Out-Law News 2 min. read

UAE to draw up its first anti-corruption law, according to press reports


The United Arab Emirates (UAE) plans to introduce its first dedicated anti-corruption law in a bid to increase transparency and fulfil international company law requirements, according to press reports.

National media aggregator Emirates 24/7 said that the new law, which will be drawn up by the company's anti-corruption authority the State Audit Bureau, would fulfil the UAE's commitment to the United Nations (UN) Convention against Corruption, which it signed in 2003.

"The Bureau will draw up an anti-corruption law and we urge all competent departments to join hands to ensure this law will see light and is implemented successfully," Bureau chairman Hareb bin Saeed Al Amimi told the publication. "This law will greatly support the UAE's efforts to fight corruption and related offences, protect public funds and better utilise national resources for comprehensive development."

Company law expert Alan Wood of Pinsent Masons, the law firm behind Out-Law.com, described the move as a further sign of the UAE's "ambition to improve transparency and governance" to increase its role as a centre for international business. The UAE has proposed a new company law which will pave the way for a reduction in restrictions on foreign company ownership, while international businesses now have the option to elect the English-speaking Dubai International Financial Centre (DIFC) Courts to resolve disputes.

"Although the UAE has long been regarded as having a relatively low corruption rate, the adoption of a new law would add clarity to companies - both domestic and international - doing business in the UAE and will act as a clear deterrent to future contravention," Wood said. "As ever, the proof of the commitment will be in the wording of the law which is proposed and there will certainly be some regional customs and practices to be contended with. Having said that with the UN anti-bribery convention, the US Foreign Corrupt Practices Act and the UK Bribery Act to draw upon, those tasked with drafting the new law will have a clear road map to follow."

The UAE has been classified by several global rating and research organisations as having one of the lowest corruption rates in the developing world, according to Emirates 24/7. According to last year's Global Enforcement Report (11-page / 2.06MB) by the Institute of Business Ethics, it has accounted for only 0.7% of international enforcement activity since the US Foreign Corrupt Practices Act came into force in 1977. However many Gulf countries are currently taking steps to widen anti-corruption measures and boost transparency within public departments, it said, while Saudi Arabia established a new anti-corruption body last year following reports of widespread financial offences.

The Bureau said that although it had unveiled some major fiscal offences within government departments, amounting to nearly Dh300 million (approximately £52.5 million) in fiscal year 2007-08, all the funds had been recovered, while cases had "sharply declined" due to intensified auditing and anti-corruption measures.

The UK Bribery Act came into force last July. Foreign companies which operate in the UK can face prosecution for bribery-related offences regardless of where the alleged activity has taken place, unless those practices are permitted locally. The Act also created the offence of bribing a foreign public official, even if that person has demanded a bribe.

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