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Update on the WTO TPR Report 2006

This report, prepared for the voluntary update of the rst Trade Policy Review of the United Arab Emirates, has been drawn up by the Ministry of Foreign Trade responsibility.

Department of Foreign Trade Policies

The Ministry of Foreign Trade is pleased to issue this update on the status of the UAEs foreign trade policy. The release of this report stems from the vision, goal, and aspirations of the governments judicious strategy that aims at attaining the highest levels of comprehensive and sustainable economic development. It also embodies the keenness of this government strategy to instill and strengthen the foundations and yardsticks of transparency as a strong base for its domestic and foreign policies. The report aims to analyze the countrys latest development in the economic climate of trade. It covers the period that followed the first UAE Trade Policy Review report issued by the WTO Secretariat in 2006, until June 2010. The report is a voluntary attempt by the Ministry of Foreign Trade and a product of constructive and fruitful cooperation with all of the federal, local government authorities in addition to the private sector. It is considered as the beginning of preparations for the second review of the trade policy of the United Arab Emirates, which will take place in 2012. It is considered as the first initiative taken by a country in the World Trade Organization. It is also considered as a precedent, since no WTO member state has published a voluntary report to demonstrate its trade policy outside of the framework of the Trade Policy Review mechanism in the WTO. The report contains four sections, the first of which tackles the status of the countrys economic environment, highlighting the main features and properties of the national economy and its foreign partnerships and investments, followed by a look into the prospects and developments of the economy. The second section specializes in showcasing the features of the trade and investment climate through shedding light on the institutional framework and defining the stages of the process of formulating and executing the trade policy, the goals of this policy, and the trade agreements that the UAE has joined. The third section is concerned with clarifying the practices and procedures that are related to the countrys trade policy, indicating the practices that have a direct impact on imports, exports as well as production and trade. The reports fourth section details the countrys trade policy by economic sector, highlighting the features, tools, and trade policy frameworks of the agricultural, mining, energy, water, manufacturing and services sectors. The UAEs trade policy, rightly remains to be one of the pillars of growth and development that have enabled the country to compete with major countries in economic performance and progress. It adopted, developed and implemented modern and effective plans and programs to diversify its exports structure and international trade partners, and has encouraged its high value-added industrial sector to increase its export abilities. These are the ingredients that led to the expansion and diversification of foreign markets receiving country exports, and increasing the levels of commercial exchange with those markets. Therefore, it come as no surprise when the World Trade Organization commends in the first Review of the Trade Policy of the UAE the foundations of this policy, highlighting the positive developments and improvements of its various tools and its impact on economic growth. The WTO goes on further to say, in what is considered as a global testament that affirms the countrys outstanding trade success: The UAEs generally liberal and increasingly diversified economy, the importance of trade for its economic performance, its relatively low border barriers to trade, and its growing economic power make it an increasingly important supporter of the multilateral trading system. The statements, figures, and statistics of this report, emphasize the UAEs continued pursuance and implementation of a trade policy framework that is in line with its regional and international obligations. Concurrently , the foundations of this policy go hand in hand with the governments strategic priorities to build a diverse and sustainable economy and attain an exceptional global status.

Minister of Foreign Trade Lubna bint Khalid Al Qasimi

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CONTENTS Page I. ECONOMIC ENVIRONMENT (1) (2) (3) (4) II. MAJOR FEATURES OF THE ECONOMY RECENT ECONOMIC DEVELOPMENTS TRADE PERFORMANCE AND INVESTMENT OUTLOOK 1 1 4 7 11 12 12 14 16 19 19 21 23 24 24 30 30 30 30 33 34 35 38 43 43 46 50 50 50 50 50 50 51 52


(5) III.

TRADE POLICIES AND PRACTICES BY MEASURE (1) (2) INTRODUCTION MEASURES DIRECTLY AFFECTING IMPORTS (i) Registration, and exclusive distribution rights (ii) Customs procedures (iii) Rules of origin (iv) Tariffs, other duties, and taxes (v) Import prohibitions, licensing, and controls (vi) Contingency trade remedies (vii) Standards and other technical requirements (viii) Government procurement (ix) Local-content requirements (x) Other measures MEASURES DIRECTLY AFFECTING EXPORTS (i) Registration and documentation (ii) Export duties and taxes (iii) Export prohibitions and restrictions (iv) Export subsidies, finance, insurance, and assistance (v) Free zones


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Page (4) MEASURES AFFECTING PRODUCTION AND TRADE (i) Incentives (ii) State-owned enterprises, state trading, and privatization (iii) Competition policy and price controls (iv) Intellectual property rights 53 53 54 59 59 64 64 64 64 69 72 74 74 75 78 81 81 82 83 87 87 88 99 102 105 110 115 117


TRADE POLICIES BY SECTOR (1) (2) INTRODUCTION AGRICULTURE AND RELATED ACTIVITIES (i) Main features (ii) Main policy instruments (iii) Developments regarding selected products MINING, ENERGY, AND WATER (i) Overview (ii) Petroleum, and gas (iii) Electricity, water, and utilities MANUFACTURING (i) Main features (ii) Policy framework (iii) Policies in selected industries SERVICES (i) Construction (ii) Transport (iii) Telecommunications (iv) Tourism services (v) Financial services (vi) Trade in business and professional services





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III. III.1 IV. IV.1 IV.2

TRADE POLICIES AND PRACTICES BY MEASURE Tariff escalation by ISIC 2-digit industry, 2005 TRADE POLICIES BY SECTOR Agri-food trade, by HS section, 2009 Structure of Abu Dhabi Electricity & Water Sector 68 80 36

TABLES I. I.1 I.2 I.3 II. II.1 II.2 II.3.1 II.3.2 III. III.1 III.2 III.3 III.4 IV. IV.1.1 IV.1.2 IV.2 IV.3 IV.4 IV.5 IV.6 IV.7 IV.8 IV.9 IV.10 IV.11 ECONOMIC ENVIRONMENT United Arab Emirates at a glance, 1995 , 2008 and 2009 Main economic indicators, 2004 - 2010 Balance of payments, 2005-2010 TRADE AND INVESTMENT REGIMES Main federal trade-related laws in the UAE UAE's selected notifications to the WTO, November 2010 Bilateral investment treaties Avoidance of Double Taxation Agreements TRADE POLICIES AND PRACTICES BY MEASURES Commercial agencies by type of activity 2007 Structure of the MFN tariff, 2005 Prohibited products, 2010 Projects implemented by the UAE Offsets Group, 2010 TRADE POLICIES BY SECTOR Main agricultural products, 2006-2009 United Arab Emirates rank in the world, by commodity in 2007 Abu Dhabi development expenditures, 2000-2008 Domestic agricultural support measures, 2000 and 2001 Reserves, production, and exports of oil and natural gas, 1990-2008 Activities of the Abu Dhabi National Oil Company, 2009 Electricity and water charges, January 2007 Trade in manufactured products, 2008 & 2009 Telecommunications indicators, 2004-08 Hotel indicators, 1995, 2000, and 2008 Insurance premiums and claims paid, 2007 Selected monetary and banking indicators, , 2005-08 65 67 70 71 74 75 80 81 100 103 106 108 31 35 38 48 15 20 28 29 1 5 9

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APPENDIX TABLES Page I. AI.1 AI.2 III. AIII.1 ECONOMIC ENVIRONMENT Destination of exports (including re-exports), 2004-08 Origin of imports, 2004-08 TRADE POLICIES AND PRACTICES BY MEASURES Applied MFN tariff averages by HS2, 2005 119 117 118

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I. (1)


1. The United Arab Emirates (UAE) is a federation of seven emirates located in the Arabian Gulf. Abu Dhabi, Dubai, and Sharjah are the three largest1; Abu Dhabi City is the federal capital. The UAE shares a border with Saudi Arabia and Oman. It has a land mass of 83,600 square kilometres2, and a total population in 2009 estimated at 8.19 million Table I.1. The urban population accounts for 75% of inhabitants as four fifths of the territory is desert. Majority of the UAE's population is foreign. The UAE has the world's seventh largest proven reserves of crude oil (7.3% of total world reserves), and seventh largest reserves of natural gas (3.2% of the world total).3 The authorities estimate that these reserves will last more than 100 years at current production rates.
Table I.1 United Arab Emirates at a glance, 1995 , 2008 and 2009 1995 Population (million) GDP total (billion, at current prices) In UAE dirhams In U.S. dollars GDP per capita (US1000$) Share of GDP at current prices (per cent) Agriculture, livestock and fishery Mining Manufacturing Electricity, water, and gas Construction Trade Restaurants and Hotels Transport, storage and communications Real estate Social and personal services Financial services Government services 145.3 42.7 17.720 2.9 30.9 10.4 1.5 8.7 11.7 6.7 10.0 5.6 10.6 934.3 254.4 53.4 1.6 33.8 15.1 1.5 9.7 8.6 1.6 6.5 7.7 1.7 5.3 7.5 914.3 249.0 ... 1.7 29.2 16.2 1.6 10.7 9.0 1.8 7.1 8.2 1.9 5.8 8.0 2.40 2008 8.07 2009 a 8.20

a Initial Source: National Bureau of Statistics, United Arab Emirates. Analytical Report on Economic and Social Dimensions in the United Arab Emirates, 2009; and IMF Staff Reports, various issues.

2. Among the Emirates, Abu Dhabi accounts for more than half of the country's total GDP, close to 40% of the population, and over 90% of crude oil and gas production. Dubai is the second largest emirate in terms of economic size, and contributes 32.3% of the country's total GDP. In 2006, it welcomed close to 7.6 million tourists in 2009. 37 million passengers used its all airport in UAE 2006 It has become the region's centre for trade, essentially by developing its location as a leading transhipment and re-export centre, based on a long-standing trading history and a generally probusiness stance. The other emirates rely on a mix of trade and light manufacturing, and depend on financial support from the Federal Government and the two largest emirates. The highly decentralized policy-making process appears to induce intense competition among the large emirates (in particular) in terms of economic achievement, and may explain that infrastructure, such as ports, airports, and free zones, tends to be replicated across the country. 3. The federal economy depends 28.9% of its GDP on petroleum and gas mining in 2009 (down from 74% in 1980), a relatively low share compared with other Gulf countries. The services sector
1 2

The others are Ajman, Fujairah, Ra's al Khaimah, and Umm al-Qaiwain. National Bureau of Statistics 2009 3 OPEC (2009).

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contributes about 35.7% in 2008 to GDP, led by external trade the country is an important transhipment and re-export centre and by public administration services, wholesale and retail trade, real estate and construction; this share has not expanded significantly since 1995. Nevertheless, these main subsectors have grown significantly in nominal value terms, as the price of oil increased substantially from its 1995 level of US$20/barrel. The manufacturing sector is large and dynamic, largely based on activities in free zones. Agriculture contributes 1.6% to the GDP in 2008; this share is high given the quasi-desert nature of the territory, and is achieved thanks to important state support since the early 1980s.4 4. In 2008 total GDP of the UAE stood at around US$254.4 billion (Table I.1). Its growth over the last thirty years has allowed the country to achieve one of the world's highest per capita incomes, at close to US$53400 by 2008. In 2009, the UAE ranked 35th out of 179 countries in terms of the UNDP Human Development Indicators.5 This performance was made possible partly by the expansion of the hydrocarbon subsector, but mainly by a large and sustained influx of foreign labour that allowed the non-oil sector to develop rapidly and competitively.6 The growth of labour and capital, rather than total factor productivity, accounts for most non-oil output expansion over the 1981-2000 period.7 In turn, this expansion was possible because of the UAE's open foreign labour policy, which has enabled the private sector to recruit expatriate workers at competitive wages. 5. In recent years, unemployment among UAE nationals has increased rapidly to 12.9% according to a recent study. It concerns mostly Emiratis because foreigners do not generally have access to unemployment status and benefits, and therefore are not recorded. Moreover, close to half of the Emirati population of Emirati nationals is under 15 years old, and a large number of nationals is likely to enter the labour force in the near future. To create employment opportunities for UAE nationals, "emiratization quotas" and other measures have been put in place at federal level (Box I.1). In February 11th 2006 a new cabinet was formed and H.H. Sheikh Mohammed bin Rashid Al Maktoum was appointed as a Vice President, Prime Minister of UAE.8 As a result, reducing unemployment becomes a strategic priority for newly formed cabinet. The Prime Minister unveiled the second round of federal government strategy from 2011 till 2013. The strategy doctrine strives to ensure that all Government work is conducted according to a set of guiding principles that puts citizens first and promotes an accountable, lean, innovative, and forward-looking Government9. Moreover, in February 2010 the UAE Cabinet has approved a Historic National Charter that aims to transform the UAE into one of the best countries in the world by 2021. The year 2021 will correspond with the golden jubilee anniversary of the UAE10.The UAE National Historic Charter called for continued focus on the increased involvement of Emiratis in the private sector11. The economic vision of the National Historic Charter envisages development of knowledge-based economy that will be diverse and flexible led by skilled professional Emiratis.
The National Bureau of Statistics of the United Arab Emirates has been established by the Federal Law No. 9 of 2009, to satisfy the needs of the national development of the country and to organize the work of the national statistical system. The National Bureau of Statistics (NBS) has a legal character, an independent budget and full capacity to conduct its affairs and those legal transactions which are necessary for performing its duties. The NBS is responsible for preparing the national statistical system, and will report directly to the Cabinet. The Bureau shall be considered the sole official statistical source for the State and the source of its official statistical data. ( 5 UNDP (2009). 6 This population growth rate has remained among the world's highest in recent years (5.6%), due to the wide gap between birth and mortality rates, high fertility rates, and the persistent inflow of foreign labour. 7 IMF (2003). 8 Source : The Official Web Site of the Prime Minister of the UAE 9 Source : The Official Web Site of the Prime Minister of the UAE 10 Source: Khaleej Times: UAE Unveils 2021 National Historic Charter 11 Source: EIU: EIU Country Report

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Box I.1: UAE "emiratization" policy The emiratization policy was introduced in 1998 by the National Human Resource Development and Employment Authority (Tanmia). This policy aims to increase the number of nationals employed in private sector activities. The targeted sectors were selected based on two principal criteria: the economic health of the industry and its importance to the country; and the availability of skilled jobs where good working conditions exist for nationals. The banking sector in the United Arab Emirates is of major interest to the country in terms of its contribution to the Gross Domestic Product, and its role in enhancing the effort to diversify the economic base, and to facilitate integration with the rest of the world. Given the strategic and developmental role the sector plays, which makes it an important employer of Nationals, the Council of Ministers issued its resolution # 10 for 1998 obligating all banking operating in the UAE to increase their intake of National employees at the rate of 4% per year. And in 2004, the Cabinet issued its resolution # 259/1 approving a set of measures for boosting Emiratization of jobs in the private sector. Pursuant to that Cabinet resolution, the Minister of Labour and Social Affairs issued a ministerial decree no 43 for 2005, authorizing Tanmia to follow up the progress of Emiratization in the banking sector. Based on that mandate, Tanmia, in cooperation with the Central Bank, is collecting and updating data on Emiratization in the banks operating in the UAE. The insurance sector in the United Arab Emirates is of major interest to the country in terms of its contribution to the Gross Domestic Product, and its role in enhancing economic diversification and supporting business activities. Given the strategic and developmental role the sector plays, which makes it an important employer of Nationals, the Council of Ministers issued its resolution # 202/2 for 2003 obligating all insurance firms operating in the UAE to raise their intake of National employees to 15% by the end of 2003, at the rate of 5% per year. And in 2005, the Cabinet issued its resolution # 42 entrusting Tanmia with the task of monitoring Emiratization of this sector. Based on that mandate, Tanmia, in cooperation with the Central Bank, is collecting and updating data on Emiratization in this sector. The trading sector in the United Arab Emirates is of major interest to the country in terms of its contribution to the local economy. Given the strategic role the sector plays, which makes it an important employer of Nationals, the Council of Ministers issued its resolution # 259/1 for 2004 obligating all trading firms employing 50 or more workers to raise their intake of National employees at the rate of 2% per year, starting from 2004. According to the authorities, Emiratization in this sector has encountered serious challenges and most trade companies have been unable to comply with the quota. In 2005 the Cabinet issued its resolution # 41 entrusting Tanmia with the task of monitoring Emiratization of this sector. In February 2005, the newspaper Gulf News reported that Tanmia was preparing a list of companies that did not meet the ratio requirement for the hiring of UAE nationals; it was announced that legal action would be taken against these companies. Tanmia also offers training programmes for nationals to ensure that they have adequate skills to be hired by the private sector. In addition, the authorities of certain emirates have also developed programmes to encourage entrepreneurship among nationals through the creation of small and medium-sized enterprises (SMEs). These programmes offer a simplified application process, low interest rates, and favourable repayment terms. Source: Tanmia.

6. The attractiveness of the UAE's free zones results partially from competition and investment restrictions that prevail in the rest of the economy. Although economic policy purports to be liberal and business-friendly throughout the UAE, important restrictions (through exclusive dealership arrangements, the general prohibition on foreign majority ownership of local companies and substantial state involvement in selected activities) limit market competition in general, and foreign competition in particular; these restrictions do not apply to the free zones (Chapters II(5) and III(3)(v)). On the export side, UAE companies that compete internationally are in most cases government-owned, but the government is encouraging privatisation and an overall transition to private sector participation in the economy. Airlines and civil aviation authority follow international

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operational principles and do not engage in or affect trade for WTO purposes; the DIFC is a regulator, not a supplier, of financial services. 7. The UAE dirham (Dh) was officially pegged to the Special Drawing Right (SDR) from November 1980 to December 2002, though, in practice, it was pegged to the U.S. dollar at a fixed parity12. Since then, in line with commitments agreed with other GCC countries (Chapter II(4)(ii)(a)), including toward the adoption of a common currency (planned for 2010 but will be delayed). However, the UAE has withdrawn from the monetary union in May 2009 together with Oman13 the UAE dirham has become officially pegged to the U.S. dollar. The mid-point between the official buying and selling rates for the dirham has been Dh 3.6725 per US$1 since November 1997. The UAE's exchange system is free of restrictions on payments and transfers for international transactions, except for certain restrictions under terrorist financing provisions that have been taken in accordance with UN resolutions. The UAE accepted the obligations under Article VIII of the IMF Statutes on 13 February 1974. 8. The UAE's external debt stood in 2008 at Dh623.9 billion ($170 billion), up from last year's Dh532.15 billion ($145 billion)According to the International Monetary Fund data, UAE's total government debt is expected to come down to 9.4 per cent of the GDP by the end of the year, compared to 10.6 per cent in 2007. (2) RECENT ECONOMIC DEVELOPMENTS

9. The UAE has grown from a small fishing and pearling nation (before its first export of oil in 1962), into one of the strongest and fastest-growing economies in the world. The tremendous industrialization effort undertaken since 1980 took place first in energy-intensive industries, on the basis of the UAE's comparative advantage, and subsequently in high-technology industries, such as office and consumer electronics or medical equipment. The country was also the first in the region to strategically develop both airport and seaport facilities in the 1960s, and since then has continuously recorded strong expansion in transport services to become the region's main transport hub. In addition, important public investment has been made to develop tourism, including sports facilities, leisure parks, and centers for international conferences and events; Dubai was considering making a bid for the 2016 Olympic Games, however it were discouraged as nearby Doha made an official application in 2007. Currently, Dubai is considering a bid for the 2020 Olympic Games. 10. Since 1999, the UAE's lowest economic growth has been 1.7% (in 2001). For 2008 real GDP growth was estimated at 7.4% (Table I.2). This performance has been supported by windfall revenue from the doubling of oil and gas prices between 1998 and 2001, and again between 2001 and 2005; the revenue has financed activities in, inter alia, manufacturing, construction, and financial services. Inflationary pressures have been mounting since 2000, reflecting soaring domestic demand (as oil proceeds have been increasingly reinvested locally) and increased capital inflows. In 2006, inflation was estimated at between 15 - 20%, but a reduction was achieved based on a combination of factors, including the global economic slow-down beginning in 2008. The UAE appears to be heading for a sharp decline in inflation through 2009 as the rate averaged about 3.4 per cent in the first half with negative year-on-year growth in June. The consumer price index (CPI) stood at 114.24 in the first half of the year compared with 110.49 in the first half of 2008, an increase of 3.4 per cent.

12 13

IMF (2004). Source:

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11. The consolidated budget frequently runs large deficits (Table I.2). However, in 2003 and 2004, the surge in hydrocarbon prices led to a rise in government revenue14; a large fiscal surplus was since 2004. In 2009 the Federal budget amounted to AED 42.2 billion (compared to AED 34.9 billion in 2008) maintaining a zero deficit for the fifth year running15. The global financial slowdown continues to affect the UAE economy, but government spending on infrastructure had underpinned confidence of investors and local and foreign private sector on the UAE market. The non-hydrocarbon fiscal deficit varies between a fifth and a third of GDP (Table I.2). The authorities indicated that steps have been taken to reduce it by containing the growth of spending, and reducing producer subsidies and transfers. The measures include reductions in agriculture subsidies, and an increase in pump petrol prices by an average of 20% during 2005 and increase by 15 files by litter in 2010. The Emirate of Abu Dhabi has signalled its intention to turn increasingly to the private sector to shoulder the costs of water and electricity (Chapter IV(3)); this should help to reduce subsidies as these utilities are generally provided to the population at subsidized rates. A national value-added tax system is also being explored to increase public revenue. In April 2005, however, the authorities announced that salaries of federal employees and Abu Dhabi government employees would increase by 25% in the case of nationals, and 15% for non-nationals.
Table I.2 Main economic indicators, 2004-2010 2005 National accounts (annual % change in real terms) GDP Agriculture and fishing Mining and quarrying Crude oil and Natural Gas production Manufacturing Electricity, gas and water Construction Services Wholesale Retail Trade and Repairing Services Restaurants, and Hotels Transport and communications Finance, Corporations Sector Real estate and Business Services Government services Other services Less: Imputed bank service charges Final consumption Private consumption Government consumption Gross fixed capital formation Changes in stocks Exports of goods and non-factor services Imports of goods and non-factor services

2006 27.0 -1.9 20.9 20.8 36.8 16.9 11.6 3.5 92.0 21.8 15.7 9.0 56.0 -10.9 28.7 67.4 22.1 24.1 12.4 29.0 1.8 24.1 18.2

2007 17.8 0.2 15.1 15.1 14.2 15.4 26.1 8.2 25.8 14.8 14.0 16.5 21.7 17.2 12.6 17.6 15.0 12.0 31.5 105.4 2.0 22.7 50.0

2008 23.2 1.8 35.5 35.6 17.2 17.4 26.1 11.1 18.7 15.1 14.0 15.9 14.3 10.7 9.3 13.7 20.0 21.4 13.6 20.9 4.1 33.9 33.4

2009 a -2.1


30.7 -12.0 47.0 47.3 19.3 21.3 32.3 8.7 19.1 23.0 14.7 72.9 26.8 6.2 18.9 44.5 23.4 24.9 16.4 15.4 1.6 29.0 17.6

1.9 2.0 1.7 6.2 4.1 -32.0 -22.2

The revenue comprises a royalty on proceeds of companies holding concessions in the hydrocarbon sector; income from government funds invested abroad (since 1980) by the Abu Dhabi Investment Authority (ADIA, see below); revenue from a 20% tax on profits made by foreign banks; and marginal revenue from import taxation. 15 Ministry of Finance, Information about Federal Budget 2008 and 2009.

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2005 Consumer prices (annual average) External sector Current account Balance (% of GDP) Gross official reserves (US$ billion, net) In months of next year imports of goods and services Nominal exchange rate (Dh per US$) Nominal effective exchange rate (index 2000 = 100) 6.2

2006 9.3

2007 11.1

2008 12.3

2009 a 14.0


16.9 21.3 2.3 3.67 96.0

22.1 28.0 2.0 3.67 101.2

9.4 77.9 4.3 3.67 103.6

8.5 30.9 2.2 3.67 107.5

-2.7 29.9

7.3 39.5 2.4 .. ..

3.67 121.5

Consolidated government finance (In billions of U.A.E. dirhams - current prices, end of period) Total revenue 203.9 299.1 330.8 Total Expenditure and grants 104 128 167 Overall Balance (consolidated)b 99.5 171.4 163.8 Balance (as % of GDP)b 20.2 28.5 21.5 Non-hydrocarbon fiscal balance (as % of GDP)b -16.5 -13.7 -14.2 External debt (US$ million) External debt (as a % of GDP) Financial indicators (%) a b Broad money (M2) Preliminary estimates. Negative sign indicates deficit. 33.8 23.2 41.7 41.0 30.6 80.6 49.2 130.1 62.7

450.3 254 196.6 20.5 -27.1 135.8 52.0

292.6 289 3.5 0.4 -33.7 132 56.3

360.9 271 89.4 9.8 -29.7 138 56.4




Source: IMF, Staff Report, various issues. Central Bank of UAE, Annual Reports. National Bureau of Statistics, United Arab Emirates. Analytical Report on Economic and Social Dimensions in the United Arab Emirates,

Source: IMF, Staff Report, various issues

12. Monetary policy is conducted by the Central Bank of the UAE (CBU), which has authority over most financial institutions, except some aspects of the recently created Dubai International Financial Centre. The thrust of Central Bank monetary policy is to accumulate substantial reserves with a view to maintaining the currency's peg to the dollar. The main instruments to regulate domestic liquidity are the CBU's certificates of deposit of up to 18 months maturity and the reserve requirements. Domestic interest rates have largely moved in tandem with U.S. rates. In 2003-04, the monetary environment was that of high levels of liquidity and low interest rates, reflecting the

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international environment as well as the large inflow of resources related to the oil boom and to the strongly growing economic activity. The three-month inter-bank rate for the UAE dirham declined to 0.7% in 2003 before rising again to 1.6% in 2004, and 2.5% in 2009. Real interest rates have been negative since 2002. The broad money stock has been increasing rapidly, well above the rate of GDP growth (Table I.2). The rise reflects rapidly increasing bank credit to the private sector and to stateowned enterprises. However, the halting of the economic engine of Dubai due to the slowdown in the property market and the relative halting of the economic engine of Abu-Dhabi in 200816 as demonstrated in the above figures had its implication for the aggregate money supply. Broad money growth slowed down in 2008 from 19% to 10% in 2009 , due to weak demand for credit from firms and households in addition to the cautionary approach applied by major lending institutions, partial quantity of this liquidity was converted in to Certificate of Deposit with the Central Bank (3) TRADE PERFORMANCE AND INVESTMENT

13. The UAE is a trading nation, as witnessed by its high ratio of imports plus exports (of goods and services) to GDP, i.e. around 142%. The UAE is also an important participant in global capital markets through several investment institutions, including its official Abu Dhabi Investment Authority, DP World, Dubai Holdings, and Abu Dhabi International Petroleum Investment Company. Its current account has been in surplus since independence in 1971, despite large current transfers by expatriate workers and the permanent deficit of the services account, the UAE remains a net services importer. This surplus has increased strongly since 2002, as a result of a surge in merchandise exports (in line with rising oil prices), to nearly 12% of GDP in 2004 (Table I.2). 14. The trade balance is traditionally in strong surplus, reaching US$28.1 billion in 2004. In 2007 the trade surplus was estimated at USD 53 billion. Although both export and import volumes achieved approximately similar growth rates, UAE trade balance suffered a 52.8 per cent deficit in 2008 since imports accounted for 72 per cent of the trade exchange volume. The main source of export revenue is crude oil and condensates (Table AI.1). Exports of petroleum products were estimated at US$66 billion in 2007, while gas exports have more than doubled in value. The second largest source of revenue is re-exports (around one third of total merchandise exports). This reflects the importance of the UAE as a centre for re-exports, mainly to India, Iran, and Iraq. A substantial portion of the large recent increase in re-exports reflects the role of the country's ports in the supply of merchandise for the reconstruction of Iraq. In 2009 and as a result of the global slowdown the export and re-export sector decline by 19% compared to the previous year. Another factor contributing to this decline is the domestic demand. Domestic demand for goods and services deteriorated due to a combination of external and internal shocks. A combination of global and domestic slowdown led to a decline in imports by 16%. This brought about a significant improvement in the trade deficit. UAE trade deficit declined by 45% in 2009 in comparison with the trade deficit in 2008.(see figure 1 & 2)

16 The slowdown of the economic engine of Abu-Dhabi was largely due to the decline in export earning as a result of the slowdown in global demand for petroleum product. Petroleum products are a major cost input into the economic engine of most developed economies.

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Figure 1 Exports, Imports & Trade Deficit in Percentage Changes

60% 40% 20% 0% 2006 20% 40% 60%
Importsofgoods&services(%Change) Exportsandreexportsofgoods& services(%Change)




Tradedeficitimprovedby 45% from2008to2009

Figure 2 UAE Trade Deficit

45 40 35 30 25 20 15 10 5 0 2004 2005 2006 2007 2008 2009 2010 TradeDeficit


15. Nearly 60% of non-hydrocarbon exports originate in free zones, mainly the Dubai Jebel Ali Free Zone Authority (Jafza); the main products exported from Jafza consist of machinery and appliances, including computers and other consumer electronics. The main non-hydrocarbon exports from outside the free zones are clothing, tobacco products, and aluminium. More than 17,000 companies are based in UAE free zones, with investment topping US$21 billion.

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16. Exports of crude oil are directed mainly to Japan; Chinese Taipei; and other East-Asian countries (Table AI.2). Non-oil exports are mainly shipped to India (33% of non-oil merchandise exports), to Arab countries (26%), and to Europe (18%). Re-exports are destined to Iran 18% of total Re-exports and India 17% of total Re-exports, and GCC countries (15%) at 2009.
Table I.3 Balance of payments, 2005 - 2010 (US$ billions) 2005 Current account balance (In percent of GOP) Trade balance Exports Hydrocarbon Crude oil & condensates Petroleum products Natural gas Nonhydrocarbon Exports by emirates Free zone exports Re-exports 1/ Imports (f.o.b.) Imports by emirates Free zones Income, net Government 2/ Services, net Transfers, net Private (incl. remittances) Official Financial account balance (in percent of GOP) Private capital Direct investment, net Portfolio flows, net Commercial banks Private non-banks and other Official capital Errors and omissions Overall balance Change in central bank net foreign assets Memorandum items: Overall balance (percent of GOP) Gross reserves of central bank Sources: UAE. authorities; and Fund staff estimates. 1/ Not separately compiled; estimated at 40 to 70 percent of emirates imports. 2/ Estimate of investment income of sovereign wealth funds. 1.8 21.3 4.1 28.0 24.0 77.9 -17.9 30.9 -0.5 29.9 3.9 39.5 22.7 16.9 40.9 115.4 47.4 42.2 5.2 5.8 22.4 5.0 17.4 39.8 -74.5 -57.3 -17.2 3.1 6.7 -14.6 -6.7 -6.2 -0.5 -14.7 -11.0 15.0 7.2 6.1 -3.4 5.1 -29.7 -5.5 2.5 -2.5 2006 36.2 22.1 56.6 144.6 62.0 56.4 5.6 7.2 28.5 8.0 20.5 47.0 -88.1 -67.2 -20.8 5.8 9.2 -18.0 -8.2 -7.6 -0.6 -17.8 -10.8 22.1 1.9 1.2 9.7 9.3 -39.9 -11.8 6.6 -6.6 2007 19.5 9.7 47.0 179.1 66.1 61.2 4.9 8.1 34.2 11.5 22.8 70.6 -132.1 -89.7 -42.4 7.9 12.6 -26.0 -9.3 -8.7 -0.6 28.7 13.8 59.2 -0.4 1.4 48.6 9.6 -30.1 1.1 49.9 -49.9 2008 22.2 8.8 63.5 239.8 91.1 85.4 5.7 11.5 43.0 16.4 26.5 94.2 -176.3 -130.1 -60.4 3.1 8.2 -33.8 -10.6 -10.0 -0.6 -55.3 -21.2 -25.8 -1.9 2.2 -12.2 -13.7 -32.4 -14.5 -46.9 46.9 Est. 2009 -6.2 -2.7 25.8 163.0 50.2 47.8 2.4 6.7 40.5 14.7 25.8 65.7 -137.2 -98.0 -39.2 1.5 3.7 -23.3 -10.1 -9.5 -0.6 18.8 8.1 -9.2 -1.0 2.5 -11.0 0.3 28.0 -13.7 -1.1 1.1 Proj. 2010 18.1 7.3 47.2 182.3 63.2 60.3 2.9 8.6 45.8 16.6 29.2 64.6 -135.1 -96.4 -38.6 2.4 4.5 -21.1 -10.4 -9.7 -0.7 -3.6 -1.4 8.5 -0.4 2.6 4.0 2.2 -12.0 -4.9 9.6 -9.6

Source: IMF (2009), Article IV Consultation United Arab Emirates, Staff Report, Washington D.C.

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17. UAE imports in 2009 were valued at $121.8 billion. Leading importers into the UAE are the United States (9% of total imports), China (11%), India (14%), Germany (7%), Japan (6%), the United Kingdom (4%), Italy (4%), Korea South (4%) and France (3%). Principal UAE imports are machinery and transportation equipment, chemicals and food. Foreign direct investment (FDI) inflows have advanced rapidly since 2000. In 2008 the UAE attracted US$13.7 billion of FDI, a fall of 3.2% as compared to 2007. According to official statistical data (Ministry of Economy), net FDI inflows reached about US$16.86 billion in 2005, inbound FDI reached US$ 34.085 billion by 2007.In 2008, FDI in the UAE was estimated to have reached 18 billion. The government has launched efforts to improve the collection of statistics on FDI and on economic performance generally. Leading sectors attracting FDI appear to be oil and gas field machinery and services, power and water, computers, medical equipment, telecommunications, and franchising.17 Other investment opportunities are available in Small and Medium Enterprises (SMEs), renewable energy and Islamic banking sectors. The bulk of FDI has been directed into real estate projects, and into the free zones (Chapter III(3)).18 Jebel Ali Free Zone in Dubai in particular has total estimated annual revenue of over US$8.5 billion in 2005. The bulk of the companies in Jebel Ali are active in the assembly of electronic products, light engineering and manufacturing, as well as in distribution services benefiting from low costs, efficiency enhancing infrastructure, and logistics services. Specialized free zones have recently been established to encourage trade and investment and trade in targeted services sectors. 18. According to UNCTAD, 156 Greenfield investments were made in the UAE in 2004. In 2009 the UAE had 283 Greenfield investments made up from 88 in 2002. A factor contributing to the expansion of inward FDI may have been the liberalization of the real estate subsector in Dubai, and the resulting investment boom both in housing and in development projects such as Dubai Internet City, Knowledge Village, Silicon Oasis, Dubai International Financial Centre and others.19 Outward FDI flows have also been large recently, as a result of acquisitions abroad by Dubai Ports International and its successor DP World (in port services), by Etisalat (in telecommunications), by Dubai Islamic bank (in banking), and by other state owned enterprises. 19. The financial account registers large net outflows, reflecting the regular placements of official capital abroad. Most of this capital is managed by the Abu Dhabi Investment Authority (ADIA), one of the world's largest government financial investment vehicles. In 1967 Abu Dhabis Financial Investments Board was created under the auspicious of the Department of Finance(Mandate given to UBS, Robert Fleming, Morgan Guarantee Trust and Indosuez). In 1976 the government of Abu-Dhabi decided to separate ADIA from the Government of Abu Dhabi as an independent organization; subsequently the following department were created: Equities and Bonds, Treasury, Finance and Administration, Real Estate, local and Arab investments. In 1986 it Started investing in alternative strategies. In 1987 the Equities and Bonds departments became regional (North America, Europe and Far East). In 1989 ADIA started investing in private equity. In 1993 ADIA started formal asset allocation process with a set of benchmarks and guidelines; Bonds moved from Equities Department to Treasury Department. In 1998 it started investing in inflation-indexed bonds. In 2005 ADIA dedicated allocation to small caps within equities, and investment-grade credit within fixed income. In 2007 ADIA started investing in infrastructure sector and then it moved into new headquarters. In 2008 ADIA participated in the development of policy principles for international investments with the U.S. Department of the Treasury. In the same year ADIA was appointed co-Chair with IMF of International Working Group of Sovereign Wealth Funds. In 2009 the department of Investment Services Department was created; then it became a Founding member of the International Forum of Sovereign Wealth Funds (IFSWF). ADIA is responsible for investing all of the Abu Dhabi Government's oil revenues and assets worldwide. ADIA's total assets are estimated at USD 600
17 18

According to the Abu Dhabi Chamber of Commerce. For background and information on UAE free zones, see 19 UNCTAD (2005).

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billion to 875 billion as of 2007, making it the world's largest sovereign wealth fund. ADIA has undisclosed investments generally estimated at about US$250 billion, and is one of the most influential operators in international financial markets. In 2008, ADIA reached an understanding with the US Department of the Treasury and the Government of Singapore Investment Corporation that laid out policy principles and standards for investments by sovereign wealth funds (SWFs), and countries receiving SWF investments. Later ADIA assumed the role of co-chair of the International Working Group of 26 SWFs. There was a drive to create an agreed framework of Generally Accepted Principles and Practices that reflected appropriate governance and accountability arrangements, as well as the prudent and sound basis on which SWFs conduct their investments. This culminated in the widely publicized Generally Accepted Principles & Practices of sovereign wealth funds, also known as the Santiago Principles. This was achieved in September 2008 when the International Monetary Fund International Working Group (IWG) of sovereign signed the so-called Santiago Principles in Santiago, Chile. The Principles are underpinned by the following guiding objectives for SWFs: a) To help maintain a stable global financial system and free flow of capital and investment. b) To comply with all applicable regulatory and disclosure requirements in the countries in which they invest. c) To invest on the basis of economic and financial risk and return-related considerations. d) To have in place a transparent and sound governance structure that provides for adequate operational controls, risk management and accountability. A key element of this process was the expectation that if SWFs complied with the Santiago Principles, recipient countries would recognize and respect their compliance, and would not subject SWFs to any requirement, obligation, restriction, or regulatory action exceeding that of other investors. While the Santiago Principles are voluntary, members are expected to support them and either implement or aspire to implement them. In fact, a condition of membership in the ongoing International Forum of Sovereign Wealth Funds, established by the 26 member countries in Kuwait in April 2009, is endorsement of, or in effect, compliance with, the Principles. ADIA participated in the design, development and drafting of the 24 principles20. (4) OUTLOOK

20. The outlook for the UAE economy is naturally sensitive to assumptions about the evolution of oil markets, including both oil prices and OPEC-mandated oil production quotas. The UAE's economy is expected to shrink by 0.2 percent in 2009, compared with an earlier estimate of a 0.6 per cent decline, according to the IMF's World Economic Outlook. The organisation expects the country to record 2.4 per cent growth in 2010, compared with a previous estimate of 1.6 per cent. Large fiscal and external current account surpluses are projected to persist. Non-hydrocarbon GDP growth is also expected to remain strong, supported mainly by large public investments in the tourism, transport, and construction subsectors. 21. The UAE's large official assets accumulated abroad since the 1980 provide a sizeable and steady flow of income that could dampen the negative effects of a weakening of oil prices, and thus reduce the economy's vulnerability to oil markets. Growth should also be supported by the numerous new projects coming on-stream. However, the UAE's long-term success in attracting foreign investment will require improved ownership rights for foreigners and a more efficient legal and institutional framework within which claims relating to foreign investment can be effectively addressed. The government recognizes that steps need to be taken to maintain the optimal investment environment, and has taken steps to develop further its investment regime.


Source: ADIA :

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II. (1)


1. The six emirates - Abu Dhabi, Dubai, Sharjah, Fujairah, Umm al-Qaiwain and Ajman - came together to establish a federal state (with a provisional federal constitution)1, the United Arab Emirates, on 2 December 1971.2 Until then they had been known as the Trucial States, with separate governments and treaty relationships with Britain. The seventh emirate, Ra's al Khaimah, formally acceded to the new federation on 10 February 1972. According to Articles 120 and 121 of the Federal Constitution, the federal authority is responsible for, inter alia, foreign affairs, security and defence, nationality and immigration issues, education, public health, currency, postal, telephone, and other communications services, air traffic control and licensing of aircraft, and labour relations. Under Articles 116 and 122, each emirate has jurisdiction in all matters not assigned to the exclusive jurisdiction of the federal government. The sharing of regulatory authority over matters related to international trade continues to evolve consistent with the UAEs legal framework and economic development interests, and with the requirements of WTO rules and other international trade and investment commitments. 2. The federal system includes five bodies with no full separation of powers: the Federal Supreme Council, the president, the Cabinet, the Federal National Council, and the Federal Judiciary. The Federal Supreme Council is the top policy-making body of the federation and comprises the rulers of the seven emirates. It is vested with legislative and executive powers, including electing the President and the Vice-President of the Federation, ratifying federal laws and decrees, and approving the nomination of the Prime Minister (selected by the President in consultation with the Members of the Supreme Council) and accepting his resignation.3 The Council may also relieve the Prime Minister of his post upon recommendation by the President. 3. The President and Vice-President are elected by the Supreme Council for a term of five years, renewable. In absence of the President, the Vice-President assumes his responsibilities. The President is accorded a wide range of legislative and executive powers. As chief executive of the State, the president also enjoys powers that include the right to convene and preside over meetings of the Supreme Council. The President is also entrusted with signing laws, decrees and decisions sanctioned by the Supreme Council, supervising implementation through the Cabinet; and ratification of treaties and international agreements after approval by both the Supreme Council and the Cabinet. Headed by the Prime Minister, the Cabinet is an executive authority of the federation. The Prime Minister, who is currently the Vice-President, and ruler of Dubai, selects his cabinet Ministers among representatives from the seven emirates. In February 2006, the Prime Minister announced his new Cabinet, with two women Ministers (Minister of Economy (now heading the new Ministry of Foreign Trade) and Minister of Social Affairs)4 To be followed in 17 February 2008 the appointment of Reem Al Hashemi and Dr. Maitha Salem Al Shamsi the female ministers of state, bringing the number of
On 2 December 1996, the Supreme Council approved a draft amendment to the provisional constitution making it the permanent Constitution of the UAE. The amendment also named Abu Dhabi City as the capital of the State. 2 Ministry of Information and Culture (2005). 3 Sheikh Zayed bin Sultan Al Nahyan, ruler of Abu Dhabi, was elected as the first President of the UAE, and ruled until his death on 2 November 2004. Sheikh Zayed was succeeded by his son and Crown Prince, Sheikh Khalifa bin Zayed Al Nahyan, who was elected by Members of the Supreme Council as the new President on 3 November 2004. The post of Vice-President is held by the Ruler of Dubai, Sheikh Mohamed bin Rashid Al Maktoum, who succeeded his brother after his death in January 2006. 4 The first woman minister in the UAE was appointed in November 2004 and was responsible for the Ministry of Economy and Planning. In the current Cabinet, she is in charge of the Ministry of Foreign Trade.

