7/23/2019 Trade Policies in the UAE.doc http://slidepdf.com/reader/full/trade-policies-in-the-uaedoc 1/39 WT/TPR/S/162 Trade Policy Review Page 44 IV. TRADE POLIIES !" SETOR #1$ I %TROD&TIO% 1. The emirate governments have invested large amounts of oil resources over the past 30 years to diversify their economies. In manufacturing, these resources were initially invested in state-owned companies operating in oil and gas-intensive industries, reflecting the country's comparative advantages. 2. oint-ventures and partnerships with foreign enterprises have allowed manufacturing companies to !enefit from the most up-to-date technologies. "ome have emerged as world leaders in their mar#ets. The manufacturing sector has recently diversified towards more capital-intensive, high-technology products, such as electronics and machinery, e$ported in large part from the free %ones, which have modern production and trade infrastructure. 3. "oon after independence, the &( leadership set as a strategic policy to !ecome a ma)or transport hu! !etween (urope and "outh-(ast sia. The instruments to achieve this aim have included vast amounts of pu!lic funds invested in developing port and airport infrastructure, airlines, and shipping companies and agencies. s a result, several &( transport companies now also compete effectively on world mar#ets. In parallel, tourism has !een targeted as a ma)or source of future growth in the &(* tourism in the &( is now among the fastest growing su!sectors. +. The &( still depends on crude oil and gas e$ports for a significant share of its national income. The entire oil and gas sector, as well as electricity and water utilities, remains state controlled, with foreign participation generally in the form of minority partnerships or through concessions. emar#a!le advances have !een made in the agriculture sector, at high cost, including in terms of water depletion, whereas the fisheries su!sector suffers from the conseuences of past over-fishing. #2$ A'RI<&REA%D R ELATED ATIVITIES #i$ (ai) *ea+,re- 1. The &('s main agricultural products include dates, green fodder, vegeta!les, and fruit mainly citrus and mangoes/ Ta!le I.1/. The sector also produces livestoc# goats, sheep, camels, cows, and horses/ as well as meat and poultry, eggs, and mil#* the &( is one of the world's top !reeding centres for ra!ian horses. The annual production of fish is estimated at ,000 tonnes. 1 The &( is 100 self-sufficient in dates and fish, 43 in fresh mil#, 0 in vegeta!les, 34 in eggs, 24 in meat, and 14 in poultry. 2. griculture, including farming, livestoc#, forestry, and fishing, and certain agri-industries !enefit from considera!le state assistance. 5onetheless, production of agricultural raw materials remains limited and the agri-industries rely largely on imports for their inputs. Total value added in the sector was estimated at &"62. !illion in 2003. 7ost agricultural activities ta#e place in the emirate of !u 8ha!i. 9arming generally ta#es place on small units. In addition, su!stantial processing activities ta#e place in the free %ones, particularly 8u!ai's e!el li 9ree :one ;hart I.1/. 1 7inistry of griculture and 9isheries online information. vaila!le at< http<==www.uae.gov.ae=uaeagricent="TTI"TI;"=pu!licdata2002.htm >22 "eptem!er 200?.
1. The emirate governments have invested large amounts of oil resources over the past 30 yearsto diversify their economies. In manufacturing, these resources were initially invested in state-ownedcompanies operating in oil and gas-intensive industries, reflecting the country's comparativeadvantages.
2. oint-ventures and partnerships with foreign enterprises have allowed manufacturingcompanies to !enefit from the most up-to-date technologies. "ome have emerged as world leaders intheir mar#ets. The manufacturing sector has recently diversified towards more capital-intensive,high-technology products, such as electronics and machinery, e$ported in large part from the free%ones, which have modern production and trade infrastructure.
3. "oon after independence, the &( leadership set as a strategic policy to !ecome a ma)or transport hu! !etween (urope and "outh-(ast sia. The instruments to achieve this aim haveincluded vast amounts of pu!lic funds invested in developing port and airport infrastructure, airlines,and shipping companies and agencies. s a result, several &( transport companies now alsocompete effectively on world mar#ets. In parallel, tourism has !een targeted as a ma)or source of future growth in the &(* tourism in the &( is now among the fastest growing su!sectors.
+. The &( still depends on crude oil and gas e$ports for a significant share of its nationalincome. The entire oil and gas sector, as well as electricity and water utilities, remains statecontrolled, with foreign participation generally in the form of minority partnerships or throughconcessions. emar#a!le advances have !een made in the agriculture sector, at high cost, including
in terms of water depletion, whereas the fisheries su!sector suffers from the conseuences of pastover-fishing.
#2$ A'RI<&RE A%D R ELATED ATIVITIES
#i$ (ai) *ea+,re-
1. The &('s main agricultural products include dates, green fodder, vegeta!les, and fruitmainly citrus and mangoes/ Ta!le I.1/. The sector also produces livestoc# goats, sheep, camels,cows, and horses/ as well as meat and poultry, eggs, and mil#* the &( is one of the world's top
!reeding centres for ra!ian horses. The annual production of fish is estimated at ,000 tonnes.1 The&( is 100 self-sufficient in dates and fish, 43 in fresh mil#, 0 in vegeta!les, 34 in eggs,24 in meat, and 14 in poultry.
2. griculture, including farming, livestoc#, forestry, and fishing, and certain agri-industries !enefit from considera!le state assistance. 5onetheless, production of agricultural raw materialsremains limited and the agri-industries rely largely on imports for their inputs. Total value added inthe sector was estimated at &"62. !illion in 2003. 7ost agricultural activities ta#e place in theemirate of !u 8ha!i. 9arming generally ta#es place on small units. In addition, su!stantial
processing activities ta#e place in the free %ones, particularly 8u!ai's e!el li 9ree :one;hart I.1/.
1 7inistry of griculture and 9isheries online information. vaila!le at<http<==www.uae.gov.ae=uaeagricent="TTI"TI;"=pu!licdata2002.htm >22 "eptem!er 200?.
Source: 9D online information. vaila!le at< http<==www.fao.org=es=ess=toptrade=trade.asp, and data provided !y theauthorities.
3. In 200+, total domestic imports of agri-food products were estimated at &"63. !illion* inaddition, imports !y the free %ones slightly e$ceeded &"61 !illion. Total agricultural e$ports !ycompanies outside the free %ones were &"6+0 million, and &"61.1 !illion were e$ported !y the free%ones. e-e$ports were valued at &"61 !illion. 7ain imports include cigarettes, horses reflectingthe important !reeding and horse racing activity/, sugar, chic#en, and oil. There are also si%ea!leimports of raw agricultural products e.g. to!acco leaves/ for re-e$portation after their processing inthe free %ones ;hart I.1/. The main e$ports are cigarettes, race horses, sugar confectionery,miscellaneous edi!le preparations, animal or vegeta!le fats and oils, products of the milling industry,
and vegeta!les. The main mar#ets for the &('s e$ports of agri-food products are other G;;mem!ers, Iran, Ba#istan, (& countries, and the &nited "tates.
+. Eater scarcity and high salt content, poor soil uality, and hot and arid climatic conditionsnegatively affect &('s agriculture. ccording to the 7inistry of griculture and 9isheries 79/
and the 7inistry of (conomy and Blanning2, total water withdrawal massively e$ceeds groundwater recharged from rain, with depletion estimated at 2,12@ million mJ=year .3 gricultural water withdrawal for crops was estimated at a!out 1,1+ million mJ=year all groundwater/, while landscapeirrigation used a!out 200 million mJ all treated wastewater/. The remainder was used for industrialand domestic purposes.+ The over-e$traction of groundwater resources has led to a lowering of thewater ta!le !y more than one metre on average per year since 1A, while sea water intrusion isincreasing in the coastal areas. The first desalination plant was installed in !u 8ha!i in 1A@. Thereare now many desalination plants all over the &(, of which 1A main plants located in !u 8ha!i,8u!ai, and "har)ah@* total desalination capacity is a!out A10 million m3=year. ccording to theauthorities, groundwater withdrawal is now essentially for agricultural purposes, and all domestic andindustrial needs are met !y desalination plants.
