisions of this decretal law.


                                                        Article (23):

                                                        Without prejudice to the powers and competencies of the Chairman of the Board of Directors, the Governor shall be the legal representative of the Central Bank, and shall sign, on its behalf, all instruments, contracts and documents.


                                                        Article (74):

                                                        1. 1) Banks shall take the form of public joint- stock companies, with incorporating law or decree so permits. Branches of foreign banks operating in the State, and specialized banks with low risks that are determined according to the conditions and rules set by the Board of Directors shall be exempt from this requirement.
                                                        2. 2) Other Financial Institutions may take the form of joint- stock companies or limited liability companies, in accordance with the rules and conditions issued by the Board of Directors.
                                                        3. 3) Exchange Houses and monetary intermediaries may be a sole proprietorship, or take any other legal form in accordance with the rules and conditions issued by the Board of Directors.


                                                        Article (136):

                                                        1. 1) Under the provisions of this Decretal Law, a committee within the Central Bank, named “Grievances & Appeals Committee” shall be established. The Cabinet shall issue a resolution, based on a proposal by the Board of Directors, establishing the committee’s formation, duration, system of work, and all procedures and rules related to adjudication of grievances and appeals, including fees due for consideration.
                                                        2. 2) In the formation of the committee, the presence of one or more judges and two experts with competence in financial and banking matters should be taken into consideration.
                                                        3. 3) A nominated committee member may not be a member of the Board of Directors, nor holder of any position at the Central Bank or at any of the Licensed Financial Institution.
                                                        4. 4) The chairman of the committee or any of its members shall have no interest with any party to the dispute, otherwise he shall be required to disclose such interest, and in such case another member shall be temporarily appointed to hear the presented dispute.
                                                        5. 5) The Committee shall have the jurisdiction to decide on grievances and appeals against any decisions related to financial and banking activities issued by the Central Bank related to licensing, authorization of individuals, and licensing and designation of Financial Infrastructure Systems, and may, for such purposes take all or some of the following actions:
                                                          1. a. Require any Person to appear in front of the Committee to present any evidence, testimony, information or statement.
                                                          2. b. Hear the testimony of any witnesses under oath.
                                                          3. c. Commission any experts it deems appropriate to provide opinion on any matter relating to the dispute.
                                                          4. d. Take whichever actions and procedures it deems appropriate for discharge of its mandate.
                                                        6. 6) If the Committee rejected the grievances or appeal on the grounds that it was filed by a party of no capacity or interest, the Committee may impose on the applicant a fine, not exceeding two hundred thousand (200,000) Dirhams.
                                                        7. 7) The Committee may suspend the appealed decision, if necessary, until it reached a decision on the dispute.
                                                        8. 8) A decision issued by the Committee on the grievance or appeal shall be final and shall only be challenged at the Higher Federal Court within a period of twenty (20) work days from date of its notification. The Higher Federal Court may, upon request of the appellant, suspend the decision issued by the Committee until it reached its decision on the subject, if it considered that the appeal is based on genuine grounds and that implementation of the Committee’s decision shall have irreversible consequences.


                                                        Article (3)

                                                        The Central Bank and its Board of Directors replace the Insurance Authority established by the aforementioned Federal Law No. (6) of 2007 in all competencies and legislations related thereto, and all rights, obligations, privileges, funds, material and moral assets, guarantees and undertakings belonging to the Authority, including the rights and obligations contained in any contracts, agreements or Memoranda of understanding concluded by the Authority. Assets, allocations, reserves, and revenues of the Insurance Authority from fees, fines and any other returns that it collects from exercising its functions, shall devolve to the Central Bank. The Governor replaces the Director General of the Authority in the tasks and powers established for him in the laws and legislations referred to, as of the effective date of this Decretal Law.


                                                        Article (4)

                                                        The Board of Directors of the Central Bank shall issue the necessary decisions to implement the provisions of this Decretal Law, including the decisions necessary to transfer and settle the status of the staff of the Insurance Authority which has transferred all its competencies to the Central Bank in accordance with the provisions of this Decretal Law, without prejudice to their gross salaries, job grades, and acquired rights.


                                                        Article (5)

                                                        1. 1. The text of Article (119) of Federal Law No. (6) of 2007 regarding the establishment of the Insurance Authority and the organization of its business shall be canceled, and every provision that contradicts or conflicts with the provisions of this Decretal Law shall be canceled as well.
                                                        2.  
                                                        3. 2. Rules, decisions, circulars and regulations issued in accordance with the provisions of Federal Law No. (6) of 2007 referred to shall continue to apply, in a manner that does not contradict the provisions of this Decretal Law, and until the issuance of the rules, decisions, circulars and regulations that replace them in accordance with the provisions of this Decretal law.


                                                        Article (6)

                                                        This decretal law shall be published in the Official Gazette, and shall come into force on January 2nd, 2021.

                                                      • Federal Law No. (2) of 2021 Amednding some provisions of the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities

                                                        We, Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates,

                                                        Having perused the constitution;

                                                        Federal Law No (1) of 1972, regarding Jurisdictions of Ministries and Powers of Ministers, and amendments thereto;

                                                        Decretal Federal Law No (14) of 2018, regarding the Central Bank & Organization of Financial Institutions and Activities, and amendments thereto;

                                                        And based on what was presented by the Minister of Finance, the approval of the Cabinet, the Federal National Council, and ratified by the Federal Supreme Council;

                                                        Promulgated the following Law:


                                                        Article (1)

                                                        The text of Articles (10), (11), and (22) of the aforementioned Decretal Federal Law No (14) of 2018 shall be replaced by the following texts:


                                                        Article (10):
                                                        The Central Bank shall be managed by a Board of Directors of seven (7) members, including the Chairman and the Governor.


                                                        Article (11):
                                                        1) Members of the Board of Directors shall be appointed by a Federal Decree based on recommendation of the Cabinet, and shall serve for a four (4) year term renewable to similar periods. The Decree designates from among the members of the board of directors one or more deputy chairman.
                                                        2) The Chairman, his Deputies and the Governor, shall each have the rank of Minister.
                                                        3) The Chairman issues a decision defining the powers of his Deputies.
                                                        4) Subject to item three (3) of this article, Should the Chairman be absent or his post became vacant, the Deputy Chairman shall replace him; and should both the Chairman and his Deputies be absent or their posts became vacant, the Governor shall replace them both.


                                                        Article (22):
                                                        1) Five (5) members of the Board of Directors including the Chairman of the Board of Directors, one of his Deputies, or the Governor, shall constitute quorum for any meeting.
                                                        2) Decisions of the Board of Directors shall be adopted by a majority vote of the members present. In case of a tie, the Chairman of the session shall have the casting vote.

                                                         

                                                        Article (2)

                                                        Any provision that contradicts or conflicts with the provisions of this law shall be repealed.


                                                        Article (3)

                                                        This Law shall be published in the Official Gazette, and shall come into force from the date of its issuance.

                                                      • Decretal Federal Law No. (9) of 2021 amending of some provisions of the Decretal Federal Law No. (14) of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities

                                                        We, Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates,

                                                        Having perused the constitution;

                                                        Federal Law No (1) of 1972, regarding Jurisdictions of Ministries and Powers of Ministers, and amendments thereto;

                                                        Decretal Federal Law No (14) of 2018, regarding the Central Bank & Organization of Financial Institutions and Activities, and amendments thereto;

                                                        And based on what was presented by the Minister of Finance, the approval of the Cabinet.

                                                        Promulgated the following Decretal Law:
                                                         

                                                        Article (1)

                                                        The definition of (Standing Facilities) and (Eligible Securities) included in Article (1) of the aforementioned Decretal Federal Law No (14) of 2018 shall be replaced by the following two definitions:

                                                        Standing Facilities: Monetary Policy tools made available to Licensed Financial Institution, to enable management of its liquidity in accordance with the controls and instructions issued by the Central Bank, in accordance with the provisions of this Decretal Law.

                                                        Eligible Securities: Securities approved by the Central Bank, which Licensed Financial Institution may present as collateral for drawing from the Central Bank funds in accordance with the controls and instructions issued by the Central Bank, in accordance with the provisions of this Decretal Law.
                                                         

                                                        Article (2)

                                                        The texts of Articles (15), (17), (24), (44), (50), (57), (58), (121), (128), (136) and (137) of the aforementioned Decretal Federal Law No (14) of 2018 shall be replaced by the following texts:


                                                        Article (15)

                                                        Powers & Functions of the Board of Directors

                                                        The Board of Directors shall, within the limitations imposed by the provisions of this decretal law, exercise all powers required for achieving the objectives for which the Central Bank has been established.

                                                        The Board of Directors shall, in particular, exercise the following:

                                                        1. 1) Approve regulations, rules, standards, instructions and business controls to perform its functions and jurisdictions, and take all measures and actions necessary to enforce the provisions of this decretal law.
                                                        2. 2) Establish and oversee implementation of polices for deployment and management of the Central Bank’s Own Funds and assets.
                                                        3. 3) Decide on matters relating to issuance of the Currency and its withdrawal from circulation.
                                                        4. 4) Issue regulations relating to organization of Licensed Financial Activities and decide on related matters, including regulations and procedures relating to supervision and oversight thereof, and determine conditions and rules for granting licenses to Licensed Financial Institutions to carry on Licensed Financial Activities and authorizations to undertake Designated Functions.
                                                        5. 5) Approve regulations, rules, standards, instructions and business controls for insurance and reinsurance companies, insurance agents and the professions associated therewith.
                                                        6. 6) Establish policies, and approve regulations relating to prudential supervision, and the standards and guidelines relating to Licensed Financial Activities.
                                                        7. 7) Establish regulations and standards for protection of customers of Licensed Financial Institutions.
                                                        8. 8)Approve regulations, controls, and procedures for encountering money laundering and combating terrorism financing and unlawful organizations.
                                                        9. 9) Take necessary actions, procedures and impose administrative penalties against any Person violating the provisions of this decretal law, and regulations issued in implementation thereof.
                                                        10. 10) Approve rules and regulations for maintaining integrity and efficiency of Financial Infrastructure Systems licensed, established, developed, or operated by the Central Bank.
                                                        11. 11) Approve risk management and compliance policies at the Central Bank.
                                                        12. 12) Approve Central Bank’s bylaws, issue the organizational structure and the administrative, financial and technical regulations, and determine powers and competencies, within the limitations of the provisions of this decretal law.
                                                        13. 13) Approve human resources policies at the Central Bank.
                                                        14. 14) Approve rules for the Central Bank institutional governance, including a set of rules and regulations aimed at achieving performance quality and excellence, in line with the Government’s strategic plans and objectives.
                                                        15. 15) Decide on loans and advances granted to the Government, in accordance with the provisions of this decretal law.
                                                        16. 16) Approve settlements and reconciliations relating to Central Bank’s businesses.
                                                        17. 17) Approve the Central Bank’s annual budget and any variations thereof during the year.
                                                        18. 18) Approve the Central Bank’s annual final accounts and the amount of net annual profits.
                                                        19. 19) Regulate the mechanism of objections related to the insurance activity.
                                                        20. 20) Deal with all other matters deemed within its powers, and are conducive to achievement of the objectives of the Central Bank and the discharge of its functions, in accordance with the provisions of this decretal law.



                                                        Article (17)

                                                        Higher Shari`ah Authority

                                                        1. 1) Pursuant to this decretal law, an authority named “Higher Shari`ah Authority” attached to the Central Bank shall be established with a membership not less than five (5) members and not exceeding seven (7) members, of sufficient knowledge and experience in the jurisprudence of Islamic financial transactions.
                                                        2. 2) The Board of Directors shall approve the authority’s work system, its functions and competencies, and the mechanism for financing the costs of its establishment and continuity of work.
                                                        3. 3) The Governor shall issue a decision to form the authority and appoint its members.
                                                        4. 4) Licensed Financial Institutions, which carry on the whole or part of their businesses and activities in compliance with Islamic Shari`ah shall bear all expenses of the Authority referred to in item (1) of this article, including remunerations, allowances and expenses of its members according to the decision issued by the Board of Directors.
                                                        5. 5) The Higher Shari`ah Authority shall determine the rules, standards, and general principles applicable to Shari`ah-compliant businesses and Licensed Financial Activities, and shall undertake supervision and oversight of the internal Shari`ah supervisory committees of Licensed Financial Institutions, referred to in Article (79) of this decretal law.
                                                        6. 6) The Higher Shari`ah Authority shall approve Islamic monetary and financial tools issued and developed by the Central Bank to manage monetary policy operations in the State, and provide its opinion regarding the specific regulatory rules and instructions relating to the operations and activities of Licensed Financial Institutions which conduct the whole or part of their business and activities in accordance with the provisions of Islamic Shari`ah.
                                                        7. 7) The Fatwas and opinions of the Higher Shari`ah Authority shall be binding on the internal Shari`ah supervisory committees, referred to in Article (79) of this decretal law, as well as on Licensed Financial Institutions which conduct the whole or part of their business and activities in accordance with the provisions of Islamic Shari`ah.
                                                        8. 8) The Higher Shari`ah Authority may seek assistance of a specialized party, if necessary, to conduct Shari`ah external audit of the business of any Licensed Financial Institution, which carry on the whole or part of their businesses and activities in accordance with the provisions of Islamic Shari`ah, and the conditions and procedures determined by the Authority, at the expense of the concerned institution.



                                                        Article (24)

                                                        Responsibilities of the Governor

                                                        Without prejudice to any competencies established for the Board of Directors or the Chairman of the Board of Directors, the Governor shall conduct and manage all the affairs of the Central Bank, and issue regulations, systems and policies approved by the Board of Directors. The Governor shall be responsible for the implementation of this decretal law, the regulations of the Central Bank and decisions of the Board of Directors. He may delegate some of his powers and competencies to any of his deputies, assistants, or some senior staff of the Central Bank.


                                                        Article (44)

                                                        Protection of Licensed Financial Institutions

                                                        1) The Central Bank shall take all measures it deems appropriate to maintain conduct of operations of Licensed Financial Institutions, within the frameworks and limits set by the Board of Directors.

                                                        For this purpose, the Central Bank shall:

                                                        1. A) Request to hold a meeting of the general assembly of the licensed financial institution to discuss any issue the Central Bank deems important.
                                                        2. B) Request to include any item that the Central Bank deems necessary into the agenda of the general assembly meeting of the licensed financial institution.
                                                        3. C) Stopping the implementation of any decision issued by the general assembly of the licensed financial institution in the event that it violates the laws or regulations in force.

                                                        2) The Central Bank, according to its own discretion, in cases of necessity during which the deposit-taking licensed financial institution is exposed to liquidity pressures or is subject to crisis management procedures, may provide loans to that establishment, in order to contribute to strengthening and protecting the stability of the financial system and protecting the monetary system in the state.


                                                        Article (50)

                                                        Privilege & Guarantee of Own Rights

                                                        1. 1) Debts of the Central Bank shall enjoy the privilege Government debts have, over property of its debtors. The Central Bank’s debts shall be collected in the same manner and by the same means prescribed for collection of the Government debts and property.
                                                        2. 2) Save for the Reserve Requirements referred to in Article (32) hereof, the Central Bank shall have privilege over the property of Licensed Financial Institutions for payment of all its claims and dues of cash balances or assets which constitute guarantees for these claims and dues, upon maturity thereof.
                                                        3. 3) The Central Bank may purchase, by agreement or by forced sale, or acquire immovable property in settlement of its debts. Such property must be sold within the shortest possible period of time, unless the Central Bank decided to use it for the conduct of its business, in accordance with this decretal law.
                                                        4. 4) The Central Bank must obtain sufficient guarantees to ensure the fulfillment of its rights, including mortgage, pledge or assignment.
                                                        5. 5) In case its secured rights were not paid upon maturity thereof, the Central Bank may, after ten (10) days from the date its debtor was duly notified, proceed with sale of any pledged assets, without prejudice to Central Bank’s right to initiate other legal proceedings against the debtor, until its secured rights were fully paid.
                                                        6. 6) Sale of pledged property pursuant to provisions of item (5) of this article shall be carried out by the competent court upon request of the Central Bank.
                                                        7. 7) The Central Bank shall collect its dues from proceeds of the sale carried out pursuant to provisions of item (6) of this article. Should such proceeds exceed the Central Bank’s dues; the surplus shall be deposited with the Central Bank, at the debtor’s disposal, without paying any interest.



                                                        Article (57)

                                                        Currency Specifications, Features & Denominations

                                                        1. 1) Currency notes issued by the Central Bank shall be of such denominations, designs, and specifications, and bear such features as shall be decided by the Board of Directors. Currency notes shall bear the signature of the Chairman of the Board of Directors.
                                                        2. 2) The Board of Directors shall determine the weight, composition, mix ratios, allowed variation, and all other specifications of Currency coins as well as the quantities of each denomination to be minted.
                                                        3. 3) The Central Bank shall make necessary arrangements for printing of Currency notes referred to in item (1) of this article, and minting of Currency coins referred to in item (2) of this article, along with all matters relating to such printing, minting and safekeeping of such Currency notes and coins and the relative plates and dies.
                                                        4. 4) The Central Bank shall publish decisions to issue Currency by the specifications, designs and all other features, in the Official Gazette.



                                                        Article (58)

                                                        Gold & Silver Coins and Commemorative Coins

                                                        1. 1)The Board of Directors shall determine conditions for sale and purchase of gold and silver coins at the Central Bank.
                                                        2. 2)The Central Bank may issue commemorative Currency notes or coins for any wishing party, in accordance with the rules and conditions set by the Board of Directors.
                                                        3. 3)The Board of Directors shall determine the denominations, fineness, and weights, measurements, allowed variation, and all other specifications of gold and silver coins, as well as the quantities of each denomination to be minted.
                                                        4. 4)The Central Bank shall make necessary arrangements for minting of gold and silver coins referred to in this article, along with all matters relating to such minting and safekeeping of such coins and the relative plates and dies.



                                                        Article (121)

                                                        Protection of Customers of Licensed Financial Institutions

                                                        1. 1)The Central Bank shall establish regulations relating to protection of customers of Licensed Financial Institutions, in line with the nature of activities the latter carry on and the services and products they provide. The Central Bank may establish a unit that enjoys independent legal personality, and is in charge of receiving and handling complaints of clients of licensed financial institutions. The Unit’s system of work, its powers, regulations and regulations related to human resources and its financial affairs shall be issued by a decision of the Board of Directors.
                                                        2. 2)The Central Bank and Licensed Financial Institutions shall work together to raise public awareness of the types of banking services and financial products, and their inherent risks, through all means of communication and media, in accordance with the rules set by the Central Bank in this regard.
                                                        3. 3)Licensed Financial Institutions are not permitted to charge interest on accrued interest charged on any credit or funding facilities granted to customers.


                                                        Article (128)

                                                        Suspension or Revocation of a License

                                                        1. 1)The Central Bank may suspend or revoke a license granted to a Financial Infrastructure System, in accordance with the provisions of article nos. (124) and (125) of this decretal law, via an official notice to the operator or the Settlement Institution of the concerned system and take necessary actions in this respect, as the case may be, if it considered that the system is no longer capable of conducting its operations. The Central Bank shall allow such period as specified in the notice referred to in this item, which shall not be less than twenty (20) working days from date of notification, within which the concerned system operator or its Settlement Institution may object to the Central Bank’s decision to suspend or revoke the license and provide their justifications for such objection, in accordance with the provisions of Part Five of this decretal law.
                                                        2. 2)The Central Bank, if it considers that any Designated System licensed by any of the Regulatory Authorities in the State or in other jurisdictions is no longer capable of conducting its operations, may request the concerned regulatory authority, via an official notice, to suspend or revoke the license of this system and take necessary actions in this respect, as the case may be. The concerned regulatory authority shall have the right to approve or reject the request of the Central Bank. In case of approval, the procedures and controls in force by the concerned authority shall be applicable.
                                                        3. 3)In all cases, the suspension or revocation of a license granted to a Designated System in accordance with the provisions of this article, shall not affect any transaction cleared or settled in the concerned system prior to the effective date of suspension or revocation.


                                                        Article (136)

                                                        Grievances & Appeals Committee

                                                        1. 1) Under the provisions of this Decretal Law, an independent committee within the Central Bank, named “Grievances & Appeals Committee” shall be established. The Cabinet shall issue a resolution, based on a proposal by the Board of Directors, establishing the committee’s formation, duration, system of work, and all procedures and rules related to adjudication of grievances and appeals, including fees due for consideration.
                                                        2. 2) In the formation of the committee, the presence of one or more judges and two experts with competence in financial and banking matters should be taken into consideration.
                                                        3. 3) A nominated committee member may not be a member of the Board of Directors, nor holder of any position at the Central Bank or at any of the Licensed Financial Institution.
                                                        4. 4) The chairman of the committee or any of its members shall have no interest with any party to the dispute, otherwise he shall be required to disclose such interest, and in such case another member shall be temporarily appointed to hear the presented dispute.
                                                        5. 5) With the exception of the regulations, directives, instructions, policies, and regulatory and supervisory decisions of a general nature, the Committee, shall solely and exclusively have jurisdiction to decide on grievances and appeals against any decisions by the Central Bank in accordance to the provision of this Decretal Law, and may, for such purposes take all or some of the following actions:
                                                          1. a. Require any Person to appear in front of the Committee to present any evidence, testimony, information or statement.
                                                          2. b. Hear the testimony of any witnesses under oath.
                                                          3. c.Commission any experts it deems appropriate to provide opinion on any matter relating to the dispute.
                                                          4. d. Take whichever actions and procedures it deems appropriate for discharge of its mandate.
                                                        6. 6) Appeals against decisions that fall within the competence of the committee in accordance with the provisions of this article are not accepted before the grievance or appeal thereon before the committee, and the grievance is decided according to the circumstances.
                                                        7. 7) If the Committee decided to reject or not accept the grievance of appeal, the Committee may impose on the applicant a fine, not exceeding two hundred thousand (200,000) Dirhams.
                                                        8. 8) The Committee may suspend the appealed decision, if necessary, until it reached a decision on the dispute.
                                                        9. 9) The grievance or appeal against any decision before the committee shall not be accepted after the lapse of (15) fifteen working days from the date on which the concerned person is notified of it, or if his knowledge of it is proven with certainty.
                                                        10. 10) A decision issued by the Committee on the grievance or appeal shall be final and shall only be challenged at the Higher Federal Court within a period of twenty (20) work days from date of its notification. The Higher Federal Court may, upon request of the appellant, suspend the decision issued by the Committee until it reached its decision on the subject, if it considered that the appeal is based on genuine grounds and that implementation of the Committee’s decision shall have irreversible consequences.

                                                         

                                                        PART VI

                                                        – ADMINISTRATIVE & FINANCIAL SANCTIONS AND PENALTIES –

                                                        Chapter One: Administrative & Financial Sanctions

                                                        Article (137)

                                                        1. 1) Without prejudice to other sanctions stated in any other laws in the State, and upon establishment of a violation by any Licensed Financial Institution or by any Authorized Individual of any of the provisions of this decretal law or the regulations, decisions, rules, standards or instructions issued by the Central Bank in implementation thereof, or any measures taken by the Central Bank, including procedures for encountering money laundering, combating terrorist financing, and illegal organizations, the Central Bank shall, at its own discretion, decide to impose one or more of the following penalties or take any of the following measures:
                                                          1. a. Issue, by any means, a caution to the violator.
                                                          2. b. Require the violating Licensed Financial Institution to take necessary actions and measures that the Central Bank deems appropriate to rectify the violation.
                                                          3. c. Prohibit violating Licensed Financial Institution from conducting some operations, or carrying on some Licensed Financial Activities, or impose any restrictions, conditions or limitations on all or certain operations and activities.
                                                          4. d. Impose conditions or restrictions on the license of the violating Licensed Financial Institution.
                                                          5. e. Reduce or suspend the ability of the violating Licensed Financial Institution to draw on the Central Bank’s funds through the Standing Facilities.
                                                          6. f. Require the violating Licensed Financial Institution to deposit funds with the Central Bank without return and for the period Central Bank deems appropriate, in addition to the credit balance referred to in Article (32) of this decretal law.
                                                          7. g. Impose a fine of four hundred (400) basis points over the prevailing base interest rate of the Central bank on any shortfall in the Reserve Requirements referred to in Article (32) of this decretal law.
                                                          8. h. Require the violating Licensed Financial Institution to return to customers the funds it obtained as a result of its violation of the provisions of this decretal law and any excess funds including revenue and profits shall devolve to the Central Bank.
                                                          9. i. Impose a fine between one (1) time and ten (10) times the value of unjust enrichment as determined by the Central Bank, which the violating Licensed Financial Institution has, unlawfully acquired, as a result of the violation.
                                                          10. j. Impose a fine on the violating Licensed Financial Institution not exceeding two hundred million (200,000,000) Dirhams.
                                                          11. k. Delink the violating Licensed Financial Institution from one or all Financial Infrastructure Systems.
                                                          12. l. Withdraw the license of the violating Licensed Financial Institution and strike off its name from the Register.
                                                          13. m. Impose conditions or restrictions on the authorization of the violating Authorized Individual.
                                                          14. n. Impose a fine on the violating Authorized Individual not less than one hundred thousand (100,000) Dirhams and not exceeding two million (2,000,000) Dirhams.
                                                          15. o. Prohibit the violating Authorized Individual from undertaking any Designated Function at the Licensed Financial Institution he works for, or any other Licensed Financial Institution.
                                                          16. p. Any other financial or administrative measures or sanctions issued by a decision of the Board of Directors. The decision specifies the authority entrusted with imposing these sanctions or measures.
                                                        2. 2) Decisions to impose the sanctions referred to under item (1) of this article shall be made by the Governor except for the sanction stipulated in item (I) herein shall be made by the Board of Directors.
                                                        3. 3) In all cases, the violator shall be notified, officially, of the reasoned decision within fifteen (15) working days from date of its issue. Such notice shall include the following:
                                                          1. a. Content of the decision.
                                                          2. b. Reasons for the decision.
                                                          3. c. Effective date of the decision.
                                                          4. d. A statement advising the violator of its right to submit a grievance against the decision in front of the Grievances & Appeals Committee, in accordance with the provisions of this decretal law.


                                                        Article (3)

                                                        This Decretal Law shall be published in the Official Gazette, and shall come into force on the day following the date of its publication.

                                                      • Federal Decree by Law No. (23) of 2022, Amending certain Provisions of Federal Decree by Law No. (14) of 2018 Concerning the Central Bank and the Regulation of Financial Institutions and Activities

                                                        We, Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates,

                                                        Having reviewed:

                                                        The Constitution; Federal Law No. (1) of 1972 Concerning the Competences of Ministries and the Powers of Ministers, as amended;

                                                        Federal Decree-law No. (14) of 2018 Concerning the Central Bank and the Regulation of Financial INSTITUTIONS and Activities, as amended; and

                                                        Based on the Proposal of the Minister of Finance and the Approval of the Cabinet,

                                                        Hereby decree as follows:

                                                        • Article 1

                                                          The texts of Articles (69) and (121) of Federal Decree-Law No. (14) of 2018, referred to above, shall be replaced by the following texts:

                                                          Article (69)

                                                          Deciding on the Application for License or Expansion of its Scope

                                                          1. The application for license or expansion of its scope shall be decided on within a period not exceeding sixty (60) working days from the date of satisfying the requirements and conditions of the license. The lapse of such period without reply shall be deemed rejection of the application.
                                                          2. The Central Bank may request the applicant to meet the requirements and conditions of the license within the period it determines.
                                                          3. The Central Bank may reject the application or request the addition of any financial activity at its sole discretion, according to the absorptive capacity of the financial sector of the State and the requirements of the domestic market. The decision issued in this regard shall be final and not appealable before the Grievances and Appeals Committee.
                                                          4. The applicant shall be notified of the substantiated rejection decision by means of an official notice within a period not exceeding twenty (20) days from the date of its issuance.

                                                          Article (121)

                                                          Protection of Clients of the Licensed Financial Institutions

                                                          1. The Central Bank shall create the regulations for protection of clients of licensed financial institutions, in proportion to the nature of the activities practiced by such institutions and the financial services and productions they provide.
                                                          2. The Central Bank may establish a unit with independent legal personality to receive and decide on the complaints of clients of the licensed financial institutions,. The Board of Directors shall issue a decision to establish such unit and determine its functions, rules of procedure and powers as well as the human resources and financial affairs regulations applicable thereto.
                                                          3. The Central Bank and licensed financial institutions shall jointly work to raise the community awareness about the types of banking services and financial products and the risks inherent in them, through all available means of communication and media, in accordance with the controls set by the Central Bank.
                                                          4. Licensed financial institutions may not charge interest on accumulated interest, i.e. compound interests, in respect of the facilities granted to clients. In this regard, the controls and rules set by the Central Bank in the control regulations issued thereby shall be followed.
                                                        • Article 2

                                                          New articles shall be added to Federal Decree-law No. (14) of 2018, referred to above, under Nos. (121 bis), (124 ter) and (124 quater) to read as follows:

                                                          Article (121 bis )

                                                          Credit Facility Guarantees

                                                          1. The licensed financial institutions shall obtain the sufficient guarantees for all types of facilities provided to the natural clients and private sole proprietorships, in accordance with the client's income or the guarantee, if any, and the size of the required facilities, as determined by the Central Bank.
                                                          2. No application, action or plea filed to the competent judicial authorities or the arbitral tribunals by any licensed financial institution in respect ofa credit facility provided for a natural person or a private sole proprietorship shall be accepted if such financial institution fails to obtain the guarantees referred to in Clause (1) of this Article.
                                                          3. The Central Bank may impose administrative and financial penalties which it deems appropriate on the licensed financial institutions which violate the provision of Clause (1) of this Article, in accordance with Article (137) of the present Decree-Law.

                                                          Article (124 ter )

                                                          Application for License of Financial Infrastructure System or Extension of its Scope

                                                          1. Based on the regulations set by the Board of Directors, any legal person may file an application with the Central Bank to obtain a license of financial infrastructure system or to expand the scope of a license previously issued.
                                                          2. The Board of Directors shall issue the regulations, rules, criteria and conditions pertaining to the licensing of the financial infrastructure system, including:
                                                            a. Merit and eligibility criteria;
                                                            b. Resources required for the system; and
                                                            c. Control and supervisory systems.
                                                          3. The Board of Directors may require the license applicant to meet any further requirements or conditions at its own discretion and as he deems to be in the public interest.

                                                          Article (124 quater )

                                                          Deciding on the Application for License of Financial Infrastructure System or Extension of its Scope

                                                          1. The application for license of financial infrastructure system or extension of its scope shall be decided on within a period not exceeding sixty (60) working days from the date of satisfying the requirements and conditions of the license. The lapse of such period without reply shall be deemed as rejection of the application.
                                                          2. The Central Bank may request the applicant to meet the requirements and conditions of the license within the period it determines.
                                                          3. The Central Bank may reject the application or request the expansion of the scope of the license of a financial infrastructure system at its sole discretion, in accordance with the absorptive capacity of the financial sector of the State and the requirements of the domestic market. The decision issued thereby in this regard shall be final and not appealable before the Grievances and Appeals Committee.
                                                          4. The applicant shall be notified of the substantiated rejection decision by means ofan official notice within a period not exceeding twenty (20) working days from the date of its issuance.
                                                        • Article 3

                                                          Any provision in contradiction or conflict with the provisions hereof is hereby repealed.

                                                        • Article 4

                                                          The present Decree-Law shall be published in the Official Gazette and shall enter into force as of 2 January 2023.

                                                      • Federal Decree-Law No. (54) of 2023 Amending Certain Provisions of Federal Decree-Law No. (14) of 2018 Concerning the Central Bank and Regulation of Financial Institutions and Activities

                                                        Issued on 2/10/2023

                                                        I, Mohammed Bin Zayed Al Nahyan, President of the United Arab Emirates;

                                                           Upon reviewing the Constitution;
                                                           Federal Law No. (1) of 1972 On the Competences of Ministries and the Powers of Ministers, as amended;
                                                           Federal Decree-Law No. (14) of 2018 Concerning the Central Bank and Regulation of Financial Institutions and Activities, and amendments thereof;
                                                           Based on the proposal of the Minister of Finance and the approval of the Cabinet,

                                                        Have promulgated the following Decree-Law:

                                                        • Article 1

                                                          Definitions of "Transfer Order" and "Currency" stipulated in Article (1) of the aforementioned Federal Decree-Law No. (14) of 2018 shall be replaced with the following definitions:

                                                          Transfer Order:

                                                          In connection with Financial Infrastructure System, shall mean any of the following instructions:

                                                          1.Instructions by a Participant to make funds at the disposal of another Participant, to be transferred, on a book-entry basis, in the accounts of the Settlement Institution for a Clearing and Settlement System;

                                                          2.Putting the funds in another way under the control of a Participant pursuant to the rules and procedures of the Financial Infrastructure System;

                                                          3.Instructions to discharge from liability to pay for the purposes of the operational rules of a clearing and Settlement System;

                                                          4. Instructions by a Participant either to settle an obligation by way of transferring book securities, or transferring those securities;

                                                          5.Instructions by a Participant which gives rise to assuming responsibility or discharge from the obligation to pay the amounts owed for retail operations.

                                                          Currency:

                                                          The UAE official national currency in the form of paper notes, metal coins and digital currency, and its unit is referred to as the "Dirham".

                                                        • Article 2

                                                          Provisions of Articles (42), (55), (56), (57), (62), (141) and (157) of the aforementioned Federal Decree-Law No. (14) of 2018 shall be replaced with the following provisions:

                                                          Article (42)

                                                          Opening Accounts and Keeping Balances of Digital Currency

                                                          First: The Central Bank may open the following accounts:

                                                          1. National or foreign currencies accounts for Licensed Financial Institutions and may take deposits therefrom. The Central Bank may pay or charge interest on such deposits as agreed upon;
                                                          2. Accounts for monetary authorities, other Central Banks, foreign banks, international financial and monetary institutions, Or Arab and international monetary funds. The Central Bank may pay or charge interest on such accounts, and may act as an agent or correspondent for these entities.
                                                          3. Accounts for monetary authorities, other Central Banks, foreign banks, international financial and monetary institutions, as well as Arab and international monetary funds.
                                                          4. The Central Bank may open any other accounts within the limits and subject to the rules and requirements issued by the Board of Directors.

                                                          Second: The Central Bank may keep other forms of financial accounts of digital currency whatever its kind within the limits and subject to the rules and requirements issued by the Board of Directors.

                                                           

                                                          Article (55)

                                                          Currency Issuance

                                                          1. Issuance of Currency shall be a privilege granted exclusively to the State which shall be exercised solely and exclusively by the Central Bank.
                                                          2. No Person is allowed to issue or put into circulation paper banknotes, coins, or any instrument or cheques payable to bearer on demand which have the appearance of, or purporting or are likely to be confused with the currency, and may be circulated in the UAE or in any other country as a currency.

                                                           

                                                          Article (56)

                                                          Currency Legal Tender

                                                          1. Paper banknotes and digital currency issued by the Central Bank shall be an absolute legal tender valid for payment of any amount up to their full face value.
                                                          2. Coins issued by the Central Bank shall be legal tender valid inside the UAE for payment of any amount up to its full face value but not exceeding fifty (50) Dirhams. Nevertheless, should such coins be presented to the Central Bank, the latter shall accept them without any limitation to their value.

                                                           

                                                          Article (57)

                                                          Specifications, Features and Denominations of Currency

                                                          1. Paper banknotes issued by the Central Bank shall be of such denominations, designs, and specifications as well as features decided by the Board of Directors. Paper banknotes shall bear the signature of the Chairman of the Board.
                                                          2. The Board of Directors shall determine the weights, compositions, mix ratios, allowed variation, and all other specifications of coins as well as the quantities required to be minted of each denomination.
                                                          3. The Central Bank shall take the necessary procedures for printing paper banknotes aforementioned in Clause (1) of this Article, and minting coins aforementioned in Clause (2) of this Article, in addition to all matters pertaining to such printing, minting and safekeeping of such paper banknotes and coins as well as relevant printing plates and coin dies.
                                                          4. The Central Bank shall issue the forms, specifications and designs of digital currency, requirements and conditions of possession and all other features decided by the Board of Directors.
                                                          5. The Central Bank shall publish resolutions whereunder Currency is issued pursuant to the specifications, designs and all other features in the Official Gazette.

                                                           

                                                          Article (62)

                                                          Monetary Base Cover

                                                          The Central Bank shall, at all times, hold reserves of foreign assets to cover the Monetary Base pursuant to the provisions of Article (63) of this Decree-Law and such reserves of foreign assets shall consist of one or more of the following:

                                                          1. Gold bullions and other precious metals;
                                                          2. Cash assets and deposits, and other monetary and payment instruments denominated in foreign currencies that are freely convertible in global financial markets, including digital currencies issued by the Central Banks and other monetary authorities. 
                                                          3. Securities denominated in foreign currencies issued or guaranteed by foreign governments and the companies, entities, institutions, and agencies affiliated thereto, or by international monetary and financial institutions, or by multinational corporations, provided said securities be tradable in global financial markets.

                                                           

                                                          Article (141)

                                                          Whoever intentionally mutilates, destroys or tears up Currency publicly shall be punished by imprisonment and a fine that is not less than ten thousand Dirhams (AED 10,000) or one of these two punishments.

                                                           

                                                          Article (157)

                                                          Interpretation of the Technical Terms Referred to in this Decree-Law

                                                          1.  If there is any reference in any legislation applicable in the State to the UAE Dirham, "Currency", "Cash", "Monetary Funds" or "Fund" or any similar terminology, this shall include the digital currency subject to provisions of this Decree-Law, unless context requires otherwise.
                                                          2. Virtual assets defined in applicable legislations in the State shall not be deemed a currency subject to provisions of this Decree-Law. Regulations, by-laws and rules issued by the Board of Directors shall be applicable to virtual assets and currencies if used as a method or instrument of payment or exchange.
                                                          3. The Central Bank may issue a list of interpretation for all technical terminologies stated in this Decree-Law and such list shall be published on the official website of the Central Bank.
                                                        • Article (3)

                                                          A new article shall be added to the aforementioned Federal Decree-law No. (14) of 2018 under No. (60 bis). Provision of this article shall be as follows:

                                                          Article (60 bis)

                                                          Digital Currency

                                                          1. Board of Directors shall issue a resolution to introduce national digital currency into trading and to withdraw the same when its face value is paid. Such resolution shall be published in the Official Gazette and shall be announced to the public in appropriate media.
                                                          2. The Bank shall not be responsible to refund the value of any digital currency that is missing, stolen or manipulated. The Bank shall not accept any counterfeit currency or pay its consideration.
                                                        • Article 4

                                                          Any provision that violates or contradicts the provisions of this Decree-Law shall be repealed.

                                                        • Article 5

                                                          This Decree-Law shall be published in the Official Gazette, and shall come into effect from the day following the date of its publication.

                • Regulations Applied for IC and IRP

                  • Federal Law No. 6 of 2007 on the Organization of Insurance Operations

                    FED LAW 6/2007 Effective from 15/2/2007
                    This law has been amended by The Federal Law No. (05) of 2012, Federal law No. (3) of 2018Federal Law No. (24) of 2020 and Federal Law No. (25) of 2020 respectively. You are viewing the latest version. Please find the PDFs of previous versions on the table below.

                    version 2 (consolidated as of 02/01/2021)

                    pdf download

                    version 1 (effective from 15/02/2007)

                    pdf download

                     

                    1. The word (Authority “IA”) shall be replaced by the phrase “The Central Bank”, wherever mentioned in Federal Law No. (6) of 2007 referred to herein.
                    2. The word (Minister) shall replaced by the word “Chairmen”, wherever mentioned in Federal Law No. (6) of 2007 referred to herein and in the bylaws, regulations and resolutions issued in implementation thereof.
                    3. The phrase (The Director General) shall be replaced by the phrase (The Governor of the Central Bank) wherever mentioned in Federal Law No. (6) of 2007 referred to herein and in the bylaws, regulations and resolutions issued in implementation thereof.

                    • Preliminary Chapter

                      • Sanctions

                        • Article (1)

                          • Definitions

                            The following words and phrases shall bear the meanings indicated beside each of them unless the context provides otherwise:

                            State: The United Arab Emirates.

                            Board: The Insurance Authority's Board of Directors.

                            Chairman: The Chairman of the Board.

                            Company: The insurance company incorporated in the State and the foreign insurance company licensed to carry out insurance activities in the State either through a branch, or through an insurance agent.

                            Insurer: Any insurance company incorporated in the State or foreign company licensed to carry out insurance operations in the State according to the provisions of the Law herein.

                            Insured: The person who has concluded an insurance contract with the company.

                            Insurance Agent: The person approved and authorized by the company to carry out insurance operations on its behalf or on behalf of any branch thereof.

                            Insurance Policy (Insurance Contract): The insurance document (policy) concluded by the insurer and insured containing the terms and conditions of the contract between the two parties, their obligations, and rights or the rights of beneficiary of the insurance and any endorsements therein.

                            Re-insurer: Any re-insurance company incorporated in the State or foreign re-insurance company licensed to carry out insurance operations inside the State or a foreign re-insurance company outside the State.

                            Insurance Broker: The person who independently intermediates in insurance and reinsurance operations between the insurance or re-insurance Proposer on one side and any insurance or reinsurance company on the other side and receives for his efforts commission from the insurance company or the re-insurance company with which the insurance or re¬insurance has been concluded.

                            Surveyor & Loss Adjuster: The person who examines the damages occurred to the subject matter of the insurance, and assesses them.

                            Insurance Consultant: The person, who studies the insurance requirements for his clients, gives advice in respect of the suitable insurance coverage, assists in preparing insurance requisites and receives for his efforts remuneration from his clients.

                            Actuary: The person who estimates values of the insurance contracts, policies and the related accounts.

                            Insurance-related Professions: Any person licensed by the Authority to practice any of the activities of Insurance Agent, Actuary, Insurance Broker, Surveyor & Loss Adjuster, Insurance Consultant or any other insurance-related profession that the Board decides to regulate.

                            Register: The register of insurance companies or insurance agents.

                            Data: All data and information (both paper and electronic) relating to any insurance activity, including data related to individuals who can be identified, directly or indirectly.

                            Branch: The branch of the company that carry out insurance operations in its name.

                            Authorized Manager: The person appointed by the foreign insurance company to manage its branch in the State.

                            Beneficiary: The person who acquired the rights of the insurance contract at inception or these rights has been legally transferred thereto.

                            Technical Provisions: The provisions which the insurer must deduct and maintain to meet the insured's accrued financial obligations pursuant to the provisions of the law herein.

                            Solvency Margin: The surplus in the value of the company's real assets over its liabilities that enables it to fulfil its obligations in full and to pay the required indemnities right away when they befall due without impeding the company operations or weakening its financial position.

                            Minimum Guarantee Fund: The amount that equates one third of the required solvency margin or the amount determined by the Board whichever is the greater.

                            Auditor: The accounts' auditor licensed to practice work in the State.

                            Person: Any natural or legal person.

                             

                            This article has been amended by Federal Law No. (03) of 2018 and Federal Law No. (24) of 2020 respectively. You are on the latest version. To view previous versions, click the version boxes below.
                            Version 2(effective from 26/04/2018 to 02/01/2021)

                             

                            The following words and phrases shall bear the meanings indicated beside each of them unless the context provides otherwise:

                            State: The United Arab Emirates.

                            Ministry: The Ministry of Economy.

                            Minister: The Minister of Economy.

                            Authority: The Insurance Authority established by virtue of the provisions of the law herein.

                            Board: The Insurance Authority's Board of Directors.

                            Chairman: The Chairman of the Board.

                            Director General: The Director General of the Insurance Authority.

                            Company: The insurance company incorporated in the State and the foreign insurance company licensed to carry out insurance activities in the State either through a branch, or through an insurance agent.

