Legislation Details
- Full Title: Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia
- Law Type: Cabinet Resolution
- Law Number: No. (65) of 2023
- Issued Date: 03 Jul 2023
- Effective Date: 15 Jul 2023
- Official Gazette: No. 755
- Sector: Economy and Business
- Status: Active
- Number of Articles: 48
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution establishes an Internal Sharia Control Committee and a Sharia Controller for commercial companies in the UAE that undertake their activities in accordance with Islamic Sharia. The purpose is to ensure these companies' compliance with Sharia principles and provisions through independent supervision and control. The Resolution sets out the requirements for forming the Committee, its duties, and the role and qualifications of the Sharia Controller. It also specifies penalties for non-compliance. This legislation is significant for businesses in the UAE's Islamic finance and commercial sectors, as it provides a framework to uphold Sharia-compliant practices. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 1-20)
What is the scope and purpose of this law?
The Resolution applies to commercial companies established in the UAE that conduct any of their activities in accordance with Islamic Sharia (Art. 2(1)). It excludes companies licensed by the UAE Central Bank whose activities are subject to the Bank's direct control (Art. 2(2)). The purpose is to ensure these companies' compliance with Sharia principles through the establishment of an Internal Sharia Control Committee and the appointment of a Sharia Controller (Art. 1-2). (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 2)
What are the key definitions under this law?
The Resolution provides the following key definitions:
- State: United Arab Emirates
- Ministry: Ministry of Economy
- Minister: Minister of Economy
- Company: The commercial enterprise established in the UAE and carries on any of its activities in accordance with Islamic Sharia
- Board of Directors: The Company's Board of Directors or equivalent
- General Assembly: The General Assembly of the Company or equivalent
- Committee: Internal Sharia Control Committee
- Sharia Controller: The natural person appointed by the General Assembly to perform the tasks referred to in Article 14
(Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 1)
What are the main obligations and requirements?
The key obligations and requirements under this Resolution include: 1. Companies must form an Internal Sharia Control Committee by a resolution of the General Assembly, based on a nomination by the Board of Directors (Art. 3(1)). 2. The Committee must consist of an odd number of members between 3 and 7 (Art. 3(2)). 3. Committee members must meet specific qualifications, including being Muslim, holding a bachelor's degree in Islamic Sharia, and having at least 7 years of experience issuing Sharia fatwas (Art. 4). 4. The Committee must perform duties such as issuing Sharia fatwas, supervising the company's Sharia-compliant activities, reviewing contracts, and submitting annual reports (Art. 5). 5. The company must appoint a Sharia Controller to perform the tasks outlined in Article 14. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 3-5, 14)
What licensing, registration, or approval requirements exist?
The legislation does not specify any licensing, registration, or approval requirements for companies under its scope. It focuses on the internal governance structure and Sharia compliance mechanisms that companies must establish. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023)
What rights and protections does this law provide?
The Resolution does not explicitly outline any specific rights or protections granted to individuals or businesses. It is focused on establishing the framework for Sharia compliance oversight within companies through the Internal Sharia Control Committee and Sharia Controller. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023)
Which authorities or bodies are responsible for enforcement?
The key authorities and bodies responsible under this Resolution are: 1. The General Assembly, which is responsible for forming the Internal Sharia Control Committee, appointing the Sharia Controller, and approving the termination of Committee members (Art. 3, 8-10). 2. The Board of Directors, which is responsible for nominating Committee members, appointing the Committee Secretary, and recommending the suspension of Committee members (Art. 3, 9, 10). 3. The Ministry of Economy and the Minister of Economy, who are responsible for determining which company activities are considered Sharia-compliant (Art. 2(3)). (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 2-3, 8-10)
What are the penalties for non-compliance?
The Resolution does not specify any penalties for non-compliance. It focuses on establishing the governance framework for Sharia compliance oversight within companies, without detailing enforcement mechanisms or sanctions. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023)
What fees, charges, or financial provisions are specified?
The Resolution states that Committee members shall receive an annual remuneration as decided by the General Assembly in accordance with the regulations set forth by the General Assembly (Art. 12). However, it does not provide any further details on the specific fees or financial provisions. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 12)
What exemptions or exceptions apply?
The Resolution exempts companies licensed by the UAE Central Bank whose activities are subject to the Bank's direct control from the application of its provisions (Art. 2(2)). Apart from this, the legislation does not specify any other exemptions or exceptions. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 2(2))
How are disputes resolved under this law?
The Resolution does not outline any specific dispute resolution mechanisms. It focuses on the internal governance and Sharia compliance oversight within companies, without providing details on how disputes would be handled. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023)
What are the key deadlines and time limits?
The key deadlines and time limits specified in the Resolution are: 1. The tenure of membership for the Internal Sharia Control Committee is 3 years, after which the General Assembly may decide to reconstitute the Committee or extend the current members' term for a similar period (Art. 3(3)). 2. The Committee must hold regular meetings at least twice a year, and may convene exceptional or emergency meetings as needed (Art. 6(1)). 3. The Committee may make decisions by circulation, but such decisions shall not exceed 4 per year (Art. 7(3)). (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023, Art. 3(3), 6(1), 7(3))
How does this law interact with other UAE legislation?
The Resolution references the following UAE federal laws and regulations: - The Constitution - Federal Law No. (1) of 1972, Concerning the Competencies of Ministries and the Powers of Ministers - Federal Law No. (4) of 2000, Concerning the Emirates Securities and Commodities Authority and Market - Federal Decree-Law No. (14) of 2018, Concerning the Central Bank and Regulation of Financial Institutions and Activities - Federal Decree-Law No. (32) of 2021, Concerning Commercial Companies - Federal Decree-Law No. (37) of 2021, Concerning Commercial Registry - Federal Decree-Law No. (46) of 2021, Concerning Electronic Transactions and Trust Services - Federal Decree-Law No. (50) of 2022, Concerning the Commercial Transactions Law - Cabinet Resolution No. (31) of 2017, Concerning the establishment of the UAE Council for Fatwa (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023)
When did this law come into effect?
This Cabinet Resolution was issued on 03 Jul 2023 and came into effect on 15 Jul 2023, as per the dates specified in the legislation. (Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia, 2023)
Source Documents
This article analyses Cabinet Resolution Concerning the Internal Sharia Control Committee and Sharia Controller for Commercial Companies Undertaking their Activities in Accordance with Islamic Sharia for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.