. 8espite the water constraint, remar#a!le advances have !een made in agriculture since 1A,when financial resources from oil e$ports started to flow towards the development of agricultural
production. The cultivated area increased from 1,000 hectares ha/ in 1AA to A1,000 ha in 1+,and around 2@0,000 ha in 2003 3.1 of the &('s total territory/. In 2003, there were over 34,00farms in the &(, up from 21,000 in 1+, producing mainly vegeta!les, dates, and fruit. nother + of the territory is covered !y forests, as thousands of hectares of palm trees, and woodlands, have
!een planted in the country.
@. griculture contri!uted 2.A to G8B in 2003 and employed a!out of the wor#force.7ost employment is in farming A.+ of the wor#force/, followed !y food and !everagemanufacturing 1/, to!acco processing 0.1/ and fishing 0.@/.
#ii$ (ai) 0olicy i)-+r,7e)+-
1. Given the &('s climate, most agricultural production reuires su!stantial governmentsupport* this is granted mainly !y the authorities of !u 8ha!i, which accounts for 4A of thecountry's land mass. The 79 supports agricultural production in the si$ other emirates. It is also incharge of coordinating agricultural, forestry, and fisheries policy, as well as promoting irrigatedagriculture and the management of groundwater resources, the construction of dams for flood controland groundwater recharge, and the operation and maintenance of the hydro-meteorological networ#.The operation of la!oratories, pest and disease control, uarantine, inspection services, veterinaryservices, and forestation are also under its purview.
2. t the federal level, the General Eater esources uthority is responsi!le for water management and coordination !etween the other agencies. It is also responsi!le for formulating therules and regulations on matters relating to water, including the registration of the water well drillingcompanies and licences for drilling. ccording to the authorities, the 79 and other agenciessu!sidi%e the use of !io-fertili%ers and !io-pesticides in order to limit environmental damage.
2 7inistry of (conomy and Blanning 200+/. K"tudy on the 8evelopment of gricultural "ector and its9uture 1-2000K.
3 This figure does not include the possi!le annual recharge of groundwater from neigh!ouring countriesfor e$ample from the (astern ra!ia uifer/, as no figures are availa!le.
3. part from the Government's e$perimental farms, nurseries, forestation schemes, and pu!licgardens, all agricultural land is owned and managed privately. "uch land can only !e owned !y &(
nationals. 9oreign companies may, as in other sectors of the &( economy, hold up to + of thecapital of agri-industrial companies.
+. In !u 8ha!i, the Government gives land to &( citi%ens, prepares the land for farming, and provides fertili%ers, pesticides, seeds, and irrigation. The Government of !u 8ha!i !uys part of the production mainly vegeta!les and dates/ at set farm-gate prices, and resells at set prices through the!u 8ha!i 7unicipality outlets. egeta!le production in the other mostly northern/ emirates is,according to the authorities, carried out under mar#et principles, e$cept for dates which purchased !ythe !u 8ha!i 7unicipality from farmers in the northern emirates.
. "upport for livestoc# production consists of free veterinary treatment and vaccination. "omefodder is imported, !ut it is increasingly produced locally. 9odder farms are supported with free land,
seeds, fertili%ers, and free irrigation* sales of fodder in !u 8ha!i are organi%ed !y the !u 8ha!i7unicipality. ccording to the authorities, little assistance is e$tended for poultry and dairy,
produced privately using intensive integrated production systems.
@. In general, assistance to farmers includes su!stantial investment and production su!sidies<reclamation and distri!ution of agricultural land* provision of necessary euipment and training*large-scale planting of palm trees to create suita!le shaded areas for farming* provision of fresh water and seeds* provision of, and guidance on, the timely use of fertili%ers* and mar#eting support.
A. The provision of fresh water entails a num!er of infrastructural services, including< water supply facilities, dams, drainage, and irrigation facilities. 5o irrigation water charges are levied !ythe federal or emirate governments e$cept on treated water/, !ut farmers pay for the drilling of
!oreholes on their farms and the pumping of groundwater. They pay half of the maintenance costs of the irrigation networ#.
4. The 9ederal Government has invested si%ea!le resources in agricultural research and guidanceto farmers, so as to optimi%e productivity. gricultural research focuses on four main areas<increasing the production of palm trees, dates, and fruit such as citrus and mangoes* fodder, pastoral,and wild plants* long-term research on agricultural diseases* and research on plants grown ingreenhouses. The 79 is also financing research on the types of fodder that can withstand thecountry's climatic conditions and survive on little water. "tudies are under way on com!ating salinityand the capacity of different types of fodder plants to withstand high salt content in the soil. esearchis also encouraged on !iological control methods as an alternative to the use of insecticides to com!at
agricultural diseases. nother avenue of research concerns the production of alternate vegeta!le products in greenhouses. The &( also hosts the International ;entre for Fiosaline griculture, anapplied research and development centre located in 8u!ai, which aims to develop and promote theuse of sustaina!le agricultural systems that use salt water to grow crops.
. In 200+, the Government of !u 8ha!i allocated some &"6300 million dollars to agricultureTa!le I.2/ for production estimated at &"61.2 !illion.A In addition, si%ea!le e$penditure wasallocated to electricity and water &"64 million/. It is estimated that over half of total e$penditureon electricity and water is used for irrigation purposes.
Source: I79 200!/, United Arab Emirates: Selected Issues and Statistical Appendix. vaila!le at<http<[email protected] >22 "eptem!er 200?.
10. In pril 2002, the &( notified the ETD ;ommittee on griculture of domestic support in2000 and 2001 Ta!le I.3/. These amounts are considera!ly smaller than those reported !y the(mirate of !u 8ha!i, as they contain only e$penditure !y the federal government. 5o domesticsupport had !een reported for 1@ to 1 or 2002 to 200+.4 In 2002, the &( notified the ETD
;ommittee on griculture that it granted no e$port su!sidies during the period 1@-2001. 5onotification has !een received since then.
11. gricultural products attract a tariff of either 0 or , with two e$ceptions< alcoholic !everages 0/, and 20 tariff lines covering all to!acco products with an alternate tariff ;hapter III2/iv/a//. The simple average tariff on agricultural products I"I; ev.2 definition/ islow at 3.3 +. on food products I"I; 311 and 312//. Imports of plants, animals, and their
products must meet all sanitary and phytosanitary reuirements set at federal level ;hapter III2/vii/
!//. The &( lifted its !an on olive oil from the (uropean &nion, maintained for "B" reasons, inune 200.10
12. There are no a priori price controls on agricultural products, !ut the 7(B monitors the pricesof 1 !asic goods, including food products, in an effort to com!at cartels and other anti-competitive
practices ;hapter III+/iii//.
#iii$ Develo07e)+- regardi)g -elec+ed 0rod,c+-
a/ 8ates
1. 8ates are the &('s main crop Ta!le I.1/. 8ate palm cultivation plays a #ey environmentalrole in afforesting portions of the desert into oases. Dver +0 million date palms have !een grown inthe &(* 1@ million line the roads. 7any farms use modern irrigation systems. The country is a
pioneer in tissue culture to grow date palms* several companies have emerged as leading producersof date palms using tissue-culture technology. Dne company, l Eath!a 7arionnet, was esta!lishedin 1A under the &( Dffset programme ;hapter III2/* it is currently producing a!out 300,000date palms a year, and it e$ports dates.
2. e!el li free-%one company has introduced a new technology to produce fructose syrupfrom dates. ;oncept 9ood Industries claims to !e the first company in the world to use thistechnology, which also delivers a high protein animal feed as a !y-product. The facility has thecapacity to e$tract 3,000 tonnes of high fructose syrup yearly from dates. The new facility ise$pected to !oost government-sponsored efforts to improve palm date cultivation within the &(.
!/ Dther crops
1. The l in vegeta!le pac#ing factory, owned !y the (mirate of !u 8ha!i, started operationsin 14A with the aim of processing local agricultural surplus. 11 The factory comprises lines for
pic#led vegeta!les with an annual capacity of 3,000 tonnes/, fro%en vegeta!les 00 tonnes/, andtomato paste @0,000 tonnes/.
2. The Grand 7ills for 9lour and nimal 9eed ;ompany in !u 8ha!i production capacity hasincreased from 200 to 400 tonnes of flour per day since its inception in 14. The mills are owned
!y the !u 8ha!i General Colding ;ompany section 3/ !elow/, which is government-owned. Dneanimal feed mill produces over 0 varieties of fodder* a new mill, with a capacity of 30 tonnes per hour, produces poultry, fish, and non-traditional feeds.
