UAE Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled Abuorabi and Habiba Wahdan, GLA & Company
Decision No 55 of 2021 on the Determination of the List of Strategic Impact Activities. The restricted or prohibited sectors include: secu - rity and defence; banks and insurance; and tel - ecommunications. If the regulatory authority for the relevant sector approves an application by a foreign investor who wishes to invest in a com - pany engaged in one of these sectors, it must determine the minimum percentage of share capital that must be held by UAE shareholders and the maximum percentage that may be held by the foreign shareholder. However, sectoral regulators and other gov - ernment authorities in the UAE retain a certain amount of discretion to approve or reject pro - posed transactions affecting competition in the UAE. For example, while the regulated sectors have been excluded from the scope of applica - tion of the Competition Law, investment in these sectors (including in relation to a foreign com - pany operating through a branch in the UAE) will generally require a separate approval procedure to be undertaken with the relevant regulator (in particular, to update the “undertaking’s” UAE licences and registration). Considerations in this context will not necessari - ly or exclusively be competition-related and sec - toral regulators and other government authori - ties retain considerable discretionary powers to reject a transaction where they have concerns, including national security or public policy. 4.7 Special Consideration for Joint Ventures Joint ventures are not separately dealt with under the UAE Competition Legislation. They are considered like any other transaction in terms of whether the “undertaking” is meeting the juris - dictional threshold and if there are any consid - erations as to whether it should be a ”restrictive
agreement” or if there is an abuse of a “dominant position”. Other than evaluating the “economic concentra - tion” aspects, the Competition Department will also consider if the joint venture should be con - sidered a ”restrictive agreement” or if it abuses a “dominant position”. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions Once the Minister has made their decision, the relevant competent authorities (including the Ministry) have the power and authority to enforce it. The authorities have the ability to prohibit or otherwise interfere with a transaction. The clearance or rejection decision is made by the Minister, so it is worth highlighting the pow - ers of the Minister that extend, amongst other things, to the: • commercial transactions; • commercial agency; • consumer protection; • commercial companies, including publicly listed companies; • financial and capital markets; and • intellectual property. The Minister can therefore significantly affect the provision of a product or a service in the UAE and can request the UAE enforcement bodies intervene to support any decision made in this regard. On a related note, the Competition Law also states that the Ministry will co-ordinate with the
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