                            Insurer: Any insurance company incorporated in the State or foreign company licensed to carry out insurance operations in the State according to the provisions of the Law herein.

                            Insured: The person who has concluded an insurance contract with the company.

                            Insurance Agent: The person approved and authorized by the company to carry out insurance operations on its behalf or on behalf of any branch thereof.

                            Insurance Policy (Insurance Contract): The insurance document (policy) concluded by the insurer and insured containing the terms and conditions of the contract between the two parties, their obligations, and rights or the rights of beneficiary of the insurance and any endorsements therein.

                            Re-insurer: Any re-insurance company incorporated in the State or foreign re-insurance company licensed to carry out insurance operations inside the State or a foreign re-insurance company outside the State.

                            Insurance Broker: The person who independently intermediates in insurance and reinsurance operations between the insurance or re-insurance Proposer on one side and any insurance or reinsurance company on the other side and receives for his efforts commission from the insurance company or the re-insurance company with which the insurance or re¬insurance has been concluded.

                            Surveyor & Loss Adjuster: The person who examines the damages occurred to the subject matter of the insurance, and assesses them.

                            Insurance Consultant: The person, who studies the insurance requirements for his clients, gives advice in respect of the suitable insurance coverage, assists in preparing insurance requisites and receives for his efforts remuneration from his clients.

                            Actuary: The person who estimates values of the insurance contracts, policies and the related accounts.

                            Insurance-related Professions: Any person licensed by the Authority to practice any of the activities of Insurance Agent, Actuary, Insurance Broker, Surveyor & Loss Adjuster, Insurance Consultant or any other insurance-related profession that the Board decides to regulate.

                            Register: The register of insurance companies or insurance agents.

                            Data: All data and information (both paper and electronic) relating to any insurance activity, including data related to individuals who can be identified, directly or indirectly.

                            Branch: The branch of the company that carry out insurance operations in its name.

                            Authorized Manager: The person appointed by the foreign insurance company to manage its branch in the State.

                            Beneficiary: The person who acquired the rights of the insurance contract at inception or these rights has been legally transferred thereto.

                            Technical Provisions: The provisions which the insurer must deduct and maintain to meet the insured's accrued financial obligations pursuant to the provisions of the law herein.

                            Solvency Margin: The surplus in the value of the company's real assets over its liabilities that enables it to fulfil its obligations in full and to pay the required indemnities right away when they befall due without impeding the company operations or weakening its financial position.

                            Minimum Guarantee Fund: The amount that equates one third of the required solvency margin or the amount determined by the Board whichever is the greater.

                            Auditor: The accounts' auditor licensed to practice work in the State.

                            Person: Any natural or legal person.

                             

                            Version 1(effective from 15/02/2007 to 26/04/2018)

                             

                            The following words and expressions shall bear the meanings indicated beside each of them unless the context provides otherwise:

                            State:The United Arab Emirates
                            Ministry:The Ministry of Economy
                            Minister:The Minister of Economy
                            Authority:The Insurance Authority established by virtue of the provisions of the law herein.
                            Board:The Insurance Authority's Board of directors
                            Chairman:The Chairman of the Board
                            Director General:The Director General of the Insurance Authority
                            Company:The insurance company incorporated in the State and the foreign insurance company licensed to carry out insurance activities in the State either through a branch, or through an insurance agent.
                            Insurer:Any insurance company incorporated in the State or foreign company licensed to carry out insurance operations in the State according to the provisions of the Law herein.
                            Insured:The person who has concluded an insurance contract with the company.
                            Insurance Agent:The person approved and authorized by the company to carry out insurance operations on its behalf or on behalf of any branch thereof.
                            Insurance Policy (Insurance Contract):The insurance document (policy) concluded by the insurer and insured containing the terms and conditions of the contract between the two parties, their obligations, and rights or the rights of beneficiary of the insurance or any endorsements therein.
                            Re-insurer:Any re-insurance company incorporated in the State or foreign re-insurance company licensed to carry out insurance operations inside the State or a foreign re-insurance company outside the State.
                            Insurance Broker:The person who independently intermediates in insurance and re-insurance operations between the insurance or re-insurance seeker on one side and any insurance or re-insurance company on the other side and receives for his efforts commission from the insurance company or the re-insurance company with which the insurance or re-insurance has been accomplished.
                            Loss & Damage Adjuster:The person who examines the damages occurred to the subject matter of the insurance, and assesses them.
                            Insurance Consultant:The person, who studies the insurance requirements for his clients, gives advice in respect of the suitable insurance coverage, assists in preparing insurance requisites and receives for his efforts remuneration from his clients.
                            Actuary:The person who estimates values of the insurance contracts, documents and the related accounts.
                            Register:The register of the insurance companies or the insurance agents.
                            Branch:The branch of the company that carry out insurance operations in its name.
                            Authorized Manager:The person appointed by the foreign insurance company to manage its branch in the State.
                            Beneficiary:The person who acquired the rights of the insurance contract at the start or these rights has been legally transferred thereto.
                            Technical provisions:The provisions which the insurer must deduct and maintain to meet the insured's accrued financial obligations pursuant to the provisions of the law herein.
                            Solvency margin:The surplus in the value of the company's real assets over its liabilities that enables it to fulfill its obligations in full and to pay the required indemnities right away when they befall due without impeding the company operations or weakening its financial status.
                            Minimum Guarantee Fund:The amount that equates one third of the required solvency margin or the amount determined by the Board whichever is the greater.
                            Accounts' Auditor:The accounts' auditor licensed to perform in the State.

                             

                             

                             

                        • Article (2)

                          1. The provisions of the law herein shall apply to the insurance companies incorporated in the State and the foreign companies licensed to perform the activity in the State including the companies engaged in the operations of cooperative insurance and takaful insurance or the operations of reinsurance provided for in the law herein and the insurance professions related thereto.
                             
                          2. The provisions of the law herein shall not apply to the companies operating in the free zones in the State unless specifically provided for in the law herein.
                        • Article (3)

                          1. An insurance is a contract pursuant thereto the insurer shall be obliged to pay the insured or the beneficiary whose in his favor the insurance has been concluded a sum of money, regular proceeds or other monetary indemnity in case the insured accident or risk occurred, in return of installments or any other monetary sums paid by the insured thereto.
                             
                          2. The insurer shall pay the indemnity provided for in the insurance contract to the insured or the beneficiary, as the case might be, as soon as the insured accident or risk occurred and thereupon the insurer shall legally subrogate the insured or the beneficiary in respect of the rights or obligations of each one of them.
                             
                          3. The company shall be obligated to conclude insurance contracts for all the vehicles licensed to get going in the State when so required by the pertinent authorities. The executive regulation of the law herein shall determine the insurance's premium tariffs while magnitude of the risks should be taken into consideration.
                      • Insurance Disputes Committees

                        • Chapter One Insurance Operations and Its Types

                          • Article (4)

                            In implementing the provisions of the law herein the direct insurance operations shall be divided into three types:

                            1. Life assurance and funds accumulation operations
                            2. Properties insurance
                            3. Life liability insurance

                            The executive regulation of the law herein shall determine others may be enlisted under each of the three types.

                          • Article (5)

                            Insurance operations shall include the relevant activities of the types provided for in Article (4) of the law herein and as well shall include re-insurance, insurance agents, and actuaries, insurance brokers, loss and damage adjusters and insurance consultants' activities.

                        • Digital Services

                          • Chapter Two Insurance Authority

                            • Sand Box

                              • Article (6)

                                This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                Version 1(effective from 15/02/2007 to 02/01/2021)

                                 

                                1. An authority to be called The Insurance Authority, entertaining the status of a legal person with financial and administrative independence shall be established, and shall have an independent budget subjoined to the State's budget. In such capacity, the Authority shall perform all operations and actions enabling it to achieve the objectives and duties assigned thereto pursuant to the provisions of the law and shall be an annexed to the Minister.
                                 

                                2. The main premises of The Authority shall be located in Abu Dhabi City and by decision of the Board branches thereto may be established within the State as the public interests may require.

                                .

                                 

                              • Electronic insurance

                                • Article (7)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The Authority aims at organizing and overseeing the insurance sector in a way that would ensure suitable environment to develop it and enhance the role of the insurance industry to secure lives, properties, and liabilities against risks in order to protect the national economy; collect, develop, and invest the national savings to sustain the economic development of the State; encourage fair and effective competition; provide the best insurance services in competitive premiums and coverage, and Emiratize the insurance markets jobs and for the cause the Authority shall carry out the following duties:

                                  1. Protecting the rights of the insured and the beneficiaries of the insurance operations and monitoring solvency of the companies to avail satisfactory insurance coverage in order to protect these rights.
                                     
                                  2. Enhancing performance and efficiency of the insurance companies and binding them to observe the profession's code and rule of conduct to enhance their capabilities to render the beneficiaries of the insurance the best services and attain constructive competition.
                                     
                                  3. Providing efficient and qualified human resources to carry out insurance operations including establishment of an institute for the purpose in cooperation and collaboration with Emirates Insurance Association (EIA) according to the prevailing legislations.
                                     
                                  4. Proposing programs and plans to develop the insurance sector in all aspects and enhancing insurance awareness, preparing studies and researches relevant to the insurance operations and disseminating the same.
                                     
                                  5. Consolidating cooperation and integration ties with the authorities organizing insurance sector at both the Arab world and International levels.
                                     
                                  6. Receiving applications to establish, open branches and representative offices for insurance and re-insurance companies, insurance brokers and the professions related thereto and issuing them the necessary licenses.
                                     
                                  7. Identifying the risks which shall be compulsorily insured.
                                     
                                  8. Determining unified tariffs of certain types of insurances and of those one enlisted there under in cases the public interest would require.
                                     
                                  9. Any other assignment relevant to organizing the insurance sector as resolved by the Board.

                                  .

                                   

                                • Article (8)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/12/2007 to 02/01/2021)

                                   

                                  The Insurance Authority shall be composed of the following:

                                  1. The Board
                                  2. The Director General
                                  3. The Executive Body

                                  .

                                   

                                • Article (9)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see previous versions, click on the version boxes below.
                                  Version 2(effective from 10/10/2012 to 02/01/2021)

                                   

                                  The Authority shall have a board of directors composed of a chairman and a number of directors to be appointed under a Cabinet resolution. The nominees for the Board membership must not have any type of conflict of interest in their membership, throughout the membership term. The resolution to form the Board shall determine the number, remuneration and term of office of the directors.

                                  In its first meeting, the Board shall elect from its members a Vice Chairman to substitute the Chairman in the event of his absence or if the Chairman is incapacitated

                                  .

                                  Version 1(effective from 15/02/2007 to 10/10/2012)

                                   

                                  The Authority shall have a board of directors composed under the chairmanship of the Minister of ten members of the experienced and specialized individuals designated on basis of a presentation by the Minister as follows:

                                  • Two members from the Ministry to be nominated by the Minister
                                  • One member from the Ministry of Finance & Industry to be nominated by the Minister of Finance & Industry
                                  • One member from UAE Central Bank to be nominated by the Governor.
                                  • One member from the Federation of the Chambers of Commerce & Industry to be nominated by the President of the Federation.
                                  • Five members to be nominated by the Minister out of the specialist in the sectors of finance, economy and insurance, provided they include among them one member from Emirates Insurance Association (EIA).

                                  The Cabinet shall issue a resolution to form the Board, determine remunerations of its members, and indicate duration of membership. The Chairman shall select a deputy therefor out of the Board's members

                                  .

                                • Article (10)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The executive regulation of the law herein shall lay down the terms and conditions of the Board's membership.

                                   

                                • Article (11)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  1. Membership of any of the Board's members shall end in any of the following cases:

                                  1. Resignation or replacement by the nominating body.
                                  2. Should he remained absent for three consecutive cessions or four non-consecutive cessions during one year without an acceptable excuse.
                                  3. Should he become devoid of any of the terms and conditions provided for in the executive regulation of the law herein.

                                  2. The Cabinet on recommendation of the pertinent body and within a period not exceeding sixty days as from date of vacating a seat of the board shall appoint another in his place to complete the tenure of the member who his membership came to an end.

                                   

                                • Article (12)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The Board shall assume the duties and authorities provided for in the law herein and the regulations, rules, directives, and decisions issued pursuant thereto including:

                                  1. Laying down the general policy of the Authority and approving the necessary implementation plans and programs.
                                     
                                  2. Approving draft laws relevant to insurance operations and report them to the Cabinet.
                                     
                                  3. Issuing the necessary directives to implement the provisions of the law herein, and the regulations, and rules, issued pursuant thereto.
                                     
                                  4. Approving the draft of the annual budget of the Authority and refer it to the Cabinet for sanction.
                                     
                                  5. Approving the annual report and the final accounts of the Authority and refer them to the Cabinet.
                                     
                                  6. Appointing an account auditor for the Authority and determining his remuneration.
                                     
                                  7. Acknowledging aids, donations, grants, and bequests seen in line with the objectives of the Authority.
                                     
                                  8. Settling the objections raised by the company in respect of amending the insurance's forms, policies and endorsements.
                                     
                                  9. Executing any other duties related to the Authority's affairs and objectives.

                                  .

                                   

                                • Article (13)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The Board shall meet once every three months at least and may be invited to hold an extraordinary meeting upon request of the Chairman or three members at least.
                                  The quorum for holding the meeting of the Board shall be the attendance of the majority of the members, provided the chairman or his deputy shall be among them. Resolutions shall be issued by absolute majority of the votes cast and in case of a tie the side of the chairman of the meeting shall have casting vote. Minutes of the Board's sessions shall be written down and approved by the chairman of the session. The resolutions shall be issued duly signed by the chairman.
                                  The Board may invite whoever seen fit of those experienced and qualified experts and consultants to render assistance to attend its sessions without having voting rights in decisions making.

                                   

                                • Article (14)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  By virtue of a Federal Decree based on a recommendation by the chairman a director general of the Authority shall be appointed in the same scale of an undersecretary of a ministry.

                                   

                                • Article (15)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The director general shall carry out the operations of the Authority and representing the Authority in its relations with the others and before the judiciary and in particular he shall:

                                  1. Implement policies, plans and programs approved by the Board.
                                     
                                  2. Suggest the organizational structure of the authority and superintend the same in a way that secures good performance of the operations.
                                     
                                  3. Prepare programs and plans to develop the insurance sector and upgrade its services for submission to the Board.
                                     
                                  4. Prepare draft laws, regulations, rules, directives and decisions issued in conformity with the provisions of the law herein related to insurance operations and refer the same to the Board.
                                     
                                  5. Prepare the draft of annual budget the Authority and refer the same to the Board.
                                     
                                  6. Consider complaints lodged pertaining to the insurance services and take the appropriate decisions in this respect unless seen necessary to refer them to the Board.
                                     
                                  7. Issue the necessary decisions as may be authorized pursuant to the provisions of the law herein.
                                     
                                  8. Carry out any other assignments entrusted to him by the Board

                                  .

                                   

                                • Article (16)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The Director General may delegate some of his assignments to the senior managerial employees of the Authority as provided for in the law herein, provided such delegation shall be specific and in writing..

                                   

                                • Article (17)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/12/2007 to 02/01/2021)

                                   

                                  The executive body of the Authority shall be composed of the employees appointed or contracted according to the regulations issued pursuant to the provisions of the law herein.

                                   

                                • Article (18)

                                  The Authority shall charge annul fees against the supervision and monitoring and any other fees proposed by the Board, provided a resolution therefor shall be issued by the Cabinet.

                                • Article (19)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The revenues of the authority shall be comprised of the following resources:

                                  1. Any monies allotted for the Authority by the Government,
                                  2. The fees charged by the Authority,
                                  3. The surpluses of earlier years' budgets,
                                  4. The bequests, grants, donations, and aids accepted by the Board that in line with the Authority's objectives,
                                  5. Any other resources approved by the Board.

                                  .

                                   

                                • Article (20)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The fiscal year of the Authority shall commence on the first day January and end on thirty first day of December each year. However, the first fiscal year shall commence as from date of enforcing the provisions of the law herein and end by the end of December of the following year

                                   

                                • Article (21)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  1. The Authority's funds shall be deemed public properties.
                                  2. The Authority shall entertain the exemptions and facilities as entertained by the Government Ministries and Directorates.
                                  3. Auditing of the Authority's accounts shall be taken over by one of those certified accounts auditors enlisted in the register of the operating accounts auditors.

                                   

                                • Article (22)

                                  This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                                  Version 1(effective from 15/02/2007 to 02/01/2021)

                                   

                                  The Authority shall maintain reserves equal in amount to twice the total expenditures of its annual budget and the surpluses thereof shall be transferred to the State's public treasury.

                                   

                                • Article (23)

                                  The Board shall issue on a recommendation by the Director General the bylaws, regulations, instructions and decisions pertinent to the insurance operations including:

                                  1. The Solvency Margin and the Minimum Guarantee Fund, provided the same shall not be less than one third of the Solvency Margin taking the international standards into consideration,
                                  2. The basis of calculating the Technical Provisions,
                                  3. The Re-insurance criteria,
                                  4. The basics of investing the Company’s assets,
                                  5. Determining the company's assets that meet the accrued insuring obligations.
                                  6. The accounting policies to be adopted by the company and the requirired forms to prepare reports, financial statements and presentation thereof.
                                  7. The principles of organizing accounting books and records of each of the companies, Agents, and Brokers and determining the data to be contained in these books and records.
                                  8. The records which the company shall be obliged to organize and maintain as well as the data and documents shall be made available to the Authority.
                                  9. The rules of professional practice and code of ethics
                                  10. Anti-Money laundering and combating terrorism financing in the insurance activities in collaboration with the pertinent bodies.
                                  11. The rules governing ownership in insurance companies’ capitals, pursuant to the provisions of the Federal Law pertinent to Commercial Companies.

                                  Article (23) bis (1)

                                  The Authority may compel those practicing insurance activities of certain types and classes, but not others, and determine the terms, conditions and applicable tariff rates, as well as regulating the rights and obligations of the related parties.

                                  Article (23) bis (2):

                                  The Authority may establish funds that have independent legal personality for the purpose of protecting and compensating persons. The Board shall issue a decision to determine how to establish these funds, their objectives, funding, as well as risks covered under these funds, and benefits in case those risks have occurred

                                  This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                                  Version 1(effective from 15/02/2007 to 26/04/2018)

                                   

                                  The Board shall issue on a recommendation by the director general the instructions pertinent to the insurance operations including:

                                  1. The solvency margin and the minimum guarantee fund, provided the same shall not be less than one third of the solvency margin taking the international standards into consideration,
                                  2. The basis of calculating the technical provisions,
                                  3. The standards of re-insurance,
                                  4. The basics of investing the rights of the policyholders,
                                  5. Determining the company's assets that meet the accrued insuring obligations.
                                  6. The accounting policies to be adopted by the company and the necessary forms needed to prepare reports and financial statements and presentation thereof.
                                  7. The principles of organizing accounting books and records of each of the companies, agents, and brokers and determine data to be inserted in these books and records.
                                  8. The records which the company shall be obliged to organize and maintain as well as the data and documents shall be made available to the Authority.
                                  9. The profession's rules and code of conduct.
                                  10. Anti-money laundering and terrorism financing in the insurance activities in collaboration with the pertinent bodies.

                                   

                          • Chapter Three Insurance Companies Section One The Insurer

                            • Article (24)

                              1. Insurance and re-insurance operations in the State may be carried out by any of the following entities which are licensed and registered with the Authority:
                                 
                                1. A public stock company established in the State.
                                2. A branch of a foreign insurance company
                                3. An insurance agent
                                   
                              2. A. The prior approval of the Board shall be obtained before incorporating any insurance company in the State or opening a branch of a foreign insurance company or carrying out the operations of an insurance agent.

                                B. The fiscal year of the company shall commence on the first day of January and end on the thirty first day of December each year and as for the first fiscal year it shall commence as from date of incorporation and end on the thirty first day of December of the following year.

                              3. Any insurance contract concluded by a company not duly registered according to the provisions of the law herein shall be deemed invalid and the affected party may claim compensation by reason of so invalidation.
                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                               

                              1. Insurance and re-insurance operations in the State may be carried out by any of the following entities which are licensed and registered with the Authority:
                                 
                                1. A public stock company established in the State.
                                2. A branch of a foreign insurance company
                                3. An insurance agent
                                   
                              2. A. The prior approval of the Board shall be obtained before incorporating any insurance company in the State or opening a branch of a foreign insurance company or carrying out the operations of an insurance agent.

                                B. The fiscal year of the company shall commence on the first day of January and end on the thirty first day of December each year and as for the first fiscal year it shall commence as from date of incorporation and end on the thirty first day of December of the following year.
                                 
                              3. The capital of an insurance company shall not be less than the minimum limit as determined by the executive regulation of the law herein.
                                 
                              4. Any insurance contract concluded by a company not duly registered according to the provisions of the law herein shall be deemed invalid and the affected party may claim compensation by reason of so invalidation.

                               

                            • Article (25)

                              1. The company may not combine both Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations.

                              2. Exception to what is stipulated in paragraph (1) of the article herein, an existing company licensed to practice the two types of insurance prior to the promulgation of this Law may combine Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations, provided that it will comply to do the following:

                              (a) Complete separation between Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations in terms of technical, financial, technological, administrative and legal procedures and the relevant requirements in terms of technical, administrative and financial staff, with the exception of the Director-General of the company.

                              (b) Preparation of all reports and financial statements required by the Law herein, the instructions and decisions of the Board on a consolidated total basis, and on the basis of the separation between Persons and Funds Accumulation Insurance Operations and Property and Liability Insurance Operations.

                               

                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              1. The company shall not carry out life assurance and funds accumulation operations together with the operations of properties and life liability insurances.

                              2. The existing companies engaged in the two types of insurance as provided for in Para (1) of the Article herein shall adjust their situations within five years as from date of enforcing the law herein. However, the said period may be extended by resolution of the Cabinet.

                              3. The existing companies engaged in the two types of insurance as provided for in Para (1) of the law herein upon enforcing the provisions of the law herein shall abide by the directives issued by the Board organizing the operations of each of these two types of insurances.

                               

                            • Article (26)

                              1. Properties or possessions in existence inside the State or liabilities resultant thereof shall not be insured with insurance companies outside the State and as well no mediation in insuring these properties, possessions or liabilities except with a company duly registered according to the provisions of the law herein.

                              2. The insurer may re-insure inside and outside the State.

                            • Article (27)

                              Taking the provisions of the law herein into consideration, the company may open branches therefor in the State.

                            • Article (28)

                              1. Insurance policies concluded in the State shall be written in Arabic and a faithful translation into another language may be attached therewith, and in case of differences over the interpretation of the policy the Arabic text shall prevail.
                              2. The policy's articles exempting the company from the liability shall be written in bold letters and different colour and must be acknowledged by the insured.
                              3. Insurance policies may be issued electronically, in accordance with the circumstances and conditions established by a decision by the Board.
                              4. Exception to paragraph (1) of the article herein, the Director-General may exclude certain insurance policies from the condition of writing them in the Arabic language.

                               

                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              Insurance policies concluded in the State shall be written in Arabic and a faithful translation into another language may be attached therewith and in case of differences over the interpretation of the policy the Arabic text shall prevail.

                              The policy's articles releasing the company from the liability shall be written in bold letters, different color and endorsed by the insured.

                               

                            • Article (29)

                              The company shall be maintain the number of UAE nationals working therewith as resolved by the Cabinet.

                            • Article (30)

                              No one shall be a member of the company's Board of Directors, a general manager or an authorized manager therein should he ever been:

                              1. Convicted of a crime or a felony of dishonor, distrust or public moral or pronounced bankrupt and never been rehabilitated.

                              2. Liable according to the Board's discretion for grief violations of any of the provisions of the law herein or of the companies' law in his capacity as general manager or board member of one of the companies including the liability of causing the company to go for compulsory liquidation.

                            • Article (31)

                              1. The chairman and the members of the board of directors of the company, its general manager and the authorized manager or whosoever acting on his behalf or any of the company's managers or a senior officer shall not:

                              1. Participate in managing other competing insurance company or a similar company thereto,
                              2. Compete the company's operations or do any actions or an activity that conflicts with the company's interest,
                              3. Carry out the operations of an insurance agent or a broker,
                              4. Receive a commission for any of the insurance operations.

                              2. Whosoever be in charge of the management of the company or any employee therewith shall not represent any of the shareholders of this company.

                            • Article (32)

                              Efficiency and experience in insurance operations shall be prerequisites have to be fulfilled by any general manger or authorized manager and the senior officers of the company. The company shall provide the Authority with detailed description thereof implying qualifications and experience of each one as specified in the executive regulations of the law herein.

                            • Article (33)

                              1. The company shall advise the authority of the names of the members of its board of directors, general manager or the authorized manager or any of the senior staff and whether the position of any one of them vacated. The company shall fill the vacancy within sixty days as from date of vacating the same and notify the Director General of the Authority as so.

                              2. The company's Board of Directors shall provide the Authority with copies of the minutes of the Board's meetings and its decisions related to the elections of the company's chairman, his deputy, and the board's members authorized to sign on behalf of the company and their specimen signatures within seven days as from date of issuing these decisions.

                              3. Should the chairman and the members of the board of directors lodged their resignations or the Board lost its quorum the board of directors shall form a provisional committee of experienced and specialized individuals, appoint a chairman thereto, a deputy therefor out of its members to take charge of the company's management, invite the general assembly to convene within a period not exceeding three months as from date of the formation of the committee which shall be subject to renewal for a similar period once only by decision of the Board - in order to elect the company's new board of directors. The company shall bear remunerations of the committee as decided by the Board.

                            • Article (34)

                              The company in implementation of the instructions issued by the Board shall maintain the following:

                              1. Solvency margin and the minimum guarantee fund associated with the type of insurance engaged therein.
                              2. Technical provisions as estimated at the end of each fiscal year.
                              3. The reserves need be maintained inside the State.
                            • Article (35)

                              The company licensed to carry out insurance operations after the implementation of the provisions of the Law herein shall appoint or approve a registered actuary within a month as from date of granting the license thereto, provided reporting the same to the Director General within a month as from date of appointing or approving the actuary. The companies licensed prior to implementing the provisions of the law herein shall adjust their situation in accordance with the provisions of the Article herein within three months as from date of implementing the provisions of the law herein.

                               

                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              The company licensed to carry out life assurance and fund accumulation operations shall appoint or approve a registered actuary within a month as from date of granting the license thereto, provided reporting the same to the Director General within a month as from date of appointing or approving the actuary. The companies licensed prior to implementing the provisions of the law herein shall adjust their situation to make it consistence with the provisions of the Article herein within six months as from date of implementing the provisions of the law herein.

                               

                            • Article (36)

                              1. The company shall provide any data or information requested by the Director General on the company per se or on any company possessively related or associated therewith during the period as determined by the Director General, in addition to any data or information submitted by the company to any other monitoring body and any data or information received by the company from these bodies on time of occurrence.

                              2. The company's Board of directors shall invite the Director General to attend the general assembly meetings before at least fifteen days as from date of its convention. The Director General may depute whosoever represents him out of the Authority's employees in this respect.

                              3. The Director General may assign one or more of the employees of the Authority to ascertain or verify at suitable times any of the company's transactions, records, or documents. The company shall put any of the aforesaid at the disposal of the so assigned employee and cooperate with him to enable him to fully perform his duties.

                              4. The Director General on basis of the verification performed pursuant to the provisions of Para (3) of the Article herein shall appoint experts, consultants, actuaries or accounts auditors to check the company operations, evaluate the situations and file a report thereon. The company shall cooperate with them in a manner that enables them to fully perform their duties. The company shall bear their remunerations as determined by the Director General for each one of them.

                              5. The expert, consultants, actuary or the accounts auditor shall not disclose to any body whatsoever any information on the results arrived at according to Para (4) of the Article herein only after obtaining the written approval of the Board.

                            • Article (37)

                              1. The company shall be obligated to provide the Authority with a detailed report on its operations signed by the chairman of its board of directors, the authorized manager or those authorized to sign on behalf of the company containing company's final annual accounts and all the related detailed information annexed thereto including the annual budget, detailed profit and loss accounts of the two types of insurance in which the company is engaged and of each branch thereform plus the accounts auditor's report within a period not to exceed four months as from the end of the fiscal year. The report shall reach the Authority within at least thirty days period prior to inviting the company's general assembly to convene.

                              2. Should the accounts and data provided for in Para (1) of the Article herein proved to be not in agreement with the provisions of the law, and the regulations, rule, directives and decisions issued pursuant thereof the director general shall request the company's board of directors make them corrections in order to obtain the approval thereto before presenting them to the general assembly. The company's board of directors shall not present the same before obtaining such an approval.

                              3. Should the company faces unfavorable financial or administrative situations or inflicted grief losses affecting the rights of the insured or the beneficiaries, the company chairman of the board of directors or its general manager shall forthwith inform the director general of the Authority as so.

                            • Article (38)

                              1. A.The company shall provide the authority with the insurance policies' forms and endorsements they have approved for its operations including the general and special terms and conditions and the technical basis of these policies and the premiums rates annexed thereto and as well shall provide the director general with schedules of the redemption values of the life assurance policies and funds accumulation operations and the premiums rates annexed thereto.

                                B. The director general should the public interest require or in case of existence of a genuine imperfection may demand insertion of amendments into these forms within the period he determines for the purpose. The company may oppose the amendment and in case no agreement reached the matter shall be referred to the Board to settle it.
                                 
                              2. The company shall provide the insured and the beneficiaries with copies of the insurance policies and the related details.
                            • Article (39)

                              The insurance and re-insurance companies registered with the Authority shall observe the doctrine of disclosure and transparency in their dealing with their patrons and in respect of all the documents, papers, bulletins, advertisements, propaganda and articles and scientific materials of their issue. The Board shall issue a resolution in respect of the matters must be observed in implementation the renderings of the Article herein.

                            • Article (40)

                              The accounts auditor shall forthwith file a report to the Authority with copy thereof to the company's chairman of the board of directors in any of the following cases:

                              A. Should he became evident that the financial situation of the company does not enable it to fulfill its obligations towards the insured or hinders its capacity to meet the financial requirements provided for in the law herein and the regulations, rules, directives and decisions issued pursuant thereto relevant to the financial situation of the company.

                              B. Should he became evident that there is grief imperfection in the company's performance of its financial procedures including the process of entering the statements into its accounting records.

                              C. Should he refused or have reservations in respect of any certificate issued by the company related to its income or its financial statements.

                              D. Should he decided to resign or refused to be reappointment with the company for unusual reasons.

                              2. The Director General may ask the accounts auditor to furnish him directly within a specific period with the information needed to monitor the company's operations.

                              3. The general assembly of the company, in case the accounts auditor recommended that the financial statements filed thereto by the board of directors not to be approved, may resolve either to:

                              1. return the financial statements to the board of directors and demand the budget and profit and loss account be corrected according to the auditor's remarks and deem them approved following the correction, or
                                 
                              2. refer the matter to the director general to appoint an expertise committee of account auditors, determine their remunerations to be borne by the company, to settle the subject matter of the dispute between the company's board of directors and its accounts auditors. The decision of the committee shall be binding after presenting the same once more to the general assembly for approval. The budget and the profit and loss account shall be amended as decided by the committee.
                            • Article (41)

                              The Authority shall conduct periodical inspection on the insurance and re¬insurance companies to ensure the soundness of their financial situations, and their compliance with the provisions of the law and the technical basis of carrying out the insurance and re-insurance operations. Should the Director General come to know through such inspection or vide sufficient information that one of the following incidents took place, then he shall ensure soundness of such information:

                              1. (a) The company did not fulfil its obligations, or it's likely to fall short in doing so or the company is unable to continue its operations.
                              2. (b) The company violated the provisions of the law herein, bylaws, regulations, instructions or the decisions issued pursuant thereto.
                              3. (c) The company's procedures needed to reinsure the risks accepted by it are inadequate or the company didn't make these procedures, with the exception of the insurance-related professions.
                              4. (d) The company has lost one of the required terms and conditions for licensing or registration to carry out the insurance activity.
                              5. (e) The company's total losses exceeded (50%) of its paid-up capital.
                              6. (f) The company ceased its operations for more than one year without justifiable cause or legitimate reason.

                              2. Should the Director General became evident that the said information is correct he shall ask the company to take certain procedures to rectify its position within the period he shall determine, and in case the company failed to do so, the Director General shall refer the matter to the Board to take the necessary actions to rectify these situations; including:
                              (a) Request from the company or the main office of the foreign insurance company, as appropriate, to take the necessary action to correct the administrative situations, including the disqualification of the Director-General, the Authorized Manager or any senior official.

                              (b) Disqualification of the Chairman of the Board of Directors or any member of the Board that proves accountability for the current status of the Company.

                              (c) Dissolving the Company's Board of Directors and appointing a provisional neutral administrative committee of experienced individuals to take its place and appointing a chairman for the committee and a deputy thereof. The functions and competencies of the committee shall be determined for a period not exceeding six months, extendable for a period not exceeding one year in cases where this is required. The company shall be liable for the fees of the committee as determined by the Authority and upon accomplishment of the committee's mission a new Board of Directors shall be elected in accordance with the provisions of the Commercial Companies Law.

                              (d) Taking the necessary action to merge the company into another according to the provisions of the Commercial Companies Law.
                              (e) Ceasing or cancelling the company's license.
                              (f) Restructuring the company.
                              (g) Preventing the company from concluding any more insurance contracts or preventing it from practicing a particular type or types of insurance.
                              (h) Setting upper limit for the premiums total amounts received by the company for issuing insurance policies.
                              (i) Retaining assets in the State equal in value to the company's total net obligations accrued from its operations in the State or a certain percentage of their value as determined by the Board based on the recommendation of the Director General.
                              (j) Restricting the company's involvement in any of its investments activities associated with the solvency margin or compeling it to liquidate its investments in any of these activities to serve this purpose, unless such action would cause damage to the company as decided by the expert specialized in this field.
                              (k) Appointing an independent observer member from outside the Authority to attend meetings of the Board of Directors of the company and participate in the discussions without having a vote during taking the decision and the Board shall determine his competencies and fees.
                              (l) Liquidating the company.

                              3. The provisions stipulated in paragraph (1) and (2) of the article herein shall apply to Insurance Related Professions to the extent appropriate to the nature of these professions.

                              Article (41) bis (1):

                              1. Subject to the provisions of the Law concerning Offences and Administrative Sanctions in the Federal Government, the Authority has the power to impose administrative fines on insurance companies, reinsurance companies and insurance-related professions.

                              2. The Cabinet shall issue a decision to determine the offences for which the fines referred to in paragraph (1) of the article herein shall be imposed.

                              Article (41) bis (2):

                              1. The Director-General shall designate any expert, consultant, actuary or auditor for the purpose of conducting an inspection or audit.

                              2. Inspectors and auditors appointed by the Director General shall be given all necessary authorities to enable them to carry out their duties, including:

                              (a) Accessing records, registers, statements and internal audit reports. As well as collecting information and requesting necessary clarifications from the insurance company, reinsurance company, insurance-related profession and the members in respect of the insurance operations they carry out. In addition to obtaining prints or copies of records, registers and statements.

                              (b) Collecting the necessary information and clarifications from the members of the group of insurance company or reinsurance company in relation to all records, operations and activities relating to the insurance company.

                              (c) Collecting the necessary information and clarifications from any third party that has a relation with the insurance company, reinsurance company or the insurance-related profession concerning the subject matter of auditing.

                              Article (41) bis (3):

                              Any insurance company, reinsurance company or insurance-related profession, or any of their managers or employees shall not:

                              1. Prevent, intercept or obstruct any person appointed by the Director General to carry out inspections or audits pursuant to the law herein.

                              2. Conceal any data, registers or books requested by the Director General or the person appointed by him to perform the inspection or auditing duties.

                              3. Issue any misleading statements or give any inaccurate data, registers or books.

                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              The Authority shall conduct periodical inspection of the insurance and re-insurance companies to ensure safety of the financial situations, observance of the provisions of the law and the technical basis of conducting the insurance and re-insurance operations. Should the Director General came to know through such inspection or vide sufficient information that one of the following incidents took place he shall ensure soundness of such information:

                              1. That the company did not fulfill its obligations or it's likely to fall short in doing so or unable to go on with its operations.
                              2. That the company violated the provisions of the law herein, or the regulations, rules, directives or the decision issued pursuant thereto.
                              3. That the company's procedures needed to re-insure the risks of its tolerance are inadequate or the company didn't make these procedures.
                              4. That the company became devoid of one of the required terms and conditions for licensing or registration to carry out the activity of insurance.
                              5. That the company's total losses exceeded 50% of its paid-up capital.
                              6. That the company ceased to carry out its operations for more than a year without justified or legitimate reason.

                              2. Should the director general became evident that the said information are correct he shall ask the company to take certain procedures to rectify its situations within the period he may determine and should the company failed to do as so, the director general shall refer the matter to the Board to take the necessary actions to rectify these situations; including:

                              1. Preventing the company from concluding any more insurance contracts or transacting in certain type or types of insurance.
                              2. Setting upper limit for the premiums total amounts received by the company against issuing insurance policies.
                              3. Retaining assets in the State equal in value to the company's total net obligations accrued from its operations in the State or to a certain percentage of their value as determined by the Board following a recommendation by the Director General.
                              4. Restricting the company's involvement in any of its investments activities associated with the solvency margin or obliging it to liquidate its investments in any of these activities to serve this purpose unless such action would inflect harms on the company as decided by the expert specialized in this respect.
                              5. Asking the company or the main office of the foreign insurance company as the case might be to take the necessary actions to rectify the administrative situation therein including removing the Director General, the authorized manager or any of its senior officers away from office.
                              6. Removing the Chairman of the company's board of directors or any Board member proved to be liable for the ensuing situation of the company.
                              7. Dissolving the company's board of directors, appointing a provisional neutral administrative committee of experienced individuals to take its place and as well appointing a chairman for the committee and a deputy thereof, determining their responsibilities and powers for a period not to exceed six months subject to renewal for a period not more than a year in the cases requiring as so. The company shall bear the fees of the committee as determined by the Authority and upon accomplishment of the committee's mission a new board of directors shall be appointed according to the provisions of the Law of Commercial Companies.
                              8. Taking the necessary action to merge the company into another according to the provisions of the Law of Commercial Companies.
                              9. Ceasing or canceling the company's license.
                              10. Restructuring the company.
                              11. Liquidating the company.

                               

                          • Insurance Companies' Funds

                            • Article (42)

                              Every insurance company shall deposit into one of the banks operating in the State a deposit to stand as guarantee for fulfilling its obligations amounting:

                              1. Dirham four million for the two types of insurances of life assurance and fund accumulation operations provided for in Para (1) of Article (4) of the law herein.
                                 
                              2. Dirham two million for each branch of insurance enlisted under the two types of insurances of properties and life liabilities provided for in Para (2) & (3) of Article (4) of the law herein, provided the total amount shall not exceed Dirham six million at most regardless of the number of the branches.

                              According to a resolution by the Cabinet the deposit as provided for in the preceding two paragraphs may be increased on basis of a recommendation by the Chairman.

                              The deposit shall be in the form of money or the equivalent of shares and bonds of companies incorporated in the State or a mortgage of a real-estate located therein, subject to the chairman's consent.

                              The deposit shall be deposited into one of the banks licensed in the State in the name of the company and to the order of the chairman in so capacity. As for the real-estate mortgage, an endorsement shall be entered into its registration with the Department assigned for mortgages' registration as an indication for that. The Authority shall be provided by an official certificate as so. The cash returns of the deposit (if any) shall be made for the company's interest. By consent of the Director General the whole deposit or part thereof shall be replaced by any other form of deposit provided for in the Article herein in condition that its value shall not be less than the legal limit of the deposit at the time of replacement.

                            • Article (43)

                              The deposit shall not be disposed off except by a written permission from the chairman or whosoever authorized by him. The court of jurisdiction or the committee may order seizure of the deposit against the debts accrued from the insurance operations of the company. However, no order shall be given to seize the deposit against other debts.

                              The Authority shall request the company to complete the deposit should it become less than the legally determined limit due to decrease in the values of the shares, bonds, or real-estates or impose seizure thereon or on part thereof according to the provisions of the preceding Para or for any other reason. The company shall complete the deposit within a thirty day period at most as from date of the call to complete the deposit.

                            • Article (44)

                              The bank shall not dispose off the deposit by any form or another except pursuant to a final judicial verdict or by a written permission from the chairman. The pertinent real estate registration bodies as well shall not lift off the endorsement signifying mortgaging of the real-estate kept as a deposit except by a written permission from the chairman or whosoever he authorizes.

                            • Article (45)

                              The companies engaged in any of the two insurances types provided for in Para (1) of Article (4) shall maintain funds therewith in the State equivalent in their value at least to the total amount of the special mathematical reserve of the contracts concluded inside the State or of those executed therein. The Cabinet on basis of a presentation by the Chairman may decrease percentage of the reserve to be maintained by the company to no less than 50%.

                              These funds shall be fully maintained separate from the monies of other insurance operations. However, in calculating the said reserve the deposit provided for in Para (1) of Article (42) of the law herein shall be taken into consideration in such a manner whichever the larger shall weigh up.

                            • Article (46)

                              The insurance companies operating at the time of implementing the law herein shall be given one year grace period as from date of enforcing the law herein to adjust their situations according to the provisions of Para (1) and (2) of Article (42) of the law herein. The Cabinet on recommendation of the chairman may extend the period for another year.

                          • Licensing

                            • Article (47)

                              1. Incorporation of any insurance company in the State or opening a branch of a foreign insurance company therein shall not be only after obtaining a license from the Authority which shall have the right either to grant it or refuse as may seen fit to the national economy needs provided that the purpose of the company shall be carrying out insurance operations. The executive regulations of the law herein shall determine the documents need be submitted along with the licensing application.

                              2. Should licensing be granted on basis of inaccurate information the license shall be cancelled by decision of the director general.

                          • Chapter Two Registration of Insurance Companies & Agents

                            • Article (48)

                              1. Any of the companies provided for in Para (1) of article (24) of the law herein shall not carry out insurance operations only following its inscription in the register according to the provisions of the law herein and the requisites determined by the executive regulation of the law herein.
                               

                              2. Should the registration been granted on basis of inaccurate information the registration shall be cancelled by decision of the director general.

                            • Article (49)

                              The company shall not re-insure with another company unless that other company is duly licensed to carry out the type of insurance assigned thereto for re-insurance.

                            • Article (50)

                              The Board on basis of the director general's presentation may cease the company to carry out certain type or types of the insurances of its practice for a period not exceeding a year and shall notify the company and the pertinent body given the cessation decision in any of the following cases:

                              1. Should the company is in violation of the provisions of the law herein and the regulations, rules and directives issued pursuant thereto.
                                 
                              2. Should the company became devoid of any of the terms needed for the registration according to the provisions of the law herein.
                                 
                              3. Should the company did not carry out its operations in any of the insurance types listed with those ones requiring registration or ceased operating in such a type to carry out for period of one year.
                                 
                              4. Should the company failed to fulfill its accrued financial obligations.
                                 
                              5. Should the company refrained to execute a final judicial verdict related to an insurance contract.
                            • Article (51)

                              1. Should the company within a period not more than one year as from date of the cessation eliminated the reason led to cease its operations due to any of the cases provided for in Article (50) of the law herein, the Board shall issue on basis of a presentation by the director general a decision approving the company to continue carrying out insurance operations. The decision shall be transmitted to the pertinent body and the company.

                              2. Should the company failed to eliminate the reason led to cease its operations within a period of one year at most as from date of the cessation, its license for that type or types of insurances shall be cancelled by decision of the Board. The decision shall be transmitted to the pertinent body and the company.