3. The 8u!ai Investments ;ompany, founded in 1 !y the Government of 8u!ai to invest inlocal companies to improve their productivity, holds A0 &"60 million/ of the euity of the (di!leDil 8u!ai/ ; pro)ect in the e!el li 9ree :one, in partnership with the "wiss-!ased ;7 Group30 euity/.12 The seed-crushing plant, for the production of edi!le oil and meals, is the largestfacility of its #ind in the 7iddle (ast* capacity is e$pected to !e +0,000 tonnes.
c/ 9isheries
1. The &('s fishing su!sector has had to adapt to changing conditions and technologies inrecent years. Dver-fishing has resulted in reduced catches and smaller fish in the landed catches. The
situation has !een worsened !y considera!le provision of !oats, engines, euipment, and storagefacilities !y the Government. ccording to the authorities, fishing !oats have !een operated mainly !y
non-&( nationals whose concern for stoc# preservation may !e less than that of &( fishermen.
2. In order to preserve stoc#s, the 7inistry of griculture and 9isheries has issued regulationsconcerning fishing gear, areas and seasons, and the structure of the wor#force* fishing committeeswere esta!lished to ensure proper coordination with other governmental !odies. It is illegal to catchundersi%e fish* to use less than 2-inch mesh in fish traps or less than O inch mesh in fishing nets* tocarry out fishing operations in spawning and nursery areas during the restricted period* and to fishwithout a &( citi%en on !oard the vessel. In order to protect the sea!ed and its demersal fisheries,
!ottom trawling is not permitted in the territorial waters of the &(* new fishing !oats are no longer !eing registered, nor ho!!y craft* the num!er of fish traps is also restricted, as are fishing periods. Inorder to increase fish stoc#s, a programme is in place to introduce fingerlings in protected areas.
3. ($perimental auaculture in the &( has !een underta#en for some years. ;ommercial fishfarming is !eing supported !y the &( Dffsets Group ;hapter III2//, which helped to esta!lish theinternational fish farming company sma#. The !usiness activities of sma# span all aspects of theauaculture industry, including hatcheries, fish farming, processing and pac#aging, fish feed, fish-farming euipment, mar#eting, distri!ution, e$port, and consulting. 9urther e$pansion phases are
planned in a's al-Phaimah, 9u)airah, and !u 8ha!i. The company has also acuired a sta#e in theGree# company 9eedus as part of its strategy to invest internationally in successful auaculture
pro)ects. 9eedus, as its name suggests, is engaged in the manufacture and supply of fish-feed products.
d/ ;igarettes and to!acco products
1. ($ports of cigarettes were &"6+00 million in 2002, accounting for 30 of the value of &(agricultural e$ports, up from 11 in 1A-41. Imports are also si%ea!le at &"6300 million. In thee!el li free-%one alone, some @0 companies are involved in to!acco manufacturing or trade, ta#ingadvantage of the duty-free import of inputs. Dne large company produces outside the free %ones.
#$ (I%I%' E%ER'" A%D WATER
#i$ Overview
1. The &( is a ma)or oil and gas producer in a ma)or producing area, the ra!ian Gulf. It is amem!er of !oth the Drgani%ation of Betroleum ($porting ;ountries DB(;/ since 1A+, and theDrgani%ation of ra! Betroleum ($porting ;ountries DB(;/ since 1A0. 13 Dil and natural gasreserves are among the world's five largest* !oth are estimated to last more than 100 years at current
production rates Ta!le I.+/. The &( also has further, largely untapped, gas reserves estimated tolast 100 years at current production rates.1+
Source: DB(;, Annual Statistical Bulletin 2004. vaila!le at< http<==www.opec.org=li!rary=nnual20"tatistical20Fulleting=as!200+.htm* and International (nergy gency online information, K5atural gasK. vaila!le at<http<==www.iea.org.
2. The oil and gas sector provides around a third of the &('s G8B, although this share has !eendeclining than#s to a successful programme of economic diversification, most nota!ly in 8u!ai,which faces a depletion of its oil resources. 5evertheless, the oil and gas sector remains the dominantcontri!utor to consolidated government revenues. The &( applies tariffs of on imports of all
products of the mining industry and of electricity. The &( has not included any energy-relatedservices in its GT" "chedule of ;ommitments.1
3. ccording to the ;onstitution, ownership of natural resources is vested in each emirate. Thus,the &( has neither a unified federal energy policy nor federal legislation on e$ploration anddevelopment of energy and other mineral products. The 9ederal 7inistry of (nergy represents thecountry in the international petroleum community and speciali%ed international and regionalorgani%ations to which the &( !elongs, such as DB(;, DB(;, and the ra! Drgani%ation of 7ineral esources.
#ii$ Pe+role,7 a)d ga-
1. The &( currently produces around 2. million !arrels of oil per day !=d/. !u 8ha!i ownsmore than 0 of the &('s oil and natural gas resources. 8u!ai produces around 1+0,000 !=d of oil@ of the country's production/ and su!stantial uantities of gas from offshore fields with a ma)or condensate field onshore/* "har)ah is the third &( hydrocar!on producer. Dn the east coast,9u)airah is the second largest !un#ering port in the world a!out one million tonnes of fuel per month/, although all the fuel is imported from neigh!ouring countries. Gas is increasingly used !yhouseholds and local industries, including for power generation and water desalination* e$ports havealso increased. Dil and gas production is handled !y the !u 8ha!i 5ational Dil ;ompany 85D;/,or !y su!sidiaries in which 85D; is a ma)ority shareholder, through )oint ventures withinternational companies is a ma)ority shareholder Ta!le I./. ccording to the authorities, a!out+0 of oil production is also carried out !y concessionaires wholly owned !y foreign interests.
Tale IV.
Ac+ivi+ie- o* +<e A, D<ai %a+io)al Oil o70a)y #AD%O$ 255
2. 8ownstream development of refineries, petrochemical plants, and other related industries hascreated an integrated oil and gas sector. The &( has five refineries with a com!ined capacity of more than 0.@+ million, and is the eighth largest producer among DB(; countries. The progressive
!uild-up of refining capacity since the 140s has made the &( a si%ea!le net e$porter of refined products* although their share in the total oil e$ports remains modest at a!out 10, it is on an upwardtrend Ta!le I.+/. 9urthermore, the &( has plans to !uild a new refinery at 9u)airah with acapacity to process 300,000 !=d of crude oil.
3. 9our of the five &( refineries are owned !y the respective emirates* two are operated !y!u 8ha!i Dil efining ;ompany Ta#reer/, owned !y 85D; Ta!le I./< the uwais refinery,has a capacity of 1+,000 !=d of crude oil, plus 240,000 of condensate. uwais hosts one of theworldRs largest petroleum industry comple$es, housing oil, gas, petrochemicals operations, and anum!er of companies servicing the onshore and offshore oil and gas !usiness* the other, !u 8ha!iefinery, has a capacity of 44,000 !=d. Ta#reer's refining capacity more than dou!led over 2000-0+ to
over 00,000 !=d, ma#ing it a ma)or regional operator. The (mirates 5ational Dil ;ompanycondensate refinery (5D;/, owned !y the 8u!ai (mirate, with a capacity of 120,000 !=d, !eganoperations in 8u!ai in 7ay 1. 7etro Dil, owned !y the Government of 9u)airah, is a 0,000 !=drefinery. A1,20 !=d privately owned second-hand unit was set up in "har)ah !y the private "har)ahDil efining ;ompany in 2001. The 7etro Dil and "har)ah refineries were not operating in early200@.
+. !u 8ha!i has no comprehensive petroleum legislation governing the granting of e$plorationand development permits.1@ The legal framewor# for the development of petroleum resources istherefore determined !y the terms and conditions of individually negotiated oil agreements concluded
!etween the government and the oil companies. 9oreign ownership is not a priori limited. The !u
1@
Cowever, a num!er of laws pertain directly or indirectly to the petroleum industry, including the !u8ha!i Ta$ 8ecree see !elow/, the !u 8ha!i Gas Dwnership aw, the Betroleum esources ;onservation aw,and the Betroleum Borts aw.
8ha!i 5ational Dil ;ompany 85D;/ was esta!lished in 1A1. It is fully owned !y theGovernment of !u 8ha!i. It is controlled and supervised !y the "upreme Betroleum ;ouncil.
