|By Arabian Post Staff|The new bankruptcy law of the UAE envisages the setting up of a regulatory body called the Committee for Financial Restructuring to administer the law and its procedures.
The Committee will be in charge of: overseeing the procedures of financial restructuring outside the scope of the court and will appoint experts in the field of financial restructuring, establish an electronic record of individuals against whom a bankruptcy ruling has been issued and impose restrictions as ordered by the court or the loss of eligibility under the provisions of the law.
The Committee is also responsible for organising and sponsoring initiatives that raise awareness among the public on the specification and objectives of the law, submitting periodical reports on the achievements, suggesting amendments to any provision of the law and determining any fees incurred as well as any other tasks or mandates stated by the law or the UAE Cabinet.
The number of members on the committee and the members constituting the committee will be decided by the Cabinet.
The Ministry of Finance (MoF) reviewed the final draft of the federal bankruptcy law, which was recently approved by the UAE Cabinet on the 4th of September, during a media round table held today at the Ministry’s premises in Abu Dhabi.
Obaid Humaid Al Tayer, Minister of State for Financial Affairs, who reviewed the final draft of the law at a media roundtable, said that the law is considered as an important addition to the UAE legislative system.
He said his ministry sought to implement a law that is based on modern legislative and economic principles, while taking into consideration the global developments and changes taking place in the economic and business sectors. The new law takes care of various bankruptcy situations and determines all legal tools to restructure the debtor’s business in accordance with specific terms and conditions as well as a legislative framework.
Al Tayer pointed out that the law provides for the protection for all parties, in addition to its pivotal role in attracting capital, in a safe and attractive investment environment and providing a protection legislation and legal acts.
The law works on identifying different ways to avoid bankruptcy cases and liquidation of the debtors’ funds, a comprehensive financial restructuring outside the scope of the court, composition procedures and the possibility to get new loans under terms set by the law. The law will also prevent individuals from bypassing the law as there are a number of penal provisions including five year prison sentence as well as fines up to a million dirhams.
The law includes raising credit levels and financial guarantee within its legislative priority to strengthen the confidence among investors and boost the economy by enabling the financially distressed businesses to restructure, and pay their debts and obligations without disrupting the production process in accordance with transparent legal framework. This makes it the only law which includes those specifications in the Arab region.