                            • Article (52)

                              1. The procedures related to cessation of operations or cancellation of one or more of the insurance types and the powers bestowed upon the director general in this respect shall be determined by virtue of the decisions issued by the Board for the purpose.
                               

                              2. The following shall result from the decision of ceasing the operations or canceling the license for one or more of the insurance types:
                               

                              1. The company shall be prohibited from concluding insurance contracts of any of those insurance types subject to the penalties provided for in the law herein.
                                 
                              2. All rights and obligations accrued from the contracts concluded prior to the cessation of the operations or the cancellation of the license for that or those types of insurance shall be deemed proper and valid and the company shall remain liable therefor.
                            • Article (53)

                              The company which its registration for one or more types of insurances has been cancelled may file an application to the director general to re-register it within a period not exceeding one year as from date of issuing the cancellation decision attached therewith the documents establishing elimination of the reasons of that the cancellation. The Board shall issue its decision pertaining thereto on basis of a presentation by the director general within a period of two months at most as from date of referring the matter to the Board.006

                            • Article (54)

                              1. Should the company which its registration for all types of insurance had been cancelled did not file an application for re-registration within the period provided for in Article (53) of the law herein or the Board rejected the application for re-registration, the company shall start procedures of voluntarily liquidation within a month as from the expiry date of such period or from date of notifying the company of the Board's decision and should the company did not conduct these procedures the company shall be liquidated according to the provisions of the law herein.

                              2. The registration of the company shall be deemed canceled should a non-compulsory liquidation decision been issued or a final judiciary verdict of compulsory liquidation been pronounced thereon or been declared bankrupt.

                          • Chapter Three Branches of Foreign Insurance Companies

                            • Article (55)

                              1. Branches of foreign insurance companies shall be obliged before getting registered to appoint an authorized manager for the branch to carry out insurance operations on their behalf and they shall be responsible for his actions provided attaching along with the appointment decision an official documents and an attested copy thereof in order to be deposited with the Authority authorizing him to exercise all necessary powers to manage the branch including the acts of:

                              1. Issuing insurance policies, making endorsements and paying the accrued indemnities.
                              2. Representing the company before the Authority, the courts of jurisdictions, and all official and non-official bodies in connection with the branch's operations and management.
                              3. Receiving of warnings and all notices and correspondences intended to the company.

                              2. The branches of the foreign insurance companies shall be obliged to notify the director general of the name of the so authorized manager within a month as form date of his appointment and shall appoint a replacement thereto within a month as from date of vacating his position.

                              3. The branches of the foreign insurance companies shall publish the company's consolidated final accounts in two widely circulated local daily newspapers issued in Arabic and in one local daily newspaper issued in English.

                          • Representative Offices of Foreign Insurance Companies

                            • Article (56)

                              1. Representative offices of the foreign insurance companies shall not carry on their tasks in the State before obtaining a license for the purpose from the Authority.
                               

                              2. The Authority shall issue a decision to organize the tasks of these offices.
                               

                              3. The licensing applications may be approved or rejected by decision of the Board and the decision shall be notified to the relevant bodies.

                          • Chapter Four Special Provisions related to the Companies of Life assurance and Funds Accumulation Operations

                            • Article (57)

                              Companies engaged in any of the two types of insurances provided for in Para (1) of Article (4) of the law herein shall not discriminate between a policy and another of the same type in respect of insurance premiums or profit amounts allocated to the shareholders or the like of other stipulations unless such discrimination is a result of life expectancy variations in those policies which life span has an effect therein, with exception of:

                              1. Re-insurance policies.
                                 
                              2. Insurance policies in amounts with certain discounts according to the premium rates' schedules communicated to the Authority.
                                 
                              3. Insurance policies with special terms covering the life of the members of one-family or group of people professionally or occupationally related or having any other social relation.
                            • Article (58)

                              The director general may license the company upon its own request to issue policies at premiums discounted than the usual should there are justifiable reasons.

                            • Article (59)

                              Companies engaged in either of the two types of the insurances provided for in Para (1) of Article (4) of the law herein shall examine the financial status of the related type and assess the outstanding obligations related thereto at least once every three years by an actuary.

                              Such assessment shall include all insurance operations concluded by the company inside and outside the State one-by-one and should the activity been conducted by a branch, the assessment shall be confined to the operations which their contracts been concluded inside the State or executable therein.

                            • Article (60)

                              The assessment mentioned in Article (59) of the law herein shall be conducted whenever the company intended to examine its financial status in order to determine percentage of profits to be allocated to the shareholders or policyholders or whenever it intended to make such status public.

                              The Authority may demand such assessment be conducted at any time before the lapse of three years provided the lapse of one year at least as from date of conducting the latest assessment.

                            • Article (61)

                              The executive regulation of the law herein shall determine statements should be incorporated in the expert's report in respect to the findings of the examination and the assessment referred to in Articles (59) & (60) of the law herein.

                            • Article (62)

                              The company shall send the Authority a copy of the expert's report on the findings of the examination and the assessment referred to in Articles (59) & (60) of the law herein within six months as from the expiry of the period for which the examination was conducted accompanied with the following:

                              1. A statement of the insurance policies still in effect concluded by the company inside or outside the State on the date of conducting the examination and should such an activity been carried out by a branch of a foreign company the statement shall include only those policies concluded inside the State or those ones executable therein.
                                 
                              2. A declaration by those responsible for managing the company in witness that all statements and information required to get an exact report have been put under the disposal of the expert.

                              By decision of the director general following the lapse of the six months provided for in the Article herein an extension of time may be given to the company to file the said report provided such period shall not exceed three months.

                            • Article (63)

                              Should the Authority became evident that the expert's report did not reflect the reality of the financial status of the company the Authority may order a re-examination thereof on the company's own expenses by an actuary to be elected by the Authority for the purpose.

                            • Article (64)

                              The companies engaged in life assurance and funds accumulation operations shall not deduct whether directly or indirectly any part of the funds intended to meet their obligations accrued from the insurance policies in order to allocate as profits for the shareholders or the policyholders or to pay any amount other than their obligations according to the insurance policies they have issued. Allocation of profits shall be restricted to the surplus funds as determined by the expert in his report after conducting the examination referred to in Article (59) of the law herein.

                              In implementing the provisions of the Article herein the company's funds inside and outside the State shall be deemed without prejudice to the provisions of Article (34) of the law herein as one unit.

                            • Article (65)

                              The companies engaged in life assurance and funds accumulation operations shall not issue saving bonds for a period exceeding thirty years and should the bond of a duration of twenty five years or more the surrender value after the twenty fifth year shall not be less than the full amount of the mathematical reserve and the premiums undertaken by the bearer of the saving bonds shall be of equal amounts or receding.

                            • Article (66)

                              The saving bonds shall include therein invalidation articles to be used by the company as an argument in face of the bearer to invalidate the bond for delaying payment of the premium.

                              The contract, however, shall not be invalidated before lapse of three months as from the due date of the premium and should the bond being nominal such period shall not become effective only as from date of serving a notice on the bearer of the bond by a registered letter.

                              Also, it shall be specified in these bonds that the right therein shall pass to the beneficiaries by reason of the death of the bearer of the bond without paying any additional monies or imposing any further provisos.

                              By decision of the Board based on a recommendation of the director general other statements need be included in the saving bond may be specified.

                            • Article (67)

                              In case the company engaged in life assurance and funds accumulation operations gone bankrupt or in case of liquidation the due amounts of each holder of a policy with unexpired durtion shall be estimated to equate the mathematical reserve thereto in the day of announcing the bankruptcy verdict or the liquidation decision calculated according to the technical basis of the premiums' tariff at the time of concluding the policy.

                          • Chapter Five Insurance & Re-Insurance Companies Operating in the Free Zones in the State

                            • Article (68)

                              Insurance companies licensed to operate in the free zones shall not carry on any activity outside these zones other than the activity of re-insurance.

                          • Chapter Six Insurance Agent

                            • Article (69)

                              1. The provisions relevant to the regulation of the insurance agent's operations and the accrued liabilities thereupon shall be determined pursuant to decisions or directives to be issued by the Board for the purpose.

                              2. No body shall carry out the operations of an insurance agent only after providing the director general with the agreement he concluded with the company stated therein him being authorized as agent therefor. However, the agent shall not act as an agent for more than one company. He shall fulfill the terms and conditions provided for in Article (30) of the law herein.

                          • Chapter Seven Insurance Brokers, Appraisal & Loss Adjusters, Insurance Consultants & Actuaries

                            • Article (70)

                              No body shall carry out operations of an insurance broker, a re-insurance broker, an appraisal and loss adjuster, an insurance consultant, or an actuary only after entering his registration in the register prescribed for the purpose according to the terms and conditions as determined by the Board pursuant to the rules issued for the purpose provided including therein the provisions determining his responsibility, organizing his operations and requisites of his registration. However, he shall fulfill the provisos provided for in Article (30) of the law herein.

                          • Chapter Eight Reassignment of Insurance Policies & Cessation of Operations

                            • Article (71)

                              The company may reassign the insurance policies it concluded inside the State, including the rights and obligations associated with any type of the insurances engaged therein, to another company or other companies engaged in the same type of insurance.

                            • Article (72)

                              1. The reassignment application shall be placed to the director general attached therewith the instruments and documents establishing the agreement on the reassignment. The director general shall give directions to publish a notice about the reassignment in the Gazette just once, in two widely circulated local daily newspapers issued in Arabic and in one local daily newspaper issued in English for two consecutive times, on the applicant own expenses provided that the notice shall include reference to the right of the policyholders and the beneficiaries thereof or whosoever interested therein to raise to the director general an objection to the reassignment within forty five days as from date of the latest notice specified therein the subject matter of the objection and the sustaining reasons.

                              2. The director general shall issue a decision approving the reassignment should those concerned parties raised no objection within the period referred to in Para (1) of the Article herein. The decision shall be published in the Gazette within a month as from date of its issue and shall be used as an argument in face of the insured, the beneficiaries and the company's debtors. The funds of the company shall be relocated to the company which the policies have been reassigned, taking into accounts the provisions related to conveyance and reassignment of funds. The reassigned funds shall be exempted from registration and safekeeping fees imposed according to laws of conveyance and reassignment of funds.

                              However, should any objection been raised during the said period, the reassignment application shall not be finalized only after the concerned parties reached an agreement or a final verdict been pronounced in the subject matter of the objection.

                              Nonetheless, the director general may issue a decision approving the reassignment provided the company paying an amount equivalent to its obligations towards the objector including the expenditures may be needed to maintain any of the company's assets.

                            • Article (73)

                              The provisions of Articles (71) & (72) of the law herein shall be applied should any company ceased operating in certain type or types of the insurances or intended to release its monies need be maintained inside the State for such type or these types of insurances following the company submission of an evidence establishing fulfillment of its obligations towards all policies concluded inside the State or towards those executable therein of the type or types which the company decided to cease operating therein or reassigned these policies to another company in the manner as stated in Article (71) & (72) of the law herein.

                          • Chapter Nine Merger, Acquisition, Restructuring and Liquidation of Companies

                            • Article (74)

                              1. The special provisions on merger stated in the commercial companies' law shall be applied to mergers of insurance companies.

                              2. No merger of an insurance company except into another insurance company operating in the same type of insurance and no procedures for merger shall be initiated except after filing an application for merger to the director general attached therewith the necessary reports and statements and obtaining the approval of the Board.

                            • Article (75)

                              1. The director general shall form an assessment committee participating therein one representative of each company, the accounts auditors thereof, as well as experts and specialist. The director general shall appoint one of them as chairman of the committee.

                              2. The committee provided for in Para (1) of the Article herein shall assume assessment of all assets, rights and obligations of the companies intending merger in order to indicate the shareholders' net rights on the date set for the merger. The committee shall file its report to the director general along with the company's statement of accounts produced as a result of the merger within a period not to exceed ninety days as from date of referring the matter thereto. The Board on recommendation of the director general may extend such period for a similar period in case of necessity, provided the companies intending merger shall equally bear remunerations of the assessment committee and in case of difference thereat these remunerations shall be determined by decision of the director general. However, director general's decision in this respect shall be final.

                              3. The director general shall file the committee's report to the Board along with his recommendations and should the Board approve the committee's report, the Board shall form an executive committee composed of the chairmen and Board members of the companies intending the merger and the companies' auditors to handle the excutionary procedures of merger according to the provisions of the commercial companies' law.

                            • Article (76)

                              1. The companies, the parties of the merger, shall let the insured review the agreement on which the merger has been accomplished in order to verify its articles. The agreement shall be displayed at the main office of each one of these companies for fifteen days as from date of publishing the decision of merger in the Gazette.

                              2. Any interested party shall have the right to raise an objection before the Board within thirty days as from date of publishing the decision of merger, provided the objector shall indicate the subject matter of his objection, the sustaining reasons thereto and specifically state the damages alleged to be inflicted due to merger. Should the Board failed to settle the objection for any reason within thirty days as from date of referring the same thereto the objector shall have the right to recourse to the court of jurisdiction. However, these objections or claims filed with the court shall not cease the decision of merger unless the court orders otherwise.

                              3. The Board shall issue the instructions relevant to the procedures of merger and settlement of objections raised thereto in this respect and all the matters related thereto.

                            • Article (77)

                              1. A. For the purposes of restructuring the company according to Para (2.J.) of Article (41) of the law herein the Board on basis of a presentation by the director general may dissolve the company's board of directors and form a neutral committee to restructure the company composed of experienced and specialized individuals and appoint a chairman for the committee and a deputy thereto for a period not to exceed a year as from date of issuing a decision thereto. The fees of the committee as determined by the Board shall be borne by the company. The committee shall file a monthly report to the director general on the progress of the restructuring procedures or whenever so requested.

                                B. The process of restructuring shall include for the purpose, managing the company and organizing the staggering financial affairs through negotiations with all its debtors in order to determine means to settle debts of the company by approving a restructuring plan.

                              2. The committee provided for in Para (1.A.) of the Article herein shall publish a notice once in the Gazette and for three consecutive working days in two widely circulated local daily newspapers issued in Arabic and in a local daily newspaper issued in English; all at the company's own expenses. The notice shall include calling all the creditors to file statements of their debts supported with confirmatory documents within a period not exceeding thirty days as from date of publishing the latest notice. However, any statements filed by any creditor upon lapse of such period shall not be considered.

                            • Article (78)

                              1. Irrespective of the provisions stated in any other legislation, the execution of any levy whether precautionary or executionary on the company's funds or assets or any action or execution on these funds or assets shall stay as from date of issuing the decision of the restructuring pending occurrence of any of the following cases:

                              1. The period provided for in Para 1.A. of Article (77) of the law herein lapsed in case the restructuring plan has been approved.
                              2. The Board issued a decision according to the provisions of the law herein rejecting the restructuring plan.
                              3. The creditors rejected the restructuring plan according to the provisions of the law herein.
                              4. The Board issued a decision bringing the restructuring procedures to halt according to the provisions of the law herein.

                              2. Computing of the time limit to deny hearing of legal proceedings by reason of time-lapse shall cease in connection with the procedures provided for in Para (1) of the Article herein.

                            • Article (79)

                              1. The committee shall prepare its report on the restructuring plan within a period not exceeding fifteen days as from date of substantiating the debts therewith and call the creditors to approve the plan by publishing a notice in two widely circulated local daily newspapers issued in Arabic and in a local daily newspaper issued in English, provided the same be approved by creditors representing no less than three quarters of the non-preferred and non-mortgage warranted debts.

                              2. A. in case the creditors approved the plan according to the provisions of Para (1) of the Article herein, the committee shall present the plan to the general manger whose in turn shall refer it to the Board along with his recommendations.

                              B. In case the creditors rejected the plan prepared according to the provisions of Para (1) of the Article herein, the committee shall file a report thereon to the director general who shall refer it along with his recommendations to the Board to take the necessary action according to the provisions of Para (2) of Article (41) of the law herein.

                              3. The Board may approve or disapprove the plan presented according to Para (1) of the Article herein; in case of approval the procedures of restructuring shall proceed and in case of disapproval the Board shall decide about the suitable procedure to be taken according to the provisions of Para (2) of Article (41) of the law herein.

                              4. Following the accomplishment of the restructuring a new board of directors shall be elected according to the provisions of the commercial companies' law.

                            • Article (80)

                              1. Should the Board became evident that the situations of the company are staggering still despite applying the restructuring plan or the restructuring is ineffective, the Board may decide to cease the restructuring procedures and take the suitable procedures according to the provisions of Para (2) of Article (41) of the law herein.

                              2. The Board on basis of a presentation by the director general may issue the necessary directives to repeat the restructuring and all the matters related thereto according to the provisions of the law herein.

                          • Chapter Ten Liquidation of the Company

                            • Article (81)

                              1. The provisions stated in the law herein, the rules and decisions issued pursuant thereto shall apply in case of liquidating the company. The liquidation shall be conducted by one liquidator or more to be appointed by the general assembly by the ordinary majority whereby the company's decisions are being issued.

                              Should the liquidation been on basis of a verdict, the Court shall specify method of liquidation and appoint the liquidator.

                              The decision of appointing the liquidator shall be determined therein his fees and powers coupled with commitment him to submit a guarantee should the matter necessitated. Should the liquidator's fees are not determined in the appointing decision the fees shall be determined by the court of jurisdiction.

                              2. The decision of appointing the liquidator shall be announced by insertion in the trade register and publishing in two widely circulated local daily newspapers issued in Arabic and a local daily newspaper issued in English within a week period at most as from date of the announcement. However, such an appointment shall not be used as an argument in face of the others except as from date of the announcement.

                              3. The powers of the board of directors shall end when the company starts the liquidation phase. However, the entities of the company shall remain in existence during the period of liquidation, provided their powers shall be confined to the liquidation operations that fall within the domain of the liquidators.

                            • Article (82)

                              1. Any interested party shall have the right to appeal against the decision issued by the company's general assembly appointing the liquidator before the court of jurisdiction within forty days as from date of entering the decision in the trade register.
                               

                              2. The appeal made according to Para (1) of the Article herein shall not cease the liquidation procedures unless the court decides otherwise.

                            • Article (83)

                              The liquidator shall be dismissed in the same manner of his appointment. Any decision or verdict to dismiss the liquidator shall include appointing whosoever will take his replace. The dismissal of the liquidator shall be announced by entrance in the trade register and publishing in two widely circulated local daily newspapers issued in Arabic and a local daily newspaper issued in English. Such dismissal shall not be used as an argument in face of the others except as from date of the announcement.

                            • Article (84)

                              The following shall result from the decision of liquidation:

                              1. The liquidator will add the expression "under liquidation" to the name of the company on all its papers and correspondences.
                                 
                              2.  Cessation of any signing authorization or powers issued by any body in the company. The liquidator shall solely be qualified to grant any signing authorization or powers required for the procedures of liquidation.
                                 
                              3. Cessation of computing the time-lapse barring hearing of claims of any rights or claims whether exiting or due to the company for a period of one year as from date of issuing the decision of liquidation.
                                 
                              4. Cessation of the legal proceeding and procedures filed by or against the company for a period of six months unless the court decides to proceed therein before the end of such a period; taking the provisions of Para (5) of the Article herein into consideration.
                                 
                              5. Cessation of the proceeding of any procedural or excutionary processes against the company except should it be upon request of a mortgagee and related to the mortgaged fund per se, then all these processes shall cease or denied acceptance for a period of six months as from date of issuing the decision of liquidation.
                            • Article (85)

                              The liquidator may take all the necessary decisions and procedures he may see necessary to accomplish the procedures of liquidation including:

                              1. Managing the company's operations to the extent required for the liquidation procedures.
                                 
                              2. Taking inventory of all assets and chattels of the company in collaboration with the board of directors which shall undertake to deliver the company's funds, books and documents to the liquidator.
                                 
                              3. Appointing any of the experts and individuals to assist him to accomplish the procedures of liquidation or appointing a special committee and delegate thereto any of the tasks and powers entrusted to him and issuing the necessary decisions to accomplish the procedures of liquidation.
                                 
                              4. Hiring one lawyer or more to represent the company under liquidation in any of the legal claims or procedures related thereto.
                            • Article (86)

                              Irrespective of any agreement otherwise, the liquidator may take all the necessary procedures he may see necessary to protect the company's rights including:

                              1. Canceling any action, rescinding any agreement concluded by the company or retrieving any amount paid by the company during the three months prior to issuing the decision of liquidation should that constitute preferring certain body over the creditors of the company. The period shall be one year should the company happened to be in possessive relation or associated with that body. The preferentiality shall be deemed realized should the action or the procedure done without indemnity or with partial indemnity or involved assessment of a fund or right in a value other than the real or in a value other than the regular in the market.
                              2. Canceling any action or rescinding any agreement concluded by the company with any body possessively related or associated therewith or retrieving any amount paid by the company to either of them during the three months prior to issuing the decision of liquidation.
                              3. Concluding an agreement with any of the creditors of the company on the method of paying or installing any amounts or debts accrued therefrom.
                              4. Terminating the service of any of the company's employee and paying his dues.
                              5. Terminating any contract concluded by the company with any body before it expires.

                              2. The liquidator shall take any of the procedures referred to in Para (1) of the Article herein by a written notice to be served on the relevant person. These procedures may be appealed against before the court of first instance where under its jurisdiction the company's main office falls during thirty days as from date of notifying the person.

                            • Article (87)

                              1. All mortgages and warrantees in connection with any of the funds or rights of the company made before three months as from date of issuing the decision of liquidation shall be deemed null and void. The said period shall be one year should the mortgages and warrantees were in favor of somebody possessively related to the company or associated thereto.

                              2. Every decision imposing a levy on any fund or right of the company prior to the issue of the decision of liquidation shall be deemed cancelled unless the decision was issued upon request of mortgagee or related to mortgaged fund.

                            • Article (88)

                              For the purposes of the Article (86) & (87) of the law herein an individual shall be deemed associated with the company in any of the two cases:

                              1. Should the individual being an administrator in the company or having joint business interest with an administrator therein.
                                 
                              2. Should the individual being a spouse of an administrator in the company or a relative up to the third degree of that administrator or spouse thereof or having joint business interest with any one of them.
                            • Article (89)

                              Taking the provisions of the legislations prevailing in the State into consideration, the liquidator may fulfill the company due debts and sell its properties whether in form of chattels or real-estate in public auction or by any other mean unless specified in his appointment letter that sales to be conducted in particular manner. However, the liquidator shall not sell the company's possessions in one lot except by permission of the general assembly.

                            • Article (90)

                              1. Taking into consideration the provisions relevant to the insured and the beneficiaries of the insurance policies, the liquidator shall publish within thirty days as from date of issuing the decision of liquidation a notice in a clearly visible space in two widely circulated daily local newspapers issued in Arabic and in a daily local newspaper issued in English advising the creditors of the necessity of presenting their claims against the company whether being due or not within two months should they are residing inside the State and three months should they are residing outside it.

                              2. The notice shall be republished in the same manner immediately after lapse of fourteen days as from date of publishing the first notice. The time-lapse period of the claims shall be computed as from date of publishing the first notice.

                              3. Should the liquidator or the court of jurisdiction became convinced that there is a legitimate excuse for the creditor failure to present his claim during the period specified in Para (1) of the Article herein such period shall be extended for another three month at most.

                              4. The period as from date of issuing the decision of liquidation up to date of publishing the first notice mentioned in Para (1) of the Article herein shall not be computed within the period determined to bar hearing of the creditors' claims of any rights or claims towards the company under liquidation.

                            • Article (91)

                              1. Taking Para (2) of the Article herein into consideration, the liquidator shall issue, within three months as from date of issuing the decision of liquidation, the notices indicated here below unless there are justifying reasons to go beyond this period, provided the whole period shall not exceed six months:

                              1. Notice with an acknowledgment receipt to each of the insured or the beneficiary of the insurance policy indicating extent of his rights and obligations.
                              2. Claim notice with an acknowledgment receipt to each debtor indicating amount of debts and obligations owed to the company.

                              2. An objection against the notice mentioned in Para (1) of the Article herein may be placed to the liquidator within thirty days as from date of serving the notice on the intended party and should no objection been placed during the period, the insured or the beneficiary shall be deemed to have recognized the contents of the notice.

                              3. The period determined to hear the claim filed pursuant to the provisions of Para (2) of the Article herein shall cease.

                              4. Should the claim's notice issued by the liquidator to the debtor according to the provisions of Para (1.B.) of the Article herein became final and decisive the liquidator may make settlement with the debtor or use the notice against him by virtue of the provisions of the prevailing laws.

                            • Article (92)

                              1. A. The liquidator shall issue his decisions in respect of the claims and objections submitted to him according to the provisions of Articles (91) & (92) of the law herein within a period not to exceed six months as from date of submission.

                              B. should the liquidator didn't issue his decision within the period specified in Sec. (A) of the Para herein the claims and objections shall be deemed legally rejected.

                              2. Any interested party may file an objection before the court of first instance where under its jurisdiction the company's main office falls against the decision issued by the liquidator according to the provisions of Para (1) of the Article herein within thirty days as from date of notifying the intended party of the decision or within thirty days as from lapse of the six months period referred to in Sec. (1.A) of the Article herein whichever is shorter.

                            • Article (93)

                              Irrespective of any other legislation the liquidator may file a petition to the competent court of first instance to impose a precautionary levy on any funds belonging to the company's debtors or take any precautionary or urgent measures against them according to the provisions of the prevailing legislations taking the following into account:

                              1. The liquidator shall be exempted from attaching a guarantee with his petition.
                                 
                              2. The liquidator has served a claim notice on the debtor when he filed the petition referred to herein or will serve the same within the eight days following the issue of the decision. Such notice shall stand in place of the subjective claim need be filed according to the provisions of the Civil Procedures Law.
                            • Article (94)

                              1. No creditor, debtor, insured, or beneficiary shall be entitled to file a claim against the company under liquidation after issuing the decision of liquidation except according to the principles and procedures provided for in the law herein.

                              2. Taking the provisions of Para (1) of the Article herein into consideration anybody inflicted harms due the liquidator actions or procedures may file according to the prevailing laws an objection before the court of first instance where under its jurisdiction the company's main office falls. The court may uphold, nullify, or amend these actions and procedures.

                            • Article (95)

                              Exception to the legislation in force in the State, the due debts and obligations of the company subject to liquidation shall be paid according to the following order:
                              1. The due entitlements of the staff and employees for the last four months.
                              2. The liquidator’s fees, costs, expenditures and the loans he obtained.
                              3. The rights of insured and beneficiaries of insurance policies. The liquidator shall be obliged to allot the company's assets that represent the technical provisions required to be retained in accordance with the provisions of the law herein to pay these liabilities and any amounts acquired by the company according to any arrangements of reinsurance shall be deemed part of the technical provisions.
                              4. The rights of the other debtors by order of preferences according to the laws in force.
                              5. The rights of the shareholders.

                               

                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              Irrespective of the provisions of any other legislation the company's due debts and obligations shall be paid according to the following order:

                              1. The due entitlements of the staff and employees for the last four months.
                                 
                              2. The costs and expenditures borne by the liquidator and the loans he obtained.
                                 
                              3. The rights of the insured and beneficiaries of the insurance policies. The liquidator shall be obligated to allot the company's assets that represent the technical provisions required to be maintained according to the provisions of the law herein to pay these obligations and any monies acquired by the company according to any arrangements of re-insurance shall be deemed part of the technical provisions.
                                 
                              4. The rights of the other debtors by order of preferences according to the prevailing laws.
                                 
                              5. The rights of the shareholders.

                               

                            • Article (96)

                              1. The liquidator shall submit to the general assembly every six months a provisional account of the liquidation course of action and disclose any information or details required by the partners about the liquidation's state of affairs. He shall accomplish his mission within the period specified in his appointment letter and should no period been specified any partner may file the matter to the court of jurisdiction to determine a period for the liquidation.

                              2. The liquidation's period shall not be extended except by decision of the general assembly after considering the report of the liquidator indicated therein the reasons that hindered accomplishing the liquidation on time. Should the period of liquidation been determined by the court the same shall not be extended save by its permission.

                            • Article (97)

                              1. The liquidator shall submit upon accomplishing the liquidation a final account to the general assembly about the processes of liquidation. The liquidation processes shall end upon approving the final account.

                              2. The liquidator shall declare the liquidation accomplished in the trade register and publish an announcement in two widely circulated local daily newspapers issued in Arabic and in one local daily newspaper issued in English and that shall not be used as an argument in face of the others only as from date of such an announcement. The liquidator following the accomplishment of the liquidation shall file an application to write the company off the register.

                            • Article (98)

                              1. A. Serving any notice or decision issued by the liquidator according to the law herein to the intended person shall be made by handing the same to him personally or to whosoever legally represent him or by posting it with an acknowledgement receipt to his last address as maintained by the company under liquidation.

                              B. Each notice sent pursuant to the Article herein shall be deemed duly handed to the consignee should that person refused to receive it.

                              2. Should it became difficult to serve the notice according to the provisions of Para (1) of the Article herein the liquidator shall serve the notice by publishing it in two of widely circulated local daily newspapers issued in Arabic and in one local daily newspaper issued in English at least twice. The publishing fees shall be on the intended person own expenses and such publishing shall be deemed legal notice in all aspects.

                          • Chapter Eleven Emirate Insurance Society

                            • Article (99)

                              1. The insurance companies, reinsurance companies and insurance-related professions subject to the provisions of the law herein shall establish a professional association to be called "Emirates Insurance Association" that shall have a legal personality and all the insurance companies operating in the State shall be members of the Association. The Association shall form independent committees for the different insurance activities carried out by the members.

                              2. The Association shall prepare Articles of Association issued by the Chairman after the Board’s approval under which it shall determine the Association's functions, duties, its relation with the Authority, formation of its committees for different insurance activities, provisions and procedures of its general assembly, formation of its Board of Directors, meetings of each one of them, affiliation fees, annual subscription fees, code of conduct, disciplinary procedures against the members and other related affairs.

                               

                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              1. The insurance and re-insurance companies subject to the provisions of the law herein may establish a trade union to be called "Emirate Insurance Association" entertaining the status of a legal person and all the insurance companies operating in the State shall be members of the Association.

                              2. The Association shall look after the interests of the holders of the insurance policies and the beneficiaries thereof as well as the interests of its members and shall implement the rules of professional conduct and represent the insurance companies before any entity or individual in connection with the insurance operations.

                              3. The Association upon getting the Authority's approval shall issue a special regulation to determine pursuant thereto the Association's duties, responsibilities, its relation with the Authority, the rules and procedures of its general assembly, formation of the board of directors, meetings of each one of them, affiliation fees, annual subscription fees, rules of professional conduct, the disciplinary procedures of the members and other related affairs.

                               

                          • Chapter Four Penalties

                            • Article (101)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              A fine of no less than fifty thousand Dirhams and no more than two hundred fifty Dirhams shall be imposed on anybody who violated the provisions of Paras (1), (2), (3), (4), (5), (6), (9) and (10) of Article (23), Article (34) and Paras (1) and (5) of Article (36), and Article (37), and Article (40) and Article (116) of the law herein.

                              The same penalty shall be imposed on the liquidator who violated any of the obligations ordained on him according to the provisions of the law herein, and the regulations, rules, and directives issued pursuant thereto. The fine shall be doubled in case of repeating the violation.

                               

                            • Article (102)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              A fine of no less than a hundred thousand Dirhams and no more than two hundred Dirhams shall be imposed on anybody who violated the provisions of Article (30), Article (35), Article (59), Article (64), Article (66), Article (73), and Para (2) of Article (74), Para (1) of Article (76), and Para (2) of Article (117), of the law herein.

                              The same fine as well shall be imposed on anybody who refused to provide the Authority with the documents, information, and statements need be submitted according to the provisions of the law herein, the regulations, rules, and directives issued pursuant thereto or obstructed or hindered the Director General or whosoever he authorized to execute his duties and powers stated in the provisions of the law herein, the regulations, rules, and directives issued pursuant thereto or interfered to prohibit them to obtain the information needed to execute their duties or abstained from providing them with these information or fallen short to provide them therewith within the limited period. The fine shall be doubled in case of repeating the violation.

                               

                            • Article (103)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              A fine of no less than twenty five thousand Dirhams and no more than fifty thousand Dirhams shall be imposed on anybody who violated the provisions of Article (31), Article (60), Article (62), and Article (65) of the law herein.

                               

                            • Article (104)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              A fine of no less than five thousand Dirhams and no more than fifty thousand Dirhams shall be imposed on anybody who violated the provisions of Para (7) & Para (8) of Article (23), Article (33), Article (39), and Article (55) of the law herein.

                               

                            • Article (105)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              A fine of no less than five thousand Dirhams and no more than fifty thousand Dirhams shall be imposed on anybody who violated the provisions of Para (7) & Para (8) of Article (23), Article (33), Article (39), and Article (55) of the law herein.

                               

                            • Article (106)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              A fine of no less than five thousand Dirhams and no more than ten thousand Dirhams shall be imposed on anybody who violated any other provisions of the law herein.

                               

                            • Article (107)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              The penalties stated in the law herein shall be doubled in case of recurrence and as well the court in such case may write off the company.

                               

                            • Article (108)

                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018.
                              This article has been cancelled pursuant to the Federal Law No. (03) of 2018. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              The crimes stated in the law herein shall be punishable by the penalties indicated therein without prejudice to any other harder penalties provided for in any other law.

                               

                            • Article (109)

                              The Minister of Justice in collaboration with the Minister shall issue a decision to assign the Authority's employees who shall have the capacity of law enforcement officers in the field of implementing the provisions of the law herein.

                          • Chapter Five General Provisions

                            • Article (110)

                              1. The insurance company shall manage insurance claims in accordance with the legislation in force and the provisions of the insurance policies, pursuant to the following procedures:

                              (a) Issuing a decision concerning any insurance claim in accordance with the instructions of professionals rules and code of conduct and ethics.

                              (b) In case any insurance claim is fully or partially denied, the Company must clarify the reasons for its decision in writing.

                              (c) In case of a dispute in relation to a claim, the concerned person may submit a written complaint to the Authority, which in turn may request clarification from the Company.

                              (d) In case the complainant has objection on the clarifications provided by the company, he may request that the dispute be referred to the Committee established pursuant to article No. (110).

                              2. One or more committees that will be concerned with resolving the disputes arising out of insurance contracts, operations and services shall be formed. The committee (s) shall have the competency to request any official papers or documents and to counsel experts, as well as hearing of witnesses and any other alternatives that need to be used to resolve the disputes before them.

                              3. Cases resulting from the disputes arising out of insurance contracts, operations and services shall not be accepted, if such disputes are not brought before the committees established in accordance with the provisions of paragraph No. (2) of the article herein.

                              4.The concerned party shall have the right to appeal against the decisions of the committees before the competent first instance court within thirty days of the day following their notification of the decision, otherwise the decision shall be deemed final and enforceable.

                              5. The Board shall issue the necessary decisions concerning the composition of the committees established in accordance with the provisions of paragraph No. (2) of the article herein, their competencies, powers, their work system, fees of its members and hired experts, types and classes of insurance for which insurance disputes are resolved before these committees, and other related matters.

                               

                              This article has been amended by Federal Law No. (03) of 2018. You are on the latest version. To view the previous version, click the version box below.
                              Version 1(effective from 15/02/2007 to 26/04/2018)

                               

                              The company shall make clarifications about the complaints received by the authority from the policyholders, the beneficiaries thereof and others pertaining to the insurance operations conducted by the company inside the State.

                               

                            • Article (111)

                              The companies in existence upon enforcing the provisions of the law herein shall be obliged to adjust their situations according to the provisions thereof and the regulations and directives issued pursuant thereto within the period determined by the Board, provided such period shall not exceed two years as from date of implementing the provisions of the law herein.

                            • Article (112)

                              Should the company failed to adjust its situations according to the provisions of article (111) of the law herein its registration shall be cancelled by decision of the Board.

                            • Article (113)

                              Any natural person carrying out operations of insurance agent, insurance broker, loss and damage adjuster, insurance consultant or actuary shall be obligated upon enforcing the provisions of the law herein to adjust his situation according to the provisions thereof and according to the regulations and rules pursuant thereto within the period determined by the Board, provided such period shall not exceed a year as from date of implementing the provisions of the law herein, otherwise his registration or license as might be the case shall be deemed lawfully cancelled and shall be prohibited from carrying out the operations of insurance subject to punishment according to law.

                            • Article (114)

                              1. Irrespective of what has been mentioned in any other legislation electronic data or printouts of the computers, correspondences generated by telex, fax, and e-mail shall be deemed suitable as proof of evidence should the legislative regulations relevant thereto been adhered to.

                              2. The companies may keep for the period determined by law microcopies (microfilm or other device of modern technology) instead of the original books, records, lists, documents, correspondences, telegrams, notices and other papers related to its financial operations. These microcopies copies shall have similar supremacy as proof of evidence according to the legislative regulations which a decision issued therefor.

                              3. The companies which are using in organizing its financial operations computers or other modern technological devices shall be exempted from organizing the commercial books needed according to the Commercial Transactions Law. Statements extracted from these devices or from other modern technological devices shall be deemed same as those statements extracted from the commercial books, provided compliance of the insurance companies with the established legislative regulations in this respect.

                            • Article (115)

                              All ministries, government directorates, public enterprises, and companies therein the government is having stakes which benefit from the insurance operations shall be required to present any statements or information related to the insurance operations they concluded as may be requested by the Director General within the period he determined.

                            • Article (116)

                              The insurance agent, broker, re-insurance broker, the actuary, the loss and damage adjusters, and the insurance consultant subject to the provisions of the law herein shall be obligated to present any statements or information as may requested by the Director General within the period he determined.

                            • Article (117)

                              1. The Director General shall notify the concerned bodies or the pertinent authorities as might be the case of the decisions related thereto issued by the Board or by him personally.

                              2. The Director General shall publish the decisions related to the registration's suspension, cancellation, or restoration or the decisions related to companies' merger, acquisition, restructuring, liquidation, or termination in the Gazette, in two widely circulated local daily newspapers issued in Arabic and in one newspaper issued in English on the company's own expenses.

                            • Article (118)

                              The provisions of the Law of Commercial Companies shall not apply to the insurance operations only to the extent the provisions thereto do not contradict the provisions of the law herein, and the regulations, rules, directives, and decisions issued pursuant thereto.

                            • Article (119)

                              This article has been cancelled pursuant to the Decretal Federal Law No. (25) of 2020. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 02/01/2021)

                               

                              1. The Cabinet shall issue the following regulations needed to implement the provisions of the law herein:

                              1. Fees charged pursuant thereto.
                              2. Minimum amount of the company's capital.
                              3. The Authority's human resources regulations.

                              2. The Board shall issue regulations, rules and directives necessary to implement the provisions of the law herein.

                               

                            • Article (120)

                              This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 02/01/2021)

                               

                              The employees whom the Minister decided to transfer from the Ministry shall be transferred to the Authority in the same scale, with all their rights and entitlements, provided their statues shall be adjusted according to the provisions of the regulations of the Authority's human resources' affairs without prejudice to the salaries and allowances they are receiving.

                               

                            • Article (121)

                              This article has been cancelled pursuant to the Decretal Federal Law No. (24) of 2020. To see the previous version, click on the version box below
                              Version 1(effective from 15/02/2007 to 02/01/2021)

                               

                              The employees of the Authority shall be subjected to the laws and regulations of the Civil Service as applied in the Federal Government pending the issue of the regulations of human resources designated for the Authority.

                               

                            • Article (122)

                              The Federal Law No. 9 of 1984 on insurance companies and brokers referred to herein shall be cancelled and while no contradiction with the provisions of the law herein the executive regulation and the decisions issued thereby shall remain valid pending the issue of the executive regulation necessary to implement the provisions of the law herein.

                            • Article (123)

                              Any provision in conflict or contradiction with the provisions of the law herein shall be cancelled.

                            • Article (124)

                              The law herein shall be published in the Gazette and be effective after six months as from date of publication.

                  • Insurance Companies

                    • Clarification and Guidelines Manual for Circular No 28/2010 (Regulation for Classification of Loans and Their Provisions)

                      C 28/2010 GUI
                      This Circular has been repealed and replaced by Circular No. 3/2024 regarding Credit Risk Management Regulation.
                      • Regulations Re Monitoring Large Exposure Limits

                        C 32/2013 Effective from 11/11/2013
                        This regulation has been cancelled by the circular No C1/2023.
                        • Insurance Companies & Branches of Foreign Insurance Companies

                          • Introduction

                            The Central Bank of the United Arab Emirates has issued Circular No 28/2010 regarding loan classification and provisioning on 11 November 2010. The circular provides that the Banking Supervision and Examination Department will issue a manual to clarify how banks and financial institution should apply the terms of the above mentioned circular. In addition, we have received correspondence from a number of banks outlining various implementation issues and seeking further clarification.

                            In this context we are providing this manual to assist banks in applying the requirements of Circular No 28/2010 ‘Regulation for the Classification of Loans and their Provisions’.

                            • Introduction

                              In accordance with Part Three, Chapter Two, of Union Law No. (10) of 1980 concerning the Central Bank, the Monetary System and Organization of Banking, the Board of Directors of Central Bank of the UAE sets rules to govern ratio requirements to which all banks must adhere to ensure their liquidity and solvency.

                              In particular, banks must follow a prudent credit policy in order to safeguard the assets entrusted to them.

                              For the purpose of assessing whether a bank's credit policy, and the exposures arising therefrom, is deemed prudent and, more specifically, whether the risk arising from an excessive concentration of credit to a single borrower or to a group of related borrowers may endanger the solvency of a bank, the Board of Directors of Central Bank of the UAE has resolved to set rules for the monitoring of credit exposure limits of banks operating in the U.A.E. and, as a consequence, has decided to put the following definitions and rules into force.

                              • Life Insurance

                              • Insurance Policy language

                              • Capital and Solvency

                                • Minimum Capital

                            • Takaful Insurance Companies

                              • 1. Specific Provisions

                                The aggregate amount of specific provisions including interest in suspense should be adequate to absorb estimated credit losses for individually identified credit exposures.

                                The Central Bank of the U.A.E. will regularly review the position of individually identified and classified loans and the level of specific and general provisions held by each institution. It will discuss any concerns with the institution’s senior management as well as the institution’s external auditors and may formally direct that institution to make additional provisions where it considers that provisions held are inadequate in relation to the circumstances of that institution.

                                • Article (1): Definitions

                                  1.1 Large Exposures

                                  Large exposures are those funded and unfunded exposures (less provisions, cash collaterals and deposits under lien) which a bank allows to a single borrower and his group which in total equal or exceed the percentages of the bank's capital base as scheduled in Article (2) of these Regulations.

                                  In addition, a large exposure secured by securities acceptable to the Central Bank can be adjusted to reflect a deduction for the value of said securities. The Central Bank shall determine the adjusted value based on the quality of the acceptable securities in each case, which is considered a large exposure. The portion of the funded and unfunded exposures above the adjusted value are subject to the schedule of percentage limits for large exposures in Article (2) of these Regulations.

                                  1.2 Exposures

                                  Exposures comprise the on- and off-balance sheet items set out in the attached "Guidelines to Monitoring of Large Exposure Limits," which form an integral part of these Regulations.

                                  1.3 Borrowers and Groups of Related Borrowers

                                  A single borrower shall mean any single natural or juridical person.

                                  A group of related borrowers shall mean:

                                  - Two or more natural or juridical persons who unless shown otherwise, constitute a single risk because one of them, directly or indirectly, has control over the other or others, or can exercise a controlling influence over the other party in making financial and operating decisions; or

                                  - Two or more natural or juridical persons between whom there is no relationship of control but who are to be regarded as constituting a single risk because they are so inter-related that, if one of them were to experience financial problems, the other or all of the others would be likely to encounter repayment difficulties.

                                  1.4 Control and Controlling Influence

                                  Control or controlling influence shall mean the relationship between a parent company and a subsidiary, as defined in section 1.4 of the attached "Guidelines to Monitoring of Large Exposure Limits" or a similar relationship between any natural of juridical person and a company.