(sta!lished in 144, the ;ouncil has the dual role of formulating all petroleum policies andoverseeing their implementation* it also acts as 85D;Rs main !oard. The ;ouncil is currentlychaired !y the uler of !u 8ha!i the Bresident of the &(/, who appoints its mem!ers !y decree.The "ecretary General of the ;ouncil is also the chief e$ecutive officer of 85D;.1A
. 85D; is the interface !etween the ;ouncil and the operating companies that e$ecuteapproved pro)ects. It e$ercises administrative and technical control over its affiliated companies.The ;ouncil grants petroleum concessions and licences, and 85D; carries out the detailednegotiations leading to their implementation. The ;ouncil monitors crude oil production to ensureadherence to the DB(;-mandated uotas.
@. Broducts refined !y Ta#reer are sold to international !uyers, at regional mar#et prices !y
85D;* domestic sales are carried out !y 85D; 8istri!ution Ta!le I./, a separate legal entityin the 85D; Group. num!er of other pu!lic companies mar#et oil products< (5D; 8u!ai/,(mirates federal government/, and (mirates Betroleum Broducts ;ompany (B;D, owned !y theGovernment of 8u!ai/. Gasoline prices are fi$ed !y the Government of the &( and are the samethroughout the country. part from and 4 octane gasoline, which are sold at 8h @.2appro$imately &"60. per litre/ and 8h @.A a gallon, respectively, all domestically refined productse.g. diesel, )et oil, naphtha, !un#ering oil, etc/ are sold at mar#et rates. 8iesel is currently sold at8h A.4 a gallon. round @ million tonnes of refined products per annum are sold domestically, half of the volume of e$ports.
A. "ince 1A@, pursuant to the !u 8ha!i Gas Dwnership aw, 85D; has also !eenmanaging, all !u 8ha!i's gas reserves on !ehalf of the !u 8ha!i Government. 85D; hasentered into )oint ventures with ma)or multinational oil companies to gather, process, and liuefy thegas for the domestic and international mar#ets. In 1, 85D; and the &( Dffsets Group &DG/issued a )oint declaration to share natural gas distri!ution. The resulting 8olphin Bro)ect is a recentintra-regional initiative, which aims to develop lin#s !etween the national gas infrastructures of Qatar,the &(, and Dman. 8evelopment and Broduction "haring greement was signed in 2001
!etween the &( Dffsets Group &DG, see ;hapter III2/viii// and the "tate of Qatar, under which,initially, up to 2 !illion standard cu!ic feet of natural gas are to !e supplied from Qatar to the &(daily* supplies are e$pected to start in late 200@. 8olphinRs main customers are !u 8ha!i Eater and(lectricity uthority 8E(, see !elow/, the &nion Eater and (lectricity ;ompany, the Dman Dil;ompany, and the 8u!ai "upply uthority. The 8u!ai "upply uthority is responsi!le for sourcingand securing 8u!aiRs natural gas reuirements* it is currently acuiring these from 85D;, and has
signed a 2-year gas sales agreement with 8olphin (nergy, with deliveries to commence once the pro)ect comes on stream. 8olphin's main shareholder is the Government of !u 8ha!i, with 1ownership, and two foreign partners Total and Dccidental Betroleum, each with 2+. of the euity.
4. corporate ta$ applies to oil, gas, and all petrochemical activities in !u 8ha!i according tothe !u 8ha!i Income Ta$ 8ecree of 1@, as amended. This decree was not promulgated as special
petroleum ta$ legislation !ut as a corporate ta$ law of general application. Cowever, in practice, it is presently applica!le only to Kchargea!le personsK Kdealing in oilK in !u 8ha!i. ;urrently, the ta$ranges !etween and 4 depending on the product that generates the ta$a!le income. ccordingto the authorities, Kchargea!le personsK include foreign entities, 85D; and its su!sidiaries, and allother domestic companies dealing in petroleum. The "upreme Betroleum ;ouncil grants ta$incentives, including ta$ holidays and reduced ta$ rates, to !usinesses that !enefit !u 8ha!i in terms
of, inter alia, economic development, investment, technology transfer, training of nationals.
. 8u!ai has no petroleum law as such. Betroleum operations are carried out throughconcessions or contracts concluded !etween companies and the Government of 8u!ai. The principal
operator is the 8u!ai Betroleum ;ompany, owned !y foreign companies. There is no comprehensive petroleum legislation in "har)ah, all contracts are negotiated on an individual !asis. The emirateRs policy regarding e$ploration, production, and processing of oil and all petroleum matters isformulated !y "har)ah Betroleum ;ouncil, which was esta!lished in 1.
#iii$ Elec+rici+y wa+er a)d ,+ili+ie-
1. (lectricity production was estimated at +4,100 GE=h in 2003. "ome A of the production isfuelled !y gas while the remainder is produced !y diesel generation or steam tur!ines. There are noimports or e$ports. There are plans for interconnection of electricity transmission and distri!utionnetwor#s among emirates, and among mem!ers of the Gulf ;ooperation ;ouncil G;;/. 14 Theinterconnection of all emirates is e$pected !y end-7ay 200@, with a medium term pro)ect to connect
with other G;; states. Eater production and distri!ution are closely associated with electricitygeneration, and are carried out !y the same companies.
2. There are four electricity-water authorities in the &(< the !u 8ha!i Eater and (lectricityuthority 8E(/, The 8u!ai (lectricity and Eater ;ompany 8(E/, the "har)ah Eater and(lectricity ;ompany "(E/, and the 9ederal gency for Eater and (lectricity within the 7inistryof (nergy, which supplies the four northern emirates and parts of "har)ah. ll entities, e$cept8E(, are owned and controlled !y the respective governments, and have monopoly over allsegments of the electricity su!sector.1 Installed generation capacity has increased from ,00 7E in2000 to 1+,00 7E in 200+* the share of 8E( increased from +@ of the total to + over the
period. ;oordination is !y the 7inistry of (nergy.
3. In 1A, the (mirate of !u 8ha!i formed a Brivati%ation ;ommittee for water andelectricity. In early 14, a law was passed for the comprehensive restructuring of the su!sector.20
"ince then, the !u 8ha!i electricity and water industry has !een un!undled ;hart I.2/.
14 The si$ G;; states have set up a )oint company, the G;; Bower Grid uthority, to lin# their power networ#s, improve the efficiency of each mem!er's system, and trade in electrical power.
1
Dnline information is availa!le at< http<==www.dewa.gov.ae 8u!ai (lectricity and Eater uthority/,and http<==www.sewa.gov.ae "har)ah (lectricity and Eater uthority/.
+. ;urrently, the egulation and "upervision Fureau is the sector's regulator.21 8E( is now aholding company that owns 100 of four producing companies, and @0 of four other producingcompanies, the Independent Bower and Eater Broducers IBEBs/, private foreign and domesticsta#eholders holding the remaining +0 ;hart I.2/. "ince 1, the sector has attracted a!out&"6 !illion of foreign investment. 8E(; is the sole !uyer from all the producers. (lectricitytransmission is under the monopoly of Transmission ;ompany T5";D/. 8istri!ution is under the monopoly of !u 8ha!i 8istri!ution ;ompany 88;/ for the !u 8ha!i region, and l in8istri!ution ;ompany 8;/ for the l in region. side from the IBEBs, all entities are 100owned !y 8E(. The prices of electricity and water are determined at emirate level Ta!le I.@/.
. 85D; also produces electrical power. In 2002, the latest e$pansion of the uwais refineryinvolved the addition of four gas tur!ines and two water desalination units. The output from theuwais refinery was initially intended to supply power and utilities only to plants in the uwaisindustrial area. In 2000, 85D; and the !u 8ha!i Eater and (lectricity uthority 8E(/signed a 7emorandum of &nderstanding to interconnect their electrical grids to e$change power inthe future. uwais electricity plant now supplies power to the 8E( 5ational Grid.
1. The emirate governments have each invested important financial resources to diversify their
economies into non-hydrocar!on industries. Initially, the &('s manufacturing sector developed inoil- and gas-intensive industries, such as petrochemicals, fertili%ers, cement, and aluminium, !ased onits comparative advantages. "u!seuently, the sector has rapidly evolved to more diversified productssuch as electronics and light machinery, e$ported in large part from the free %ones. ;urrently, ma)or growth areas include capital-intensive high-technology industries supplying, inter alia, security andsafety euipment* information technology euipment* medical euipment and services* construction
products* air conditioning and refrigerating euipment* environmental and pollution controleuipment* and sporting goods and euipment. To a large e$tent, this production caters for the largeoil industry, and the large infrastructural pro)ects such as 8u!ai Cealth ;are, 8u!ai 7edia ;ity,8u!ailand, 8u!ai International 9inancial ;entre. 5o statistics are availa!le on the &('smanufacturing sector.
