Legal Aspects of Doing Business in The Middle East - Term Paper Example

?Running Head: Introduction to Business Law Introduction to Business Law [Institute’s Introduction During this vague era of globalization as well as of rising markets, UAE’s financial and cultural development is strengthened via a federal regulatory structure, which has expanded adequately to support important local and global venture within UAE and is persistent to expand. Even though the main codes of law in the UAE are taken from Sharia, the majority of legislation is consisted of a blend of Islamic and European models of federal law. Besides particular legal legislation “covering agencies, company law, labor law, and intellectual property, the UAE has enacted civil and commercial codes” (Campbel, 2009). Even though the arrangement has made the growth of broad and planned legal systems feasible, these are inflexible and rigid to a certain extent, and this represents the system of government of directive that is linked with nations within the Middle East area as a whole. Since its foundation in 1971, the UAE has placed a provisional establishment, which quickly has changed into a stable one. This took place after the federal state of the UAE attained its constancy dedicated towards a fair strategy, and made cultural alterations and huge achievements at the local, provincial and global levels in addition to further development for the people of this nation; this would be among the most flourishing practices of alliance. This constitution clarifies the major regulations of the political and constitutional management of the state. Actually, it has revealed the key reason of organization of the federation, its ideas and elements on the local and district levels. It has as well elaborated on the most important communal and financial “pillars of federation and stressed public rights, responsibilities and freedoms” (Campbel, 2009). In addition, it has emphasized a federal system and controlled issuance of federal legislation in addition to the experienced establishment. In particular, it has taken care of economic dealings of the nation, armed forces conditions and governmental, administrative and global authorities among the nation and affiliate emirates. “According to Article 144 of the constitution, amendments to the constitution are drafted by the Federal Supreme Council, and must be approved by a two-thirds majority of the Federal National Council, after which the amendment is signed into law by the president” (Campbel, 2009). Main Provisions The “Federal Supreme Council” is the main legal power within the UAE. It is the major governmental and decision-making organization. It ascertains general regulations and endorses federal legislation. The leaders of Dubai and Abu Dhabi hold “veto power” (Campbel, 2009). The establishment manages the link amid the “federal government and the emirate governments” via the central government related controls and leaving an indefinite region of hidden authorities to the emirates. Every emirate has power on its own oil and mineral assets and a few matters of inner safety. The federal government emphasizes dominance in nearly all issues related to regulation and government. Constitution allocates jobs to the federal government in the fields of foreign affairs, defense and protection, ethnicity and migration concerns, learning, health care system, coinage, communication methods, employment affairs, banking, distribution of territorial waters and criminals’ exile. It also permits the transference of governmental power located within the Union onto neighboring federal associations, mainly the financial center in Dubai. The change sets an example for the growth of the federal power. The federal constitution facilitates the leaders of the emirates, nonetheless, to resign, if they would like to, in some specific areas of power recommended as being the duty of particular emirates to the federal rule. The verdict to join the military is an illustration of this right. The federal constitution also allows all emirates to preserve or to start membership in the “Organization of Petroleum Exporting Countries (OPEC) and the Organization of Arab Petroleum Exporting Countries (OAPEC)” (Cotran, 2000); but no-one has done that until now. Abu Dhabi was the only emirate to be a member and abandoned its membership supporting the alliance. The link between the federal and the provincial levels of regime carries on modifying and developing. A few emirates have gained from the alliance in the fields such as tourism and schooling. Simultaneously, within other areas such as the courts, there has been a developing tendency for additional intentional relinquishment of “local authority to the federal institutions” (Cotran, 2000). Both the conventional and contemporary types of government is there and complement each other. Even though prominent political figures within the emirates are not voted for, residents may convey their issues to their leaders by means of conventional systems, for instance, the “open majlis” (Cotran, 2000), or unofficial meeting. The federal constitution disallows maltreatment or humiliating attitude and forbids detainment, investigation, imprisonment, or detention, along