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women ministers in the federal government to four out of 22 ministers. In March 2008, Khouloud Ahmad Jouan Al Dhahiri became the first woman in the UAE to be named as a judge. Capt. Aysha Al Hamili become the first commercially licensed female pilot in the UAE and in November 2009 she was appointed as a permanent representative of the UAE on the Council of the International Civil Aviation Organization (ICAO). 4. The Federal National Council (FNC) comprises 40 members representing the seven emirates.5 The number of seats assigned to each emirate is based on its population; Abu Dhabi and Dubai hold the largest number.6 Women holds 9 seats in the FNC representing 22.5% of the members. The selection of representatives, appointed for two calendar years, is at the discretion of the ruler of each emirate. Under the Constitution, the FNC has a consultative role, including serving the people and the nation, consolidating the principles of shura (consultation) in the country, examining and amending proposed federal legislation, questioning ministers and holding them accountable for their respective ministries, and discussing the annual budget. The FNC is presided over by one of its members. 5. The judicial system is composed of a federal and a local judiciary. The federal judiciary comprises the Federal Supreme Court, the federal courts of appeal (civil and sharia), and the federal courts of first instance (civil and sharia)7. The Federal Supreme Court consists of five judges including a President of the court, appointed by presidential decree and endorsed by the Supreme Council8. The Federal Supreme Court has exclusive jurisdiction under the Constitution to decide on specified matters, including the constitutionality of federal laws, inter-emirate disputes, and disputes between the Federal Government and the emirates. The federal courts of appeal comprise a body of judges including court presidents9. Panels of three judges hear criminal cases, civil, commercial, and other matters10. They also hear appeals against judgments by the federal courts of first instance and the local judicial authorities, together with other disputes in accordance with applicable laws. Judgments of the federal courts of appeal are final. 6. The federal courts of first instance have a body of judges and court presidents who hear criminal cases, as well as civil, commercial, and other matters. Judgments are delivered by a single judge unless the law stipulates otherwise. Article 116 of the Constitution states that all matters not specifically stipulated as falling within federal jurisdiction may be considered within the relevant emirates. The emirates of Dubai and Ra's al-Khaimah established local judiciary, not attached to the Ministry of Justice, which oversees the federal judicial system. 7. Since 2007 the UAE has considered the establishment of specialized courts. In 2009 the Minister of Justice issued law No. 338 regarding specialized departments at the Courts of First Instance tasked with consumer protection. The emirate of Abu Dhabi is examining the possibility of establishing specialized courts, including courts to specific to investment and economic affairs. 8. At emirate level, governments differ in size and complexity, depending on, inter alia, population, and areas of development. The emirates of Abu Dhabi, Dubai, Sharjah, and Ra's al Khaimah, have similar local government structures, with the exception that the latter emirate does not
Article 68 of the Constitution. Article 71 prohibits any member of the FNC from holding any other post in the federal government, including ministerial positions. 6 Eight seats each for Abu Dhabi and Dubai, six each for Sharjah and Ra's al-Khaimah, and four each for Fujairah, Umm al-Qaiwain, and Ajman. 7 Article (9) of Federal Judicial Authority Law No. 3 of 1983. 8 Articles 96 and 97 of the Constitution. They are appointed for an indefinite duration. 9 There are four civil federal courts of appeals and two sharia federal courts of appeals (one based in the capital and the other in Al Ain). 10 There are no courts specialized in economic/commercial matters in the UAE.

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possess an executive council. In other emirates, the ruler has a diwan his office - through which the concerns of citizens may be directed to the government11. Under the Constitution each emirate is permitted to relinquish national powers to the Federal Government. Important examples of this are the decision to unify the armed forces in 1976,12 and the relinquishment by each emirate of the right to join the Organization of Petroleum Exporting Countries (OPEC) and the Organization of Arab Petroleum Exporting Countries (OAPEC). Overall, modern and traditional government structures coexist and evolve together. The concept of holding the open "majlis" or council, a traditional means for tribesmen to voice their opinions, concerns and complaints to their rulers, has remained relevant. In the majlises, for example, discussions between Sheikhs and other citizens may address a variety of issues including economic and foreign policy, matters concerning unemployment, or specific individual requests. (2) TRADE POLICY FORMULATION AND IMPLEMENTATION

9. Formulation and implementation of the UAE trade policy is the direct responsibility of the Ministry of Foreign Trade, which was established in [2008]13. The Ministry of Foreign Trade coordinates with other federal ministries, trade-related bodies and local departments: These include the Ministry of Economy, Ministry of Finance, Emirates Authority for Standardization and Metrology (ESMA), Ministry of Agriculture and Fisheries, the municipalities of Abu Dhabi and Dubai, Ministry of Labour and Social Affairs, Ministry of Justice and Islamic Affairs, Federal Customs Authority, Ministry of Public Health, and Ministry of Petroleum and Natural Resources. The private sector provides inputs to trade policy formulation by communicating its views through the chambers of commerce and industry and the associations. 10. A National Committee (NC) was created by a Ministerial Decree 4/395 of 2002 to deal with WTO related matters14. It acts under the supervision of the Ministry of Foreign Trade, as an advisory body to the UAE negotiating team. The NC is supported by five sub-committees covering: market access for non-agricultural products, intellectual property rights, protection of domestic production, trade in services, and the Singapore issues. 11. Trade policies are formulated and implemented by means of legal instruments. Bills are prepared by the relevant ministries, and presented successively to the Cabinet, the Federal National
11 For example, the largest emirate, Abu Dhabi, has its own central governing council, the Executive Council, presided over by the Crown Prince Sheikh Mohamed bin Zayed Al Nahyan. Its Eastern and Western regions are headed by an official with the title of Ruler's Representative, and its main cities are administered by municipalities, each of which has a nominated municipal council. Abu Dhabi also has a legislative branch at the local government level, which has a role similar to that of the Federal National Council. Its National Consultative Council comprises 60 Members elected from among its main tribes and families and is chaired by a Speaker. The Council provides a forum for its members to voice concerns and suggest introduction or revision of federal legislation. The Council is also vested with powers to question officials and examine and endorse local legislation. There is a similar pattern of municipalities and departments in each of the other emirates (Ministry of Information and Culture, 2005). 12 FNC decision 1 of 1976 amending the Constitution. 13 The institutional capacity of trade formulation was reflected in the establishments of a department fully dedicated to the formulation of foreign trade policy incarnated in the Foreign Trade Policies Department (FTPD) in the Ministry of Foreign Trade. 14 The NC comprises 33 members and is chaired by the Vice-Minister of Foreign Trade. Membership of the NC includes representatives from the Ministry of Finance and Industry, Chamber of Commerce and Industry, Emirates Authority for Standardization and Metrology, Ministry of Agriculture and Fisheries, municipality of Abu Dhabi, Ministry of Labour and Social Affairs, Ministry of Justice and Islamic Affairs, Federal Customs Authority, Ministry of Public Health, Ministry of Petroleum and Natural Resources, Federal Environment Authority, the Central Bank, and the University of the Emirates.

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Council, and to the President of the Federation, for approval15. Once ratified by the Supreme Council, the bills are signed by the President and published as laws in the Official Gazette16. 12. According to Federal Law No. 1 of 1972, each Ministry negotiates international agreements within its jurisdiction. However, the sole Ministry authorized to sign such agreements is the Ministry of Foreign Affairs, which can delegate its authority to other ministries17. The Federal Supreme Council is responsible for ratifying and endorsing international agreements and covenants18. The Cabinet is also obliged under the Constitution to notify to the Federal National Council of all international agreements and covenants. Treaties/international agreements, once ratified, prevail over domestic legal instruments. In descending order, the Constitution is followed by laws, decree-laws, ordinary decrees, and regulations. The main trade-related laws and regulations of the UAE are presented in Table II.1.
Table II.1 Main federal trade-related laws in the UAE Laws GCC Common External Customs Tariff GCC Common Customs Law of 1 January 2003 (Decision of the Supreme Council of the GCC regulating the customs procedures for the establishment of the customs union; 21-22 December 2002) Federal Law No. 18 of 1981 concerning the organization of commercial agencies, as amended by Federal Act No. 14 of 1988 Federal Company Law No. 8 of 1984 concerning commercial companies and the amending laws thereof Federal Law No. 5 of 1973 Federal Law No. 5 of 1985 Federal Law No. 18 of 1993 UAE Federal Order No. 16 of 1975 (the public tenders law) Ministerial Decision No. 20 of 2000 on Administration of Contracts System Federal Law No. 7 of 1976 establishing the State Audit Institution Federal Law No. 1 of 1979 organizing industrial affairs Federal Law No. 7 of 2002 concerning copyrights and neighbouring rights Federal Law No 37 of 1992 on trademarks as amended by Law No. 8 of 2002 Federal Law No. 17 of 2002 on the industrial regulation and protection of patents, industrial drawings and designs Federal Law No. 4 of 1983 on the Pharmaceutical Profession and Pharmaceutical companies Federal Insurance Law No. 9 of 1985 Ministerial decision (Minister of Economy and Commerce) No. 333 of 2004 regulating the activities of foreign insurance companies Federal Law by Decree No. 3 of 2003 regarding the organization of the telecommunication sector, the amended Federal Law of 1991, and the Executive Order of the Supreme Committee No. 3 of 2004 Federal Law No. 4 of 1985 and Federal Law No. 8 of 2001 Federal Law No. 10 of 1980 concerning the Central Bank, the monetary system and organization of banking Subject Tariff Customs regulations; import and export procedures; rules of origin Regulation of commercial agencies (exclusive distribution rights) Commercial companies law Commercial register Civil transactions (Civil Code) Commercial transactions Government procurement Government procurement Government procurement Industrial projects Copyright Trade marks Industrial patents Pharmaceutical profession and pharmaceutical companies Insurance services Insurance services Telecommunications

Postal services Banking and financial intermediation services

Chapter 1, part 5 of the UAE Constitution (Articles 100-115), regulates the legislative procedures at the federal level. 16 They come into effect one month from the date of publication or the date specified in each law. 17 Articles 46/6, 54/4, 60/7 and 91 of the Constitution treat the same issue. 18 Article 47 of the Constitution. Under Article 49 of the Constitution, substantive decisions by the Supreme Council must be taken by a majority of five out of the seven members, and include the votes of Abu Dhabi and Dubai. Decisions relating to procedural matters are taken by simple majority.


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Federal Law No. 4 of 2000 (Stocks and Commodities Authority) Federal Law No. 23 of 1991 concerning the practice of the advocate profession and amending laws, respectively, No. 20 of 1987 1997 and No. 5 of 2002 Federal Law no 1 of 2006 concerning Electronic Transactions & E-Commerce Federal Law no. (2) of 2006 concerning the combating and information technology Federal Law no 8 of 2004 regarding Financial Free Zones Federal Law (13) of 2006 Of the amendment of certain provisions In Law (18) of 1981 Concerning the organization of commercial agencies Federal Law no 24 of 2006 concerning Consumer Protection Federal Law no 32 of 2006 regarding Copyright & Related Rights Federal Law no 31 of 2006 regarding Patents & Industrial Designs Federal Decree no 43 of 2006 regarding the UAE joining the New York Convention Federal Law 4 of 2007 setting up UAE Investment Authority Federal Law no 6 of 2007 concerning the Insurance Authority Federal Law No. 13 of 2007 on Commodities that are Subject to Import and Export Control Procedures Anti-Fronting Law (Concealment Law) no 17 of 2004, & UAE Cabinet resolution no 229 of 2007 Ministerial Decree No. (788) of 2009 on Protection of Wages. Federal Law No 2 of 2010 amending provisions of Federal Law No. 18 of 1981 (Agency Law). Federal decree amending Article 227 of the UAE Commercial Companies Law, Federal Law No. (8) of 1984 (Companies Law) with the effect of abolishing minimum share capital requirements in respect of limited liability companies (LLCs) . Cabinet approval for the UAE admission to the Convention on Temporary Admission (the Istanbul Convention). The Agreement requires the contracting parties to accept the ATA carnet, an international customs agreement. Federal Decree No 33 of 2010 regarding the accession of the United Arab Emirates to the Revised Kyoto Convention in order to facilitate and coordinate the customs procedures.

Securities regulation Legal services Information Technology Information Technology Financial Services Agency Law Consumer Law Copy Rights Patents Environment Investment Insurance Trade Concealment Law Labour Agency Law Commercial Companies Law

Customs regulations; import and export procedures

Customs regulations; import and export procedures

Source: Information provided by the UAE authorities.

13. As a member of the Gulf Co-operation Council (GCC), the UAE has harmonized its traderelated legislation with that of the other members (section (4)(ii)(a)). According to the authorities, this has been achieved to a large extent. As of 10 October 2005, 15 GCC resolutions had been adopted, covering, inter alia, the extension of national treatment to all GCC nationals, exemption of production inputs from tariffs, and introduction of an industrial organization law/regulation in GCC countries. The UAE has also taken steps to align its trade-related legislation on the WTO Agreements, as well as establishing institutions to monitor this legislation. However, the UAE still needs improved and targeted WTO technical assistance in customs valuation, competition policy, TBT, and SPS measures. In general, investment in the UAE is regulated by Commercial Companies Law No. 8 of 1984, and by Commercial Agency Law No. 18 of 1981 and amending Law No. 14 of 1988 (sections (4)(i) and (5) below). (3) POLICY OBJECTIVES

14. The UAE's main goal is to develop sound economic (including trade) policies to increase growth, diversify the economy away from oil, and create more employment opportunities for all its citizens. The policies are also aimed at attracting local and foreign investment to develop further the economy. The government is to continue to promote a progressive economic agenda, built around economic liberalization and diversification, and promotion of the role of the private sector.

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15. The UAE federal Government launched its first strategy in 2007, the second cycle of the UAE Government Strategy for the years 2011-2013 was announced in March 2010. The UAE Government Strategy 2011-2013 lays the foundations to achieve the UAE Vision 2021. It forms the basis upon which the federal entities develop their strategic and operational plans, and consists of seven general principles, seven strategic priorities, and seven strategic enablers. The strategic priorities and enablers are not fully comprehensive but comprise the major focus areas for the government. Each strategic priority and enabler includes general main directions and specific sub-directions - which combined lead to the fulfilment of relevant main direction -and which the government will work to achieve during this strategy cycle. The seven general principles steer the work of the UAE Government and apply across all strategic priorities and strategic enablers. The seven strategic priorities are the themes that define the priorities of the UAE Government over the coming three years. Finally, the seven strategic enablers direct how the machinery of the Federal Government must operate in order to fulfil its strategic priorities19. 16. In February 2010 the Cabinet has approved a historic National Charter that aims to transform the UAE into one of the best countries in the world by 2021 , when the country will be celebrating the golden jubilee anniversary of the formation of the Union20. The National Charter contains four important components: a) b) c) d) An ambitious and confident nation grounded in its heritage. A strong union bonded by a common destiny. A competitive economy driven by knowledgeable and innovative Emirati. A nurturing and sustainable environment for quality living.

17. The Emirates Competitiveness Council was established in 2009 . ECC aims to increase productivity ,growth, diversify the economy away from oil. This will be archived via developing the competitiveness strategy for the UAE and proposing policies and initiatives to enhance competitiveness of all major sectors21.The Emirates Competitiveness Council (ECC) was created to ensure UAEs position as a global leader through: a) Creating a robust and innovation-based business environment b) Fostering a highly capable talent base of UAE nationals as well as attracting and retaining top global talent c) Realising the full potential of all the emirates d) Reaching higher levels of prosperity and quality of life in the UAE e) Strengthening the customer-centric orientation of government f) Building on sectors competencies and pioneering new, innovation-based clusters22 18. The government recognizes the importance of trade and investment to its overall goals. To this end, it seeks improved market access for its products through multilateral trade liberalization, and bilateral and regional trade agreements; the UAE already has quite a liberal trade regime. Furthermore, discussions are under way in the UAE to re-examine the federation's commercial law, which limits foreigners to minority stakes in firms established outside of free zones, and to extend foreigners the right to own and lease real estate. 19. The Federal Government provides the broad framework for policymaking in the UAE; however, most key decisions are made at the emirate level. Dubai is involved with most new
19 20

Source: Prime Minister Office: Source: Khaleej Times 21 Source: 22 Source: Emirates Competitiveness Council :

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initiatives, and is expected to accelerate its diversification process to compensate for its small and declining oil industry. Diversification will include developing further the emirate's tourism, media, shipping, financial, and commercial services, as well as expanding its industrial base. Dubai has announced the launch of several new free zones. Abu Dhabi, meanwhile, intends to continue to invest heavily in the development of its large, upstream hydrocarbons resources and downstream industrial projects, notably in the petrochemicals subsector. It will also promote plans to sell off a number of non-hydrocarbon industries, and continue efforts to privatize substantially the power and water subsectors in the near future.23 20. On July 2010 the Vice President and Prime Minister of UAE and Ruler of Dubai has approved "Green Buildings Project" in the UAE. The guide contains general rules on the application of green building standards on new government projects implemented by the Ministry of Public Works, which would increase the environmental safety and establish clear and certified standards for green buildings in the country. The project contributes to energy consumption in all its forms, improving the quality of the internal environment of buildings, water conservation, promoting public health, reduce harmful emissions from sources of cooling water, especially carbon dioxide, as well as contributing to maintain the country's environment in the long term so that new buildings can be able to withstand current environmental challenges and contribute to providing a sustainable urban environment-friendly environment. The most important elements of green buildings to be taken into account in the implementation of new government projects by the Ministry of Public Works are competencies of building facades, cooling systems, energy, water usage, indoor environmental quality and surfaces, thermal surfaces and their designs24 . 21. Tapping into renewable energy become an economic prerequisite, in April 2006 Masdar (the Abu Dhabi Future Energy Company) was established. Masdar city is a multi-faceted company advancing the development, commercialisation and deployment of renewable energy solutions and clean technologies. It integrates the full renewable and clean technology lifecycle - from research to commercial deployment with the aim of creating scalable clean energy solutions. To achieve that it works with global partners and institutions to integrate new research with proven technologies to produce efficient systems and processes that can be replicated globally. Masdar consists of three business units and one investment arm: Masdar Carbon, the clean technology cluster city, Masdar Power and Masdar Venture Capital .In addition, Masdar is associated with the Masdar Institute of Science and Technology a joint programme with Massachusetts Institute of Technology25. Another significant development on the renewable energy landscaped materialize on June 20009 when the Preparatory Commission of the International Renewable Agency (IRENA) designated Abu Dhabi as the interim headquarters of IRENA26.

22. In Spring 2008, The UAE Government published the Policy of the United Arab Emirates on the Evaluation and Potential Development of Peaceful Nuclear Energy, which outlines the government's fundamental principles for its work in this area. Through the policy paper, the UAE government endorsed six principles that would govern its exploration of a potential civil nuclear power program: a) The UAE is committed to complete operational transparency. b) The UAE is committed to pursuing the highest standards of non-proliferation. c) The UAE is committed to the highest standards of safety and security.
23 24

The Economist Intelligence Unit, September 2005. 25 Source: Masdar (the Abu Dhabi Future Energy Company) 26 Source:IRENA

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d) The UAE will work directly with the IAEA and conform to its standards in evaluating and potentially establishing a peaceful nuclear energy program. e) The UAE will work in partnership with the governments and firms of responsible nations, as well as with the assistance of appropriate expert organizations. f) The UAE will approach any peaceful domestic nuclear power program in a manner that best ensures long-term sustainability. 23. On 4 October 2009: His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE issued Federal Law No. 6 of 2009 Regarding the Peaceful Uses of Nuclear Energy. The law represents a key component of the necessary legal infrastructure, in accordance with the criteria set by the International Atomic Energy Agency (IAEA) as a framework for the successful implementation of a peaceful nuclear energy sector. The law also institutionalized other elements of the UAE's policy on the evaluation and potential development of a peaceful nuclear energy program, which was published in April of 2008, including prohibiting the development, construction or operation of uranium enrichment or spent fuel reprocessing facilities within the borders of the UAE. International nuclear non-proliferation experts have described the fulfillment of this key non-proliferation commitment as an important factor in demonstrating the completely peaceful nature of the UAE's nuclear energy program. Equally worth note is the law's establishment of a safety regulator and the development of mechanisms to preserve its regulatory independence and fiscal sustainability. These are important steps in achieving the UAE's aspiration of delivering the highest standards of safety within any future peaceful nuclear energy program. (4) (i) TRADE AGREEMENTS WTO

24. The UAE became an original Member of the WTO on 10 April 1996; it had been a contracting party to the GATT since 8 March 1994. The UAE is neither a signatory nor an observer to any of the WTO's plurilateral agreements. It has not been involved in any dispute under the Dispute Settlement Mechanism, either directly or as a third party. The UAE has fulfilled most of its notification requirements (Table II.2). Missing notifications are essentially in the areas of agriculture, rules of origin, import licensing, and state owned enterprise. 25. The UAE grants at least most-favoured-nation (MFN) treatment to all its trading partners, except Israel. It benefited from transition periods (available to developing countries) to implement some of its commitments including under the Agreement on Customs Valuation. The UAE notified the Secretariat on 5 July 2004 that it has enacted the necessary legislation and is now fully implementing the WTO Customs Valuation Agreement. 26. The UAE is a strong believer and advocate of the multilateral trading system. It is playing an active role in the current round of multilateral trade negotiations. Its main interests in the Doha Development Agenda (DDA) include greater non-agricultural market access (NAMA), and further liberalization of trade in services. In NAMA, the UAE suggested the inclusion of a new sector (raw materials, including non-ferrous metals, with primary aluminium as its strategic priority) into the proposed list to be covered by the sectoral tariff elimination approach.27 This sectoral initiative aims at reaching a balanced approach between tariff reductions trough a formula approach which does not in many cases focus on areas of interest to developing countries and the aim of increasing exports of raw materials that many developing countries consider an essential element of their economy. The UAE also submitted its initial offer in services, which is basically in line with the policy objectives set
WTO document TN/MA/W/37, 37Add.1 and Add.2 of respectively 20 May 2003, 28 May 2004, and 21 April 2005

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by the Government and its reform process currently under way.28 Recently, new collective requests have been received from certain WTO Members and are under consideration. The UAE supports the strengthening of technical assistance programmes for developing and least developed countries.
Table II.2 UAE's selected notifications to the WTO, November 2010 WTO Agreement Description of Periodicity requirement Agreement on Agriculture Articles 10 and 18.2 Export subsidies Annual Article16.2 Article 18.2 Net-food import Domestic support

Most recent notification G/AG/N/ARE/4 22 May 2002 G/AG/N/ARE/1 G/AG/N/ARE/5 22 May 2002 G/ADP/N/1/ARE/1 26 March 1997 G/ADP/N/53/Add.1/Rev. 1 19 April 2000 G/ADP/N/14/Add.4 G/SCM/N/18/Add.4 25 April 1997


No export subsidies in 2000-01 List of DS measures in 2000-01 No laws/regulations relevant to the agreement No AD actions taken since 31 December 1999 Anti-dumping, subsidies and countervailing duties

Agreement on Implementation of GATT Article VI (Anti-dumping) Article 18.5 Laws and Once, then changes regulations Article 16.4 AD Semi-Annual

Article 16.5

Competent authority

Agreement on Import Licensing Procedures Article 7.3 Import licensing Articles 1.4(a) and 8.2(b) Import licensing laws and regulations

Once, then changes Once, then changes

G/LIC/N/3/ARE/1 25 April 2000 G/LIC/N/1/ARE/1 18 April 1997

No import licence requirements No legislation on import licensing procedures

Article 5 Agreement on Preshipment Inspection Article 5 Laws and regulations Agreement on Rules of Origin Article 5 Paragraph 4 Annex II Preferential rules of origin

Once, then changes

G/PSI/N/1/Add.5 3 February 1997

No laws and regulations relevant to the Agreement

G/RO/N17 10 April 1997

Article 5 Paragraph 4 Annex II

Preferential rules of origin

G/RO/N/13 19 November 1996

UAE does not have any non-preferential ruling of general application relating to rules of origin. UAE does not have any non-preferential ruling of general application relating to rules of origin. Emergency measures

Agreement on Sanitary and Phytosanitary Measures Article 7, Annex B Sanitary and Ad hoc phytosanitary Measures Agreement on Safeguards Article 12.6 Safeguards Once, then changes State Trading Article XVII 4a GATT


G/SG/N/1/ARE/1 27 March 1997 G/STR/N/1/ARE

No legislation

State trading

No State Trading enterprises within the meaning of art. XVII GATT No subsidies

Agreement on Subsidies and Countervailing Measures Article 25.1 Subsidies Annual

Article 25.11

Countervailing measures


G/SCM/N/38/ARE G/SCM/N/48/ARE G/SCM/N/60/ARE 18 April 2000 G/SCM/N/52/Add.1/Rev.1 2 May 2000

No countervailing action during the period 1 January-30 June 1999


WTO document TN/S/O/ARE, 4 July 2005.

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WTO Agreement


Description of requirement Countervailing duty action

Periodicity Semi-annual

Most recent notification G/SCM/N/40/Add.1/Rev.9 28 April 2009

Comment No countervailing duty action have been taken during the period 1 January-30 June 1998 No legislation

Article 32.6

Countervailing measures

Once, then changes

G/SCM/N/1/ARE/1 26 March 1997

Agreement on Technical Barriers to Trade Articles 10.1 and 10.3 Enquiry point [X ] 2.9.2 Monthly list of notifications

Once, then changes Monthly

G/TBT/ENQ/26, 3 March 2004 G/TBT/GEN/N/109

Members instructed the Secretariat to prepare a monthly list of notifications.

GATT 1994 Article XVII:4(a) and Understanding on the Interpretation of Article XVII:1 Article VII - 20.1 Annex III of Article VII State trading enterprises Customs valuation Customs valuation Once Annual

5 March 2010 G/STR/N/1/ARE 14 October 1996 WT/Let/72 G/VAL/N/4/ARE/1 15 September 2004 S/C/N/29 25 October 1996 S/ENQ/46 17 September 1997 TN/S/O/ARE 4 July 2005 G/MA/NTM/QR/1/Add.5, 19 November 1998; G/MA/NTM/QR/1/Add.7 16 June 2000 IP/N/3/Rev.4/Add.3 12 September 2000 IP/N/1/ARE/C/1 3 March 2004 No STEs

Extension of CV transition period for three years Full implementation of the Agreement No changes to existing laws and regulations The Ministry of Economy Initial offers on trade in services

GATS General Agreement on Trade in Trade in services Services (GATS) Art. III:3 General Agreement on Trade in Enquiry point Once, then Services (GATS) Art. III:4 or changes IV:2 General Agreement on Trade in Initial Offer Services (GATS) Decision on Notification Procedures for Quantitative Restrictions Notification Every two years, procedures from 31 January quantitatve 1996 restrictions Agreement on Trade-Related Aspects of Intellectual Property Rights Article 69 Contact points Once, then changes Article 63.2 Copyright and neighbouring rights Once, then changes

QRs maintained

Ministry of Economy Federal Law No. 7 of 2002

Source: WTO documents.


Regional agreements

The UAE has adopted an open-minded approach in pursuing high-standards, WTO-consistent FTAs with its trading partners, in recognition of the potential of such agreements to reinforce global trade liberalisation. (a) Gulf Cooperation Council (GCC)

27. The GCC was created on 25 May 1981 by Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.29 Behind its formation was a general perception by these countries of their vulnerability arising from their oil wealth, their small and dispersed populations (28 million), their vast surface area (2.6 million square kilometres), and their limited military capabilities in a generally unstable region. The main objectives of the GCC Agreement are regional cooperation and integration

See GCC online information. Available at:

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in all economic, social, and cultural affairs, including trade, industry, investment, finance, transport, communications, and energy. Its specific objectives are to achieve a common market, with equal treatment of GCC citizens in each member country in respect of freedom of movement, work, residence, ownership of real estate, movement of capital, as well as financial and monetary coordination including adoption of a common currency. The GCC Common Market was launched in January 200830 after fulfilling most of its requirements and as a culmination of many previous steps taken in context of "economic citizenship" in the GCC . At a December 2005 summit in Abu Dhabi, GCC leaders endorsed five macroeconomic and budgetary convergence criteria for monetary union by 2010, including a cap on budget deficit relative to gross domestic product, the public debt to GDP ratio, inflation rates, and on national interest rates, and adequacy of foreign exchange reserves. However the common GCC currency has run into difficulties since the 2006 withdrawal of Oman and the UAE following suit in 2009. The withdrawal of two major economic powerhouses, in addition to the difficulties in meeting the five macroeconomic and budgetary convergence criteria will further delay the instigation of the monetary union scheduled for year 2010. 28. In June 2010, on the issue of joining the Gulf Currency, the Prime Minister of the UAE Sheikh Mohammed Bin Rashid Al Maktoum explained: we said, well the UAE said 'not yet' and I think they are right, until we are sure. Therefore now we will not change anything for the time being until we see something solid really and profitable31. In 1983, the GCC member states set up a freetrade area, whereby originating goods were exempt of customs tariffs. That agreement was notified to the GATT, under the enabling clause, on 11 October 1984. Since January 2003, GCC states have been in the process of setting up a customs union: a common across-the-board tariff of 5% on most products has been in place since then; and the common GCC Common Customs law of 2003 provides for common origin rules for all the members (Chapter III(2)(iii)). However, practical details of certain trade issues have yet to be addressed, including fully harmonizing the list of products subject to rates higher than 5%, and standards and technical regulations. 29. In 1989, the GCC and EC concluded a Cooperation Agreement under which their Foreign Ministers hold a Joint Council/Ministerial meeting once a year. The objective of this agreement is to facilitate trade relations, and to contribute to strengthening stability in a strategic part of the world.32 In December 2008 the GCC signed its first Free Trade Area Agreement with Singapore followed in June 2009 by the GCC EFTA states FTA. The GCC is currently engaged in negotiating FTAs with a number of other countries and economic blocks. These include Australia, New Zealand, China, Japan, Korea, India, Pakistan, Turkey and the Mercosur. (b) Greater Arab Free-Trade Area (GAFTA)

30. Under the treaty of the Greater Arab Free-Trade Area (GAFTA)33, signed on 19 February 1997, and in force since 1 January 1998, all trade barriers among its members were eliminated without exception on 1 January 2005. Nonetheless, non-tariff barriers, in particular, standards, lengthy bureaucratic and administrative procedures at the borders, transit fees, and certificates of origin are reported. The treaty also provides for rules of origin (Chapter III (2)(iii)). The principal entity responsible for implementing the programme is the Economic and Social Council of the League of Arab States (LAS). Greater Arab Free Trade Area (GAFTA) was notified to WTO by Saudi Arabia in 2006.
Gulf Cooperation Council: The GCC Process & Achievement Source: CNN Exclusive Interview: 32 European Commission (2003). 33 The GAFTA members are: the GCC members plus Algeria, Egypt, Iraq, Jordan, Lebanon, Libyan Arab Jamahiriya, Morocco, Palestinian Authority, Somalia, Sudan, Syrian Arab Republic, Tunisia, and Yemen.
31 30

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31. The overall value of Arab trade in 2008 registered a 32.5% increase in exports reaching approximately $1,050 Billion. This is primarily attributed to the steady increase in oil prices during the first 7 months of the year 2008.Moreover, overall Arab imports registered a 32.2% increase reaching approximately $702 Billion. The increase came to satisfy the needs of economic activity in light of the continued growth in most Arab States. The weight of Arab exports as a percentage of global exports also increased to constitute 6.7%, while the weight of Arab imports as a percentage of global imports also increased to 4.3%. The percentage of Intra-Arab exports as part of total Arab exports was 8.3% in 2008, in comparison with 8.9% the previous year. Moreover, the percentage of Intra-Arab imports as part of total Arab imports was 11.1% in 2008, in comparison with 12.1% during the previous year. The decrease in the importance of Intra-Arab exports in relation to total exports is attributed to the fact that the percentage of increase in the value of total exports has surpassed the percentage of increase in intra-Arab exports. The same thing occurred with regards to the Intra-Arab imports that also registered a decrease in relation to total exports. The Greater Arab Free Trade Area (GAFTA) has contributed towards increasing intra-Arab trade as a percentage of total Arab Global trade, which was 4-5% in the 90s. The United Arab Emirates exports to Arab States (FOB value), including petroleum products grew by threefold in five years from $1.9 billion in 1999 to approximately $6.5 billion in 2004, to roughly $14.4 billion in 2008, coming in second place after Saudi Arabias $38.6 billion in exports to Arab states. In the mean time, UAE imports from Arab States increased from $1.6 billion in 1999, to $3.8 billion in 2004, and rose further to $7.9 billion in 2008.34 (c) The Common Market for Eastern and Southern Africa (COMESA) 32. On April 2010 in Riyadh, the Gulf Cooperation Council (GCC) signed a Memorandum Of Understanding (MOU) with COMESA. The MOU will provide a framework of co-operation between the parties, which will facilitate the joint implementation of programmes, projects and activities mutually agreed and spelt out in supplementary agreements specific to each joint programme, project or activity35. (iii) Bilateral agreements

33. The UAE has signed bilateral trade agreements with Syria (signed on 12 November 2000), Jordan (17 March 2001), Lebanon (2 March 2002), Morocco (17 March 2002), and Iraq (2 April 2002). Trade agreements are under consideration with Australia. 34. In March 2004, the United Arab Emirates signed a Trade and Investment Framework Agreement (TIFA) with the United States to provide a formal framework for dialogue on economic reform and trade liberalization. TIFAs promote the establishment of legal protection for investors, improvements in intellectual property right protection, more transparent and efficient customs procedures, and greater transparency in government and commercial regulations. The United States began negotiating a Free Trade Agreement with the UAE in March 2005. In early 2007, the United States and the UAE announced that despite considerable progress in a number of areas under negotiation, they would not be able to complete FTA negotiations under the existing time frame for trade promotion authority. The United States and the UAE have since initiated a "TIFA Plus" consultative process under the existing bilateral Trade and Investment Framework Agreement (TIFA); this process will be used to advance trade liberalization in as many areas as possible - building where appropriate on progress made during the FTA negotiations36. According to the authorities, with the
Petroleum products are not covered by the GAFTA Treaty. Arab Monetary Fund, Joint Arab Economic Report. 35 Source: 36 Source: US Department of States:

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exception of the ongoing bilateral negotiations with the United States, all future bilateral agreements will be negotiated at the GCC level, not by individual members. (iv) Other preferential arrangements

35. The UAE does not participate in the Global System of Trade Preferences (GSTP) among developing countries, and it neither provides nor receives trade preferences under the Generalized System of Preferences (GSP). 36. In June 2006, The UAE joined the Information Technology Agreement (ITA) in the WTO. Bahrain ,Oman and Saudi Arabia are members in the ITA and the rest of the GCC are in the process of joining this agreement37. (5) INVESTMENT FRAMEWORK

37. The UAE's investment policy is implemented through licences, the basic requirement for all business. Licensing procedures are publicly available and transparent but vary from emirate to emirate. Procedures apply differently to local and foreign companies only when the firm is a branch of a foreign company and is founded in the UAE but is foreign-invested. In Dubai, there are three categories of licences: industrial licences for industrial activities; professional licences covering all services and artisans; and commercial licences covering all kinds of trading activities. While the UAE's economic environment is generally liberal and business-friendly, its investment policy continues to limit foreign investment and competition between local and foreign investors, except in the free zones where 100 per cent foreign ownership is allowed. 38 This policy has been successful in maintaining a balance of preserving business opportunities for UAE citizens while welcoming foreign dynamism and promoting dynamism is specific areas. The Outside of free zones, investment licences can be obtained only by domestic companies that are majority-owned by UAE nationals, or by 100% foreign-owned branches, which must appoint a local services agent or "sponsor" (Chapter III(2)(i))39. Free zones have been continuously expanded to accommodate economic demand and to implement innovative ideas. Currently, [26 ] free zones exist, and [ 12] new zones are under consideration and implementation. 38. According to the UAE constitution, each emirates natural resources and wealth are publically owned by the said emirate, and must be utilised and preserved for the sake of the national economy. At the federal level there is no consolidated legislation governing the acquisition of real estate by foreigners. While certain general provisions of UAE law refer to property rights, the matter is generally left to the discretion of each emirate. For example, acquisition of land for commercial or private purposes in Dubai is restricted to UAE citizens and, to a certain extent, GCC citizens. However under Order no. 3 of 2006 Dubai has designated areas where expatriates can enjoy freehold ownership in Dubai. The list includes 23 areas and 45 plots including Jebel Ali, the Palm Island projects, the World Islands, Dubai Marina, Emirate Hills and Al Barsha. More than 15,000 expatriates have already moved in. In addition the emirate of Dubai has recently undertaken several legislative measures that further regulate land registration and allocation of properties that can be owned by nonUAE nationals. In 2007 the Emirate of Dubai introduced Law 8 2007 an Escrow Law Account . The law aims to offers reassurance and guarantee to home buyers and investors and to boost confidence in the real estate market.

Source: WTO Documents G/IT/1/Rev.42, 29 June 2010. Foreign companies or non-national individuals may own 100% of projects located in the free zones (Chapter III(3)). 39 Trade Agencies Law, Federal Act No. 18 of 1981, as amended by Law No. 14 of 1988.


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39. In Abu Dhabi, a law on land ownership was adopted in 2005.40 The law stipulates that real estate granted by the Government to a citizen before or after issuance of the law, is his or her own property; the citizen has the right to register such ownership and is entitled, within the limits of the law, to use, exploit, and dispose of such property. The law also allows GCC citizens to own real estate located in investment areas, and specifies the terms of the surface lease contracts on real estate outside investment areas. Foreigners have also been given the right, under the new law, to lease real estate in investment areas located in Abu Dhabi for a limited duration. Other emirates have their own regulations and decisions governing land/property ownership. For example, the emirate of Sharjah adopted a resolution (in 2005), which stipulates that the owner of a property is not permitted to sell it to non-GCC citizens; such sales may only be possible after approval by the ruler of the emirate and under specific conditions. Ras Al-Khaimah was the first government after Dubai to offer freehold property ownership rights allowing expatriates to purchase in selected developments of the Emirate. The government of Ras Al-Khaimah set its own public joint stock company RAK Properties PJSC and granted 4.6 million square metres of land for the development of a wide portfolio of residential and industrial projects. 40. Federal Company Law No. 8 of 1984 (the Commercial Companies Law - CCL) regulates the establishment of companies, both local and foreign, outside the free zones. All companies must have one or more national partners who account for at least 51% of their capital.41 The partners may agree to share the profits in proportions that differ from their capital share. The Law also stipulates that management of the company may be undertaken by the foreign partner. According to the authorities, since 2005, the restriction no longer applies to GCC nationals, who can therefore own 100% of a company's capital. 41. In 2009 the President of the United Arab Emirates introduced an amendment to the companies law, the amendment to the capital requirements. Under the amended law, prospective business partners seeking to establish a limited liability company will have the freedom to determine the capital requirements of their new company and there will be no minimum par value for the companys shares. In contrary to the previous law, which specified Dh 150,000 as a minimum to create such companies. The amended law has been applied retrospectively to companies established on or after 1 June 200942. 42. Under the CCL, foreign companies may also exercise their main activity in the UAE by opening a branch or a representative office43. There are 2,256 registered foreign companies at the Federal Ministry of Economy (MoE) functioning through 2700 branches in the UAE , and operate in construction, petroleum, insurance, accounting, tourism, courier, and air transport services. A foreign branch or office can be 100% owned by the foreign company. The foreign branch may exercise only the activities for which it is licensed by each emirate; the company must apply to the MOE for this licence. If approved by the MOE the application goes to the economic department of each emirate in which the business is to be undertaken.44 Once licensed by the economic department of the emirate,
Law No. 19 of 2005. Under the CCL, companies are defined as any "economic project", excluding companies operating in the hydrocarbon industry, and in electricity, gas, and water desalination. 42 Source: 43 The representative office may promote business for the products and services provided by the parent company, and facilitate contacts between the company and its UAE clients. However, it is not licensed to conduct business operations or marketing directly in any manner. 44 These are the Abu Dhabi Municipality (online information available at:; the Ajman Municipality; the Dubai Municipality (online information available at:; the Fujairah Municipality (online information available at:; the Ra's al-Khaimah Municipality; the Sharjah Municipality; and the Umm al-qaiwain Municipality.
41 40

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the company licence is registered by the MOE. A condition for opening a representative office or branch of a foreign company in the UAE is to appoint a local service agent or "sponsor", with no capital share and management power (see Chapters III(2)(i) and IV). The agent's services consist mainly in maintaining contacts with the governmental authorities, and obtaining the relevant licences, approvals, and authorizations. Agents are not responsible for any of the financial obligations or activities of the company's branch or representative office within the UAE or abroad. The agent's remuneration depends on the contract. Foreigners may form sole proprietorships45 to practice certain activities in some emirates in some professional services such as,48 medical services, engineering consultancies, legal consultants, computer consultants, and non-trading activities. A foreign sole proprietor is also required to appoint a local services agent. 43. In 2006, the UAE made important changes to the Commercial Agencies Law (Agencies Law), which previously had required that all commercial agents be either UAE nationals or companies wholly owned by UAE nationals, and had restricted the number of agents a foreign principal could appoint as well as the terms of the agency relationship46. Federal Law (13) of 2006 Of the amendment of certain provisions In Law (18) of 1981 Concerning the organization of commercial agencies revised the following aspects of the law : a) b) c) d) Agency Time Frame: limited an agency contract to a fixed time period Renewal of Contract: Required mutual consent to renew an agency agreement. Damages :Allowed either party to file for damages. Agency Disputes: Eliminated the Ministry of Economys Trade Agencies Committee, which handled agency disputes. e) Agent Consent: Allowed the import of liberalized goods without the agent's approval.