                                  1.5 Principal Shareholders

                                  In the context of these Regulations, a principal shareholder shall mean any natural or juridical person, single or related as defined in section 1.3 above, holding 5% or more of a bank's voting share capital.

                                  1.6 Capital Base

                                  The capital base of a bank is the same as that used for capital adequacy purposes, as defined in the Central Bank's Circular No. 27/2009 dated 17/11/2009 and calculation therein as per BASEL II.

                                  • 1.1 Classification of Loans

                                    Loans should be classified within levels 1 to 5 according to their conditions and the banks own assessment (see the table in 2 below). The onus will be on the bank to justify their assessment to the Central Bank’s satisfaction. This requirement applies to all loans and advances.

                                    The classification described in the circular does not preclude banks from developing their own more granular grading system which in all cases should be clearly mapped to the 5 categories below.

                                  • Financial Regulations / Takaful

                                    • 1.2 Determining Provisioning Amounts and Collateral Value

                                      The circular specifies the following minimum provisions for all loans.

                                      ClassificationCriteriaProvision
                                      NormalAll information available assures repayment as agreedGeneral Provision.
                                      Watch-listSome weakness in the borrower’s financial position and credit worthiness that requires more than normal attention.General Provision.
                                      Sub -standard loansPayment of principal is in arrears beyond 90 days or some loss is possible due to adverse factors.Specific Provision Minimum 25% of the net exposure amount
                                      Doubtful loansFull recovery seems doubtful based on the available information, leading to a loss or part of these loans.Specific Provision Minimum 50% of the net exposure amount
                                      Loss loansPossibility of no recovery at all after the bank has exhausted all available courses of actionSpecific Provision Minimum 100% of the net exposure amount

                                       

                                      It should be noted that for corporate and commercial loans doubtful and loss categories should be determined on a principle basis and not necessarily on a rule, such as number of days delinquent. Provisions for retail exposures should be fully rule based.

                                    • Life Insurance/ Takaful

                                      • 1.3 Commercial and Corporate Facilities

                                        For commercial and corporate facilities, the bank is required to use the above classification unless it can demonstrate, based on evidence and sound judgment, that the listed criteria for a specific facility is not the best indication of impairment. In this case, the bank can classify the loan to an alternate category (higher or lower).

                                        This process needs to be well documented, based on the bank’s board approved internal provisioning policy and follow a clear decision making criteria. Particular attention will be paid to restructured facilities or those where outstanding interest has been capitalized. The evidence should be presented to the Central Bank upon request.

                                        If in doubt over the classification of a particular facility, please do not hesitate to contact your Supervisor at the Central Bank.

                                      • 1.4 Retail and Consumer Loans

                                        Specific provision percentages based on the number of days past due has to be followed for retail lending categories (including residential mortgages) as per the below table:

                                        Days past duePersonal Consumer LoanCar LoansCredit Card LoansResidential Mortgages
                                        90 - 120 days(inclusive)At least 25 %At least 25 %At least 25 %At least 25 %
                                        120 – 180 days (inclusive)At least 50 %At least 50 %At least 50 %At least 50 %
                                        Over180 daysAt least 100 %At least 100 %At least 100 %At least 100 %

                                         Note: the percentages in the table are of the net exposure amount (defined below)

                                      • 1.5 Past Due Definition

                                        Loans are considered past due if any part of the contractual interest and/or principal payment is not met on time. The number of days past due is non cumulative, where the most recent payment cures the earliest contractual breach.

                                        For example if repayments are agreed to be made monthly, and the customer is 30 days late in making the repayment, his next repayment should cover 60 days to cure the arrears. However, If the customer only makes one month payment, the customer cures the past month arrears (30 days) but falls in arrears for the new month (i.e. in arrears for 1 day).

                                      • 1.6 Calculation of Provision and Collateral Value

                                        The minimum specific provisions for all loans should be calculated by multiplying the percentages provided in the above table by the net exposure amount. The net exposure amount is defined as the outstanding loan balance less the net realizable value of the collateral held. The collateral should be multiplied by the following discount factors to arrive at the net realizable value.

                                        Collateral typeDiscount factorConditions
                                        Cash (or cash equivalent)100%Provided it is under legal right of set off
                                        Federal Government (security or guarantee)100% 
                                        Local Government (security or guarantee)100% 
                                        Foreign sovereign government bonds rated BBB – or above100% 
                                        UAE licensed Bank (security or guarantee)100% 
                                        Foreign bank rated AA - or above (security or guarantee)100% 
                                        Foreign bank rated BBB- but below AA - (security or guarantee)80% 
                                        Listed Shares on a recognized stock exchange70%The previous 3 months average closing price should be used.
                                        Should be traded on a deep liquid and market.
                                        Bonds or guarantees from corporations rated above BBB-70%The previous 3 months average closing price should be used.
                                        Should be traded on a deep and liquid market.
                                        Residential Real Estate70%Valuation should be not more than 6 months old.
                                        The bank should have a registered first mortgage over the property.
                                        The bank has legal certainty over its ability to take control of security in a reasonable time frame.
                                        Interest should be immediately suspended where the time frame for taking over the security is uncertain and is expected to exceed 1 year.
                                        Commercial Real Estate50%Valuation should be not more than 6 months old.
                                        The bank should have a registered first mortgage over the property.
                                        The bank has legal certainty over its ability to take control of security in a reasonable time frame.
                                        Interest should be immediately suspended where the time frame for taking over the security is uncertain and is expected to exceed 1 year
                                        All other banks bonds or guarantees50% 
                                        Cars, Boats, Machinery and other movables50%Valuations should not be more than 3 months old
                                        The bank should have a legal and enforceable charge over the item
                                        All other corporate bonds or guarantees (not including cross or personal guarantees)40% 

                                         

                                        Where the net collateral value exceeds the outstanding loan amount, the bank is not required to take any provisions. However, the bank is required to continually assess the need to raise a specific provision and raise one should the situation change (e.g. outstanding loan amount exceeds the net realizable collateral or the collateral value deteriorates).

                                      • 1.7 Interest Suspension on Past Due Loans

                                        It is a requirement under the circular that interest on loans that have been provisioned or loans where the interest is over due for 90 days or longer should be debited to the loan account and credited to a suspense account and not to the profit and loss account.

                                        The bank, however, can still take the interest to the profit and loss account where the net realizable value of collateral continues to exceed the outstanding balance of the loan. This assessment should be made at least quarterly. Any cash payments made by the customer can also be recognized in Profit and Loss Account only after the overdue principal amount has been satisfied.

                                        Interest suspense account should be clearly documented with clear audit trails showing interest movement. The account will be examined by the Central Bank.

                                      • 1.8 Interest Suspension on Overdraft Facilities

                                        Circular No 28/2010 highlights at least three situations where interest should be suspended on overdrafts. These are:

                                        A – Where there is doubt regarding payment of interest and/or it has not been paid after 90 days of due date.

                                        In this case a specific provision should be raised and interest suspended unless, as described in (3) above, the net realizable collateral value continues to exceed outstanding balance of the facility.

                                        B – When due interest on other accounts of the same customer (or group) other than the overdraft account has been suspended.

                                        Where interest is suspended on an account of a related entity or a member of the same group of entities, the default position is to suspend interest on all group accounts unless the outstanding balance is well covered by the net realizable collateral.

                                        However, the bank can continue to credit the interest on over draft facility to the profit and loss account. Where: -

                                        • The bank believes that there is low correlation between the entity and other group member(s) that have interest suspended, and
                                        • All other facilities of the entity are in good standing,
                                        • There is no guarantee between the borrower and the defaulted entity,

                                        In this case, all group facilities that are not 90 day past due should be migrated to the “watch list” category.

                                        C – When the outstanding balance is consistently in excess of the agreed upon limit or when the account is in debit although there is no sanctioned facility.

                                        “Consistently” is defined as a period that exceeds 60 continuous days or a total of 60 days in any 6 months period.

                                • Re-Insurance Companies

                                  • 2. General Provisions

                                    These provisions are calculated as 1.5% multiplied by the ‘normal’ and ‘watch list’ Credit Risk Weighted Assets (CRWA). CRWA should be calculated using the Basel II standardized approach.

                                    By definition all exposures receiving 0% Risk Weight are excluded from General Provisions.

                                    • Article (2): Limits Constituting Large Exposures

                                      For the purpose of Central Bank reporting a large exposure is defined as those funded and unfunded exposures and unused committed lines (less provisions, cash collaterals, bank guarantees and Federal Government guarantees) to a single borrower or his group, which in total is equal to or exceeds 10 % of the bank’s capital base.

                                      The Central Bank has set the maximum large exposure limits as shown in following table:

                                      Table of Maximum Large Exposure Limits
                                      BorrowerAggregate PercentageIndividual Percentage
                                      Federal GovernmentNot applicableNot applicable
                                      UAE Local Governments and their non-commercial entities100%No cap for local governments 25% for each non-commercial entity
                                      Commercial entities of Federal and Local Governments100%25%
                                      A single borrower or a group of related borrowersNot applicable25%
                                      Shareholders who own 5% or more of a bank’s capital and their related entities50%20%
                                      Inter-bank exposures - over 1 yearNot applicable30%
                                      A bank’s subsidiaries and affiliates25%10%
                                      Board members25%5%
                                      Bank’s employees3%Maximum 20 months’ salary
                                      A bank’s external auditors, consultants and lawyersNot allowedNot allowed


                                       

                                      Notes to the table:

                                      1. Exposure is defined as the sum of: funded, unfunded and committed lines. Unfunded exposures may be adjusted for Credit Conversion Factors (CCF) in accordance with Basel II.
                                         
                                      2. The above definition of Exposure excludes bank’s investment in marketable bonds/sukuks (that are rated not less than AA-, or equivalent, by one of the top three rating agencies) where such bonds/sukuks are held to meet Central Bank liquidity requirements, or are held in the trading book and the intention is not to hold such bonds/sukuks to maturity.
                                         
                                      3. Exposure to Federal Government includes deals transacted on behalf of the Federal Government.
                                         
                                      4. A Government Related Entity (GRE) that is profitable and can service its debt obligations from its own resources/operations, without need for any implicit or explicit government support and holds a rating of not less than BBB- (or equivalent) from one of the top three rating agencies can be treated as a single obligor in accordance with the 4th line in this table.
                                         
                                      5. Exposures to banks operating outside the UAE, irrespective of their maturity, are not allowed to exceed 30% of the bank’s capital base. The same applies to exposures of branches of foreign banks to their head offices and other branches abroad, as well as to foreign subsidiaries and affiliates of such head offices; this limit also applies to exposures of UAE incorporated banks vis-à-vis their foreign subsidiaries and affiliates.
                                         
                                      6. All banks must have strict policies in place (approved by their board of directors) to cover potential conflict of interest where loans are issued to staff members on a “stand- alone” commercial basis. Loans for business purposes should be separately classified as commercial loans and approved on an ‘arms- length’ basis.
                                         
                                      7. Banks that have exposures that are out of line with the new limits as per the table at the date on which they come into force, must, at a minimum, improve such exposures at the rate of 20% per annum, i.e. full compliance with the limits must be achieved in 5 years.
                                         
                                      8. The limits contained in this table are subject to review, in line with international regulatory development.
                                         
                                      • 2.1 Build up of the General Provision

                                        The Circular allows banks a period of 4 years to reach the minimum general provisions prescribed as 1.5% of CRWA. It is our expectation that banks build up the deficiency in their General Provisions in equal installments over the 4 year period. Banks are encouraged to achieve the minimum requirement of General Provisions in a shorter duration if possible.

                                        No bank is allowed to fall below its current level of General Provisioning during the 4 years transition period unless its general provisions exceeds the minimum requirement of 1.5% of CRWA.

                                        The Central Bank will be assessing the progress towards building up the general provisions by the banks and will issue individual guidance to banks if required.

                                    • 3. Provisioning for Off Balance Sheet Items

                                      Some off balance sheet exposures such as bank guarantees, letters of credit, irrevocable commitments to lend and unused overdraft limits should be treated as impaired and adequate provisions raised against them if the bank believes it is likely they will be called upon and the financial position of the customer has deteriorated.

                                      In this case the exposures should be converted to on balance sheet using 100% credit conversion factor (CCF) then assigned to the one of the three defaulted categories (3 to 5) as mentioned in 1 and 2 above and specific provision allocated against as appropriate.

                                      Where the off balance sheet exposure is in the form of a derivative contract and there is doubt that all contractual future cash flows will be received from the counterparty, the bank should assess the net marked to market exposure to the counterparty taking into account any enforceable netting arrangements in place. The net position (if due from) should then be converted to on balance sheet asset using 100% CCF and assigned to one of the three defaulted categories (3 to 5) as mentioned in 1 and 2 above and specific provision allocated as appropriate.

                                      Please note that under Basel II, all off balance sheet exposures are converted to on balance sheet exposures using Credit Conversion Factors “CCF” and Risk Weights are then assigned in order to arrive at the Credit Risk Weighted Assets which are then multiplied by 1.5% to arrive at the General provision.

                                      • Article (3): Reporting Requirements

                                        All large exposures must be reported to the Central Bank on a consolidated quarterly basis (including subsidiaries and affiliates where applicable), as per the attached special return forms (Special Banking Return Forms-Large Exposures), not later than the end of the month following the end of each calendar quarter. Banks must report any large exposure which existed at any time during that quarter.

                                        The Central Bank may in the future exempt certain exposures from the reporting requirements.

                                        If, in an exceptional case, exposures exceed the limits fixed in section 2 above at any time during any quarter, these must be reported to the Central Bank in writing without delay, indicating the reasons for the non-compliance. The Central Bank may allow banks a limited period of time during which they must comply again with the limits.

                                        Banks are required to take appropriate measures to comply with the limits as soon as possible and in any event not later than the end of the quarter following the over-limit situation.

                                        Exposures to members of a bank's board of directors, or of a similar designated body, must be reported to the Central Bank on a quarterly basis as per the attached special return forms (Special Banking Return Form - Exposures to Board Members) not later than the end of the month following the end of each calendar quarter. The explanatory notes attached to the return forms must be followed.

                                      • 4. Share Values and Investment Values

                                        The circular requires the use of the International Accounting Standard in recognizing losses or a decline in the value of the investment asset.

                                        In particular IAS 39 requires the bank to recognize losses either directly through P&L (Fair value option) or periodically asses the asset for impairment depending on the initial designation of the asset.

                                        If uncertain, please discus with your external auditor the accounting treatment applied to the specific assets.

                                        • Article (4): Management Responsibilities

                                          4.1 General Responsibilities for Credit Policy

                                          The board of directors, or a similar designated body of banks operating in the U.A.E. is responsible for its bank's credit policy and, therefore, must review, for information all facilities above a certain limit and approve all facilities above a higher limit. They must also ensure a fair structure and a balanced composition of their bank's credit portfolio.

                                          Banks must formulate general credit policy instructions aimed at implementing a prudent lending structure, taking into account the risk arising from excessive exposures vis-à-vis governments, public sector entities, particular economic sectors etc., within the U.A.E. and abroad. Banks should exercise utmost prudence with regard to inter-bank exposures. The credit policy instructions must address both on-and off-balance sheet items.

                                          A proper credit evaluation including appropriate documentation must be undertaken prior to granting any credit facility. The credit assessment has to be in line with each bank's general credit policy and must be based on an in-depth analysis of each customer's credit worthiness, reputation as a borrower and any information on loan-repayment history.

                                          4.2 Special Responsibilities for Large Exposures

                                          Notwithstanding the legal effectiveness of a transaction, a bank may only incur a large exposure on the basis of a unanimous resolution on the part of all members of its board of directors, or of a similar designated body, provided that the bank's general credit policy procedures have been followed. The resolution has to be passed prior to the lending and a copy of it must be placed on the customer's file.

                                          4.3 Special Responsibilities for Exposures to Members of a Bank's Board of Director

                                          A bank may only incur an exposure to a member of its board of directors, or of a similar designated body, on the basis of a unanimous resolution on the part of all members, except the member concerned, provided that the bank's general credit policy instructions have been followed. The resolution has to be passed prior to the lending and a copy of it must be placed on the member's file.

                                          4.4 Assessment of Credit-Worthiness

                                          Banks are obliged to ask their major borrowers to disclose reliable evidence of their financial situation by submitting financial statements, other relevant information and signed declarations of their independence from the bank, its principal shareholders, directors and officers. All such information has to be updated regularly. In exceptional circumstances, banks may refrain from doing so, if the requirement to disclose would be clearly unjustified due to the type and level of security provided.

                                        • 5. Write Backs of Provisions and Reclassification of Loans

                                          A loan can be reclassified to a higher category and the specific provision reversed if the arrears have been fully satisfied and the bank has sufficient information to indicate that the borrower is able to deliver on his contractual obligations going forward.

                                          The reclassified loan should be initially assigned to the watch list category for a period of at least 12 months and be subject to close monitoring. The expectation is that banks will immediately downgrade the loan and raise appropriate provisions if early signs of deterioration reappear.

                                          Where the bank has agreed to restructure a facility, the facility should only be upgraded after the new arrangement has been fully adhered to by the customer for at least 90 days and should remain on the watch list for at least a 12 months period.

                                          After at least 90 days, the difference between the present value of the original facility and the present value of the restructured facility should be written off against the provision assigned. The remainder of the provision can then be released with the appropriate approval from the relevant internal credit committee.

                                          • Article (5): Control and Documentation

                                            Central Bank of the UAE requires that every bank sets up sound administrative and accounting procedures and adequate internal control systems, especially for the purpose of identifying and recording all large exposures, as defined in these Regulations, and for monitoring and controlling those large exposures according to each bank's own general credit policy.

                                            The implementation of these accounting procedures and internal control systems must be approved by each bank's board of directors, or by a similar designated body, and should be documented appropriately.

                                          • 6. Write-Off Loans and Advances

                                            All credit policies should adequately detail the write-off procedures and periodical review of written off loans in order to minimize potential abuse. The ultimate authority for approval of write-offs rests with the board of directors or any designated body duly formed by the board of directors (National Banks may refer to Circular No. 23/2000 dated 22/07/2000 – Required Administrative Structure in Banks).A memoranda accounts should be maintained for written off loans. All recoveries made from the accounts earlier written off should be credited to the income account. A summarized record of such recoveries should be maintained for Central Bank’s examiner’s review.

                                            • Article (6): Implementation

                                              These Regulations come into force one month from the date of their publication in the Official Gazette.

                                              Banks not meeting the limit requirements, as defined in these Regulations, may be granted additional period for reduction of their exposures individually and/or in the aggregate, not extending beyond five years from the implementation of these Regulations, as mentioned under Paragraph 7 of the Notes to the Table of Maximum Large Exposure Limits.

                                              Circular No. 16/93 and its amendments shall be cancelled with effect from the date these Regulations come into force.

                                              Yours faithfully,,,

                                              • Enclosures:

                                                - Guidelines to Monitoring of Large Exposure Limits.

                                                - Special Banking Return Forms for Large Exposures and their Explanatory Notes.

                                            • 7. Frequency of Review and Internal Reporting

                                              The management of each institution shall ensure that a review of its loan portfolio is made at least on quarterly basis and a complete report is provided to the relevant committee. Such reports shall provide sufficient information that will enable the committee to deliberate and direct management to take timely and necessary remedial action within a specified time frame.

                                            • 8. Supervisory Reporting Requirements

                                              • The institution shall submit to the Central Bank on monthly basis the following statements as per the attached Forms:
                                              • Classification of loans and advances and provisioning and movement in provisions and interest in suspense
                                              • Classification of loans and advances by economic activity
                                              • Classification of loans and advances by segments
                                              • Statement of overdue and rescheduled loans and advances and performing and non-performing loans and advances
                                              • Security wise distribution of loans and advances

                                              CLASSIFICATION OF LOANS AND ADVANCES & PROVISIONING

                                               

                                              Name of Institution:
                                              Date:

                                               

                                              (AED 000)

                                              SI.No.ClassificationNo. of A/csOutstandingSp. Prov required as per C.B.RegulationSp. Prov held for LoansGen.Prov held for LoansInt in suspTotal Prov held (F+G+H)
                                              ABCDEFGHI
                                              1Loans and Advances(Gross)       
                                              2Normal       
                                              3Watch List       
                                              4Substandard (S/S)       
                                              5Doubtful (D/F)       
                                              6Loss       
                                              7Total Classified Advances (S/S+ D/F+ Loss)       
                                                       

                                              MOVEMENT IN PROVISIONS AND INTEREST IN SUSPENSE

                                              ( During the month of ----------------)

                                               

                                               Sp.ProvInt in SuspGen ProvInt free deposit from H.O.Total
                                              (1)(2)(3)(4)(5)
                                              Opening balance as at ------------------     
                                              Add: amount provided during the month     
                                              Less: Released to profit & loss account during the month     
                                              Less: Loans written off during the month     
                                              Closing balance as at ---------------     
                                              Loans written off charged to P/L A/c during the month ( Amount to be shown under column - 5 )------------------------------------- 
                                              Authorized Signatory:
                                              Designation:
                                              Signature:
                                              Date:
                                              Name of Officer:

                                              CLASSIFICATION OF LOANS & ADVANCES BY ECONOMIC ACTIVITY

                                               

                                              Name of Institution: 
                                              Date: 
                                               (AED 000)
                                              Economic SectorsO/SClassificationsProv& Int in Susp held
                                              NormalWatchlistS/SD/FLoss
                                              Agriculture and Allied Activities       
                                              Mining & Quarrying       
                                              Manufacturing       
                                              Electricity, gas & water       
                                              Trade       
                                              Transport, Storage & Communication       
                                              Construction & purchase of residential & commercial buildings       
                                              Other Constructions       
                                              Other Financial Institutions       
                                              Services       
                                              Government       
                                              Personal (As per Circular 12/93)       
                                              All others       
                                              Total Loans & Advances (Gross)       
                                                      

                                              Authorized Signatory:

                                              Name of Officer:

                                              Designation:

                                              Signature:

                                              Date:

                                              CLASSIFICATIONS OF LOANS & ADVANCES BY SEGMENTS

                                              Name of Institution: 
                                              Date: 
                                               (AED 000)
                                              SegmentsO/SClassificationProv & Int in Susp held
                                              NormalWatchlistS/SD/FLoss
                                              1. Corporate       
                                              2. Retail       
                                              (a) Personal Consumer Loans       
                                              (b) Auto Loans       
                                              (c) Credit Cards       
                                              (d) Personal Real Estate mortgage loans       
                                              3. All others       
                                              Total Loans & Advances (Gross)       

                                              Authorized Signatory:

                                              Name of Officer:

                                              Designation:

                                              Signature:

                                              Date:

                                               

                                              STATEMENT OF OVERDUE AND RESCHEDULED LOANS & ADVANCES AND PERFORMING AND NON-PERFORMING LOANS AND ADVANCES

                                              Name of Institution:
                                              Date:
                                               
                                               (AED 000)
                                              Please indicate the book valueLoans overdue but not rescheduled
                                              (a)
                                              Loans rescheduled
                                              (b)
                                              Total
                                              ( a+b)
                                              ( c )
                                              (i) Loans & advances which have been overdue for more than 1 month and up to 3 months   
                                              (ii) Loans & advances which have been overdue for more than 3 months and up to 6 months   
                                              (iii) Loans & advances which have been overdue for more than 6 months and up to 1 year   
                                              (iv) Loans & advances which have been overdue for more than 1 year   
                                              (v) Sub-total (i +ii +iii + iv )   
                                              (vi) Loans & advances which are not overdue (Normal operative accounts) 
                                              (vii) Total loans and advances ( v + vi ) 

                                               

                                              PERFORMING AND NON-PERFORMING LOANS AND ADVANCES

                                              (AED 000 )

                                              (i) Performing loans & advances (Income generating accounts) 
                                              (ii) Loans & advances on which interest no longer accrues to the Profit & loss 
                                              (iii) Loans & advances on which no interest is charged 
                                              (iv) Total non-performing loans and advances ( ii + iii ) 
                                              (v) Total loans and advances ( i + iv ) 

                                              Authorized Signatory:

                                              Name of Officer:

                                              Designation:

                                              Signature:

                                              Date:

                                              Security-wise Distribution of Loans and Advances

                                              Name of institution: 
                                              Date:(AED 000)
                                              (A) SECUREDOutstanding loan amountClassified portion out of outstandingValue of Security
                                              1. Pledge of Deposits   
                                              (a) Within UAE   
                                              (b) Abroad   
                                              2. Pledge of Shares/Securities   
                                              (a) Local Company's shares /securities   
                                              - Quoted   
                                              - Un-quoted   
                                              (b) Foreign Company's shares /securities   
                                              - Quoted   
                                              - Un-quoted   
                                              3. Mortgage of properties   
                                              (a) Registered mortgage   
                                              - UAE properties   
                                              - Properties abroad   
                                              (b) Equitable mortgage   
                                              - UAE properties   
                                              - Properties abroad   
                                              4. Assignment of Receivables   
                                              5. Counter Guaranteed by:   
                                              (a) Banks - UAE   
                                              - Abroad   
                                              (b) Head office / Branches abroad   
                                              (c) Subsidiaries/ Affiliates - UAE   
                                              - Abroad   
                                              6. Sovereign /Government Guaranteed   
                                              (a) UAE - Federal Government   
                                              - Emirates Government   
                                              (b) Other Governments   
                                              7. Stock in Trade   
                                              (a) Hypothecated   
                                              (b) Pledged   
                                              8. Mortgage of :   
                                              (a) Vehicles (personal cars, commercial, etc.)   
                                              (b) Machineries (constructions/agricultural/industrial etc)   
                                              9. Other Tangible Security (give details)   
                                              Sub Total (Secured)   
                                              (B) UN - SECURED   
                                              Total Loans & advances (Gross)   
                                              Authorized Signatory:Name of Officer:Designation:Signature:
                      • Guidelines to Monitoring of Large Exposures

                        C 32/2013 GUI

                        (Annexure to Circular No 32/2013)

                        This regulation has been cancelled by the circular No C1/2023.
                        • Amendments of the Regulations Regarding Bank Loans & Other Services Offered to Individual Customers No. 29/2011

                          • Amendments of Mortgage Loans Regulations (Circular No. 31/2013)

                            • Introduction

                              In the past, the main causes of bank insolvencies in many countries have been defaults on big individual loans and inadequate credit dispersion. This was attributable to an over-concentration of exposures to a single borrower or to a group of related borrowers which resulted in an unacceptably high risk of loss. For this reason, the Central Bank of the UAE (Central Bank), in its attempt to ensure the sound functioning of the banking system within the UAE, set rules aimed at preventing banks from incurring credit losses which might arise if an excessive concentration of exposures to a single borrower or to a group of related borrowers was not addressed.

                              The capital of a bank not only fulfills a liability function for its depositors but also plays an important role as a factor for limiting business risk and as a buffer against losses. The most appropriate way, therefore, to reduce credit risk is to limit a bank’s large exposures relative to the size of its capital base.

                              In addition to setting limits for large exposures, the Central Bank considers that it is also important to give guidelines concerning lending policies and procedures in general for all banks operating in the UAE. Moreover, the Central Bank has decided to monitor very closely the loan portfolio of each bank especially with regard to large exposures.

                              The guidelines given in the following pages have been prepared in order to explain the new rules to banks in detail and also to draw their attention to the specific risk arising from excessive exposures: they form an integral part of Circular No 32/2013.These guidelines must be supplemented with the relevant Basel Committee standards.

                              • Amendments to Circular No. 31/2013 on Regulations regarding Mortgage Loans

                                After greetings,

                                Please be informed that the Board of Directors of the Central Bank has issued Decision No. 96/By Circulation/2019 amending Circular No. 31/2013 on Regulations regarding Mortgage Loans.

                                By this Decision, the age requirement at the time of the last repayment has been abolished, regardless of the nationality. The age should be determined by the lender in accordance with its risk management and lending practices.

                                We attach herewith a copy of the above Decision and please circulate it internally.

                                The attached Decision comes into force with immediate effect.

                                Yours faithfully,

                                • Central Bank Board of Directors’ Resolution No. 96/By Circulation/2019 Amending Circular No. 31/2013 on Regulations regarding Mortgage Loans

                                  Governor,

                                  Having perused the provisions of the Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities; and

                                  Circular No. 31/2013 on Regulations regarding Mortgage Loans.

                                  The Central Bank's Board of Directors has issued the following resolution:

                                  Article One:
                                  The text of the second paragraph of item (3) of Article (3) of Circular No. 31/2013 on Regulations regarding Mortgage Loans shall be replaced with the following text:

                                  (The maximum age at the time of the last repayment should be determined by the mortgage loan providers in accordance with their risk management and lending policies).

                                  Article Two:
                                  This Resolution shall be communicated to whomsoever is concerned for implementation, and shall be published in the Official Gazette in both Arabic and English.

                              • 1. Definitions

                                • Amendments to Circular No. 31/2013 on Regulations regarding Mortgage Loans

                                  After greetings,

                                  Please be informed that pursuant to the Board of Directors of the Central Bank’s Decision No. 31/2/2020, Circular No. 31/2013 on Regulations regarding Mortgage Loans has been amended.

                                  By these amendments, the Loan to Value (LTV) ratio for real estate was increased for the first time buyers by 5%, in order to enhance the affordability of home purchases.

                                  We attach herewith a copy of the above amendments and please circulate these internally.

                                  The attached amendments come into force with immediate effect.

                                  Yours faithfully,

                                  • 1.1 Large Exposures and Large Exposure Limits

                                    Large exposures are those funded and unfunded outstandings and committed unused limits (less provisions, cash collaterals, bank guarantees and Federal Government guarantee) which a bank allows to a single borrower or his group which in total equal to or exceed 10% of the bank’s capital base. Any exposure beyond this percentage must be incurred in accordance with these regulations and guidelines. Suitable adjustments are allowed for exempted exposures as described in Para 2.11 and for computation of CCF in respect of contingent exposures.

                                    Large exposure limits refer to the level of maximum exposure which a bank may allow to a single borrower or his group. These limits are specified in the Table contained in Article (2) of Circular 32/2013.

                                    • Central Bank Board of Directors’ Resolution No. 31/2/2020 Amending Circular No. 31/2013 on Regulations regarding Mortgage Loans

                                      Governor,

                                      Having perused the provisions of the Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities; and

                                      Circular No. 31/2013 on Regulations regarding Mortgage Loans.

                                      The Central Bank's Board of Directors has issued the following resolution:

                                      Article One:
                                      The texts of paragraphs (A.a), (A.b), (B.a) and (B.b) of Item (2) of Article (3) of Circular No. 31/2013 on Regulations regarding Mortgage Loans shall be replaced with the following texts:

                                      A. UAE Nationals
                                      • First House/Owner Occupier

                                      Each borrower can only claim one property under this category.

                                      1. a. Value of Property less or equal to AED 5 million - maximum 85% of the value of the property.

                                      2. b. Value of Property more than AED 5 million - maximum 75% of the value of the property.

                                      B. Expatriates
                                      • First House/ Owner Occupier

                                      Each borrower can only claim one property under this category.

                                      1. a. Value of Property less or equal to AED 5 million - maximum 80% of the value of the property.

                                      2. b. Value of Property more than AED 5 million - maximum 70% of the value of the property.

                                      Article Two:
                                      This Resolution shall be communicated to whomsoever is concerned for implementation, and shall be published in the Official Gazette in both Arabic and English.

                                    • 1.2 Exposure Values to Compute Large Exposures

                                      In accordance with Basel framework, exposure values are derived for individual risk categories such as banking book on balance sheet non-derivative assets, banking book “traditional” off-balance sheet commitments (applying CCF), positions in the trading books (excluding options), options in the trading book, and counter-party credit risk from derivatives, securities financingtransactions, and long settlement transactions across both banking and trading books.

                                    • 1.3 Borrowers and Group of Related Borrowers

                                      A single borrower shall mean any single natural or juridical person.

                                      A group or related borrowers shall mean:

                                      - two or more natural or juridical persons who unless shown otherwise, constitute a single risk because one of them, directly or indirectly, has control over the other or others, or can exercise a controlling influence over the other or others in making financial and operating decisions;

                                      or

                                      - two or more natural or juridical persons between whom there is no relationship of control but who are to be regarded as constituting a single risk because they are so interrelated that, if one of them were to experience financial problems, the other or all of the others would be likely to encounter repayment difficulties such as failing to honour an obligation in a timely manner or in full.

                                      The Central Bank reserves the right to determine individual exposures as connected.

                                    • 1.4 Control and Controlling Influence

                                      Control or controlling influence shall mean the relationship between a parent company and a subsidiary, where the parent holds a minimum of 50% of the subsidiary’s share capital or has control over it via, for example, the composition of the board of directors, or via a similar relationship between any natural or juridical person or company.

                                    • 1.5 Stand-Alone Government Related Enterprises (GREs)

                                      A Government Related Entity (GRE) that is profitable and can service its debt obligations from its own resources/ operations, without need for any implicit or explicit government support and holds a rating of not less than BBB- (or equivalent) from one of the top three rating agencies can be treated as a single obligor or "stand-alone entity" for the purpose of large exposure limits.

                                    • 1.6 Principal Shareholders

                                      In the context of these regulations, a principal shareholder shall mean any natural or juridical person, single or related as defined in section 1.3 above, holding 5% or more of a bank’s voting share capital.

                                    • 1.7 Capital Base

                                      The capital base of a bank is the same as that used for capital adequacy purposes, as defined in the Central Bank’s Circular No 27/2009 and calculated in accordance with Basel II.

                                    • 1.8 Credit Conversion Factor (CCF)

                                      Unfunded exposures may be adjusted for CCF in accordance with Basel II (Refer to Annexure B-3 for details).

                                    • 1.9 Bank's Subsidiaries and Affiliates

                                      If a bank holds 20% to 50% share capital of another institution, it is classified as ‘affiliate’ and if it holds 50% or more, it is classified as ‘subsidiary’. However, if the parent company has majority control over the voting power of the board of that company, it should also be classified as a subsidiary.

                                • 2. Limits on Large Exposures

                                  In addition to the limits set out in the Table in Article (2) of Circular No 32 /2013, the Central Bank gives the following explanations and instructions in respect of large exposures to a singleborrower or to a group of related borrowers:

                                  • 2.1 Federal Government

                                    Exposures to Federal Government and their non-commercial or commercial entities which are fully guaranteed by the Federal Government are exempt from large exposure limits. Similarly, deals transacted by a bank on behalf of the Federal Government are also exempt. However such exposures are required to be reported in BRF 77.

                                  • 2.2 UAE Local Governments and Their Non-Commercial Entities

                                    Aggregate funded and unfunded exposures to UAE Local Governments and their non- commercial entities are not permitted to exceed 100% of a bank’s capital base. Within this upper limit, there is no individual cap for exposures to Local Governments however there is an upper limit of 25% for exposure to eachnon-commercial entity in the exposure group.

                                  • 2.3 Commercial Entities of Federal and Local Governments

                                    The commercial entities of Federal Government which are not fully guaranteed and entities owned by UAE Local Governments are subject to aggregate exposure limit of 100% and individual limit of 25% of a bank’s capital base. Stand-alone GREs that meet the definition contained in Article 2 of Circular 32/2013 (see note 4 to the Table of Maximum Large Exposure Limits) are however excluded from this group and exposures to them will be considered under (2.4) below.

                                  • 2.4 A Single Borrower or a Group of Related Borrowers

                                    In the case where a borrower or group of related borrowers belongs to the private sector or it is an entity with Government ownership of less than 50% (but not controlled by them- refer to para 1.4 above) or meets the definition of “stand-alone” GRE, an individual limit of 25% will be applicable. No aggregate limit has been specified for this category.

                                  • 2.5 Principal Shareholders and Their Related Entities

                                    The Central Bank deems it undesirable that a bank lends heavily to its shareholders. Therefore, funded and unfunded exposures to a shareholder who owns 5% or more of a bank’s capital (and his related entities) shall not exceed 20% individually and 50% in aggregate.

                                    Where a principal shareholder (for natural persons, not governments) is also a member of a bank’s board of directors, or a similar designated body, such exposures will be considered within the above aggregate exposure limits.

                                  • 2.6 Interbank Exposures

                                    1. 2.6.1 Interbank exposures within UAE with original tenure of 1 year or less are exempt from individual and aggregate limits.
                                       
                                    2. 2.6.2 Interbank exposures with original maturity period of 1 year or more are not allowed to exceed 30% of bank’s capital base.
                                       
                                    3. 2.6.3 Exposures to banks operating outside the UAE, irrespective of their maturity are not allowed to exceed 30% of the bank’s capital base.
                                  • 2.7 Bank's Subsidiaries and Affiliates (Exposures Within a Banking Group)

                                    Whenever a bank incurs an exposure to its own parent company or to other subsidiaries of its parent, particular concerns arise. Although the management of exposures should be carried out in a fully autonomous manner according to the principles of sound banking management and without regard to any considerations other than those principles, it cannot be excluded that a certain influence on credit decisions may be exercised by persons directly or indirectly holding a qualifying participation in such a bank. As a consequence thereof, this influence may be used to the detriment of the sound and prudent management of that bank. Therefore, the Central Bank has decided to set the individual limit for an exposure at 10% in such case and to fix an aggregate limit for all such exposures at 25% of a bank’s capital base.

                                  • 2.8 Board Members

                                    1. 2.8.1 A bank is not allowed to incur a funded or unfunded exposure to a member of its board of directors, or of a similar designated body, which exceeds 5% of its capital base. All such exposures, taken together must not exceed 25 % of the capital base.
                                    2. 2.8.2 Where a member of a bank's board of directors, or of a similar designated body, is part of a group of related borrowers, total exposures to him must be included under the group. Similarly, the group's exposures must be taken into consideration when calculating the member's exposures which are not allowed to exceed 5% of a bank's capital base. Where such member is also a principal shareholder, the rules set out in Para 2.5 will apply.
                                    3. 2.8.3 Exposures must be measured on a gross basis. However collaterals mentioned in para 1.1 are allowed to be deducted for arriving at the net exposure.
                                    4. 2.8.4 Where a bank incurs an exposure for the purpose of real estate financing, fully registered mortgages are required.
                                    5. 2.8.5 Exposures shall only be incurred on a commercial basis and on market terms. Moreover, the fact that the borrower is a member of the board of directors or of a similar designated body must in no way influence the bank's credit assessment and decision.
                                    6. 2.8.5 A bank must ensure full recovery of all exposures to members of its board of directors or of a similar designated body.
                                    7. 2.8.6 Branches of foreign banks operating in the UAE are not allowed to incur an exposure to their board members who are working abroad.
                                    8. 2.8.7 In case a bank is obliged to book interest due from an exposure to a member of its board of directors, or of a similar designated body, in a suspense account and/or to make a bad debt provision and/or to write off an exposure, either partly or fully, the following rules shall apply:
                                       
                                      1. In case of UAE incorporated banks, the board of directors must obtain the approval of the bank's general assembly, in the presence of the bank's external auditors, and a copy of the meeting's minutes shall be filed with the Central Bank without delay.
                                      2. In case of branches of foreign banks operating in the U.A.E., the approval of the head office must be obtained and a copy thereof shall be filed with the Central Bank without delay.
                                      3. The member concerned shall not participate in the decision of the board of directors, or of a similar designated body.
                                      4. Banks are prohibited from granting any new facilities to a member of its board of directors, or to a member of a similar designated body, after the procedures, mentioned under (a) and (b) above, have been engaged.
                                  • 2.9 Bank's Employees

                                    Employees are defined as staff members of all levels, including executive managers. Banks are prohibited from incurring exposures to their employees other than in the form of personal loans, as defined in the Central Bank's Regulations No.29/2011. Branches of foreign banks operating in the UAE are not allowed to incur an exposure to their staff who are not working with their UAE branches.

                                    Individually the exposures are limited to 20 months’ salary with an aggregate limit of 3% of the bank’s capital base. Housing loans extended to staff members in accordance with Central Bank Regulations and bank’s housing loan policy duly approved by their board of directors, are excluded from these limits.

                                  • 2.10 Exposures to Auditors, Consultants and Lawyers

                                    In order to avoid any conflict of interest between a bank and its statutory auditors, regular consultants and lawyers, the Central Bank instructs banks not to incur any exposure to such parties. In this context, a 'regular' consultant or lawyer means any person or firm who is employed on a regular basis either under a 'retainer agreement' for a specified period or under a more general 'understanding' according to which the bank would make use of the services offered by such persons or firms for most of its needs or cases.

                                  • 2.11 Exempted Exposures

                                    The following exposures are exempted from the application of Article (2) of the Circular No 32/2013 and from the individual and aggregate limits fixed in sections 2.2 to 2.9 of the Guidelines:

                                    1. 2.11.1 Asset items constituting direct or indirect claims on/ or guaranteed by the UAE Federal government including its non-commercial public sector entities;
                                    2. 2.11.2 Asset items constituting claims on/ or guaranteed by eligible multilateral development institutions and their affiliates as per Appendix 8 of the BASEL II Implementation Guidelines vide Circular No 27/2009.
                                    3. 2.11.3 Asset items secured by collateral in the form of securities issued by the entities mentioned in 2.11.1 or 2.11.2 above;
                                    4. 2.11.4 Investments made in marketable securities such as bonds/ Sukuks issued by Emirates Governments or GREs, rated not less than AA- (or equivalent) by one of the top three rating agencies, held to meet Central Bank’s liquidity requirements or held in the trading book and the intention is not to hold such bonds/ sukuks till maturity;
                                    5. 2.11.5 Exposures secured by proper lien over deposits placed with the lending bank or its parent company or its subsidiary, under the condition that the lien can be legally enforced;
                                    6. 2.11.6 Any other asset or security which has been specifically exempted by Central Bank from the purview of large exposure requirement.
                                  • 2.12 Additional Guidelines for Computation of Exposure Values:

                                    Exposures, in either the banking or trading books, that will be in the scope of the large exposures framework can be categorized and should be measured as follows:

                                    1. 2.12.1 Banking book on balance sheet non-derivative assets, where the exposure measure is typically determined by accounting standards;
                                    2. 2.12.2 Banking book “traditional” off-balance sheet commitments where the exposure measure is the product of the notional amount of the commitment and the credit conversion factor (CCF) applied (refer to Annexure B-3 for additional details);
                                    3. 2.12.3 Positions in the trading book (excluding options) where the exposure measure is based on the mark-to-market approach of the risk-based capital requirements;
                                    4. 2.12.4 Options in the trading book where the exposure measure is based on a mark-to-market approach with a jump-to-default assumption; and
                                    5. 2.12.5 Counterparty credit risk from derivatives, securities financing transactions, and long settlement transactions across both banking and trading books, where the counterparty credit exposure measure is determined by one of the methods of the counterparty credit risk framework.

                                    Banks may refer to Basel standards/ Basel Team in the Central Bank for further clarification on specific issues.

                                  • 2.13 Continuous Compliance

                                    Banks have to comply with the limits set above at all times, that is, not only on the reporting dates but continuously throughout each reporting period.

                                • 3. Reporting Requirements

                                  1. 3.1 All large exposures, as defined in Article (2) above, have to be reported to the Central Bank on a monthly or quarterly on consolidated gross basis in accordance with Annexure B-1 and B-2 attached to the Circular 32/2013. (Local banks with branches, subsidiaries or associates abroad will submit consolidated returns).Monthly and quarterly reports are required to be submitted online, in accordance with the schedule provided. Any large exposures existed at any time during the quarter will be included in the reports though it might have been repaid by date of the report.
                                     
                                  2. 3.2 The Central Bank reiterates that the members of the board of directors and the members of similar designated bodies of banks are fully responsible for the submission of punctual and complete reports.
                                     
