Legislation Details
- Full Title: Federal Law Regulating Donations
- Law Type: Federal Law
- Law Number: [number] of 2021
- Issued Date: 11 Apr 2021
- Effective Date: 01 Nov 2022
- Official Gazette: No. 700
- Sector: Family and Community
- Status: Active
- Number of Articles: 89
- Chapters/Parts: 0
- Amendments: 0
Summary
The Federal Law Regulating Donations aims to regulate the collection and distribution of donations in the United Arab Emirates, including in free zones. The law establishes a framework for obtaining permits, maintaining records, and overseeing the activities of licensed parties and authorized entities involved in fundraising and donation management. It also sets out requirements for cross-border donations and prohibitions on certain practices. The law is intended to protect donor funds and ensure the efficient and transparent use of charitable contributions. (Federal Law Regulating Donations, 2021, Art. 1-3)
This legislation is significant for businesses, charities, and individuals in the UAE as it clarifies the legal obligations and restrictions around fundraising and donations. It provides a clear regulatory structure to promote accountability and prevent misuse of donated funds. Compliance with the law is crucial for any party seeking to collect or distribute donations within the country. (Federal Law Regulating Donations, 2021, Art. 1-3)
What is the scope and purpose of this law?
The Federal Law Regulating Donations applies to any party wishing to collect or provide donations within the UAE, including in free zones. The law aims to regulate the collection, receipt, and distribution of donations in order to protect donor funds and ensure their efficient use. (Federal Law Regulating Donations, 2021, Art. 2-3)
What are the key definitions under this law?
- Donations: Funds collected in cash or in kind, including national and foreign currency, bonds, sukuk, and stocks, for charitable or humanitarian purposes. (Federal Law Regulating Donations, 2021, Art. 1)
- Fundraising: Collecting donations by any means in accordance with the provisions of this law. (Federal Law Regulating Donations, 2021, Art. 1)
- Licensed Parties: Charitable societies, federal, local, and non-governmental organizations and institutions authorized to collect, receive, and distribute donations. (Federal Law Regulating Donations, 2021, Art. 1)
- Permit: Written or electronic consent from the competent authority to collect and distribute donations. (Federal Law Regulating Donations, 2021, Art. 1)
- Authorized Entities: Legal persons granted a permit by the competent authority to collect and distribute donations. (Federal Law Regulating Donations, 2021, Art. 1)
- Classification Certificate: A certificate issued by the competent authority granting charitable or humanitarian status to non-governmental organizations and public benefit institutions. (Federal Law Regulating Donations, 2021, Art. 1)
What are the main obligations and requirements?
The law imposes several key obligations on licensed parties and authorized entities:
- Obtaining a permit from the competent authority before collecting or distributing donations, except for authorized entities. (Federal Law Regulating Donations, 2021, Art. 6)
- Maintaining an electronic record of all donations collected and providing periodic reports to the competent authority. (Federal Law Regulating Donations, 2021, Art. 11, 21-22)
- Opening dedicated bank accounts for collecting and disbursing donations, and not commingling these funds with other sources. (Federal Law Regulating Donations, 2021, Art. 17)
- Complying with regulations on collecting or receiving donations from outside the UAE and transferring donations outside the country. (Federal Law Regulating Donations, 2021, Art. 13-15)
- Prohibitions on trading in donated funds, entering financial speculation, or distributing revenues to members or employees. (Federal Law Regulating Donations, 2021, Art. 20)
What licensing, registration, or approval requirements exist?
The law requires a permit from the competent authority to collect or distribute donations, except for authorized entities. To obtain a permit, the applicant must be a legal person, state the purpose and details of the fundraising, and provide evidence of the charity's approval. The competent authority must study the application and issue a decision within 20 working days. No party may be granted more than four permits per year, except by decision of the competent authority head. (Federal Law Regulating Donations, 2021, Art. 6-10)
Additionally, the law requires non-governmental organizations, public benefit institutions, and other parties to obtain a "Classification Certificate" from the competent authority in order to use the "charitable or humanitarian" designation. (Federal Law Regulating Donations, 2021, Art. 16)
Which authorities or bodies are responsible for enforcement?
The Ministry of Community Development and local authorities are designated as the "competent authorities" responsible for implementing and enforcing the provisions of this law. Their key roles include:
- Establishing a system for measuring the efficiency and evaluating licensed parties and authorized entities. (Federal Law Regulating Donations, 2021, Art. 4)
- Issuing permits for fundraising and overseeing compliance. (Federal Law Regulating Donations, 2021, Art. 6-10)
- Maintaining records of donations and receiving periodic reports from licensed parties and authorized entities. (Federal Law Regulating Donations, 2021, Art. 11, 21-22)
- Overseeing cross-border donations and money transfers. (Federal Law Regulating Donations, 2021, Art. 13-15)
- Issuing "Classification Certificates" to non-governmental organizations and public benefit institutions. (Federal Law Regulating Donations, 2021, Art. 16)
What are the penalties for non-compliance?
The law specifies the following penalties for violations:
- Suspension of the permit issued to the licensed or authorized entity. (Federal Law Regulating Donations, 2021, Art. 30)
- Administrative penalties, including fines ranging from AED 50,000 to AED 500,000, depending on the violation. (Federal Law Regulating Donations, 2021, Art. 33)
- Criminal penalties, including imprisonment for a period not exceeding 5 years and/or a fine not exceeding AED 1 million, for the person responsible for the actual management of the licensed or authorized entity. (Federal Law Regulating Donations, 2021, Art. 35-37)
When did this law come into effect?
The Federal Law Regulating Donations was issued on 11 April 2021 and came into effect on 1 November 2022. (Federal Law Regulating Donations, 2021, Issued Date and Effective Date)
How does this law interact with other UAE legislation?
The Federal Law Regulating Donations references and interacts with several other UAE federal laws, including:
- Federal Law No. (1) of 1972 Concerning the Jurisdictions of Ministries and the Powers of Ministers
- Federal Law No. (3) of 1987 Issuing the Penal Code
- Federal Law No. (2) of 2008 on Public Welfare Associations and Institutions
- Federal Law by Decree No. 5 of 2021 on Combating Information Technology Crimes
- Federal Law No. (7) of 2014 concerning Combating Terrorism Offences
- Federal Law No. (14) of 2016 Concerning Administrative Violations and Sanctions in the Federal Government
- Federal Law by Decree No. (14) of 2018 Concerning the Central Bank and the Regulation of Financial Institutions and Activities
- Federal Law by Decree No. (20) of 2018 Concerning Combating Money Laundering and the Financing of Terrorism and Illegal Organisations
(Federal Law Regulating Donations, 2021, Preamble)
Source Documents
This article analyses Federal Law Regulating Donations 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.