44. Before changes to the agency law were introduced in 2006, once an agency agreement registered, it could not be terminated without the agent's approval (except after a decision by the Commercial Agencies Committee of the MOE), even if the term of the agreement has been initially limited. Pursuant to amendments introduced by Law No. 13 of 2006 to the Commercial Agency Law, agency contracts may or may not be time limited In addition, a commercial agency may only be deregistered by mutual agreement or pursuant to a court order, such that, where the parties to a fixedterm contract wish to terminate the contract summarily, or either party to a non fixed-contract wishes to terminate the contract, termination can only occur by bringing the matter before the court and the courts ordering deregistration. Furthermore, either party (not only the agent) may request compensation for a prejudice caused by the termination of the agency contract. These amendments are aimed at balancing out the relationship between the parties to an agency contract and at improving transparency in the dispute resolution process through the referral of disputes to the courts. As noted above, a foreign company may appoint an agent that is not registered in the MOE; in this case, the contract cannot be defended in the court under the Trade Agencies. 45. Once more, a new amendment to the agency law was introduced in 2010. Federal Law No. 2 of 2010 has gone into effect with amending some provisions of Federal Law No. 18 of 1981, regarding the regulation of commercial agencies, which was issued by the president of the United Arab Emirates His Highness Sheikh Khalifa bin Zayed Al Nahyan. According to the Law, and considering Articles 27 and 28, which were added to Federal Law No. 18 of 1981, it is not permissible
Sole proprietorship is a simple business method whereby an individual trades on his own account pursuant to a trade licence issued in his own name. This form of business entity is referred to as an "establishment" rather than a company. 46 Source: United States Trade Representative Office :

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for a client to terminate an agency contract or fail to renew it, unless there is a fundamental reason that would justify its termination or non-renewal. Additionally, it is not permissible to register an Agency in the Registry of Commercial Agents to another Agent even if the previous Agency was confined to a fixed term contract, unless it was cancelled through mutual consent between the agent and the client, or if there were substantial grounds to justify the termination of the agency - or not renewing it - that are found convincing by the Commission, or if there was a judicial verdict for its cancellation. Article 27, which was introduced in the law that was published in the Official Gazette, stipulates the establishment of a committee to be called the Commercial Agencies Committee which would be formed through a Ministerial Council decision that would also organize its meetings, compensate its members, and specify dispute review fees. Article 28 states that the Committee shall consider any dispute which may arise relating to an Agency that is registered with the Ministry. It also states that the parties of the dispute may not go to court over their dispute before first presenting it to the Committee, which must start looking into it within 60 days from the date of application for dispute review, as long as the application is complete, or from the date of the completion of the required documents. The Committee would then use that which it deems appropriate to perform its functions, and its decisions may be challenged at the relevant court within 30 days of the date of the notification of the Committees decision, after which the decision would be final and cannot be appealed. Under the law, every other ruling contrary to or inconsistent with its provisions is cancelled, and the law shall be applied on the following day of its publication in the Official Gazette. 46. The UAE's hydrocarbon industry is specifically excluded from the provisions of the CCL. It is owned and controlled by the respective emirates, and foreign participation must take the form of joint-ventures (Chapter IV(3)(ii)).47 Similarly, electricity, gas, and water utilities are supplied by state monopolies, although the Emirate of Abu Dhabi has announced the partial privatization of several electricity and water plants (Chapter IV(3)(iii)). The Abu Dhabi government and Abu Dhabi Water and Electricity Authority (ADWEA) have embarked upon a long-term programme for the privatisation of the water and electricity sector. Projects involving foreign participation in these subsectors are generally majority state controlled and owned by the State or by UAE nationals. 47. Certain activities are reserved for UAE nationals and for companies totally owned by UAE nationals: real estate services; rental/leasing services relating to cars; services incidental to agriculture, hunting, and forestry, including veterinary medicine stores; services incidental to fishing; placement services; investigation and security services; and passenger and freight road transport. Some of the above mentioned activities can be practiced by GCC nationals. There are no restrictions on investment abroad by UAE nationals. 48. The Ministry of Economy the UAE is currently drafting a Foreign Investment Law whose aim will be to create favourable conditions for foreign investments and bring in transfer of knowledge and expertise that are not the UAEs core competencies. The Foreign Investment Law will serve as a onestop-shop law reflecting government policies towards foreign investments. The draft law will not apply to free trade zones but will concern all foreign investments in the UAE except those projects in the oil, gas, water and electricity sectors. It will regulate foreign investors rights, protect and promote foreign investments and accord fair and equitable as well as national treatment to foreigners albeit with a few exceptions and finally open up sectors / subsectors for foreign investors with 100% ownership. 49. The UAE has signed various bilateral trade and investment framework agreements (Table II.3). The UAE is a member of the Multilateral Investment Guarantee Agency.

The Constitution states that all natural resources are the property of each emirate and that they should be preserved and effectively used for the good of the national economy.

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Table II.3.1 Bilateral investment treaties Country Algeria Austria Belarus Belgium and Luxembourg China Czech Republic Egypt Finland France Germany Italy Korea Lebanon Malaysia Mongolia Morocco Mozambique Pakistan Poland Romania Sudan Sweden Switzerland Syria Tajikistan Tunisia Turkey Turkmenistan Ukraine UK Yemen Uzbekistan Vietnam Jordan Azerbaijan Armenia Slovakia Russia .. Not available. 17/7/2009 28/6/2010 Final signature 24/4/2001 17/6/2001 27/3/2000 8/3/2004 1/7/1993 23/11/1994 11/5/1997 12/3/1996 9/9/1991 21/6/1997 22/1/1995 9/6/2002 17/5/1998 11/10/1991 21/2/2001 9/2/1999 24/9/2003 5/11/1995 31/1/1993 11/4/1993 18/2/2001 10/11/1993 3/11/1998 26/11/1997 17/12/1995 15/4/1996 28/9/2005 9/6/1998 21/1/2003 8/12/1992 13/2/2001 26/10/2007 16/2/2009 15/4/2009 20/11/2006 Cabinet decision (319/8) 2001 (422/5)2001 (299/8) 2000 (527/9)1996 (260/6) 1993 (12/12) 1995 (110/6) 1997 (223/9) 1996 (80/5) 1992 (193/14) 1997 (84/6) 1995 (472/6)2003 (307/15) 1998 (561/4) 1991 (492/5) 2001 (118/9) 1999 (489/6) 2003 (69/13) 1996 (104) 1993 (61/12) 1995 (345/8) 2001 (583/22) 1999 (13/13) 1999 (541/9) 1998 (433/7) 1999 (259/12) 1996 (584/5) 2005 (420/27) 1999 .. (8/8) 1993 (270/8) 2001 (8/8) 2008 (318/9) 2009 (333/8) 2009 (333/4) 2006 (75) 2001 (33) 2008 (78) 2009 (118) 2009 (40) 2007 25/8/2001 22/4/2008 11/10/2009 16/12/2009 30/4/2007 (31) 1999 (15) 2000 (24) 1997 (11) 2006 (109) 1999 (12) 2004 16/2/1999 29/1/2000 24/2/1997 7/3/2006 24/11/1999 28/2/2004 Federal decree (27) 2002 (26) 2001 (1) 2001 (11)2005 (36) 1994 (84) 1997 (34) 1998 (22) 1997 (35) 1992 (35) 1998 (62) 1995 (24) 2004 (105) 1998 (24) 1992 (71) 2002 (89) 1999 (28) 2003 (37) 1996 (6) 1993 (3) 1996 (4) 2002 (32) 2000 Execution 3/6/2002 3/6/2002 2/1/2001 29/1/2005 12/4/1994 26/6/1997 2/3/1998 24/2/1997 27/4/1992 2/3/1998 20/11/1995 27/4/2004 25/10/1998 25/3/1992 19/11/2002 26/9/1999 2003 17/6/1996 29/1/1993 9/1/1996 5/2/2002 21/3/2000

Source: Ministry of Finance.

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Table II.3.2 Avoidance of Double Taxation Agreements No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Country Egypt Algeria Yemen Tunisia Morocco Sudan Syria Lebanon Mozambique Pakistan India India (Protocol) Srilanka Philippine Korea Singapore Indonesia Thailand Malaysia China New Zealand Ukrania Belarus Romania Turkmenistan Armenia Tajikistan Magnolia Austria Poland Germany Finland Italy Czech France Belgium Luxembourg Turkey Canada Mauritius Seychells Bosnia and Herzegovina Azerbaijan Spain Malta Holand Bulgaria Uzbekistan Kazakhstan Vietnam
Greece Germany Ireland

Final Sign 12/4/1994 24/4/2001 13/2/2001 10/4/1996 9/2/1999 15/3/2001 26/1/2000 17/5/1998 24/9/2003 7/2/1993 29/4/1992 27/3/2007 7/7/1992 22/9/2003 22/9/2003 1/12/1995 30/11/1995 1/3/2000 28/11/1995 1/7/1993 24/9/2003 2003 27/2/2000 11/4/1993 9/6/1998 22/4/2002 17/12/1995 21/2/2001 23/9/2003 31/1/1993 9/4/1995 12/3/1996 22/1/1995 30/9/1996 19/7/1989 30/9/1996 20/11/2005 29/1/1993 9/6/2002 18/9/2006 19/9/2006 18/9/2006 20/11/2006 5/3/2006 13/3/2006 8/5/2007 26/6/2007 26/10/2007 22/12/2008 16/2/2009 18/1/2010 01/07/2010 01/07/2010

Cabinel Decision (214/7)1994 (320/9) 2001 (159/6)2001 (260/13) 1996 (119/10) 1999 (346/9) 2001 (104/7) 2000 (308/16) 1998 (489/6) 2003 (58/12) 1993 (245/8) 1992 (105/7) 2007 (488/5) 2003 (548/8) 2003 (520/12) 2003 (13/13) 1996 (15/15) 1996 (206/11) 2000 (14/14) 1996 (560/5) 1993 (519/11) 2003 (119/10) 2003 (300/9) 2000 (62/13) 1995 (406/13) 1999 (549/9) 2003 (434/8) 1999 (493/6) 2001 (521/13) 2003 (103/5) 1993 (206/10) 1995 (244/10) 1996 (83/5) 1995 (526/8) 1996 (453/7) 1989 (527/9) 1996 (658/7)2005 (58/12) 1993 (587/10) 2002 (319/9) 2006 (297/6) 2006 (331/2) 2006 (332/3) 2006 (100/6) 2006 (99/5) 2006 (138/6) 2007 (211/11) 2007 (64/8) 2008 (255/15) 2009 (319/10) 2009 (42/3/15) 2010

Federal Decree (13) 1995 (84) 2001 (73) 2001 (25) 1997 (90) 1999 (83) 2001 (72) 2000 (106) 1998 (28) 2004 (3) 1994 (39) 1993 (80) 2007 (27) 2004 (73) 2004 (30) 2004 (34) 1996 (36) 1996 (105) 2000 (35) 1996 (38) 1994 (29) 2004 (11) 2004 (2) 2001 (3) 1996 (108) 1999 (74) 2004 (16) 2000 (70) 2002 (26) 2004 (7) 1994 (21) 1996 (23) 1997 (62) 1995 (84) 1997 (83) 1989 (83) 1997 (31) 2006 (5) 1994 (3) 2004 (51) 2007 (8) 2007 (39) 2007 (42) 2007 (54) 2006 (53) 2006 (102) 2007 (5) 2008 (70) 2008 (47) 2009 (77) 2009

Execution 26/3/1995 28/11/2001 25/8/2001 24/2/1997 26/9/1999 28/11/2001 11/6/2000 25/10/1998 4/5/2004 29/1/1994 21/8/1993 4/9/2007 4/5/2004 29/12/2004 4/5/2004 17/6/1996 17/6/1996 12/11/2000 17/6/1996 5/6/1994 4/5/2004 28/2/2004 2/1/2001 9/1/1996 24/11/1999 29/12/2004 29/1/2000 29/11/2002 27/4/2004 29/1/2004 18/3/1996 24/2/1997 20/11/1995 26/6/1997 15/11/1989 26/6/1997 7/5/2006 29/1/1994 7/1/2004 20/6/2007 6/2/2007 30/4/2007 30/4/2007 13/8/2006 13/8/2006 29/11/2007 22/1/2008 28/9/2008 30/6/2009 11/10/2009

Source: Ministry of Finance.

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III. (1)


1. The UAE's position as the main commercial hub of the Middle-East is due in great part to its relatively liberal trade regime, particularly with respect to the import and export of goods. Its MFN tariff is based on the GCC's Common External Tariff; its rates averaged 5.1% in 2005, with the majority of rates at 5%. The entire UAE tariff is bound, at ceiling rates (in general) averaging 15%. The UAE has taken no anti-dumping, countervailing or safeguard actions. 2. Customs procedures are simple and largely computerized, reflecting the authorities' policy to facilitate trade, which in the case of several emirates includes a large re-export industry. Few technical regulations are implemented at the border; they are generally based on internationally accepted standards. The exclusive "agency law" the UAE has no competition legislation contributes to the segmentation of the domestic market and to the high prices of branded products; it also constitutes a barrier to full GCC integration. The government has recently introduced changes to the agency law to help ensure fair treatment of parties and to promote a competitive environment in the UAE ([reference discussion in section above]). 3. The main characteristic of the UAE's export policy is extensive reliance on free zones, from which 80% of non-oil exports originate. These free zones are exempt from all the licensing, agency, "emiratization", national ownership, and other domestic regulations that otherwise apply to the UAE customs territory. 4. Federal procurement appears to be conducted competitively, and can be tendered electronically; procurement by the other public bodies, including state-owned enterprises and municipalities, appears to be relatively opaque, with provisions varying from contract to contract. There is strong reliance on foreign companies, particularly to realize major projects for which local expertise is not available. . 5. State ownership in the economy remains extensive. Nonetheless, several state-owned companies successfully compete worldwide; some of them are their own regulatory bodies. The UAE has passed a number of laws relating to intellectual property, and has backed up commitments to strengthen and enforce intellectual property rights with the establishment of a new Intellectual Property Office at the MOE. (2) (i) MEASURES DIRECTLY AFFECTING IMPORTS Registration, and exclusive distribution rights

6. A prerequisite for doing business in the UAE is having the appropriate licences (Chapter II(5)). In particular, all entities carrying out trade must be in possession of a trading licence. An importer obtains this licence from the economic department of the emirate in which business is to take place; licensing procedures and regulations vary from emirate to emirate. The trading licence is valid only for the emirate in which it is issued; it specifies the products that may be imported, as well as the activity of the licensee (e.g. importer, construction company). The licensee is responsible before the court for any liability resulting from consumption of the product in the UAE, for example where products are found to be faulty or dangerous. Clearing agents, who must be GCC nationals, can clear imports only on behalf of the licensed importers, and only those products mentioned on the licence.

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7. Under the Commercial Companies Law, the trading licence can be obtained by either majority-owned UAE companies or by 100% foreign-owned branches of foreign companies.1 However, a large percentage of imports take place under the Trade Agencies Law, whereby the trading licence is held by exclusive commercial "agents".2 According to business sources, it is difficult to distribute imported products without a local agent.3 8. Under the Trade Agencies Law, importing activities, and wholesale and retail distribution services, as well as the sale, display or rendering of a commodity or service in the UAE, are reserved for exclusive "agents". An agent must be a UAE national, or a company owned by UAE nationals; must purchase products or services from foreign companies according to independent sale agreements and then resell to its clients as per other agreements, in its own name. The agency agreement/contract specifies the agent, the principal (owner of the trade mark or manufacturer of the brand), the area of coverage (one or several emirates), and the brand and models of the product that can be imported and sold exclusively by the agent. According to the authorities, 9940 agencies were registered at the end of 2007.(Table III.1).
Table III.1 Commercial agencies by type of activity 2007 Activity Engineering, electrical, mechanical, water desalination, and drainage equipment Pharmaceutical and medical equipment Fire extinguishing, safety and security equipment Vehicles, heavy and light equipment, tools and repair equipment Cosmetics, perfumes, accessories, antiquities, gifts, tobacco, and jewellery Oil-production equipment Petrochemical, metallic products and oil and gas exploration equipment Electronics, electrical, and home appliances Building materials and equipment Agents & flying equipments Textiles, clothes, and leather products Foodstuff Furniture, furnishing and equipment for offices, shops and home materials, and appliances Animal, fishery, agricultural items, equipment, products, pesticides, and veterinary products Consultancies Shipping equipment Audio-visual, scientific, and photographic devices Office materials and equipment, laboratory instruments, systems, and educational games and toys Sport equipment and children toys Others Newspapers, advertising and printing equipment agents Packing, and stowing, including services Total number of agencies by activity Number of registered agencies 1451 529 397 364 310 212 181 181 154 136 106 62 79 53 65 52 56 16 13 14 8 6 4445

Source: Ministry of Economy, Information provided by Annual Trade Agencies Statistics 2007 .

9. In order to benefit from exclusive import and distribution rights, the agency agreement must be registered with the Ministry of Economy (MOE). The registration costs Dh 5,000 (US$1,360), and is renewable annually against Dh 2,000 (US$545). Before changes to the agency law were introduced in 2006, once an agency agreement registered, it could not be terminated without the agent's approval
Federal Company Law No. 8 of 1984 (the Commercial Companies Law - CCL). Trade Agencies Law, Federal Act No. 18 of 1981, as amended by Law No. 14 of 1988. 3 U.S. Department of State (2005). Information on the share of total imports carried out by exclusive agents is not available.
2 1

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(except after a decision by the Commercial Agencies Committee of the MOE), even if the term of the agreement has been initially limited. Pursuant to amendments introduced by Law No. 13 of 2006 to the Commercial Agency Law, agency contracts may or may not be time limited In addition, a commercial agency may only be deregistered by mutual agreement or pursuant to a court order, such that, where the parties to a fixed-term contract wish to terminate the contract summarily, or either party to a non fixed-contract wishes to terminate the contract, termination can only occur by bringing the matter before the court and the courts ordering deregistration. Furthermore, either party (not only the agent) may request compensation for a prejudice caused by the termination of the agency contract. These amendments are aimed at balancing out the relationship between the parties to an agency contract and at improving transparency in the dispute resolution process through the referral of disputes to the courts. As noted above, a foreign company may appoint an agent that is not registered in the MOE; in this case, the contract cannot be defended in the court under the Trade Agencies 10. New amendment to the agency was again introduced in 2010. Federal Law No. 2 of 2010 has gone into effect with amending some provisions of Federal Law No. 18 of 1981, regarding the regulation of commercial agencies, which was issued by the president of the United Arab Emirates His Highness Sheikh Khalifa bin Zayed Al Nahyan. According to the Law, and considering Articles 27 and 28, which were added to Federal Law No. 18 of 1981, it is not permissible for a client to terminate an agency contract or fail to renew it, unless there is a fundamental reason that would justify its termination or non-renewal. Additionally, it is not permissible to register an Agency in the Registry of Commercial Agents to another Agent even if the previous Agency was confined to a fixed term contract, unless it was cancelled through mutual consent between the agent and the client, or if there were substantial grounds to justify the termination of the agency - or not renewing it - that are found convincing by the Commission, or if there was a judicial verdict for its cancellation. Article 27, which was introduced in the law that was published in the Official Gazette, stipulates the establishment of a committee to be called the Commercial Agencies Committee which would be formed through a Ministerial Council decision that would also organize its meetings, compensate its members, and specify dispute review fees. Article 28 states that the Committee shall consider any dispute which may arise relating to an Agency that is registered with the Ministry. It also states that the parties of the dispute may not go to court over their dispute before first presenting it to the Committee, which must start looking into it within 60 days from the date of application for dispute review, as long as the application is complete, or from the date of the completion of the required documents. The Committee would then use that which it deems appropriate to perform its functions, and its decisions may be challenged at the relevant court within 30 days of the date of the notification of the Committees decision, after which the decision would be final and cannot be appealed. Under the law, every other ruling contrary to or inconsistent with its provisions is cancelled, and the law shall be applied on the following day of its publication in the Official Gazette. 11. In general, the advantage for the foreign company of having an exclusive agent is a network of contacts, connection with someone with a good knowledge of local customs and markets, and the availability of outlets to distribute the product. However, the agent is entitled to prevent the products from being imported by others into the specified territory, which may, inter alia, contribute to exceptionally high retail margins on imported branded products. In October 2005, following price increases, the MOE exempted a list of basic food items from the coverage of the Trade Agencies Law.4 The efforts of the UAE Governments to ensure price stability is further exemplify by an amendment by Law No. 13 of 2006 to the Commercial Agency Law, pursuant to which goods specified by the Cabinet as liberalized goods may enter the market even without the agents approval.
4 Dry and condensed milk; frozen and canned vegetables; children's foodstuff and milk ; chickens; cooking oil; rice; flour; fish products; meat and meat products; tea; coffee; cheese; pasta (macaroni, vermicelli); sugar; and diapers (Cabinet Decision N 538/1).

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12. The system of exclusive distribution rights precludes the application of the principle of free movement of goods and services within the GCC customs union, of which the UAE is a member. For example, a product cannot be re-exported to Dubai from Qatar if a UAE agent (not involved in this operation) already holds exclusive agency rights for that product in Dubai. The GCC Customs Law states that: "The prerequisite of obtaining an import license for importing any commodity into any of the GCC States shall be abolished because it goes into conflict with the requirements of the formation of the GCC customs union and the principle of the single point of entry." The Trade Agency Law does not apply to free zones (section (3)(v) below). (ii) Customs procedures

13. Since the establishment of the GCC customs union on 1 January 2003, the UAE has been applying the GCC Common Customs Law, and its Rules of Implementation and Explanatory Notes.5 Under the "single port of entry" principle, items imported in the UAE (or any other GCC State), and destined for another GCC market, are subject to customs duty only at the first point of entry into the GCC. Customs procedures and the required documentation are the same for all GCC members.6 14. Each emirate has its own Customs authority but customs procedures are the same throughout the UAE, and customs requirements are kept to a minimum so as not to impair the UAE's active transhipment and re-export business.7 The Federal Customs Authority (FCA) was established in 2003. FCA is the authority concerned with customs affairs in the United Arab Emirates. It is working to unify, develop and improve customs policies, legislations and regulations, and supervise their implementation across the local departments of customs. Operators holding a trading licence are given an import code; clearing and forwarding agents clear imports of products authorized under that code. The required documents are the delivery order from the shipping agent, the original invoice and certificate of origin, the packing list, and the bill of lading. The customs administration of the emirate of first importation collects and retains relevant customs duties, which are not transferred to or managed by the Federal Customs Authority . A deposit or bank guarantee is required in the case of imports eligible for duty and tax concession (section (iii)(b) below). 15. About 71% of UAE imports are cleared by Dubai Customs and approximately 21% by Abu Dhabi Customs. At both Dubai and Abu Dhabi Customs, the entire customs declaration can be made electronically8. In 2005, approximately 17% of Dubai Customs declarations were processed electronically. As a result of computerization, customs clearance times in Dubai are reported as among the shortest worldwide (a few minutes); in some cases, clearance is possible before shipments arrive in Dubai, provided that cargo documents are on time and in order. One of the reasons for the rapid customs clearance is the quasi absence of inspections for conformity with technical regulations (section (vii)); as a result, clearance does not require physical examinations or technical controls. 16. In April 2010 The Dubai Customs launched the Mirsal 2 B2G service for its eligible business partners who conduct high volume business with Customs using Mirsal 2; the integrated system enabling business partners to submit declarations online from clients system to Mirsal 2 with easy transactional processing and E-payment taking place directly between both parties. This initiative
The Common Customs Law of the GCC States is available online at: English/enew01.htm. 6 A description of the GCC customs procedures is available online at: 7 The main Customs Offices are: Dubai Customs (; Abu Dhabi Customs (; Sharjah Customs (; and Fujairah Customs ( 8 Source: National Beuro of Statistics

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comes as part of the continuous improvement of the electronic systems offered by Dubai Customs to its clients and in light of Dubai Customs trend towards electronic processing of all customs declarations. The latest electronic business service (B2G) shall provide a number of benefits including but not limited to; reduction of human errors, automation of collaborative business process with Customs, fastest channel for declaration submission, physical presence for declaration submission is avoided thereby freeing clients from the hassle of frequent visits, creation of more time for the core business tasks, reduction of declaration cost, round the clock - 24 X 7 availability, quick feedback on the status of the declaration, simple, painless and easy declaration process, thus in turn helping Customs to make best use of its human resources and assigning counters employees to do other tasks.9 17. The UAE invoked Article 20.1 (on the five-year transition period available to developing countries) of the WTO Customs Valuation Agreement (CVA) to delay the full implementation of the Agreement until the end of 2003. The federal customs authorities have confirmed that the CVA is now implemented by all emirates.10 Nonetheless, technical assistance has been requested by the UAE to familiarize its customs administration and economic operators with the CVA. The UAE has notified the WTO that it does not currently apply minimum values to any products, with the exception of tobacco products, and does not use or plan to use pre-shipment inspection services for customs valuation purposes.11 Customs tariffs are levied on the c.i.f. value of imports. 18. At Dubai Customs, customs-related disputes that are not solved at the level of custom offices can be brought to the Valuation Directorate if they relate to valuation, or to the Directorate of Tariff if they relate to classification. No dispute regarding valuation or classification at Dubai Customs has ever been brought to a judicial court. The operator could also appeal to the World Customs Organization (WCO), of which the UAE is a member. (iii) Rules of origin

19. The UAE has never made a notification to the WTO Committee on Rules of Origin. There have not been any disputes or complaints in the WTO regarding the rules of origin applied by the UAE. 20. The UAE applies non-preferential and preferential rules of origin. As part of its obligations under the GCC customs union, the UAE applies the same non-preferential rules of origin as the other five GCC members with respect to imports from third countries. Under the non-preferential scheme, products are generally considered as originating from the country where they are wholly obtained or where they underwent substantial transformation, with at least 40% of local value added. A certificate of origin is required to clear imports. It must be produced by the original exporter and legalized by a recognized authority in the country of export. 21. The UAE's preferential rules of origin are also generally based on a value-added content criterion, but may differ according to the agreement (Chapter II(4)(ii) and (iii)). For products imported from the Greater Arab Free-Trade Area (GAFTA), local value-added of at least 40% is required in order to qualify for preferential treatment. It is important that origin rules be harmonized for past and future FTAs involving GCC Members.

Source: Dubai Costumes: Dubai Customs - MIrsal 2 B2G WTO document G/VAL/N/4/ARE/1, 15 September 2004. 11 WTO document G/VAL/W/120, 27 May 2003.

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(iv) (a)

Tariffs, other duties, and taxes MFN tariffs

22. The UAE has a low and simple MFN tariff (Table III.2); all rates are ad valorem (except on tobacco), and there are no tariff quotas, no nuisance rates, and no other duties and taxes on imports. Its tariff is based on the GCC's Common External Tariff (CET), which consists of an across-the-board rate of 5% together with a list of 421 tariff lines that are duty free amongst GCC countries, mainly agricultural raw materials and basic food products, pharmaceutical products, and other products including certain papers, books and magazines, unwrought precious metals, vessels and airplanes; in the case of the UAE, alcoholic beverages are subject to a 50% tariff; and the alternate tariff on tobacco products is 100% or Dh 100 per 100 sticks of cigarettes or Dh 800 per kg. of raw tobacco, whichever is higher.12
Table III.2 Structure of the MFN tariff, 2005 2005 1. Bound tariff lines (% of all tariff lines) 2. Duty-free tariff lines (% of all tariff lines) 3. Non-ad valorem tariffs (% of all tariff lines)a 4. Tariff quotas (% of all tariff lines) 5. Non-ad valorem tariffs with no AVEs (% of all tariff lines)a 6. Simple average tariff rate Agricultural products (WTO definition) b Non-agricultural products (WTO definition)c Agriculture, hunting, forestry and logging (ISIC 1) Mining and quarrying (ISIC 2) Manufacturing (ISIC 3) 7 Domestic tariff "spikes" (% of all tariff lines)d 8. International tariff "peaks" (% of all tariff lines) e 9. Overall standard deviation of applied rates 10. "Nuisance" applied rates (% of all tariff lines) f a b c d e f 100 5.8 0.4 0.0 0.4 5.1 6.2 4.8 3.3 5.0 5.2 0.5 0.5 5.6 0.0 Bound rates 100 1.0 0.0 0.0 0.0 14.9 24.0 13.1 16.7 15.0 14.7 0.8 0.8 16.8 0.0

Tariff lines that are missing, or for which no rate was available. WTO Agreement on Agriculture. Excluding petroleum. Domestic tariff spikes are defined as those exceeding three times the overall simple average applied rate (indicator 6). International tariff peaks are defined as those exceeding 15%. Nuisance rates are those greater than zero, but less than or equal to 2%.

Source: WTO Secretariat calculations, based on data provided by the Emirates authorities.

23. The overall average MFN applied tariff is 5.1%. The coefficient of variation is 1.1 (with a standard deviation of 5.5), reflecting the fact that tariffs range from zero to 100% (Table AIII.1). Tariffs average 6.2% on agricultural products (WTO definition), and 4.8% on non-agricultural products. Using ISIC (Revision 2) definition, manufacturing, and mining and quarrying receive almost the same average level of protection, at 5.2% and 5%, respectively; the average tariff for agriculture is 3.3%. 24. In aggregate, the UAE's tariff displays positive escalation, from first-stage processed products, with an average tariff of 4%, to semi-finished goods, with an average rate of 4.9%, and fully processed products, on which tariffs average 5.4%. This positive tariff escalation stems from the lower tariffs applied (on average) to agricultural raw materials. In most industries, tariffs are uniform

The tariff rate on alcohol was imposed under a Cabinet resolution (No. 141/4).

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from the first to the final stage of processing (Chart III.1). Otherwise, tariff escalation is mixed (negative from the first to the second stage, and then positive) in food and beverages, reflecting the high rates on tobacco and spirits. Escalation is slightly negative in chemicals and in paper and printing, because of duty-free imports of pharmaceuticals and certain books; it is also slightly negative in basic metal industries, with duty-free imports of unwrought precious metals, and in fabricated metal products because of duty-free imports of vessels and airplanes.

Chart III.1 Tariff escalation by ISIC 2-digit industry, 2005

Per cent

10.0 9.0 8.0 7.0 6.0 5.0


Raw materials


Fully processed

4.0 3.0 2.0 1.0 0.0 All products

Non-metallic mineral products

Fabricated metal products

Basic metal products

Chemicals, plastics

Food, beverages

Source : WTO Secretariat estimates, based on data provided by the United Arab Emirates authorities.

25. The UAE bound all its tariff lines at ad valorem rates; the final bound rates range from zero to 200%. The majority of tariff lines (79% of the total) were bound at a final rate of 15%; some 19% of lines were bound at 10% or less, while 1% of lines (covering items such as organic chemicals and pharmaceutical products) were bound at zero. Some 0.8% of lines (covering alcoholic beverages and tobacco products) carry a bound rate of 200%. The simple average final bound rate is 14.9%, compared with a simple average applied MFN rate of 5.1% in 2005 (Table III.2). For most products, including all agricultural products, the final rates were implemented with immediate effect; for 13.4% of lines however, the final bound rates are entered into force after ten years (i.e. April 2006), and for 0.6% of lines after 15 years (April 2011). For most products, MFN applied rates are well below the final bound rates; however, on 33 tariff lines at the HS eight-digit level, the applied MFN rate of 5% is above the final bound rate of zero (as of April 2006).13 According to the authorities, this has
The HS codes are: 29011010, 29011020, 29011030, 29011040, 29011050, 29011060, 29011090, 29012100, 29012200, 29012300, 29012400, 29012910, 29012920, 29012930, 29012940, 29012950, 29012960,

Other manufacturing

Wood products

Textiles, apparel

Paper, printing



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resulted from the implementation of the GCC tariff in 2003, with rates higher than those previously levied or bound by the UAE. (b) Duty and tax concessions and exemptions

26. Industrial inputs such as equipment, spare parts, raw and semi-manufactured materials, and packing materials necessary for industrial production are exempted from duty under a federal law relating to industry assistance (section (4)(i) and Box III.1). These "privileges and exemptions" are specific to the UAE and may therefore differ from one GCC State to another. The exemptions are industry and company specific, and apply to production for both the domestic and export markets. 27. Duty and tax concessions are also granted under the "import for re-export", "temporary admission", or "transit" regimes. Importers using the "import for re-export" regime make a deposit or provide a bank guarantee in lieu of duty; the deposit or bank guarantee is refunded/released on proof of re-export. Goods remaining in the UAE after 180 days are liable to duty payment. The same documentation is required for goods declared under "temporary admission", such as goods imported for exhibitions, equipment used in construction, scientific research, development projects, and items for repair or maintenance, except that the goods must be re-exported within a maximum of three years of import. Importers do not need to hold a trading licence if they are engaged in re-export, temporary admission, or transit. 28. In April 2010 The cabinet gave its nod for the UAE admission to the Convention on Temporary Admission (the Istanbul Convention). The Agreement requires the contracting parties to accept the ATA carnet, an international customs document that assures through an international guarantee system that duties and taxes will be paid in cases of misuse. The ATA carnet is now the document most widely used by the business community for international operations involving the temporary admission of goods14. Also in May 2010, the President, of the United Arab Emirates has issued the Federal Decree No 33 of 2010 regarding the accession of the United Arab Emirates to the Revised Kyoto Convention in order to facilitate and coordinate the customs procedures.15. The agreement will provide the following: a) It comprises standards for best international practices facilitating and coordinating customs procedures. b) It eliminate disparity between customs procedures and practices of the signatories which impedes international trade and other international trade exchanges. c) It can facilitate international trade without negatively affecting standards of customs control. d) The implementation of programs for the continuity customs practices and procedures, and thus enhances and improves efficiency and effectiveness. e) It also helps the consistent and transparent implementation of measures and procedures, and provides all parties with information required in relation to laws, customs regulations, and administrative directives. f) It defines the utilization of specific risk management and procedure control based on auditing, and information technology, as well as cooperation with other local authorities, customs departments and the private sector and specifies methods for the application of international standards related to customs work.

29012990, 29021100, 29021900, 29022000, 29023000, 29024100, 29024200, 29024300, 29024400, 29025000, 29026000, 29027000, 29029010, 29029020, 29029090, and 30068000. 14 Source: 15 Source:

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29. Consignments, received on a "through-bill-of-lading", consigned to a destination outside the UAE and dispatched overland, are cleared on a "transit bill". A deposit or guarantee is required by Customs, and is refunded on proof of exit of the goods out of the UAE within 30 days of the date of the transit bill. If the consignment is dispatched by sea, directly from the port (ship-shore-ship or ship to ship), the goods are cleared on a trans-shipment bill. 30. Duty-free imports are also allowed for, inter alia, international organizations, diplomatic missions, the armed forces, police, and charity institutions.16 There is currently no duty-drawback scheme, although this is permissible under Article 16 of the Executive Supplementary Notes to the GCC Common Customs Law. (c) Tariff preferences

31. In principle products from a GCC member circulate free of duty across the Customs Union, including the UAE. Imports originating from the other members of GAFTA enter the UAE duty-free, with the exception of tobacco products and all alcoholic products excluded from the GAFTA preferential provisions. (v) Import prohibitions, licensing, and controls

32. The GCC Common Customs Law distinguishes absolute import prohibitions from restricted imports. Each GCC state determines its own list of prohibited or restricted products, although GCC members are currently working on the development of a common list to the extent possible. Imports that are prohibited in some member States and permitted in others must not transit through the member states in which they are prohibited. 33. In the UAE, absolute import prohibitions are maintained for various reasons, including international conventions, environmental protection, health and safety, and religious and moral considerations. They cover all kind of drugs; asbestos; used pneumatic tyres; industrial waste; forged and duplicate currency; "Habara" falcons; ivory and rhinoceros horn; live camels; any printed material that does not adhere to religion or morals that is aimed at causing corruption and disorder; or materials prohibited under any law in force in the country (Table III.3). All imports from Israel are prohibited.
Table III.3 Prohibited products, 2010 HS headings 0908; 1302; 1207; 1211; 2939 Product/description Narcotics Reasons for prohibition Federal Law No. (6) of 1986; Dubai Customs Admin; Circular No. 1782 of 1982; Government Decision of 1966 Authorizing agency MI MJ MH MAF CB

Counterfeit money 4907.0031 4907.0032 7118 Banknotes in circulation Banknotes not yet in legal circulation Coins

Government Decision of 1966 Federal Law No. (10) of 1980

16 Section VIII of the Common Customs Law of GCC States specifies those agencies and goods exempt from duty, such as the diplomatic corps, military forces, personal effects, imports by charitable societies, and returned goods.

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Decision by Israel Boycott Office prohibiting goods from Israel, bearing Israeli marks or logos 0507.1000 9504.3000 5608.1100 Crude ivory (ivory) and rhinoceros' horn Gambling tools and machineries 3-layer nylon fishing nets

Federal Law No. (15) of 1972


Decision by Crown Prince Sheikh Maktoum Bin Rashid on 28 May 1989


Decision by the Ministry of Agriculture and Fisheries No. (34) of 1988; Council of Ministers Decree No. (173/9) of 1988 Ministry of Information Decisions Nos (75), (31) and (156) of 1988, 1986 and 1996 respectively


49 701 9702.0000 9703.0000

Printed matter, oil painting, photograph, pictures, cards, books, magazines, and stone sculptures that contradict Islamic teachings, decency or deliberately imply immorality or turmoil Works of art that contradict the Islamic teachings, decency or deliberately imply immorality or turmoil Used and reconditioned tyres Candies in cigarette form Children's toys in form of dinosaur, etc. consisting of lead


9701 9702 9703 4012 1704.9090

MF M Decision No. (53/2/60/2003) M MEP MH MAF

9503.4100 9503.4900 0106.3100

Toys representing animals or nonhuman creatures, stuffed Toys representing animals or nonhuman creatures, not stuffed Falcon hunting is prohibited from September until March each year except for: falcons with permits under CITES Convention; falcons bearing passports; and sick falcons arriving for treatment with permits from the Environment Research Authority Ozone layer depleting substances Ministerial Decree No. (166/94); Ministry of Interior Decision No. (1/43) of 2003; Ministry of Interior Decision No. (1631) of 1998 MAF ADP FEA


Decision by Chairman of Federal Environment Authority No. (13) of 1999


2903 2908.1000

Halogenated derivatives of hydrocarbons Halogenated, sulphonated or nitrosated derivatives of phenols or phenol-alcohols containing only halogen substitutes and their salts Radiation-polluted substances Sheets and pipes of asbestos-cement Laser pens Dangerous trash Federal Decree No. (1) of 2002 MH ME FEA MIC MH M MI MH M FEA M C C

6811 9013.2000

Part of Federal Law No. (24) of 1999, in accordance with the system for circulation of dangerous materials and refuse Part of Federal Law No. (24) of 1999, in accordance with the system for circulation of dangerous materials and refuse Local Ordinance by Sheik Hamdan Bin Rashid No. (98) of 1996 Ministry of Economy and Commerce Decision

2403.1030 1602.4

Chopped or compressed tobacco (pan) Swine and its products

Trade Policy Review Page 40

7326.2020 7204 7404.0000 7503.0000 7602.0000 7802.0000 7902.0000 8002.0000 8101 - 8112 8548.1000

Steel wire articles for fishing Ferrous waste and scrap Copper waste and scrap Nickel waste and scrap Aluminium waste and scrap Lead waste and scrap Zinc waste and scrap Tin waste and scrap Waste and scrap of other base metals Waste and scrap of primary cells, primary batteries and electric accumulators; spent primary cells, spent primary batteries and spent electric accumulators Meat and edible meat offal

No. (4/7/1234/79); Dubai Customs Ministry of Agriculture and Fisheries Decision No. (34) of 1991 Customs Notice No. (6/2003); Council of Ministers Decree No. 1/294 of 2003



Ministerial Decision No. (428) of the year 2008 On extension the lift of ban for importing Somali chilled and frozen meat Ministerial Decree No.(64) of the year 2005-03-02 On terms and conditions for importation of Pet Animals to the United Arab Emirates Administrative Decision NO. (62) of the year 2005 Concerning ban importing all kinds of living birds and their products from the Federal Republic of Russia Ministerial Decree No.(140) of the year 2005.


01061940 01061950

Dogs Cats






Residues and waste from the food industries; prepared animal fodder, Animal forage Palm tree seedling offshoots, coconut



Ministerial Decree No.(40) of the year 2005 On the Amendment of the Ministerial Decree Number (39) of the year 1991 on banning to import date palm trees and their offshoots, coconut trees(Al Narjeel) and the ornamental palm trees Ministerial Decree No.(276) of the year 2006 concerning ban importation of all kinds of living domestic , slaughtered, wild, Ornamental birds, their products and offal from Alava province in Spain



01063 0207

06023 0603


Live poultry, that is to say,fowls of the species Gallus domestics, ducks, geese, turkeys and guinea fowls. Birds Meat and edible offal, of the poultry of heading 01.05,fresh, chilled or frozen. Ornamental shrubs Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared. Foliage, branches and other parts of plants, without flower or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes fresh, dried, dyed, bleached, impregnated or otherwise prepared.


United Arab Emirates Page 41


01063 0207

06023 0603


01 02 06023 0603


01063 0207


Live poultry, that is to say,fowls of the species Gallus domestics, ducks, geese, turkeys and guinea fowls. Birds Meat and edible offal, of the poultry of heading 01.05,fresh, chilled or frozen. Ornamental shrubs Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared. Foliage, branches and other parts of plants, without flower or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes fresh, dried, dyed, bleached, impregnated or otherwise prepared. LIVE ANIMALS Meat and edible meat offal Ornamental shrubs Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared. Foliage, branches and other parts of plants, without flower or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes fresh, dried, dyed, bleached, impregnated or otherwise prepared. Birds Meat and edible offal, of the poultry of heading 01.05,fresh, chilled or frozen. Live poultry, that is to say,fowls of the species Gallus domestics, ducks, geese, turkeys and guinea fowls. Birds Meat and edible offal, of the poultry of heading 01.05,fresh, chilled or frozen. Live poultry, that is to say, fowls of the species Gallus domestics, ducks, geese, turkeys and guinea fowls. Ornamental shrubs Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared. Foliage, branches and other parts of plants, without flower or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes fresh, dried, dyed, bleached, impregnated or otherwise prepared.

Ministerial Decree No.(175) of the year 2006 on Ban importation of all species of living, domestic, wild ornamental birds, their products and offal from Fuon Town in Denmark .


Ministerial Decree No.(112) of the year 2006 concerning ban importation of all kinds of living, slaughtered, domestic, wild, bred in captivity birds, and products and offals there from Burkina Faso


Ministerial Decree No.(96) of the year 2006 on ban importation of all kinds of living birds, slaughtered, tamed, wild, bred in captivity, their products and their offal from the Republic of Niger


01063 0207

Ministerial Decree No.(91) of the year 2006 on ban importation of all kinds of living tamed, wild, ornamental birds, their products and their offal from the State of Cameron .



06023 0603


Trade Policy Review Page 42

01063 0207


06023 0603



Birds Meat and edible offal, of the poultry of heading 01.05,fresh, chilled or frozen. Live poultry, that is to say, fowls of the species Gallus domestics, ducks, geese, turkeys and guinea fowls. Ornamental shrubs Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared. Foliage, branches and other parts of plants, without flower or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes fresh, dried, dyed, bleached, impregnated or otherwise prepared. LIVE ANIMALS

Ministerial Decree No.(90) of the year 2006 on ban importation of all kinds of living tamed, wild, ornamental birds, their products and their offal from the Republic of Albany.