                                  3. 3.3 Should a bank fail to submit information or submit incomplete or inaccurate information regarding the return forms or fail to inform the Central Bank of any intra-quarter excess by special notification, pursuant to this regulation, the Central Bank will impose penalties in accordance with Union Law No. (10) of 1980.
                                • 4. Management's Responsibilities

                                  • 4.1 General Responsibilities for Credit Policy

                                    The Central Bank considers that the granting of credit is, generally, the core area of banking business and, therefore, the board of directors or a similar designated body and the management of banks operating in the UAE are responsible for their bank's credit policy.

                                    Consequently, the Central Bank directs banks to formulate general credit policy instructions aimed at ensuring a prudent lending structure. Each bank's board of directors, or a similar designated body, has to approve and to implement these instructions in a way that allows for proper monitoring of all exposures.

                                    Moreover, the Central Bank requires that a proper credit evaluation with relevant documentation will be undertaken prior to granting any credit facility.

                                    With regard to the specific risk arising from exposures to individual countries, banks are requested to apply an extremely prudent policy when fixing country limits. The Central Bank recommends thatbanks should refer to internationally renowned credit rating agencies.

                                  • 4.2 Special Responsibilities for Large Exposures

                                    The complete loss of a large exposure may represent a considerable burden on any lending bank's capital base. The Central Bank, therefore, has stipulated that large exposures may only be granted on the responsibility of the entire board of directors of the bank, necessitating a unanimous resolution on the part of all of its members or of the members of a similar designated body.

                                    The resolution may be passed at a meeting or in writing on a circulation basis, provided that adoption is made on unanimous acceptance.

                                    Any such resolution has to be passed prior to the lending and a copy of it must be placed in the customer's file. Where a bank has incurred a large exposure without the required prior resolution of all members, this does not impair the legal effectiveness of the transaction. However, the Central Bank reserves the right to take appropriate action in accordance with Union Law No. (10) of 1980 and related regulations of the Central Bank based thereon.

                                    Any existing exposure, becoming a large exposure by an increase of credit facilities, also requires a unanimous resolution of all members. In the event that an existing exposure becomes a large exposure through a reduction of the capital base, the Central Bank directs that the board of directors of the bank deliberates thereon. The board of directors must appropriately document its awareness and subsequent decisions concerning remedial action.

                                    Under very special circumstances only, banks may deviate from the general principle of a unanimous resolution. Any such exemption must be documented properly. The Central Bank, in the course of its examinations, will verify each such case.

                                  • 4.3 Special Responsibilities for Exposures to Members of a Bank's Board of Directors

                                    A bank shall only incur an exposure to a member of its board of directors, or of a similar designated body, on the basis of a unanimous resolution on the part of all members, except the member concerned, provided that the bank's general credit policy instructions have been followed. The resolution has to be passed prior to the lending and a copy of it must be placed on the member's file. In order to avoid any conflict of interest banks are requested to be very prudent when incurring exposures to members of their board of directors, or of a similar designated body.

                                  • 4.4 Assessment of Credit-Worthiness

                                    A proper assessment of a borrower's credit-worthiness serves to protect both the bank and its depositors and creditors.

                                    It should be beyond question that lending business is only conducted with the necessary prudence customary in banking; that is, before granting a loan, the bank must be convinced that the prospective borrower is credit-worthy.

                                    The Central Bank, therefore, advises all banks operating in the U.A.E. not only to examine the credit-worthiness of their customers in detail before granting any loan, but also to ensure a proper follow-up regarding the financial situation of each customer throughout the whole business relationship.

                                    Banks have to make sure that they can detect any deterioration in their customers' financial situation with minimal delay. For this purpose, they are expected to review their loan books on a regular basis and ask their customers for up-dated information.

                                    Banks must insist that major borrowers disclose reliable evidence of their financial situation by submitting financial statements, other relevant information, and signed declarations of their independence from the bank, its principal shareholders, directors and officers.

                                    Regarding corporate customers required to keep accounts, banks should obtain regular audited annual financial statements and ensure that they are kept informed of any major changes in the customer's business environment or other variables of such customers occurring throughout the year.

                                    In the case of loans to group enterprises, banks must obtain the individual financial statements of the borrowing group enterprise as well as the consolidated statements of the group itself.

                                    In cases where the head office of a foreign bank or a fellow branch abroad decides on loans to be granted by its UAE branch to borrowers with activities in the UAE, the Central Bank insists that full documentation be made available to the bank's UAE branch.

                                    With regard to borrowers who are not obliged to prepare financial statements, banks must obtain statements of assets and liabilities, land register excerpts, property tax and/or income tax assessment notices and confirmation of salary, where applicable. The question as to what documents the credit-worthiness assessment is to be based on may be decided on a case by case basis.

                                    Banks may, in exceptional cases only, refrain from requesting a complete disclosure of a customer's financial situation where the requirement to disclose would be clearly unjustified due to the type and level of security provided; for example, where the security provided covers the repayment of the loan, including interest, at all times, at the following minimum values or after the following minimum adjustments:
                                     

                                    Time/saving deposits:-nominal value
                                    Life insurance policies:-surrender value
                                    Fixed and floating interest securities:- quoted market price less amarkdown of 20%
                                    Equities:-quoted market price less a markdown of 40 %
                                    Precious metals: (gold coins/ingots)-market price less a markdown of 30% (special caution is advisable)
                                    Pledged goods:-50% of wholesale price
                                    Mortgage rights:-60% of market value of the property*

                                     

                                    * The market value must be determined by an independent expert and it should not exceed 10 times the yearly obtainable rent.

                                    Other securities than mentioned above, especially unquoted securities, are not considered appropriate by the Central Bank. Banks are free to be more prudent in fixing higher markdowns particularly when the market is facing national or international financial problems. However banks should ensure that they hold adequate collaterals in respect of large exposure cases.

                                    The waiver of the disclosure of financial situation may also be justified in the light of the credit-worthiness of guarantors. In this case, the bank must be informed about the financial situation of the guarantors according to the same principles as in the case of borrowers. Moreover, only such persons may be acceptable as guarantors who, in addition to the borrower, have assumed a legal obligation for a particular loan. All persons or enterprises already considered as a single borrower (within a group of related borrowers) are, however, exempted from qualifying as acceptable guarantors for this purpose.

                                    The Central Bank emphasizes that, in the case of unsecured loans, the financial situation of a borrower be always disclosed irrespective of his credit-worthiness.

                                • 5. Control and Documentation

                                  Sound administrative and accounting procedures are, in general, a prerequisite for a bank's proper management and control of its loan portfolio. In addition, regarding the identification, recording and reporting of large exposures, the Central Bank instructs banks to set up special mechanisms allowing for a correct monitoring of these exposures. A bank's internal instructions on large exposures should be an integral part of its general credit policy and, therefore, must be approved and appropriately documented by each bank's board of directors or by a similar designated body. The general credit policy instructions must also define the functions and responsibilities of a bank's subsidiaries and branches with regard to lending.

                                  The Central Bank recommends that the accounting procedures and internal control systems of a bank be set up in close co-operation with each bank's external auditors.

                                • 6. Implementation

                                  The revised limits as given in the Table in Article (2) will apply from the date of publication of these Regulations in the Official Gazette. The exposures that are out of line with the limits contained in the Table are to be regularised at the rate of 20% per annum, i.e. full compliance must be achieved in 5 years. Banks who have exposures outside the limits must provide the Central Bank, within 3 months of the date of implementation of these Regulations, with a detailed time-bound plan of action to achieve full compliance.

                                  • Annexures:

                                    B-1 Special Banking Return Forms (BRFs 39, 76-87)
                                    B-2 Explanatory Notes to Special Banking Return Forms
                                    B-3 Credit Conversion Factors (CCFs) under Basel Guidelines

                                     

                                    ANNEXURE- B MONITORING OF LARGE EXPOSURES

                                    (Annexure to Circular No 32/2013)

                                       

                                    Annexure B-1 Special Banking Return Forms (BRFs)

                                    BRF 39

                                    Large Borrowers with 10% Exposure to Bank's Capital

                                    BRF 76

                                    Aggregate Large Exposure Summary Sheet

                                    BRF 77

                                    Federal Government and their Non-Commercial Entities

                                    BRF 78

                                    UAE Local Government and their Non-Commercial Public Sector Entities

                                    BRF 79

                                    Commercial Entities of Federal & Local Governments (Excluding stand-alone GREs)

                                    BRF 80

                                    Stand-alone GREs

                                    BRF 81

                                    Single Borrower or a Group of Related Borrowers

                                    BRF 82

                                    Major Shareholders and Related Entities

                                    BRF 83

                                    Domestic Interbank Exposures

                                    BRF 84

                                    Overseas Interbank Exposures

                                    BRF 85

                                    Exposures within a Banking Group

                                    BRF 86

                                    Exposures to Board Members

                                    BRF 87

                                    Exposures to Bank Staff

                                    Annexure B-2

                                    Explanatory Notes to Special Banking Return Forms on Large Exposures

                                    Annexure B-3

                                    Credit Conversion Factors (CCFs) under Basel Guidelines

                                     

                                    BANKING AND MONETARY STATISTICS- LARGE BORROWERS WITH 10%/5% EXPOSURE TO BANK'S CAPITAL- BRF 39
                                    Name of Bank : For the quarter ending:(AED in 000) 
                                    Name of Single Obligor or GroupNames of upto 5 largest entities within the group (if relevant)Funded O/SUnfunded O/S CCF equivalent)Commited Unused limitsTotal Exposure
                                    A. Borrowers/ groups Residents of the UAE (at 10% of the Bank's Capital Base or AED 750 Mln whichever is lower)  
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                     Total    
                                    B. Borrowers/ groups Non Resident in the UAE -at 5% of the Bank's Capital Base or AED 500 Mln whichever is lower)  
                                          
                                          
                                          
                                          
                                          
                                     Total    
                                    NOTE: Reporting should include customers where funded and unfunded exposures are in excess of the thresholds defined hereabove
                                    FORM NO: BSD/BRF 39-LARGEST EXP/ NOV13   

                                     

                                    BANKING AND MONETARY STATISTICS- AGGREGATE LARGE EXPOSURE SUMMARY SHEET- BRF 76
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (calculated as per CAR Return): Aggregate large exposures under each category 
                                    Funded O/S, unfunded O/S and committed un-used limitsAggregate regulatory limit (%)BRF Nos
                                    NoLarge Exposure CategoriesTotal exposureAs % of capital base 
                                    1Federal Government and their non-commercial entitiesNone  BRF-77
                                    2UAE Local Governments and their non-commercial entities100%  BRF-78
                                    3Commercial entities of Federal Government and UAE Local Governments (ownership > 50%)- Excluding Stand-alone Entities100%  BRF-79
                                    4.1Stand-alone commercial entities of Federal Government and UAE Local Governments (GRE rated BBB- or above)-Note 6Not applicable  BRF-80
                                    4.2A single borrower or a group of related borrowersNot applicable  BRF-81
                                    5Shareholders who own 5% or more of the bank's capital and their related entities50%  BRF-82
                                    6.1Domestic interbank exposures - Over 1 YearNot applicable  BRF-83
                                    6.2Overseas interbank exposures- Over 1 YearNot applicable  BRF-84
                                    7A bank's subsidiaries and affiliates25%  BRF-85
                                    8Board Members25%  BRF-86
                                    9Bank employees (funded and unfunded)3%  BRF-87
                                          
                                    NOTES: 
                                    1Exposure is defined as the sum of: funded O/S, unfunded O/S and committed unused limits. Unfunded exposures may be adjusted for Credit Conversion Factors (CCF) in accordance with Basel II.
                                    2The above definition of Exposure excludes marketable bonds/sukuks that are rated not less than AA- (or equivalent) by one of the top three rating agencies. Such bonds/sukuks should be held to meet Central Bank liquidity requirements or in the trading book and the intention is not to hold such bonds/sukuks to maturity.
                                    3Exposure to Federal Government includes deals transacted or exposure taken on behalf of Federal Government.
                                    4Non-commercial entities of the Federal and local Governments will include public utilizes which provide goods or services on non-competitive basis.
                                    5Commercial entities or GREs of the Federal and Local Governments will include their commercial companies where they own more than 50% share capital of the company. Those where the Government ownership is less than 50% will be reported under the "single borrower" category.
                                    6A Government Related Entity (GRE) that is profitable and can service its debt obligations from its own resources/ operations, without need for any implicit or explicit government support and holds a rating of not less than BBB- (or equivalent) from one of the top three rating agencies can be treated as a single obligoror "stand-alone entity" for inclusion under item 4.1 of the table. The Government ownership in such entities should not be less than 50%.
                                    7Total exposures under individual categories should be derived from the annexed supporting BRFs as indicated in the Remarks columns.
                                     FORM NO: BSD/BRF-76 LE SUMMARY /NOV13

                                     

                                    BANKING AND MONETARY STATISTICS- LE UAE FEDERAL GOVT & THEIR NON-COMMERCIAL ENTITIES- BRF 77
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return):  
                                    Name of the borrowing entityFunded O/S (Excl. Debt Securities)Debt securitiesUn-Funded O/SCommitted unused limitsTotal exposures
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                    Total Exposure     
                                    FORM NO: BSD/BRF-77 LE FED GOVT /NOV13 
                                    Although such exposures fall in the exempted category, these are required to be reported regardless of amount for information.

                                     

                                    BANKING AND MONETARY STATISTICS- LE UAE LOCAL GOVT & THEIR NON-COMMERCIAL PUBLIC SECTOR ENTITIES - BRF 78
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return):      
                                    Non-Commecial public sector entities (25% limit)Funded O/S (Excl. Debt Securities)Debt securitiesUnfunded O/SCCF amountCommited unused limitsTotal exposuresAs % of capital baseRef No of Central Bank Approval
                                    Abu Dhabi(sub total)        
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                    Dubai(sub total)        
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                    Sharjah(sub total)        
                                              
                                              
                                              
                                              
                                              
                                    Ajman(sub total)        
                                              
                                              
                                              
                                              
                                    UAQ(sub total)        
                                              
                                              
                                              
                                    RAK(sub total)        
                                              
                                              
                                              
                                              
                                    Fujairah(sub total)        
                                              
                                              
                                              
                                    A. TOTAL EXPOSURE TO NON-COMMERCIAL ENTITIES      
                                    UAE local Governments/ Departments (Aggregate limit for the group= 100% of capital base)      
                                    ABU DHABI        
                                    DUBAI        
                                    SHARJAH        
                                    AJMAN        
                                    UAQ        
                                    RAK        
                                    FUJAIRAH        
                                    B. TOTAL EXPOSURE TO EMIRATES GOVTS     
                                    GRAND TOTAL (A+B) LIMIT 100%      
                                    NOTES:1. Entities reported on this list must match CB list of PSE
                                     2. All entities falling in this category should be arranged group-wise. O/S must include bonds and sukuks which do not match the criteria of exclusion. Use additional rows as required.
                                     3. All exposures are required to be reported regardless of amount.
                                    FORM NO: BSD/BRF-78 LE EM & PSE GOVT /NOV13

                                     

                                    BANKING AND MONETARY STATISTICS- LE COMMERCIAL ENTITIES OF FEDERAL & LOCAL GOVT (EXCL STAND-ALONE ENTITIES) - BRF 79
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return):      
                                    Individual limit 25% and aggregate limit, 100%Funded O/S (Excl. Debt Securities)Debt securitiesUnfunded O/SCCF amountCommited unused limitsTotal exposuresAs % of capital baseRef No of Central Bank Approval
                                    Abu Dhabi(sub total)        
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                    Dubai(sub total)        
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                    Sharjah(sub total)        
                                              
                                              
                                              
                                              
                                              
                                    Ajman(sub total)        
                                              
                                              
                                              
                                              
                                    UAQ(sub total)        
                                              
                                              
                                              
                                    RAK(sub total)        
                                              
                                              
                                              
                                              
                                    Fujairah(sub total)        
                                              
                                              
                                              
                                    TOTAL EXPOSURE TO COMMERCIAL ENTITIES (100% aggregate limits)      
                                    NOTES:

                                    1. All entities falling in this category should be arranged group-wise. Use additional rows if required.

                                    2. Exposures must include bonds and sukuks unless they meet the criteria for exclusion.

                                    3. All exposures are required to be reported regardless of amount.

                                    FORM NO: BSD/BRF-79 LE GREs /NOV13

                                     

                                    BANKING AND MONETARY STATISTICS-LE STAND ALONE GREs - BRF 80
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return): 
                                    NAME OF STAND ALONE GRE/ ENTITY/GROUPFunded O/S (Excl. Debt Securities)Debt securitiesUnfunded O/SCCF amountCommitted unused limitsTotal exposuresAs % of capital base (25% limit)Ref No of Central Bank Approval
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                    Total        
                                    Entities should be arranged group wise. Exposures must include bonds and sukuks unless they meet the meet the criteria for exclusion  
                                    FORM NO: BSD/BRF 80- LE STAND ALONE GREs/NOV13
                                             

                                     

                                    BANKING AND MONETARY STATISTICS-LE SINGLE BORROWER OR A GROUP OF RELATED BORROWERS- BRF 81
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return): 
                                    A. Exposure to Resident borrowers/ groupsFunded O/S (Excl. Debt Securities)Debt securitiesUnfunded O/SCCF amountCommitted unused limitsTotal exposuresAs % of capital base (25% limit)Ref No of Central Bank Approval
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                    B. Exposures to Non resident borrowers     
                                             
                                             
                                             
                                             
                                             
                                    Total (A+B)        
                                    Entities should be arranged group wise. Exposures must include bonds and sukuks unless they meet the meet the criteria for exclusion
                                    FORM NO: BSD/BRF81- LE SINGLE BORR/NOV13  

                                     

                                    BANKING AND MONETARY STATISTICS- LARGE EXPOSURE TO MAJOR SHAREHOLDERS & RELATED ENTITIES- BRF 82
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return): 
                                    Shareholders who own 5% or more of bank's capital and their related entitiesFunded O/S (Excl. Debt Securities)Debt securitiesUnfunded O/SCCF amountCommitted unused limitsTotal exposuresAs % of capital base (20% limit)Ref No of Central Bank Approval
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                             
                                    Total        
                                    Aggregate Exposure Limit50% 
                                    Notes: Exposures to all borrowers/ groups falling in this category are required to be reported though exposures to individual shareholders may be below the limit.
                                    FORM NO: BSD/BRF 82-LE SHAREHOLDER/NOV13

                                     

                                    BANKING AND MONETARY STATISTICS- LE DOMESTIC INTERBANK EXPOSURE- BRF 83
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return):
                                     Exposure to banks operating within UAEFunded O/SInter Bank CDs/Debt SecuritiesUnfunded O/SCCF amountCommitted unused limitsTotal exposureAs % of capital base (limit 30%)Ref No of Central Bank Approval
                                    1Remaining maturity less than one year     
                                    2Remaining maturity more than one year     
                                    3Total domestic interbank      
                                    4List of counter parties where remaining maturity per counterparty is more than one year:
                                     Name of banks:       
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                     TOTAL        
                                     FORM NO: BSD/BRF 83 -LE DOMESTIC INTERBK/ NOV13    

                                     

                                    BANKING AND MONETARY STATISTICS- OVERSEAS INTERBANK EXPOSURE- BRF 84
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return):   
                                    Exposure to banks operating outside UAEFunded O/SInter Bank CDs/Debt SecuritiesUnfunded O/SCCF amountCommitted unused limitsTotal exposureAs % of capital base (limit 30%)Ref No of Central Bank Approval
                                    1Remaining maturity less than one year      
                                    2Remaining maturity more than one year      
                                    3Total foreign interbank      
                                    List of counter parties where remaining maturity per counterparty is more than one year: 
                                    CountryName of banks:       
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                     Total        
                                    Notes:         
                                    1All foreign banks branches exposure should be reported under the country of their Head Office 
                                    2Exposure to a subsidiary of a foreign bank should be reported in the country where subsidiary is registered. 
                                     FORM NO: BSD/BRF 84-LE OVERSEAS INTERBK/NOV13   

                                     

                                    BANKING AND MONETARY STATISTICS- LARGE EXPOSURES WITHIN A BANKING GROUP- BRF 85
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return):
                                     Name of Entity/ Group% share in capitalFunded O/S (Excl. Debt Securities)Inter Bank CDs/Debt SecuritiesUnfunded O/SCCF amountCommitted unused limitsTotal exposureAs % of capital base (limit 10%)Ref No of Central Bank Approval
                                    1Consolidated subsidiaries:         
                                    1.1Financial subsidiaries:         
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                    1.2Non-financial subsidiaries:       
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                               
                                    1.3Sub-total         
                                               
                                    2Non-consolidated entities:       
                                     (Parent/ holding company and affiliates)        
                                    2.1Financial entities        
                                               
                                               
                                               
                                               
                                               
                                               
                                    2.2Non-financial entities        
                                               
                                               
                                               
                                               
                                               
                                    2.3Sub-total         
                                               
                                               
                                    3Grand total         
                                     AGGREGATE LIMIT      25% 
                                               
                                    Notes:1. Exposure to entities part of a banking group to which the reporting bank belongs, should be reported on this form.
                                     2. Equity or quasi equity investments in consolidated/ non-consolidated entities should not be included. Further, only funded exposure should be reported.
                                     FORM NO: BSD/BRF 85-LE OVERSEAS INTERBANK/NOV13       

                                     

                                    BANKING AND MONETARY STATISTICS- LARGE EXPOSURE-BOARD MEMBERS- BRF 86
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return):
                                    Exposure to board members and their entities/ related entities and groupFunded O/SUnfunded O/SCCF amountCommitted unused limitsTotal exposureAs % of capital base (limit 5%)Ref No of Central Bank Approval
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                    TOTAL       
                                    AGGREGATE LIMIT     25% 
                                    Notes:       
                                    All exposures to board members are required to be reported even though they may be below the limit. Entities should be arranged group-wise.
                                    FORM NO: BSD/BRF 86 -LE BOARD/NOV13    

                                     

                                    BANKING AND MONETARY STATISTICS- EXPOSURE TO BANK STAFF- BRF 87
                                    Name of the bank:For the quarter ending:(AED in 000)
                                    Capital Base (as per CAR return): 
                                    TOTAL OUTSTANDING LOANS TO BANK EMPLOYEES (UNDER REGULATION NO 29/2011)
                                     Loan typeNumber of loansBalance O/SAs % of Capital BaseRemarks
                                    1Personal loans (excluding housing)  
                                    2Car Loan    
                                    3Overdraft    
                                    4Credit card outstanding   
                                    5Total (Limit 3%)    
                                            
                                    6Total Housing loans      
                                            
                                    LIST OF LOANS WHICH DO NOT MEET THE CRITERIA LAID DOWN IN REGULATIONS 29/2011 
                                    S.N.Name of staffOriginal amountBalance O/SLoan period in monthsMonthly instalmentInterest rateSecurity/ remarks
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                          
                                    STAFF HOUSING LOANS WHICH ARE OUTSIDE THE PERVIEW OF BANK'S STAFF HOUSING LOANS POLICY 
                                    S.N.Name of staffOriginal amountBalance O/SLoan periodMonthly instalmentInterest rateSecurity/ remarks
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                            
                                    FORM NO: BSD/ BRF 87-STAFF LOANS/NOV13
                                  • Annexure B-2

                                    EXPLANATORY NOTES TO SPECIAL BANKING RETURN FORMS (BRFs) FOR LARGE EXPOSURES
                                    (Annexure to Circular No 32/2013)

                                    General Instructions for Completing Special Banking Return Forms for Large Exposures

                                    1. Banks must refer to Circular No 32/2013 along with Guidelines to Monitoring of Large Exposures and Explanatory Notes to BRFs in order to ensure correct submission of Special Banking Return Forms on Large Exposures.
                                    2. The Special BRFs form a part of BRF system and should be uploaded accordingly. BRF 39 is monthly report and BRFs 76 to 87 are quarterly reports which must be submitted along with monthly and quarterly batches as instructed through BRF Platform.
                                    3. Except for those exposures secured by cash collaterals, bank guarantees/ stand-by LCs and guarantee from the Federal Government, all other exposures are required to be reported on gross basis.
                                    4. BRFs specified hereunder are in the summary form, listing entity/ group exposures and aggregate exposures. Banks however must maintain full details of such exposures including approvals of various types of facilities to group/ relatedentities, collaterals held, status of the accounts, variations and reductions in the exposures, CCF calculations, etc. which will be reviewed by the Central Bank Examiners from time to time.
                                    5. All large exposures are required to be reported on consolidated basis (including foreign branches and all financial subsidiaries domestic or international) as per Basel II capital framework. Lending to the same entity by group members that are consolidated, should be reported together and calculated as a percentage of the consolidated capital base. Foreign banks however need not report exposures taken by their head offices or overseas branches.

                                    BRF- 39 Large Exposures at 10% / 15% of the Bank's Capital

                                    A large exposure is defined as those funded and unfunded outstandings and unused committed limits (less provisions, cash collaterals, bank guarantees and Federal Government guarantee) to a single borrower or his group which in total is equal to or exceeds 10% of the bank’s capital base or AED 750 Mln whichever is lower in case of resident borrowers. For Non-Resident borrowers, the above exposure amount has been fixed at 5% of capital base or AED 500 Million whichever is lower for reporting purposes.

                                    In case of group accounts, banks must report the name of the group along with names of 5 largest borrowing entities within the group. Exposures within the banking Group are not to be reported in this form.

                                    Unfunded exposure should include committed unused limits of the borrower with adjustments for Credit Conversion Factor (CCF) in accordance with Annexure B-3.

                                    BRF- 76 Aggregate Large Exposure Summary Sheet

                                    This report lists summary of all large exposures specified in the Article (2) of the Circular on Table of Maximum Large Exposure Limits. The amounts are derived from BRFs 77 to 87 in order to monitor the aggregate exposures under individual categories.

                                    BRF 77UAE Federal Government and their Non-Commercial Public Sector Entities: Although exempted, reporting under the category is required for information purposes.Exposure to Federal Government will include deals transacted on behalf of Federal Government.
                                    BRF 78UAE Local Governments and their Non-Commercial Entities: Aggregate exposure under this category should not exceed 100% of capital base. The upper limit for individual non-commercial entities is 25%. Borrowing entities falling under this category should be listed Emirate wise. For the purpose of aggregation, all exposures under this category should be reported whether individually they exceed the specified exposure limit or not.
                                    BRF 79Commercial Entities of Federal and Local Governments (Excluding stand-alone GREs): This category includes Government Related Enterprises (GREs). Except for “stand alone” GREs as below, all exposures to relative GREs should be reported whether individually they exceed the specified exposure limit or not.
                                    BRF 80Stand-alone Commercial Entities of Federal and Local Governments: These include Government Related Entities (GREs) which are profitable and can service their debt obligations from their own resources/ operations, without need for any implicit or explicit Government support and hold a rating of not less than BBB- (or equivalent) from one of the top three rating agencies. These will be treated at par with “single borrower” with individual exposure limit of 25% of bank’s capital. No aggregation is required.
                                    BRF 81Single Borrower or a Group of Related Borrowers: This category will include private sector borrowers and companies where the government ownership of shares is less than 50%. In such cases, exposures to an entity or group should not exceed 25% of capital base. No specific aggregate limit has been fixed for this category. Lending to non-residents should be shown separately in the space provided if they exceed specified limit under these regulations.
                                    BRF 82

                                    Major Shareholders and Their Related Entities: Where exposures to major shareholders and their entities exceed 20% of bank’s capital individually and 50% collectively. If a board member or his entities fall under the major shareholder category, his exposure should be listed here.

                                    All exposures to major shareholders whether they exceed the regulatory limit or not, should be reported for calculating the aggregate exposure.

                                    BRF 83
                                    BRF 84
                                    Domestic and Overseas Interbank Exposures: Inter-bank exposures are exempted from the aggregate limit. However exposures to individual banks for a period over 1 year are not allowed to exceed 30% of bank’s capital base. Local banks should report lending by their overseas branches, where applicable. Foreign banks should report only on UAE operations.
                                    BRF 85LE to Bank’s Subsidiaries and its Affiliates: Exposures to them are subject to 10% individual limit and 25% aggregate limit. In case a consolidated subsidiary or affiliate falls under other BRF as well, such exposures should be reported only in BRF-1.
                                    BRF 86LE to Board Members and Their Related Entities: Their exposure limits are 5% of the bank’s capital base as individual and 25% in aggregate. All exposures to board members whether they exceed the regulatory limit or not, should be reported for calculating the aggregate exposure. If a board member is also a major shareholder of the bank, his exposure should be reported in BRF 86.
                                    BRF 87LE to Bank Staff: Exposure to staff members should be incurred in accordance with Regulations No 29/2011 of 23/02/2011. Aggregate of such exposures should not exceed 3% of the bank’s capital base. Staff housing loans are exempted from the computation of large exposures vide Notice No 30/98 dated 17/1/1998 but those outside the bank’s housing loan policy should be reported.
                                  • Annexure B-3

                                    CREDIT CONVERSION FACTORS (CCF) UNDER BASEL GUIDELINES
                                    (Annexure to Circular No 32/2013)

                                    In accordance with standardized approach under Basel II, banks may apply CCF percentages for off-balance sheet items determining large exposure limits. Since this is only a summarized list, banks may refer to Basel documents for additional information/ clarification.

                                    1. Credit Conversion Factor of 100%

                                    • All direct credit substitutes, including general guarantees of indebtedness and all guarantee type instruments, such as standby letters of credit and acceptances, backing the financial obligations of other parties.
                                    • Credit derivatives such as credit default swaps where the bank provides credit protection.
                                    • Sale and repurchase agreements and asset sales with recourse, where the credit risk remains with the bank.
                                    • Forward asset purchases, forward deposits and commitments for the unpaid portion of partly-paid shares and securities which represent commitments with certain draw-downs.

                                    2. Credit Conversion Factor of 50%

                                    • Transaction-related contingent items e.g. performance bonds, bid bonds warranties and standby letters of credit related to particular transactions.
                                    • Underwriting commitments under note issuance and revolving underwriting facilities.
                                    • Other commitments -Not unconditionally cancellable with an original maturity exceeding one year.

                                    3. Credit Conversion Factor of 20%

                                    • Other commitments not unconditionally cancellable with an original maturity of one year or less.
                                    • Short-term self-liquidating trade-related contingent items e.g. documentary credits collateralised by underlying shipments.

                                    4. Credit Conversion Factor of 0%

                                    • Any commitment that is unconditionally cancelable.
                                    • Any items of doubt may be referred to Basel Team at the Central Bank for their clarification/ decision.
                                • Amendment of page No. 5 of the Regulations Regarding Bank Loans & Other Services Offered to Individual Customers No. 29/2011

                                  Please note that page number 5 of the Regulations Regarding Bank Loans & Other Services Offered to Individual Customers No. 29/2011 dated 23 February 2011 is to be replaced by the attached.


                                  d) In order to ensure that the monthly installments deducted for repayment of this loan and resulting interest are kept in a reasonable proportion to the customer's income, the deductions from his salary and/ or regular income must not exceed the limits specified under Article (7) of these Regulations.

                                  e) Loans extended to sole proprietorship firms and companies, secured by salary of the owner or salaries of the partners shall be treated the same way this loan is treated, and shall be subject to the same terms and conditions.

                                  f) This loan shall be extended as per an application by the customer to be approved by the bank or the finance company, and it should be drafted in the manner set out in Article (12) hereof.
                                   

                                  Article (3)
                                  Car Loan

                                  a) Car Loan: Is a loan extended by the bank or the finance company to its customer for the purpose of purchasing a private car.

                                  b) Car loan shall be treated as separate from the personal consumer loan, and should not exceed (80%) eighty percent of the value of the financed vehicle.

                                  c) Repayment Period: The maximum period for repayment of the loan shall be (60) months.

                                  d) Security: This loan should be secured by a mortgage over the car.

                                  e) Car loans extended to sole proprietorship firms and companies, secured by salary of the owner or salaries of the partners shall be treated the same way this loan is treated, and shall be subject to the same terms and conditions.

                                  f) This loan shall be extended as per an application by the customer and approved by the bank or the finance company, and it should be drafted in the manner set out in Article (12) of these Regulations.

                                • Amendment of page (14) of Regulations Regarding Bank Loans & Other Services Offered to Individual Customers

                                  We hereby attach page (14) of the Regulations Regarding Bank Loans & Other Services Offered to Individual Customers, please replace page (14) in the copy of the Regulations you have with this page, where paragraph (b) was added.

                                  This amendment shall become effective from the date of this Notice.

                                   


                                  Article (19)
                                  Interpretation of these Regulations

                                  The Legal Development Unit of the Central Bank shall be the reference for interpretation of the provisions of these Regulations.
                                   

                                  Article (20)
                                  Currently Outstanding Loans

                                  1. a- The provisions of these Regulations shall apply to all banks and finance companies including Islamic banks and Islamic finance companies in relation to personal consumer loans and car loans granted by these entities currently existing, except for commissions, fees or any fines charged on them prior to the date on which these regulations come into force, which is considered finalized.
                                     
                                  2. b- Any borrower may transfer his loan / finance from any bank or finance company operating in the UAE against paying of an early payment fee not exceeding 1% of the outstanding balance of the loan, or AED 10,000, whichever is less. Another bank or a finance company operating in the UAE may accept the transfer regardless of the fact that the loan or the finance balance exceeds the limits allowed under these regulations. In case of excess, however, the balance of the loan or the finance may not be increased by extending an additional loan or a finance to the borrower.
                                     

                                  Article (21)
                                  Publication

                                  These regulations shall be published in the Official Gazette in both Arabic and English, and shall come into effect one month after date of its publication.

                                • Additional Clarifications to Regulation No. 29/2011 Regarding Bank Loans & Services Offered to Individual Customers

                                  N 4501/2011 Effective from 7/7/2011

                                  Further to our Notice No 2901/2011 dated 28/04/2011 on the Clarifications and Guidelines Manual, several banks have sought guidance and clarifications on some additional matters. After reviewing their responses, it has been decided to add the attached clarifications.

                                  Other issues, which are currently under discussion with the banks, shall be clarified in due course.

                                  • ANNEXURE TO NOTICE NO. 4501/2011 dated 07/07/2011 Clarifications to Regulation No 29/2011 dated 23.02.2011 on Bank Loans and Services Offered to Individual Customers

                                    Article (2) - Personal Loan:

                                    1. If certain existing personal loans availed by UAE Nationals have been fully or partly utilised for Residential Real Estate purposes, banks may with the explicit consent of the borrower suitably segregate them and set up separate loans in accordance with these guidelines and internal policies of the bank. All real estate loans should be supported by official and other documents regarding purchase, development or improvement of the property. The related installments should not exceed 50% limit alongwith other repayments in accordance with the Regulations.

                                    Article (7) - Repayment Installments:

                                    1. In existing loans not covered under (1) above where total repayment burden exceeds 50% of gross salary and regular income, banks may agree to restructure/ reschedule the loan for longer than 48 months provided no fresh funds are made available to the borrower till regularization within the laid down criteria.
                                       
                                    2. Banks are permitted to defer upto two instalments in a year at their discretion.

                                     

                                • Regulations Regarding Bank Loans and Other Services Offered to Individual Customers - UAE Nationals

                                  Reference to our letter dated 07/05/2013, regarding the above subject.

                                  Please note that the moratorium period to reschedule loans of other banks advanced to national customers has ended today 06/08/2013.

                                  Accordingly, you are permitted to buyout and transfer these loans from other banks on condition that you strictly abide by the following:

                                  1. 1) Terms of Regulations Regarding Bank Loans and Other Services Offered to Individual Customers.
                                     
                                  2. 2) Repayment installment for all loans at all banks and lending entities must not exceed 50% of the regular income of the borrower.
                                     
                                  3. 3) Loan repayment period must not exceed 48 months, expect for certain loans exempted by the Central Bank.

                                  Non-compliance with these instructions would subject your bank to severe sanctions, in addition to Government refraining from dealing with your bank.

                                  Yours faithfully,

                                   

                                • Clarifications regarding Central Bank's Regulations concerning Personal Loans and Mortgage Loans

                                  After greetings,

                                  The Central Bank would like to clarify the following points regarding Central Bank)s Regulations concerning personal loans and mortgage loans:
                                   

                                  1. 1- Notice No. 4501/2011 dated 07/07/2011 provided banks and finance companies an option, back then, to separate residential real estate loans from personal loans availed by UAE nationals, with the overall installments not to exceed 50% limit along with other repayments in accordance with the Regulations. This has become clear-cut with the issuance of Regulations regarding Mortgage Loans on 28/10/2013.
                                     
                                  2. 2- As per the definitions mentioned in the Regulations regarding Mortgage Loans, Mortgage Loan is defined as a loan that is collateralized against a residential property granted for the purpose of constructing, purchasing or renovating a house for owner occupier or investment purposes. It also includes loans granted for the purchase or the development of land for these purposes.
                                     
                                  3. 3- Under Article (3) of the Regulations regarding Mortgage Loans, the maximum DBR allowed is set out in “Regulations Regarding Bank Loans and Other Services Offered to Individual Customers”- i.e. 50 percent of gross salary and any regular income from a defined and specific source at any time.
                                  4.  
                                  5. 4- Notice No. 4501/2011 dated 07/07/2011 also gives the banks an option to restructure/reschedule personal loans, which their total repayment burden exceeds 50% of gross salary/regular income, for longer than 48 months provided no fresh funds are made available to the borrower. Therefore, the purpose is to bring down the DBR to 50% and less without any additional finances.
                                  6.  
                                  7. 5- Central Bank's requirements to buyout and transfer loans from other banks are mentioned in Notice No. 13/1187/2013 dated 06/08/2013 (copy enclosed).

                                  Therefore, banks and finance companies must stop marketing or offering any products that are not in line with Central Bank's Regulations and the above clarifications.

                                   

                                • Amendments to Regulation No. 29/2011 Regulation regarding Bank Loans & Other Services Offered to Individual Customers

                                  N 193/2018 Effective from 25/9/2018

                                  After greetings,

                                  Reference to Regulation 29/2011 regarding Bank Loans & Other Services Offered to Individual Customers, its amendments and additional clarifications, and in order to stop the unacceptable practices related to the purchase and transfer of UAE nationals’ loans among banks that increase the burdens of UAE nationals, and after consultation with the banking industry, the Board of Directors of the Central Bank has decided to introduce amendments to the above Regulation, its amendments and additional clarifications.

                                  We enclose herewith a copy of the Amendments to the Regulation regarding Bank Loans & Other Services Offered to Individual Customers. These amendments are effective from the date of this notice.

                                  Please comply with these amendments to avoid regulatory actions, in addition to listing your bank’s name on the list of non-cooperative banks in implementing the Government initiatives focusing on resolving the problem of UAE nationals’ loans burden.

                                  Yours faithfully,

                                  • Central Bank Board of Directors' Resolution No. 26/3/2018 of Amending Regulation No. 29/2011 - Regulation regarding Bank Loans & Other Services Offered to Individual Customers

                                    Chairman of the Board,

                                    Having perused the provisions of Union Law No. (10) of 1980 concerning the Central Bank, the Monetary System and Organization of Banking; and

                                    Regulation No. 29/2011 - Regulation regarding Bank Loans & Other Services Offered to Individual Customers, its amendments and additional clarifications.

                                    The Central Bank’s Board of Directors has issued the following resolution:

                                    • Article One:

                                      The texts of paragraph (b) of Article (20) of Regulation No. 29/2011 - Regulation regarding Bank Loans & Other Services Offered to Individual Customers shall be replaced with the following texts:

                                      (Any borrower may transfer his/her loan/financing from any bank or finance company operating in the UAE against paying of an early payment fee not exceeding 1% of the outstanding balance of the loan, or AED 10,000, whichever is less. Another bank or a finance company operating in the UAE may accept the transfer under the following conditions:

                                      1. For loans granted after the issuance of this Regulation, the requirements of the Regulation must be fully complied with, in particular those relating to the loan or financing amount, the repayment period and monthly deduction.
                                         
                                      2. For loans granted prior to the issuance of this Regulation, the profit/interest rate should be reduced and the repayment period or loan/financing balance should not be increased by granting an additional loan or financing to the borrower.)
                                    • Article Two:

                                      To cancel the additional clarifications under the numbers (2.1) and (7.2), issued by Notice No. 4501/2011 of 7/7/2011.

                                    • Article Three:

                                      This Resolution shall be communicated to whomsoever is concerned for implementation, and shall be published in the Official Gazette in both Arabic and English.

                                • Amendments to Appendix 2 of Regulation No. 29/2011 - Regulations regarding Bank Loans & Other Services Offered to Individual Customers

                                  N 3986/2019 Effective from 8/10/2019

                                  Please be informed that the Board of Directors of the Central Bank has issued Decision No. 96/By Circulation/2019, regarding the following:

                                  1. 1- Amending Appendix 2 of Regulation No. 29/2011 - Regulations regarding Bank Loans & Other Services Offered to Individual Customers (Copy enclosed). By this amendment, the early settlement or partial settlement fee applying to home loans has been reverted to maximum 1% of the outstanding balance or AED 10,000, whichever is less.
                                  2.  
                                  3. 2- Banks and finance companies that arbitrarily changed the stated terms of the fees in existing customer agreements, thus violated item 7 of the amendments of Regulation No. 29/2011 attached to Notice No. 157/2018, are required to respect the original terms of the agreements and refund all overcharges for all customers based on their original fee within 30 days of this notice.

                                  We attach herewith a copy of the above Decision and please circulate it internally.

                                  The attached Decision comes into force with immediate effect.

                                  • Central Bank Board of Directors’ Resolution No. 96/By Circulation/2019 of Amending Appendix 2 of Regulation No. 29/2011 - Regulations regarding Bank Loans & Other Services Offered to Individual Customers

                                    Governor,

                                    Having perused the provisions of the Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities; and

                                    Regulation No. 29/2011 - Regulations regarding Bank Loans & Other Services Offered to Individual Customers, its amendments and additional clarifications.

                                    The Central Bank's Board of Directors has issued the following resolution:

                                    Article One:

                                    The Appendix 2 of Regulation No. 29/2011 - Regulations regarding Bank Loans & Other Services Offered to Individual Customers shall be replaced with the enclosed appendix.

                                    Article Two:

                                    This Resolution shall be communicated to whomsoever is concerned for implementation, and shall be published in the Official Gazette in both Arabic and English.

