UAE Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled Abuorabi and Habiba Wahdan, GLA & Company
1.2 Legislation Relating to Particular Sectors Sectors and Exemptions The UAE Competition Legislation applies to all undertakings operating in the UAE as well as to activities that take place abroad and have an effect on competition in the UAE and the com - mercial activities and transactions of both local and international undertakings. The following are exempt from the UAE Compe - tition Legislation. • Any agreement, practice or action related to a specific good or service where the authority to regulate competition rules is granted, by virtue of another law that includes provisions related to regulating the rules and procedures for considering anti-competitive practices and instances for their exemption and eco - nomic concentration operations, to a sectoral regulatory body, unless the sectoral regula - tory body requests the ministry take over this matter, in whole or in part, in writing and the ministry agrees to this. • Establishments owned by the Federal govern - ment and which are specified in a Cabinet Decision which has been approved by a min - ister together with the relevant authority. • Establishments owned by the local govern - ment of one of the seven emirates, operating within the emirate and which are determined by a decision issued by the government of the emirate. The Competition Law does not provide any other exemptions. With that being said, a restructuring exemption is implied based on the definition of economic concentration under the Competition Law (see 2.3 Types of Transactions ) and the requirement for a change of control. In the event a transaction does not fall within the definition
Rules are met, which are higher than most (if not all) of the jurisdictions in the Gulf and Middle East region. Antitrust and merger control rules and restric - tions under the UAE Competition Legislation do not apply to undertakings in the Abu Dhabi Global Market (the “ADGM”) or the Dubai Inter - national Financial Centre (the ”DIFC”). This is despite Article 3 of the Competition Law stating that the Competition Law will apply to all under - takings with regards to their economic activities in the UAE and exploitation of intellectual prop - erty rights inside or outside the UAE, thereby affecting competition in the UAE. The reason why the UAE Competition Leg - islation does not apply to undertakings in the financial free zone areas, can be legally justified by Article 121 of the UAE Constitution, which enabled the UAE federation to create financial free zones in the UAE, and most importantly, to exclude the application of certain Federal Laws in these zones. Federal Law No 8 of 2004 on Financial Free Zones in the UAE also states that financial free zones are exempt from all Federal civil and com - mercial laws. Neither the ADGM nor the DIFC have separate legislation to regulate antitrust or merger control. It is therefore safe to assume that the UAE Com - petition Legislation only applies to onshore UAE undertakings and excludes financial free zone undertakings unless the activities or transactions taking place via an undertaking based in either of the two financial free zones (ie, the ADGM or the DIFC) affect competition in the UAE main - land, whether directly, indirectly or through an onshore-based subsidiary.
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