2. vaila!le trade data Ta!le I.A/ show that imports in the &( customs territory of manufactured products, e$cept food, !everages and to!acco section 2/ a!ove/, are appro$imately&"63 !illion annually* in addition, imports into the e!el li 9ree :one alone there are in total over 20 free %ones/ amount to a!out &"610. !illion. e-e$ports are in the order of &"610 !illion.($ports from the customs territory average &"62.+ !illion annually, and consist mainly of aluminium,other articles of !ase metal, and plastic and ru!!er articles. In addition, e$ports from e!el li 9ree:one to third countries &"64.@ !illion annually/ consist mostly of machinery and euipment, as wellas instruments and apparatus.
7ineral products A0 3A3 133 1++ 33I. ;hemical products and related industries 2,0+@ A4A 3 1@ A14II. Blastic and articles thereof, ru!!er and article thereof 1,+4 3+ +@ @ 2@AIII. aw hides and s#ins, leather, furs#in, etc. 14@ 20 11 1@ 10IS. Eood, cor#, etc. and articles +3 1 @1 0 @S. Bulp of wood or other fi!rous cellulosic materials, paper and
paper!oard +3A 3 + +SI. Te$tiles and te$tiles articles +,A@ +3A 1,44 +3@ 3+0SII. 9ootwear, headgear, um!rellas, etc. ++0 AA 303 1 +ASIII. rticles of stone, plaster, cement, as!estos, etc. AA+ 240 23 42 21SI. 5atural or cultured pearls, precious or semi-precious stones,
etc. A,2A 1A 03 42 1+S. Fase metals and articles of !ase metal 3,21 @+1 A3@ 1,11+ @A4SI. 7achinery and mechanical appliances* electrical euipment
etc. A,A10 @,122 2,0 +,+3SII. ehicles, aircraft, vessels and associated transport euipment 3, +2 1,10 123 34+SIII. Dptical, photographic, cinematographic, measuring, etc.
instruments 1,1++ +A+ 3+ 1 32SIS. rms and ammunition A 0 1 0 0SS. 7iscellaneous manufactured articles 1,1+0 201 +42 12 130SSI. Eor#s of art, collectors' pieces and antiues 3 0 131 3 0"ection to SSI total 3,10+ 10,4 10,2A4 2,33 4,+
Source: ;entral Fan# of the &nited ra! (mirates, Statistical Bulletin, various issues. vaila!le at<http<==www.c!uae.gov.ae=statisticalL!ulletin.htm.
#ii$ Policy *ra7ewor9
1. The long-term policy o!)ective shared !y all emirates is to increase the manufacturing sector'scontri!ution to G8B. Typically, each (mirate holds a ma)ority sta#e or is the sole shareholder in #eycompanies. The 7inistry of 9inance and Industry is the federal authority in charge of formulating the
policies.
2. Industrial licences are reuired to esta!lish a manufacturing activity. These licences areissued !y the economic authority of the emirate in which the !usiness office is to !e located. 9oreigncompanies wishing to esta!lish in the &( may hold at most + of the capital of the company;hapter II//. 9rom the point of view of competition there is no regulation of incentives offered !ythe respective emirates.
3. &nder 9ederal Industrial aw 5o. 1 of 1A, the 9ederal Government may offer investmentincentives to companies that register with it Fo$ III.1/. ccording to the authorities, the onlyassistance effectively availa!le is the concessionary financing provided !y the (mirate IndustrialFan# ;hapter III3//. The num!er of industries registered at the 7inistry of 9inance increased from1,2+3 in 1 to 3,03@ in 200+* the stoc# of investment has increased three-fold since 2002, to&"61A.1 !illion. The food, !everage and to!acco industries have e$perienced the largest increase ininvestment over 2000-0+, growing !y A3 annually, followed !y chemicals and plastics. The largestindustrial growth has ta#en place in !u 8ha!i and 9u)airah. s noted, these statistics cover only the
production of units that are registered at the federal level.
+. "ome institutions have !een created specifically to foster the development of themanufacturing sector. 9or e$ample, 8u!ai Investment ;ompany, esta!lished in 1@, has sta#es witha total of over &"61.@ !illion in over 20 companies. nother company, !u 8ha!i 5ational IndustrialBro)ects, was set up in 1A as a private shareholding company designed to esta!lish medium- to
large-scale industries and services pro)ects that will open new !usiness opportunities. In 7ay 200+,the (mirate of !u 8ha!i esta!lished the Cigher ;orporation for "peciali%ed (conomic :ones, aimed
at providing an integrated infrastructure, a suita!le !usiness environment, and professional servicesthrough the esta!lishment and management of special %ones in !u 8ha!i.22 Dther o!)ectives includethe promotion of local industries and the creation of employment and training opportunities for &(nationals. The corporation also encourages small, medium-si%ed and speciali%ed industries, and willencourage the private sector to !ecome involved in the management of the %ones.
. The !u 8ha!i government has also announced plans to privati%e certain manufacturingcompanies. state-owned company, General Colding ;ompany GC;/ too# over the industrialholdings of the General Industries ;orporation, which was wound up. GC; is privati%ing some of itsenterprises as part of the emirateRs strategy to forge a pu!lic-private partnership and stimulate localfinancial mar#ets. The areas to !e privati%ed include fodder, cement, steel and pipe plants, and flour mills section 2/iii/ a!ove/. The privati%ation is e$pected to strengthen the local stoc# mar#ets as
the newly privati%ed firms o!tain listings.
@. The &( Dffsets Group is also active in promoting industrial development ;hapter III2//.Bro)ects esta!lished under the &( Dffsets Brogramme, lin#ed to purchases of military euipment,include a shipyard, agri-!usiness pro)ects, and manufacture of air-conditioning units Ta!le III.+/. Inpril 1, the &( Dffsets Group announced the formation of &T" - Furnstop, a )oint-venture
!etween the &( group &nited Technical "ervices 1/, Furnstop from 9inland +0/ and 8assaultInvestments /, the company manufactures firefighting and prevention euipment.
A. 795 applied tariffs on manufactured goods e$cept agri-food/ are generally at modalrate/, with a few rates at %ero mainly on pharmaceutical products and printed matter/. Imports of allinputs are duty free, either under the industrial incentives regulations ;hapter III+//, or under thestatutes of the respective state-owned companies.
#iii$ Policie- i) -elec+ed i)d,-+rie-
a/ 7etals
1. The 8u!ai luminium ;ompany 8u!al/ plant, esta!lished in 1A and owned !y the 8u!aiGovernment, is now one of the world's !iggest smelting comple$es, with a capacity of aroundA@0,000 tonnes a year of high grade aluminium in 200+. 8u!al reports that its unit cost of productionis among the world's lowest. It processes imported alumina, and e$ports primary aluminium productsto almost 0 countries. In 7arch 200, 8u!al entered into a provisional agreement with one of IndiaRs engineering and construction conglomerates arsen and Tou!ro/ to !uild a 8h3.@A !illioncom!ined !au$ite mining and alumina refinery in IndiaRs Drissa state. In pril 200, 8u!al andGlo!al lumina Broducts ;orporation signed a memorandum of understanding for 8u!al to ma#e asu!stantial investment in Glo!al lumina. 8u!al contri!utes 12 to 8u!ai's G8B and 0 to non-oil revenues.23 Given the importance of this industry for its economy, the &( has proposed theelimination of tariffs on primary aluminium in the ETD.2+
2. 8u!ai ;a!le ;ompany 8uca!/ manufactures low- and medium- voltage electric ca!les.2
(sta!lished in 1A, 8uca! is a )oint-venture !etween the 8u!ai and !u 8ha!i Governments 0each/. 8uca!'s sales revenues increased !y 30 in 200+ to &"614A million 8h @4A million/. The
company has recently e$panded its !usiness !y entering into new e$port mar#ets in Iran, India,ordan, and Tan%ania under ma)or pro)ects and distri!ution agreements.