                                     

                                    Amendment to the Regulations Regarding Bank Loans & Services Offered to Individual Customers (29/2011)

                                    Introduction:

                                    Please note that paragraphs 4 and 5 are cancelled by Notice No. (2535/2022). 
                                    1. This Amendment applies to and forms part of the Regulations Regarding Bank Loans & Services Offered to Individual Customers (29/2011) (the “Regulations”). It applies specifically to Appendix 2 of those Regulations, which set out the “Maximum Limits for Fees and Commissions Charged on Retail Customer Service”. Upon coming into force, this Amendment replaces the previous version of Appendix 2 and is mandatory and enforceable in the same manner as the Regulations. This Amendment also replaces any other fee caps set out by the Central Bank at this time but not future caps set outside of the scope of this document.
                                       
                                    2. All fees set out in this Amendment are exclusive of UAE VAT charges.
                                       
                                    3. Article 11 of 29/2011 remains in force and banks and finance companies must comply accordingly.
                                       
                                    4. Banks and finance companies will need to notify and seek approval from the CBUAE ex-ante for any planned introduction of a new fee or a change in existing fee levels (which are larger than 5%) not capped by this amendment. Such notifications can be submitted to the CBUAE during the first 5 business days of April and October of any given year.
                                       
                                    5. The Central Bank will accept ad hoc notifications for exempt fees on an ad hoc basis where it is shown to the Central Bank’s satisfaction that these relate to new products. This will be assessed on a case-by-case basis.
                                       
                                    6. The fee caps set out in this Amendment represent the maximum permissible charges. Banks and finance companies must have appropriate product approval processes in place for all products, which include an examination of the basis and appropriateness of a fee calculation and, if applicable, must charge lower fees than those prescribed in these caps.
                                       
                                    7. The Central Bank will supervise regulated entities to ensure that rates are applied in a fair and appropriate manner. This will include ensuring that regulated entities do not automatically default to using maximum caps where actual costs may be lower.
                                       
                                    8. Regulated entities to which the Regulations apply are required to provide the Central Bank with a full list of the fees they charge no later than 30 days after this Amendment comes into force. Up to date fees should also be made publicly available and should be easily accessible for consumers (e.g. online and in branches).
                                       
                                    9. These fee caps will be reviewed on an annual basis for continued suitability.

                                     

                                    Maximum Limits for Fees and Commissions Charged on Retail Customer Service

                                    No.ProductFeeCap (AED)
                                    1Personal AccountsAccount closure fee100
                                    2Personal AccountsAccount balance letter50
                                    3Personal AccountsNo liability certificate60
                                    4Personal AccountsRelease letter50
                                    5Personal AccountsLiability letter issued to Govt Departments/embassies60
                                    6Personal AccountsLiability letter issued to financial institutions60
                                    7Debit CardIssuing supplementary ATM Card25
                                    8Debit CardReplacing Secret Pin Code25
                                    9Debit CardReplacing lost or stolen ATM card25
                                    10Debit CardOwn ATM fees0
                                    11Debit CardFees for using other bank’s ATM2
                                    12Debit CardCopy of sales slip25
                                    13Consumer LoansDelayed payment penal interest chargesMax 200
                                    14Consumer LoansEarly settlement from other bank loans1% Max 10,000
                                    15Consumer LoansFinal settlement from other sources/EOSB1% Max 10,000
                                    16Consumer LoansPartial payment1% Max 10,000
                                    17Consumer LoansRevolving overdraft fees200
                                    18Consumer LoansLoan Cancellation Fee100
                                    19Consumer LoansOther (loan copy, issuing redemption statements, audit confirmation etc)25
                                    20Car LoansEarly settlement1% outstanding
                                    21Car LoansNOC to Traffic Department0
                                    22Car LoansAdvance payment of installment1% of installment
                                    23Car LoansLate payment penal chargesMax 500
                                    24Car LoansIssuance of liability letter to other banks60
                                    25Car LoansCancellation fee100
                                    26RemittanceSwift copy charges15
                                    27RemittanceDemand draft/pay order issuance/cancellation75
                                    28Customer Term DepositsAccount closure fees-terms depositsCost (max 2%)
                                    29Credit CardsCard replacement fee75
                                    30Credit CardsLiability/no liability letter50
                                    31Credit CardsDuplicate statement45
                                    32Credit CardsCopy of sales voucher65
                                    33Credit CardsLate Payment feesMax 230
                                    34Home LoansLate payment feesMax 700
                                    35Home LoansEarly settlement feesMax 1% of outstanding balance or 10,000, whichever is less
                                    36Home LoansIssuance of liability letter85
                                    37Home LoansOther certificate75
                                    38Home LoansNon-standard statement production/copy of original documentation100
                                     Home LoansProperty swaps administration feeMax 1320
                                    (valuation included)
                                    40Home LoansIssuance of NOC150
                                    41Home LoansPartial settlement chargesMax 1% of outstanding balance or 10,000, whichever is less
                                    42Home LoansClearance letter95
                                    43Home LoansRequest of other letters90

                                     

                                • Loans Against Property (Loans to Individuals)

                                   

                                  It has come to the attention of the Central Bank that many banks are introducing various loans against property schemes as mortgage loans, in violation of Regulations Regarding Mortgage Loans, Circular No. 31/2013 dated 28/10/2013 (Regulation 31/2013).

                                  The following guidelines are issued to ensure that banks and finance companies comply with the above Regulations, as well as, Regulations Regarding Bank Loans & Other Services Offered to Individual Customers, Circular No. 29/2011 dated 23/2/2011 (Regulation 29/2011).

                                  1. Under Article 1 of Regulation 31/2013, a mortgage loan is defined as: ‘A loan that is collateralized against a residential property granted for the purpose of constructing, purchasing or renovating a house for owner occupier or investment purposes. It also includes loans granted for the purchase or the development of land for these purposes.’ This was further clarified by Central Bank’s Notice No. 22/2017 dated 17/1/2017 (copy enclosed).
                                     
                                  2. Any other personal loans granted by banks and finance companies using property as collateral for purposes other than those stated in the above definition must not be classified as a mortgage loan and hence fall to be treated in accordance with the provisions of Regulation 29/2011.
                                     
                                  3. Accordingly, banks and finance companies are not allowed to extend the tenor of such loans beyond 4 years and must not take private houses as security for personal loans, as per Article 15-5 of Notice No 2901/2011 dated 28/4/2011 (copy enclosed).
                                     
                                  4. Banks and finance companies must ensure, in case of any personal and mortgage loans, that the DBR does not exceed 50% or 30% (in the case of retirees) of salary or regular income as the case may be. As soon as the bank/company is aware that a borrower is retired, immediately the DBR must be reduced to 30% as per Article 7-2 of Notice No. 2901/2011 dated 28/4/2011.

                                     In addition, in case of salary reduction for reasons other than retirement, the bank/company could adjust the DBR to 50% of the reduced salary by extending tenor, as per Article 20-3 of Notice No. 2901/2011 dated 28/4/2011, and in both cases, no bank or finance company should provide additional facilities/funds when the remaining tenor of personal/mortgage loans exceeds the respective regulatory limits.
                                     
                                  5. Personal and mortgage loans should not be structured as an overdraft (OD).

                                  Please abide by the above guidelines and ensure full compliance with the above two Regulations at all times.

                                   

                                • Amendments to Appendix 2 of the Regulations Regarding Bank Loan & Other Services Offered to Individual Customers and Consumer Protection Standards

                                  After greetings,

                                  Following a review of the consumer protection regulatory framework, the Board of Directors of the Central Bank has decided to introduce amendments to the Appendix of the above Regulations and Consumer Protection Standards, as follows:

                                  1. Amendment of Appendix 2 of the Regulations Regarding Bank Loan & Other Services Offered to Individual Customers (Circular 29/2011) amended via Notice No. 3986/2019 (copy enclosed); and
                                     
                                  2. Amendment of the Consumer Protection Standards issued via Notice No. 1158/2021 dated 24 February 2021 (copy enclosed).

                                  These amendments cancel the requirement for obtaining Central Bank’s approval to impose new fees, or increase existing fees not capped by the Central Bank by more than 5 per cent. The amendments are as follows:

                                  1. Paragraphs 4 and 5 of Notice No. 3986/2019 mentioned above are cancelled.
                                     
                                  2. The text of Paragraph 5.1.1.22 of the Consumer Protection Standards is replaced by the following new text:

                                  “Any increase of Fees that are capped by the Central Bank must not exceed the limit imposed by such caps. Please refer to the Maximum Limits for Fees Annexure contained in the Consumer Protection Standards.”.

                                  In addition, paragraphs 5.1.1.23 and 5.1.1.24 are cancelled.

                                  Licensed Financial Institutions are reminded of their obligations in paragraph 2.1.1.47 of the Consumer Protection Standards which states:

                                  “If the Licensed Financial Institution decides to make Permissible changes to the contract, the Licensed Financial Institution must give Consumers a minimum of 60 calendar days’ notice before changes to the terms and conditions of a Financial Product and/or Service, including changes to Fees, can take effect...”

                                  The above amendments come into effect immediately.

                                  Yours faithfully,

                          • The Board of Directors’ Decision No.( 22 ) of 2017 Concerning the Application of the Investment Limits Stipulated in the Financial Regulations for Insurance Companies and the Financial Regulations for Takaful Insurance Companies

                            The Director General of the Insurance Authority;

                            Having perused:

                            - The Federal Law No. (6) of 2007, concerning the Establishment of the Insurance Authority and the Organization of Insurance Operations as amended, and its Executive Regulation;

                            - The Board of Directors’ Decision No. (25) of 2014, Concerning the Financial Regulations for Insurance Companies;

                            - The Board of Directors’ Decision No. (26) of 2014, Concerning the Financial Regulations for Takaful Insurance Companies;

                            - And, pursuant to what has been presented by the Director General of the Authority and approved by the Insurance Authority Board of Directors,

                            Has decided:

                            • Definitions

                              • Article (1)

                                The following words and expressions shall bear the meaning indicated beside each one of them unless the context provides otherwise:

                                State: The United Arab Emirates.

                                Law: Federal Law No. (6) of 2007 on Establishment of the Insurance Authority and Organization of the insurance Operations and its amendments.

                                Executive Regulation: the Executive Regulation of the Federal Law.

                                Authority The Insurance Authority.

                                Board: The Insurance Authority Board of Directors.

                                Director General: The Director General of the Insurance Authority.

                                The Company: The insurance company incorporated in the state or a branch of a foreign insurance company, licensed to carry out insurance operations in the State either through a branch or an insurance agent, including Takaful Insurance Companies.

                                Financial Regulations: Board of Directors’ Decision No. (25) of 2014 Pertinent to Financial Regulations for Insurance Companies and Board of Directors’ Decision No. (26) of 2014 Pertinent to Financial Regulations for Takaful Insurance Companies, as the case may be.

                                Investments: The act of investing, laying out money or capital by a Company with the expectation of profit or the process of investing or engaging funds or capital by the Company with the aim of achieving an expected profit, provided that this is compliant with the Islamic Shari’a provisions, as the case may be.

                                Investment limits: The limits of Asset distribution and allocation stipulated in the Financial Regulations.

                                Minimum Capital Requirement: The minimum capital required to be maintained by a Company at all times as directed by the Authority.

                                Solvency Capital Requirement: Funds that the Company must maintain to cover current and projected operations during the next twelve months, which are measured to ensure that all quantitative risks have been taken into account.

                                Minimum Guarantee Fund: Funds that the Company must maintain to cover current and projected operations during the next twelve months, which is at least one third of the Solvency Capital Requirement or as determined by the Authority.

                                Associate companies: The Company in which the insurance company owns 20% to 50% and has a significant effect on its decisions and in accordance with International Financial Reporting Standards.

                            • Scope of Application

                              • Article (2)

                                1: The Company shall implement the provisions contained in this decision when applying the Asset distribution and allocation limits contained in Chapter I of the financial Regulations.

                                2: The provisions of this Decision shall be read in conjunction with the financial Regulations and shall be deemed complementary thereto.

                            • Asset Distribution and Allocation Limits

                              • Article (3)

                                For the purpose of implementing the Asset distribution and allocation limits in accordance with the provisions of Article (3) of the Financial Regulations, the Company shall comply with the following:

                                1. If the Company has investments exceeding the investment limits or sub-limits without a deficit in the Minimum Capital, Solvency Capital or Minimum Guarantee Fund requirements, it shall include the annual and quarterly investment portfolio analysis reports stipulated in Article (10) of Chapter 1 of the Financial Regulations sequel to the Asset distribution and allocation limits on the Company and any plans the Company intends to take as part of the investment risk management process.

                                2. If the Company has investments that exceed the Asset distribution and allocation limits and result in a deficit in the Minimum Capital, Solvency Capital or Minimum Guarantee Fund requirements, the Company shall submit a detailed realistic correction plan including outdistance the deficit in accordance with Article 8 of Chapter II of the Financial Regulations.

                                3. If the Company desires to enter into new investments outside the asset distribution and allocation limits and has no deficit in any of the Minimum Capital, Solvency Capital or Minimum Guarantee Fund requirements, it may:

                                A. Purchase, improve or increase any of the assets if the investment limit or sub-limit of that asset category has been exceeded.

                                B. Purchase, improve or increase any assets if this would lead to exceeding the investment limit or sub-limit.

                                Provided that the procurement, improvement or increases referred to in paragraphs (A) and (B) of this clause do not result in a default in meeting any of the Minimum Capital, Solvency Capital or Minimum Guarantee Fund requirements.

                                4. If the Company has a deficit in any of Minimum Capital, Solvency Capital or Minimum Guarantee Fund requirements, or if this results from a purchase, improvement or if a deficit in meeting any of the Minimum Capital, Solvency Capital or Minimum Guarantee Fund requirements resulted from a purchase, improvement or increase, the company shall comply with the following:

                                A. No purchases, improvements or increases in any assets if the investment limit or sub-limit of that asset category has been exceeded.

                                B. No purchases, improvements or increases in any assets if this would lead to exceeding the investment limit or sub-limit.

                                5. If the Asset distribution and allocation limits are exceeded by the Company for easons beyond its control such as changes in the value of the assets or a change in the classification, the Company shall comply with the following:

                                A. If this does not result in incapability to meet any of the solvency requirements, the investment portfolio analysis report stipulated in Article 10 of Chapter 1 of the Financial Regulations shall include an analysis of the excesses in the Asset distribution and allocation limits.

                                B. If this results in a deficiency in any of the financial solvency requirements, the Company shall submit a detailed realistic correction plan including the outdistance of the deficit in accordance with Article 8 of Chapter II of the Financial Regulations.

                              • Article (4)

                                A. The Company shall process investments in the listed and not listed Associate Companies in the financial markets within the State in a separate category with a limit of (20%) of the invested assets therein with no sub-limit.

                                A. The Company shall process investments in the listed and not listed Associate Companies in the financial markets outside the State in a separate category with a limit of (10%) of the invested assets therein with no sub-limit.

                            • General Provisions

                              • Article (5)

                                1. All assets invested outside the Asset distribution and allocation limits determined in the Financial Regulations are considered not acceptable for the purpose of calculating the financial solvency and pursuant to the provisions of Article (11) of Chapter II of the Financial Regulations.

                                2. In cases not stipulated in this decision, the provisions of the Financial Regulations prevail; including the provisions stipulated in Part II (General Provisions).

                              • Article (6)

                                The Director General shall issue the decisions and circulars necessary to implement the provisions of this Decision.

                              • Article (7)

                                This decision shall be published in the Official Gazette and shall come into effect from the date of its issuance.

                          • The Insurance Authority's Board of Directors Resolution No (4) of 2010 Concerning the Takaful Insurance Regulations

                            The Minister of Economy, Chairman of the Board of Directors of the Insurance Authority,

                            Having perused:

                            - The Federal Law No. (6) of 2007 pertaining to the Establishment of the Insurance Authority and the Regulation of Insurance Business;

                            - The Federal Law No. (6) of 1985 regarding Islamic Banks, Financial Institutions and Investment Companies;

                            - The Implementing Regulations of the Federal Law No. (6) of 2007 issued under the resolution of the Insurance Authority’s Board of Directors No. (2) of 2009; and

                            Based on the recommendation of the Insurance Authority Director General and the approval of the Board of Directors thereof,

                            Has resolved to promulgate the following Regulations:

                            • Article (1) Terminology Definitions

                              1. The following words and expressions wherever used herein shall have the meanings ascribed thereto, unless the context requires otherwise:
                                Law
                                 
                                The Federal Law No. (6) of 2007 concerning the establishment of the Insurance Authority and the regulation of the insurance business.
                                 
                                Implementing regulations
                                 
                                The Implementing regulations for the Federal Law No. (6) of 2007 issued under the resolution of the Insurance Authority’s Board of Directors No. (2) of 2009.
                                 
                                Authority or IA
                                 
                                The Insurance Authority established under the provisions of the Law.
                                 
                                Board
                                 
                                The Insurance Authority’s Board of Directors.
                                 
                                Chairman
                                 
                                The Chairman of the Insurance Authority’s Board of Directors.
                                 
                                Director General
                                 
                                The Director General of the Insurance Authority.
                                 
                                Company
                                 
                                The Takaful Insurance company which is incorporated and practicing its business in accordance with the provisions of the Law, the Implementing Regulations and these Regulations, and whose all operations are compatible with the Islamic Shariah provisions.
                                 
                                Takaful Insurance
                                 

                                A collective contractual arrangement aiming at achieving cooperation among a group of participants against certain risks whereby each participant pays certain subscription fees to form an account called the participants' account through which entitled compensations are paid to the member in respect of whom the risk has realized. The Takaful Insurance company shall manage this account and invest the funds collected therein against certain remuneration.

                                All transactions of the Takaful Insurance company should be compatible with the Islamic Shariah provisions.

                                Shariah Supervision Committee
                                 
                                The committee formed within the company to provide opinion on the transactions of the company and their conformity with the Islamic Shariah provisions.
                                 
                                Shariah Controller
                                 
                                A company employee appointed by the company's board of directors based on the recommendation of the Shariah Supervision Committee to audit the extent and manner in which the company's different functions implement the Shariah Supervision Committee’s resolutions and opinions.
                                 
                                Supreme Fatwa and Shariah Supervision Committee
                                 
                                A Committee formed within the Insurance Authority and exercises the authorities and powers provided for herein and in the resolutions issued thereunder by the Authority.
                                 
                                Participant
                                 
                                An individual holding a participation membership policy and a Takaful Insurance contract, who undertakes to regularly pay the subscription fees, and who, and his legal heirs or assignees, where assignment is allowable, shall have the right to receive compensations or benefits provided by the participants account within the company.
                                 
                                Contribution
                                 
                                The consideration which the participant undertakes to pay on basis of the donation (Tabarru’) commitment for his participation in Takaful Insurance account with the company to compensate the damages or pay the benefits to the eligible beneficiary.
                                 
                                Participation Membership Policy
                                 
                                The policy containing key fundamentals and principles of Takaful Insurance applied by the company in its relation with the participants and which should be accepted by the participant upon participation.
                                 
                                Takaful Insurance Policy
                                 
                                The policy concluded between the company and the participant and containing the contract terms and conditions, the rights and obligations of both parties or the beneficiaries of the Takaful Insurance as well as any endorsement to this policy.
                                 
                              2. Save as provided for in item (1) above, the words and expressions included herein shall have the same meaning assigned thereto under Article (1) of the Law.
                            • Article (2) Scope of Applicability

                              1. The provisions herein shall apply to all Takaful insurance companies, incorporated or to be incorporated under the laws in force in the State so as to practice Takaful insurance business, as well as foreign Takaful insurance companies licensed to practice their businesses in the State, which are managed and doing the business in accordance with the Islamic Shariah provisions.
                                 
                              2. The provisions herein shall not apply to the companies operating in the free zones, except as otherwise provided for in the free zone laws and regulations.
                                 
                              3. As to matters not provided for herein, Takaful Insurance companies and their Takaful Insurance business shall be subject to the implementing regulations, bylaws, instructions, and resolutions issued by the Insurance Authority pursuant to the provisions of Law.
                            • Article (3) Practicing Takaful Insurance Business

                              Takaful Insurance business shall be practiced exclusively by Takaful Insurance companies; conventional insurance companies may not practice Takaful Insurance activities, either directly by establishing internal independent entity or indirectly through insurance agent or broker.

                            • Article (4) Types of Takaful Insurance

                              Takaful Insurance activities are classified into three types:

                              1. Personal Takaful Insurance.
                                 
                              2. Property Takaful Insurance.
                                 
                              3. Liability Takaful Insurance.
                            • Article (5) Classes of Personal Takaful Insurance

                              Personal Takaful Insurance includes the following classes:

                              1. Family Takaful Insurance of all forms.
                                 
                              2. Health Takaful Insurance of all forms.
                                 
                              3. Personal Accident Takaful Insurance associated with family Takaful insurance.
                            • Article (6) Classes of Property and Liability Takaful Insurance

                              Property and Liabilities Takaful Insurance includes the classes referred to in Article (5) of the Implementing Regulations, provided that they do not include anything that contradicts Islamic Shariah provisions.

                            • Article (7) Not Allowing Combining of Takaful Insurance Types

                              1. The company may not combine the business of Personal Takaful Insurance on one hand, and the business of Property and Liability Takaful Insurance on the other.
                                 
                              2. The existing companies practicing both types described in item (1) above must rectify their status to be in line with this requirement within the remaining period of the period specified in item (2) of Article (25) of the Law.

                              This period is subject to any extension to the original period that may be prescribed.

                            • Article (8) Management of Takaful Insurance Operations

                              Risk management and investment operations associated with contributions shall be carried out by the company on the basis of Wakalah (proxy) or Wakalah and Mudaraba simultaneously.

                              The relation between the participant and the company shall be governed by the provisions of the Takaful participation policy.

                            • Article (9) Takaful Insurance Participation Policy

                              1. The company shall develop this policy to offer it to those who wish to participate in the participants’ account for any type or class of Takaful Insurance. The policy must be signed by both parties and a copy should be given to the participant. The following shall be taken in consideration when preparing the policy:
                                 
                                1. This policy shall be separate from the Takaful Insurance policy, which must be consistent with the principles included in the participation policy;
                                   
                                2. The policy shall address the bases and rules governing the Takaful relationship between the participant and the company, including the legal nature of this relationship;
                                   
                                3. The policy shall elaborate that payments made by the participant are made as donation (Tabarru’) obligation;
                                   
                                4. The policy shall name the account in which the participant will participate;
                                   
                                5. The policy shall disclose the company’s commitment to provide goodwill loan (Qardh Hasan) where the participants’ account assets are insufficient to repay the obligations incurred on such account;
                                   
                                6. The amount of Wakalah fees due to company and the method of its calculation, as well as the share of the company from the Mudaraba proceeds or Wakalah fees for investing the participants’ account and the method of calculating such proceeds or fees; and
                                   
                                7. Information on the company's policy for investing the portions allocated for investment from the contributions provided such policy is consistent with the Islamic Shariah provisions.

                                 
                              2. The policy mentioned in the previous clause shall be submitted to the Company's Shariah Supervision Committee for approval before offering it to those concerned.
                                 
                              3. The said policy shall then be presented to the Insurance Authority for approval. After soliciting the opinion of the Supreme Fatwa and Shariah Supervion Committee, the Insurance Authority may object to the policy contents if incorporating any provisions in contrary to legal provisions or Islamic Shariah provisions, or if containing an explicit prejudice to the interests of the participants.
                                 
                              4. The company must maintain a record of Takaful Insurance participation policies. Such record shall be subject to inspection and auditing by the Shariah Supervision Commitee and the Insurance Authority.
                            • Shariah Supervision Committee

                              • Article (10) Formation of the Commitee

                                1. The company undertakes to form a committee to be called "the Shariah Supervision Commitee". The committee shall consist of three members nominated and appointed as follows:
                                   
                                  1. The committee members shall be nominated by the company’s board of directors.
                                     
                                  2. The candidates' names and qualifications shall be presented to the Insurance Authority forty five days prior to the meeting of the company's general assembly which will consider the nominations.
                                    After soliciting the opinion of the Supreme Fatwa and Shariah Supervision Committee at the Authority, the company shall be notified of the Authority’s approval or objection. In case of objection, the company shall nominate a substitute to the disapproved candidate.
                                     
                                  3. The candidates' names shall be presented to the company's general assembly to approve their appointment as committee members and to inform the Authority of the names of those appointed as committee members within ten days after the general assembly meeting.
                                     
                                  4. The Committee membership term shall be three renewable years.
                                     
                                  5. The committee members shall elect a chairman and vice-chairman from amongst them. The chairman shall represent the committee before the company’s board of directors, its general assembly, the Insurance Authority, and the Supreme Fatwa and Shariah Supervision Committee.

                                   
                                2. In case a committee membership seat becomes vacant, the company's board of directors shall appoint a member fill in the vacant membership to complete the term provided for in item (D), clause (1) herein; and shall inform the Authority accordingly. Such appointment shall be presented to the general assembly in its first subsequent meeting for approval.
                              • Article (11) Conditions for the Committee Membership

                                A candidate to be a member in the Shariah Supervision Committee shall meet the following requirements:

                                1. Should be a Muslim, enjoying the full legal capacity.
                                   
                                2. Should be recognized for his scholarship and knowledge of the Islamic Shariah provisions in general, and of the jurisprudence of Islamic financial transactions, in particular.
                                   
                                3. To be conversant with the modern financial and commercial transactions.
                                   
                                4. Not a shareholder, a member of the board of directors, or employee of the company.
                                   
                                5. A member may not combine membership in two Shariah supervision committee of companies.
                              • Article (12) Undertakings of the Committee

                                The committee undertakes the following:

                                1. Setting the basic Shariah rules for the company’s operations.
                                   
                                2. Review all the company's transactions, the Takaful insurance products, contracts, and documents which the company deals with in order to ensure compatibility with the Islamic Shariah provisions; and approve same before placing same into practical use.
                                   
                                3. Review the Takaful insurance transactions and the investments conducted by the company, and show to what extent they are consistent with the Islamic Shariah provisions.
                                   
                                4. Approve or reject any activity carried out by the company if such activity is inconsistent with the Islamic Shariah provisions.
                              • Article (13) Authorities of the Committee

                                All Committee resolutions shall be binding to the company. The Committee shall have the right to access, at any time, all company's records, contracts, and documents; may require clarifications as it deems necessary to perform its tasks and the company's management should provide such clarifications. In case the Committee was not enabled to perform its functions, it must state such case in a report to the board of directors of the company. If the board of directors fails to meet the Committee’s request, it must notify the Insurance Authority accordingly, in which case the Authority shall refer the issue to the Supreme Fatwa and Shariah Supervision Committee whose decision shall be binding over the company.

                              • Article (14) Annual Report of the Committee

                                The Shariah Supervision Committee shall provide an annual report to the company's general assembly summarizing the Committee's activities along with its observations on the company's transactions and how far the company is in compliance with the Shariah provisions.

                                The Committee’s report should be read in the general assembly’s annual ordinary meeting; and a copy thereof shall be provided to the Insurance Authority along with the documents to be submitted to the Authority before the convening of the company's general assembly.

                              • Article (15) The Committee's By-laws

                                The company shall set, by a resolution of its board of directors, the by-laws for the Shariah Supervision Committee work. The by-laws shall state how the Committee will hold its meetings, what is the quorum, and how it takes decisions. However, the by-laws must provide that deputizing other Committee members to attend its meetings or to vote on the decisions is not permissible. The by-laws must specify the relation of the Committee with the company's various functions and with the Shariah Controller. A copy of the by-laws must be sent to the Authority for approval.

                              • Article (16) The Shariah Controller

                                Under a recommendation from the Shariah Supervision Committee, the company's board of directors shall appoint a staff member specialized in Takaful insurance to act as the Shariah Controller on the transactions inside the company.

                                The Shariah Controller shall review the company's transactions under the direct supervision of the Shariah Supervision Committee to ensure that the Committee opinions and decisions have accurately been implemented. The Shariah Controller shall perform his duties in coordination with the Committee. In addition, he shall assume the duties of the Committee secretary and report to it.

                              • Article (17) Supreme Fatwa and Shariah Supervision Committee

                                1. A supreme commitee called (the Supreme Fatwa and Shariah Supervision Committee) shall be formed within the Insurance Authority of at least three members and no more than five members, to be referred to for the purpose of these Regulations as (the Supreme Committee).
                                   
                                2. Members of the Supreme Committee shall be appointed by a resolution of the Authority’s board of directors. The members shall elect one of them as the chairman and another as vice-chairman.
                                   
                                3. To be appointed as a member in this Board, the candidate shall meet the same requirements provided for in article (11) herein, in addition to having experience in Shariah business in Takaful insurance or Islamic finance for a period of no less than three years.
                                   
                                4. The membership term shall be three renewable years.
                                   
                                5. A member in this committee may not be a member in any other Shariah Committee in Takaful insurance companies.
                              • Article (18) Supreme Committee Undertakings

                                The Committee shall have the following powers:

                                1. Issue legal opinions (Fatwa) in the field of Takaful insurance and investment in terms of compatibility of transactions related thereto with the Islamic Shariah provisions. Such Fatwas shall be binding over the companies and their Shariah Supervision Committees.
                                   
                                2. General oversight and inclusive Shariah control over the works of the Shariah Supervision Committees in the companies.
                                   
                                3. Coordinate the Shariah opinions issued by the Shariah Supervision Committees.
                                   
                                4. Settle disputes that may arise between the Shariah Supervision Committees and the companies' boards of directors.
                                   
                                5. Adopt the Shariah criteria, which the Shariah Control Committees must comply with in performing their duties.
                                   
                                6. Determine the Shariah areas of insurance, where Takaful insurance companies may practice their businesses.
                                   
                                7. Review the articles of association of Takaful insurance companies to ensure that they are acceptable in terms of Shariah.
                                   
                                8. Collect the Fatwas and jurisprudence opinions with respect to Takaful insurance and investment businesses that are compatible with the Islamic Shariah provisions, classify, explain, and distribute the same to the Takaful insurance companies to serve as a reliable Shariah reference.
                              • Article (19) Joint Meetings

                                The Supreme Committee may invite any Shariah Supervision Committee for a bilateral or collective meeting for deliberations on issues falling under the responsibilities of such Committees.

                              • Article (20) Supreme Board By-Law

                                The Insurance Authority shall set the by-laws for the Supreme Committee undertakings and forward same to the board of directors for approval.

                              • Article (21) Accounting Books and Records, and Final Accounts

                                The Board shall issue special instructions for Takaful insurance financial and accounting operations as follows:

                                1. The accounting policy to be followed by companies, the forms required to prepare the financial reports and statements including the forms for preparing the balance sheet and final accounts.
                                   
                                2. The bases for organizing accounting books and the data to be contained therein.
                                   
                                3. The records which companies are obligated to organize and maintain.
                                   
                                4. Statement and documents which companies should provide to the Insurance Authority.
                              • Article (22) Participants' Accounts

                                An existing company currently practicing all classes of Takaful insurance shall undertake to adopt complete separation between the personal Takaful insurance business on the one hand, and the property and liability Takaful insurance business on the other hand, in terms of technical, financial, and administrative aspects. In particular, there should be two accounts (or more) for the participants completely separated per the type of insurance practiced by the company.

                                The funds available in each account shall be allocated to meet the liabilities incurred by this account and the expenses for the account management.

                              • Article (23) The Account for the Family Takaful Insurance

                                The participations in the family Takaful insurance shall be divided into two accounts:

                                1. Investment Account: to which the portion of participations allocated for investment in this type of Takaful insurance shall be transferred.
                                   
                                2. Risk Coverage Account: to which the portion of participations allocated for risk coverage in this type of Takaful insurance shall be transferred.
                              • Article (24) Accounts for Other Takaful Insurance Types and Classes

                                1. One or more accounts called (Takaful Participant Account) shall be opened in the company per the non-family Takaful insurance types and classes. Accrued participations shall be recorded in such account(s), in addition to the investment revenues realized from investing the funds accumulated in the said account(s).
                                   
                                2. Due compensations and benefits from the participants' Takaful account shall be paid in accordance with the terms and conditions of Takaful insurance policies.
                                   
                                3. Inputs and outputs of such account(s) shall be determined in accordance with the company-established accounting rules which should be consistent with the insurance transactions accounting rules amended in accordance with Takaful insurance principles. A copy of such rules shall sent to the Insurance Authority after having same approved by the Shariah Supervision Committee.
                                   
                                4. The assets of the participants' account should be completely separate from the company's assets, and should not include the deposit required in accordance with Article (42) of the Law.
                            • Participants' Rights

                              • Article (25) Sharing in the Participant Accounts' Surplus

                                1. After soliciting the opinion of the Shariah Supervision Committee, the company shall establish the rules under which participants shall share in the surplus realized in the participants' accounts, either collectively for all accounts or individually for each account subject to complete separation between the family Takaful insurance accounts and the accounts of other insurance types and classes; and provided that participants in one account may not share in the surplus realized in the other account.
                                   
                                2. The surplus in the family Takaful insurance account shall be determined with the knowledge and approval of the company's actuary.
                                   
                                3. The company may retain a portion of the surplus to form a contingency provision to counter future contingent circumstances, in addition to the technical provisions provided for in the Law.
                                   
                                4. The company may not distribute profits to the shareholders from any surplus realized by the participants' accounts, except for the consideration collected by the company for managing such accounts as prescribed under the Takaful insurance participation policy.
                              • Article (26) Participation in the General Assembly Meetings

                                1. After obtaining the approval of the Ministry of Economy and the Securities and Commodities Authority, as the case may be, the company shall develop by-laws defining the participants who have the right to attend the company's ordinary or extraordinary general assembly meetings of the company. This shall include setting the criteria to be met by the participant to have the right to attend such meetings, either in terms of the size of his contributions, the period of dealing with the company, or other criteria. Such by-laws shall be forwarded to the Insurance Authority for approval.
                                   
                                2. The persons mentioned in the previous clause shall be invited to attend the said meetings via registered mail, provided that they are provides with all documents presented to the general assembly.
                                   
                                3. The aforesaid participants shall have the right to attend and discuss without having voting rights in the meetings.
                              • Article (27) The Actuarial Report on Reviewing the Family Takaful Insurance Account

                                A participant in the family Takaful insurance account shall have the right to receive a copy of the Actuary’s report on reviewing the account, and the company shall meet his request within ten business day.

                              • Article (28) The Goodwill Loan (Qardh Hasan)

                                1. In case the participant account assets are insufficient to meet the account liabilities, the company shall provide a goodwill loan (non-interest-bearing loan) to the participants' account.
                                   
                                2. The obligation to grant the goodwill loan shall be comprehensive subject to a maximum equal to the total of the company’s shareholders equity.
                                   
                                3. The company shall have the right to recover this loan from the surplus(s) realized in subsequent periods whether in one payment or several installments as decided by the company's general assembly.
                                   
                                4. In case the company does not provide a goodwill loan to meet a loss realized in the participants' account(s), the company shall be notified by the Director General to do so within fifteen days from the date of notification. If the company fails to do so, the matter shall be referred to the Authority’s board of directors to take a decision to suspend the company for the period the board deems appropriate.
                              • Article (29) Takaful Reinsurance

                                1. The company shall ensure that its outbound or inbound Takaful reinsurance business must be compatible with the Takaful insurance basic principles and in pursuance to the directives and decisions of the Shariah Supervision Committee.
                                   
                                2. The company shall cede the outbound reinsurance business to Takaful reinsurance or Takaful insurance companies. In case such companies do not have the adequate capacity, or due to the requirements of distributing the liabilities and risks to a proper number of companies, the company shall have the right to deal with reinsurance companies.
                                   
                                3. The company may share the risk liability with Takaful insurance companies or insurance companies inside and outside the State.
                              • Article (30) Zakat Fund

                                1. The company shall establish a Zakat Fund to deposit the Zakat due on the company's transactions as permissible under its articles of association.
                                   
                                2. The Zakat Fund shall have an account independent from the other company's accounts, whether those related to the shareholders or participants. The Shariah Supervision Committee shall approve the method of managing the account
                                   
                                3. Disbursement from this account shall be made under a decision of the company's board of directors, and in accordance with the Islamic Shariah provisions and as approved by the Shariah Supervision Committee.
                                   
                                4. The board of directors of the company shall develop by-laws to regulate the operation and management of this Fund, provided that members appointed to manage it shall not receive any remuneration for their work in managing or supervising the Fund.
                                   
                                5. In all cases, the company must calculate the Zakat due on the shareholders and must announce it after the approval of the Shariah Supervision Committee thereon within the final financial statements for the fiscal year.
                            • General Provisions

                              • Article (31) Breaching the Islamic Shariah Provisions

                                Should it be evident that the company has carried out business inconsistent with the Islamic Shariah provisions, the company shall be notified by the Director General, after soliciting the opinion of the Supreme Committee, to rectify its status in line with the Islamic Shariah provisions within thirty days from the date of notification. If the company fails to do so, the matter shall be referred to the Authority’s board of directors to consider suspending the company from doing business for the period the board deems appropriate. Anyone proved to have been involved in an intentional Shariah breach shall be held accountable.

                              • Article (32) Transfer of the Company Control

                                Change in control over the company may not be valid unless approved by the Director General of the Insurance Authority. The control over the company means having the capability whether directly or indirectly, to control the company's decisions and its financial and Takaful policies.

                              • Article (33) Transfer of the Takaful Insurance Portfolio

                                1. The provisions of the Law, in particular the provisions of Articles (71) and (72) thereof, shall apply to the procedures and method of transferring the Takaful insurance portfolio.
                                   
                                2. The Takaful insurance portfolio may only be transferred to another Takaful insurance company practicing the same type and class of the Takaful insurance as practiced by the company.
                              • Article (34) Insurance Broker, Surveyor, Adjustor and Consultant

                                1. Each insurance broker, surveyor, adjustor and consultant, associated with a specific Takaful insurance operation in a Takaful insurance company may request, through the same company, the opinion of the Shariah Supervision Committee in the company regarding the Islamic Shariah position on the operation. The Committee must provide them with its opinion through the company.
                              • Article (35) Rectifying the Company's Status

                                Subject to the provisions of Article (7) herein, the currently existing Takaful insurance companies should rectify their status in accordance with the provisions of these Regulations within a maximum period of one year from the date of these Regulations coming into force.

                              • Article (36) Decision Making

                                The Director General shall issue the required decisions to enforce the provisions of these Regulations.

                              • Article (37) Publication and Enforcement of these Regulations

                                These Regulations shall be published in the official gazette and shall come into force from the date of publication.

                          • Regulations of the “Risks Bureau”

                                 We are pleased to inform you that the UAE Central Bank decided to put into force the Regulations of the Risks Bureau as at 1st May, 1982. Enclosed please find :

                            1. A copy of the Regulations of the Risks Bureau.
                            2. A copy of the Directives for the Implementation of the Regulations of the Risks Bureau.

                              We, kindly, draw your attention that when you submit the required information, make sure that :

                              The Name of the Customer is exactly the same as the one on the municipality permit.

                              2. Only the following numerals are used, i.e., 1, 2, 3, 4, 5, , when reporting amounts.

                              Please, make also sure, that the Head of the risks Bureau receives before or on April 15th, 1982 the following:

                              Your preliminary estimate of the number of Customers who would be subject to reporting out of all Customers.

                              2. A list of your Authorized Personnel who would be engaged in submitting the information, together their specimen signatures. We thank you for your cooperation.
                               

                                                                                                                                             

                            • Part One: Establishment of the “Risks Bureau"

                              • Article 1

                                1. There shall be established at the United Arab Emirates Central Bank, a 'Risks Bureau' :
                                2. In these regulations the word " Institution ( s ) " would refer to the Commercial Banks, Investment Banks, and Financial Institutions operating in UAE.

                                3. The Risks Bureau will undertakes the following tasks:

                                  (i) To receive statements and data containing information and data on the various credit facilities granted to the customers of the Institution which should submit the above-mentioned statements and data periodically as required by the provisions of Paragraph (2) of Article (104) and Article (131 of Union Law No. (10) , (1980).

                                  (ii)To report to the Institutions, on demand, the sum total of credits extended to each of their customers.

                                  (iii) To refer contraventions detected by the Bureau to the Banking Supervision Department for appropriate action.

                              • Article 2

                                The Central Bank shall determine the personnel requirements of the Bureau.

                            • Part Two:General Rules

                              • ( 1 ) Declaration of Banking Risks

                                • Article (3 )

                                  Institutions should submit periodic statements containing the amount and type of credits opened in favour of their customers as well as the amount and type of credits used by customers

                                • Article ( 4 )

                                  At periods specified in the directives for the implementation of these regulations all institutions shall submit statements to the “Risks Bureau” on each customer, separately when the tot……dit extended to him by the Institution concerned reaches or exceeds, in the last working day of the month being reported, the limit, in UAE Dirhams. determined by UAE Central Bank’s Board of Directors

                                • Article ( 5 )

                                  These statements should include all credits meeting the requirements specified under Article ( 4 ) of these Regulations whatever their currency might be, whether in UAE Dirham or in foreign currency, and whoever is the beneficiary, whether or not he be a businessman.

                                • Article ( 6 )

                                  The statements shall differentiate between credits according to their types and / or to the collaterals given against them, in accordance with the classification specified in the the directives for the implementation of these regulations .

                                • Article ( 7 )

                                  ( i ) To ensure the confidentiality of the operations of the Risks Bureau and the secrecy of the data it receives from Institutions or sends to them a coding system, to be determined by the Central Bank, shall be adopted to denote Institutions and Customers.

                                  ii The Central Bank may take any other measure which ensures the secrecy of information pertaining to banking risks.

                                • Article ( 8 )

                                  ( Banking Risks Statements should be prepared according to special forms determined by the Central Bank. Institutions should obtain the necessary printed materials from the Central Bank.

                                  ( ii ) Each statement should be prepared in two copies stamped with the Institution's seal and duly signed by the Manager and marked to the effect that te information included therein corresponds to the records.

                                • Article ( 9 )

                                  The required statement should be handed to the Risks Bureau before the twenty fifth day of the month following the month covered by the statements.

                              • ( 2 ) Reporting Total Banking Risks to Banks

                                • Article ( 10 )

                                  The Risks Bureau shall consolidate the data provided by the Institutions according to the rules defined in Articles (3–9) of these regulations, on each of their customers. The Risks Bureau shall, upon demand, inform a requesting institution the total credits granted and used by any customer from all institutions.

                                • Article (11)

                                  Reporting referred to in Article (10) of these Regulations shall differentiate between total credits according to their types on the one hand and collaterals given against them on the other hand. Such reporting shall be effected in accordance with the prodedure to be defined in the directives for the implementation of these regulations.

                                  All measures to ensure the secrecy of reporting shall also be observed in the same manner followed to assure the confidentiality of the statements provided by the Institutions on the credits extended to their customers.

                              • ( 3 ) Expenses of the Risks Bureau

                                • Article (12)

                                  The risks Bureau expenses shall be borne by the Institutions mentioned in Paragraph ( b ) of Article ( 1 of these regul……..

                                • Article ( 13 )

                                  The Risks Bureau shall provide the Institutions with the printed matters and forms defined in these regulations and in the directives for their implementation, whether these printed matters concern statements of banking risks or requests for specific information.

                                • Article ( 14 )

                                  The Risks Bureau expenses shall be distributed amongst the institutions in proportions equal to the ratio of total loans of each institution to the aggregate consolidated loans of all institutions as at the 31st of December of each year.

                                • Article ( 15 )

                                  Each institution should pay annually the amount incurred by it relating to the Risks Bureau expenses within a month of notification.

                                • Article ( 16 )

                                  The Central Bank shall bear no responsibility of whatever nature or cause as a result of losses or damage due to delay, negligence or errors by institutions with regard to the data submitted by them or by the Risks Bureau.

                                • Article ( 17 )

                                  The provisions of Article (107) of Union Law No. (10), (1980) shall apply in the event of delay by an institution in submitting the data specified in Article ( 3 ) and ( 4 ) of these regulations.

                                • Article ( 18 )

                                  The Governor of the Central Bank shall, in accordance with the requirements of public interest lay down the directives necessary for the implementation of these regulations.

                            • Directives For the Implementation of the Regulations of the Risks Bureau

                              • Part One General Provision

                                • Article 1

                                  "Institution (s)" in these directiv for the implementation of the regulations of the Risks Bureau would refer to : the commercial banks, in stment banks, and financial institutions operating

                                • Article 2

                                  The Risks Bureau shall give eac Institution a code number consisting of two digits be i ported to t Institution concerned.

                                • Article 3

                                  (1) Each Institution should ascertain the number of its customers whose credits, whether opened for or used by the customer, amount to or exceed Dh. 500,000 by the end of April 1982. Each Institution should prepare lists for these customers along the lines specified in Part Two of these Directives, then submit them to the Risks Bureau of the UAE Cen Bank, Abu Dhabi, for the first time only, before the tenth of May, 198…..

                                  (2) The Risks Bureau shall report to……… Institution the code numbers of its customers …………. first time before the seventeenth of …………

                                • Article 4

                                  Each Institution should prepare statements of risks as at the last working day of April 1982, along the lines specified in Part Three of these Directives, and presc them, for the first time only, to the Risks Bureau before the twenty seventh day of May, 1982.