Ministerial Decree No.(45) of the year 2006 On ban the importation of all hoofed living animals and their products from some Provinces in Argentina Ministerial Decree No.(44) of the year 2006 on ban importation of all kinds of living tamed, wild, ornamental birds, their products and their offal from the Republic of Nigeria.


01063 0207


06023 0603


2703 31 a ADP: C: CB: FEA: M: MAF: ME: MEP: MF: MH: MI: MIC: MJ:

Birds Meat and edible offal, of the poultry of heading 01.05,fresh, chilled or frozen. Live poultry, that is to say,fowls of the species Gallus domestics, ducks, geese, turkeys and guinea fowls. Ornamental shrubs Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared. Foliage, branches and other parts of plants, without flower or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes fresh, dried, dyed, bleached, impregnated or otherwise prepared. Peat (including peat litter), whether or not agglomerated. Fertilisers


Ministerial resolution number (476) of the year 2007 Concerning by-law of AGCC fertilizers and agricultural soil conditioners law


For reasons of space, not all HS Codes are reproduced. These are contained in the underlying regulations. Abu Dhabi Police Customs Central Bank Federal Environment Authority Municipality Ministry of Agriculture and Fisheries Ministry of Energy Ministry of Economy Ministry of Finance Ministry of Health Ministry of Interior Ministry of Information and Culture Ministry of Justice

Source: Dubai Customs.

United Arab Emirates Page 43

34. In April 2000, the UAE notified the Committee on Import Licensing Procedures that there are no import licensing requirements in the UAE.17 Nonetheless, certain goods require prior authorization for, inter alia, health, security, moral, religious, and safety control purposes (Table AIII.2). Companies may be granted an import permit upon application to the relevant ministry or entity. (vi) Contingency trade remedies

35. The UAE has not taken any anti-dumping, countervailing or safeguard actions since becoming a Member of the WTO in 1996. It has no national laws and/or regulations on contingency trade remedies.18 However, the UAE has adopted the Federal Decree No (7) of 2005 regarding approval and implementation of the Unified GCC Law on anti-dumping, countervailing measures and safeguards.; implementing regulations have yet to be finalized. (vii) Standards and other technical requirements

36. Technical regulations (as defined in Annex I of the WTO Agreement on Technical Barriers to Trade (TBT Agreement)) and SPS measures (as described in Annex I of the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)) are generally issued by Ministerial decree. The UAE has made more than 23 notifications to the TBT Committee as of March 2009 on new technical regulations and conformity assessment procedures. According to WTO data there were 23 notifications. The last one dates to July 2006. The UAE has largely harmonized its policies and regulations on standardization and technical regulations with other GCC Members. (a) Standards, testing, and certification

37. The Emirates Authority for Standardization and Metrology (ESMA) was established by law in 2001 as a governmental body.19 ESMA is a financially and administratively independent Authority, with revenues increasingly from, inter alia, sales of standards, implementation of conformity assessment programmes including accreditation, and quality marks. ESMA is managed by a Board of Directors chaired by the Minister of Economy. The law also sets out provisions on the issuance of standards, technical regulations, and conformity assessment. Its aim is health, safety and environmental protection by ensuring that imported or domestically produced goods meet the UAE technical regulations. ESMA is the sole body responsible for setting standards in the UAE, and is one of the federal bodies that recommend technical regulations to UAE Cabinet (the latter can also be set at emirate level). ESMA departments deal with conformity assessment, accreditation, standards, and metrology. ESMA is the WTO national enquiry point. It has accepted the WTO Code of Good Practice for the Preparation, Adoption, and Application of Standards. ESMA is a member of the International Organization for Standardization (ISO), of Codex Alimentarius, IEC System of Conformity Assessment Schemes for Electrotechnical Equipment and Components (IECEE), and (through ENAS (see below)) of the International Laboratory Accreditation Cooperation (ILAC). 38. The Government's priority is to align national standards on international norms. ESMA has 3985 standards in place till end of 2008, of which 85% are based on GCC standards as set by the Gulf Standards Organization (GSO), and some 15% are UAE standards. In general, GCC standards are based on international standards. About 12% of the 3985 standards in force in the UAE are

WTO document G/LIC/N/3/ARE/1, 25 April 2000. WTO documents G/ADP/N/1/ARE/1, 26 March 1997; G/SCM/N/1/ARE/1, 26 March 1997; and G/SG/N/1/ARE/1, 27 March 1997. 19 Federal Law No. 28 of 2001. See ESMA online information. Available at: esma/.


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compulsory (technical regulations). All standards, including technical regulations, are published in the Official Gazette; they are also available online through ESMA website. Most UAE standards and GCC standards are either identical to international standards, or based on international standards, except the cases where international standards are not suitable for the country due to issues related to climate, environment or technological problems. Nevertheless, UAE standards in general are subject to updating and revision to ensure it serves UAE needs and that they are harmonized with international standards. 39. In the absence of national standards on any type of products, suppliers may declare compliance to internationally accepted standards20; self-declaration is accepted. ESMA implements two main conformity assessment schemes; The quality mark program (a voluntary programme applying to any product according to UAE standards) and the Emirates Conformity Assessment Scheme (ECAS). The latter scheme operates two programs. A voluntary program under the authority of ESMA applies to all products that meet ECAS requirements. Applicants must submit a registration application, supported by a declaration of conformity to the applicable standards as well as by a test report issued by one of the accredited laboratories. The mandatory program applies to the following regulated products: cigarettes and closed type electric water storage heaters for household use. For each regulated product, the applicant must submit a similar registration application as the one mentioned above ESMA reviews the submitted information, makes a decision on the level of conformity, and issues a certificate of conformity. 40. The conformity assessment procedure on passenger vehicles and tyres consists of selfdeclaration to the GSO by producers or suppliers for approval. Imports of other products may require certificates, inspection, or market surveillance under such bodies as the Ministry of Health, the Ministry of Agriculture, the Ministry of Energy, or emirate governments. 41. The Emirates National Accreditation System (ENAS) was established in 2004 to accredit conformity assessment bodies including testing and calibration laboratories, and certification and inspection bodies.21 ENAS is under the authority of ESMA. In addition, the Dubai Municipality's Accreditation Department (DAC) accredits conformity assessment bodies testing and calibration laboratories, and certification and inspection bodies. Both ENAS and DAC are members of ILAC, although current plans are to merge all accreditation unites and departments in GCC countries in one regional accreditation body that serves the GCC region. The UAE has not concluded any mutual recognition agreements. (b) Sanitary and phytosanitary measures

42. The WTO national enquiry point for SPS measures is the Ministry of Agriculture and Fisheries (MOEW)which is also the national notification authority. The (MOEW)is in charge of inspection of all imports, exports, and domestic production of plants, animals, and their products. The UAE has made a total of 23SPS notifications since becoming a Member of the WTO. All notifications were made in 2004 and 2006 (Table II.2). One of the 2004 notifications concerned general legislation on animal welfare to be adopted by the UAE.22 Recent notifications relate mostly to import bans on birds and their products because of bird flu. Since 1995, no specific trade concerns

Ministerial Decision No. 2/114 of 2004. ENAS online information. Available at: 22 G/SPS/N/ARE/3, 29 July 2004. See UAE Agriculture Information Centre online information. Available at:


United Arab Emirates Page 45

have been raised concerning SPS measures maintained by the UAE.23 The UAE is a member of the World Organization for Animal Health (OIE), the International Plant Protection Convention (IPPC), and Codex Alimentarius.24 43. All SPS regulations are federal. Under Federal Law No. 5 of 1979 (Plant Quarantine Law of GCC countries), all imports of plants and plant products are subject to an agricultural quarantine system.25 In addition, agricultural consignments are not permitted to enter the country unless accompanied by a phytosanitary certificate issued by the competent authority in the exporting country and attested by an Arab country's embassy in the exporting country. Imports of certain food products (e.g. canned food) are exempt from phytosanitary certificates. Phytosanitary certificates do not appear to be required to attest absence of radiation, dioxin, or cyclamate. 44. The Department of Veterinary Quarantine at the MOEW, in cooperation with municipalities, is in charge of authorizing imports of animals and their products, animal feeds, and additives.26 All consignments of animals, their products or offal require: an official veterinary health certificate issued by the exporting country, and describing the distinctive marks of the consignment, its origin, evidence that it has been checked directly before shipment and found free of epidemic and contagious diseases, and duly attested by an Arab country's embassy; and a report by the captain of the plane, ship or carrier attesting that they have not been in contact with any infected animals of contagious or epidemical diseases, or passed through infected areas during their journey. For slaughtered animals, a certificate from an Arab country's embassy in the exporting country (if available) should attest that they were slaughtered according to Islamic law. 45. The Ministry of Health also regulates certain imports of food (Table AIII.2). Imports of drugs and medicines must be registered with the Technical Affairs Section of the Drug Control Department at the Ministry of Health, in accordance with Articles 40, 41, 61, and 65 of Federal Law No. 4 of 1983 on the pharmaceutical profession and institutions. (c) Marking, labelling, and packaging

46. ESMA has updated its packaging and product labelling standards in accordance with o GSO norms and international standards. There is currently one compulsory labelling legislation (technical standards) for food and two other voluntary standards for, labelling of chemicals and other industrial products. 47. Food labels must contain product and brand names, lot identification, production and expiry dates, country of origin, name of the manufacturer, net content weight in metric units, and the list of ingredients and additives in descending order of proportion.27 All fats and oils used as ingredients must be specifically identified on the label. Arabic labelling is required and can be applied by sticker.28

23 Under the WTO Agreement on Sanitary and Phytosanitary Measures, Members have the possibility to raise concerns regarding SPS measures maintained by other Members. An explanation of the reasons for such measures may be requested and should be provided by the Member maintaining the measure. 24 WTO document, G/SPS/GEN/49/Rev.6, 9 June 2004. 25 This law is available online at: Federal5_e.doc. 26 Federal Law No. 6 of 1979, concerning veterinary quarantine, as amended in 1992. Available at: 27 GCC Technical Regulation No. 9 of 1995. 28 Further information available at:

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48. There are currently no provisions on the use, production, internal or external trade of genetically modified organisms (GMOs). Accordingly, there are no marking or labelling requirements for products containing GMOs. (d) Environmental-related trade measures

49. The UAE prohibits the import of certain products for environmental or health reasons, or in accordance with international conventions on, inter alia, the Basel Convention on the Transboundary Movements of Hazardous Wastes and their Disposal, the Rotterdam Convention on Prior Informed Consent (PIC) concerning chemicals, the Vienna Convention and Montreal Protocol on Control of Substances Depleting the Ozone layer), the Stockholm Convention on Persistent Organic Polluants (POPs), and Appendices I, II and III of the Convention on International Trade in Endagered Species of Wild Fauna and Flora (CITES) regulating trade in endangered animals and plant products . Federal Law No. (24) of 1999 specifies that "No public or private party or qualified or unqualified persons are allowed to import or bring, bury or dispose of hazardous wastes in any form in the UAE". The handling of hazardous chemicals and waste in the UAE falls under the Regulation on Handling of Hazardous Substances, Hazardous Wastes and Medical Wastes. 50. The UAE Ministry of Environment and Water was established in 2006, and has also established the following three institutions with the primary purpose of protecting the environment29 ; the Environment Agency in Abu Dhabi (formerly the Environmental Research and Wildlife Development Agency - ERWDA), established in 1996; the Environmental and Protected Areas Authority, in Sharjah, established in 1998; and the Environmental Protection and Industrial Development Commission (in Ra's al-Khaimah), established in 1999. (Since 10 September 2009, and in accordance with Federal law number. 7 of 2009, MOEW took over all previous mandates of the Federal Environmental Agency .) Their activities do not have a direct impact on trade, except for issues related to the international conventions mentioned above. No taxes are levied for environmental purposes. (viii) Government procurement

51. National accounts data show that consolidated government expenditures on goods and services amounted to Dh 24.3 billion (US$6.6 billion), or 6.4% of the UAE's GDP in 2004. However, these figures understate the importance of public procurement, as they do not include purchases in the context of development projects, or procurement by state-owned companies. Despite provisions favouring local suppliers, there is a strong reliance on foreign companies, particularly for major projects for which local expertise is not available. According to certain business sources, provisions of the procurement regime may vary from contract to contract.30 The UAE is neither a member of nor an observer to the WTO Plurilateral Agreement on Government Procurement. 52. The regulation on federal government procurement is Ministerial Decision No. 20 of 2000 on the administration contracts system. Total federal expenditure under the Decision reached Dh 527 million (US$143 million) in 2004. This Decision does not apply to purchases by the Ministry of Defence or those related to the State Security System; or to purchases for any "projects" handled by the Permanent Project Committee; or to any project excluded from the ambit of the regulation by a resolution or law passed by the Council of Ministers. In 2008 federal procurements amounted to Dh 231 million (US$[63 million ]), reflecting a reduced amount excluding procurements of the ministry of education since it was transferred to the local government of Abu Dhabi.
29 30

Federal Environmental Law No. 24 of 1999. U.S. International Trade Administration (2004).

United Arab Emirates Page 47

The UAE Ministry of Finance has fully transformed government procurement procedures by establishing an e-procurement system aiming to promote government procedure transparency. Such a system also substantially satisfies the suppliers since it saves his effort in coming to the ministry first to register, second to buy the bid then present its proposal and third to get the result of the transaction. Both companies working in the state as well as those working outside the state would benefit from the e-procurement system. 53. Government procurement organization in the UAE has undergone substantial change over the past decade. The Ministry of Finance will no longer be involved in central procurements of other federal ministries. Each ministry will offer its requirements for bids with no limitation and in accordance with the procurement procedures defined in the Financial procedures guidelines and Decision 20 of 2000. The. The Ministries of Health and of the Interior handle their own procurement under the Decision; this is also the case of purchases (e.g. highways) by the Ministry of Public Works and Housing. Procurements undertaken by the Ministry of Education have been transferred directly to the Emirate of Abu Dhabi as this ministry conducts significant procurement. In addition an independent dispute settlement entity has been established with the aim of resolving cases which may take place among suppliers and internal and external contractors on one hand and federal ministries on the other.. The pre-evaluation by the Ministry of Finance of contracts has been abandoned in favor of an advisory pre-evaluation which aims to ease ministries performance and grant them freedom and speed in implementing the transactions. With the same overall aim the State Audit Institution (SAI), an independent from the executive institution, exercises a posteriori control of transactions. 54. The Decision no. 20 of 2000 also requires purchases of products, services and construction works be made through "general tender" (open tender), or in certain cases, "limited tender", "practical participation", or "direct order". Under the general tender, bids are advertised publicly. Under the limited tender method, used when only a limited number of suppliers is available, bids are requested from a list of pre-approved suppliers. Under the practical participation method, a committee requests quotations from selected contractors without any tendering process. The direct order method is to be used in exceptional circumstances, such as the absence of competitive markets (e.g. monopoly). According to MF data, only Dh 12 million (2.3%) of federal purchases were carried out using the limited tender method in 2004, and Dh 10 million were spent through direct order; over 80% of the total value of purchases by MF follows the general tender method. 55. The bidder must be a GCC citizen or a company with maximum foreign equity of 49%. Certain tenders are exempt from this condition and open to foreign companies and establishments, essentially when these are the only available suppliers. In these cases, the foreign company is invited to open a branch and employ a service agent (Chapter II(5)). According to business sources, tenders are usually open to foreign suppliers with whom the authorities have worked on past projects.31 In the future, tenders may be opened on a national treatment basis to foreign-owned bidders established in free zones. 56. A procurement notice is usually published for one month at MF or the relevant ministry, electronically (since 2001), and twice in two widely disseminated newspapers. In order to have access to the electronic system, suppliers must register with the MF and pay Dh 1,000 the first year and Dh 500 for renewal.32 Publication may also be in foreign newspapers or other available media. A notice regarding planned procurement is published at the beginning of each fiscal year. The notice includes a description of goods and services to be procured, the authority receiving tenders, the period of validity of tenders, and the deadline for submission of tenders. Specifications and conditions of the
31 32

U.S. Department of State (2005). Online information available at: and (Arabic only).

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procurement must be in Arabic but, if necessary, they may be translated into one or more foreign languages. 57. A "bid bond" (of 5% of the bid value) with a UAE bank is required as an initial guarantee (Article 32 of the Decision). A Tenders Committee is constituted by the MF to assess the tenders and select the "best and lowest" bid. The selected company must provide a performance bond, generally of 10% of the bid value, to finalize the contract (Article 50). Majority government-owned companies are exempted from the two bonding obligations. There is no standard system for suppliers to challenge the award of a contract. According to the authorities, claims related to the tendering process can be submitted to a committee formed within the MF. 58. All defence purchases are centralized at federal level under the Ministry of Defence. In general, all contracts of US$10 million or more are subject to an "offset programme", under the UAE Offsets Group (UOG)33, which was created in 1990 and reports to the Ministry of Defence. Under the programme, all purchases by the UAE armed forces or elements thereof are subject to the offset obligation. The UOG could also require offsets on other than military public purchases, although this is not the case presently. The UOG carries out its purchases through direct negotiation with contractors and on a countertrade or offset basis. It acts as a conduit between international contractors and the local private sector; the ultimate objective is the diversification and development of the UAE economy. 59. Specifically, suppliers (domestic or foreign) that sign a defence procurement contract must undertake to set up a joint-venture with the private sector that will generate returns equal to an agreedupon share of the contract, over a specified period (generally seven years). An investment agreement is reached on an "offset programme" with each foreign defence supplier. Under the programme, the foreign company undertakes to "fulfil its offset obligation" equivalent to 60% of the value of the original contract. The UOG measures the output of an offset project through its profits. 60. To date, the UOG has implemented over 25 joint ventures (Table III.4) with a combined paidup capital in excess of Dh 5 billion (US$1.3 billion). Offset projects cover the full spectrum of economic activities, including advertising, fish farming, language centres, shipbuilding, leasing and financial services, and medical services. Offset arrangements tend to negatively affect competition and increase the cost of goods and services procured, because the qualification and selection of suppliers are not based solely on optimizing quality and cost, but are biased by conditions relating to the associated joint-venture projects.
Table III.4 Projects implemented by the UAE Offsets Group, 2010
Project name Abu Dhabi Shipbuilding Activity Construction of shipyard for building, maintaining, repairing, refitting naval and commercial ships Date palm nursery for plants propagated by tissue culture Language centre Advertising and events marketing for government and private sectors Shipping company owning and operating vessels and brokering cargo to finance and operate globally a fleet of modern dry bulk vessels and combined carriers in wet and dry Defence partner contractor/foreign Local partner Abu Dhabi Government Local shareholders Al Wathba Materials Local investors Agricultural

Newport News (shares sold to Abu Dhabi Government) Kranti Development Limited McDonnell Douglas (now Boeing) Deutz AG/Tatra Deutz Offset Countertrade Dept. Torvald Klaveness Group

Al Wathba Marrionet Berlitz Abu Dhabi BSI Bern Sapeth International LLC Combined Cargo UAE

Emirates Commercial Centre Abu Dhabi Investment Company (ADIC); Oman & Emirates Invest. Holding General Investments


UOG online information. Available at:

United Arab Emirates Page 49

Project name

Activity bulk traders Treatment of infectious medical waste generated from hospitals, health and dental clinics, and laboratories Technical maintenance services for testing and repairing avionics equipment Advisor and consultant for international and regional companies wishing to invest in Abu Dhabi Outpatient healthcare centre Manufacture of mobile solar energy generators for power, desalination and refrigeration Service centre covering satellite and aerial remote sensing data Fish and shrimps in mariculture facilities Production of recycled laser printer cartridges Centralized cooling systems that will serve groups of buildings and complexes Greenhouses and agricultural management

Defence partner Giat


Local partner

Condor Medical Waste Management - Abu Dhabi GAM-AERO Gulf Business Center

Condor Medical Waste Mgt General Investments FZE GAMCO United Technical Services

Aerospatiale (now EADS) Dassault; French Fighter Invest & Coop. Programme Lockheed Martin GEC-Marconi GEC-Marconi (now BAe Systems); Astrium Dassault; French Fighter Invest & Coop. Programme Boeing

Gulf Diagnostic Center Gulf Solar Power Company Infoterra (Gula Center for Remote Sensing) International Fish Farming Co (ASMAK) Laser Re-nu National Central Cooling Company (Tabreed) MIRAK Agriculture (National Horticulture Center Franserres) Oasis International Leasing Co Productivity and Leadership Consortium Safewater Chemicals Solex Robotics Services UTS Burnstop LLC Abu Dhabi Risk & Treasury Systems LLC Trakker ME Schmidlin Gulf Energy Maritime Fusion Glass LLC German Emirati Company Limited (GECO) CITYZZ Visitor Center Emirascope Prefabricated Building Elements

Ibn Khaldoun Al Nasser Holding Abu Dhabi Industrial Development CO Founders: 63 Shareholders: 31,400 Emirates Printing Forms Est 247 founders Al Hamed Enterprises

Owning, managing, selling, and leasing assets and properties Technology transfer centre Chemical production Inspection services for bulk storage tanks Manufacture of fire extinguishing products and equipment

Dassault; French Fighter Invest & Coop. Programme Thales British Aeropace Systems Westinghouse (bought by Northrop Grumman) Specialist Mechanical Engineers General Electric Dassault; French Fighter Invest & Coop. Programme Macquarie, MBDA Trakker Pakistan Alfia Investment Company Inovex Thales Diehl IWS Rohde and Schwarz Alfia Investment Company Rohde and Schwarz Rohde and Schwarz

Founders: 59 CERT Al Jaber Group Al Mansouri Specialized Engineering United Technical Services Abu Dhabi Commercial Bank Al Jaber Group Local investors ENOC Local investors Bina Group Local investors Local investors

Fleet management services A high-tech faade manufacturing company that aims to increase a building's life span Shipping company Glass products for architectural and interior construction projects Production of precast aerated concrete Multimedia interactive visitor centre Production of prefabricated elements

Source: Information provided by the UAE authorities

61. Dubai Law No. 6 of 1997 contains provisions regulating contracts between Dubai Government departments and companies entering into a contract, including the preparation of tender documents, issuing the tender, bid bond requirements, and performance bond requirements. The Dubai Government also requires a foreign company to employ a service agent. Certain governmental purchases can be handled electronically (since 2000).34


In the emirate of Dubai, is used to advertise public purchases of information technology


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62. Given the decentralised nature of the UAE, the majority of procurement (by value) is at emirate level. Furthermore, given the importance of the public sector, including state-owned companies, public purchases are particularly large in relation to total expenditure. For example, in Abu Dhabi, the Ministry of Health reportedly accounts for 70% of demand for pharmaceuticals and hospital equipment.35 (ix) Local-content requirements

63. The Secretariat has not received any information suggesting the presence of measures requiring the use of local products. However, the exclusive distribution system with the obligation to employ a UAE agent could be linked to a local employment scheme, as could the general requirement for a foreign branch to employ a local agent. In addition, the UAE Offsets Group runs a large offset programme (see above), which has not been notified under the WTO Agreement on Trade-Related Investment Measures. (x) Other measures

64. The authorities indicate that no agreements have ever been concluded with foreign governments or foreign firms to restrict exports to the UAE. The Secretariat has not been informed of any countertrade arrangements involving the governments of the UAE. The UAE does not maintain any compulsory reserve stocks. It has never taken any measures for balance-of-payment purposes. (3) (i) MEASURES DIRECTLY AFFECTING EXPORTS Registration and documentation

65. To export goods of UAE origin, shippers are required to provide Customs with an original invoice and a completed export declaration. (ii) 66. (iii) Export duties and taxes Since 2003, an export tax on steel scrap has been levied at the rate of Dh 250 per ton. Export prohibitions and restrictions

67. The UAE maintains export controls (through permits) on certain products for safety, security, and environmental reasons, and to ensure compliance with international obligations under treaties and conventions (e.g. the Basel Convention, CITES, the Convention on Chemical Weapons, the Treaty on Nuclear Non-Proliferation) to which it is a signatory. It restricts in particular exports of dual-use goods that might be used in weapons of mass destruction programs, as well as conventional weapons. Permits are also required to export animals and animal products, as well as narcotic drugs, psychotropic substances, and precursors.36 WTO rules do not apply in any way to sovereign decisions to limit the exploitation of natural resources including oil.gaz and other natural resources. 68. The UAE tightened export control laws and enforcement to prevent the movement of illicit goods and materials across its borders. In August 2007, the UAE government enacted a stringent export control law that includes stiff penalties for parties involved in the diversion of controlled

35 British Embassy, Commercial Section, Abu Dhabi, "Background notes on Abu Dhabi". Available at: 36 See also Federal Environmental Agency online information. Available at:

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shipments. Federal Law Number 13 of 2007, addressing commodities subject to import and export control procedures, does the following: a) b) c) d) e) f) g) h) i) j) k) Authorizes government bodies to restrict or ban the import, export or re-export of goods deemed a threat to the UAEs national security, foreign policy, natural resources, public health and safety, or the environment. Bans the export or re-export of strategic goods, including arms and military hardware, chemical and biological materials, and dual-use items without a special license. Establishes a national committee with clear oversight and management responsibility for UAE export control procedures. This committee has the ability to categorize goods and technologies as strategic and controlled, if they can be used for military purposes or in conventional weapons or weapons of mass destruction. Specifies penalties, up to imprisonment for one year and/or fines totaling over US$270,000.

69. In September 2008, the UAE amended the export control law to toughen its implementation. In April 2009, the UAE cabinet formed the UAE Committee on Commodities Subject to Import and Export Control, reporting directly to the Council of the Ministry of Foreign Affairs, which reports to the President of the UAE. The committee includes representatives from across the UAE government. The changes37 (iv) Export subsidies, finance, insurance, and assistance

70. The authorities indicate that the UAE does not grant or maintain any export subsidy within the meaning of the WTO Agreement on Subsidies and Countervailing Measures.38 At federal level, the Emirate Industrial Bank, 51% owned by the Federal Government, provides financing "at reasonable terms" for the industrial sector.39 This includes export credits and equity financing.40 To be eligible, the project should have a minimum of 51% UAE or GCC ownership and should be located in the UAE. In addition, the project should have an industrial licence issued by the Ministry of Finance and Industry. The Emirate Industrial Bank was merged with the Real Estate Bank under the name Emirates Development Bank in order to provide loans for Industrial Projects. The Government has also recently purchased the shares of the partners in the Emirate Industrial Bank in order for the bank to be fully owned by the federal government. 71. Export promotion is the responsibility of each emirate. According to the authorities, the creation of a federal body for export promotion is currently envisaged, with the aim of harmonizing all promotional activities within the UAE territory. Law No. 10/2006 dated May 1, 2006 established Dubai Export Development Cooperation (EDC) as an autonomous organization funded by the Government of Dubai. EDC role is to provide exporters with the services required to enter or expand foreign markets including trade information, branding advice, financial, legal and foreign trade representation and access to potential buyers. DEDC offers many services most notably Trade Credit Insurance is also known as Accounts/Trade Receivables Insurance, Dubai Sub-contracting and Partnership Exchange (Dubai-SPX) is a program that serves as technical information sharing and a match making hub, with a mission of promoting Dubais industrial, business and service capacities
Source: Ministry of Foreign Affairs: Export Control & Combating Terror Financing _UAE Embassy in Washington DC 38 WTO document G/SCM/N/38/ARE, 18 April 2000. 39 Central Bank of the United Arab Emirates (2003). 40 See Emirates Industrial Bank online information for a summary of available financing:

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and a Trade Partnership Program that is composed of Dubai Trade Dubai which is a single window providing a streamlined flow of services. The Department of Economic Development in Abu-Dhabi has dedicated a specific department for the purposes of export development called Foreign Trade & Export Support.41 (v) Free zones

72. The UAE's first free zone was established by decree at Jebel Ali in 1980. It has since expanded from 10 hectares to over 300. Its success in attracting foreign investment and technological expertise, and the growth of re-exports and transhipment as a major commercial activity led all the emirates, except Abu Dhabi, to create such free zones to attract inward investment, employment generation, and significant economic development. Aside from the advantages already available to companies in the UAE Customs territory (no corporate or personal taxes, freedom to repatriate capital and profits, low import duties except on tobacco and spirits, no exchange restrictions), the free-zone regimes allow 100% foreign ownership of companies, and hence a full control over their activities. Comparative advantages in each zone are based on individual locations, facilities, areas of specialization (e.g. motor vehicles), and establishment and operating costs.42 73. Another advantage of operating in a free zone is that the Trade Agencies Law (section (2)(i)) above), which regulates a part of the domestic trade in the Customs territory does not apply. Various types of licences allow operators to practice specified activities in free zones. At the Jebel Ali Free Zone, a "general trading licence" allows the holder to import, export, distribute, and store any items in accordance with the zone's rules and regulations; a "trading licence" gives the same rights, but for specified items only. An "industrial licence" allows the holder to import raw materials, manufacture specified products, and export the finished products. A "national industrial licence" is reserved for manufacturing companies with at least 51% GCC ownership; it allows duty-free sales inside the UAE customs territory. However, the value added by the free-zone company must be at least 40% of the value of the good to qualify for duty-free sales. A "service licence" allows the holder to carry out the services specified in the licence within the zone. The type of services supplied must be the same as the services supplied by the parent company. A number of the national factories which are located in the Jebel Ali Free Zone are registered with the Ministry of Economy . Their capital is more than 51% owned by nationals. They have industrial production license . National treatment apply to factories located in the Jabel Ali Free Zone. 74. Another regulatory specificity of the free zones, which could become significant for companies' productivity (depending on future policy trends), is the absence of restrictions on hiring foreign employees. There are currently few barriers to the recruitment of foreign labour in the UAE, and foreign employment has been the source of economic growth (Chapter I(1)). However, Emiratization programs are being progressively applied to counter the problem of unemployment of nationals. Within the free zones, premises may be owned on leased land, and mortgaged. Therefore, a company established in a free zone that has built its own facility may mortgage its premises to a bank or financing company to finance its debts or obligations. 75. Operators register with the customs authority of the emirate in which the free zone is located. The relevant customs authority delivers import and export permits. Products may be brought into free zones and duty-free shops, and exported outside the country or to other free zones and duty-free


Source Department Of Economic Development Abu_Dahbi . Organizational Structure of DEDInformation on all the UAE free zones is available online at:



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shops, without being subject to customs duties.43 Goods can remain indefinitely in free zones. All exports from free zones are accounted for through export declaration. Imports from free zones and duty-free shops into the customs territory are liable to all the normal customs duties and taxes (except, as mentioned above, the GCC-owned companies that meet the 40% rule of origin criterion). 76. In 2009, there were 26 free zones in operation in the UAE, with investments of about US$4 billion. Several free zones are dedicated to specific services subsectors, including Dubai Internet City, Dubai Media City, Dubai Health Care City (Box IV.1), and Knowledge Village. In addition, 12 free zones are under development, and Dubai has announced the launch of several additional free zones. Jebel Ali Free Zone Authority (Jafza) manages one of the world's largest and fastest growing exportprocessing zones, and is a leading global trade and trans-shipment centre.44 The zone is built around Dubai's Jebel Ali Port which is one of the world's largest ports (Chapter IV(5)). Upon completion of the Jebel Ali Airport, expected in 2010, Jebel Ali Free Zone will be the only one in the region with an airport and a port on site. Over 6,000 businesses from over 110 countries are operating at Jafza as of 2008: 76% are involved in trading, warehousing, and distribution; 20% in manufacturing; and 4% in services. Jafza is a commercial organization but is financially supported by its only shareholder, the Government of Dubai, to which it submits quarterly performance reports. (4) (i) MEASURES AFFECTING PRODUCTION AND TRADE Incentives

77. In the context of its annual notification obligations under the WTO Agreement on Subsidies and Countervailing Measures, the UAE submitted its most recent "new and full" notification in April 2009.45 According to this notification, the Government of the UAE does not grant or maintain within its territory any subsidy, within the meaning of Article 1.1 of the Agreement, that is specific (within the meaning of Article 2 of the Agreement), or that operates directly to increase exports from or reduce imports into its territory within the meaning of Article XVI:1 of GATT 1994. However, some support is provided to agriculture (Chapter IV(2)). No information is available regarding financial assistance extended by the emirate authorities to private companies and to stateowned companies operating in the UAE and abroad (section (ii) below). 78. A number of investment incentives are available under Federal Law No. 1 of 1979 (Box III.1), ranging from duty-free imports to the supply of utilities at low prices. The Emirate Industrial Bank provides financing "at reasonable terms" to the industrial sector (section (3)(iv) above)46. Federal Law No. 1 of 1979 Organizing Industrial Affairs will be repealed soon and replaced by a forthcoming industrial regulation law, the project of which is currently under final review. This law will ensure compliance with international obligations. 79. Other important incentives is provided through program that support small and medium enterprises. The services provided by these programs are centred on two pillars one is support in preparing feasibility study and business plan and the second is through facilitating finance in cooperation with locales banks. Khalifa Fund was established with full financial and administrative
The following goods may not enter free zones and duty-free shops: flammable goods, excluding authorized fuels necessary for operations; radioactive materials; arms, ammunition and explosives of any kind, except those licensed by the competent authorities; goods infringing laws on intellectual property rights protection; all kinds of narcotic drugs and derivatives; goods originating in an economically boycotted country; and goods prohibited from entering the country. 44 Further information is available online at: 45 WTO document G/SCM/N/40/Add.1/Rev.928 April 2009. 46 Central Bank of the United Arab Emirates (2003).

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independence to support small and medium enterprises in Abu-Dhabi. In Dubai a similar programme was established on June 12- 2002 named Mohammed Bin Rashid Establishment for Young Business Leaders t launched on June 12, 2002 . in 2010 the government of Ras Al Khaimah has authorised a new business plan aimed at improving opportunities for small and medium-sized enterprises named the Saud bin Saqr Programme for Young Business Leaders grants SMEs47.
Box III.1: Provisions of Federal Law No. 1 of 1979 Organizing Industrial Affairs Article 20 The Cabinet, and the authorities in the Emirates, may grant projects that meet certain conditions, the following privileges and exemptions: assignment of a building-site for the project, either free or at a reduced price or a symbolic rent with optimal conditions; rent on the necessary industrial buildings at optimal conditions, in the industrial areas established by the Government; supply of electricity and water at incentive rates; customs-free imports of: (a) machinery, equipment, spare parts and building materials required for project; (b) raw and intermediate materials, semi-products, packing and wrapping materials used at production level. tax-exemption for the profits made by the project as well as the reserve amounts deducted from these profits to be re-invested in the project, for a renewable period of five years starting from the date when production becomes effective; exemption of locally made products when exported from export duties and taxes; subsidies to exports; and protective measures for local products, taking into consideration their kind, quality and quantity.

Article 21 Priority for the privileges and exemptions mentioned in Article 20 is given for: competitive, export-oriented or export-substitution projects; projects using local raw materials; projects established in areas determined by the Government; and any other projects that may be of specific economic importance, and included, for this reason, in the government development plan.

The law applies to most industrial projects except extraction or refining of petroleum or other raw materials. Source: Federal Law No. 1 of 1979 Organizing Industrial Affairs.


State-owned enterprises, state trading, and privatization

80. In October 1996, the UAE notified the WTO that it does not maintain any state-trading enterprises within the meaning of Article XVII of the GATT.48 Quite a few state-owned companies appear to be engaged in international trade, such as in the hydrocarbon subsector. Wholly or partially government-owned companies that engage in trade include: Etisalat; Abu Dhabi National Oil Company (ADNOC); Dubai Petroleum Company; Emirates National Oil Company; Sharjah Oil Refining Company; Dubai Aluminium Company; and Al Ain cement plant.

47 48

Source: Emirates Business 24-7 : RAK helps SMEs explore untapped areas WTO document G/STR/N/1/ARE, 14 October 1996.

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81. In general, the emirate governments have a laissez-faire approach towered the economy. A Portion of companies engaged in productive activities are owned or controlled by the emirates or by the Federal Government. As a result of large public investments, generally in partnership with foreign enterprises that bring their technologies, many productive state-owned companies have grown large enough to compete on world markets. In addition, because of their ownership structure these companies benefit from a financial rating allowing them to borrow at low interest rates. Some of them (e.g. in electricity and air transport) also benefit from a favourable domestic environment when they are both operators and regulators. 82. In recent years, Emirati firms have increasingly made acquisitions abroad, particularly in finance, real estate hotel, tourism and the transport sector. According to a study by Ernest & Young the UAE came top in the number of mergers and acquisition deals in the Middle East region by recording 65 transactions in 200949. Moreover, The international expansion of Emirates based companies was made possible by activities of the followings state owned enterprises: a) Abu-Dhabi Investment Authority (ADIA): Abu-Dhabi Investment Authority (ADIA) has the following enterprise under its control Procific, Tamweelview European Holdings SA which is the European Real Estate investment arm of ADIA. One of its significant real estate investments is Sturegallerian AB. An additional investment arm of ADIA is Tannadice Investments LLC which owns 25% stake in Chicago Parking Meters, LLC. Other sovereign wealth arms of ADIA include: Flamingo,Fundaq, Ganges, Gulab, Indent, Jhelum, Manly, Mark 5, Merlion, Monsoon, Roic, Ssgain and Way50. b) The Abu Dhabi Investment Council: The Abu Dhabi Investment Council was splintered off from the Abu Dhabi Investment Authority. It is much smaller in size than ADIA. ADIC is a Joint Stock Company that specializes in providing investment and corporate finance in addition to advisory services. It also currently invests in private equity, real estate, asset management and infrastructure. The ADIC owns about 73% of the National Bank Abu Dhabi c) Emirates Investment Authority: Emirates Investment Authority It is a fund that is mandated to manage the sovereign wealth of the United Arab Emirates federal government. Established in November 2007 by Emiri decree, the Emirates Investment Authority (EIA) is the first federal sovereign wealth fund for all seven states comprising the United Arab Emirates (Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain). d) International Petroleum Investment Company(IPIC) : IPIC is the Abu Dhabi state enterprise which is responsible for all foreign investments in the oil and chemicals sector. It is based in Abu Dhabi, United Arab Emirates. Established in 1984 it is wholly owned by the Government of the Emirate of Abu Dhabi. The IPIC portfolio includes investments in Austria, Egypt, Pakistan, Spain, South Korea, UAE, Germany, Oman, Japan, and Portugal. Investments include downstream hydrocarbon operations, petrochemical plants, pipelines, power utilities, and shipping. e) The Investment Cooperation of Dubai (which owns Emaar, Dubai Holding and Borse Dubai): The Investment Cooperation of Dubai (ICD) was established in the emirate of Dubai of the United Arab Emirates , the sovereign wealth fund, is broken into several operating investment companies. It was formed in May 2006, with the transfer of the governments portfolio of investments from The Department of Finances Investment Division. Similar to Abu Dhabis strategy, Dubai developed
49 50

Source: Khaleej Times: UAE Tops the Region in Mergers Source: Sovereign Wealth Fund Institute.

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plans to diversify their reliance on oil exports through creating sovereign wealth vehicles. One of its goals is to help better manage Dubais state-owned enterprises. f) Dubai World ( Dubai World owns Nakheel , DP World, Drydocks World, Economic Zones World, Istithmar ) g) Mubadala: Mubadala was established in October 2002 as a Public Joint Stock Company is a wholly owned investment vehicle of the Government of the Emirate of Abu Dhabi, in the United Arab Emirates. Mubadalas sole shareholder is the Government of the Emirate of Abu Dhabi. One of Mubadalas goals is to implement a long-term economic diversification strategy aimed at creating a modern, dynamic, productive economy. Mubadala comprises 9 separate business units with their own specialist areas of focus: Energy, Industry, Aerospace, Information & Communication Technology, Services Ventures, Real Estate & Hospitality ,Infrastructure, Healthcare and Acquisitions h) The Investment and Development Office (IDO) in Ras Al Khaima: IDO was set up on 1 January 2004 with the aim to identify new investment opportunities and facilitate the prospective investors in their goals to set up new businesses in Ras Al Khaimah51. 83. In the finance sector Abu-Dhabi Investment Authority have made one of the most extravagant international acquisition. A history of how the company was established will clarify its international portfolio of acquisition s. In 1967 Abu Dhabis Financial Investments Board was created under the auspicious of the Department of Finance(Mandate given to UBS, Robert Fleming, Morgan Guarantee Trust and Indosuez). In 1976 the government of Abu-Dhabi decided to separate ADIA from the Government of Abu Dhabi as an independent organization; subsequently the following department were created: Equities and Bonds, Treasury, Finance and Administration, Real Estate, local and Arab investments. In 1986 it Started investing in alternative strategies. In 1987 the Equities and Bonds departments became regional (North America, Europe and Far East). In 1989 ADIA started investing in private equity. In 1993 ADIA started formal asset allocation process with a set of benchmarks and guidelines; Bonds moved from Equities Department to Treasury Department. In 1998 it started investing in inflation-indexed bonds. In 2005 ADIA dedicated allocation to small caps within equities, and investment-grade credit within fixed income. In 2007 ADIA started investing in infrastructure sector and then it moved into new headquarters. In 2008 ADIA participated in the development of policy principles for international investments with the U.S. Department of the Treasury. In the same year ADIA was appointed co-Chair with IMF of International Working Group of Sovereign Wealth Funds. In 2009 the department of Investment Services Department was created ; then it became a Founding member of the International Forum of Sovereign Wealth Funds (IFSWF) . In 2007 ADIA purchased a 4.9 percent stake in Citigroup's making it the largest shareholder ahead of Los Angelesbased Capital Group Cos52. 84. In 2007 Mubadala Development Company announced an agreement in which it will acquire a 7.5% stake in Carlyle Group for $1.35 billion in cash. The deal represents a 10% liquidity discount to the parties agreed-upon $20 billion firm valuation. The minority investment includes no associated voting rights and is subject to value-related protective rights. Mubadala also committed $500 million to an investment fund managed by Carlyle , in addition in 2009 Mubadala signed an agreement with General Electric to establish a commercial finance joint venture. The joint venture will combines Mubadalas regional investment expertise with GEs global origination excellence, a regional training centre for next-generation business leaders was also established.
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Source: Sovereign Wealth Fund Institute. Source: Bloomberg: Citigroup to Raise $7_5 Billion From Abu Dhabi State

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85. Borse Dubai Limited (Borse Dubai) and The NASDAQ Stock Market Inc. (NASDAQ) announced a series of transactions that created a global financial marketplace53. On December 2009 , Dubai Financial Market, PJSC (DFM) announced that it has made an offer to NASDAQ Dubai a joint venture between Borse Dubai Ltd. (Borse Dubai) and The NASDAQ OMX Group Inc. (NASDAQ OMX) as a result DFM acquired 100% of NASDAQ Dubai54. Borse Dubai purchased 27.4 per cent of OMX ,the Nordic and Baltic exchange operator based in Sweden. Such partnership will allow Borse Dubai to leverage the strong financial technology capabilities of OMX. In 2010 the London Exchange Group declared that Borse Dubai Limited has a 20.6 % share in London Stock Exchange Group. 86. Dubai Holding A subsidiary of the Investment Corporation of Dubai has acquired 51.4% in Och Ziff Capital Management a US based company. 87. Dubai Group the investment arm of Dubai Holding made several international acquisitions. In the Middle East & North Africa it held 62% shares in TAIB Bank, 51% shares in Acacia, 51% shares in Al Fajer ReTakaful ,41% shares in Oman National Investment Holding Co, 18% shares in EFG-Hermes, 15% shares in Bank Muscat, 10% shares in Global Investment House, and a joint venture with Qater Investment Authority called Qatar Dubai Investment and Dubai Group Sigorta A. another joint venture in Turkey. In Asia they have acquired 6% shares in Vietnam Asset management a 51% in KOP Group a 40% shares in ACR Retakaful Holding,30% shares in Bank Islam ,28% shares in Chiranjjeevi Wind Energy,10% share in Sun Hung Kai Financial 5% share in Bharat Hotels and A joint venture with Adventity BPO India Pvt. Ltd and 10.89% share in China Enersave Ltd a Chinese based company. In Europe they have acquired 9.07% in Marfin Investment Group Holdings SA a Greek based company. In North America In North America it acquired 90% The Chicago City Centre Hotel & Sports Club shares , 90% shares of The Braintree Portfolio, 90% shares of The Denver Office Portfolio and 100% shares of Jumeirah Essex House HotelDubai International Capital another subsidiary of Dubai Holding bought a 2.87% share in ICICI Bank Limited India and a 2.87% in ICICI Bank Limited, both companies are incorporated in India. 88. In the real estate hotel and tourism sector Nakheel Properties have made significant investments in Kerzner International Ltd.-the developer and operator of Atlantis Resorts. It also made an investment in IHI plc, the owner and operator of the five-star Corinthia Hotel brand including hotels in Malta, St Petersburg, Lisbon, Tripoli, Budapest and Prague. In New York, Nakheel Hotels has majority ownership of the Mandarin Oriental Hotel and the W Hotel Union Square - in addition to Hotel Washington in Washington DC. It also acquired a 50 % stake in the Mexican resort, One&Only Palmilla in Los Cabos and a 33 per cent stake in the Metropole Hotel in central London. It also made an investments of $375m with Fontainebleau Resorts, LLC, in exchange for a 50% interest in the company's iconic Fontainebleau Miami Beach resort55. 89. Also, Dubai International capital bought a 100% share in Travelodge a UK based company.