3. steel factory, with an initial capacity of 00,000 tonnes of 10-32 mm diameter steel per annum, was !uilt in the 7ussafah Industrial rea, in !u 8ha!i. The factory uses imported rawmaterial. ($pansion plans include the construction of a 20,000 tonnes per year smelter, a 31 7E
power station and a desalination plant with a capacity of 2,000 cu!ic meters of fresh water per day.Gas will !e supplied to the pro)ect through a newly constructed pipeline. Information on governmentownership in the plant was not provided.
+. magnesium alloy plant is under construction at "har)ah's 9ree :one. The magnesiumsmelter pro)ect is !eing promoted !y the "ahari Group of !u 8ha!i and 5ormans of l!ania, with a0 sta#e each in the pro)ect. The plant's initial production capacity will !e 20,000 tonnes per year of magnesium products, to !e increased to @0,000 tonnes upon completion. aw material
magnesium/ will come from mines in l!ania. The production is e$pected to !e e$ported.ccording to the authorities, there is no government ownership in the plant.
!/ ;hemicals, and plastics
1. 85D;'s activities include the manufacture of petrochemicals section 3/ii/ a!ove/. 9or e$ample, Forouge is a )oint-venture, esta!lished in 14 in !u 8ha!i uwais/, !etween 85D;and Forealis, one of (uropeRs largest polyolefin plastics/ producers Ta!le I./. Its &"61.2 !illion
petrochemical plant, with an annual capacity of 40,000 tonnes, produces polyethylene.2@
2. ;hemical fertili%er production !egan in the &( in 140 with the esta!lishment !y 85D;of uwais 9ertili%er Industries 9(TI/, which currently has a capacity of 1,00 tonnes of ammonia
and 1,00 tonnes of urea per day. !u 8ha!i 9ertili%er Industries, set up as a )oint-venture !etweenthe &(-!ased International Technical Trading ;ompany @+/ and "Q7 of ;hile 3@/, produces+0,000 tonnes of fertili%er annually. Dther fertili%er manufacturing pro)ects are located in e!el li9ree :one.
c/ ;ement
1. The cement industry is one of the oldest manufacturing industries in the &(, dating !ac# tothe mid 1A0s. In 200+, cement and clin#er production were estimated at .4 million tonnes andA.2 million tonnes, respectively. imestone is availa!le locally, !ut !au$ite, iron ore, and gypsum areimported. Twelve factories operate throughout the country, producing clin#er and Bortland cement*one factory in a's al-Phaimah manufactures white cement. Total capacity is estimated at 10.@million tonnes of cement, and A.2 million tonnes of clin#er. shortage of cement and clin#er throughout the &( in 200, reflected the ongoing construction !oom. There has !een an importante$pansion of capacity as the authorities consider that the mar#et for these products will increasesu!stantially. The !u 8ha!i Government has announced plans to privati%e the l in cement plant,which has !een renamed the (mirates ;ement 9actory.
d/ Bharmaceutical products
1. 9ederal aw 5o. + of 143 is the main law regulating the pharmaceutical industry. The7inistry of Cealth is responsi!le for licensing pharmaceutical companies, !oth in the ;ustomsterritory and in the free %ones. ccording to the authorities, most production ta#es places, in si$
companies outside the free %ones, although there are two companies in the free %ones. ;urrently, the
2@ 9urther information is availa!le online at< http<==www.!orouge.com.
largest company !oth in terms of capital and sales/ is the Gulf Bharmaceutical ;ompany ulphar/ !ased in a's al-Phaimah.2A 9ounded in 14, ulphar manufactures 2A varieties of medicine
including anti!iotics/, only A of which are consumed locally. ($ports in 200+ e$ceeded&"613 million and went to +0 countries. ulphar has five factories< three in a's al-Phaimah, one in(cuador, and one in Germany. The a's al-Phaimah (mirate owns 2 of the capital of ulphar."peciali%ed in the production of intravenous solutions, Gulf In)ect was set up !y a group of local andGulf !usiness interests in the e!el li 9ree :one. The company e$ports to around 2@ countries.ccording to the authorities, aside from ulphar, all companies in the industry are entirely under
private ownership. Imports of pharmaceutical products are generally duty-free.
#$ SERVIES
#i$ o)-+r,c+io)
1. The e$ceptionally fast pace of industriali%ation and economic development in the &( hascoincided with a glo!al property !oom, driven !y low interest rates and accelerating with rising oil
prices. In the 1A-00 period, the construction mar#et was driven mainly !y the traditional pu!licsector customers such as utilities and ports. "ince 2000, the mar#et has !een driven !y large pro)ects.Its rapid advances have also !een encouraged !y the gradual opening of property acuisition toforeigners in 8u!ai. It is estimated that half the num!er of flats sold in the city in 200+-0 were tointernational !uyers and speculators.24 The other emirates do not grant freehold rights to foreigners.
2. Eith nearly &"6100 !illion of ma)or pro)ects under way in 8u!ai alone in Dcto!er 200, the&( is facing shortages of contractors in certain speciali%ed construction services, such as power generation stations, metro lines, !ridges, marine pro)ects, and sewage treatment plants. s a result,clients are turning to foreign contractors for these services. Bro)ect management contractors, !othlocal and foreign, coordinate the process on !ehalf of their clients, from concept to completion.Traditionally, designs are completed !efore contractors are as#ed to compete for the constructioncontract.
3. ;onstruction services are not highly protected* many foreign pro)ect contractors are active inthe &(. The &( generally accepts internationally recogni%ed standards and technical regulations.Brofessions in construction are regulated at emirate level, !ut foreign professionals are numerous.These factors have helped to maintain construction prices at relatively low levels !y internationalcomparison. Cowever, the &( has not included any construction services under its GT""chedule.2
+. The &('s relatively open la!our mar#et, and the resulting availa!ility of !oth s#illed anduns#illed foreign construction wor#ers has facilitated the e$pansion of its property mar#et. &ns#illedconstruction la!ourers typically wor# e$tended hours, for monthly salaries of &"6200-20 and withfreuent reports of delayed payment.30 Eor#ers are lodged in la!our camps close to the constructionsites. 9ollowing a campaign !y local doctors concerned a!out the increasing incidents of heatstro#e,the 7inistry of a!our and "ocial ffairs 7"/ announced in late une 200 that on-site wor#erswould !e granted a four-hour !rea# starting at 12<30 pm from uly to ugust. In "eptem!er 200, the7" issued an unprecedented Ktough rulingK against a construction company followingdemonstrations for non-payment of wages.31 "ince ta#ing office in 5ovem!er 200+, the 7" has
introduced reforms to improve inspection and penali%e non-respect of la!our legislation, which havereportedly met stiff resistance from the !usiness community.
#ii$ Tra)-0or+
a/ Dverview
1. "ince the mid 140s, a strategic policy priority of the &( is to !ecome a ma)or aviation andmaritime transport hu! !etween (urope and "outh-(ast sia. It has largely succeeded in this. Thegovernments of the emirates have invested vast resources in developing port and airportinfrastructure, which have also !een among the leading su!sectors attracting 98I, al!eit always on the
!asis of minority shareholdings. Transport not only plays an important role in the economy of the&(, !ut the transport networ# has effectively !ecome central to the entire region. The &(currently has no railway system.
2. 8ecision-ma#ing, including operational management, is under the responsi!ility of the airportand port authorities of each emirate* 8B Eorld and 8u!ai airport are under the authority of therespective emirates. This raises important coordination issues, given the presence of two world-classairports and two ma)or sea ports within 10 #m. 5ational ;ommittee for Bort "ecurity isresponsi!le for the security of the main ports.
3. The &('s mar#et access and national treatment policy in the field of transport services maydiffer from one emirate to another. In general, the main restrictions to competition, including fromforeigners, are through the dominant position of and control through state-owned enterprises, and thereuirement for foreign commercial presence to !e in the form of minority +/ ownership,including under the ;ommercial ;ompanies aw.32
+. The &( has not included any transport sector in its 1+ "chedule of GT";ommitments.33 Given the comparative advantage of the &( in transport, a su!stantial ETD offer in this area, including through a rela$ation of restrictions on foreign ma)ority ownership, wouldconsolidate the traditionally li!eral &( transport policy, and sustain su!stantial growth in thetransport su!sector.