                                • Article 5

                                  Lists of customers and statements of banking risks should be prepared by each Institution every 3 months* (following April 1982) and presented to Risks Bureau and reported back within the following time limits

                                  (*) ending the last day of each March, June, September and December of each year (circular no.376 dated 16.2.86)

                                  A – Institutions must present the additional lists for the new customers’ names before the tenth day of the month following that for which the lists are submitted.

                                  B – The Risks Bureau shall return to each Institution the detachable parts of these lists before the fifteenth day of the month following that for which the lists are submitted.

                                  C – Each Institution shall submit statements on customers’ risks before the twenty fifth day of t mo th following that for which the statements are submitted.

                                  D – The Risks Bureau shall answer the special information request within two days of its receipt

                                • Article 6

                                  (1) Each Institution shall directly contact the Risks Bureau of the UAE Central Bank in Abu Dhabi. Contacts, consultations and correspondence shall be effected directly between Institutions and the Risks Bureau without recourse to any other department of the Central Bank.

                                  (2) Such contacts, consultations and correspondence shall be effected only with the Coding Section of the Risks Bureau. No contact shall be permitted between the Bureau’s other Sections and Institutions or their customers.

                                • Article 7

                                  The regulations of the Risks Bureau and the directives for their implementation have devised a method of work and laid down procedures to communicate information and data that will provide top confidentiality. Therefore, all Institutions are requested to do the same on their part i.e. to make sure that the lists of customers, the statements on banking risks, and all correspondence related to the Risks Bureau are treated top confidential papers and should not be avail... or handle except by specified Institution’s staff. ese Institution’s employees should be highly trustworthy perso All information, lists, statements, …….. and recor should be kept in a safe place unaccessible to anyone except the designated employees.

                                • Article 8

                                  The Governor shall set down the internal ……….. for organising the working of the Risks Bureau to achieve the highest efficiency.

                                • Article 9 :

                                  The directives for the implementation of th regulations of the Risks Bureau shall come into force i the UAE as of 1.5.1982.

                              • Part Two : Customers’ Lists

                                • Chapter One Preparation of the Lists

                                  • Article 10

                                    The customers’ list is intended to identify the Institution’s customers on a separate document independent the banking risks statements. The Risks Bureau will give those customers code numbers to assure for its operations top confidentiality.

                                  • Article 11

                                    (1) The Customers’ list consists of a set of separate sheets numbered serially. Each sheet contains two part separated by a clear broad line. The part to the right of this line contains the Institution’s columns, (i.e. columns from 1 to 7), and that to the left contains the columns of the Risks Bureau (i.e. columns from 8 to 11). Please refer to the attached Form (R.B. –1)

                                    (2) Columns 10 and 11 of the part pertaining to Risks Bureau form together a detachable part which can be separated from the other parts of the list. The Risks Bureau shall return this part to the concerned Institution showing therein the code number given to each customer.

                                  • Article 12

                                    Institutions must fill in their custom ……….. on ……… (R.B.–1) attached hereto. The printed ……………… will be supplied by the Risks Bureau.

                                  • Article 13 :

                                    The customers who shall be registered in the Customers List are only those to whom the Institution has extend credits whose total reaches or exceeds the amount specified in Article 3 of these directives.

                                  • Article 14

                                    The Institution shall prepare the first general list of all its customers subject to reporting as at 30 April, 1982. This list shall be supplemented by complementary sheets of the same Form (R.B. –1) on which the Institution shall record its new customers whose total credits opened (or used) has reached or exceeded at the end of the month being reported the limit specified in Article 3 of these directives. Thus the general list of an Institution’s customers, at a given date, shall consist of the first general list and the added complementary sheets submitted by the bank till that date.

                                  • Article 15 :

                                    An Institution may not reorganize the general list of its customers unless the Risks Bureau requests so and shall be done according to its instructions.

                                  • Article 16 :

                                    Sheets of the institution’s customers’ general list shall be numbered serially, i.e. the first sheet bears No. 1 the second No. 2 and so on. These serial numbers must continue uninterrupted with respect to the complementary sheets. Therefore the institution may not return to …….. once again unless it is deemed necessary to prepare a new general list for its customers pursuant to the Risks Bureau’s request.

                                  • Article 17

                                    An Institution must number successively its customers recorded in the list giving each customer a serial number Numbering starts from No.1 and continues in column No. 1 of the list sheets and without interruption.

                                    But if the institution deleted one of its customers due to the decrease in the total credits opened in his favour below the limit determined in the directives, or because he has ceased to become a customer of the Institution, it may never give a new customer the same serial number of the deleted one.

                                  • Article 18

                                    An Institution should fill in the list all required information such as the list serial number, date, Institution’s code number and the customer’s code number; whether the designated columns for such information fall in the part of the institution or the Risk Bureau’s. In general the institution should ……….in all rows and columns of the customers list, except columns 8, 9 and 11 wherein the institution should record nothing.

                                  • Article 19

                                    The customers list is a principal document on which relies to a great extent the activity of the Risks Bureau

                                    Therefore, institutions are requested to pay due attention in preparing it, and ensure correctness of recorded information therein.

                                  • Article 20 :

                                    Customers list shall be closed on the last day of the month being reported. Each of the list sheets should be duly signed by the Institution’s authorized signatory.

                                  • Article 21

                                    (1) Each institution should prepare its customers list in duplicate and put them in a sealed envelope, to be put inside another envelope sealed by red wax and despatched with a covering letter inside the sealed envelope to the Risks Bureau before the tenth day of the month following that for which the list is prepared.

                                    (2) Each Institution shall prepare a third copy of the list which should be identical in every respect to both copies sent to the Risks Bureau and conformable to the Institution’s records.

                                  • Article 22

                                    Lists shall be despatched to the Risks Bureau under covering letter according to Form (R.B. –2) wherein the Institution shall indicate the number of the list sheets, the relevant month and total number of customers.

                                  • Article 23 :

                                    (1) When the Institution deletes – during the three months period — one or more of its customers, whether due to decreasing their credits below the determined minimum limit or because the customer has ceased dealing with it; it should notify the Risks Bureau, before the tenth day of the month following the month being reported, of its deleted customers by a letter, according to Form (R.B. –3) dispatched to the Risks Bureau at the same time the list of customers, for the period during which deletion was effected, is sent.

                                    (2) But if the deleted customer becomes one of the Institution’s customers whose credits must be reported, either because the Institution has increased the credits of such customer above the determined minimum limit, or the customer has resumed dealing with the Institution the latter should consider him as one of its new customers, and enters duly his name in a complementary list's sheet and gives him the proper serial number.

                                  • Article 24

                                    The Risks Bureau shall return to the relevant Institution, before the fifteenth day of the month that follows the month being reported, the detachable part of the list’s second copy only after filling column (11) thereof with customers' code numbers.

                                  • Article 25

                                    The detachable parts shall be sent to the Institution under covering letter, Form (R.B. –4) which acknowledges receipt of the list and bears the Risks Bureau's stamp and signature of the authorized employee. Furthermore, each of the list's detachable part returned to the Institution should bear the Bureau's stamp and the authorized signature.

                                • Chapter Two Detailed Explanation of the Items and Columns of the Customer's Lists

                                  • Article 26 : List's Serial Number

                                    According to the preceding Article No. 10, the Institution shall number the list’s sheets serially starting from No. 1. The Institution should write the proper serial number against the word "List’s Serial No." shown in two places of the list, one in the middle and the second in the detachable part to be returned to the bank.

                                  • Article 27 Date

                                    As the Customers' List's are to be reported as at the last working day of the month being reported, therefore the Institution shall record, against both words "date" situated under "List's Serial No.", only the month and year of the List.

                                  • Article 28 : Bank Code Number

                                    The Risks Bureau shall report, in advance, this number to the Institution, which consists ……. digits identifying the Institution's name. Therefore, the Institution should record both digits against the word "Institution Code Number" in the assigned place on the List’s original and on the detachable part to be returned to the Institution.

                                  • Article 29 : Customer’s Serial No. (columns 1 and 10)

                                    The two columns allocated for the customer’s serial number bear No. 1 and No. 10, and the Institution should record therein the serial number of each customer. The serial number should be recorded in both columns and should be continued on the following sheets of the list in accordance with the method shown under the preceding Article 17. It must be observed that the numbers recorded in column (1) should be the same as those recorded in column (10)

                                  • Article 30 : Customers Name and his Commercial Address (Column 2)

                                    The Institution shall record in this column the customer’ full name. The Institution should write down accurately the correct name of the customer.

                                  • Article 31 The Legal type of the customer (Column 3)

                                    Institutions should indicate in this column the customer’ legal personality, showing that in detailed writing.

                                  • Article 32 : Customer’s Legal address or his Head Office (Column 4) .

                                    It shall be mentioned in this column – in full and correct manner – the customer’s legal address. For instance : Abu Dhabi – No …………… Hamdan Street, P.O. Box No ……………. It is meant by the legal address the address considered by the customer as the center to which all notifications related to his business should be addressed. This address might differ from his home address or might be the same in rare cases. Also the legal address might differ from that where he practices his business. For instance, the Head Office of a company may be at (Abu Dhabi) and its business place is (Mussaffah).

                                    But if the customer is a company with branches, or an institution or a business with several branches, the address of the Head Office in UAE should be mentioned. In case the legal address is unknown, the Institution must give full description regarding his address, home or the place where the customer practices his business ……… etc.

                                  • Article 33 Type of Work practiced (Column 5)

                                    All Institutions must indicate very clearly in this column the customer’s professions.

                                  • Article 34 : Places where a customer conducts his business (Column 6)

                                    The Institution shall mention in this column the place or places where the customer – to the Institution's knowledge – practices his business.

                                  • Article 35 Economic Sector Number (Column 7)

                                    According to the customer’s profession the Institution shall indicate the type of economic sector to which the customer belongs. The Institution shall mention in this column the number, representing the mentioned sector, selected from the attached annex. If the customer practices several professions at the same time, the number representing each sector should be mentioned.

                                  • Article 36 : Customer’s Code Number (Column 8

                                    This column is allocated for the Risks Bureau. The Institution may not mention anything therein.

                                  • Article 37 Remarks of the Risks Bureau (Column 9)

                                    This column is allocated for the Risks Bureau. The Institution may not mention anything therein.

                                  • Article 38 Customer’s Serial Number (Column 10)

                                    This column is identical to column (1), so the Institution should enter therein the same customers' serial numbers as entered in column (1).

                                  • Article 39 Customer's Code Number (Column 11)

                                    This column is identical to column (8). It is also allocated for the Risks Bureau, consequently the Institution should mention nothing therein.

                              • Part Three : Reporting Banking Risks and Requesting Special Information

                                • Chapter One : General Provisions

                                  • Article 40 :

                                    ( 1 ) Banking Risks statements shall be prepared according to Form (R.B. –5). A special statement is prepared for each customer who comes under the provisions of these regulations.

                                    ( 2 ) A code number shall be used to identify the reported customer and another code number identifying the Institution. The keys for both code numbers shall be available only to the Risks Bureau and the Institution.

                                  • Article 41

                                    (1) Banking risks statements shall be prepared according to the positions of such risks at the last working day of the month being reported, i.e. according to the position of credits in the Institution’s records at the mentioned date.

                                    (2) Statements shall be prepared in duplicate; each signed by the specially authorized signatory of the Institution, i.e. who is authorized by the Institution to sign these statements which shall be delivered to the Risks Bureau before the twenty fifth day of the month following that of the statements.

                                    (3) Statements shall be put in a sealed envelope which shall be put inside another one sealed by red wax and sent under covering letter according to Form (R.B. –6) in duplicate. Each copy bears the Institution’s stamp and signature. The covering letter shall indicate the number of statements contained in the inner envelope and the relevant month.

                                  • Article 42 :

                                    After receiving the envelope and making sure that the number of statements conforms with that mentioned in the covering letter, the Risks Bureau shall return to the Institution the duplicate copy of the covering letter after entering in the relevant place acknowledgement of receipt of the envelope with the number of statements.

                                  • Article 43 :

                                    If the Institution deemed it necessary to add some explanations and clarifications on the statement, it should record the same on a separate sheet in duplicate to be attached to both copies of the statement. Both copies shall bear the customer’s code number. Institutions should avoid mentioning any information therein that might identify the customer.

                                  • Article 44 :

                                    To facilitate the task of the Risks Bureau and to enable it to discover mistakes, all institutions are requested to take the utmost care in preparing statements and securing correct information required to be entered therein.

                                  • Article 45

                                    Institutions shall be furnished with the printed matter necessary for the preparation of statements by the Risk Bureau exclusively.

                                • Chapter Two : Credits (risks) which should be reported

                                  • Article 46

                                    In application of Article 4 of the Risks Bureau’s Regulations, each Institution operating in the UAE should submit a statement on each of its customers when total credits extended to him reach or exceed Dh. 500,000

                                  • Article 47

                                    In order to know if the credits granted to a customer amount to the minimum limit shown in the preceding Article, the Institution shall add all of the various types of credits opened for the customer as indicated in the statement of Form (R.B. –5) whether such credits are used or not and whether the Institution has notified the customer about them or not.

                                  • Article 48 :

                                    Dirham and foreign currency credits should be reported. Foreign currency shall be converted into dirhams according to exchange rates in force at the date of the report.

                                  • Article 49 :

                                    Credits extended by the Institution to its customers abroad shall also be reported. Credits extended by a resident Institution to another resident Institution and credits extended to one of the public departments or organizations should be reported also.

                                  • Article 50 :

                                    Statements shall be made on the customer whom the Institution has extended credit:

                                    (1) As regards commercial papers (checks, discounted bills of exchange, etc...) the statement would contain data on the customer who endorses them to the Institution.

                                    (2) As regards credits covering acceptances or guarantees the statement shall cover the customer for whom the Institution gave the acceptance or the guarantee.

                                    (3) As regards documentary letters of credit, the customer who requested the opening of the documentary letter of credit shall be reported.

                                • Chapter Three : Explanations of Banking Risks’ Statement

                                  • Article 51 Economic Sector

                                    Institutions should mention the customer's sector according to his practiced profession. Institutions shall use the attached annex to specify s . economic sector. Writing only the number of the economic sector will suffice. In case the customer is practicing various professions at the same time, all of them must be mentioned

                                  • Article 52 Code Number

                                    (a) the Institution : The code number given by the Risks Bureau for the Institution preparing the statement shall be mentioned.

                                    The customer : The customer’s code number given in the detachable part of the customers list by the Risks Bureau shall be mentioned.

                                  • Article 53 : Date of Statement

                                    End of month for the credits reported in the statement shall be mentioned.

                                  • Article 54 Credits

                                    Credits reported in the statement shall be detailed according to the following:

                                          Discounts

                                    (2) Loans and advances against merchandise, excluding credits extended against import and/or export documents (items 5 and 6 below)

                                    Loans and advances secured by real guarantees (excluding those against merchandise).

                                    Loans and advances secured by personal guarantees

                                    Loans and advances secured by documentary credits for imports.

                                    (6) Loans and advances secured by presentation of export documents.

                                    (7) Loans and advances against documentary credits for exports.

                                    (8) Unsecured loans and advances.

                                    (9) Acceptances.

                                    (10) Documentary letters of credit

                                    ( 1 ) Guarantees.

                                    The first eight types (1–8) deal with obligations representing actual credit. But the last three (9–11) do not represent more than a promise given by the Institution to lend its signature to the customer. These types do not lead to an actual credit except in the case of customer’s default.

                                  • Article 55 : Discounts

                                    It shall be recorded under this item the credits opened and those actually used against commercial papers discounted by the customer in favour of the Institution. Excluded items are discounting collateral merchandise bonds (warrants) which are included under item (2), and discounting of promissory notes which the customer signs in favour of the Institution and which are included under one of the items 2 to 8 according to the guarantees provided to secure debt.

                                  • Article 56 : Collateral Merchandise Bonds (Warrants) and Advances against Merchandise

                                    Under this item shall be recorded the opened and/or used credits through:

                                    ( ) Discounting collateral merchandise bonds (warrants)

                                    (2) Loans and advances secured by pledging the customer's merchandise with the Institution.

                                  • Article 57 Loans and Advances Secured by Real Guarantees

                                    It shall be recorded under this item the opened credits and those used as loans and advances totally secured by real guarantee (movable values, gold, foreign currencies real mortgage, commercial bonds ) established especially to guarantee debt repayment, but excluding loans and advances against merchanise and the like included under item (2)

                                    But if the mortgage does not secure more than a part of the credit, the unsecured part shall be recorded either under item (8) – unsecured advances, or under item (4) if secured by personal guarantees.

                                    Institutions attention should be drawn to that:

                                    ( ) the credits against discounting promissory notes written by the customer in favour of the Institution and secured by real guarantee shall be recorded under item (3) unless the guarantee was merchandise then the credit in this case shall be recorded under item

                                    Advances against pledging commercial papers shall be recorded in item (3) unless such papers are discounted then they should be recorded in item (1).

                                  • Article 58 Loans and Advances Secured by Personal Guarantees

                                    These are the opened or used credits in the form of loans and advances extended by the Institution to a customer and are totally or partially secured by personal guarantees, or by discounting of promissory notes signed by the customer in favour of the Institution and guaranteed by other persons.

                                  • Article 59 : Loans and Advances against Documentary Credits For Imports

                                    These are credits extended to the customer by the Institution to cover cash payment such is part of the total amount of the documentary credit opened by the customer for imports, or are credits extended by the Institution to the customer when the former pays the cost of the imported goods and delivers shipping documents to the latter who has not yet paid its cost to the Institution.

                                  • Article 60 : Loans and Advances Secured by Presentation of Exports Documents

                                    These represent credit extended to the exporting customer when he presents the shipping documents to the Institution which pays him its value before the Institution receives its value from the foreign importer.

                                  • Article 61 Loans and Advances against Documentary Credits for Exports

                                    When the Institution extends a credit to a UAE exporter against a documentary credit opened in his favour with the Institution.

                                  • Article 62 : Unsecured Loans and Advances

                                    It shall be recorded under this item the credits opened or used by the customer without any guarantee whatsoever or against discounting promissory notes written by the customer in favour of the Institution and secured by no more than the customer.

                                  • Article 63 Note relating to Articles 1 to 8

                                    If both personal and real guarantees are submitted at the same time against a certain credit, Institutions are required to evaluate in each case separately the nature and weight of the submitted guarantee and under which category the credit should preferably be recorded or to which categories should be distributed. The Institution should be careful not to record a single credit under two different items.

                                  • Article 64 : Acceptances

                                    It shall be recorded under this item non-cash credit facilities provided by the Institution to their customers in such a manner where the Institution pledges to pay to the beneficiary the value of the commercial papers which shall become due on the customers in a later date.

                                  • Article 65 : Documentary Credits

                                    It shall be recorded under this item the credits extended by the Institution to the customer in the form of opening documentary credits at the customer’s order without debiting him with the transaction value except in a contra account or without charging him with an advance cash prepayment to cover the opened credit.

                                    But when the customer pays an advance cash prepayment or when the Institution debits the customer's account with the amount of the advance cash prepayment, then what should be mentioned in this column will be the remaining balance of the opened documentary credit after deducting the amount of prepayment.

                                  • Article 66 Guarantees

                                    It shall be recorded under this item the non-cash credit facilities provided by the Institutions to their customers such that the Institution pledges to pay to the creditors of its customers the value of the security asked of them against fulfilment of certain obligations in favour of their creditors. This item covers also the non-cash credit facilities extended as a result of customers guaranteeing other person …….. would have never obtained these facilities had it not for the pledge of those customers. It is required that the customer guarantor should not be originally obligated to pay such debt.

                                  • Article 67 Opened Credits – Used Credits

                                    In the column of opened credits, the Institution shall record for each of the credit types the maximum limit opened for its customer, whether the latter has used the credit or not, and also whether the Institution has notified the customer in writing of its opening, or it has been opened pursuant to a verbal notice, or just after an internal approval. In all cases the amount of the opened credit should be mentioned even if no part thereof has been used.

                                    With regard to the column of used credits, the Institution shall record for each of the credit types the amount actually used by the customer from the credit initial amount at the end of the month of report. Institutions should pay attention in particular to record the amount used by the customer as a used credit irrespective of whether the Institution has secured the credit from other institutions or not. Commercial papers in collection shall be considered as used credits if they were discounted. But if they were deposited by the customer for collection only they shall not be considered as used credits.

                                • Chapter Four : Requesting Special Information

                                  • Article 68 :

                                    (1) The Risks Bureau may give the Institutions, upon their written application a statement containing the total credits extended to a given person or institution.

                                    (2) Request for special information shall be of two types The first is to enquire about total credits extended by all Institutions to a natural or legal person who is not an institution’s customer. The second is to enquire about total credits extended by all Institutions to a natural or legal person who is an Institution's customer

                                    (3) An Institution may not apply for special information about a natural or legal person unless such person is one of the Institution’s customers, or is seeking to deal with the Institution, or the Institution is engaged in a transaction with which the customer is related and for this reason the Institution is requesting the special information.

                                  • Article 69

                                    (1) Applications for special information about credits (banking risks) should be prepared on printed matter o Form (R.B. –7) for requests of the first type, and of Form (R.B. –8) for those of the sec...... type.

                                    (2) Such applications shall be in duplicate placed in red wax sealed envelope and shall be answered in accordance with the rules specified for sending statements or answering them.

                                  • Article 70

                                    The Risks Bureau shall not reply to a verbal request especially those made by telephone. Also it shall not answer verbally or by telephone those duly submitted written requests. Also it shall not reply to request sent by telex.

                                • Chapter Five Miscellaneous Provisions

                                  • Article 71

                                    The Risks Bureau shall not be held responsible for any error whatsoever that might occur as a result of a mistake or incorrect information reported to it in the statements on banking risks or for delay in reporting such information. Also this Bureau shall not be liable whatsoever for omissions or errors that might be incurred by its employees

                                  • Article 72 :

                                    (l) Correspondence shall be addressed follows:

                                    Central Bank of the UAE – Head of Risks Bureau Risks Bureau – Abu Dhabi P.O. Box 354

                                    (2) Envelopes containing banking risks statements or list of code numbers or request for special information should be sealed with red wax.

                          • Insurance Authority Board of Directors’ Resolution No. (9) of 2020 on the Amendment of Some provisions of the Insurance Authority Board of Directors’ Resolution No. (33) of 2019 Concerning the Regulation of the Committees for the Settlement and Resolution

                            IA-BOD-RES 9/2020 Effective from 12/3/2020

                            The Board of Directors of the Insurance Authority,

                            Having perused,

                            - Federal Law No. (6) of 2007 on the Establishment of the Insurance Authority and Organization of Insurance Operations, its amendments and its Executive Regulation;
                            - Insurance Authority Board of Directors’ Resolution No. (33) of 2019 Concerning the Regulation of the Committees for the Settlement and Resolution of Insurance Disputes; and,
                            - Based on the proposal of the Director General of the Insurance Authority and approval of the Board of Directors of the IA,

                            Has resolved:

                            • Decision No. (50) of 2019 Concerning Enhancing the Shari’a Controller’s Role in Takaful Insurance Companies Operating in the State

                              Effective from 17/4/2019

                              Director General of the Insurance Authority,

                              Having pursued:

                              - The Federal Law No. (6) of 2007, concerning the Establishment of the Insurance Authority and the Organization of Insurance Operations and the amendments thereof;

                              - Insurance Authority Board of Directors Resolution No. (2) of 2009 concerning the issuance of the Executive Regulation of Federal Law No. (6) of 2007 pertinent to the Establishment of the Insurance Authority and Organization of its Operations;

                              - And, Takaful Insurance Regulations issued by The Insurance Authority’s Board of Directors Resolution No (4) of 2010 Concerning the Takaful Insurance Regulations,

                              Has Decided:

                              • Article (1)

                                The definition of " Beneficiary “provided under Article No. (1) shall be amended to read as follows:

                                Beneficiary: The person for whom the insurance stipulates for his interest, an amount of money, a fixed payment, or other financial compensation in case an accident happened, or if the insured risk in the insurance contract is realized.

                                • Conditions that must be met in Shari’a Controller

                                  • Article (1)

                                    To approve the employment of a Shari’a Controller at Takaful insurance companies, following conditions must be met:

                                    1. To be a natural person.
                                       
                                    2. The Shari’a Controller shall be appointed in the company by its Board of Directors, and based on the recommendation of the Shari'a Supervisory Committee in the Company.
                                       
                                    3. To practice the Shari’a Controller duties on full-time basis, and it is not permissible to combine between the job of a Shari’a Controller and any other job in the Company.
                                       
                                    4. To be a Muslim with full legal capacity, and has a sound reputation and good conduct and to be knowledgeable in the Arabic language.
                                       
                                    5. Has never been dismissed from service for disciplinary reasons.
                                       
                                    6. Submit a certificate confirming that he has not been sentenced in a felony or misdemeanor that violates honor or honesty and public morals, and to submit a declaration that he has not been declared bankrupt unless he is rehabilitated.
                                       
                                    7. The following qualifications and experience are required:
                                       
                                    1. Must be a holder of a university qualification in Shari’a and a degree in either law, insurance, business or economics.
                                       
                                    2. Must have passed training courses in Shari’a or any legal, insurance, business or financial training courses.
                                       
                                    3. To be knowledgeable in the jurisprudence of Islamic financial transactions.
                                       
                                    4. To have practical experience for a period of not less than three years in the field of insurance or have worked in the field of Shari’a Control and other related activities. The experience shall be for one year for UAE Nationals.
                                       
                                • Article (2)

                                  Additional paragraphs shall be added to the Article (5): having the numbers (4), (5), (6) and shall read as follows:
                                  4. The subrogation of an Insurer (Company), by the amount paid as an insurance for a damage, in the place of the insured or the beneficiary for the rights of any of them before the third party causing the damage for which the insurer is liable or before the insurance company of the third party causing the damage under a legal subrogation right.
                                  5. Claims between Insurance Companies and the adjustment of balances .
                                  6. Claims between Insurance-Related Professionals and Insurance Companies.

                                  • Duties and Functions of the Shari’a Controller

                                    • Article (2)

                                      The Shari’a Controller shall conduct and ensure the following:

                                      1. Review Insurance contracts and transactions to confirm that they comply with the provisions of the Islamic Shari’a Principles and the Fatwa(s) issued to newly originated transactions.
                                      2. Takaful insurance operations in the company are carried out in accordance with the provisions of Islamic Shari’a Principles.
                                      3. The Company carries out its business either in accordance with the basis of WAKALA or WAKALA and MUDARABA together.
                                      4. The Participants' accounts and the accounts of shareholders are separated.
                                      5. Covering the realized deficit in participants' account is followed up through interest-free loan “QARD HASSAN”
                                      6. The existence of a documented and approved mechanism for the distribution of surplus to the participants in the Company’s Takaful insurance operations.
                                      7. The company has prepared the membership document, attached to the insurance policy and its clauses are reviewed.
                                      8. There are no charges imposed on the participants' accounts in the general insurance more than the percentage of the WAKALA remuneration prescribed in the Financial Regulations for Takaful Insurance companies.
                                      9. The company is providing the Insurance Authority with a copy of the report of the Shari'a Supervisory Committee.
                                      10. The company has implemented the recommendations contained in the reports of the Shari'a Supervisory Committee.
                                      11. The External Auditor's report is prepared to review the extent of compliance with the Anti Money Laundering and Terrorist Financing Instructions and other relevant decisions.
                                      12. The Actuary has carried out his role in terms of reviewing the actuarial aspects in the family Takaful insurance.
                                      13. The Zakat Fund is established in the company in accordance with the provisions of the Regulations.
                                      14. The nature of clients and properties to be insured, to what extent they are compliant with Islamic Shari'a provisions, and whether the approval of the Shari'a Supervisory Committee is acquired.
                                      15. To prepare periodic reports and submit them to the Shari'a Supervisory Committee and the Board of Directors on the extent to which the company's operations are compliant with the Shari'a Supervisory Committee’s decisions and opinions.
                                      16. To attend the Shari'a Supervisory Committee’s meetings and to present their report in the general assembly of the company.
                                      17. Any other matters affecting the Company's compliance with the Islamic Shari’a provisions and the related legislation.
                                      18. Issues requiring clarification, interpretation or Fatwa are collected in order to be introduced to the Shari'a Supervisory Committee at its periodic meetings to take the necessary action to issue Fatwa concerning them.
                                      19. Violations and deficiencies are clarified for Takaful insurance operations and General Manager of the Company was informed for correction.
                                      20. Any other duties assigned to him are carried out.
                            • Amendment of Circular No. 25/2005 regarding Loans extended to finance purchase of Company Shares

                              After greetings,

                              Reference to Central Bank Circular No. 25/2005 dated 13/4/2005 regarding the above subject, please abide by the said circular except for article no. (5) which has been amended from date until further notice, as follows:

                              1. 5- Loans extended against pledge of shares of companies which have been in operation for more than five years should not exceed 80% of the market value of these shares.

                              Yours faithfully,

                            • Insurance Authority Board of Directors' Resolution No. (18) of 2020 Concerning the Electronic Insurance Regulations

                              Effective from 27/4/2020

                              The Chairman of the Board of Directors of the Insurance Authority,

                              Having pursued,

                              - The Federal Law No. (5) of 1985 concerning the promulgation of Civil Transactions Law and the amending laws thereof;
                              - The Federal Law No. (10) of 1992 concerning the promulgation of the Evidence Act for Civil and Commercial Transactions and the amending laws thereof;
                              - The Commercial Transactions Law issued by The Federal Law No. (18) of 1993;
                              - The Federal Law No. (17) of 2002 concerning the regulation and protection of industrial property rights for patents, Industrial Drawings and models;
                              - The Federal Law No. (3) of 2003 Concerning Regulating the Telecommunications Sector.
                              - The Federal Law by Decree No. (3) of 2012 on the establishment of the National Electronic Security Authority (NESA), as amended;
                              - The Federal Law No. (1) of 2006 concerning the Electronic Commerce and Transactions;
                              - The Federal Law No. (24) of 2006 On Consumer Protection;
                              - The Federal Law No.)6( of 2007 on Establishment of the Insurance Authority & Organization of Insurance Operations and the Amendments thereof;
                              - The Federal Law by Decree No. (3) of 2012 on the establishment of the National Electronic Security Authority (NESA), as amended;
                              - The Federal Decree-Law No. (5) of 2012 concerning Combating Cybercrimes and the amendments thereof;
                              - The Federal Law No. (14) of 2018 concerning the Central Bank, the Organisation of Financial Institutions.
                              - The Federal Law No. (20) of 2018 Concerning Confronting Money Laundering and Combating Terrorist Financing and Financing Illicit Organizations.
                              - The Insurance Authority Board of Directors’ Resolution No. (2) of 2009Concerning the Issuance of the Executive Regulations of the Law No. (6) of 2007 Concerning the Establishment of the Insurance Authority and Organization of Insurance Operations, and theamendments thereof;
                              - The Insurance Authority Board of Directors’ Resolution No. (3) of 2010 Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance Companies Operating in the UAE and theamendments thereof;
                              - And, based on the recommendation of the Director General of the Insurance Authority and the approval of the Board of Directors,

                              Has resolved,

                              • Definitions

                                • Article (1)

                                  The following words and phrases shall have the meanings ascribed thereto hereunder unless the context indicates otherwise:

                                  State: The United Arab Emirates

                                  Law: Federal Law No. (6) of 2007 Cconcerning the Establishment of the Insurance Authority and Organization of Insurance Operations and the amendments thereof.

                                  Executive Regulations: The Executive Regulations of the Law.

                                  Authority/IA: The Insurance Authority.

                                  Board: The Board of Directors of the IA.

                                  Director General: The Director General of the IA.

                                  Company: The insurance company incorporated in the State and the foreign insurance company licensed to carry out insurance activities in the State either through a branch, or through an insurance agent, including Takaful insurance companies.

                                  Insurance-Related Professions: Any person licensed by the Authority to practice any of the activities of Insurance Agent, Actuary, Insurance Broker, Surveyor & Loss Adjuster, Insurance Consultant or any other insurance related profession that the Board decides to regulate.

                                  Insured: The person who has concluded an insurance contract with the company.

                                  Insurance Proposer: The person who applies to acquire insurance coverage through the website of the insurance company, insurance agent or insurance broker.

                                  Insurance Agent: The person approved and authorized by the company to carry out insurance operations on its behalf or on behalf of any branch thereof.

                                  Insurance Broker: The person who independently intermediates in insurance and reinsurance operations between the insurance Proposer or reinsurance Proposer on one side and any insurance or reinsurance company on the other side and receives for his efforts commission from the insurance company or the re-insurance company with which the insurance or reinsurance has been concluded.

                                  Electronic: What is relevant to new technologies which has electric, digital, magnetic, wireless, visual, electromagnetic, computed, photic capabilities, and the likewise.

                                  Electronic Information: Electronic data and information in the form of text, codes, sounds, graphics, images, or otherwise

                                  Electronic Insurance Operations: Any business carried out by the company through electronic and smart systems, including but not limited to;

                                  insurance coverage offers, insurance premium offers, selling of insurance policies, marketing of insurance policies, collection of premiums, receipt of claims, receipt and handling of complaints.

                                  Website: The Company Address on the Web, which is accredited in all company’s publications, advertisements, and electronic documents and authorized by the competent authority, including but not limited to:

                                  1. Social networks such as Facebook, LinkedIn and Twitter.
                                  2. Multimedia sharing networks such as YouTube, Instagram and Snapchat.
                                  3. Blogs such as Blogger, Tumblr, and Word Press.
                                  4. Participatory work applications such as Google Docs and wiki tools.
                                  5. Systems based on artificial intelligence and machine learning.
                                  6. Autoreply, chatbot and smart personal assistant.
                                  7. SMS.
                                  8. Voice, video or audio communication.
                                  9. Live chat channels.
                                  10. Smart applications.

                                  Electronic Copy: A record or document that is created, stored, generated, copied, sent, communicated or received by electronic means, on a tangible medium or any other Electronic medium and is retrievable in perceivable form.

                                  Illegal Access: A person deliberately accesses a computer, a website, an information system, or a computers network without authorization.

                                  Outsourcing Company, Provider or Developer: Any natural or legal person providing, publishing, and interfering with the trading of insurance information and data via the Internet.

                                  Price Comparison Websites: The registered company at the Authority to provide insurance premium price comparison services, using the internet.

                                  Competent Authorities: government entities concerned with the regulation of the businesses identified in the laws for their establishment.

                              • Chapter One General Provisions

                                • Article (2)

                                  1. These regulations shall apply to all electronic and smart insurance operations practiced by licensed Insurance Companies, Insurance-related Professions and marketing insurance policies through banks to the extent applicable to their nature.
                                  2. The provisions of the Federal Law concerning the Electronic Commerce and Transactions and other related laws in force shall apply to the conclusion of an insurance contract electronically or any other matters related to the electronic insurance operations, excluding the matters that are specifically addressed hereunder.
                                  3. Insurance Companies, and Insurance-related Professions must comply with the application of Protection of Confidential Information, issued by the Competent Authorities.
                              • Terms of Approval

                                • Article (3)

                                  Before submitting an application to obtain the approval of the Insurance Authority to practice electronic insurance operations, Companies shall develop a specific action plan for electronic insurance operations, approved by the company’ board of directors, or signed by the owner of the Sole Proprietorship or signed by the same person, in the event that he is a natural person or Sole Proprietorship, as appropriate, prior to submitting it to the Authority. This plan shall include but not limited to the following:

                                  1. An analysis of the projected volume of electronic insurance operations for the next three years;
                                  2. An analysis of the risks associated with electronic transactions and the necessary precautionary measures and procedures to mitigate those risks, including, but not limited to – risks of cyber security, risks of adverse selection, money-laundering and terrorist financing offenses in insurance activities, strategic risks and illegal access to the website.
                                  3. A contingency plan, including the actions that should be taken in case one or more element of the electronic or smart system are disrupted. The plan should include the corrective measures to ensure continuity of business, and reporting to the authorised officials within the company and the Authority.
                              • Chapter Two: Electronic Insurance Strategy & Risk Management

                                • Responsibilities of the Board of Directors/ Mangers Committee

                                • Article (4)

                                  1. The adoption of the electronic insurance strategy in the company and providing the necessary directives to the executive management to ensure the proper implementation thereof.
                                  2. The adoption of the risk management strategy related to electronic insurance, the development of the related internal supervisory controls, and supervising the executive management in the course of their implementation of these requirements.
                              • Responsibilities of Executive Management

                                • Article (5)

                                  The Executive Management shall commit to the following: -

                                  1. Ensure that online insurance products and services are in line with the strategy adopted by the Board of Directors in this respect.
                                  2. Ensure that the level of risks arising from electronic insurance remains within the acceptable risk level stated in the risk strategy adopted by the Board of Directors or the Managers Committee, as the case may be.
                                  3. Take the necessary actions to implement the internal supervisory controls to minimize the risk of exploitation from inside and outside the Company.
                                  4. Ensure the availability of adequate expertise and resources for the business and sustain the electronic insurance system.
                                  5. Develop a written policy adopted by the Board of Directors that establishes a clear separation between the executive and the supervision powers of the electronic insurance and related risk management strategies, so as to determine persons and their powers to access and view the stored files and possibility to make changes to the data contained therein, as well as saving the logs that reflect any access and change to the data of those systems.
                                  6. Develop a policy for advertising and use of price comparison services, obtaining data, sharing data with InsureTech companies, electronic channels developers, manufacturers and suppliers.
                              • Addition of Permitted Lines of business

                                • Article (6)

                                  The company shall apply the resolutions in force and submit an application to obtain the Insurance Authority’s approval on the classes of insurance products that will be sold through its website and comply with the following conditions:

                                  1. The Company shall not sell insurance policies of persons and funds accumulation operations and life insurance products, if linked to investment instruments, through the Company's website or any other website.
                                  2. Subject to what is stipulated in paragraph (1) of the Article herein, the Company may sell life and personal insurance policies, which don’t require specific underwriting to each individual case.
                                  3. The Company and Insurance Related Professions may sell Liability and Property insurance products through their website, in the following lines:

                                    a. Health Insurance.
                                    b. Fire insurance and associated perils.
                                    c. Land vehicles and related liabilities.
                                    d. Personal accidents.
                                    e. Comprehensive household insurance.
                                    f. Travel insurance.
                                    g. Guarantee insurance and fidelity guarantee.
                                    h. Robbery and theft insurance.
                                    i. Glass insurance.
                                    j. Professional indemnity insurance including liabilities of those professionals in the fields of heath, engineering, finance, accountancy, law and other professions.
                                    k. Workman’s compensation and employer liability insurance.
                                    l. Agriculture and livestock insurance and insurances of other animals.
                                    m. Other insurances normally falling under miscellaneous accident insurance.
                                    n. Marine cargo insurance.
                                    o. Insurance related to housing loans, credit, personal loans, credit cards and similar perils such involuntary loss of employment and wallet insurance.
                                    p. Any other insurance that the Authority approves.

                                  4. The Company shall meet the requirements stipulated in Articles (3), (4) and (5) of in the Regulations herein.
                              • Chapter Three: Website

                                • Management of the Website

                                • Article (7)

                                  When managing the website, the Company shall comply with the following:

                                  1. The Company shall establish an IT department that shall be responsible for the managing of the official website.
                                  2. The Company shall obtain the Authority's prior approval before assigning the management of the website to any other party, and must verify the compliance of the contracting party with the provisions of the Regulations herein and related legislation.
                                  3. The Company shall appoint of a Communication Officer with the organization to which the management of the website was outsourced. The Communication Officer’s responsibility shall - include but not limited to - monitoring the contents of the website, responding to the enquiries and requests of customers, verifying that the other party is adhering to application of the outsource contract terms and conditions, verifying the commitment and adherence of the other party to the Regulation hereunder and other related legislation.
                                  4. Companies and related professions shall regularly conduct tests for Illegal Access and assessing vulnerabilities for the website or smart application to guarantee the soundness of such and to fill any potential gaps (if any).
                                  5. Compliance with cyber security standards and requirements issued by the Competent Authorities, to protect data, systems and networks issued by the Competent Authorities.
                                  6. Take the necessary measures, adhere to the data confidentiality of customer and visitor, adhere to the laws related to privacy as soon as they are issued, and put in place the necessary technical measures to prevent the leak of customer or visitor data, whether such thing happened intentionally or unintentionally.
                              • Transparency and Disclosure

                                • Article (8)

                                  1- The Company or related profession shall comply to directly provide all necessary information to enter into a contract through its website, including the following as a minimum:

                                  • Name of the Company or Related Professions that owns the website or the smart application.
                                  • A Declaration to show the website or smart application belongs to the Company that is carrying the risk or it is one of the insuranceRelated Professions. In the latter case, it is mandatory to declarethe name of the company that is carrying the insured risks.
                                  • The Company or Related Profession ’s registration number with the Authority.
                                  • Contact details through phone and by electronic means.
                                  • An explanation on how to register a complaint so that procedures are clear.

                                  2- The Company shall continuously update the data and information stipulated in Para (1) of this Article on its website or smart application.

                              • Information Security and Integrity

                                • Article (9)

                                  1- The company shall maintain the confidentiality of the Electronic Information obtained through the website, and shall not disclose this information to any other party except by judicial or security order. Accordingly, the company shall establish the necessary procedures and controls to maintain the confidentiality of information.

                                  2- The Company and Related Professions shall ensure the security and integrity of the information provided through its website, through applying the measures and criteria determined by the competent authorities in the state, including storing data inside the State and in the cloud.

                                  3- The commitments of the Company and Related Professions and persons responsible of such for maintaining the confidentiality of Electronic Information pursuant to this Regulation shall remain in force and indefinite.

                                  4- The Company and Insurance-related Professions shall protect the confidentiality of personal data and shall not share it with third parties, except within the scope of the provisions specified in this resolution. Further, the Company and Insurance-related Professions shall not disturb customers when promoting products by SMS or frequent emails, unless with prior approval of the Customer for that.

                                  5- establish different levels of supervision and control of the electronic insurance operations carried out through its website as follows:

                                  • Application of the minimum security measures and procedures to prevent the alteration of content of the fixed information displayed on the website by unauthorized individuals.
                                  • Taking security measures and procedures to protect the shared Electronic Information with customers or visitors of the website from alteration, theft or illegal usage.
                                  • Application of measures and procedures and provision of the latesttechnologies and programs to ensure the security of the paymenttransactions carried out through the company's website, by using payment systems that are adopted and licensed by the Central Bank of the United Arab Emirates for paying the amounts of issuing orrenewing the insurance policy.

                                  6- The department responsible for the website shall supervise the design, implementation, follow - up and update the security system of the Company’s website.

                                  7- The Company and Insurance-Related Professions shall establish the necessary measures to deal with emergency cases or disasters. They shall also maintain backup copies of all data and Electronic Information displayed or obtained through their website and shall establish a clear mechanism for restoring the website systems in case of failure of one or more elements of the automated system of the website.

                                  8- Insurance companies and Insurance-Related Professions shall take the necessary measures to prevent any viruses from accessing devices, networks, and databases through which the data of customers or visitors to the website may be leaked, whether such thing happened intentionally or unintentionally. They shall also take the necessary measures to not use any storage tools, disks, software, or networks containing viruses, whether such thing happened intentionally or unintentionally.