90. On June 1, 2006 Emmar Properties, one of the worlds largest real estate companies, acquire John Laing Homes, the second largest privately held homebuilder in the U.S., creating one of the worlds leading real estate developers in residential homebuilding. The transaction cost US$1.050 billion56. In August, 2006, Emaar acquired Hamptons International, the UK-based premier realtor with over 130 years of real estate expertise, Emaar objective was to draw advantages from Hamptons core
53 54

Source: NASDAQ : Borse Dubai and NASDAQ Source Dubai Financial Market: Dubai Financial Market to Acquire NASDAQ Dubai for US$ 121 Source: AME Info: Nakheel emerges as major global player in hotel investment industry Source : KPMG: Emaar Properties announces the acquisition of John Laing Homes


55 56

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competencies in operations, service support and product sales. Emmar have expanded internationally by opening the following companies ;in Asia in 2005 Emaar entered the Indian real estate market by creating a joint venture with MGF Developments Limited of India , the new formed company was called Emaar MGF Land Limited; On July 4th 2006 Emaar Properties opened a fully fledged company Emaar China in Shanghai;. Emaar Pakistan developed two projects Canyon Views in Islamabad and Crescent Bay in Karachi; In May 2007, Emaar Indonesia signed a Memorandum of Understanding (MoU) with Perusahaan Pengelola Aset (PPA), the state-owned Asset Management Company in Indonesia , for developing a US$600 million mixed-use project on Lombok Island project, this was followed by the signing of a joint venture in March 2008, between Emaar and Bali Tourism Development Corporation (BTDC), a state-owned firm under the Ministry of State-Owned Enterprises. Emmar Jordan was established to cater for the needs of the Jordanian market. On 2007 it developed the Dead Sea Golf and Beach Resort; In 2009 Emaar Lebanon was founded; In September 2006 The Economic City Emaar.E.C was established, Emaar.E.C is a Saudi joint stock company managed by Emaar Properties PJSC and a number of high profile investors. Emaar Middle East, a joint venture between Emaar Properties and Al Oula Real Estate Development Company (Saudi-based real estate company) developed several high value projects in the Kingdom of Saudi Arabia like Jeddah Gate, Al Khobar Lakes and Emaar Residences at Fairmont Makkah; Emaar Misr for Development S.A.E was founded in Egypt with total investment reaching US$7.97 billion in the Egyptian market; the most prominent projects are; Uptown Cairo, Marassi, Mivida and the Cairo Gate; in Syria, Emaar Syria entered into a joint venture with IGO, the offshore investment and property development company to develop The Eighth Gate a mixed used real estate project in Yafour the project valued US$500 million ; In Turkey, Emaar Turkey opened its Istanbul office in June 2006 several projects were lunched most notably the Tuscan Valley and the New Istanbul Development. In Morocco, Emmar Morocco developed 5 large projects through strategic partnerships with the Moroccan government and Onapar; Emaar Canada launched its projects, Wills Creek, in the prestigious community of South Surrey, British Columbia; in the United States of America Emaar USA developed Beverally West Residence in Bervelly West LA California57. 91. In the transport sector , Dubai Ports International (now DP World), the world's sixth-largest port operator, owned by the Dubai Government, made a 3 billion bid in October 2005 for P&O, Britain's biggest ports and ferries group. In February 2005, Dubai Ports International announced the acquisition of CSX World Terminals for close to US$1.5 billion, thus gaining a strong presence in Asia for the first time, including in Hong Kong, China and China, as well as in Australia, Germany, the Dominican Republic, and the Bolivarian Republic of Venezuela. DP Worlde has also made an offer in 2007 to buy Auckland International Airport in New Zealand for $3 billion58. 92. In the aerospace transportation industry Mubadala Development, has signed a deal in 2008 with the Italian aerospace company Finmeccanica to build components for civilian aircraft. In February 2009 Mubadala Development Company signed a Heads Agreement that will form a joint venture with Sikorsky Aerospace Services. The agreement will establish an aviation military Maintenance Repair and Overhaul (MRO) Centre that was followed by signing a multilateral agreement with GE Aviation and its affiliates to provide technical support and services to Mubadalas affiliate MRO companies SR Technics and ADAT, including technical and corporate training support, comprehensive material support, and the granting of licenses to service certain GE59. Dubai International capital acquired a 2% share in DaimlerChrysler AG .In 2006 The Emirate of Ras Al Khaimah announced the creation of RAK Airways, the UAE's fourth national carrier. RAK Airways is a private joint stock company incorporated in the RAK Free Zone at Jazirat Al Hamra with
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Emaar International Emaar International Company Source: Middle East Forum: Sovereign Wealth Funds Investment Vehicles For GCC 59 Mubadala: Mubadala Sign Mult-faceted Aviation Agreement

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an authorized capital of AED 1.5 billion in 2009 the airline has suspended its operations and announced that the airline will re-launch before the end 201060.. 93. The only significant steps towards privatization since WTO Membership in 1996 have been in Abu Dhabi's electricity and gas subsectors (Chapter IV(3)). The emirate of Abu Dhabi has also initiated plans for the sale of certain companies in the manufacturing sector (Chapter IV(4)). (iii) Competition policy and price controls

94. The UAE does not have competition legislation. Anti-competitive practices are dealt with on a case-by-case basis by the MOE, in consultation with the MF and the chambers of commerce. In principle, the UAE market should be highly competitive given the low import duties and the absence of non-tariff barriers. However, a lack of competition results from the market-segmenting effects of exclusive agency laws (section (2)(i) above). These exclusive rights also constitute a barrier to full GCC integration.61 In order to address these issues the UAE government plans to soon introduce a Competition Law. Various model laws are being considered and the government is currently examining a draft submitted by the GCC Secretariat for a unified GCC Competition Law. A draft UAE competition Law is under consideration by the Ministerial Cabinet of which the main objective is to promote competition by controlling and eliminating all practices which have as their object or effect the prevention, restriction or distortion of competition within the UAE market. In addition, a draft GCC competition Law is under consideration by the GCC Member States the objective of which is to promote competition by controlling or eliminating all practices which have as their object or effect the prevention, restriction or distortion of competition within the GCC market. The UAEs next WTO TPR should update or reflect the development of competition in the UAE. 95. In principle there are no a priori price controls, and the government discourages such practice. However, the MOE monitors the prices of 15 goods, mainly food products, in order to contain the negative effects of cartels and other anti-competitive practices.62 Recently the UAE has imposed however price controls on the rental market and has set out in 2008 maximum prices for food products such as eggs, rice, chicken and bottled water The federal and emirate governments have a role in the price determination or approval of a number of services, including telecommunications, postal, and medical services. Electricity, water, and gas prices are set by state-owned companies at the emirate level. Also, Gasoline prices are fixed by the Government of the UAE and are the same throughout the country. Some form of rent control are in place in some emirates especially in Dubai and Abu-Dhabi. (iv) Intellectual property rights

(a) Overview 82. The UAE initially availed itself of its right under Articles 65.2 and 65.4 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to delay for a period of four years, beginning in January 1996, the date of application of the Agreement, and for a period of five years, beginning 1 January 2000, the date of application of the provision on chemical and pharmaceutical products patents. 96. In the context of the review of its IP legislation in 2001, the UAE provided responses to questions posed by Canada, Japan, Switzerland, and the United States.63 Subsequently, a number of
Source: World Bank (2002). 62 The products include dry and condensed milk; frozen and canned vegetables; children's foodstuff and milk ; chickens; cooking oil; rice; flour; fish products; meat and meat products; tea; coffee; cheese; pasta (macaroni, vermicelli); sugar; and diapers (Cabinet Decision No. 538/1). 63 WTO document IP/Q/ARE/1, 2 February 2004.
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amendments were made, and three laws entered into effect in 2002: Federal Law No. 17 of 2002 (issued on 17 November 2002), pertaining to the industrial regulation and protection of patents, industrial drawings, and designs (subsequently amended by Federal Law No. 31 of 2006); Federal Law No. 8 of 2002 (issued on 24 July 2002), amending Federal Law No. 37 of 1992 in respect of trademarks; and Federal Law No. 7 of 2002 (issued on 1 July 2002) concerning copyright and neighbouring rights (subsequently amended by Federal Law No. 32 of 2006). 97. In accordance with Article 63.2 of the TRIPS Agreement, the UAE notified the English version of Federal Law No. 7 of 2002 concerning copyrights and neighbouring rights.64 The UAE undertook to communicate the two other laws to the WTO Secretariat as soon as their translation would be finalized The authorities have notified the contact point for IPRs as the Ministry of Economy and Planning. 98. The UAE is a member of the following treaties: the WIPO Convention, since September 1974; the Paris Convention (industrial property), since September 1996; the Berne Convention (literary and artistic works), since July 2004; the PCT (Patent Cooperation Treaty), since March 1999; the WIPO Copyright Treaty (WCT), since July 2004; the Rome Convention, since January 2005; and the WIPO Performances and Phonograms Treaty (WPPT), since June 2005. (b) Patents

99. The 1992 Patent and Design Law No. 44 provides for the protection of a patent granted for any invention that is the result of an innovative idea, or for an innovative improvement on a patented invention, whether in relation to a new industrial product, an industrial process or method or to the application of a known industrial process or method. The law was amended in November 2002, in part to ensure conformity with the provisions of the TRIPS Agreement. For example, the term of patent protection was increased from 15 years renewable for five additional years, to 20 years (nonrenewable) from the date of filling the application. 100. The law enables the patent holder to prevent others from manufacturing, importing, offering for sale, selling, using or otherwise keeping for the purpose of selling or using the product, or using the method. To conform with Article 28 of the TRIPS Agreement, the amendment specified the rights of the patent holder in preventing others from using it. 101. The 2002 amendment also extended the coverage of the protection of innovations to all fields of technology, including agriculture, hunting, fishing, handicrafts, and services, covering both product and method of processing. Previously, inventions dealing with the chemistry of drugs or pharmaceutical compounds, as well as inventions in foodstuffs were excluded from coverage. They are now covered by Article 4 and 70 of the Law No. 31 of 2006. Exceptions (from patentability) exist for plant and animal research, or biological processes for the production of plants or animals, with the exception of microbiological processes and products; scientific principles and discoveries; diagnostic, therapeutic and surgical methods for the treatment of humans or animals; and inventions related to national defence or that would be contrary to public order and morality. Micro-organisms are patentable. 102. The supervisory ministry for IP matters is the Ministry of Economy .Since the entry into force of the TRIPS Agreement, it has opened a register in which patent applications for inventions concerning pharmaceutical and agricultural chemical products can be filed.


WTO document IP/N/1/ARE/C/1, 3 March 2004.

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103. The Patent and Designs Law provides for non-exclusive compulsory licensing, after the lapse of at least three years after granting the patent. An applicant must prove that efforts have been made to obtain a licence from the patent owner on reasonable conditions. The licence should be for the purpose of fulfilling the demands of the local market. Article 24 of the Law No. 31 of 2006 stipulates that the importation of the product is not sufficient ground for granting a compulsory licence. No compulsory licence has so far been granted. There is no provision on parallel imports of patented products and there has been no jurisprudence in the UAE in this regard. (c) Industrial designs

104. Industrial designs are protected by the Patent and Design Law (Article 51) and the related 1993 Decree No. 11 (Articles 45-49). The holder is accorded exclusive rights over imports of any product related to the industrial design, or processing of such a product for the purpose of offering it for sale or selling it. A special register is kept by the Ministry of Economy All industrial designs must be registered. The provisions on industrial designs under the Patent and Industrial Design Law also apply to integrated circuits (Articles 43-51). Protection is granted for ten years, renewable once for five years. (d) Layout-designs (topographies) of integrated circuits

105. Computer programs are protected by the 1992 Copyrights and Neighboring Rights Law No. 40. The 2002 amendment has brought under its scope computer program applications, as well as compilations of data. According to the federal authorities, the law now provides for clear provisions to deal with the situation foreseen in the derogation from Article 36 as specified in Article 37 of the TRIPS Agreement, whereby a person has no knowledge or reasonable grounds to know when acquiring an integrated circuit or an article incorporating such an integrated circuit that it contains an unlawful topography. 106. The provisions on industrial designs under the Patent and Industrial Design Law also apply to integrated circuits (Articles 43-51). Protection is for ten years.. (e) Copyright and related rights

107. The 1992 Copyrights and Neighboring Rights Law No. 40 is the main legislation protecting copyright. It was amended in 2002.65 The amendment provides more detailed measures to enforce copyright in line with the provisions of the TRIPS Agreement. In particular, the amendment is designed to meet the obligations arising from Article 9 of the TRIPS Agreement (Berne Convention, Articles 1-21, except Article 6 bis), through the extension of the works and types of expression covered as well as the nature of the protection. The amendment introduces the exclusive right to exploit, under the rental right, literary works, including computer programs and cinematography work. Copyright protection is for 50 years. The supervisory ministry for issues related to copyright is the Ministry of Economy. (f) Trade marks

108. The 1992 Trademarks Law No. 37 is the main legislation protecting trademarks. Article 2 of the law considers as trademarks, among others, signs that take a particular form if they are used to distinguish goods, products or services, or to indicate that the products, goods or services are the properties of the owner of the mark.66 Sound constitutes an element of the trade mark if it accompanies the trade mark. The law also contains provisions on well-known marks. A unified GCC
65 66

The 2002 legislation is contained in WTO document IP/N/1/ARE/C/1, 3 March 2004. Article 1 of the Law defines a sign as a drawing that can be seen and that constitutes one element.

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Law on trademarks has been adopted on the 27th session of the High Council of the GCC held in Riyadh in 2006. In the UAE, the GCC Law has been approved by Federal Decree No. 52 of 2007. The Law was expected to be implemented six months after the adoption of its executive regulation. However, pursuant to the decision of the GCC Committee on Commercial Cooperation (Doha, 2008) the Law has been re-sent to the technical Committee for further discussion on the new proposals made by Oman and Bahrain. To date, the proposed modifications are still under consideration by the technical Committee. 109. The Trademarks Law allows the court to delete the registration of a trade mark if it is determined that the mark has not been used effectively during five years, unless the owner justifies the non-use of the trade mark. According to the authorities, the 2002 amendment of this law added that the non-use of the trade mark should not be a reason for the deletion, if it is due to reasons not related to the ownership of the trade mark. Trademarks registration is renewable indefinitely. The Ministry of Economy is the supervisory ministry for issues related to trade marks. 110. The Trademark Law does not contain provisions with respect to parallel imports or to national or international exhaustion of rights. However, the owner of a trade mark may, by a written notarized contract, grant to any person a licence to use the trade mark (Article 30). The licence has no effect on third parties unless it has been recorded in the Register and published as prescribed in the Executive Regulations. According to the authorities, the Trademark Law could, as a result, be invoked by the owner of the trade mark to prevent parallel imports; no such case has not so far been filed in the UAE. (g) Geographical indications

111. The Trademarks Law does not contain a definition of geographical indications as such. However, geographical indications can be considered as trademarks if they are used to distinguish goods or services with regard to their production, selection or commercialization. Geographical indications related to alcoholic beverages cannot be registered in the UAE. Under the Trademark Law, a trade mark that misleads consumers about the origin of a product cannot be registered. (h) Protection of undisclosed information

112. As regards pharmaceutical products specifically, Law No. 4 of 1983 related to pharmaceutical institutions and the pharmacy profession and its by-laws provide for the establishment of a committee in charge of pharmaceutical registration and pricing. All confidential information submitted to it must be kept confidential, provided the owner has undertaken the necessary steps to keep it confidential. According to the authorities, the term of protection of undisclosed information in the pharmaceutical subsector is, in practice, five years. (i) Enforcement

113. The Copyright Law, the Patent and Design Law, and the Trademarks Law provide for measures aimed at preventing violation of intellectual property rights, including preventive seizure, confiscation, removal or destruction of products and equipment, as well as elimination of the effects of the illegal acts, and compensation. In addition, Punitive Law No. 3 of 1987 specifies imprisonment of up to three years for IPR violation. Customs is entitled to take measures at the border to prevent any violation of intellectual property rights, in accordance with the above-mentioned laws as well as under Customs regulations. These measures can be taken upon demand of the right holder based on a judicial order. 114. Articles 37-42 of the Trademarks Law define penalties with regard to counterfeit, imitation, misleading practices, and fraudulent use of registered trademarks. Unlimited fines of at least

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Dh 5,000 can be levied, as well as unlimited prison sentences (up to three years under the Punitive Law). The Copyrights Law lays down similar procedures, with minimum detention of two months (up to three years under the Punitive Law), and fines of Dh 10,000-500,000. Articles 60-62 of the Patent Law also lay down criminal sanctions and monetary penalties in the range of Dh 5,000100,000. Imprisonment is for at least three months, and up to three years under the Punitive Law.

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IV. (1)



The emirate governments have invested large amounts of oil resources over the past 30 years to diversify their economies. In manufacturing, these resources were initially invested in state-owned companies operating in oil and gas-intensive industries, reflecting the country's comparative advantages. Joint-ventures and partnerships with foreign enterprises have allowed manufacturing companies to benefit from the most up-to-date technologies. Some have emerged as world leaders in their markets. The manufacturing sector has recently diversified towards more capital-intensive, high-technology products, such as electronics and machinery, exported in large part from the free zones, which have modern production and trade infrastructure. Soon after independence, the UAE leadership set as a strategic policy to become a major transport hub between Europe and South-East Asia. The instruments to achieve this aim have included vast amounts of public funds invested in developing port and airport infrastructure, airlines, and shipping companies and agencies. As a result, several UAE transport companies now also compete effectively on world markets. In parallel, tourism has been targeted as a major source of future growth in the UAE; tourism in the UAE is now among the fastest growing subsectors. The UAE still depends on crude oil and gas exports for a significant share of its national income. The entire oil and gas sector, as well as electricity and water utilities, remains state controlled, with foreign participation generally in the form of minority partnerships or through concessions. Remarkable advances have been made in the agriculture sector, at high cost, including in terms of water depletion, whereas the fisheries subsector suffers from the consequences of past over-fishing. AGRICULTURE AND RELATED ACTIVITIES




(2) (i)

Main features The UAE's main agricultural products include dates, green fodder, vegetables, and fruit (mainly citrus and mangoes) (Table IV.1). The sector also produces livestock (goats, sheep, camels, cows, and horses) as well as meat and poultry, eggs, and milk; the UAE is one of the world's top breeding centres for Arabian horses. The annual production of fish is estimated at 95,000 tonnes.1 The UAE is 100% self-sufficient in dates and fish, 55% in milk and dairy products, 39% in vegetables, 52% in eggs, between 15% to 20% in meat & poultry2.
5. 6.

Agriculture, including farming, livestock, forestry, and fishing, and certain agriindustries benefit from considerable state assistance. Nonetheless, production of agricultural raw materials remains limited and the agri-industries rely largely on imports for their inputs. The contribution of agriculture sector to the GDP was US$2.4 billion in 2008it reached 1.7% and employed about 4.2% of the workforce3. Most agricultural activities take place in the emirate of Abu Dhabi. Farming generally takes place on small units. In addition, substantial

1 2

Source: Ministry of Agriculture and Fisheries. Source: MOEW.

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processing activities take place in the free zones, particularly Dubai's Jebel Ali Free Zone (Chart IV.1).
Table IV.1.1 Main agricultural products, 2006-2009 (US$ million) 2006 Trade balance of agricultural products Total imports Live animals Meat and edible meat offal Fish and crustaceans, molluscs and other aquatic invertebrates Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included Products of animal origin, not elsewhere specified or included Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage Edible vegetables and certain roots and tubers Edible fruit and nuts; peel of citrus fruit or melons Coffee, tea, mate and spices Cereals Products of the milling industry; malt; starches; inulin; wheat gluten Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder Lac; gums, resins and other vegetable saps and extracts Vegetable plaiting materials; vegetable products not elsewhere specified or included Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates Sugars and sugar confectionery Cocoa and cocoa preparations Preparations of cereals, flour, starch or milk; pastrycooks' products Prepsrations of vegetables, fruit, nuts or other parts of plants Miscellaneous edible preparations Beverages, spirits and vinegar Residues and waste from the food industries; prepared animal fodder Tobacco and manufactured tobacco substitutes Total export Live animals Meat and edible meat offal Fish and crustaceans, molluscs and other aquatic invertebrates Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included Products of animal origin, not elsewhere specified or included Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage Edible vegetables and certain roots and tubers Edible fruit and nuts; peel of citrus fruit or melons Coffee, tea, mate and spices Cereals Products of the milling industry; malt; starches; inulin; wheat gluten Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder Lac; gums, resins and other vegetable saps and extracts Vegetable plaiting materials; vegetable products not elsewhere specified or included

2007 -4,989 7,748 105 736 221 630 3 32 557 778 475 955 43 410 14 12 391 113 532 183 245 307 419 241 51 295 1,084 9 1 37 21 0 1 2 13 1 3 44 1 2 0

2008 -7,125 10,763 161 1,084 248 894 2 44 726 955 659 1,967 88 564 19 5 787 163 328 228 370 367 495 327 73 209 1,355 14 1 34 30 0 2 3 24 3 5 53 3 0 0

2009 -6,393 10,207 144 972 256 890 3 36 745 1,065 548 1,580 86 1,005 16 5 442 148 225 228 429 309 517 295 70 194 1,536 20 1 29 160 0 4 2 19 5 0 50 2 0 0

-3,860 6,374 134 525 182 527 3 31 455 633 397 611 70 244 14 9 313 78 687 156 196 224 359 191 41 296 1,031 7 3 32 61 0 1 1 13 2 0 51 13 0 0

Source: National Bureau of Statistics

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Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates Sugars and sugar confectionery Cocoa and cocoa preparations Preparations of cereals, flour, starch or milk; pastrycooks' products Prepsrations of vegetables, fruit, nuts or other parts of plants Miscellaneous edible preparations Beverages, spirits and vinegar Residues and waste from the food industries; prepared animal fodder Tobacco and manufactured tobacco substitutes Total re-export Live animals Meat and edible meat offal Fish and crustaceans, molluscs and other aquatic invertebrates Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included Products of animal origin, not elsewhere specified or included Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage Edible vegetables and certain roots and tubers Edible fruit and nuts; peel of citrus fruit or melons Coffee, tea, mate and spices Cereals Products of the milling industry; malt; starches; inulin; wheat gluten Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder Lac; gums, resins and other vegetable saps and extracts Vegetable plaiting materials; vegetable products not elsewhere specified or included Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates Sugars and sugar confectionery Cocoa and cocoa preparations Preparations of cereals, flour, starch or milk; pastrycooks' products Prepsrations of vegetables, fruit, nuts or other parts of plants Miscellaneous edible preparations Beverages, spirits and vinegar Residues and waste from the food industries; prepared animal fodder Tobacco and manufactured tobacco substitutes Production Crops and livestock, primary ('000 tonnes) Dates Tomatoes Camel's milk Goat's milk Poultry meat Eggplants Hen's eggs (million egg) Citrus fruit, total Camel meat Cabbages Cucumbers and gherkins Fruit juice n.e.s. Sheep's milk Cow's milk, whole, fresh

129 15 317 109 66 64 46 66 26 9 1,483 15 32 29 75 1 1 79 257 146 129 7 44 6 2 59 21 88 31 29 35 89 24 6 278

127 12 357 98 73 91 39 70 72 11 1,675 7 47 25 69 1 2 84 304 159 190 6 70 6 3 44 24 75 50 38 54 91 29 9 288

203 11 345 110 74 167 50 76 59 87 2,283 3 44 19 71 1 1 126 330 183 550 81 89 6 3 60 29 80 46 38 54 107 34 12 318

82 6 473 137 79 155 65 80 52 113 2,278 6 52 15 84 0 1 132 352 113 538 17 99 7 4 34 19 120 42 36 48 137 38 10 373

758 74 102 36 24 13 352 12 0.55 10 4.9 7.2 15 17

758 59 108 38 50 12 507 13 0.58 8 5.4 7.0 16 18

758 127

12 718 16 15 22 3.8 21

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Lemons and limes Goat meat Cauliflower Live animals ('000) Goats Sheep Camels Cattle

5 36 8 1626 1114 359 59

6 38 5 1708 1172 378 62

5 8 1794 1234 398 65

Source: Ministry of Foreign Trade ; Ministry of Environment & Water.

Table IV.1.2 United Arab Emirates rank in the world, by commodity in 2007
Rank 4 7 7 25 30 30 32 34 40 41 43 44 46 50 54 55 58 59 72 72 Commodity Rank Commodity

Dates Indigenous Camel Meat Camel milk, whole, fresh Onions (inc. shallots), green Citrus fruit, nes Almonds, with shell Okra Eggplants (aubergines) Goat milk, whole, fresh Figs Spinach Cauliflowers and broccoli Lemons and limes Sheep milk, whole, fresh Tomatoes Pumpkins, squash and gourds Mangoes, mangosteens, guavas Other melons (inc.cantaloupes) Lettuce and chicory Cucumbers and gherkins

72 80 81 81 87 88 91 95 96 96 104 113 123 129 149 155 166

Vegetables fresh nes Indigenous Sheep Meat Chillies and peppers, green Beans, green Watermelons Grapes Cabbages and other brassicas Indigenous Chicken Meat Tobacco, unmanufactured Carrots and turnips Fruit Fresh Nes Hen eggs, in shell Bananas Indigenous Cattle Meat Cow milk, whole, fresh Potatoes Indigenous Goat Meat

80 81 81 87

Indigenous Sheep Meat Chillies and peppers, green Beans, green Watermelons

Source: Minister of Foreign Trade, UAE. Minister of Environment & Water, UAE. National Bureau of Statistics, UAE FAO online information

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Chart IV.1 Agri- food trade, by HS section, 2009 Us$ million

7,000 6,000 5,000 4,000 3,000 2,000 1,000 0


Re Export Export Import

Source: Ministry of Foreign Trade online information, available at:


In 2009, total domestic imports of agri-food products were estimated at US$10.1 billion; , and US$1.5 billion were exported. Re-exports were valued at US$2.3 billion. Main imports include cigarettes, horses (reflecting the important breeding and horse racing activity), sugar, chicken, and oil. There are also sizeable imports of raw agricultural products (e.g. tobacco leaves) for re-exportation after their processing in the free zones (Chart IV.1). The main exports are cigarettes, race horses, sugar confectionery, miscellaneous edible preparations, animal or vegetable fats and oils, products of the milling industry, and vegetables. The main markets for the UAE's exports of agri-food products are other GCC members, Other Arab Countries, Iran, Pakistan, EU countries, and the United States. Water scarcity and high salt content, poor soil quality, and hot and arid climatic conditions negatively affect UAE's agriculture. According to the Ministry of Environment & Water (MOEW) and the Ministry of Economy4, total water withdrawal massively exceeds groundwater recharged from rain, with depletion estimated at 2,126 million m/year.5 Agricultural water withdrawal for crops was estimated at about 1,914 million m/year (all groundwater), while landscape irrigation used about 200 million m (all treated wastewater). The remainder was used for industrial and domestic purposes.6 The over-extraction of groundwater resources has led to a lowering of the water table by more than one metre on average per year since 1979, while sea water intrusion is increasing in the coastal areas.7 The first desalination plant was installed in Abu Dhabi in 1976. There are now many desalination


Ministry of Economy(2004). This figure does not include the possible annual recharge of groundwater from neighbouring countries (for example from the Eastern Arabia Aquifer), as no figures are available. 6 Ministry of Presidential Affairs (2004). 7 FAO online information, "Aquastat, Country Profiles: United Arab Emirates". Available at: [22 September 2005].

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plants all over the UAE, of which 17 main plants located in Abu Dhabi, Dubai, and Sharjah8; total desalination capacity is about 710 million m3/year. According to the authorities, groundwater withdrawal is now essentially for agricultural purposes, and all domestic and industrial needs are met by desalination plants. Abu Dhabi plans to double its current daily production of 630 million gallons at a cost of US$20 billion, while Dubai will increase current production by 600 million gallons a day, at a cost of between US$10 billion and US$20 billion over the next decade

Despite the water constraint, remarkable advances have been made in agriculture since 1975, when financial resources from oil exports started to flow towards the development of agricultural production. The cultivated area increased from 15,000 hectares (ha) in 1977 to 71,000 ha in 1994, and around 263,923 ha in 2008 (3.1% of the UAE's total territory), and there were over 42,028 farms in the UAE, up from 21,000 in 1994, producing mainly vegetables, dates, and fruit. Another 4% of the territory is covered by forests, as thousands of hectares of palm trees, and woodlands, have been planted in the country. Main policy instruments



Given the UAE's climate, most agricultural production requires substantial government support; this is granted mainly by the authorities of Abu Dhabi, which accounts for 87% of the country's land mass. The MOEW supports agricultural production in the six other emirates. It is also in charge of coordinating agricultural, forestry, and fisheries policy, as well as promoting irrigated agriculture and the management of groundwater resources, the construction of dams for flood control and groundwater recharge, and the operation and maintenance of the hydro-meteorological network. The operation of laboratories, pest and disease control, quarantine, inspection services, veterinary services, and forestation are also under its purview. At the federal level, the General Water Resources Authority is responsible for water management and coordination between the other agencies. It is also responsible for formulating the rules and regulations on matters relating to water, including the registration of the water well drilling companies and licences for drilling. According to the authorities, the MOEW and other agencies subsidize the use of bio-fertilizers and bio-pesticides in order to limit environmental damage. In this respect the Ministry of Environment and Water provided farmers with a total of 82 thousand tons of organic fertilizers and about 330 thousand date palm ste offs during the last ten years. Apart from the Government's experimental farms, nurseries, forestation schemes, and public gardens, all agricultural land is owned and managed privately. Such land can only be owned by UAE nationals. Foreign companies may, as in other sectors of the UAE economy, hold up to 49% of the capital of agri-industrial companies. In Abu Dhabi, the Government gives land to UAE citizens, prepares the land for farming, and provides fertilizers, pesticides, seeds, and irrigation. The Government of Abu Dhabi buys part of the production (mainly vegetables and dates) at set farm-gate prices, and resells at set prices through the Abu Dhabi Municipality outlets. Vegetable production in the other (mostly northern) emirates is, according to the authorities, carried out under market principles, except for dates which purchased by Al Foah Palm Cultivation Developing Company from farmers in the northern emirates.




Environmental Research and Wildlife Development Agency (2002).

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Support for livestock production consists of free veterinary treatment and vaccination. Some fodder is imported, but it is increasingly produced locally. Fodder farms are supported with free land, seeds, fertilizers, and free irrigation; sales of fodder in Abu Dhabi are organized by the Abu Dhabi Municipality. According to the authorities, little assistance is extended for poultry and dairy, produced privately using intensive integrated production systems. In general, assistance to farmers includes substantial investment and production subsidies: reclamation and distribution of agricultural land; provision of necessary equipment and training; large-scale planting of palm trees to create suitable shaded areas for farming; provision of fresh water and seeds; provision of, and guidance on, the timely use of fertilizers; and marketing support.



The provision of fresh water entails a number of infrastructural services, including: water supply facilities, dams, drainage, and irrigation facilities. No irrigation water charges are levied by the federal or emirate governments (except on treated water), but farmers pay for the drilling of boreholes on their farms and the pumping of groundwater. They pay half of the maintenance costs of the irrigation network. The Federal Government has invested sizeable resources in agricultural research and guidance to farmers, so as to optimize productivity. Agricultural research focuses on four main areas: increasing the production of palm trees, dates, and fruit such as citrus and mangoes; fodder, pastoral, and wild plants; long-term research on agricultural diseases; and research on plants grown in greenhouses. The MOEW is also financing research on the types of fodder that can withstand the country's climatic conditions and survive on little water. Studies are under way on combating salinity and the capacity of different types of fodder plants to withstand high salt content in the soil. Research is also encouraged on biological control methods as an alternative to the use of insecticides to combat agricultural diseases. Another avenue of research concerns the production of alternate vegetable products in greenhouses. The UAE also hosts the International Centre for Biosaline Agriculture, an applied research and development centre located in Dubai, which aims to develop and promote the use of sustainable agricultural systems that use salt water to grow crops. The Ministry of protected Environment and Water is also encouraging farmers to apply modern technologies in agriculture such as protected agriculture, hydroponics and drying dates. The Ministry will also set up in 2009 about 585 plastic houses and 85 glass houses for drying dates for farmers. It also encourages them to grow local fodder crops. In 2007, the Government of Abu Dhabi allocated some US$80 million dollars to agriculture. In addition, sizeable expenditure was allocated to electricity and water (US$520 million). It is estimated that over half of total expenditure on electricity and water is used for irrigation purposes.



Table IV.2 Abu Dhabi development expenditures, 2000-08 (In millions of UAE dirhams) 2004 AGRICULTURE ELECTRICITY AND WATER INDUSTRY AND COMMERCE TRANSPORT AND COMMUNICATIONS 1, 095 2,147 1,579 2,340 2005 943 3,002 916 2,357 2006 331 2,428 288 2,715 2007 289 1,902 239 1,310 2008 Prel. 270 1,803 1,115 4,292

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2,066 320 656 1,470 214 11 11,816

1,189 56 773 393 156 7 9,792

414 48 55 541 395 106 7,321

216 162 333 233 194 163 5,041

784 164 428 229 149 23 9,257

Source: IMF (2009), United Arab Emirates: Selected Issues and Statistical [April 2009].





In April 2002, the UAE notified the WTO Committee on Agriculture of domestic support in 2000 and 2001 (Table IV.3). These amounts are considerably smaller than those reported by the Emirate of Abu Dhabi, as they contain only expenditure by the federal government. No domestic support had been reported for 1996 to 1999 or 2002 to 2010 9. In 2002, the UAE notified the WTO Committee on Agriculture that it granted no export subsidies during the period 1996-2001.10 No notification has been received since then. This is still the case according to the WTO website.

Table IV.3 Domestic agricultural support measures, 2000 and 2001 Measure type Name and description of measure Value (US$) 2000 Green box measures General services Agricultural research Sanitary quarantine and veterinary services Development programmes (special and differential treatment) Investment subsidies generally available to agriculture Input subsidies generally available to lowincome or resource-poor producers Note: Exchange rate: US$ 1= Dh 3.6725. Loans and financing in agricultural sector 1,769,911 680,735 1,497,617 953,029 209,666 335,085 245,064 680,735 2001

Source: WTO document G/AG/N/ARE/5, 22 May 2002, Supporting Table DS:1.


Agricultural products attract a tariff of either 0% or 5%, with two exceptions: alcoholic beverages (50%), and 20 tariff lines covering all tobacco products with an alternate tariff (Chapter III(2)(iv)(a)). The simple average tariff on agricultural products (ISIC Rev.2 definition) is low at 3.3% (4.5% on food products (ISIC 311 and 312)). Imports of plants, animals, and their products must meet all sanitary and phytosanitary requirements set at federal level (Chapter III(2)(vii)(b)). The UAE lifted its ban on olive oil from the European Union, maintained for SPS reasons, in June 2005.11

WTO document G/AG/N/ARE/3, 25 April 2000. WTO documents G/AG/N/ARE/2, 25 April 2000, and G/AG/N/ARE/4, 22 May 2002. 11 WTO documents G/SPS/R/30, 4 September 2003; G/SPS/R/34, 16 August 2004; and G/SPS/R/35, 13 January 2005.

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There are no a priori price controls on agricultural products, but the MOE monitors the prices of 15 basic goods, including food products, in an effort to combat cartels and other anti-competitive practices (Chapter III(4)(iii)). Developments regarding selected products

(iii) (a)


Dates are the UAE's main crop (Table IV.1). Date palm cultivation plays a key environmental role in afforesting portions of the desert into oases. Over 40 million date palms have been grown in the UAE until 2009; 16 million line the roads. Many farms use modern irrigation systems. The country is a pioneer in tissue culture to grow date palms; several companies have emerged as leading producers of date palms using tissue-culture technology. One company, Al Wathba Marionnet, was established in 1997 under the UAE Offset programme (Chapter III(2); it is currently producing about 300,000 date palms a year, and it exports dates. A Jebel Ali free-zone company has introduced a new technology to produce fructose syrup from dates. Concept Food Industries claims to be the first company in the world to use this technology, which also delivers a high protein animal feed as a by-product. The facility has the capacity to extract 35,000 tonnes of high fructose syrup yearly from dates. The new facility is expected to boost government-sponsored efforts to improve palm date cultivation within the UAE. Other crops




Al-Ain Vegetable Factory , a member of Agthia Group P.J.S.C since 2008, resides in Abu Samra, in Al Ain , known as the OASIS of the UAE. Al-Ain Vegetable Factory is a leading UAE manufacturer and marketer of tomato paste, canned and frozen vegetables. The company products are marketed in the UAE and the wider MENA region, with a leading position in the UAE tomato paste segment and a growing presence in the increasingly important frozen vegetable category. The company employs approximately 200 people. In 2009, The company has also invested in another tomato paste manufacturing plant in Egypt. The total processing capacity of both plants is 2100 tons per day12. The Grand Mills for Flour and Animal Feed Company in Abu Dhabi production capacity has increased from 200 to 800 tonnes of flour per day since its inception in 1987. The mills are owned by the Abu Dhabi General Holding Company (section (3) below), which is government-owned. One animal feed mill produces over 50 varieties of fodder; a new mill, with a capacity of 30 tonnes per hour, produces poultry, fish, and non-traditional feed All stages of production and control are fully computerized. Grand Mills is working closely with Al Ain University. The input raw materials in to the production are facilitated by three pneumatic ship. Then, unloaders are used to unload raw materials received in bulk from ships to material handling systems, with an unloading capacity of 1000 tonnes per hour. Grain Silos equipped with cleaning machinery provide storage capacity for 150,000 tonnes of grain. The grains are cleaned, cycled, cooled and stored in 78 silos of varying capacities. The warehousing facility at the factory has 60,000.00 square feet of space, for raw material storage13.


12 13

Source: Source:

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The United Arab Emirates is the second country at the world level in re-exporting canned sugar14. Re-exporting quantity reached 15.1 million ton annually, according to UNSD of 2008. And UAE is at the 20th level among world countries regarding the quantity of cane sugar imports, this quantity reached 182 thousand ton, accounting for 1% of countries importing such commodity. The average ton price reached about USD 274. The United Arab Emirates was ranked the twenty seventh amongst the countries of cane sugar exporting world, where it exported 15.1 thousand ton with a value of USD 6 million approximately. Foreign Trade data of UAE clarify that the country's exports of sugar and sugar products reached 63 countries along the world in 2009, with a total value of about USD 472 million and a quantity of 909 thousand ton. Also, in 2009 the Re Export with a total value of about USD 111.6 million and a quantity of 207 thousand ton. And Import of sugar and sugar products with a total value of about USD 225 million and a quantity of 278 thousand ton. Al Khaleej Sugar refinery started production in 1995. The first sugar refinery to be established in the Gulf, with a daily production capacity of 2,400 tons. With a current daily production capacity of over 4,800 tons, it has already achieved the status of the largest sugar refinery in the world. The refinery has continuously improved its operations to become one of the most efficient refineries in the world.

Dubai Investments PJSC was incorporated in 1995, with the primary objective of investing in companies and projects. It aims to invests in viable and profitable entities, both existing and start-ups, Since 1995, DI has established 47 subsidiary companies encompassing a diverse range of sectors including manufacturing, food and related fast moving consumer goods, wholesale and retail trade representation, healthcare and pharmaceuticals, industrial and commercial properties, real estate management and property development, transportation, shipping, distribution and logistics, marketing and sales, publishing and telecommunications . DI was set up with a paid up share capital of AED 650 million. In the year 2008, DI shareholders have grown to 21,500 with the paid up share capital standing AED 3.2.