!/ 7aritime transport services
1. The growth of maritime transport to and from the &( has resulted largely from thedevelopment of 8u!ai's e!el li Bort, a large and rapidly e$panding deep seawater portinfrastructure. The port has allowed the development of ma)or shipping and transhipment activities aswell as ship!uilding, repairs, and maintenance services. The &( has !een a mem!er of theInternational 7aritime Drgani%ation I7D/ since 1A+.3+
2. The &('s merchant fleet comprises shipping companies registered in the &( and at least1 owned !y nationals. It ran#ed 31st worldwide at end 2001, with 3.1 million deadweight tonnes,and 140 ships* +2 were under the national flag and the rest under foreign flags. "ome 4 of alltonnage transported to and from &( ports was shipped under foreign flag. 3 The total deadweight
tonnage at end 2001 was composed mainly of oil tan#ers +1/, container ships 2+/, and generalcargo, including passengers 1./. ctivity of !ul# carriers is insignificant. The num!er of
registered large vessels had increased to over A0 in 200.
3. The regulation of shipping services is shared !etween the 7D; and the respective portauthorities. The 7D; is in charge of all security, seaworthiness, and communications aspects of marine navigation, as well as compliance with international standards. The regulation distinguishesthree types of ships< foreign flag vessels calling at &( ports* national flag vessels* and foreign flagvessels operating in &( territorial waters, mainly in the conte$t of offshore pro)ects e.g. 8u!ai7aritime ;ity, Balm Island/. The 7D; regulates all those operating in &( waters.
+. 9oreign flag vessels must have a contract with one of the federal or local governments tooperate in the &( waters, and cannot carry out ca!otage on their own account. This is designed toencourage local companies to register vessels under the &( flag. ;rews wor#ing on ships servicing
the territorial waters must have residency visas. 9oreign companies must o!tain approval from the7D; in the form of a licence. ll ships operating in the territorial waters must !e classed under oneof the categories of the International ssociation of ;lassification "ocieties I;"/. In addition,foreign ships must not !e older than 2 years, and local ships must have I;" approval issued withinfive years.
. The &nited ra! "hipping ;ompany &";/ is the largest container carrier to and from the7iddle (ast. &"; was esta!lished )ointly !y the si$ G;; states, in uly 1A@. The share owned
!y the &( 9ederal Government is 1@.. num!er of other domestic shipping companies are partly or fully owned !y the 9ederal Government or !y the governments of the emirates. Theseinclude 85T;D, 5ational Betroleum ;onstruction ;ompany, and 5ational 7arine 8redging;ompany all three owned !y the 9ederal Government/* Itisalat and 8elma ;o-operative "ociety,owned !y the !u 8ha!i Government* and ra! 7aritime Betroleum Transport ;ompany in whichthe !u 8ha!i Government owns .1, the 8u!ai Government, .1, and nine other ra! countrieshave .1 each/.
@. The &( shipping agency and freight forwarding mar#et comprises numerous companies.The &( is host to one of the world's largest shipping agencies, Gulf gency ;ompany G;/, !asedin e!el li 9ree :one since 2002. The company also supplies spare parts and various services tovessels worldwide. G; is entirely private.
A. The &( has 1 large commercial ports including oil terminals/ with a total capacity of over A0 million tonnes. 8u!ai's e!el li Bort, which handles primarily !ul# cargo and industrial material
for e!el li 9ree :one, is the world's largest man-made port. The &('s ports e$port mainly oil andgas, !ut also raw materials and finished goods. Imports consist of intermediary and consumer goods,as well as a significant re-e$port trade to other economies in the Gulf region, (ast frica, and theIndian su!continent. The &( ran#s among the top five locations in the world for !un#ering andother ship chandling* and its ship-repair facilities and ship-!uilding capacity are developing rapidly.
4. s noted, port services are regulated at emirate level. 7ost port handling services, includingcrane lifting, loading, discharging, stevedoring and stowage, storage and warehousing, as well as
pilotage, appear to !e supplied e$clusively !y the emirates' port authorities.
. 8u!ai's ports, with over 100 !erths !etween them, play a pivotal role in &( trade, andincreasingly in regional and world trade. 8u!ai Borts uthority 8B/ managed them until
"eptem!er 200, and handled .1 million Ktwenty feet euivalent unitK T(&/ containers in 2003, theworld's seventh largest throughput, !efore a record growth of 2 in 200+. Dn 24 "eptem!er 200,
the 8u!ai Borts uthority and 8u!ai Borts International merged into a single new glo!al port operator 8B Eorld. In addition, a new regulator the 8u!ai Borts and e!el li 9ree :one uthority was
created to oversee the regulation of 8u!ai's ports. 8B Eorld is fully owned !y the (mirate of 8u!ai.It handles enuiries, cargo clearance, as well as manifest and cargo handling services, online. 3@
egistered users can view and pay duties online. Information on port dues and other fees and ta$esfor the 8u!ai ports is availa!le electronically.3A
10. arge outflows of 98I have ta#en place in port services, reflecting !oth the availa!ility of domestic financial resources, and the growing domestic e$pertise in the area of port management.8u!ai Borts International now 8B Eorld/ had recently made large investments in other ports,including a!road. 8B Eorld runs the port of ;onstant%a in omania. In 8ecem!er 200+, 8BI
purchased ;"S Eorld terminals' international portfolio, including the operations of Fusan's 5ew Bortin Porea, Cong Pong's sia ;ontainer Terminals, as well as port terminals in ustralia and Germany.In anuary 200, 8BI announced agreements to ta#e over operational management of !u 8ha!i and
9u)airah ports. It also !id successfully to !uild and operate the planned international container transhipment terminal on allarpadam Island in India. 8BI too# over the management of the 8)i!outiairport in 2003. In late 200, 8B Eorld entered into negotiations with a view to purchasing BUD of the &nited Pingdom.
11. The marine terminals of e!el 8hanna and uwais, &mm al-5ar, 8as Island, :ir#u and7u!arra% islands handle the !ul# of the &('s crude oil and gas e$ports. They are owned andoperated !y the !u 8ha!i Betroleum Borts Dperating ;ompany 8BBD;/.
12. Bort :ayed is !u 8ha!i's main general cargo port, esta!lished in 1A2.34 There are21 !erths for handling general cargo, including !ul# cargo, ro-ro, pro)ect cargo, and petroleum
products. ($pansion plans at Bort :ayed envisage two-phase development of the port over 1 years,ending in 2013. Dperated !y the !u 8ha!i "eaport uthority until 200, Bort :ayed is to !emanaged and operated !y 8B Eorld as of the first uarter of 200@. The port's affairs are controlled !ythe !u 8ha!i 9inance 8epartment. ;ertain activities can !e supplied !y private companies providedthat one mem!er of the company's !oard is a representative from the !u 8ha!i 9inance 8epartment,these are< stevedoring and port cleaners* construction services* computer and IT systems suppliersand maintenance services* containers gantry cranes and euipment manufacturing and maintenanceservices.
13. "har)ah's ports, Bort Phalid, Camriyah Bort and Phorfa##an ;ontainer Terminal P;T/ onthe east coast have a com!ined total of 3 !erths. Phorfa##an is the country's second largestcontainer handling facility, and the main port for trade with Iran. "har)ah's ports are under the "har)ah
Bort uthority "har)ah's 8epartment of "eaports and ;ustoms/. Bort operations are governed !y theBort ct of 1AA. In 1A@, the uthority esta!lished the company Gulftainer to manage and operatethe container terminals in Bort Phalid and Phorfa##an. Gulftainer also owns one of the largest heavytransport fleets in the &nited ra! (mirates and a container repair company. )man Bort, which alsoservices )man 9ree :one situated in the port, has eight !erths designed to handle !oth container andgeneral cargoes. Blans are under way to deepen the port. It has special facilities to handle cargoes of
3A "ee in particular K8u!ai Bort TariffK. vaila!le at< http<==www.dpa.co.ae=tariff=generalconditions.pdf* and Bort :ayed online information. vaila!le at< http<==www.port%ayed.gov.ae=
"ervices=Tariff.htm.34 Bort :ayed online information. vaila!le at< http<==www.port%ayed.gov.ae=home=Bort:ayed.htm>A "eptem!er 200?.
chemicals, waste paper, and fodder. The )man Bort uthority has also set up two dry doc#s to provide maintenance and repair services.