                              • Duties of the Companies and Related Professions

                                • Article (10)

                                  The Company and Related Professions shall make sure of the following:

                                  1. Verify its website or smart application's capacity to expand and absorb any additions that may arise in the future, such as the capacity of the website to handle any increase in the number of users, and the absorption of additional electronic insuranceoperations resulting from selling insurance policies or receivingclaims and handling complaints.
                                  2. The website or smart application shall be made available for use on a 24 hours’ basis and throughout the year and the responsible department for the website shall supervise and ensure that. In the event that the website is subject to maintenance processes, these responsible departments shall ensure that maintenance period shall not exceed one working day as maximum. In case of failure to complete maintenance operations during this period, the company shall notify the Authority in writing of the reasons that led to the website failure and determine the expected period of time to reboot the website.
                                  3. Ensure that the electronic content on the website does not fall under any of the prohibited content categories.
                                  4. Ensure that the website does not violate any laws, regulations and legislation in force in the UAE.
                                  5. Ensure the collection and processing of the sensitive data of users in a secure manner (Including: using SSL techniques / Encryption to prevent illegal collection of usernames, credit card information and bank information).
                                  6. Ensure that servers and website systems are secure, the use of antivirus and malware software, and shall perform security audits according to the best practices of management and operations.
                              • Pre-contract Phase

                                • Article (11)

                                  1. The Company shall illustrate its website with a description of the nature of the products that the company sells and markets electronically, and with self-assessment tools which enable the Insurance Proposer to assess his insurance needs, and eventually enable him to make an informed decision to conclude the contract.
                                  2. The Company is committed to draw the attention of the Insurance Proposer to the following information in a timely manner during the purchase process and before concluding the contract:

                                    a. Nature of the product countering the insurance risk.
                                    b. Main benefits of the product.
                                    c. Options of the insurance product and the insurance coverage.
                                    d. Exclusions of coverage and restriction of the product.
                                    e. If there are waiting periods for specific covers.
                                    f. Total premiums, VAT and any other expenses, in an accurate and clear manner.
                                    g. Warning the Insurance Proposer of the consequences of providing incorrect data and information.
                                    h. Showing the outcome of cancelling the contract, in particular the manner premium refunds are calculated.
                                    i. Informing the Insurance Proposer about the importance of acquiring insurance consultancy from a licensed and registered Insurance Consultant.

                              • Declarations of the Insurance Proposer

                                • Article (12)

                                  The Company, through its website is committed to use "step by step" approach for the disclosure of essential individual information (rather than providing information in full) to ensure that the Insurance Proposer acknowledges and signs the same, and that he has read the essential information related to the insurance application, and that he comprehends and understands legal consequences of his declaration.

                              • Outsourcing of Electronic Insurance Operations

                                • Article (13)

                                  1. The Company and Insurance -Related Professions, after satisfying the procedures set forth in the Regulations herein- when outsourcing the electronic insurance operations to other party, outsourcing the development, management or maintenance of its website or outsourcing any other operations related to its website, shall develop a special provision in the Outsourcing Contract thereunder the other party shall commit to apply the provisions of the Regulations herein, the code of professional practice issued by the Insurance Authority, and other related legislation. The Company and Insurance-Related Professions shall remain accountable to the IA.
                                  2. It is permissible to execute contracts through electronic automated means, including two or more electronic information systems that are prepared and programmed to do such in advance. The contracting shall be valid and has legal grounds, even if no direct personal interference was done in the process of executing the contract between these systems.
                                  3. It is permissible to enter into a contract through an electronic automated system in the possession of a Company and Related Professions and other party, provided the other party knows or is expected to know that the system will automatically handle entering and executing the contract.
                                  4. The Company and Related Professions, that wish to sell their insurance products through a website owned by other party licensed for this purpose, shall obtain the prior approval of the Insurance Authority. The Company and Related Professions shall verify that the website of the other party meets the following conditions:
                                     
                                    • If the other party's website is used to sell the insurance products of other companies, each insurance product must be clearly linked to the company providing it.
                                    • The website shall include all the information and data that need to be disclosed by the company, such as; the Company name,address, license status, classes of insurance activities, channels of communication with the Company.
                                    • The Website of the other party shall clarify the role of this party, its obligations towards customers such as the insured and whether this party is a broker or insurance agent licensed by the Insurance Authority or any other authority.
                              • Advertising and Marketing

                                • Article (14)

                                  The Company and Insurance-Related Professions or the party outsourced to perform the business related to the company’s website, when conducting advertisement and promotion of the electronic operations shall comply with the provisions of the code of professional practice, and must obtain the prior written approval of the Insurance Authority.

                              • Chapter Four: Price Comparison Websites

                                • Article (15)

                                  1. Insurance Companies and Insurance-Related Professions are prohibited from dealing with Price Comparison Websites, except for Insurance Brokers.
                                  2. In the event that the company deals with an Insurance Broker that deals with Price Comparison Websites, the company shall abide by the prices and coverage that appears on the Price Comparison Websites.
                                  3. When dealing with Price Comparison Websites, Insurance Brokers are obliged to do the following:

                                    a. Not to deal with websites not registered with the Authority.
                                    b. Providing the Authority with a copy of the agreement signed between the Insurance Broker and the owner of the Price Comparison Website, containing the terms and conditions, including not allowing them to issue or market any kind of insurance policies, and that the service provided by the website is to compare prices only and that the right to communicate with customers is limited to the Insurance Broker. The Insurance Broker shall also refrain from granting price comparison websites any authority to issue an insurance certificate. The agreement shall also indicate the amount of the allowance received by the Price Comparison Website which must be as a referral allowance in the form of a lump sum only.

                                  4. The Price Comparison Websites that handle insurance, for the purposes of registration, shall satisfy the following:

                                    a. To be a company registered in the State according to the Commercial Companies Law or one of the financial free zones in the State.
                                    b. Submit a registration application to the Authority in accordance with the approved regulations.
                                    c. Providing the Authority with a copy of the agreement concluded with the Insurance Broker, provided that it includes referral fees for Price Comparison Websites provided that they are in the form of lump sums and it is prohibited to charge a commission for the services they provide.
                                    d. To have one of the goals of the company in its memorandum of incorporation is to provide a service for comparing insurance premium rates.
                                    e. Insofar as the issue relates to insurance, the company should not extend its work on anything other than providing premium comparison services.
                                    f. Not to engage in the activity of the Insurance Agent, insurance Broker, or any other insurance-related professions, or carry out insurance underwriting operations or receive insurance premiums.
                                    g. The Website clearly and explicitly and legibly included that the website only provides insurance policy price comparison services.
                                    h. Refrain from maintaining, storing or copying any electronic data or information related to potential clients or clients and such information must be transferred electronically to the company in question without making copies thereof.
                                    i. Submit an undertaking to the Authority to abide by Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority and organization of Insurance Operations, the amendments thereof, its regulations, instructions, decisions and circulars issued pursuant thereto.
                                    j. Designating an employee who is concerned with communicating with the Authority, and providing the Authority with his contact information and updating it periodically.

                                  5. Price Comparison Websites must apply to renew the registration annually, including the following: -

                                    a. A list of the brokers contracted with during the year.
                                    b. Any changes to the agreement concluded with the Broker.
                                    c. A statement of the revenues generated by the Brokers.
                                    d. A list of the insurance lines that are compared.
                                    e. Any matters decided by the IA.

                                  6. Price Comparison Websites are prohibited from communicating with the customer, and communication shall only be made through an Insurance Broker.
                                  7. The provisions of the Regulations herein shall be applied to Price Comparison Websites, to the extent that they are applied to them, and according to what is decided by the Authority in this regard.
                                  8. In the event that any of the violations of the Price Comparison Websites are proven according to evidence available to the IA or the Competent Authorities, the IA may take any of the following measures and penalties:
                                  1. Warning the Price Comparison Website to take appropriate measures to rectify its conditions during a specific period.
                                  2. In the event that the conditions are not rectified within the specified period, the Price Comparison Website is prohibited from dealing with the Insurance Broker for a period not exceeding six months.
                                  3. In the event of repeating the violation, the website shall be blocked for a temporary period in coordination with the Competent Authorities, or the website shall be completely blocked, according to the discretion of the IA.
                              • Chapter Five: Selling and Marketing Insurance Policies

                                • Identifying the Customer

                                • Article (16)

                                  1. The Company and the Insurance Agent, prior to selling or issuing any insurance policy through its website, shall verify the identity of its customers and the documents submitted by them and develop the necessary procedures in this regard. The Insurance Broker shall comply with the aforementioned rules when issuing the insurance certificate.
                                  2. The Company and the Insurance Agent shall apply what is included in the legislations of anti- money laundering, combating the financing of terrorism and financing illegal organizations crimes, and they must inform the Competent Authority in accordance with electronic regulations or other approved means for any suspected activities that take place through its website.
                                  3. The Company, Insurance Related Professions and Insurance Agent shall maintain proper records of customers’ documents and identities obtained through its website for a period of at least 10 years.
                                  4. The Company, Insurance-Related Professions and Insurance Agent shall establish an electronic account for each customer and shall develop the following procedures to protect the customer's account:
                                  • Change the password of the customer's account periodically.
                                  • Request to re-enter the password after lapse of a fixed period of inactivity.
                                  • Validate the customer's email address by sending a verification link (activation).
                                  • A unified policy approved by the company’s board of directors, which includes insuring the insurer has two factors upon logging in.
                              • Rules of Selling the Insurance Policy

                                • Article (17)

                                  1. The Company and Insurance Agent shall issue dated electronic insurance policies and the issued electronic version shall include all the contents of the policy, including the insurance application, policy terms, limits of coverage and the annexes. They shall provide the customer with a copy of the entire policy in all available ways and means. Additionally, they must provide the customer with a thorough electronic copy of the policy in (PDF) format, which shall be sent by e-mail or other electronic means as soon as they are issued. The commencement date of and expiry date of the insurance coverage shall be clearly stated in the policy. The Insurance Broker shall comply with the aforementioned rules when issuing the insurance certificate.
                                  2. The Company and Insurance Agent shall enable the customer to view, print and download a complete electronic copy of the policy through his electronic account on the Company's website at any time. In the event that the format of the electronic policy requires the use of special software, the company shall provide the necessary software on its website.
                                  3. The Company and Insurance Agent shall provide the customer at his request with a paper copy of the insurance policy issued electronically signed and stamped by the Company or any other document directly related to this policy through its branches or its agent’s branches, or by sending it by registered mail within a period not exceeding seven working days from the date of customer application.
                                  4. The Company and Insurance Agent shall provide the Insurance Authority with the electronic websites addresses through which the insurance policies will be sold, or through the Agent or the Broker.
                              • Payment of the Due Premiums

                                • Article (18)

                                  The payment of electronic policies premiums may be paid by the applicable electronic means of payment, including direct debit from a bank account or credit card payment and other payment methods adopted by the Central Bank of the United Arab Emirates.

                              • Post-sale Provisions - Services

                                • Article (19)

                                  1. The Company and the Insurance Agent –as case may be - shall abide by all legislations in force related to the electronic operations in the State, when selling any insurance policy through its website. The Insurance Broker shall comply with the aforementioned rules when issuing the insurance certificate.
                                  2. The Company, The Insurance Agent and the Insurance Broker shall develop clear procedures for the cancellation of the policy through their website.
                                • Article (20)

                                  1. The Company and Insurance Agent shall communicate with the customer by using at least two means of communication preferred by the customer, such as; E -mail, registered mail, SMS and telephone.
                                  2. The Company and Insurance-Related Professions, when sending notification or announcement to more than one customer by E - mail or any other means of communication, shall verify and ensure that the notification or announcement does not contain any personal information relating to any customer and in a way that prevents the recipients of the notification or announcement to identify the identity of any other recipient.
                                  3. The Company, the Insurance Agent and the Insurance Broker, when issuing the insurance policy through their website, shall provide a special section for post sales services on the website, whereby the customer can perform any of the following operations:
                                  • Render any additional services related to the valid policy.
                                  • Demand to Make any amendments to the policy, such as; addition, renewal or cancellation.
                                  • Verify the status of the policy (valid, expired or cancelled).
                                  • Know the date of commencement of the insurance coverage, the expiry date, insurance amount and insurance policy number.
                                  • View the premiums schedule.
                                  • View the paid premiums, payment dates and amounts.

                                  4. The Company, the Insurance Agent and the Insurance Broker shall inform the customer one month at least before the expiry date of the insurance policy
                                  to enable the customer to renew the policy or obtain insurance coverage from another company. The Customer shall be informed through all the available means of communication referred to in Para (1) of the Article herein.

                                   

                              • Registering Complaints and Claims

                                • Article (21)

                                  Without prejudice to the provisions of the Code of Professional Practice and the legislations in force, the Company, the Insurance Agent and the Insurance Broker shall provide through their website, all the information necessary to the customer or the third party (the injured third party) to lodge complaints and follow - up their status. The information shall include the following as a minimum:

                                  1. Complaint/Claims Forms.
                                  2. Contact details of the concerned department for receiving complaints in the Company, the Insurance Agent and the Insurance Broker.
                                  3. Available communication channels to inquire about complaints (email, fax, phone, postal address).
                                  4. A general description of complaints handling procedures, including the estimated time to address a complaint.
                                  5. The Company and the Insurance Agent are obliged to provide a written response to the claim, whether by accepting the claim or part of it or rejecting the claim in full, with an explanation of the reason.
                                  6. Contact information of Customer Happiness Department in the Insurance Authority.
                              • Claims Handling

                                • Article (22)

                                  1. The company shall provide electronic claim forms for submitting claims and uploading electronic copies of the claim documents. After accepting the electronic claim, the company shall provide the claimant with a reference number of his claim.

                                  2. Before reimbursement of the claim submitted online, the Company may require the original claim documents from the claimant to match them and verify their validity.

                              • Chapter Six: Final Provisions

                                • Supervision and Inspection

                                • Article (23)

                                  1. The Insurance Authority shall supervise and conduct periodical or challenge inspections in order to ensure compliance with the legislation issued by the Authority and to verify any irregularities resulting from the inspection or contained in the complaints received by the Authority.

                                  2. The Insurance Authority may request all information and documents for the purposes of supervision and auditing.

                              • Violations and Penalties

                                • Article (24)

                                  1. If it was substantiated by evidence to the Authority and any othercompetent authorities, that the Company, Insurance Agent or Insurance Broker committed a violation, then the Authority may take one of the following actions and penalties:

                                  a. Warning that appropriate measures shall be taken to rectify conditions within a specified period.

                                  b. Suspend the electronic system for a period not exceeding six months in cooperation with the related Competent Authorities, and in case of repeating the violation, the period of suspension shall be doubled, and the public shall be notified of such by an announcement which shall bepublished by the Insurance Authority on its website or any other means.

                                  c. In case of failure to rectify conditions within the specific period, adecision to cancel the approval granted shall be taken, and all Insurance Companies, Agents, Brokers and competent authorities shall be informed of the decision and the public shall be informed by an announcementpublished by the Insurance Authority on its website.

                                  d. In the event the approval granted is cancelled pursuant to the provisionof the Article herein, the entity against which the decision was issued may not submit a new application for approval before the lapse of one year from the date of issuing the cancellation decision.

                                  1. Websites that carry out insurance operations inside the State without obtaining a required license by the IA shall be blocked, in coordination with the Competent Authorities in the state.
                              • Grievance

                                • Article (25)

                                  The decision issued by the Authority according to Article (24) of the Regulations herein may be appealed within (20) days from the date of notification thereof. The appeal request shall be submitted to the IA’s Board of Directors to decide within (60) working days of submitting the complete request, and the decision of the Board on such appeal shall be final.

                              • Final Provisions

                                • Article (26)

                                  Insurance Companies and Insurance Related Professions registered by the Authority shall rectify their conditions pursuant to the provision of the Regulations herein within six months from their entry into force.

                                • Article (27)

                                  The Director General shall issue the decisions and circulars necessary to implement the provisions of the Regulations herein.

                                • Article (28)

                                  These Regulations shall be published in the Official Gazette and shall come into force as from the following day of its publication.

                            • The Insurance Authority Board of Directors’ Decision No. (42) of 2019 On the Amendment of Certain Provisions of the Insurance Authority Board of Directors’ Decision No. (13) of 2018 Instructions Concerning Marketing Insurance Policies through Banks

                              The Chairman of the Board of Directors of the Insurance Authority,

                              Having pursued;

                              - Federal Law No. (1) of 2006 concerning Electronic Transactions and Commerce;
                              - The Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority and Organization of Insurance Operations, the amendments thereof and its Executive Regulations;
                              - Decretal Federal Law No. (14) of 2018 Concerning the Central Bank & Organization of Financial Institutions and Activities;
                              - Insurance Authority Board of Directors’ Decision No. (13) of 2018, Instructions Concerning Marketing Insurance Policies through Banks;
                              - And, based on the proposal of the Director General of the Insurance Authority and the approval of the Insurance Authority's Board of Directors,

                              Has decided:
                               

                              Article (1)

                              To amend Paragraph No. (2) of Article (5) to read as follows:
                              “To acquire practical training for a period of (30) hours at any insurance company in the same insurance products he is going to market.”
                               

                              Article (2)

                              Article No. (9) of Board’s Decision No. (13) of 2018 shall be cancelled and replaced by the following text:

                              “The Insurance Company shall have a point of sales in the Emirate where the Bank is marketing its insurance policies or shall have electronic services that enable customers to communicate with the company to receive their feedback, inquiries and complaints, within the following conditions:

                              1. Providing the service of communication with the company through telephone, website or through an electronic application that can be downloaded on smartphones.
                              2. Easiness to use website or application.
                              3. Responding to customer complaints and inquiries within one day.
                              4. The electronic services shall be in Arabic and at least one other language.
                              5. The company shall maintain a special record inside it showing the details of complaints, inquiries and the results.”
                                 

                              Article (3)

                              The period granted to insurance companies to rectify their status, at the time the Board of Directors’ Decision No. (13) of 2018 entered into force, shall be extended, in accordance with the provisions contained therein for an additional period of (six months) as from the effective date of this Decision.
                               

                              Article (4)

                              The companies practicing the marketing of insurance policies through banks shall rectify their status in accordance with the provisions of this Decision.
                               

                              Article (5)

                              The provisions of this Decision shall come into force from the date of its issuance and shall be published in the Official Gazette.

                            • Board of Directors' Decision No. (42) of 2017 on the amendment of some provisions of Insurance Authority Board of Directors' Decision No. (25) of 2016 Pertinent to Regulation of the Unified Motor Vehicle Insurance Policies

                              Chairman of the Board of the Insurance Authority;

                              Having perused:

                              - The Federal Law No. (6) of 2007, concerning the Establishment of the Insurance Authority and the Organization of Insurance Operations , its amendments and its Executive Regulation ;
                              - The Federal Law No (21) of 1995 concerning the Federal Traffic Law ,its amendments;
                              - Insurance Authority Board of Directors' Decision No. (25) of 2016 Pertinent to Regulation of the Unified Motor Vehicle Insurance Policies
                              - And, based on the approval of the Board of Directors of the Insurance Authority and the proposal of the Director General of the Authority,

                              Has decided:

                              Article 1

                              The Unified Motor Vehicle Insurance Policy against Third Party Liability shall be amended as follows:

                              1. Article (13) of Chapter one (General Conditions) shall be renumbered as paragraph (a) of the said Article, and the clause "for the type and year of manufacture of the vehicle" shall be inserted after the words "suitable repair shops ....".
                                 
                              2. A paragraph (b) shall be added to Article (13) as follows:

                                (b) For the damaged motor vehicle, insured against loss and damage at an insurance company with the condition of repair within the Agency, the repair shall be carried out within the Agency's repair shops pursuant to this condition. The insurance company insuring the loss and damage has the right of recourse against the Third Party liability insurance company in accordance with the following reimbursements basis:

                                1) The reimbursement for the motor vehicle that has passed more than one year from its first registration or its use and until the end of the second year shall be after deduction of 15% of the value of the final repair bill.

                                2) The reimbursement for the motor vehicle that has passed more than two years from its first registration or its use and until the end of the third year shall be after deduction of 30% of the value of the final repair bill.

                                3) In case more than three years have lapsed since the first registration or use of the motor vehicle, the company shall abide by repairing the damaged vehicle at suitable repair shops for the type and year of manufacture of the vehicle. The damaged parts shall be replaced with original parts of the same standard, provided that, if the agreement between the Loss and Damage Insurance Company and the insured has the condition that "repair shall be within the agency", this condition shall remain effective.

                                4) The existing rights between companies prior to the implementation of this regulation shall be observed.

                                3. A clause (fourth) shall be added to the provisions of paragraph (e) of Chapter Two "Obligations of the Insurance Company" as follows:

                                "Fourth: In case of the entitlement to the loss of benefit allowance (substitute motor vehicle) and the Affected Third Party has insurance against loss and damage and Third Party Liability , he shall be entitled, for the purpose of obtaining the loss of benefit allowance (substitute motor vehicle) to claim directly to his company, which has the right of recourse for same amount paid against the insurance company of the insured ,who caused the accident and has insurance against Third Party Liability"

                              Article (2)

                              Amendments of some provisions of Chapter One "General Conditions of the Unified Motor Vehicle Insurance Policy against Loss and Damage to read as follows:

                              1. To delete paragraph (b) of Article (8) and replace it with the following text: "The Insured shall be liable to pay the dues arising on the vehicle before receiving the compensation and to submit the required papers and power of attorney and attend before the competent departments, if necessary in order to transfer the ownership of the motor vehicle to the company. Whereas, in case there is mortgage, the company shall undertake without delay the communication with the competent entity (the owners of mortgages) to obtain a non-objection letter to transfer the ownership of the salvage of the vehicle to the company.

                              2. Two new paragraphs (13) and (14) shall be added as follows:

                              (13) In case of the entitlement to the loss of benefit allowance (substitute motor vehicle) and the Affected Third Party has insurance against loss and damage and Third Party Liability , he shall be entitled, for the purpose of obtaining the loss of benefit allowance (substitute motor vehicle) to claim directly against his company ,which has the right to claim the for same amount paid to the insurance company of the insured ,who caused the accident and has insurance against Third Party Liability in accordance with the rules specified in the Third Party Liability policy"

                              (14) If the fixed and irreplaceable parts of the motor vehicle such as chassis or pillars are damaged and need cutting, tightening or welding as a result of the accident, the motor vehicle shall be considered total loss and the Company shall be obliged to pay the compensation according to the value specified in the policy between the Company and the insured"


                              Article (3)

                              This decision shall take effect as of 01/01/2018 and shall be published in the Official Gazette.

                            • Consumer Protection Standards

                              C 8/2020 STA Effective from 25/12/2020
                              • Insurance Authority Board of Directors’ Decision No. (40) of 2019 Concerning the Amendment of Certain Provisions of the Insurance Authority Board Decision No. (3) of 2010 On the Instructions Concerning the Code of Conduct and Ethics

                                Insurance Authority Board of Directors’ Decision No. (40) of 2019 Concerning the Amendment of Certain Provisions of the Insurance Authority Board Decision No. (3) of 2010 On the Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance companies operating in the UAE

                                Chairman of the Board of Directors of the Insurance Authority,

                                Having perused:

                                - The Federal Law No. (6) of 2007 concerning the Establishment of the Insurance Authority and the Organization of Insurance Operations, the amendments thereof and its Executive regulations;
                                - The Federal Law No. (2) of 2015 On Commercial Companies;
                                - The Federal Law No. (5) of 1985 Concerning the Promulgation of the Civil Transactions Law;
                                - The Federal Law No. (18) of 1993 Concerning the Promulgation of the Commercial Transactions Law;
                                - The Insurance Authority Board Resolution No. (3) of 2010 On the Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance Companies Operating in the UAE;
                                - And, based on the proposal of the Director General of the Insurance Authority and the approval of the Insurance Authority Board of Directors,

                                Has decided:

                                Article (1)

                                1. The phrase "and Insurance-Related Professions" shall be added to the title of the Board of Directors of the Insurance Authority Resolution No. (3) of 2010 on the Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance Companies Operating in the UAE so that the title shall read as follows:

                                  “The Insurance Authority Board Resolution No. (3) of 2010 On the Instructions Concerning the Code of Conduct and Ethics to be Observed by Insurance Companies and Insurance-Related Professions Operating in the UAE”

                                Article (2)

                                The following shall be added to Article No. (1) “Definitions”:

                                1. The phrase " including insurance-related professions where necessary” shall be added to the definition of “Company”, so that the definition of a Company shall read as follows: -
                                  Company: An insurance company incorporated in the State and a foreign insurance company licensed to operate in the State either through a branch or an insurance agent, including insurance-related professions where necessary.
                                  2. The definition of Insurance-Related Professions shall be added as follows:
                                  Insurance-Related Professions: Any person licensed by the Authority to practice any of the activities of Insurance Agent, Actuary, Insurance Broker, Surveyor & Loss Adjuster, Insurance Consultant or any other insurance-related profession that the Board decides to regulate.

                                Article (3)

                                The text of Article No. (2) “Scope of Application” shall be replaced by the following:

                                1. The provisions of these Instructions shall apply to all companies registered by the Insurance Authority and operating in the State and which are marketing their products and services, directly or indirectly, thought an insurance agent or insurance broker.
                                2. The provisions of these Instructions shall apply to insurance-related professions licensed and registered by the Insurance Authority, to the extent appropriate to the nature of the business of each profession.

                                Article (4)

                                Insurance-related professionals shall rectify their status in accordance with the provisions of this Decision within one month as from the date of its publication.

                                Article (5)

                                This Decision shall be published in the Official Gazette and shall come into force as from the day following the date of publication.

                                • Introduction

                                  These Regulatory Standards form part of the Consumer Protection Regulation (Circular No. 8 – 2020). All Licensed Financial Institutions must comply with these Standards when the Licensed Financial Institution carries out licensed financial activities. These Standards are mandatory and enforceable in the same manner as the Regulation.

                                  The Standards follow the principles-based structure of the Regulation, with each Article corresponding to the specific Article in the Regulation.

                                  This document must be read in conjunction with other regulations, including Shari’ah compliance regulations and the Standard Re. Shari’ah Governance For Islamic Financial Institutions.

                                • Article 1: Definitions

                                  The Definitions set out in Article 1 of the Consumer Protection Regulation (Circular No. 8 – 2020) apply to these Standards

                                • Article 2: Disclosure and Transparency

                                  • 2.1 Disclosure

                                    • 2.1.1 General Provisions for all Financial Products and/or Services

                                      General Requirements

                                      1. 2.1.1.1Licensed Financial Institutions must apply the Disclosure and Transparency requirements to all Financial Products and/or Services provided through all communication channels of service including branches, telephone banking, mobile applications, internet banking and all other channels.
                                      2. 2.1.1.2All disclosure information must be available in Arabic and English. Refer to Clause 2.3.1.3.
                                      3. 2.1.1.3Disclosure information must be easily available in all branches and all other communication and distribution channels.
                                      4. 2.1.1.4Information must be available in a format accessible and in a manner suitable for People of Determination or a representative nominated by such a Consumer. The Licensed Financial Institutions must assess and provide the information in the format best suitable for the Consumer.
                                      5. 2.1.1.5Information must be in clear and plain language and presented using user-friendly sized font, color and spacing. It should incorporate appropriate visual graphics and provide examples using text boxes and tables to help educate Consumers about key financial concepts.
                                      6. 2.1.1.6Licensed Financial Institutions must use official documents for all transactions when dealing with its Consumers. In particular, the name of the Licensed Financial Institution and a regulatory disclosure statement stating that the Licensed Financial Institution is licensed by the Central Bank must be accurately displayed in the documents. Documents must not use any other term that might indicate any out of scope unlicensed activities.
                                      7. 2.1.1.7Licensed Financial Institutions must clearly and prominently display the full legal/trade name of the Licensed Financial Institution on the main signage of the licensed premises, websites, letterheads, business cards, transaction receipts and all other marketing/branding materials.
                                      8. 2.1.1.8When Licensed Financial Institutions provide Advice of any kind, they must not make statements that are untrue, misleading or omit information that is necessary to understand the nature, costs, risks, terms and conditions of the Financial Products and/or Services.
                                      9. 2.1.1.9When Specific Advice is provided to a Consumer by the Licensed Financial Institution, the Specific Advice must be documented. If a Financial Product and/or Service is sold, a copy of the Specific Advice must be provided to the Consumer.
                                      10. 2.1.1.10Licensed Financial Institutions must continuously monitor and, improve the effectiveness of its disclosures with techniques such as Complaint analysis, Consumer satisfaction surveys, mystery shopping and Call- backs to Consumers.
                                      11. 2.1.1.11Licensed Financial Institutions must inform Consumers about account services that are included and the account services that are optional and if there is an additional fee.
                                      12. 2.1.1.12Licensed Financial Institutions must inform Consumers about the terms and conditions related to termination, expiry date, unclaimed balances and Fees for all payment instruments that it offers.
                                      13. 2.1.1.13Where Licensed Financial Institutions are offering any form of rebate, gift or other incentive on their Financial Products and/or Services, Licensed Financial Institutions must clearly disclose separately the terms and conditions associated with that rebate, gift or incentive and highlight any conditions and/or restrictions. Easy and direct access must be provided to obtain the specific terms and conditions related to the rebate, gift or incentive.
                                      14. 2.1.1.14Licensed Financial Institutions must include statements in terms and conditions, financial product disclosure documents, Key Facts Statements and application forms that will warn Consumers of consequences in the event of a Consumer’s failure to meet the Licensed Financial Institution’s terms and conditions before and during the Consumer’s relationships with Licensed Financial Institutions.
                                      15. 2.1.1.15Licensed Financial Institutions must ensure that all warning statements required by these Standards are prominently and clearly displayed in the disclosure document, i.e. they must be in a highlight box and in bold type. Warning statements, as specified in this Standard, are to be provided during all communications with the Consumer regarding a product or service. Additional warning statements must be provided regarding potential negative financial implication on the Consumer.
                                      16. 2.1.1.16Information on Base Lending / base financing rates or other reference rates including the effective dates of these rates must be made available on the Licensed Financial Institution’s website and mobile application and be displayed at the Licensed Financial Institution’s branch. The posting of the rates must be updated on a regular basis with each change in rates.
                                      17. 2.1.1.17Where a contract with a Consumer has a provision for annual automatic renewal of the contract, the Licensed Financial Institution must send a written notice to the Consumer at least 30 calendar days in advance from the date of renewal. The notice must also inform the Consumer how and when the automatic renewal can be cancelled.
                                      18. 2.1.1.18Licensed Financial Institution’s schedule for Fees, including Third Party Fees, must be clearly on display in all branches and on the Licensed Financial Institution’s website.
                                      19. 2.1.1.19Licensed Financial Institutions must provide Consumers with a Key Facts Statement prior to providing a Financial Product and/or Service or on the Consumer’s request.
                                      20. 2.1.1.20The Key Facts Statement should be the first document provided to the Consumer during the sales process and must be individually and clearly presented. Prior to signing the contract, the Consumer must sign to acknowledge receipt of a Key Facts Statement for the product or service being purchased.
                                      21. 2.1.1.21Key Facts Statements specific for a Financial Product and/or Service must be offered to Consumers for any Financial Product and/or Service that is being distributed, advertised, marketed, sold or otherwise provided by Licensed Financial Institutions (including insurance/takaful and structured products).
                                      22. 2.1.1.22The Key Facts Statement must:
                                        1. a.Be a stand-alone document;
                                        2. b.Be concise (preferably within 2 pages) and use plain language which is easy to understand;
                                        3. c.Provide an accurate description of each Financial Product and/or Service;
                                        4. d.Specify whether the Licensed Financial Institution reserves the right to change terms and conditions at a later date;
                                        5. e.Specify the notice period to be provided before implementing any future and Permissible change in terms and conditions;
                                        6. f.Specify, as applicable, related interest/profit rates, Fees, key terms & conditions, key obligations, limitations and key requirements of the financial product in a legible font size;
                                        7. g.Use “Warning” boxes to highlight key risks related to the purchase of Financial Products and/or Services. This should include disclosure of any assumptions made that may affect the performance of the Financial Product and/or Service, any risks that would create the potential for monetary losses or the lack of any potential gains/profit and any limitations on potential monetary gains; and
                                        8. h.For loan/financing products, Licensed Financial Institutions must disclose to Consumers the expected Annual interest/profit rate, any possible fees on the Credit Product and the standard formula of computing interest/profit amount as may be prescribed by the Central Bank. In addition, Licensed Financial Institutions must disclose in a prominent manner in the Key Facts Statement whether the product has a fixed, variable or a combination of fixed and variable interest/profit rate basis.

                                        Section 2.1.2, 2.1.3, 2.1.4 and 2.1.5 of this Article apply to Key Facts Statements.

                                      23. 2.1.1.23Licensed Financial Institutions must provide appropriate information to the potential and existing Consumer at all stages of the relationship. All information, disclosures and other communications by Licensed Financial Institutions to Consumers must be accurate and comprehensive at each of the following 3 stages of the Consumer relationship:
                                        1. a.Prior to providing a Financial Product and/or Service to a Consumer: The information gathering stage before the point of sale or at the application stage. Disclosure should be made so that the Consumer has an understanding of the financial product’s features, pricing, benefits, risks, Fees and Consumer’s rights and obligations before making a decision;
                                        2. b.At point of entering the contract: The stage in which the Consumer is being provided with an offer and is at the stage of accepting the Financial Product and/or Service offer made by the Licensed Financial Institution; and
                                        3. c.During the term of the contract: The stage after the acceptance of the contract and until the end of the contract.
                                      24. 2.1.1.24Disclosures relating to the privacy and use of personal information must be made to the Consumer in accordance with Article 6: Protection of Consumer Data and Assets of these Standards.

                                      Prior to Providing a Financial Product and/or Service

                                      1. 2.1.1.25Licensed Financial Institutions must provide inquiring Consumers with a copy of the terms and conditions of the Financial Product and/or Service that pertains to the inquiry. Licensed Financial Institutions must answer in Writing, any queries of Consumers relating to terms and conditions.

                                      At Point of Entering the Contract

                                      1. 2.1.1.26In case of rejection of any Consumer’s application for a Financial Product and/or Service by the Licensed Financial Institution, the Licensed Financial Institution must disclose the reason for rejection to the applicant except where the reason of rejection is related to Financial Crime Compliance risks or as may be prohibited by law.
                                      2. 2.1.1.27Licensed Financial Institutions must provide Consumers with a copy of the contract to read and with appropriate time to review before signing it.
                                      3. 2.1.1.28Licensed Financial Institutions must provide Consumers with all final documents involved in a transaction including any document that contains the signature or indication of approval of the Consumer. This applies to all documents including but not limited to the offer, contract, terms and conditions, security and guarantee. Documents must be provided free of charge regardless of how they are provided.
                                      4. 2.1.1.29Where there is a guarantor or more than one Person signing a contract for a Financial Product and/or Service, each Person must be given copies of the documents free of charge.
                                      5. 2.1.1.30Consumers must be offered a choice of which document format they wish to receive the initial copies of the documents.
                                      6. 2.1.1.31Where a Cooling-off Period is required to be provided by these Standards or prescribed by the Central Bank, Consumers must be informed of their right to a Cooling-off-Period at time of signing the contract for the purchase of a Financial Product or Service. Where a longer Cooling-off period is specified by way of other legal or regulatory requirements, the longer period must be applied.
                                      7. 2.1.1.32Consumers may waive the Central Bank’s required Cooling-off Period of complete 5 business days by signing a written waiver provided by the Licensed Financial Institution containing a warning about agreeing to an immediate commitment.
                                      8. 2.1.1.33The underlying Shari’ah contracts for Shari’ah-compliant financial products should include a clause granting the Consumer Cooling-off option (Khiyar Al-Shart) for a period of 5 complete business days in accordance with the provisions contained in the Civil Transactions Law and the relevant Shari’ah standards.
                                      9. 2.1.1.34Where a Licensed Financial Institution is required to carry out an assessment of a Consumer regarding the suitability, affordability and/or appropriateness of a Financial Product and/or Service, a copy of the summary of the results of the assessment must be provided to the Consumer without charge except as may be prohibited by law.
                                      10. 2.1.1.35Licensed Financial Institutions must disclose in a prominent manner to a Consumer whether the interest/profit rate charged on a Credit Product is variable or fixed or a combination of the variable and fixed rate, where applicable, and the method of calculation of the rate.
                                      11. 2.1.1.36Where a Base Lending / base financing Rate forms part of the final interest/profit rate offered to a Consumer, Licensed Financial Institutions must disclose to the Consumer the separate components of the rate i.e. Base Lending / base financing Rate + X basis points. Licensed Financial Institutions must explain and provide a clear example of the concept of the Base Lending / base financing Rate and the potential frequency at which the rate will be revised as well as where the rates will be publicly posted.
                                      12. 2.1.1.37Licensed Financial Institutions must disclose all Fees that are applicable to Consumers and provide Consumers with a copy of the Fees specific to the Financial Product and/or Service, at the time of signing a contract or upon a Consumer’s request at any time. Licensed Financial Institutions must explain the amount and calculation methodology of all applicable Fees. The Licensed Financial Institution must disclose to the Consumer that Third Party Fees may apply and disclose the amount. If the amount is not known, the Licensed Financial Institution should endeavor to provide an estimate or range.
                                      13. 2.1.1.38Licensed Financial Institutions must disclose whether the Fees to be charged to the Consumer are one time or recurring. In cases where Fees are recurring, Licensed Financial Institutions must disclose the frequency of recurrence and the time period over which the amount will continue to be charged to the Consumer.
                                      14. 2.1.1.39Licensed Financial Institutions must advise Consumers on what they can do to protect their accounts from fraud and misuse and must ensure that Consumers are fully aware of the consequences of granting an unauthorized Person and/or Third Parties access to their bank accounts and any other Financial Product and/or Service. In particular, Licensed Financial Institutions must inform Consumers of the consequences of sharing their personal information, personal identification number (PIN) and other security information.
                                      15. 2.1.1.40Licensed Financial Institutions must inform Consumers of the process and contact method to follow in reporting a lost or a stolen card and in case of Unauthorized Transactions on their accounts.
                                      16. 2.1.1.41Licensed Financial Institutions must inform Consumers that they are responsible for:
                                        1. a.Keeping their banking correspondence secure for future reference;
                                        2. b.Verifying the accuracy of any account / transaction statements sent to them; and
                                        3. c.Confirming to the Licensed Financial Institution, their contact information and identification when changes occur or as requested. Requests for subsequent confirmation of information from a Licensed Financial Institution must be executed in a secure manner.
                                      17. 2.1.1.42Islamic Financial Institutions (IFIs) which offer Shari’ah compliant products must disclose the Shari’ah basis of the Financial Product and/or Service and the approval from the Internal Shari’ah Supervision Committee. The Shari’ah basis should also be included in the Key Facts Statement.

                                      During the Term of the Contract

                                      1. 2.1.1.43During the term of the contract, Licensed Financial Institutions must provide Consumers with a regular detailed statement including all transactions that occurred in an account for a Financial Product and/or Service:
                                        1. a.The statement must include key information that fully informs the Consumer as to the amount, type and status of the transactions in the account(s); and
                                        2. b.No Fees can be charged for original statements provided to the Consumer.

                                      Sections 2.1.2, 2.1.3, 2.1.4 and 2.1.5 of this Article contain further details on statements to be shared during the term of the contract.

                                      1. 2.1.1.44Licensed Financial Institutions must inform Consumers of all transactions on their accounts as they occur, by sending a free SMS to a mobile phone or, if requested, to the Consumer’s email address. The details of such transactions must be available on the Consumer’s mobile or internet banking platforms.
                                      2. 2.1.1.45In case of digital transactions, the Licensed Financial Institution must communicate specific information to the Consumer upon receiving transaction requests and upon execution of the transaction as prescribed by the Central Bank.
                                      3. 2.1.1.46Licensed Financial Institution cannot change terms and conditions of a contract unless this has been clearly, separately, and prominently disclosed and agreed by way of expressed consent by the Consumer.
                                      4. 2.1.1.47If the Licensed Financial Institution decides to make Permissible changes to the contract, the Licensed Financial Institution must give Consumers a minimum of 60 calendar days’ notice before changes to the terms and conditions of a Financial Product and/or Service, including changes to Fees, can take effect, with exception provided by Clause 2.1.1.36 and 2.1.3.21 regarding lending Rates.
                                      5. 2.1.1.48In the notification to Consumers of Permissible changes to the terms and conditions of a contract, the Licensed Financial Institutions must provide a plain language summary of the key changes along with a copy of the revised Terms and Conditions.
                                      6. 2.1.1.49Where there is a Permissible change in the methodology to calculate rates and Fees, the Licensed Financial Institution must disclose the revised methodology to the Consumer by way of written notice that must be provided 60 calendar days in advance of the change taking effect.
                                      7. 2.1.1.50When a Consumer or the Licensed Financial Institution transfers or closes a Consumer’s account except for credit cards and investment accounts, the Licensed Financial Institution must issue to the Consumer a final closing account statement, identified as such, within 7 complete business days of the Consumer requesting the transfer or closure of the account.
                                      8. 2.1.1.51When intending to close, merge or move a branch of a Licensed Financial Institution, the Licensed Financial Institution must:
                                        1. a.Notify the Central Bank immediately in the manner as may be prescribed by the Central Bank;
                                        2. b.Provide at least 60 calendar days’ written notice to affected Consumers to enable them to make alternative arrangements;
                                        3. c.Post a notice that is clearly visible to Consumers in the closing branch and stating the date of closing of the branch;
                                        4. d.Disclose how continuity of service will be provided to the Consumer; and
                                        5. e.Disclose this information on their website.
                                    • 2.1.2 General Provisions for Deposit Products

                                      General Requirements

                                      1. 2.1.2.1Licensed Financial Institutions that offer Deposit Products must comply with the requirements in Section 2.1.1 of this Article as applicable, in addition to complying with the requirements of this Section.

                                      Prior to Providing a Deposit Product and/or Service

                                      1. 2.1.2.2Where a Licensed Financial Institutions offers low cost savings account and / or current account, they must be transparent and inform the Consumer of the availability of a low cost savings account and / or current account and disclose the key features of such accounts.
                                      2. 2.1.2.3Licensed Financial Institutions must disclose if the account type requires an initial deposit to open the account and a minimum balance to be maintained in that type of account. The disclosure must warn the Consumer of the consequence of not maintaining a minimum (daily / monthly) balance in the account including the imposition of any Fee.
                                      3. 2.1.2.4Licensed Financial Institutions must disclose the expected Annual Interest/Profit Rate that will be paid on the deposit, the frequency of interest/profit payments and any circumstances that might affect the amount or frequency of the interest/profit payments.
                                      4. 2.1.2.5Licensed Financial Institutions must disclose all Fees on both standard and additional/optional services applicable to the deposit account to Consumers.

                                      At Point of Entering the Contract

                                      1. 2.1.2.6Licensed Financial Institutions must inform Consumers of the implication of redeeming a fixed deposit before maturity. Licensed Financial Institutions must disclose any penalty applied to the interest/profit rate or Permissible Fees applicable to early closure of deposit account within a specified time frame.
                                      2. 2.1.2.7For accounts with a cheque book facility, Licensed Financial Institutions must inform Consumers in Writing of:
                                        1. a.Any limit on the number of cheques permitted in their cheque book; and
                                        2. b.The repercussions of returned cheques including fees, closure of the current account and / or a negative report to the Credit Information Agency.
                                      3. 2.1.2.8Licensed Financial Institutions must inform Consumers of the communications channel that Consumers can use to obtain periodic transaction account statements on their deposit accounts.

                                      During the Term of the Contract

                                      1. 2.1.2.9Licensed Financial Institutions must, at minimum on a monthly basis, provide the Consumer with a free transaction account statement (electronic or paper) which must include, where applicable:
                                        1. a.Account Number/ID;
                                        2. b.Name(s) on the Account;
                                        3. c.The time period covered by the statement;
                                        4. d.The opening balance;
                                        5. e.Each deposit;
                                        6. f.Each withdrawal;
                                        7. g.Breakdown of any interest/profit credited;
                                        8. h.Breakdown of all Fees by amount and type;
                                        9. i.The end of statement period closing balance;
                                        10. j.Term dates on fixed deposit