with access to residences lacking the consent of owner, with the exception of circumstances when it is mandatory by regulation. It offers the sovereignty of the courts, although its verdicts are conditional on evaluation by the political control. The federal constitution, moreover, declares that every individual is equal before the law and there must be no prejudice among residents of the nation with respect to social group, ethnicity, spiritual conviction or public standing. It further states that punishment is individual. An indicted individual is supposed to be blameless till his conviction is confirmed before a federal court in which all the essential assurances of the civil right of self-protection are protected. The law must also recommend the instances within which the existence of a counsel for security must be consigned and “physical” “moral” exploitation of a blamed individual is outlawed. The law must identify misdemeanors and penalties and no punishment must be enforced for commission or exclusion done unless the pertinent law has been publicized. “The United Arab Emirates is a federation of seven Emirates. The legislative branch is the unicameral Al-Majlis Al-Watani Al-Ittihadi or Federal National Council (FNC)” (Cotran, 2000). Seven thousand important figures that are elected through the local regimes to stand for a number of communal factions and ethnic groups chose twenty from the forty affiliates of the Federal Council. The remaining twenty are elected by the head of states of the Emirates to work for two years with the chance of reinstatement. The procedure of choosing the Federal Council’s affiliates is in the hands of the federal constitution to the “Emirates' discretion.” “From the forty affiliates, eight members are from Dubai and eight from Abu Dhabi. Six are from Sharjah and Ra’s al Khaymah each, and four from Ajman, Umm al Oaywayn, and Al Fujayrah each” (Cotran, 2000). The Federal Council evaluates legislation and recommends modifications to it, although it does not include the authority to sanction regulations or to enact fresh rules. By itself, the legislature is mainly an advice giving structure. On the other hand, the Federal Council does cover the authority to check and modify recommended legislation in addition to the right to call and inquire any federal minister along with its individual affiliates. Discussing the yearly budget is also among the key responsibilities of the Federal Council. The Council of Ministers prepares and submits federal laws to the Federal Council where they are primarily given to an appropriate commission. If a commission indicates modifications to the recommended plan by the management, the modified plan is sent to the “Legal and Legislative Committee, before the floor debate, for consultation and formulation of its provisions. Finally, the draft is presented to the president of the federation” (Cotran, 2000). Responsibilities of the Federal Council Devising the general guiding principle on every issue related to the federation in the establishment, and making an allowance for each issue that could initiate the success of the goals of the coalition as well as the general wellbeing of the affiliate emirates. Supporting a number of federal laws earlier than their issuance together with laws about the yearly general financial plan of the “federation and the closing accounts” (Price, 1998). Authorizing the verdicts on issues that, “by virtue of the provisions of the constitution” (Price, 1998), are conditional on the authorization and endorsement from the Federal Council. This sort of endorsing occurs earlier than the issuance of such verdicts by the head of the ruling body. Authorization of agreements and global contracts. This sort of authorization is carried out by verdict. Endorsing the election of the “prime minister” of the nation, acknowledging his resignation, and demanding him to quit on the indication of the leader of the nation. Acknowledging the election of the leader and the board of adjudicators, “accepting their resignations, and dismissing them in the cases specified by the constitution” (Price, 1998). Ultimate authority on the dealings of the federation on the whole. Any other pertinent tasks stipulated within the establishment or within the federal laws. Functioning Federal Council provides its individuals with a set of laws together with its system for performance of business in addition to the process for appointing on its pledges. The negotiations of the Federal Council must not be disclosed to the public. Federal Council initiates a “general secretariat” (Price, 1998) comprising an adequate amount of representatives to facilitate it in carrying out its responsibilities and tasks. Rulings of the Federal Council on substantial issues are prepared by a greater part of its affiliates, given that this mainstream incorporates the “vote of the emirates of Abu Dhabi and Dubai” (Price, 1998). The rest must abide by the judgment of the aforementioned mainstream. On the other hand, rulings of the committee on bureaucratic issues must be presented by a mainstream’s vote. Such issues are known as the by-laws of the ruling body. Federal Council arranges its meetings in the capital; nonetheless, they can be