Legislation Details
- Full Title: Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts
- Law Type: Cabinet Resolution
- Law Number: (14) of 2025
- Issued Date: 10 Feb 2025
- Effective Date: 16 Apr 2025
- Official Gazette: No. 793
- Sector: Finance and Banking
- Status: Active
- Number of Articles: 32
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution establishes a regulatory framework for federal entities in the UAE to outsource the collection of their debts to third-party service providers. The resolution sets out the eligibility requirements for outsourcing parties, the process for engaging them, and the obligations and responsibilities of both the creditor entity and the outsourcing party. It aims to enhance the efficiency and effectiveness of debt collection by enabling federal entities to leverage professional services while maintaining appropriate controls and oversight. The resolution is significant for businesses and individuals in the UAE as it provides clarity on the rules governing outsourced debt collection, which can impact their interactions with federal authorities. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 1-14)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to establish a regulatory framework for federal entities in the UAE to outsource the collection of their debts to third-party service providers. The purpose is to (1) set standards and controls for managing the risks associated with debt outsourcing arrangements, (2) provide clear rules governing the outsourcing of federal debt collection to enhance efficiency and ensure continuous government revenue, and (3) enable federal entities to leverage professional debt collection services to effectively recover financial receivables. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 2)
What are the key definitions under this law?
The resolution provides the following key definitions:
- Decree-Law: The Federal Decree-Law No. (15) of 2024 Regarding the Collection of Federal Entities' Debts.
- Outsourcing Party: A company that enters into a contractual arrangement with the Creditor to perform debt collection operations.
- Outsourcing: The process through which the Creditor engages an Outsourcing party to perform debt collection duties, in whole or in part, and/or to trace the debtor's assets.
- Contract: An agreement between the Creditor and the Outsourcing party for the performance of outsourcing activities.
- Conflict of Interest: The existence of any direct or indirect personal or financial relationship or interest between the Outsourcing party and the debtor that might affect the Outsourcing party's independence, integrity, or ability to perform the outsourced tasks.
(Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 1)
What are the main obligations and requirements?
The resolution imposes the following key obligations: 1. The Creditor must engage an Outsourcing party that is duly licensed by the Competent Authority in the UAE to conduct debt collection and/or debtor's asset tracking activities. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 4) 2. The Outsourcing party must provide the Creditor with proof of its commitment to confidentiality and adherence to standards for protecting the debtor's personal and financial data, as well as warrant the absence of any conflict of interest. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 4) 3. The Outsourcing party must submit a technical proposal demonstrating its ability and efficiency to effectively undertake the collection operations and track and verify the debtor's assets. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 6) 4. The Outsourcing party must set up and submit a Debt Collection Management Plan to the Creditor, which the Creditor must review and approve. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 7)
What licensing, registration, or approval requirements exist?
The resolution requires that the Outsourcing party be duly licensed by the Competent Authority in the UAE to engage in debt collection and/or debtor's asset tracking activities. However, the Creditor may engage a foreign company specializing in these activities to pursue collection procedures or track debtor's assets outside the UAE. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 4)
Which authorities or bodies are responsible for enforcement?
The resolution does not specify any particular authorities or bodies responsible for the enforcement of its provisions. However, it does mention the establishment of a Debt Collection Follow-up Unit, which is tasked with granting the Debt Collection Units of the Creditors the authority to use the E-Collection Platform. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 9)
What are the penalties for non-compliance?
The resolution does not specify any penalties for non-compliance with its provisions.
What fees, charges, or financial provisions are specified?
The resolution states that the Outsourcing party may not pay any costs for collection management and debtor's assets tracking on behalf of the Creditor without the latter's prior approval. It also requires the Outsourcing party to record all operating expenses paid on behalf of the Creditor on the E-Collection Platform, and prohibits the payment of any such expenses to the Outsourcing party unless approved by the Creditor. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Art. 10)
What exemptions or exceptions apply?
The resolution does not specify any exemptions or exceptions to its provisions.
How are disputes resolved under this law?
The resolution does not provide any information on how disputes arising under this law are to be resolved.
What are the key deadlines and time limits?
The resolution does not specify any key deadlines or time limits.
How does this law interact with other UAE legislation?
The resolution references the following related UAE legislation: - The Constitution - Federal Law No. (1) of 1072 Regarding the Competencies of Ministries and the Power of Ministers, as amended - Federal Decree-Law No (26) of 2019 Regarding Public Finance, as amended - Federal Law No. (11) of 2023 Regarding Procurement in the Federal Government - Federal Decree-Law No. (15) of 2024 Regarding the Collection of Federal Entities' Debts (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025, Preamble)
When did this law come into effect?
This Cabinet Resolution came into effect on 16 April 2025, as stated in the "Effective Date" section of the legislation details. (Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts, 2025)
Source Documents
This article analyses Cabinet Resolution Regarding the Rules for Outsourcing the Collection of Federal Entities' Debts 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.