Legislation Details
- Full Title: Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance
- Law Type: Federal Decree-Law
- Law Number: No. (40) of 2021
- Issued Date: 21 Apr 2021
- Effective Date: 17 May 2021
- Official Gazette: No. 702
- Sector: Finance and Banking
- Status: Active
- Number of Articles: 30
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution establishes the executive regulations for the Federal Decree-Law No. (26) of 2019 Regarding Public Finance. It outlines the powers of the Minister of Finance, requirements for cash flow hedging, controls for concluding contracts, and rules for preparing the draft final account of federal entities. The resolution aims to provide a comprehensive regulatory framework for public finance management in the UAE. It is an important law for businesses and individuals interacting with the federal government, as it sets out the financial obligations, reporting requirements, and oversight mechanisms. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to provide the executive regulations for the Federal Decree-Law No. (26) of 2019 Regarding Public Finance. It applies to all federal government entities in the UAE. The purpose is to establish a comprehensive regulatory framework for managing public finances, including cash flow monitoring, contract controls, budget preparation, and financial reporting. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 1-2)
What are the key definitions under this law?
The Cabinet Resolution provides the following key definitions:
- Cash Flow Hedging: Ensuring the availability of sufficient liquidity in anticipation of exposure to variations and fluctuations in cash flows during subsequent financial periods. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 1)
- Financial Circular: The circular issued by the Minister to the Federal Entities specifying the rules, controls, procedures and accounting treatments for the transactions and settlements necessary for the preparation of the draft final account. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 1)
- Decree by Law: Federal Decree by Law No. (26) of 2019 Regarding Public Finance. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 1)
What are the main obligations and requirements?
The Cabinet Resolution imposes the following key obligations on federal entities: 1. Comply with the controls and procedures when concluding contracts that entail financial obligations beyond the current fiscal year. This includes ensuring contract appropriations are included in the Medium-Term Fiscal Framework and that annual budget allocations are available. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 4) 2. Adhere to the specified rules when preparing the draft final account, such as accurate accounting classifications, timely completion of annual closing procedures, and inclusion of required disclosures and performance indicators. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 5) 3. Submit the draft final account and supporting documents to the Supreme Audit Institution and the Ministry of Finance by the specified deadlines. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 5)
What are the requirements for cash flow hedging?
The Cabinet Resolution outlines the following requirements for cash flow hedging: 1. The Minister of Finance shall monitor the government's financial position and liquidity flows. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 3) 2. Cash flow hedging aims to mitigate negative effects of cash flow variations, ensure continued implementation of development plans, maintain the government's ability to fulfill financial obligations, and build the cash reserve. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 3) 3. The Minister shall submit semi-annual and annual reports to the Cabinet on the cash flow hedging position, including plans to address anticipated economic shocks or fluctuations. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 3) 4. If there are strong indications of an exceptional decline in public resources, the Ministry shall propose a reduction percentage in the draft general budget law, excluding allocations for inevitable employees. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 3)
What are the powers of the Minister of Finance?
The Cabinet Resolution grants the following powers to the Minister of Finance: 1. If there is an exceptional or unexpected decline in cash revenues, the Minister may submit a memorandum to the Cabinet proposing a reduction in approved budget allocations, up to 50% of the current year's budget. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 2) 2. In the memorandum, the Minister may recommend measures such as injecting additional liquidity from reserves, reducing allocations, rescheduling payments, or issuing public debt. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 2) 3. The Minister shall issue instructions to federal entities on implementing the Cabinet's decision on any of the proposed measures. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Art. 2)
How does this law interact with other UAE legislation?
The Cabinet Resolution references the following related legislation: - Federal Law No. (1) of 1972 Regarding the Competences of Ministries and the Powers of Ministers - Federal Decree by Law No. (26) of 2019 Regarding Public Finance - Cabinet Resolution No. (37) of 2012 Regarding the Implementing Regulations of the Federal Decree by Law No. (8) of 2011 Regarding the Rules for Preparing the General Budget and the final Account - Cabinet Resolution No. (17) of 2013 Regarding the Implementing Regulations of the Federal Decree by Law No. (1) of 2011 Regarding the Public Revenues - Cabinet Resolution No. (4) of 2019 Regarding the Procurement and Warehouse Management Regulations in the Federal Government (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Preamble)
When did this law come into effect?
The Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance came into effect on 17 May 2021, the date it was published in the Official Gazette No. 702. (Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance, 2021, Effective Date)
Source Documents
This article analyses Cabinet Resolution Regarding the Executive Regulations of Federal Decree by Law Regarding Public Finance 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.