The UAE's fishing subsector has had to adapt to changing conditions and technologies in recent years. Over-fishing has resulted in reduced catches and smaller fish in the landed catches. The situation has been worsened by considerable provision of boats, engines, equipment, and storage facilities by the Government. According to the authorities, fishing boats have been operated mainly by non-UAE nationals whose concern for stock preservation may be less than that of UAE fishermen. In order to preserve stocks, the Ministry of Environment & Water has issued regulations concerning fishing gear, areas and seasons, and the structure of the workforce; fishing committees were established to ensure proper coordination with other governmental bodies. It is illegal to catch undersize fish; to use less than 2-inch mesh in fish traps or less than inch mesh in fishing nets; to carry out fishing operations in spawning and nursery areas during the restricted period; and to fish without a UAE citizen on board the vessel. In order to protect the seabed and its demersal fisheries, bottom trawling is not permitted in the territorial waters of the UAE; new fishing boats are no longer being registered, nor hobby craft; the number of fish traps is also restricted, as are fishing periods. In order to increase fish stocks, a programme is in place to introduce fingerlings in protected areas. Experimental aquaculture in the UAE has been undertaken for some years. Commercial fish farming is being supported by the UAE Offsets Group (Chapter III(2)),



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which helped to establish the international fish farming company Asmak. The business activities of Asmak span all aspects of the aquaculture industry, including hatcheries, fish farming, processing and packaging, fish feed, fish-farming equipment, marketing, distribution, export, and consulting. Further expansion phases are planned in Ra's al-Khaimah, Fujairah, and Abu Dhabi. The company has also acquired a stake in the Greek company Feedus as part of its strategy to invest internationally in successful aquaculture projects. Feedus, as its name suggests, is engaged in the manufacture and supply of fish-feed products. (d) Cigarettes and tobacco products

The total Exports and Re-Exports of cigarettes were US$1,985 million accounting for 52% of the value of UAE agricultural exports, up from 11% in Imports are also sizeable at US$824 million. In the Jebel Ali free-zone alone, companies are involved in tobacco manufacturing or trade, taking advantage of the import of inputs. One large company produces outside the free zones.

in 2009, 1979-81. some 60 duty-free

(3) (i)



The UAE is a major oil and gas producer in a major producing area, the Arabian Gulf. It is a member of both the Organization of Petroleum Exporting Countries (OPEC) since 1974, and the Organization of Arab Petroleum Exporting Countries (OAPEC) since 1970. 15 Oil and natural gas reserves are among the world's five largest; both are estimated to last more than 100 years at current production rates (Table IV.4). The UAE also has further, largely untapped, gas reserves estimated to last 100 years at current production rates.16

Table IV.4 Reserves, production, and exports of oil and natural gas, 2000-08
2000 Proven crude oil reserves (m b) Crude oil production (1,000 b/d) Crude oil and refined products exports (1,000 b/d) Crude oil exports Volume (1,000 b/d) Value (US$ million) Exports of refined products (1,000 b/d) Output of refined products (1,000 b/d) Proven natural gas (billion standard m3) Marketed production of natural gas (million standard m3) Natural gas export (million standard m3) 1,815 26,148 392 315 6,060 38,380 6,950 1,787 22,414 398 310 6,060 39,360 7,460 1,614 21,768 486 425 6,060 43,390 7,113 2,048 25,153 514 430 6,060 44,800 7,187 2,172 38,099 504 440 6,060 45,800 7,380 2,195 55,079 509.0 401 6,060 47,790 7,499 2,420 70,100 452.8 420 6,040 48,790 7,767 2,342 84,390 407.7 399 6,072 50,290 7,549 2,334 82,202 304.4 398 6,091 55,398 7,987 97,800 2,175 2,207 2001 97,800 2,115 2,185 2002 97,800 1,900 2,100 2003 97,800 2,248 2,562 2004 97,800 2,344 2,676 2005 97,800 2,195. 2006 97,800 2,420 2007 97,800 2,342 2008 97,800 2,548 -

.. a

Not available. Share and ranking among OPEC countries.

Source: OPEC, Annual Statistical Bulletin 2008. International Energy Agency online information, "Natural gas". Available at:

15 16

Online information available at: http://; and IMF (2005b).

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The oil and gas sector provides around a third of the UAE's GDP, although this share has been declining thanks to a successful programme of economic diversification, most notably in Dubai, which faces a depletion of its oil resources. Nevertheless, the oil and gas sector remains the dominant contributor to consolidated government revenues. The UAE applies tariffs of 5% on imports of all products of the mining industry and of electricity. The UAE has not included any energy-related services in its GATS Schedule of Commitments.17 According to the Constitution, ownership of natural resources is vested in each emirate. Thus, the UAE has neither a unified federal energy policy nor federal legislation on exploration and development of energy and other mineral products. The Federal Ministry of Energy represents the country in the international petroleum community and specialized international and regional organizations to which the UAE belongs, such as OPEC, OAPEC, and the Arab Organization of Mineral Resources. Petroleum, and gas




The UAE currently produces around 2.5 million barrels of oil per day (b/d). Oil production is expected to reach four million barrels per day by 2015 and natural gas production will increase to 6.5 billion cubic feet of gas daily. Abu Dhabi owns more than 90% of the UAE's oil and natural gas resources. Dubai produces less than100,000 b/d of oil (6% of the country's production) and substantial quantities of gas from offshore fields (with a major condensate field onshore). Sharjah is the third UAE hydrocarbon producer. On the east coast, Fujairah is the second largest bunkering port in the world (about one million tonnes of fuel per month), although all the fuel is imported from neighbouring countries. Gas is increasingly used by households and local industries, including for power generation and water desalination; exports have also increased. Oil and gas production is handled by the Abu Dhabi National Oil Company (ADNOC), or by subsidiaries in which ADNOC is a majority shareholder, through joint ventures with international companies is a majority shareholder (Table IV.5). According to the authorities, about 40% of oil production is also carried out by concessionaires wholly owned by foreign interests.





100 (ADCO) ADMA-OPCO ZADCO 60 60 60 40 40 40


68 70

32 30


WTO document GATS/SC/121, 2 April 1996.

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100 70



100 100 60


Source: ADNOC.


Downstream development of refineries, petrochemical plants, and other related industries has created an integrated oil and gas sector. The UAE has five refineries with a combined capacity of more than 0.64 million, and is the eighth largest producer among OPEC countries. The progressive build-up of refining capacity since the 1980s has made the UAE a sizeable net exporter of refined products; although their share in the total oil exports remains modest at about 10%, it is on an upward trend (Table IV.4). Furthermore, the UAE has plans to build a new refinery at Fujairah with a capacity to process between 150,000 to 200,000 b/d of crude oil. Four of the five UAE refineries are owned by the respective emirates; two are operated by Abu Dhabi Oil Refining Company (Takreer), owned by ADNOC (Table IV.5): the Ruwais refinery, has a capacity of 145,000 b/d of crude oil, plus 280,000 of condensate. Ruwais hosts one of the worlds largest petroleum industry complexes, housing oil, gas, petrochemicals operations, and a number of companies servicing the onshore and offshore oil and gas business; the other, Abu Dhabi Refinery, has a capacity of 88,000 b/d. Takreer's refining capacity more than doubled over 2000-05 to over 500,000 b/d, making it a major regional operator. The Emirates National Oil Company condensate refinery (ENOC), owned by the Dubai Emirate, with a capacity of 120,000 b/d, began operations in Dubai in May 1999. Metro Oil, owned by the Government of Fujairah, is a 90,000 b/d refinery. A 71,250 b/d privately owned second-hand unit was set up in Sharjah by the private Sharjah Oil Refining Company in 2001. The Metro Oil and Sharjah refineries were not operating in early 2006. Abu Dhabi has no comprehensive petroleum legislation governing the granting of exploration and development permits.18 The legal framework for the development of petroleum resources is therefore determined by the terms and conditions of individually negotiated oil agreements concluded between the government and the oil companies. Foreign ownership is not a priori limited. The Abu Dhabi National Oil Company (ADNOC) was established in 1971. It is fully owned by the Government of Abu Dhabi. It is controlled and supervised by the Supreme Petroleum Council. Established in 1988, the Council has the dual role of formulating all petroleum policies and overseeing their implementation; it also acts as ADNOCs main board. The Council is currently chaired by the Ruler of Abu Dhabi (the



18 However, a number of laws pertain directly or indirectly to the petroleum industry, including the Abu Dhabi Tax Decree (see below), the Abu Dhabi Gas Ownership Law, the Petroleum Resources Conservation Law, and the Petroleum Ports Law.

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President of the UAE), who appoints its members by decree. The Secretary General of the Council is also the chief executive officer of ADNOC.19

ADNOC is the interface between the Council and the operating companies that execute approved projects. It exercises administrative and technical control over its affiliated companies. The Council grants petroleum concessions and licences, and ADNOC carries out the detailed negotiations leading to their implementation. The Council monitors crude oil production to ensure adherence to the OPEC-mandated quotas. Products refined by Takreer are sold to international buyers, at regional market prices by ADNOC; domestic sales are carried out by ADNOC Distribution (Table IV.5), a separate legal entity in the ADNOC Group. A number of other public companies market oil products: ENOC (Dubai), Emirates (federal government), and Emirates Petroleum Products Company (EPCO, owned by the Government of Dubai). Gasoline prices are fixed by the Government of the UAE and are the same throughout the country. Apart from 95 and 98 octane gasoline, which are sold at Dh 6.25 (approximately US$0.5 per litre) and Dh 6.75 a gallon, respectively, all domestically refined products (e.g. diesel, jet oil, naphtha, bunkering oil, etc) are sold at market rates. Diesel is currently sold at Dh 7.8 a gallon. Around 6 million tonnes of refined products per annum are sold domestically, half of the volume of exports. Since 1976, pursuant to the Abu Dhabi Gas Ownership Law, ADNOC has also been managing, all Abu Dhabi's gas reserves on behalf of the Abu Dhabi Government. ADNOC has entered into joint ventures with major multinational oil companies to gather, process, and liquefy the gas for the domestic and international markets. In 1999, ADNOC and the UAE Offsets Group (UOG) issued a joint declaration to share natural gas distribution. The resulting Dolphin Project is a recent intra-regional initiative, which aims to develop links between the national gas infrastructures of Qatar, the UAE, and Oman.



A Development and Production Sharing Agreement was signed in 2001 between the UAE Offsets Group (UOG, see Chapter III(2)(viii)) and the State of Qatar, under which, initially, up to 2 billion standard cubic feet of natural gas are to be supplied from Qatar to the UAE daily; in 2007, natural gas flowed for the first time from Qatar to the UAE. Full throughput of 2 billion standard cubic feet a day was achieved in early 2008 and natural gas started flowing to Oman in late 2008, thus completing the regional gas grid. Today, Dolphin Energy is in the process of completing the Taweelah-Fujairah Pipeline (TFP). TFP will transport a substantial volume of gas directly to the east coast of the UAE along a 240km overland pipeline route. Dolphins main customers are Abu Dhabi Water and Electricity Authority (ADWEA, see below), the Union Water and Electricity Company, the Oman Oil Company, and the Dubai Supply Authority. The Dubai Supply Authority is responsible for sourcing and securing Dubais natural gas requirements; it is currently acquiring these from ADNOC, and has signed a 25-year gas sales agreement with Dolphin Energy, with deliveries to commence once the project comes on stream. Dolphin's main shareholder is the Government of Abu Dhabi, with 51% ownership, and two foreign partners Total and Occidental Petroleum, each with 24.5% of the equity.

Dana Gas, Public Joint Stock Company (PJSC), is the first regional private sector natural gas resource enterprise to be established in the Gulf, the Middle Easts largest regional
ADNOC (2005).


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private sector natural gas company, It holds assets and contractual entitlements to the largest private sector integrated natural gas supply chain in the Gulf. In addition to commencing the operation of its existing assets, Dana Gas plans to expand its business by pursuing natural gas opportunities throughout the Gulf as well as the wider Middle East, North Africa and South Asia (MENASA) region. Dana Gas PJSC has been incorporated according to the laws of UAE, after successfully completing partial capitalization in July 2005 of AED 3.94 billion of its shares to prominent regional and sector-experienced Founders, and completing the allotments for its Initial Public Offering (IPO) of AED 2.06 billion of equity shares as per the allocation policy as set out in the Prospectus. Dana Gas has established joint ventures throughout the region for instance DanaGas Egypt, Sajaa Gaz Privet Limited Company(SAJGAS), United Gas Transition Company Limited (UGTL), Crescent National Gas Cooperation Limited (CNGCL), Iraq Kurdistan Gas Project and DANAGAZ Bahrain. Dana Gas sales revenues reached AED 1.28 billion in 2009. 20

A corporate tax applies to oil, gas, and all petrochemical activities in Abu Dhabi according to the Abu Dhabi Income Tax Decree of 1965, as amended. This decree was not promulgated as special petroleum tax legislation but as a corporate tax law of general application. However, in practice, it is presently applicable only to "chargeable persons" "dealing in oil" in Abu Dhabi. Currently, the tax ranges between 55% and 85% depending on the product that generates the taxable income. According to the authorities, "chargeable persons" include foreign entities, ADNOC and its subsidiaries, and all other domestic companies dealing in petroleum. The Supreme Petroleum Council grants tax incentives, including tax holidays and reduced tax rates, to businesses that benefit Abu Dhabi in terms of, inter alia, economic development, investment, technology transfer, training of nationals.


On Feb 4th, 2010 the government of announced the discovery of new oil discovery in Dubai located east of "Rashid" field. On Aug 31st, 2009 the ruler of Dubai, issued a decree forming the Supreme Council of Energy. There is no comprehensive petroleum legislation in Sharjah, all contracts are negotiated on an individual basis. The emirates policy regarding exploration, production, and processing of oil and all petroleum matters is formulated by Sharjah Petroleum Council, which was established in 1999. Electricity, water, and utilities



Electricity production at 17.369 MW in 2007. Some 92% of the production is fuelled by gas while the remainder is produced by diesel generation or steam turbines. There are no imports or exports. The total generation capacity of the UAE at 3730.17 GW/h in 2009 while the number of consumers according to use categories for 2009 at 230771. There are plans for interconnection of electricity transmission and distribution networks among emirates, and among members of the Gulf Cooperation Council (GCC). The first stage completed in the first quarter of 2009 to link the electricity grids of Bahrain, Saudi Arabia, Qatar and Kuwait and Phase II is expected to complete by the end of 2010, upgrading the electrical power the internal of the UAE and Oman, while it was invited to the States the third phase (the UAE and Oman) to enter at this stage as agreed UAE that are currently being implemented to connect to their main network of the body, are expected to be completed this linkage in the second quarter 2011. The interconnection works of the Abu Dhabi Dubai Sharjah and FEWA grid was completed in April 2008The GCC interconnection system will provide emergency support to any national system and allow regional and international energy trading. Water



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production and distribution are closely associated with electricity generation, and are carried out by the same companies 21.

There are four electricity-water authorities in the UAE: the Abu Dhabi Water and Electricity Authority (ADWEA), The Dubai Electricity and Water Company (DEWA), the Sharjah Water and Electricity Company (SEWA), and the Federal Agency for Water and Electricity within the Ministry of Energy, which supplies the four northern emirates and parts of Sharjah. All entities, except ADWEA which is a public organization albeit with significant administrative independence and a separate legal entity, are owned and controlled by the respective governments, and have monopoly over all segments of the electricity subsector.22 Installed generation capacity has increased from 9,500 MW in 2000 to 16GW in 2007 but there are plans to raise the federations capacity for electricity generation to almost 26 GW by 2010; ADWEA accounts for 53% of the federations total installed capacity. Coordination is by the Ministry of Energy.

In 1997, the Emirate of Abu Dhabi formed a Privatization Committee for water and electricity. In early 1998, a law was passed for the comprehensive restructuring of the subsector23. Since then, the Abu Dhabi electricity and water industry has been unbundled (Chart IV.2).
47. 48.

Currently, the Regulation and Supervision Bureau is the sector's regulator24. ADWEA is now a holding company that owns 100% of four producing companies, and 60% of four other producing companies, the Independent Power and Water Producers (IPWPs), private foreign and domestic stakeholders holding the remaining 40% (Chart IV.2). Since 1999, the sector has attracted about US$5 billion of foreign investment. ADWEC is the sole buyer from all the producers. Electricity transmission is under the monopoly of Transmission Company (TRANSCO). Distribution is under the monopoly of Abu Dhabi Distribution Company (ADDC) for the Abu Dhabi region, and Al Ain Distribution Company (AADC) for the Al Ain region. Aside from the IPWPs, all entities are 100% owned by ADWEA. The prices of electricity and water are determined at emirate level (Table IV.6). ADDCs customer base is comprised of 412,540 service agreements for the supply of water and/or electricity, which is distributed to customers at the 33 kV and 11 kV levels throughout three regions: Eastern Region (Mussaffah and Baniyas), Western Region (Liwa, Silla) and Abu Dhabi Island25

The Abu Dhabi water and electricity sector comprises the production, transmission, distribution and supply of electricity and water to customers. New projects have been implemented to enhance the transmission and distribution networks to meet the rapid growing demands for water and electricity. In 2007 total length of ADDC water distribution system adds up to (8000) Km. while the AADC water distribution system has reached (3550 Km.)

Federal Electricity & Water Authority, UAE. And Ministry of Energy, UAE. Online information is available at: (Dubai Electricity and Water Authority), and (Sharjah Electricity and Water Authority). 23 Law No. 2 of 1998. 24 RSB online information, Available at: 25 Source:


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Chart IV.2 Structure of Abu Dhabi Electricity & Water Sector

Source: Abu Dhabi Water and Electricity Company, Statistical Report 1998-2008

Table IV.6 Electricity and water charges, January 2007 PRODUCT CUSTOMER CATEGORY Adwea ELECTRICITY UAE NATIONALS DOMESTIC NON-UAE DOMESTIC GOVERNMENTAL SCHOOLS FARMS WATER UAE NATIONALS DOMESTIC NON-UAE DOMESTIC NATIONALS NATIONALS 0.05 0.15 0.15 AND 0.15 0.03 0 0.01 0.005 50 MONTHLY 0.01 Dewa DH/KWH 0.075 0.20 0.20 0.20 0.075 DH/GALLON 0.015 0.035 0 0 0.035 0.015 0.025 0 0 0.03 0.01 0.02 0 0 0.03 0.075 0.20 0.20 0.20 0.075 0.075 0.15 0.20 0.20 0.075 PRICE Sewa Fewa



Source: Ministry of Energy.


ADNOC also produces electrical power. In 2002, the latest expansion of the Ruwais refinery involved the addition of four gas turbines and two water desalination units. The output from the Ruwais refinery was initially intended to supply power and utilities only to plants in the Ruwais industrial area. In 2000, ADNOC and the Abu Dhabi Water and Electricity Authority (ADWEA) signed a Memorandum of Understanding to interconnect

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their electrical grids to exchange power in the future. Ruwais electricity plant now supplies power to the ADWEA National Grid. (4) (i) MANUFACTURING Main features

The emirate governments have each invested important financial resources to diversify their economies into non-hydrocarbon industries. Initially, the UAE's manufacturing sector developed in oil- and gas-intensive industries, such as petrochemicals, fertilizers, cement, and aluminium, based on its comparative advantages. Subsequently, the sector has rapidly evolved to more diversified products such as electronics and light machinery, exported in large part from the free zones. Currently, major growth areas include capitalintensive high-technology industries supplying, inter alia, security and safety equipment; information technology equipment; medical equipment and services; construction products; air conditioning and refrigerating equipment; environmental and pollution control equipment; and sporting goods and equipment. To a large extent, this production caters for the large oil industry, and the large infrastructural projects such as Dubai Health Care, Dubai Media City, Dubailand, Dubai International Financial Centre. No statistics are available on the UAE's manufacturing sector. However, a National Bureau of Statistics was established according in 2009 according to Federal Law No. 9 of 200926. The Ministry of Economy said that the NBS would prepare, analyse and compile national data and statistics across economic, social and demographic sectors. The move follows a recommendation from the IMF which suggested the implementation of a comprehensive and consistent statistical system27. Available trade data (Table IV.7) show that imports in the UAE customs territory of manufactured products, except food, beverages and tobacco (section (2) above), are approximately US$111.6 billion in 2009 compared to US$143.2 billion in 2008; in addition,. Re-exports are in the order of US$37.9 billion in 2009. Exports from the customs territory average US$16.2 billion in 2009 compared to US$15.1 billion in 2008.


Table IV.7 Trade in manufactured products, 2008 & 2009 (US$ million) 2008 (b) HS section Import 3123 7250 4857 523 1306 Export 1360 388 1507 6 7 Re Export 173 1172 1233 150 284 Import 2554 6551 3735 491 835 2009 Export 1011 461 1419 5 8 Re Export 190 949 1213 151 181

V Mineral products VI. Chemical products and related industries VII. Plastic and articles thereof, rubber and article thereof VIII. Raw hides and skins, leather, furskin, etc. IX. Wood, cork, etc. and articles X. Pulp of wood or other fibrous cellulosic materials, paper and paperboard XI. Textiles and textiles articles XII. Footwear, headgear, umbrellas, etc. XIII. Articles of stone, plaster,
26 27

1352 5463 741 2472

310 372 23 2628

136 2444 232 493

1102 4763 706 2135

388 274 29 518

160 2430 223 467

Source: National Bureau of Statistics web site ; Source: AME Info ;

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cement, asbestos, etc. XIV. Natural or cultured pearls, precious or semi-precious stones, etc. XV. Base metals and articles of base metal XVI. Machinery and mechanical appliances; electrical equipment etc. XVII. Vehicles, aircraft, vessels and associated transport equipment XVIII. Optical, photographic, cinematographic, measuring, etc. Instruments XIX. Arms and ammunition XX. Miscellaneous manufactured articles XXI. Works of art, collectors' pieces and antiques Section V to XXI total

33128 22521 32787 21991

6518 1420 274 111

17201 1593 8700 6874

27632 11218 29438 15573

8956 2183 378 468

13408 1405 8703 7097

2381 336 2895 120 143247

23 5 125 1 15077

514 6 703 143 42049

2280 69 2369 140 111590

22 2 113 3 16236

546 3 645 158 37930

Source: Ministry of Foreign Trade, UAE online information


Policy framework

The long-term policy objective shared by all emirates is to increase the manufacturing sector's contribution to GDP. Typically, each Emirate holds a majority stake or is the sole shareholder in key companies. The Ministry of Finance and Industry is the federal authority in charge of formulating the policies. Industrial licences are required to establish a manufacturing activity. These licences are issued by the economic authority of the emirate in which the business office is to be located. Foreign companies wishing to establish in the UAE may hold at most 49% of the capital of the company (Chapter II(5)). From the point of view of competition there is no regulation of incentives offered by the respective emirates. Under Federal Industrial Law No. 1 of 1979, the Federal Government may offer investment incentives to companies that register with it (Box III.1). According to the authorities, the only assistance effectively available is the concessionary financing provided by the Emirate Industrial Bank (Chapter III(3)). The number of industries registered at the Ministry of Finance increased from 1,243 in 1995 to 3,036 in 2004; the stock of investment has increased three-fold since 2002, to US$17.15 billion up to US$34 billion in 2007. The food, beverage and tobacco industries have experienced the largest increase in investment over 2000-04, growing by 73% annually, and increase in investment over 2007-06, growing by 69% annually. Followed by chemicals and plastics. The number of foreign companies in the United Arab Emirates and registered with the Ministry of Economy in February 2009 until approximately 2639 foreign companies from various countries of the world28. The largest industrial growth has taken place in Abu Dhabi and Fujairah. As noted, these statistics cover only the production of units that are registered at the federal level. Some institutions have been created specifically to foster the development of the manufacturing sector. For example, Dubai Investment Company, established in 1996, has stakes with a total of over US$1.6 billion in over 20 companies. Another company, Abu Dhabi National Industrial Projects, was set up in 1997 as a private shareholding company designed to establish medium- to large-scale industries and services projects that will open new business opportunities. In May 2004, the Emirate of Abu Dhabi established the Higher Corporation for Specialized Economic Zones, aimed at providing an integrated infrastructure,
Ministry of Economy




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a suitable business environment, and professional services through the establishment and management of special zones in Abu Dhabi29. Other objectives include the promotion of local industries and the creation of employment and training opportunities for UAE nationals. The corporation also encourages small, medium-sized and specialized industries, and will encourage the private sector to become involved in the management of the zones.

The Abu Dhabi government has also announced plans to privatize certain manufacturing companies. A state-owned company, General Holding Company (GHC) took over the industrial holdings of the General Industries Corporation, which was wound up. GHC is privatizing some of its enterprises as part of the emirates strategy to forge a publicprivate partnership and stimulate local financial markets. The areas to be privatized include fodder, cement, steel and pipe plants, and flour mills (section (2)(iii) above). The privatization is expected to strengthen the local stock markets as the newly privatized firms obtain listings. The UAE Offsets Group is also active in promoting industrial development (Chapter III(2)). Projects established under the UAE Offsets Programme, linked to purchases of military equipment, include a shipyard, agri-business projects, and manufacture of airconditioning units (Table III.4). In April 1999, the UAE Offsets Group announced the formation of UTS - Burnstop, a joint-venture between the UAE group United Technical Services (51%), Burnstop from Finland (40%) and Dassault Investments (9%), the company manufactures fire fighting and prevention equipment. The Offset Program Bureau (OPB) was established in 1992 to oversee the offset program in the UAE. It is mandated to set up joint ventures, as well as to invest in commercial, industrial, financial, and educational projects and to create investment funds in the UAE and abroad. OPB also acts as a conduit between international contractors and local private sector for creation of commercially viable, profitable and sustainable joint ventures. In 2007, OPB created a fully-owned subsidiary; Tawazun Holding to contribute substantially in diversifying UAEs oil-dominated economy by focusing on the development and expansion of selected emerging companies across a wide range of industrial and commercial disciplines. Since its inception, Tawazun Holdings major subsidiaries are Caracal International - the first national arms manufacturer in the United Arab Emirates and Merkel, the German maker of hunting rifles and shotguns which has production lines in Germany, as well as a distribution network in all over Europe and North America. Other Tawazun subsidiaries include Burkan Munitions, Remaya, Emirates Precision Industries, Abu Dhabi Autonomous Systems Investments, Caracal Shooting Club, Al Ain Shooting Club. MFN applied tariffs on manufactured goods (except agri-food) are generally at 5% (modal rate), with a few rates at zero (mainly on pharmaceutical products and printed matter). Imports of all inputs are duty free, either under the industrial incentives regulations (Chapter III(4)), or under the statutes of the respective state-owned companies Policies in selected industries Metals



(iii) (a)


The Dubai Aluminium Company (Dubal) plant, established in 1979 and owned by the Entirely state, is now one of the world's biggest smelting complexes, with a annual consumption of process materials capacity of around 1,880,000 mt year of high grade aluminium in 2009. Dubal reports that its unit cost of production is among the world's lowest. Each year, DUBAL manufactures approximately one million tonnes of finished product,
HCSEL online information. Available at:


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made-to-order for 300 customers in about 45 countries worldwide predominantly in the Far East, Europe, the ASEAN region, the Middle East and Mediterranean region, and North America. This includes foundry alloy for the automotive industry; extrusion billet for construction, transport and industrial applications; billets for forging processes in automotive industries; and high purity primary aluminium for the electronics and aerospace industries. DUBAL also holds a 50 per cent share in Emirates Aluminium ("EMAL"), a green-field smelter development at Al Taweelah, Abu Dhabi. Commissioning of EMAL Phase 1 (comprising a 756-cell smelter plus associated power generation, reduction material and casting infrastructure) began in December 2009. Active investments are also being made to secure DUBAL's requirements of alumina and other critical raw materials. With regards to alumina feedstock in particular, the company has to date engaged in four strategic upstream bauxite/alumina projects in Brazil, Cameroon, Republic of Guinea and India. In March 2005, Dubal entered into a provisional agreement with one of Indias engineering and construction conglomerates (Larsen and Toubro) to build a Dh 3.67 billion combined bauxite mining and alumina refinery in Indias Orissa state. In April 2005, Dubal and Global Alumina Products Corporation signed a memorandum of understanding for Dubal to make a substantial investment in Global Alumina. Dubal contributes 5% to Dubai's GDP and 5.4% to non-oil revenues30. Given the importance of this industry for its economy, the UAE has proposed the elimination of tariffs on primary aluminium in the WTO31.

Dubai Cable Company (Ducab) manufactures high, medium and low voltage electric cables.32 Established in 1979, Ducab is a joint-venture between the Dubai and Abu Dhabi Governments (50% each). Ducab reached AED 2.4 billion global sales during 200933. The company has recently expanded its business by entering into new export markets in Iran, India, Jordan, and Tanzania under major projects and distribution agreements. Emirates Steel Industries (ESI), formally Emirates Iron & Steel Factory (EISF) is a wholly owned government factory strategically located at the recently developed Industrial City of Abu Dhabi (ICAD). The factory is the largest steel plant in the UAE, utilising the latest rolling mill technology to produce reinforcing bars for the construction industry. A steel factory, with an initial capacity of 600,000 tonnes of 10-32 mm diameter steel per annum in 2006, was built in the Mussafah Industrial Area, in Abu Dhabi. The factory uses imported raw material. Expansion plans include the construction of a 205,000 tonnes per year smelter, a 351 MW power station and a desalination plant with a capacity of 2,000 cubic meters of fresh water per day. Gas will be supplied to the project through a newly constructed pipeline34.


A magnesium alloy plant is under construction at Sharjah's Free Zone. The magnesium smelter project is being promoted by the Sahari Group of Abu Dhabi and Normans of Albania, with a 50% stake each in the project. The plant's initial production capacity will be 20,000 tonnes per year of magnesium products, to be increased to 60,000 tonnes upon completion. Raw material (magnesium) will come from mines in Albania. The production is expected to be exported. According to the authorities, there is no government ownership in the plant.

30 31

Dubal online information. Available at: WTO document TN/MA/M13, 6 August 2004. 32 Information is available at Ducab's website: 33 Source: Ducab. 34 Source: Emirates Steel Industries.

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Chemicals, and plastics


ADNOC's activities include the manufacture of petrochemicals (section (3)(ii) above). For example, Borouge is a joint-venture, established in 1998 in Abu Dhabi (Ruwais), between ADNOC and Borealis, one of Europes largest polyolefin (plastics) producers (Table IV.5). Borealis and Borouge manufacture 4 million tonnes of polyolefins (polyethylene and polypropylene) per year. Borouge polyolefins manufacturing capacity reached 2 million tonnes per year (t/y) by mid-2010 and an additional 2.5 million t/y is scheduled for 201335.

Chemical fertilizer production began in the UAE in 1980 with the establishment by ADNOC of Ruwais Fertilizer Industries (FERTIL), which currently has a capacity of 1,050 tonnes of ammonia and 1,500 tonnes of urea per day. Abu Dhabi Fertilizer Industries, set up as a joint-venture between the UAE-based International Technical Trading Company (64%) and SQM of Chile (36%), produces 40,000 tonnes of fertilizer annually. Other fertilizer manufacturing projects are located in Jebel Ali Free Zone.


Cement & Ceramic The cement capacity in 2008 at 29.8 million tonnes increased to 34.1 million tonnes in 2009.36 The cement industry is one of the oldest manufacturing industries in the UAE, dating back to the mid 1970s. In 2004, cement and clinker production were estimated at 9.8 million tonnes and 7.2 million tonnes, respectively. Limestone is available locally, but bauxite, iron ore, and gypsum are imported. Twelve factories operate throughout the country, producing clinker and Portland cement; one factory in Ra's al-Khaimah manufactures white cement. Total capacity is estimated at 10.6 million tonnes of cement, and 7.2 million tonnes of clinker. Ras Al Khaimah Cement Company was established in 1995 as part of the continuing economic and social development policy being implemented by the Emirate of Ras Al Khaimah. The plant is capable of producing 960,000 tons of Clinker and 1,000,000 tons of Cement per year complying with BS and ASTM Standards. The plant is equipped with the state-of-the-art production equipments, which assure efficient use of electricity and natural gas while guaranteeing the highest degree of product quality and consistency. Ras Al Khaimah Cement Company plant is connected to a terminal inside the adjacent Saqr Port , it has the capacity to load ships up to 40,000 dwt, in a minimum amount of time. A shortage of cement and clinker throughout the UAE in 2005, reflected the ongoing construction boom. There has been an important expansion of capacity as the authorities consider that the market for these products will increase substantially. The Abu Dhabi Government has announced plans to privatize the Al Ain cement plant, which has been renamed the Emirates Cement Company.
64. 65.

Ras Al Khaimah Cement Company was established in 1995 as part of the continuing economic and social development policy being implemented by the Emirate of Ras Al Khaimah. The plant is capable of producing 960,000 tons of Clinker and 1,000,000 tons of Cement per year complying with BS and ASTM Standards. The plant is equipped with the state-of-the-art production equipments, which assure efficient use of electricity and natural gas while guaranteeing the highest degree of product quality and consistency. Ras Al Khaimah Cement Company plant is connected to a terminal inside the adjacent Saqr Port , it has the capacity to load ships up to 40,000 dwt, in a minimum amount of time.

35 36

Source: Borouge. according to a latest Global Investment House (GIH) report, January 2010

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Ras Al Khaimah Ceramics : RAK Ceramics is a public shareholding company. The Ras Al Khaimah plants alone produce around 227,000 sq. mt. of tiles per day and over 8500 pieces of sanitary ware per day. RAK Ceramics has overseas plants in China, Sudan, Bangladesh, India and Iran. The global production of tiles is over 360,000 of tiles per day and over 11,500 pieces of sanitary ware per day, making RAK Ceramics one of the largest multinationals in the world manufacturing. It has been officially recognised as the world's largest ceramic tile manufacturer by the Ceramic World Reviews. RAK Ceramics is considered among the top 25 ceramic tile manufacturers in 2009 with a total production output of 115 million square metres from 15 manufacturing facilities located in six countries37. Pharmaceutical products



Federal Law No. 4 of 1983 is the main law regulating the pharmaceutical industry. The Ministry of Health is responsible for licensing pharmaceutical companies, both in the Customs territory and in the free zones. According to the authorities, most production takes places, in six companies outside the free zones, although there are two companies in the free zones. Currently, the largest company (both in terms of capital and sales) is the Gulf Pharmaceutical Company (Julphar) based in Ra's al-Khaimah.38 Founded in 1985, Julphar manufactures 275 varieties of medicine (including antibiotics), only 7% of which are consumed locally. Exports in 2004 exceeded US$135 million and went to 40 countries. Julphar has five factories: three in Ra's al-Khaimah, one in Ecuador, and one in Germany. The Ra's al-Khaimah Emirate owns 25% of the capital of Julphar. Specialized in the production of intravenous solutions, Gulf Inject was set up by a group of local and Gulf business interests in the Jebel Ali Free Zone. The company exports to around 26 countries. According to the authorities, aside from Julphar, all companies in the industry are entirely under private ownership. Imports of pharmaceutical products are generally duty-free. Gulf Pharmaceutical Industries (Julphar) was established in 1980 . A public shareholding company based in the Emirate of Ras Al Khaimah, UAE. It is engaged in the manufacture of pharmaceutical products that address a range of therapeutic segments. Julphar is the first pharmaceutical manufacturing company in Arab Gulf States. Sales grew by 22% to AED 762.0 million in 2009 over 2008. Sales CAGR reached 14% over the last 5 years. Julphar had 3,487 products registered in over 45 countries around the globe at the end of 2009. Leading markets are Saudi Arabia, Iraq, UAE, Kuwait, Lebanon, Afghanistan and Egypt. Julphar product range can be divided into the following major therapeutic segments: Anti-Infectives, Cardiovascular Systems, Endocrinology, Central Nervous System, Respiratory System ,Musculoskeletal & Joint diseases, Immunosuppressant, Oral Cavity & Gastrointestinal Tract, Nutrition and Blood, Skin, Local Anesthetics and Para-Medical Products. Julphar has nine functional production facilities. The nine facilities are devoted to nine different classes of products: Julphar I which is Pharmaceutical Solid dosage Forms which specializes in non-sterile solid dosage forms such as tablets, capsules, effervescent tablets and powders for suspensions (PPS), sachets, etc. Julphar II which is -Lactam Antibiotics & Sterile Dosage Forms. This plant is a dedicated facility for Ampoules & Vials filling adhering strictly to cGMP and pharmacopoeia specified environmental controls. The manufacturing vessels are equipped with closed loop CIP and SIP Systems. Julphar III is a Oral -Lactam Plant dedicated facility for the manufacture of oral Penicillin products. Julphar IV which is


37 38

Source: Available at:

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a Oral Cephalosporin Plant dedicated facility to produce all forms of oral Cephalosporin Julphar V is Off-line Packaging Plant caters to that provide different language packaging materials and special regulatory requirements for pharmaceutical products from other countries. Julphar VI is a Liquid & Semi Solid Pharmaceutical Dosage Form. This plant manufactures Liquid and Semi Solid Pharmaceutical Dosage forms. Julphar VII is Biotech Lab and Production Facility. A biotech product production capabilities which has the capacity to meet the demand of erythropoietin, interferon, GCSF and interleukin. Julphar VIII is Sterile Powder Filling facility that handles the sterile dry powder injection vials. Julphar IX is a Sterile Cephalosporin Powder Filling Plant which is dedicated to handle dry powder injection vials for cephalosporin products. (5) (i) SERVICES Construction

The exceptionally fast pace of industrialization and economic development in the UAE has coincided with a global property boom, driven by low interest rates and accelerating with rising oil prices. In the 1975-00 period, the construction market was driven mainly by the traditional public sector customers such as utilities and ports. Since 2000, the market has been driven by large projects. Its rapid advances have also been encouraged by the gradual opening of property acquisition to foreigners in Dubai. It is estimated that half the number of flats sold in the city in 2004-05 were to international buyers and speculators39. The other emirates do not grant freehold rights to foreigners.

With nearly US$100 billion of major projects under way in Dubai alone in October 2005, the UAE is facing shortages of contractors in certain specialized construction services, such as power generation stations, metro lines, bridges, marine projects, and sewage treatment plants. As a result, clients are turning to foreign contractors for these services. Project management contractors, both local and foreign, coordinate the process on behalf of their clients, from concept to completion. Traditionally, designs are completed before contractors are asked to compete for the construction contract.
70. 71.

Burj Khalifa is the tallest construction building in the world. Burj Khalifa was inaugurated on January 4th 2010. At 828 metres (2,716 feet) and more than 160 stories, Burj Khalifa is the tallest free-standing structure in the world40. Yas Island a multi use real estate & Leisure projects. Yas Island is 25 km2 island located between the coast and city of Abu Dhabi and Dubai. The project includes hotels, theme parks, golf courses, mega malls, apartments and villas It has first Ferrari theme park, Ferrari World Abu Dhabi, F1 racing circuits, home of the Formula 1 Abu Dhabi Grand Prix. The estimated cost of the projects ranges between US$45-50 billion41.



Construction services are not highly protected; many foreign project contractors are active in the UAE. The UAE generally accepts internationally recognized standards and technical regulations. Professions in construction are regulated at emirate level, but foreign professionals are numerous. These factors have helped to maintain construction prices at relatively low levels by international comparison. The UAEs existing services schedule does

39 40

Financial Times, 20 September 2005. Source: Burj Khalifa: 41 Source: Yas Island :

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indeed include commitments on constructing services. In addition, the UAEs Initial Offer in the Doha Round services negotiations sets out more specific commitments. The UAE's relatively open labour market, and the resulting availability of both skilled and unskilled foreign construction workers has facilitated the expansion of its property market. Unskilled construction labourers typically work extended hours, for monthly salaries of US$200-250 and with frequent reports of delayed payment42. Workers are lodged in labour camps close to the construction sites. Following a campaign by local doctors concerned about the increasing incidents of heatstroke, the Ministry of Labour (MOL) announced in late June 2005 that on-site workers would be granted a four-hour break starting at 12:30 pm from July to August. In September 2005, the MOL issued an unprecedented "tough ruling" against a construction company following demonstrations for non-payment of wages43. Since 2005 the UAE has made great progress legislating and enforcing the rights of its labour force. Legislative initiatives have addressed specific situations as illustrated by Federal law 51 of 2006 on human trafficking. In addition the first draft of an amended Federal labour law was ready in 2007 whereby the Minister of Labour will be allowed to approve the formation of labour unions. The Directives by HH. Sheik Mohammed Bin Rashid Al Maktoum issued in 2006 seek on the other hand to improve the lives and living conditions of guest workers. Furthermore a Collective Labour Dispute Committee in each labour jurisdiction has been established to include representatives of both labour and employers. In 2007 the MOL undertook aggressive measures designed to stop late and non-payment of wages as well as to facilitate worker transfers to other employers. At the bilateral level the UAE has signed several MOUs with South Asian countries whose purpose is to increase collaboration in preventing illegal recruitment practices and other unfair labour practices.

(ii) (a)

Transport Overview

Since the mid 1980s, a strategic policy priority of the UAE is to become a major aviation and maritime transport hub between Europe and South-East Asia. It has largely succeeded in this. The governments of the emirates have invested vast resources in developing port and airport infrastructure, which have also been among the leading subsectors attracting FDI, albeit always on the basis of minority shareholdings. Transport not only plays an important role in the economy of the UAE, but the transport network has effectively become central to the entire region. The UAE's market access and national treatment policy in the field of transport services may differ from one emirate to another. In general, the main restrictions to competition, including from foreigners, are through the dominant position of and control through state-owned enterprises, and the requirement for foreign commercial presence to be in the form of minority (49%) ownership, including under the Commercial Companies Law44. The UAE has not included any transport sector in its 1994 Schedule of GATS Commitments45. Given the comparative advantage of the UAE in transport, a substantial WTO offer in this area, including through a relaxation of restrictions on foreign majority



Middle-Eastern Economic Digest, 15-21 July 2005. The Emirate Economist, Sunday 25 September 2005. Available at: 44 Federal Law No. 8 of 1984 Concerning Commercial Companies. 45 WTO document GATS/SC/121, 2 April 1996.



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ownership, would consolidate the traditionally liberal UAE transport policy, and sustain substantial growth in the transport subsector. (b) Maritime transport services

The growth of maritime transport in the UAE resulted largely from the development of Dubai's Jebel Ali Port, a large and rapidly expanding deep seawater port infrastructure. The port has allowed the development of major shipping and transhipment activities as well as shipbuilding, repairs, and maintenance services. The UAE has been a member of the International Maritime Organization (IMO) since 197446.


The Maritime Transport Sector is going through continual improvement since the establishment of the National Transport Authority as per Federal Law No. 1 (2006). The NTA Maritime Transport Sector is responsible for developing ship licensing system, issuing of navigational licenses and levying fees in accordance with the UAE commercial maritime law (26) 1981. The NTA is updating and amending the Marine Transport Commercial Law in order to liberalise marine trade and registration of foreign ships. The UAE's fleet comprises all ships registered in the UAE with a 51% ownership by UAE nationals. It ranked 47th under the gross tonnage of the world merchant shipping registered on 31 December 2008. The commercial fleet consisted of 622 ships of 100GT of above flying UAE flag , and the total commercial payload reached approximately 4.5 million tons.