arranged at any other spot selected earlier. The United Arab Emirates is basically a civil law rule greatly controlled by “French, Roman, Egyptian and Islamic law” (International Business Publications, 2009). General Law standards, for instance, implementing earlier court rulings as officially authorized models, are normally not acknowledged – even though verdicts ordered by higher courts are generally adopted by lower courts. Just provincial firms may “appear as counsel before a court” (International Business Publications, 2009). As the UAE has developed itself like a local spot for global trade, intercession is steadily turning out to be an accepted technique of resolution for any argument. Islamic courts function side by side with the civil and criminal courts in the UAE. The Islamic court in the UAE is mainly in charge of social issues amid Muslims. Non-Muslims will not have to appear before an Islamic court in any case. Islamic courts possess the special authority to listen to family arguments, together with issues relating to divorce, legacies, child guardianship and care of younger ones. The Islamic court may, just on the national level, listen to petitions of some specific illegal incidents together with rape, theft, driving after the heavy consumption of alcohol and associated offenses, which were tried in lower criminal courts at the beginning. Even though there exists a federal court system with an ultimate court of petition within Abu Dhabi, both Dubai and Ras Al Khaimah are not components of the federal legal structure. Different from the other emirates, Dubai and Ras Al Khaimah enclose their individual court structures that are not dependent on the federal court. The three key subdivisions inside the court structure are: “civil, criminal and Sharia, or Islamic, law” (Tamimi? 2003). The court system of Dubai consists of the following courts: “the Court of First Instance, the Court of Appeal and the Court of Cassation. The Court of First Instance includes the Civil Court, the Criminal Court and the Sharia Court” (Tamimi? 2003). Every UAE court will allow a legal representative selected by a petitioner in accordance with the terms of the law, and the legal representative is required to verify his selection as a delegate of his client via the power of attorney “notarized by a notary public” (Tamimi? 2003). The Federal Council of the United Arab Emirates discusses the yearly financial plan in addition to twelve-monthly closing accounts. Abiding by the nation’s constitution, partially every emirate’s profits are set aside for the federal resources; however, in fact Abu Dhabi as well as Dubai produce 90 percent of the UAE’s GDP and also chip in to federal resources. Out of these two, Abu Dhabi’s inputs are bigger by a small margin. The shortfall is usually supported by further inputs of the two emirates, in addition to a little support from the Central Bank of the United Arab Emirates. Conciliations are in process with other affiliates of the “Gulf Cooperation Council” to develop a standard data average and economic accounting structure. Better validation is considered necessary to plan for the financial unification likely during 2013. The establishment is as well talking about a “value-added tax” as a way of expanding the tax base, provided that it can be in line with the other affiliates of the Gulf Cooperation Council. The UAE having an outer slanting growth policy has reduced its reliance on petroleum profits by now. Other profits, totaling up to hardly six percent of government incomes during 2000, were generated to be one-third of the entire amount in 2005. The federal law has supported diversification and privatization of the financial system. Dubai has been in the forefront to draw foreign savings in attempts to turn into the most important point of global trade. Abu Dhabi, which produces more or less 95 percent of total oil production, is leading the privatization of utilities along with drawing foreign savings within a number of divisions of the financial system, mainly the electrical power industry, to create a center of attraction for contemporary technology as well as administration systems and cost effectiveness. The most determined privatization strategies are related to desalination of water and as well as generation and provision of electrical energy. Around eleven businesses are started within Abu Dhabi to deal with the special phases of generating, working, arranging, transmitting and allocating of water and electrical energy. Other concerns take account of the removal of government grants of water and electrical energy in addition to an arrangement of reducing the 15,000 expert workers within the industry with the intention of decreasing expenditure and boost productivity. References Campbell, C. (2009). Legal aspects of doing business in the Middle East. lulu.com. Cotran, E. (2000). Yearbook of Islamic and Middle Eastern law. Springer. International Business Publications. (2009). United Arab Emirates business law handbook. Price, C. (1998). United Arab Emirates Court of Cassation judgments. Brill Academic Publishers. Tamimi, E. (2003). Practical guide to litigation and arbitration in the United Arab Emirates. Kluwer Law International. Read More