The regulation of shipping services is shared between the NTA and the respective Transport port Authorities of each Emirate. The NTA is in charge of all security, seaworthiness, and communications aspects of marine navigation, as well as compliance with international standards. The regulation distinguishes three types of ships: foreign flag vessels calling at UAE ports; national flag vessels; and foreign flag vessels operating in UAE territorial waters, mainly in the context of offshore projects (e.g. Dubai Maritime City, Palm Island). The NTA regulates all those operating in UAE waters The Abu Dhabi - Executive Council through Resolution 30G 28/2008 has instructed the DOT (Maritime Sector) to coordinate the development of regulations regarding the Management of Abu Dhabi s Waterways. Through these regulations the Department of Transport seeks to promote and facilitate safe coastal and inland water navigation in Abu Dhabi that meets internationally recognized standards, while promoting the smooth operation of Abu Dhabis civilian ports, maritime enterprise and integrated transportation system to achieve the goals set out in Abu Dhabi Vision 2030. Flag vessels must have a contract with one of the federal or local governments to operate in the UAE waters, and cannot carry out cabotage on their own account. This is designed to encourage local companies to register vessels under the UAE flag. Crews working on ships servicing the territorial waters must have residency visas. Foreign companies must obtain approval from the NTA in the form of a licence. All ships operating in UAE territorial waters must be classed under one of the categories of the International Association of Classification Societies (IACS). In addition, foreign ships must not be older than 25 years, and local ships must have IACS approval issued within five years. The United Arab Shipping Company (UASC) is the largest container carrier operating from the Middle East. UASC was established jointly by the six GCC states, in July
IMO online information. Available at:




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1976. The share owned by the UAE Federal Government is 10.96%. A number of other domestic shipping companies are partly or fully owned by the Federal Government or by the governments of the emirates. These include ADNATCO, National Petroleum Construction Company, and National Marine Dredging Company (all three owned by the Federal Government); Etisalat and Delma Co-operative Society, owned by the Abu Dhabi Government; and Arab Maritime Petroleum Transport Company (in which the Abu Dhabi Government owns 9.1%, the Dubai Government, 9.1%, and nine other Arab countries have 9.1% each).

The UAE shipping agency and freight forwarding market comprises numerous companies. The UAE is host to one of the world's largest shipping agencies, Gulf Agency Company (GAC), based in Jebel Ali Free Zone since 2002. The company also supplies spare parts and various services to vessels worldwide. GAC is entirely private. The UAE has 15 large commercial ports (including oil terminals) with a total capacity of over 70 million tonnes. The country owns well over 30 ports and commercial free trade zones in Jabal Ali, Sharjah, Ras al Khaima, Ajman, and Fujairah. Dubai's Jebel Ali Port, which handles primarily bulk cargo and industrial material for Jebel Ali Free Zone, is the world's largest man-made port. The UAE's ports export mainly oil and gas, but also raw materials and finished goods. Imports consist of intermediary and consumer goods, as well as a significant re-export trade within the Gulf region, East Africa, and the Indian subcontinent. In 2008, Dubai International Port container storage capacity had reached 46.8 million TIUS arriving, mainly from the Americas, Asia including China, India and the middle East. The projected storage capacity for the next 10 years is in the order of 95 million TIUS. The UAE ranks among the top five locations in the world for bunkering and other ship handling; and its ship-repair facilities and ship-building capacity are developing rapidly. As noted, port services are regulated at emirate level. Most port handling services, including crane lifting, loading, discharging, stevedoring, stowage, storage and warehousing, as well as pilotage, appear to be supplied exclusively by the emirates' port authorities. Dubai's ports, with over 100 berths, play a pivotal role in UAE trade, and increasingly in regional and world trade. Dubai Ports Authority (DPA) managed them until September 2005, and handled 5.15 million "twenty feet equivalent unit" (TEU) containers in 2003, the world's seventh largest throughput, before a record growth of 25% in 2004. On 28 September 2005, the Dubai Ports Authority and Dubai Ports International merged into a single new global port operator DP World. In 2006, Dubai World was ranked 8th in the world in the sphere of port operations; Dubai World had processed well over 8,923 million containers. In addition, a new regulator the Dubai Ports and Jebel Ali Free Zone Authority was created to oversee the regulation of Dubai's ports. DP World is fully owned by the Emirate of Dubai. It handles enquiries, cargo clearance, as well as manifest and cargo handling services, online47. Registered users can view and pay duties online. Information on port dues and other fees and taxes for the Dubai ports is available electronically48. Dubai Ports is regarded as the seventh largest international port in terms of size and capacity, and has successfully acquired the nationally renowned port operators such as P&O and CSX.




See DP World online information. Available at: asp?NewsID=25. 48 See in particular "Dubai Port Tariff". Available at: conditions.pdf; and Port Zayed online information. Available at: Tariff.htm.


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Large outflows of FDI have taken place in port services, reflecting both the availability of domestic financial resources, and the growing domestic expertise in the area of port management. Dubai Ports International (now DP World) had recently made large investments in other ports, including abroad. Dubai Ports operates well over 49 international ports worldwide in 31 countries. DP World runs the port of Constantza in Romania. In December 2004, DPI purchased CSX World terminals' international portfolio, including the operations of Busan's New Port in Korea, Hong Kong's Asia Container Terminals, as well as port terminals in Australia and Germany. In January 2005, DPI announced agreements to take over operational management of Abu Dhabi and Fujairah ports. It also bid successfully to build and operate the planned international container transhipment terminal on Vallarpadam Island in India. DPI took over the management of the Djibouti airport in 2003. In late 2005, DP World entered into negotiations with a view to purchasing P&O of the United Kingdom.
88. 89.

The marine terminals of Jebel Dhanna and Ruwais, Umm al-Nar, Das Island, Zirku and Mubarraz islands handle the bulk of the UAE's crude oil and gas exports. They are owned and operated by the Abu Dhabi Petroleum Ports Operating Company (ADPPOC). Port Zayed is the main gateway for container and general cargo vessels in Abu Dhabi. Apart from the same, Mussafah Port located in the heart of the industrial precinct of Abu Dhabi, Free port located adjacent to Port Zayed servicing smaller vessels, tugs, barges and service crafts and the under construction Khalifa Port and Industrial Zone (KPIZ) comprise the major ports servicing the Emirate of Abu Dhabi. The port sector in Abu Dhabi is undergoing massive change, with the planned closure of Port Zayad and construction of a new port and industrial zone called Port Khalifa. This move will increase capacity of the port sector as well as release urban land for re-development. The planned changes are expected to be completed by 2013. The Khalifa Port and Industrial Zone will be developed in 5 phases and will include a container handling terminal and piers for handling raw and bulk cargos. KPIZ will replace Abu Dhabi's largest existing port, Mina Zayed by 2013. Port Zayed will then be redeveloped into a residential and commercial area. The Khalifa Industrial Zone will be developed in as two Areas (A and B). It will comprise of industrial zones, offering 100% foreign ownership to companies and individuals. The Port will be completed in phases. The first phase of Khalifa Port is expected to be completed in late 2010 when the first vessel is expected to visit Khalifa Port. In March 2011, Area A of Khalifa Industrial Zone is expected to be completed. The Stage 1A development will include over 3.2 km of quay walls able to accommodate a throughput of over 2 million TEUs and over 6 million tonnes of general cargo. Four additional development phases have been planned for, increasing the overall throughput of the port to over 22 million TEUs and 35 million tonnes of general, break, dry, and liquid bulk cargo by 2028. The overall project is expected to be completed in 2028 at an estimated total project cost of US$ 24 Billion.




The powers, functions and responsibility for regulating and operating the Ports in Abu Dhabi, that were previously held by the Sea Ports Authority have been devolved to the Department of Transport (Maritime) and the Abu Dhabi Ports Company (ADPC) respectively. All port terminal operations in Abu Dhabi are presently the responsibility of Abu Dhabi Terminals, which is a joint venture company owned by ADPC and Mubadala of Abu Dhabi. DP World which has a management agreement with Abu Dhabi Terminals is the defacto operator of Port Zayed. The UAE western coast of Sharjah houses Khlaid Port and Al Hamariah Port. On the East coast Khorfokan port container storage capacity had increased by 8% in 2007 with well over 20 million containers. Khorfokan was designated as a specialist container storage facility and was ranked as the 120th in the world. Khorfokan port is

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equipped with 1460m bays and is currently being developed for building new additional bays of 440m and depth of 16.5m for receiving ships with 8000 containers capacity. Sharjah's ports are under the Sharjah Port Authority (Sharjah's Department of Seaports and Customs). Port operations are governed by the Port Act of 1977. In 1976, the Authority established the company Gulftainer to manage and operate the container terminals in Port Khalid and Khorfakkan. Gulftainer also owns one of the largest heavy transport fleets in the United Arab Emirates and a container repair company. Ajman Port, which also services Ajman Free Zone situated in the port, has eight berths designed to handle both container and general cargoes. Plans are under way to deepen the port. It will have special facilities to handle cargoes of chemicals, waste paper, and fodder. The Ajman Port Authority has also set up two dry docks to provide maintenance and repair services.

Cement, marble, and gravel from nearby quarries and factories are the main products shipped from Port Saqr in Ra's al-Khaimah. In 2004, Ra's al-Khaimah Port Authority awarded the Kuwaiti firm KGL a US$45 million contract to build, operate, and manage its container terminal at Port Saqr for 21 years. Bulk cargo tonnage of ships calling at Fujairah Port rose from 6.1 million tonnes in 2002 to 8.9 million tonnes in 2004, much of it in the form of bunker fuel. Fujairah is now one of the world's three largest bunkering centres49. As noted, Fujairah Port's container activity is operated and managed by DPI (since March 2005). Most other activities including bunkering, continue to be managed by the Fujairah Port under a 1982 Ordinance50. However, maintenance services are outsourced to companies such as Arab Heavy Industries Company, experts in the field of structural steel fabrication, tank and ship building, and marine services Air transport services




Each emirate is fully responsible for developing its civil aviation; this partly explains the relatively large number of UAE international airports. The UAE's aviation industry has advanced sizeably over the past few years, fuelled by considerable airport expansion, as well as by the launch of five new airlines. Moreover, the world's largest aircraft order was made by a UAE airline in 2003, and large purchases have been made by another. The UAE civil aircraft registry contained about 225 aircraft in 2009, a number expected to double by 2013 Some 20 airlines were in operation in late 200551. The six UAE international airports are becoming leading regional aviation hubs, connecting Europe and South-East Asia. One of the strategies that has led to the development of air transport services in the UAE is the use of the UAE territory as land-bridge on intercontinental routes. Typically, bilateral air service agreements have been concluded with countries in Europe and Asia and UAE airlines have subsequently exploit sixth freedom rights, e.g. serving routes between European and Asian cities with a stopover in a UAE city52. UAE airlines have also exploited


With Singapore and Rotterdam. Port of Fujairah Ordinance 1982. Available at: 51 See "Air Carriers of the Middle East". Available at: Emirates. 52 The sixth freedom right is defined by ICAO as the right, in respect of scheduled international air services, of transporting, via the home State of the carrier, traffic moving between two other States. It is a combination of the third freedom and fourth freedom rights (granted by one State to another State to respectively put down and take on, in the territory of the first State, traffic coming from or destined for the home State of the carrier) ("Freedoms of Air". Available at:


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fifth freedom rights on routes where available53. As a result, certain UAE companies are now among the dominant airlines on the New Zealand-Australia route. Both of Emirates Airline and Etihad Airlines operate around 96 flights from UAE to Australia weekly.

There are no preferences for GCC carriers or companies in air transport. The UAE is an ICAO Contracting State54. Etihed Airways and Emirates are members of the International Air Transport Association (IATA).

A new body entitled Dubai Civil Aviation Authority was created by Dubai ruler decree No 21 in 2007, to strengthen the growth of the Aviation Sector replacing the Department of Civil Aviation. Separate entities comprising Dubai Airports and Dubai Air Navigation Services were also established for managing airports and Air Traffic operations. A new airport Al Maktoum International is being constructed at Jabel Ali, to be completed by 2020. On completion it will have a capacity of 120 million passengers. On June 2010.World Central-Al Maktoum International (DWC) airport received aerodrome certification on from the General Civil Aviation Authority. Dubai Airports officially opened DWC for cargo operations welcoming inaugural flights operated by Rus Aviation, Skyline and Aerospace Consortium. Phase 1 of the Al Maktoum International Airport was completed55. Major airlines and transportation services.

Emirates airline, which is fully owned by the Government of Dubai, was the world's fastest-growing intercontinental airline, one of the world's five most profitable, and the 17th largest in terms of cargo tonnage56. It operates from Dubai Airport, and since its creation in 1985 has grown at an annual average of over 20%. Emirates airline carried over 22.7 million passengers in 2008, and declared a record US$ 1.37 billion profit. The airline also announced the largest order in commercial aviation history at the 2007 Dubai Air Show, worth US$58 billion bringing the order book to 155 aircraft. With 53 A380-800s on order (outstanding), it received the first A380 in July 2007, In June 2010 Emirates Airlines ordered a further 32 A380s from Airbus, taking their total firm orders for the iconic flagship of the 21st century to 90 aircraft. The order has a list price of US$ 11.5 billion. It operates services to 100 cities in 64 countries. Emirates SkyCargo, the cargo division of Emirates airline, moved more than 660,000 tonnes of freight in 2003-04. Emirates airline has also purchased large shares in foreign air companies, such as Airlanka in 1998. Emirates airline is not a member of the three major international airline alliances, but operates in code-share on a number of routes, notably with major U.S. airlines.
99. 100.

The Department of Transport (Aviation Division) (DoT), established in 2006, is responsible for the economic regulation and strategic direction of air transport in the emirate and for the oversight of safety and security. The key stakeholders and operators are Abu Dhabi Airports Company (ADAC), Etihad Airways, Abu Dhabi Aircraft Technologies (ADAT), Maximus Airlines, Midex Airlines and Royal Jet. Abu Dhabi Airports Company (ADAC) opened the new Terminal 3 Abu Dhabi International Airport in the first quarter of 2009. The new building is located next to Terminal 1 and has increased the airports overall annual passenger capacity to 12 million passengers. The terminal is dedicated to Etihad

The fifth freedom is defined as "the right or privilege, in respect of scheduled international air services, granted by one State to another State to put down and take on, in the territory of the first State, traffic coming from or destined to a third State (e.g. Dubai Sydney Auckland). 54 International Civil Aviation Organization online information. Available at : index.html. 55 Source: Gulf News : Al Maktoum International airport begins operations 56 Airline Business, November 2004.


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Airways, the national carrier of the UAE, and has been fully operational since the end of January 200957.

In July 2003, the Abu Dhabi Government launched Etihad Airways, and wholly owned by the government of Abu Dhabi, operates scheduled passenger and cargo services worldwide to 56 destinations and operates a fleet of 45 aircraft with 111 on order, including the A380. In the financial year 2008 Etihad carried 6 million passengers and 330,000 tonnes of cargo. The airline has won many international awards for service quality, is a major component of the Abu Dhabi economy and employs approximately 6,000 personnel. Maximum Air Cargo, an ACMI operator based in AUH, operating a fleet of speciallift capable Antonov aircraft as well as several other Russian- and American-built cargo aircraft. It is currently seeking designation as a national carrier to undertake scheduled cargo flights.



Midex Airlines, based at Al Ain with a fleet of Airbus A300 Freighter and Boeing 747-200 freighter aircraft, operates a range of non-scheduled flights and plans in the future to operate scheduled cargo flights as a designated airline of the UAE. The Government of Abu Dhabi is a shareholder in several other aviation companies. Abu Dhabi Aviation, established in March 1976, is the largest commercial helicopter operator in the region, with a fleet of over 59 craft. (8 Augusta Westland AW139 - additional 13 awaiting delivery, 15 Bell 412, 19 Bell 212 and 4 Bell 206), 3 fixed-wing aircraft (3 DHC-8); employing over 748 personnel, including some 129 pilots and 221 aircraft maintenance engineers. It is 80% owned by the Abu Dhabi Government. The bulk of the company's business is in support of Abu Dhabi offshore oil, engineering, and construction companies, but also includes offshore rescue services and the aerial application of agricultural sprays and fertilizers. Other activities include medical evacuation, survey, photography, crop spraying and charter. The company has expanded its operations in recent years to other countries, including Oman, Yemen, Saudi Arabia, Spain, and Iran. Royal Jet, a luxury air charter service was launched in May 2003. It currently operates a fleet of four aircraft. A division of Royal Jet, the Royal Med service, attracts passengers travelling for medical assistance; the Royal Med air ambulance, equipped with state-of-the-art medical equipment, was launched in 2003. Royal Med now accounts for almost half of Royal Jet business. Royal Jet is a jointventure, shared equally by Amiri Flight of Abu Dhabi and Abu Dhabi Aviation.58 Royal Jet is an award-winning international luxury flight services provider headquartered in Abu Dhabi, the capital of the United Arab Emirates (UAE). It is jointly owned by Abu Dhabi Aviation and the Presidential Flight Authority, (previously known as Amiri Flight), In recognition of service excellence, Royal Jet has been voted the World's Leading Private Jet Charter by the WTA. This came just months after winning another prestigious award, Business Jet Provider of the Year, at the Aviation Business Awards ceremony in Dubai. Royal Jet's core offerings consist of luxury VIP Aircraft Charter, Medical Evacuation Service, Fixed Base Operations (FBO)/VIP Terminal at Abu Dhabi International Airport and Aircraft Management and Acquisition Consultancy. Royal Jet is a founding member of the Middle East Business Aviation Association (MEBAA), promoting the interests of the regional business aviation industry and a member of the NBAA, AVITAT, MedLink (a service of MedAir Inc.) and the Flight Safety Foundation.



57 58

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Air Arabia, is commenced operations in October 2003 as one of the Middle East's first low-cost services. It was established by a decree issued by the Ruler of Sharjah59. The airline carried over 160,000 passengers in its first six months. Presently, it operates flights to 57 destinations across the Middle East, North Africa, Asia and Europe. The owners of the company are the Sharjah Department of Civil Aviation and the Sharjah Airport Authority (see below). In June 2007 Air Arabia transformed from a Limited Liability Company (LLC) to a Public Joint Stock Company (PJSC). In a study conducted by Aviation Week magazine the carrier was ranked first on the Top Performing Companies (TPC (Transaction Processing Performance Council, San Francisco, CA, an organization devoted to benchmarking transaction processing systems60. Flydubai is the second low cost carrier in the UAE. In July 2008 Flydubai ordered 54 aircraft worth about $ 4 billion. It commenced operations in January 2009 as the second lowcost service carrier in the UAE. Flaydubai flays to 21 destinations. In June 2010, the government of Dubai issued Law No.13/ Year 2010 amended a preceding law (No.11/Year 2008) which had set up flydubai with a capital of AED 220 million. The amendment more than doubled the capital to AED 500 million to be fully paid by the government of Dubai61. The General Civil Aviation Authority (GCAA) is a federal, autonomous body established by Federal Law No. 4 of 1996.62 It oversees all activities related to civil aviation and provides navigation services, registration, and licensing services for the UAE aviation industry. Companies wishing to conduct commercial air transport in the UAE must obtain an Air Operator Certificate from the GCAA. The GCAA proposes air transport policy general guidelines and relevant legislation to the Council of Ministers, and enforces international agreements and conventions. New foreign entrants are allowed into the market on the basis of bilateral air transport agreements. The UAE also signed open-sky agreements with the United States in April 1999, and with five other countries thereafter63. The key parameters contained in these agreements are equity and reciprocity of capacity and frequency, multi-designation, and a double disapproval tariff regime. However, the authorities have stressed that the UAE prefers an open tariff regime freely determined by the airlines. Cabotage is reserved for UAE carriers unless specifically authorized.




Amiri Decree of 3 February 2003. Source: Transaction Processing Performance Council, USA. 61 Source: WAM 62 General Civil Aviation Authority online information. Available at: 63 As at January 2006, air services agreements, including in some cases open-skies agreements or memoranda of understanding, were in place with: Algeria; Argentina ; Armenia; Australia; Austria; Azerbaijan; Bahrain; Bangladesh; Belarus; Belgium; Bosnia and Herzegovina; Botswana (MOU); Brazil; Brunei Darussalam (open skies); Bulgaria; Burkina Faso (MOU); Cambodia (MOU); Cameroon; Canada; Chad (MOU); Chile (open skies); China; Comoros (MOU); Croatia (MOU); Cyprus; Czech Republic; Democratic Republic of Congo (MOU); Denmark; Egypt; Former Yugoslav Republic of Macedonia (MOU); France; Gambia; Germany; Ghana; Greece; Hong Kong, China; Iceland; India; Indonesia; Iran (MOU); Iraq; Ireland; Italy; Japan; Jordan; Kazakhstan; Kenya; Kuwait; Latvia; Luxemburg; Macao; Madagascar; Malaysia (open skies); Maldives; Malta; Mexico; Morocco; Mozambique (MOU); Namibia; Nepal; Netherlands; New Zealand (open skies); Niger (MOU); Nigeria; Norway; Pakistan; Peru; Philippines; Poland; Portugal; Qatar; Republic of Korea; Republic of Yemen; Romania; Russia; Rwanda (MOU); Saudi Arabia; Seychelles; Singapore (open skies); Slovenia; South Africa; Spain; Sri Lanka; Sudan; Switzerland; Syria; Tajikistan (MOU); Tanzania; Thailand; the Separate Customs Territory of Taiwan; Penghu; Kinmen and Matsu; the United Kingdom; the United States (open skies); Tunisia; Turkey; Turkmenistan; Uganda; Ukraine (MOU); Uruguay (MOU); Uzbekistan; Viet Nam; Zambia (MOU); and Zimbabwe.


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"Wet" leasing of aircraft (with crew and, typically, fuel, maintenance, and insurance) by UAE carriers is not restricted to UAE companies or citizens.


There are no nationality requirements for crews engaged in domestic or international air passenger and freight services. However, the GCAA has embarked on a nationalization programme since 1998. This has led to an increase in the number of UAE nationals serving in the GCAA, including in the Air Traffic Control Centre, and more generally in the Air Navigation Services directorate. According to the GCAA, this policy has resulted in 54% nationalization of the GCAA's total personnel. According to the authorities, the nationalization policy does not compromise the overriding objectives of ensuring safety and quality.

Airport and related services


The UAE's six international airports vary considerably in size and capacity. Dubai, the world's 16th in terms of international passenger throughput, and 17th in terms of cargo tonnage, has become the main aviation hub in the Middle East. Abu Dhabi, 170 km away, is competing rapidly, thanks to government support and the new airline Etihad Airways, which is headquartered there. While air transport services are regulated at federal level, airports are run at the emirate level. Dubai Airport is one of the busiest in the region with over 112 airlines. Its rapid growth has been concomitant with massive expansion of the supporting infrastructure. Dubai Cargo Village hosts cargo facilities and services. In 2008, the Village handled over 1.73 million tons of cargo and 37 million passengers. In addition, work started at Jebel Ali in February 2005 for the construction of another Dubai airport on an area covering 140 km2, the largest of its kind. The new airport city at Jebel Ali will be the largest air-sea transportation centre in the Middle East. The Dubai Civil Aviation Authority controls and operates Dubai airports and has the task of raising funds to finance airport-related projects; to date, most projects have been financed by the Dubai Government. Airports and Related Services The principal airports in the emirate of Abu Dhabi are Abu Dhabi International Airport, Al Bateen and Al Ain, all of which are owned and operated by Abu Dhabi Airports Company (ADAC).



Abu Dhabi Airports Company (ADAC) is the owner and operator of these airports and is wholly owned by the Government of the Emirate of Abu Dhabi. The present airport was opened on the mainland in 1982, 26 kilometres east of the city centre, close to the trunk route linking Abu Dhabi with Dubai. The design of the Airport is the work of Aroports de Paris, the architects responsible for Charles de Gaulle Airport in Paris. Abu Dhabi International Airport has registered a record year in 2008, handling 9.0 million passengers, up 30% year-on-year, making it one of the fastest growing airports in the Middle East region. Meanwhile, Abu Dhabis cargo volume continued its strong performance last year, rising 12% to 353,820 tonnes in 2008. Against that background of unprecedented growth ADAC has completed a USD 254 million expansion with a new the commissioning of the new Terminal 3 concourse in 2009. This initial expansion will increase the airport's present capacity from 7 million to 12 million by 2008, adding 8 new aerobridges to the current 11, a second runway and a new ATC tower. The main phase of the expansion, Midfield Terminal, will open in 2014 and provide an additional 20 million mppa capacity by 2014 and ultimately 50 million mppa when the airport is fully operational. The MTC will be positioned between the two parallel run ways.

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Al Ain International Airport is the second airport in the Emirate of Abu Dhabi and serves the Eastern region of Abu Dhabi with a purpose built t cargo hub facility and is an ideal base for low cost and regional carriers. ADAC is moving ahead with plans to create a free trade zone in the vicinity of Abu Dhabi Airport. The Free Zone is an important part of the development and expansion of the airport. It will ensure that Abu Dhabi International Airport will become a thriving cargo and business hub as well as ensuring ADACs goal of increasing non-aeronautical revenues. Occupying a built area of over four million square metres, the Free Zone will offer investors an impressive package of world-class facilities and services. Clusters of amenities will be brought in close proximity and all the required facilities will be conveniently integrated to ensure that investors receive the best service. Al Bateen Airport, located in the heart of Abu Dhabi, has recently been taken over by ADAC and is rapidly developing as centre for corporate jet operation offering rapid access to the CBD and extremely efficient ground services for this important niche market. The Department of Transport and ADAC are jointly developing a road map for the future development of other key airport facilities in Abu Dhabi within the framework of the Western Regional Airports Master Plan.

Sharjah International Airport dates back to 1932 when Imperial Airways the forerunner of British Airways constructed an airfield in the emirate as a stopover en route to India and Australia. This was the first airport in the country. Today, Sharjah International airport is Middle East regions leading air transportation gateway. It is considered as the number one cargo hub in the region and is increasingly becoming popular throughout the world as a favourite transit and destination point for passengers. Passenger traffic jumped by 37% to 2.23 million in the first nine months of 2006 compared with the same perion in 2005. Sharjah Airport also has a major expansion programme. After the expansion Sharjah Airport is expected to quadruple its capacity. It is a popular trans-shipment point, especially for intermodal cargo arriving by sea and air-freighted onwards. Following an Amiri Decree, Sharjah International Airport is a financially independent body, run autonomously by the Sharjah Airport Authority. The Airport is the first among all the airports in the Middle East to introduce Cargo Tracking System online and touch screens placed within the airport for knowing the cargo status. Non-aeronautical activities (e.g. duty-free shops, car rentals, currency exchange) are generally outsourced, as well as certain aeronautical services such as maintenance operations (carried out by GAMCO - see below), fire and crash rescue. Abu Dhabi Aircraft Technologies (ADTA), formerly known as Gulf Aircraft Maintenance Company (GAMCO), is a major provider of aviation technical services for the commercial and military aviation industries. The companys main facilities and operations are to the south-west of Abu Dhabi International Airport, occupying 200,000m2 adjacent to Terminal 3. ADTA operates several narrow and wide body hangars, including A380, covering approximately 30,000m2 and are supported by an extensive range of component and engine overhaul and repair workshops, test laboratories and bonded storage, as well as a 100,000lb thrust Engine Test Cell. ADTA is the Middle East's leading independent provider of maintenance, repair & overhaul with an international client portfolio stretching from Iceland in the west to Sri Lanka in the east. Abu Dhabi Aircraft Technologies is a member of Mubadala Development Company, a


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strategic investment and development vehicle established and wholly-owned by the government of the Emirate of Abu Dhabi. (d) Road transport

The UAE Land Transport Sector has been going through a transition period since the issue of the Federal Law No.(1) of 2006, article 4 regarding the establishment of the National Transport Authority. The NTA is tasked with developing a licensing system pertaining to land transport and granting licenses to relevant transport bodies covering all modes of Land Transport for federal inter emirates transport and international transport in accordance with UAE relevant Laws and Regulations. The UAE has a high quality highway network comprised of about 4,000 Km asphaltpaved roads, which connect all main cities and population centres of the country. The highway network also connects UAE to the neighbouring countries Saudi Arabia and Sultanate of Oman. Roads and other public transport, including inter-emirate roads are regulated by the National Transport Authority and each Emirates Transport entity. All road transport companies, as any other company in the UAE, must be majority-owned by UAE nationals. Road transport companies generally employ foreign drivers.


The Federal Government issued Law no. 2 of 2009, establishing Union Railway Company with a mandate to manage the development, construction and operation of the UAEs national railway, with a capitalisation of Dh1 billion (US$272m), to oversee a planned national rail system64. The railway will be built to link the principal centres of population and industry of the UAE, as well as to form a vital part of the planned GCC railway network. Built to international standards, Union Railways state of the art network will enable the rapid transport of passengers and freight, opening up new trade corridors and journey opportunities. Once complete, it will redefine logistics and transport in the region, providing as a safe, efficient, sustainable network that links all corners of the UAE, and eventually, the UAE to the wider GCC. This extensive investment will support the Governments continued mission to build a diversified economy and continued economic growth. The Union Railway covers a network of up to 1,500 km stretching across all seven Emirates. The railway will connect the UAE to Saudi Arabia via Ghweifat city in the West and Oman via Al Ain in the East. The route will initially cater to freight transport, though passenger services will be added in the near term. By ensuring frequent and reliable services, journey times will be substantially reduced. This will bring diverse communities together and open up areas that were previously more difficult to reach, through a safe, efficient and sustainable mode of transport that will change everyday lives.(UAE Railway Map Figure 1)
Figure 1 UAE Railway Map



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The Department of Transportation in Abu-Dhabi plans to develop a metro rail in Abu Dhabi as part of a master public transport plan. The metro will mainly connect the proposed Central Business District with Sowwah Island, Reem Island, Saadiyat Island, Yas Island, Abu Dhabi International Airport and Masdar, Capital City District, Emerald Gateway, Zayed Sports City and ADNEC. Most of the proposed network is expected to be underground. The monorail track (which is part of the metro project) is expected to be 31 Km long. Each monorail station is expected to handle 1,000 commuters. The monorail might also include 15 two-coach trains and 5-minute intervals between each service train and another Metro would be linked to Dubai Metro and to other cities in the UAE and to other GCC states. This project is part of Abu Dhabis Department of Transport plan to invest USD 82 billion in the transport network of Abu Dhabi, which includes the construction of roads and a Light Rail65.
120. 121.

The work on Dubai Metro started on July 2005 and it was launched on September 2009. By February 2010, 29 stations will be operating on the Red Line with 24 elevated, 4 underground and 1 at grade (street level).it cost $ 7.6 billion66. Decision-making, including operational management, is under the responsibility of the airport and port authorities of each emirate; DP World and Dubai airport are under the authority of the Emirate of Dubai. This raises important coordination issues, given the presence of two world-class airports and two major sea ports within 150 km. The Emirate of Abu Dhabi established a Department of Transport in 2006 to oversee its maritime and aviation sectors and, in 2008, extended the Departments responsibilities to include land transport. The General Civil Aviation Authority (GCAA) is responsible at the Federal Government level for regulation of safety and security standards and for provision of air navigation services. A National Committee for Port Security is responsible for the security of the main ports.

A study is underway to build a 700 km-long railway system to link Abu Dhabi and Dubai, with the northern Emirates. The project would add to the UAE competitive edge, create job opportunities and serve as a magnet for foreign investment.
122. 123.

The GCC Railway link feasibility study has been completed, the UAE section is roughly 684km which is 32% of the entire GCC route of 2117km . It is envisaged that the GCC railway will become operational by 2016. Telecommunications



The UAE has reached one of the highest telephone penetration rates in the world in recent years (Table IV.8). As of 2008, the UAE has achieved the highest mobile penetration rate in the world, with 196% active subscribers. With respect to fixed line subscribers, the penetration rate was 32% of inhabitants at the end of 2008, which is a slight increase from the 30.1% at the end of 2005. The retail prices for local fixed line services are among the lowest in the region and are quite affordable, and as such, are not deemed to be a deterrent to subscription applications. The estimated number of Internet users has increased by 121% from 2005 reaching 1,1 million subscribers. The telecommunications industry as a whole has evidenced substantial total growth in recent years. Accordingly, in 2005 the total revenues of the sector were USD 3.5 billion and in excess of USD 8.1 billion in 2008, representing a 131% increase.

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Source : Source:

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Important institutional and regulatory changes have taken place. Currently, two full service providers (fixed net, mobile, internet, landing station, etc) are fully operational compared to the 2005 situation whereby the UAE telecommunication market was a monopoly. In this regard, the second operator EITC joined the incumbent ETISALAT as the UAEs second full-service telecommunication operator in February of 2006 when it signed its telecommunication license. Etisalat's profits reached USD 2.36 billion in 2008, mainly spurred by the growth of cell phone services. It is important to note that both operators are partially owned by the UAE government. Both operators are responsible for paying the Federal Government a royalty of 50% of their total net profits. The UAEs present WTO commitments with respect to foreign ownership disqualify any international interest from acquiring more than 49% of either existing operator or any future entrant, notwithstanding the fact that no additional fixed net, mobile or internet licenses are presently available. Accordingly, as the telecommunications sector in the UAE appears to be opening on a gradual basis, future liberalization must be viewed in the context of the relevant licensing and ownership restrictions which create a relatively tightly held and closely guarded market at present.

Table IV.8 Telecommunications indicators, 2004-08 2004 Telephone penetration Telephone lines per 100 habitants (%) Mobile subscribers per 100 habitants (%) Total full-time staff in telecommunication services Price indicators (US$) Telephone connection chargea Monthly subscription chargeb Cost of 3- minute local call Cost of 3-minute call to the United States or France Cost of 3-minute call to Kuwait Revenues of Etisalat (US$ million) Connection and subscription charges Local and national fixed calls Revenues from international fixed calls Data/text services Leased lines Mobile communications services Expenditure by Etisalat (US$ million)c Total annual investment in telecommunications Internet usage Number of Internet hostsd Percentage of population Subscribers users from homee Subscribers users from officef Number of Internet cafsg Dial-up subscribers Broadband subscribers Peak dial-up access cost (US$/hour) Off peak dial-up access cost (US$/hour) .. a b c d e f g Note: Source: Not available. Connection charge includes standard telephone set. Subscription charged quarterly at Dh 45 a quarter. Includes the 50% royalty to the Federal Government. This refers to the number of shared web hosting subscribers. Consist of dial-up and Al Shamil users. Consist of dial-up, Business One, and leased line users. This is the number of Al Mawrood, Etisalat's Internet caf brand. Exchange rate: Dh 3.6725 = US$1. Etisalat and Telecommunication Regulatory Authority. 29.4 91.1 10,040 54.5 4.1 free 1.73 1.73 773.3 25.2 68.4 106.7 47.8 16.1 427.1 520.0 101.1 8,372 0.195 1,155,104 551,413 438 363,646 56,596 0.49 0.27 2005 30.1 110.5 10,086 54.5 4.1 free 1.73 1.73 2006 30.3 127.6 10,763 54.5 4.1 Free 1.73 1.73 2007 30.4 166.4 10695 49.01 4.1 Free 1.12 1.12 2008 32 196 11,759 49.01 4.1 Free 1.12 1.12

399,357 129,320 0.49 0.27

442,772 240,620 0.49 0.27

524,210 379,800 0.49 0.27

1,1482 640,000 527,925 0.49 0.27

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Telecommunications services are among the few activities effectively supervised at federal level, by means of the Federal Law by Decree 3/2003 and the Executive Order No. (3) of 2004.67 A new Telecommunications Regulatory Authority (TRA) began operations in November 2004.68 Since its establishment the UAE government has issued Federal Law No. 5 of 2008. One of the notable amendments in this legislation is the specific grant of authority to the TRA to ensure the protection of competition in the telecommunications sector. Based on this authority the TRA issued a competition regime designed to prevent and, if necessary penalize anti-competitive behaviour in the telecommunications sector. With respect to the TRAs maintenance of a suitably competitive environment, the TRA has issued Regulatory Policies and Procedures which ensure that the prices charged by operators are consistent with the promotion of competition TRA policies prohibit operators from implementing any prices which are anti-competitive or could restrict, distort or prevent competition.
126. 127.

On 2006 the Telecommunication Regulatory Authority granted a licence to Du to install operate and manage a Public Telecommunication Network and to provide Telecommunication Services. Du is the second mobile operator in the UAE. It has 3.5 million active users as of 2009. Du offer fixed and mobile telephony, broadband connectivity and IPTV services to individuals, homes and businesses, and carrier services for businesses. DU employs around 2000 staff 69.


In order to adjudicate interconnection disputes, in accordance with the powers and obligations in the telecom law, the TRA issued interconnection Dispute Resolution Procedures (IDRP) in order to create an efficient and transparent regulatory mechanism for the systematic adjudication of contentious interconnection matters between operators. Since the issuance of the IDRP, several disputes have been referred to the TRA for adjudication which the TRA has responded to in relatively short periods, thereby decreasing regulatory uncertainty in the industry. In its decisions, the TRA has consistently taken positions which are consistent with international best practice.

The TRA has full authority for issuing and implementing regulations for telecom services and all licensed operators. It is also responsible for the management of the frequency spectrum, for establishing and implementing standards for type approval of equipment, and for national numbering policy. With respect to the promotion of efficient usage of national spectrum, the TRA has issued a set of regulations for radio spectrum. In this regard, the TRA has published a National Frequency Allocation Chart as well as a Spectrum Fees Policy which are designed to allow market participants as well as prospective market entrants transparent access to the processes, standards and costs applicable to radio spectrum. Additionally the TRA has standardized the application process for spectrum allocations and made the relevant forms readily available for the public. The TRA also has full authority on interconnection and price regulation. The TRAs Interconnect Pricing Regulatory Policy requires that all interconnection services must be cost oriented and that Long Run Incremental Cost shall be the primary criterion for the TRA to examine such prices.
129. 130.

Providers of mobile telecommunications services are required to ensure portability of numbers, and freedom of choice in the selection of suppliers of national and international connections. The only universal service obligation (USO) explicitly mentioned in the Executive Order is the provision of free-of-charge calls to emergency services.

Federal Law by Decree No. 3 of 2003 Regarding the Organisation of the Telecommunications Sector, issued on 3 April 2004, and its Executive order are available at: 68 Information on the TRA is available at: http://www/tra/ae/main. 69 Source: DU :


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The TRA has issued a national plan on the management of internet networks.. Internet service providers require a TRA licence that specifies the conditions and standards for their activities. The TRA is currently preparing to expand the UAE telecommunication market further through the eventual admission of more providers of telecommunications services. To this end, the TRA issued several Resolutions which laid the foundation for future licensing activities underlining the UAEs commitment to establish a transparent and easily navigable environment for potential investors to assess the prerequisite licensing requirements for entry into the UAE telecommunications market. In 2009 the TRA plans to issue 4 additional licenses authorizing GMPCS and PAMR services as well as mobile television and satellite communications.



Telecommunications Regulatory Authority (TRA) awarded Al Yah Satellite Communications Company (Yahsat) a ten-year satellite services license for the installation, operation and management of a satellite communications network and provision of satellite communications services in the UAE70. Tourism services



Over the last decade, the authorities have targeted tourism as one of the main sources of future growth in the UAE. This policy has been successful, and tourism is among the fastest growing subsectors in the country, accounting for a large share (12%) of GDP in 2005. Neither the war in Iraq nor the regional political instability have affected the sector's performance.

Over the past decade, the number of visitors to the UAE has grown from 1 to 6 million annually, representing an annual growth of three times the world tourism growth rate over the same period. It is estimated that by 2015 annual visits to the UAE will amount to 14 million. The growth rate even accelerated during 2000-04 despite the difficult geopolitical environment. Among the possible explanations for this impressive performance are: large public investment in airports, airlines, and other transport infrastructure, making it possible to travel to the UAE easily; large investment in hotels; and large and varied sports and leisure projects that respond to wealthy consumers' preferences, such as the shopping festival, prestigious horse races, tennis tournaments, car rallies, and other highly-prized sports events.
135. 136.

Some three quarters of tourism revenues and tourist arrivals relate to the Emirate of Dubai; this share has been rising71. In 2002, Dubai was ranked as the fastest growing tourist destination by the World Tourism Organisation, with 31% growth in the number of visitors. Spending by inbound international visitors is expected to total AED6.4 billion (US$1.8 billion) in 2005. Over the next decade, this result is expected to grow by 7.2 per cent to AED15.8 billion (US$4.3 billion). Tourism remains the largest industry in Dubai.

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Source: Source For data on tourism revenues Ministry of Economy.

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Table IV.9 Hotel indicators, 1995, 2000, and 2008 (Number of US$ million) AVERAGE ANNUAL PERCENTAGE CHANGE OVER THE PERIOD 1995-00 2000-03 3.0 4.7 6.1 12.9 4.8 1.8 0.7 2.0 3.3 15.2 5.0 21.4


2000 265 49 39 714.8 234.1 62.2

2008 271 90 43 1,093.5 1549 111.4

Exchange rate Dh 3.6725 = US$1.

Source: Ministry of Economy, Issues: Hotels. Available at:

Tourism services are regulated at the emirate level. Dubai Tourism and Commerce Marketing (DTCM) is responsible for the promotion, planning, supervision, and development of tourism in Dubai72. Dubai's government has been particularly instrumental in developing tourism, as a long-term alternative to reliance on oil revenues. In particular, the Government of Dubai has made very large-scale investments in tourism development projects (Box IV.1). In addition, consistent pro-business policies have combined with an investor-friendly environment. For example, Dubai is the only emirate to allow property ownership by foreigners in certain cases, In March 2006 the Land Registration Law of the Emirate of Dubai No.//2006 The Dubai Property Law was enacted which clarified and confirmed the freehold ownership of land by UAE, GCC and non-GCC nationals in certain areas designated by the Ruler.
137. 138.

Abu Dhabis Government has significantly up weighted its commitment to the development of tourism in its 2030 Policy Vision with the goal of realising the Emirates potential for being a world class tourism destination. The Abu Dhabi Tourism Authority was created in 2004 with Vision of being A leading tourism authority that is positioning the Emirate of Abu Dhabi as an outstanding, globally recognized, sustainable tourism destination, while enriching the lives of the Abu Dhabi community and visitors alike . The Government, individual and foreign investors have made substantial investments in the development of tourism infrastructure and events in the Emirate. Organizations such as the Tourism Development Investment Company and Abu Dhabi National Exhibition Centre have been at the forefront of some of these investments (see inset below). To date the growth generated has been impressive with hotel guests increasing from 959,000 in 2004 to 1.5 million in 2008. Hotel revenues also increased by 288% in the same period.

Box IV.1: Saadiyat

The 27 square kilometre island just 500 metres offshore Abu Dhabi city is being transformed in a 27 billion dollar investment into a signature residential, cultural and leisure destination. It is perhaps best known for its Cultural District which will be home to the worlds single largest concentration of premier cultural institutions. These include the Sheikh Zayed National Museum, the Dubai Department of Tourism and Commerce Marketing online information.

Available at:

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Guggenheim Abu Dhabi Museum, the Louvre Abu Dhabi, a performing arts centre and maritime museum. Believing that the buildings of these world-class institutions will be as much a visitor draw as the contents, we engaged architectural luminaries to design their concepts with commissions going to Lord Norman Foster, Frank Gehry, Jean Nouvel, Zaha Hadid and Tadao Ando respectively. While fast shaping up as a global cultural hub, Saadiyat is also progressing other developments the Saadiyat Beach Golf Course, for instance. This environmentally friendly course, is an 18 hole grass championship course the only ocean course in the Arabian Gulf. Again, in line with TDICs hallmark approach to teaming up with world-class partners, the golfing legend Gary Player was commissioned to design this course. Noted for his commitment to environmental sensitivity the result is a course which in many ways is at one with nature using its beachfront landscape to its best advantage and including many water-saving devices. Saadiyat Beach is also to be home to a number of luxurious beach resorts many of which will be run by some of the best names in the hospitality business. TDIC has also, entered the real estate sector with the sale of homes in the first phase of Saadiyat Beach. These homes are in carefully master planned neighbourhoods and will deliver a residence with a difference with great golf course and sea views, close to luxurious beachfront resorts and all their facilities and within a short distance of the Cultural District

Box IV.2: Selected projects in Dubai In October 2000, Dubai Internet City opened as a technology free-zone, launching Dubais quest to become a regional hub for a host of strategic sectors. The model was subsequently replicated for, inter alia, media, finance, healthcare, and microchips. In 2004, Dubai Healthcare City, a newly created free zone, began providing specialized medical and healthcare services with the help of partners and investors from regional and international clinics. The project targets customers from the GCC, the Indian subcontinent, East Africa, and Central Asia. A turnover of US$1 billion was expected in 2005. The Government of Dubai is progressively implementing plans to set up the Dubai International Financial Centre (DIFC), a dollar-based financial free zone designed to mirror many aspects of the London Euromarkets. The DIFC is located in a multi-billion dollar complex of modern structures, called Capital Dubai, on which construction began in 2003. The DIFC will encompass a comprehensive set of international financial functions, including institutional and investment banking, asset management, insurance and re-insurance, Islamic finance, back-office operations, and the DIFX, an international exchange that will trade a full range of financial instruments. Operations reportedly began in September 2005 with about 20-25 firms. A number of major international firms have announced plans to participate and some key bond issuers, including the World Bank, have committed to listing issues on the DIFX. The DIFC is to be regulated by separate enabling laws and a separate regulator, the Dubai Financial Services Authority (DFSA), and judiciary, both at the emirate level. This approach has been legitimated by a constitutional amendment and a UAE federal law, which allow emirates to form financial free zones, independent of the civil and commercial (but not criminal) laws of the UAE and of the emirates. According to the IMF, since both the operating and regulatory arms of the DIFC are subordinate to the Government of Dubai, the governance structure holds the potential for conflicts of interest. The DIFC is intended to be segregated from the domestic financial sector. Banking operations in the DIFC are confined to institutional wholesale banking; both deposit taking and dealing in dirham are prohibited. As noted by the IMF, given the currency peg between the dirham and the dollar, loss of monetary control arising from the leakage of funds between the sectors is not a major issue; however, the opportunity will be there for financial innovations to exploit regulatory arbitrage and produce shifts of funds between the DIFC and the UAE. The US$3 billion Palm Island project for the construction of two artificial, palm-shaped islands off Dubai's coast, is a by-product of the Jebel Ali harbour expansion. Each island will have around 60 km of coastline. The islands will house residential homes and hotels, as well as entertainment and retail outlets. Infrastructure work

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on the first island was completed in 2004. In addition, there are plans to build a similar group of 200 artificial islands in the shape of the world map. With a total investment of almost US$6 billion and an assigned space of 4 billion square feet, Dubailand is one of the world's largest self-contained tourism projects, offering leisure, sport, retail, and entertainment attractions. The launch phase, covering initial infrastructure like road works and utility provision, will extend from 2004 to 2006. The main construction phase will be completed by 2010. Financing is mostly from the private sector, domestic and foreign. Other projects include the construction of the world's first luxury underwater hotel, as well as the only indoor skiing centre in the Gulf region, Dubai Snow World. In 2004, Dubai Holding was established as a Dubai government-owned organization charged with running some of the emirates major ventures. They include Dubailand, Dubai Internet City, and Jumeirah Beach Residence.
Sources: Dubai Health Care City online information. Available at:; Oryx Real Estate online information. Available at:; "Dubailand: Investment opportunities". Available at:; Dubai International Financial Centre online information. Available at:; and IMF (2004).


Under the GATS, the UAE has scheduled commitments on the provision of hotel and restaurant services through modes 1 to 3, i.e. cross-border supply, consumption abroad, and commercial presence. However, the supply of these services through a commercial presence is limited to a maximum foreign equity participation of 49% pursuant to the UAEs horizontal restriction. Financial services



Banking and financial intermediation services are regulated at federal level by the Central Bank of the UAE; insurance services are also regulated at federal level under the authority of the Ministry of Economy and Planning. The Insurance Commission regulates the sector .The main purpose of the New Insurance Law is to establish an Insurance Commission which will be responsible for the ongoing regulation of the insurance industry in the UAE, which will include having responsibility for the licensing and supervision of all insurance companies, insurance brokers, insurance agents, insurance consultants operating in the UAE, along with other experts in the insurance service industry, such as loss adjusters and actuaries. The Insurance Commission replaces the UAEs Ministry of Economy, whose insurance section has until now been tasked with the responsibility of regulation of this sector73. In addition, the Government of Dubai launched the Dubai International Financial Centre, in early 2005, offering insurance, banking, and financial intermediation services (Box IV.2). Insurance services



Total insurance expenditure in the UAE, as measured by the Insurance Authority in terms of total insurance value was USD 3.99 billion in 2007. This represents average annual growth of 12% (in nominal terms) relative to the value in 1996, the year of the UAE's WTO accession. Expenditure, as a share of total world expenditure, increased to 0.05%. Per capita insurance expenditure was US$350 in 2004, of which US$291 on non-life insurance and US$60 on life insurance. Value added in the insurance subsector corresponds to about 1.65% of GDP, up from 1.51% in 199674. The figures are relatively modest given the country's high

73 74

Source: Clyde & Co; Swiss Re, Sigma, various issues. Available at

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per capita income, but are rapidly increasing, particularly in the life insurance business75. (This entire par. is subject to modifications but no data for 1996-2007 exists)

In 2007, 51 insurance companies were licensed in the UAE, half of which were foreign. Most companies are based in Abu Dhabi or Dubai, and carry out the full range of insurance business (Table IV.10); life policies still account for only a small proportion of overall business. The oil subsector represents a large share of insurance business. There are also 21 UAE insurance agents (only UAE citizens can be insurance agents), 174 national and 10 foreign brokers, and 67 survey and damage assessment experts, 18 insurance consultants and 11 actuaries.
Table IV.10 Insurance premiums and claims paid, 2007 (US$ million)
Total Type of insurance Claims Car Cargo and transport Fire Theft Life Others Total 558 126 261 1 235 475 1656 Premiums 990 450 424 2 724 1397 3987 Claims 431 99 208 0 52 391 1180 Premiums 695 349 332 2 166 1132 2675 Claims 128 27 54 0 183 84 476 Premiums 295 101 92 1 558 265 1311 UAE companies Foreign companies

Source: UAE Insurance Authority


Today the insurance sector in the UAE is regulated by an independent Insurance Authority established under law no. 6 of 2007. Federal Insurance Law No. 9 of 1984 is the main law covering the supply of insurance services. From 1978 to 2004, 24 foreign companies were licensed. The UAE made no specific commitments in its GATS Schedule regarding insurance services. Cross-border supply of insurance services is not possible for companies located abroad. All assets and risks in the UAE must be insured domestically (by domestic companies or by local branches of foreign companies, or by "agencies" (see below)). The maximum foreign ownership of domestic insurance companies allowed by law is 25%. Representative offices cannot engage in business or act as agents. This does not apply to reinsurance services, for which commercial presence is not required: UAE insurance companies can reinsure their risks from international reinsurance markets. UAE-based companies can insure risks located abroad. Ministerial Decision No. 333 issued by the MOE on 25 November 2004 changed the conditions of licensing for foreign insurance companies. In particular, the Decision specifies economic needs criteria, such as the level of domestic demand for classes of insurance offered or whether new classes of insurance coverage are to be introduced by the applicant. In addition, the Decision requires the appointment of a minimum number of UAE nationals as staff ("10% of the staff and at least two persons in the first year, rising to 25% of the staff and at least 12 persons in the fourth year"). The authorities indicate that a few foreign companies have applied for licences under the new conditions since October 2004, and five foreign companies have been granted a licence as a branch.
Insurance Authority:




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Local insurance companies wishing to establish in an emirate must first apply to the Insurance Authority for application approval, then to the Securities & Commodities Authority (SCA) for Establishment procedure, then to Insurance Authority for licensing and registration. The local authorities issue the trade license according to the above mentioned federal approvals. Eligible foreign insurance companies can either open a branch and appoint a local insurance agent or enter into an agency contract with a local insurance agent representing them. Both domestic companies and foreign branches must have minimum fully paid-up capital of Dh 50 million (US$13.7 million), and must deposit Dh 6 million for non-life, and Dh 4 million for life insurance with a local bank. Combined life and non-life or noninsurance-related operations are not allowed. The general manager, the authorized manager and the senior employees of the insurance company must have suitable qualifications and experience in the insurance business. The manager of a foreign branch must be resident in the UAE. The applicant must specify the expected over all volume of retention within the UAE market, the foreign branch must in addition, appoint a local service agent, his function is to assist the company according to the local service agency agreement. As noted, foreign companies may also supply the UAE market through the appointment of a local agent to represent them and market their products (as distinct from the local service agent employed by the branch). A copy of the agency agreements between the company and the local agent must be submitted to the Insurance Authority and the agent must be registered at the IA. No taxes or stamp duty are levied at federal or emirate level on settlements from life and non-life insurance, on insurance companies.





The UAE has a large financial subsector relative to its size and population (Table IV.11). At September 2008, the UAE had 52 commercial banks. There are 24 national banks (of which 8 are Islamic banks). With 681 branches as at Sep. 2008. There are also 28 foreign banks (with 117 branches). In addition, there are 92 licensed representative offices of foreign banks and financial institutions. The UAE banking subsector is also generally sound and profitable, despite temporary setbacks that resulted from the global financial crisis: in September 2008, all 52 banks operating in the country met the minimum 10% capital-assets ratio; and this ratio exceeded 11.7% (tier 1 capital to assets ratio) for the subsector as a whole. The gross non-performing loan (NPL) ratio was relatively high at 2.4% at end 2008, but considerable provisions for loan loss coverage (94.5%) bring the net NPL ratio below 1%. Bank loans have grown substantially, with assets and deposits increasing at double digit rates on average between end 2005 and September 2008, and are well distributed across industries. Profitability of banks remained strong in 2007, and up to September 2008.


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Table IV.11 Selected monetary and banking indicators, 2005-08 (US$ billion unless otherwise specified) Indicators Central Bank of UAE Total assets/liabilities Foreign assets and gold holdings Notes and coins issued Banksa Total assets/liabilities Foreign assets Foreign assets to total assets (%) Foreign liabilities Foreign liabilities to total liabilities (%) Depositsb Residents Non-residents Bank credit (net)c Residents Non-residents Total number of national banks and branchesd National banks National branches Total number of foreign banks and branchese Foreign banks Foreign branches Number of workers in banks (in UAE)f a b c d e f

2005 21.9 21.1 5.7 173.7 47.7 27.4 23.2 13.4 111.6 104.6 6.9 98.7 87.7 11.0 391 21 370 108 25 83

2006 28.1 27.9 7.3 234.1 63.2 27.0 48.4 20.7 141.3 127.8 13.5 137.0 120.1 16.9 452 21 431 106 25 81

2007 77.9 77.8 8.6 333.0 53.6 16.1 87.4 26.2 194.0 177.4 17.6 189.6 170.6 19.0 530 22 508 108 27 81

September 2008 50.9 41.4 11.7 393.8 63.6 15.4 88.8 22.6 236.1 212.1 24.0 260.0 241.0 18.8 681 24 657 145 28 117

Including a restricted licence bank until 31.5.2003 Not including inter-bank deposits. Not including loans to banks. Including pay offices, customer service units and automated branches Including a pay office and customer service units Excluding drivers, messengers, and guards.

Source: UAE Central Bank online information. Available at:

The Emirates Banks Association, founded in 1982, aims to represent and defend the interests of its domestic and foreign member banks and to exchange information regionally and internationally76. Membership, which is not compulsory, covered 42 banks at end 2008 of which 23 are national banks, 18 are foreign banks and one representative office.

Banking and financial intermediation services are regulated at federal level by the independent Central Bank of the UAE77, under Federal Law No. 10 of 1980. This law establishes five principal categories of institutions: commercial banks, investment banks, financial establishments, financial intermediaries, and monetary intermediaries, each of which must be licensed by the Central Bank. Foreign banks are required to have the legal form of a branch, licensed and regulated by the Central Bank. Every commercial bank, including branches of foreign banks, must have a minimum paid-up capital of Dh 40 million (US$10.9 million), or 10% of risk weighted assets in the UAE, whichever is greater. However most branches of EU and US banks have been given permission to exceed large exposures limits based on their global capital. Similar exemptions have also been given to some GCC banks.
152. 153.

Since 2007 2008 the Central Bank of the UAE has licensed three new foreign commercial banks, and thus lifting the moratorium on the licensing of new foreign banks which was in effect since 1981.

76 Emirates Banks Association online information. Available at: [19 September 2005]. 77 UAE Central Bank online information. Available at: [19 September 2005].

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Foreign banks pay a 20% local emirate tax on profits in each emirate78. There are no restrictions on the presence of foreign senior staff in foreign banks. All banks in the UAE are required to employ a minimum of 10% UAE nationals in total staff (excluding auxiliary staff) as per Central Bank regulations. Additionally, Council of Ministers Decree No. 10 of 1998 effective January 1999, requires all banks to increase the number of UAE-national staff by 4% annually. Due to the demographic structure of the UAE, whereby UAE nationals represent only approximately 9% of the total workforce, compliance with these regulations has not been achieved by many banks. However, the Central Bank and other authorities continue to encourage adherence.

In its specific commitments under the GATS, the UAE has, with limitations, made commitments on all banking and other financial services as specified on the Central Products Classification list, with the exception of settlement and clearing services for financial assets; according to the authorities, this exception was due to the absence of a stock exchange in 1996 when the UAE became a member of the WTO. The UAE has bound measures on all these services for cross-border supply and consumption abroad without limitation, except for the horizontal limitation of 49% maximum foreign ownership. Measures affecting mode 3 supply (commercial presence) remain unbound for new licences to operate bank branches, and to expand activities of existing financial entities.


Financial intermediation services At the end of 2004, there were 19 financial investment companies (of which three were foreign), 22 finance companies, 13 financial consultancies (all locally incorporated), 15 financial intermediaries dealing in currencies and commodities as money market transactions (Forex dealers), and two investment banks. The number of finance companies licensed to operate in the UAE rose to 24 in 2009 from 22 in 2008. The two new companies licensed during 2009 were Abu Dhabi Commercial Islamic Finance Company and Siraj Finance Company79. There is no moratorium on the licensing of new financial institutions or on establishing branches of existing ones.
156. 157.

The UAE's two securities markets were established in Abu Dhabi and Dubai in 2000 under Emirate laws. They are regulated by the Securities and Commodities Authority (an independent body, chaired by the Minister of Economy) under Federal Law No. 4 of 2000 established with the aim of regulating the licensing, management, membership and supervision of the financial markets and brokerage firms. SCA regulations permit foreign firms to list their securities in these markets after having satisfied certain requirements. Twenty nine of the 135 companies in the SCA register are foreign. In 2008 the SCA issued a regulation authorizing foreign firms that are licensed from peer authorities in their respective countries to operate in the UAE. Brokers wishing to operate on the UAE exchanges must have at least 51% national ownership. Capital must be at least AED 30 million. Brokerage firms are required to produce an AED 20 Million bank guarantee The total number of licensed brokerage firms stands currently at 99. Listed securities are tradable via brokers only. There is also a securities market, the Dubai International Financial Exchange (DIFX), with its own regulator, within the Dubai International Financial Centre (DIFC) free zone. There are no nationality restrictions in the DIFC; however, transacting business in dirhams is not permitted, nor is the acceptance of deposits in any currency from a natural or juridical person in the UAE. The DIFC regulations offer foreigners a business environment that is free of restrictions and limitations that appear in UAE laws and regulations.
The legislation differs from emirate to emirate, although the rate of 20% applies in all emirates. Source: UAE Central Bank Annual Report 2009

78 79

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Regulations on investment funds are set out in Central Bank Resolution No. 164/8/94. The fund manager must be a company licensed by the Central Bank; the latter can permit foreign companies to set up branches or representative offices. All companies must nevertheless have a principal centre of administration in the UAE. Investment funds/products must be marketed by a Central Bank licensed financial institution (bank or securities market). The SCA has finished drafting in 2009 a new law that authorizes it to regulate securities and commodities services including investment funds and financial portfolio management that are currently regulated and supervised by the UAE Central Bank. The new law will give SCA the jurisdiction authority over most financial services as per best international practice, as well as the power to license under the same conditions both foreign and domestic firms. However based on public and market interest considerations the Board of Directors of the SCA has the discretional power to exempt local and foreign companies applying for licenses from certain conditions. Currently, there is only one commodities exchange in the UAE, the Dubai Gold and Commodities Exchange (DGCX), which operates from the Dubai Metals and Commodities Centre (DMCC). The DGCX commenced trading in November 2005. It is regulated and supervised by the SCA. The DGCX is a joint venture between the DMCC and two Indian companies. Since the DGCX is a financial free zone, foreign broking and trading companies can operate freely. Currently there are 106 foreign brokers operating at the DGCX. In practice, the licensing procedure is in two stages: operators first apply for membership to the DGCX, which requires full disclosure as to ownership, directors, financial conditions, home regulator and suitability to act as brokers or traders in a commodity futures market; companies are given initial approval, and the information is passed to the SCA for final approval. Trade in business and professional services




The UAE's labour market is generally open to foreigners; 91% of the UAE work force is foreign. As trade in business services in general, and professional services in particular, relies to a large extent on movement of physical persons, suppliers are particularly favoured by the liberal conditions regarding both the movement of natural persons (Mode 4 in GATS terminology), and long-term employment of foreigners80. Foreign professionals are permitted to practice business services and professions such as auditing, medical services, engineering, legal practice and consultancies, computer consultancies and similar services under sole proprietorship businesses, provided they hold a valid UAE residence permit; obtain a professional licence from the government of the emirate in which they intend to operate; and have signed a service agency contract with a local services agent that is a UAE national, and the contract has been authenticated by the notary public. An agent's duties and obligations towards the foreign professional are limited to facilitating the practice of an activity in the emirate, such as assisting in obtaining and renewing work permits issued by the Ministry of Labour, and other government authorities. The local service agent holds no share in the firm and does not interfere in its management. In its GATS schedule of specific commitments, the UAE has bound measures affecting cross-border supply, consumption abroad, and commercial presence (modes 1-3) for accounting, auditing and book-keeping services; for certain taxation services; for



80 The movement of natural persons, as understood under the GATS, is temporary by nature and is executed only for a very particular purpose; it does not cover permanent employment of foreigners in domestic firms; nor the conditions for foreigners to work permanently in domestic industries.

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architectural, engineering, urban planning and landscape services; services81. (a) Legal services

and for veterinary

Legal services, including advocates, lawyers, and counsellors, are regulated both at emirate and federal level. Federal Law No. 23 of 1991, concerning the Advocates Ordinance and Amendments thereof, regulates the advocacy profession in the UAE. Advocates are free to move within the country once they obtained a licence, except for the emirates of Dubai and Ra's al Khaimah: to practice advocacy in the emirates of Dubai and Ra's al Khaimah, a local licence is required. Dubai regulations require lawyers to have an office in Dubai in order to appear in a Dubai Court. Establishment is regulated at the federal level, such that requirements concerning law firms equally apply in all the emirates. Law firms must be 100% owned by UAE nationals. This ownership requirement applies in all the emirates. In the five emirates applying Federal Law No. 23 of 1991, concerning the Advocates Ordinance and Amendments thereof, foreign lawyers can offer legal advice on foreign, international, and local law, and can represent clients in the court of appeal for a maximum of four years, and in the court of first instance for a maximum of eight years. Foreign lawyers cannot appear in the Supreme Federal Court and Courts of Cassation. A foreign lawyer must obtain a permit from the Ministry of Justice, which requires a diploma from a foreign professional body recognized by the Ministry of Education. The lawyer must be registered in the bar of his home country, have 15 years of experience and meet conditions of good reputation. There is no prior residency requirement. The request for a licence is presented to the Ministry of Justice through the local law firm. If all procedural conditions are met, the Ministry of Justice registers the applicant as a lawyer and allows him to practice, but only as an employee of the local law firm. Law firms are allowed to seek assistance from foreign lawyers in so far as the work assigned to the latter does not consist in representing clients in the Supreme Court and the Court of Appeal. Firms of legal consultants may not represent clients before courts Recently, the Ministry of Justice has been putting pressure on law firms to meet the requirements of the emiratization policy (section (b) below and Chapter I(1)). Licences, for both foreign and local lawyers are renewed annually. In principle, they can be revoked only for professional reasons. Foreign lawyers may represent clients in the court of appeal and the courts of first instance. Their permits shall not be withdrawn unless they break their professional obligations set established by law. The conditions for withdrawal are identical for local and foreign lawyers. The UAE does not have a Bar Association.



Accounting and auditing services


Accounting services are regulated at federal level. Federal Law No. 22 of 1995 and relevant ministerial decisions cover auditors and certified accountants, both firms and individuals. Accountants benefit from free movement within the country, enabling them to operate in an emirate other than the one in which they are registered, provided that they obtain a professional license from the relevant authorities of that emirate. As a rule, for each activity, the physical rather than the moral person is licensed (e.g. who signs the books). The international financial reporting standards (IFRS) are applied by some special branches of foreign auditing companies in the UAE. A modified version of the above mentioned Federal Law has been drafted and sent to the Cabinet for discussion and approval.
WTO document GATS/SC/121, 2 April 1996.


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The professional body for accountants in UAE is the Accountants and Auditors Association (AAA). It was established in 1997 by a Resolution of the Ministry of Labour and Social Affairs (No. 227/97). Auditors are not obliged to register with the AAA.


Foreign accounting firms have been able to practice audit and accounting services freely in the UAE, but the situation is changing. Some 263 foreign individual auditors, 264 local (or GCC) individual auditors, 65 local firms and 12 foreign firms operate in the UAE, the latter in the form of branches. Each foreign branch is 100% foreign-owned and have several sub-branches operating in the various emirates. As noted, foreign firms must have a local services agent. All of the foreign companies were established under legislation in place before 1995; no foreign accounting firm has been established since 1995. Since the introduction of the emiratization policy in 1997, foreign ownership in new foreign firms establishing in the UAE is limited to 75%82. This requirement also applies, in principle, to firms established before 1995, which have been given a transition period, currently until 2010, to find local partners in that proportion83.



The Register includes local GCC and other foreign natural persons and firms. There are three categories in the Registry: practicing auditors; non-practicing auditors (study, sickness, travel, etc.); and trainees. The latter is for nationals who, having completed the theoretical part of the education, are performing the three years of supervised professional practice required to qualify as an auditor in the UAE. Trainees receive a monthly remuneration amounting to Dh 5,000. Registration conditions for foreigners include a university degree in accounting or an equivalent degree; three years of experience in accounting; and fellowship or five years of registration with an auditing professional body recognized by the Ministry of Economy (e.g. the Institute of Chartered Accountants in England and Wales, the American Institute of Certified Public Accountants or the Canadian Institute of Chartered Accountants); and evidence of a partnership with a UAE citizen or company or a certificate of employment therewith (all mentioned cases must be registered in the auditors schedules in the Ministry). Auditing firms must meet the following conditions: one of the partners or managers must be a UAE national registered as a practicing auditor in the Registry; the partnership contract should be notarized by the official authorities; and all partners should be registered in as practicing auditors. If one of the partners is a firm established outside the UAE, that foreign firm must hold a certified licence for practicing as an auditor in its country of registration. In all cases the firm must be established as solidarity company. The professional body for accountants in UAE is the Accountants and Auditors Association (AAA). It was established in 1997 by a Resolution of the Ministry of Labour and Social Affairs (No. 227/97). Auditors are not obliged to register with the AAA.




Engineering services

Foreign engineering firms and professionals are allowed to practice in the UAE, on the major specialized construction projects. The engineering profession is regulated at emirate level. There are three forms through which a foreign engineering consultant or contractor can

Ministerial Resolution No. 7 of 1997 Regarding the Registration of Foreign Offices and Companies in the Register of Auditors. 83 Council of Ministers Decision No. 366/4 of 2005. GCC citizens are treated as UAE citizens for the purpose of this requirement.


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operate: a joint-venture with a local firm, a partnership with a local engineering firm, or a foreign branch (with a local service agent). In certain cases (large projects), foreign engineering contractors can be invited to tender without having to incorporate locally. All engineers, local and foreign, must be registered with the Engineers Society of the UAE.

According to the authorities, conditions for supplying engineering services are similar across the emirates. However, information was available only for the Emirate of Dubai. According to the Dubai Municipality conditions, a licence for the practice of engineering consultancy requires the applicant to be a fully competent UAE national, of good conduct and reputation; to hold a BSc. in engineering from a recognized university in one of the engineering fields for which the licence is requested; to have at least three years of experience in the specialized field after obtaining the university degree; and to be a member of the engineers' association of the country of study. The Order regulating the profession in Dubai also requires that the applicant is not an owner of, or a partner in any of the contracting companies or in building materials trading companies84. According to the Order, a foreign engineering branch office is defined as the branch established in the emirate by one of the foreign specialized engineering firms. Licensing of the foreign branch is limited to the fields of specialization not commonly provided by local engineering firms. The head office of the foreign firm should have existed for not less than 15 years, and carried out a number of projects of large technical and financial value.



The firm's manager must be registered in the registry for engineering consultancy profession and have no less than 15 years of experience in the practice of the profession. The foreign branch must have technical staff for each of the licensed fields of activity to be practiced, be led by an engineer with no less than 15 years in the specialization, assisted by a number of assistant engineers (consistent with the volume of the current works assigned to the firm) with no less than seven-years experience; the head office must undertake to appoint the required staff to reside in the emirate.

Article 4 of Local Order No. 89 of 1994 on Regulating the Practice of the Engineering Consultancy Profession in the Emirate of Dubai.


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REFERENCES ADNOC, Annual HSE Reports 2008, Abu Dhabi. Available at: Al-Karasneh and Fatheldin (2005), Market Structure and Performance in the GCC Banking Sector: Evidence from Kuwait, Saudi Arabia and UAE, AMF Economic Papers No. 11, Arab Monetary Fund, Abu Dhabi, March. Arab Advisors Group (2005), Competition Levels in Arab Cellular Markets and Privatization levels in Arab Cellular and Fixed Markets, Telecoms Strategic Research Service, 19 September. Available at: Central Bank of the United Arab Emirates (2009), Annual Report, 2009. Available at: Economist Intelligence Unit (2009). Country Profile 2009, United Arab Emirates. Available at: Environmental Agency Abu Dhabi. Annual Fisheries Statistics Report Abu Dhabi Emirate 2009. Water Resources Statistics 2006, Abu Dhabi. European Commission, The EU and the GCC, Brussels IMF (2010), Regional Economic Outlook: Middle East and Central Asia. Available at: IMF (2010), Staff report for the 2010 Article IV Consultation February 18, 2010. Available at: http://www.imf. org/ IMF (2005a), Article IV Consultation United Arab Emirates, Staff Report, Washington D.C. IMF (2005b), United Arab Emirates: Selected Issues and Statistical Appendix. [22 September 2005]. Available at:

Ministry of Economy (2007), Report on the Insurance Sector Business in the United Arab Emirates. Ministry of Economy (2004), Study on the Development of Agricultural Sector and its Future 19952000, Abu Dhabi. Ministry of Economy (various issues), Statistic Abstract in the United Arab Emirates. National Media Council, United Arab Emirates Yearbook (various issues), Environment Agency Abu Dhabi, Water Resources Department, Integrated Vision for Water Resources and Environment for UAE, Abu Dhabi (various issues),. National Human Resource Development and Employment Authority (2005), United Arab Emirates Human Resources Report 2005, Abu Dhabi. OPEC, Annual Statistical Bulletin (various issues). Available at: U.S. U.S. Commercial Service : Your Global Business in United Arab Emirates A Country Commercial Guide for U.S. Companies. Available at:

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U.S. International Trade Administration , Government Procurement Regulations United Arab Emirates. Available at: UNCTAD (various







UNCTAD (various issues), World Investment Report, Geneva. UNDP (various issues), Human Development Report, New York. World Bank (2002), Completing the GCC Customs Union, 6 June. Available at: http://lnweb18.


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Table AI.1 Destination of exports (including re-exports), 2004-08 (US$ thousands) 2004 Total America United States Other America Europe EC(27) Belgium United Kingdom France Netherlands Germany Italy Denmark EFTA Other Europe Commonwealth of Independent States (CIS) Africa Kenya Middle East Oman Yemen Qatar Asia China Japan Six East-Asian traders Korea, Rep. of Singapore Chinese Taipei Hong Kong, China Malaysia Other Asia India Pakistan Australia Indonesia Memorandum: EC(15)





581,675 498,269 83,406 3,199,182 1,810,507 475,308 288,619 63,870 261,703 194,448 120,487 59,396 723,034 665,641 1,386,040 3,508,754 273,727 8,711,841 259,252 302,958 338,492 43,889,405 271,060 13,926,578 15,161,554 87,718 201,218 14,444,204 368,604 59,810 9,750,185 3,868,922 744,745 75,071 91,290 1,700,385

854,915 796,518 58,397 4,435,333 3,049,267 565,488 283,374 133,447 887,000 450,170 127,772 139,596 1,002,387 383,679 1,198,392 4,702,610 314,123 12,395,833 515,925 420,067 727,764 60,983,635 304,184 27,996,956 12,546,993 64,635 288,890 11,784,462 339,553 69,453 13,664,700 5,346,162 921,880 92,004 110,756 2,874,781

809,261 719,583 89,678 5,639,957 2,785,029 686,082 497,607 644,757 201,697 242,850 92,040 55,600 1,997,783 857,145 1,789,363 5,597,736 299,611 13,952,937 752,045 474,833 1,006,185 75,116,004 374,371 36,380,072 17,043,311 71,561 241,385 16,287,210 366,662 76,493 15,212,552 4,734,651 1,122,164 103,867 145,016 2,649,052

1,025,126 699,712 325,414 5,839,677 3,097,527 848,325 435,676 596,002 255,597 251,599 213,018 23,345 1,824,801 917,349 2,288,753 6,588,910 459,840 17,682,965 968,510 520,124 1,533,092 89,191,469 436,088 39,815,060 18,931,195 85,031 269,734 17,767,704 724,301 84,425 19,568,845 9,425,653 819,535 126,124 68,969 2,885,233

1,773,763 1,230,163 543,600 8,132,656 4,595,345 1,294,851 502,743 555,026 310,703 509,465 703,555 22,342 2,742,439 794,872 1,638,454 7,690,365 305,386 21,131,401 1,409,964 426,813 3,049,780 122,193,236 1,142,448 34,486,284 47,567,542 239,325 380,639 45,403,184 1,334,086 210,308 22,616,417 15,242,248 815,456 147,522 175,319 4,259,563


International Trade Centre, based on Trade Map database.

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Table AI.2 Origin of imports, 2004-08 (US$ thousands) 2004 Total America United States Other America Brazil Europe EC(27) United Kingdom Germany France Italy Netherlands Finland Belgium EFTA Switzerland Other Europe Turkey Commonwealth of Independent States Africa Middle East Oman Asia China Japan Six East Asian Traders Korea, Rep. of Hong Kong, China Singapore Malaysia Chinese Taipei Other Asia India Pakistan Australia Indonesia Memorandum: EC(15) 2005 2006 2007 2008

72,072,000 5,063,107 3,792,310 1,270,797 643,662 18,607,776 15,731,825 2,958,310 3,531,876 2,720,206 2,129,788 607,025 574,719 27,637 2,001,545 1,918,738 874,406 1,117,044 898,920 1,166,300 5,484,957 27,158 29,167,017 5,313,680 4,428,231 4,885,406 1,650,049 607,114 808,531 1,134,623 685,089 18,740,017 7,098,769 447,397 903,835 649,235 14,983,450

80,814,016 6,904,811 5,120,093 1,784,718 816,268 23,002,510 20,078,855 4,403,598 4,501,772 2,393,404 2,321,328 856,651 1,480,599 50,618 1,922,885 1,850,574 1,000,770 1,443,150 1,018,306 1,598,242 5,862,621 48,280 34,254,766 6,890,999 4,677,114 5,754,876 1,769,175 580,456 1,236,822 1,497,004 671,419 22,015,234 8,765,235 520,360 997,028 765,410 18,936,110

97,863,600 8,404,805 6,376,012 2,028,793 1,060,084 25,782,865 22,499,120 4,031,017 5,945,872 2,408,645 3,361,003 984,500 678,104 19,854 2,312,161 2,206,308 971,584 1,892,237 1,015,039 2,377,863 8,940,490 205,175 40,576,603 8,502,838 5,833,494 6,202,764 2,072,067 649,695 990,641 1,785,262 705,099 25,535,172 8,476,486 524,170 1,431,783 850,761 21,392,929

127,001,504 11,079,980 8,416,796 2,663,184 1,289,653 32,128,193 27,800,837 4,628,060 7,188,241 3,100,394 4,701,424 1,112,268 606,246 21,134 3,138,776 3,012,531 1,188,580 2,849,810 1,200,045 3,405,091 9,751,766 102,258 54,959,512 12,307,983 8,073,723 8,214,619 2,814,702 731,114 1,182,815 2,479,932 1,006,056 33,571,750 12,247,038 778,659 2,653,820 1,551,974 26,339,566

175,485,696 15,515,360 12,244,200 3,271,160 1,169,657 46,737,327 38,950,632 7,624,404 10,101,614 3,835,326 5,919,440 1,431,899 975,924 30,981 5,993,404 5,644,890 1,793,291 7,474,448 1,873,088 6,367,002 17,025,805 955,809 80,356,951 17,356,072 11,610,284 11,509,716 4,243,159 1,328,198 1,141,993 3,503,878 1,292,488 50,098,107 16,873,676 1,405,071 3,321,108 1,703,066 36,565,228


International Trade Centre, based on Trade Map database

United Arab Emirates

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Table AIII.1 Applied MFN tariff averages by HS2, 2008 Average tariff (%) 5.1 0.0 4.3 2.8 4.9 5.0 3.0 2.3 2.3 3.4 0.5 3.7 3.3 5.0 5.0 5.0 5.0 3.6 5.0 4.7 5.0 4.9 20.8 4.8 100.0 5.0 5.0 5.0 5.0 5.0 0.1 5.0 5.0 5.0 5.0 5.0 5.0 5.0 4.9 5.0 5.0 5.0 5.0 Std-dev (%) 5.5 0.0 1.8 2.5 0.8 0.0 2.5 2.5 2.5 2.4 1.5 2.2 2.4 0.0 0.0 0.0 0.0 2.3 0.0 1.2 0.0 0.8 21.7 0.9 0.0 0.0 0.0 0.0 0.5 0.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.0 0.0 0.0 0.0 Imports 2008 (US$ million) 175485696

HS Chapter and description Total/Average 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Live animals Meat and edible meat offal Fish and crustaceans, molluscs and other Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified Products of animal origin, not elsewhere specified Live trees and other plants; bulbs, roots Edible vegetables and certain roots and tubers Edible fruit and nuts; peel of citrus fruit or melons Coffee, tea, mat and spices Cereals Products of the milling industry; malt; starches; insulin; wheat gluten Oil seeds and oleaginous fruits; misc grains, seeds Lac; gums, resins and other vegetable extracts Vegetable plaiting materials; vegetable products Animal or vegetable fats and oils and their cleavage products; prepared edible fats Preparations of meat, of fish or of crustaceans Sugars and sugar confectionery Cocoa and cocoa preparations Preparations of cereals, flour, starch or milk; pastry Preparations of vegetables, fruit, nuts Miscellaneous edible preparations Beverages, spirits and vinegar Residues and waste from the food industries; fodder Tobacco and manufactured tobacco substitutes Salt; sulphur; stone; lime and cement Ores, slag and ash Mineral fuels, mineral oils and products; mineral waxes Inorganic chemicals; organic or inorganic compounds Organic chemicals Pharmaceutical products Fertilizers Tanning or dyeing extracts; pigments; paints Essential oils; perfumery, cosmetics Soap, organic surface-active agents Albuminoidal substances; modified starches Explosives; pyrotechnic products; matches Photographic or cinematographic goods Miscellaneous chemical products Plastics and articles thereof Rubber and articles thereof Hides and skins (other than fur skins) and leather Articles of animal gut (other than silk-worm gut)

No. of lines 7,143 48 81 127 44 32 15 76 75 34 22 86 73 30 15 61 38 38 20 53 105 41 40 32 20 100 37 77 226 424 40 31 78 69 50 32 10 42 89 153 118 38 43

Range (%) 0-100 0 0-5 0-5 0-5 5 0-5 0-5 0-5 0-5 0-5 0-5 0-5 5 5 5 5 0-5 5 0-5 5 0-5 5-50 0-5 100 5 5 5 0-5 5 0-5 5 5 5 5 5 5 5 0-5 5 5 5 5

160937 1084212 248323 893857 2124 43902 725791 954809 659549 1966958 87826 564339 19299 5149 787180 163497 327964 228458 370300 366997 494941 327216 72572 209263 995258 358267 1770444 1379751 1004691 1037008 48413 540484 1738860 373093 94560 20421 143722 870246 3392712 1465626 19117 465334

Table AIII.1 (cont'd)

WT/TPR/S/162/Rev.1 Page 120

Trade Policy Review

HS Chapter and description 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 78 79 80 81 82 83 84 85 86 87 88 89 Fur skins and artificial fur; manufactures thereof Wood and articles of wood; wood charcoal Cork and articles of cork Straw, of esparto or of other plaiting materials Pulp of wood or of other fibrous cellulosic material Paper and paperboard; articles of paper Printed books, newspapers, pictures and other Silk Wool, fine or coarse animal hair; and woven fabric Cotton Other vegetable textile fibres; paper yarn Man-made filaments Man-made staple fibres Wadding, felt and nonwovens; special yarns Carpets and other textile floor coverings Special woven fabrics; tufted textile fabrics; lace Impregnated, coated, covered or laminated textile fabrics Knitted or crocheted fabrics Apparel and clothing accessories, knitted or crocheted Articles of apparel and clothing accessories, not knitted or crocheted Other made up textile articles; sets; worn clothing Footwear, gaiters and the like; parts of such articles Headgear and parts thereof Umbrellas, sun umbrellas, walking-sticks, etc. Prepared feathers and down articles Articles of stone, plaster, cement, asbestos Ceramic products Glass and glassware Natural or cultured pearls, jewellery Iron and steel Articles of iron or steel Copper and articles thereof Nickel and articles thereof Aluminium and articles thereof Lead and articles thereof Zinc and articles thereof Tin and articles thereof Other base metals; cermets; articles thereof Tools, implements, cutlery, of base metal Miscellaneous articles of base metal Nuclear reactors, boilers, machinery and appliances Electrical machinery and equipment and parts Railway or tramway locomotives, rolling-stock Vehicles other than railway or rolling-stock Aircraft, spacecraft, and parts thereof Ships, boats and floating structures

No. of lines 17 154 18 23 21 133 50 10 50 131 29 69 117 45 54 44 36 44 116 157 101 37 26 9 11 99 45 85 65 171 179 70 23 62 10 25 12 54 73 58 589 362 24 184 16 23

Average tariff (%) 5.0 5.0 5.0 5.0 5.0 5.0 1.5 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 3.5 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 4.9 3.1 1.3

Range (%) 5 5 5 5 5 5 0-5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 0-5 5 5 5 5 5 5 5 5 5 5 5 0-5 5 5 0-5 0-5 0-5

Std-dev (%) 0.0 0.0 0.0 0.0 0.0 0.0 2.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Imports 2008 (US$ million)

38778 1265136 28613 12814 57716 1061760 233161 51388 17549 159746 13224 1094158 409454 110008 184618 190446 78468 130419 1087103

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 0.6 2.5 2.2

1530172 407531 674548 33928 7362 25784 838693 604176 1029414 33120838 12484788 5639089 1301228 78273 1674152 11179 93895 56324 90184 490546 605687 18521928 14271941 205023 17335776 4144206 310101

Table AIII.1 (cont'd)

United Arab Emirates

WT/TPR/S/162/Rev.1 Page 121

HS Chapter and description 90 91 92 93 94 95 96 97 '99 Optical, photographic, precision surgical instruments Clocks and watches and parts thereof Musical instruments; parts and accessories Arms and ammunition and parts and accessories Furniture; bedding, mattresses, mattress supports Toys, games and sports requisites Miscellaneous manufactured articles Works of art, collectors' pieces and antiques Commodities not elsewhere specified

No. of lines 210 57 32 24 100 49 67 10

Average tariff (%) 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0

Range (%) 5 5 5 5 5 5 5 5

Std-dev (%) 0.0

Imports 2008 (US$ million)


0.0 0.0 0.0 0.0 0.0 0.0 0.0

714478 31241 336071 2109194 509420 277292 95389 21482448

a Note:

The complete product description is contained in the HS Chapter definition. Lines not used: 1 in Chapters 02, 05, 39, 48, 58, 85, 87, and 90; 2 in Chapters 13, 28, and 29; 3 in Chapter 01; and 5 in Chapter 12.


WTO Secretariat estimates, based on data provided by the United Arab Emirates authorities; imports data from International Trade Centre, based on Trade Map database.