1+. ;ement, mar!le, and gravel from near!y uarries and factories are the main products shippedfrom Bort "ar in a's al-Phaimah. In 200+, a's al-Phaimah Bort uthority awarded the Puwaitifirm PG a &"6+ million contract to !uild, operate, and manage its container terminal at Bort "ar for 21 years.
1. Ful# cargo tonnage of ships calling at 9u)airah Bort rose from @.1 million tonnes in 2002 to4. million tonnes in 200+, much of it in the form of !un#er fuel. 9u)airah is now one of the world'sthree largest !un#ering centres.3 s noted, 9u)airah Bort's container activity is operated and managed
!y 8BI since 7arch 200/. 7ost other activities including !un#ering, continue to !e managed !y the9u)airah Bort under a 142 Drdinance.+0 Cowever, maintenance services are outsourced to companiessuch as ra! Ceavy Industries ;ompany, e$perts in the field of structural steel fa!rication, tan# and
ship !uilding, and marine services
c/ ir transport services
1. (ach emirate is fully responsi!le for developing its civil aviation* this partly e$plains therelatively large num!er of &( international airports. The &('s aviation industry has advancedsi%ea!ly over the past few years, fuelled !y considera!le airport e$pansion, as well as !y the launch of five new airlines. 7oreover, the world's largest aircraft order was made !y a &( airline in 2003,and large purchases have !een made !y another. The &( civil aircraft registry contained a!out 110aircraft in 2003, a num!er e$pected to dou!le !y 2013. "ome 20 airlines were in operation in late200.+1 The si$ &( international airports are !ecoming leading regional aviation hu!s, connecting(urope and "outh-(ast sia.
2. Dne of the strategies that have led to the development of air transport services in the &( isthe use of the &( territory as land-!ridge on intercontinental routes. Typically, !ilateral air serviceagreements have !een concluded with countries in (urope and sia and &( airlines havesu!seuently e$ploit si$th freedom rights, e.g. serving routes !etween (uropean and sian cities witha stopover in a &( city.+2 &( airlines have also e$ploited fifth freedom rights on routes whereavaila!le.+3 s a result, certain &( companies are now among the dominant airlines on the 5ew:ealand-ustralia route.
3 Eith "ingapore and otterdam.+0 Bort of 9u)airah Drdinance 142. vaila!le at< http<==www.fu)airahport.ae.+1 "ee Kir ;arriers of the 7iddle (astK. vaila!le at< http<==www.airlinedata.com=
The si$th freedom right is defined !y I;D as the right, in respect of scheduled international air
services, of transporting, via the home "tate of the carrier, traffic moving !etween two other "tates. It is acom!ination of the third freedom and fourth freedom rights granted !y one "tate to another "tate torespectively put down and ta#e on, in the territory of the first "tate, traffic coming from or destined for the home"tate of the carrier/ K9reedoms of irK. vaila!le at< http<==www.icao.int=icao=en=trivia=freedomsLair.htm >1+ "eptem!er 200.?/.
+3
The fifth freedom is defined as Kthe right or privilege, in respect of scheduled international air services, granted !y one "tate to another "tate to put down and ta#e on, in the territory of the first "tate, trafficcoming from or destined to a third "tate e.g. 8u!ai "ydney uc#land/.
3. There are no preferences for G;; carriers or companies in air transport. The &( is anI;D ;ontracting "tate.++ Gulf air and (mirates are mem!ers of the International ir Transport
ssociation IT/.
'aor airlines and transportation ser,ices
1. In 200+, (mirates airline, which is fully owned !y the Government of 8u!ai was the world'sfastest-growing intercontinental airline, one of the world's five most profita!le, and the 1Ath largest interms of cargo tonnage.+ It operates from 8u!ai irport, and since its creation in 14 has grown atan annual average of over 20. (mirates airline carried over 10 million passengers in the 2003-0+,and declared a record &"6+2 million profit. The airline also announced the largest order incommercial aviation history at the 2003 Baris ir "how, worth &"61 !illion. Eith + 340-400s onorder, which it will start receiving in 200@, (mirates airline is the largest customer of the future ir!ussuper-)um!o. It operates services to A4 cities in + countries. (mirates "#y;argo, the cargo division
of (mirates airline, moved more than @@0,000 tonnes of freight in 2003-0+. (mirates airline has also purchased large shares in foreign air companies, such as irlan#a in 14. (mirates airline is not amem!er of the three ma)or international airline alliances, !ut operates in code-share on a num!er of routes, nota!ly with ma)or &.". airlines.
2. Gulf ir, one third owned !y each of the Governments of !u 8ha!i, Fahrain, and Dman,cele!rated + years of operations in 7arch 200+. The airline's networ# covers more than + cities in3+ countries, with a fleet of 3+ aircraft. It carried @ million passengers in 2003. In 2001, the airline
!egan a three-year recovery plan to halve its losses and eventually move !ac# to profita!ility. Gulf Traveller, a full service, economy su!sidiary of Gulf ir, was launched in 2003 and, with averageloads in e$cess of A0, has e$ceeded e$pectations* it has contri!uted significantly to Gulf ir'srecovery. Gulf is not part of any of the ma)or alliances* it has code-share agreements with mericanirlines and a num!er of sian and 7iddle-(astern airlines.
3. In uly 2003, the !u 8ha!i Government launched (tihad irways, fully funded and owned !y the !u 8ha!i Government. Fy mid-200+, it had a fleet of si$ aircraft. (tihad has ordered 2+ir!us aircraft, including four 340s, and has ta#en options to purchase 12 additional aircraft* thetotal value of the agreement e$ceeded &"6A !illion. (tihad services 1@ destinations. cargo divisionwas launched in late 200+.
+. The Government of !u 8ha!i is a shareholder in several other aviation companies. !u8ha!i viation, esta!lished in 7arch 1A@, is the largest commercial helicopter operator in theregion, with a fleet of over +0 craft. It is 30 owned !y the !u 8ha!i Government. The !ul# of the
company's !usiness is in support of !u 8ha!i offshore oil, engineering, and construction companies, !ut also includes offshore rescue services and the aerial application of agricultural sprays andfertili%ers. The company has e$panded its operations in recent years to other countries, includingDman, Memen, "audi ra!ia, "pain, and Iran. oyal et, a lu$ury air charter service was launched in7ay 2003. It currently operates a fleet of four aircraft. division of oyal et, the oyal 7edservice, attracts passengers travelling for medical assistance* the oyal 7ed air am!ulance, euippedwith state-of-the-art medical euipment, was launched in 2003. oyal 7ed now accounts for almosthalf of oyal et !usiness. oyal et is a )oint-venture, shared eually !y miri 9light of !u 8ha!iand !u 8ha!i viation.
++
International ;ivil viation Drgani%ation online information. vaila!le at < http<==www.icao.int=inde$.html.
. ir ra!ia, the "har)ah government-owned airline, commenced operations in Dcto!er 2003 asone of the 7iddle (ast's first low-cost services. It was esta!lished !y a decree issued !y the uler of
"har)ah.+@ The airline carried over 1@0,000 passengers in its first si$ months. Bresently, it operatesflights to 2+ destinations in 1+ countries within the 7iddle (ast and the Indian su!continent. Theowners of the company are the "har)ah 8epartment of ;ivil viation and the "har)ah irportuthority see !elow/.
@. The General ;ivil viation uthority G;/ is a federal, autonomous !ody esta!lished !y9ederal aw 5o. + of 1@.+A It oversees all activities related to civil aviation and provides navigationservices, registration, and licensing services for the &( aviation industry. ;ompanies wishing toconduct commercial air transport in the &( must o!tain an ir Dperator ;ertificate from the G;.The G; proposes air transport policy general guidelines and relevant legislation to the ;ouncil of 7inisters, and enforces international agreements and conventions.
A. 5ew foreign entrants are allowed into the mar#et on the !asis of !ilateral air transportagreements. The &( also signed open-s#y agreements with the &nited "tates in pril 1, andwith five other countries thereafter. +4 The #ey parameters contained in these agreements are euityand reciprocity of capacity and freuency, multi-designation, and a dou!le disapproval tariff regime.Cowever, the authorities have stressed that the &( prefers an open tariff regime freely determined
!y the airlines. ;a!otage is reserved for &( carriers unless specifically authori%ed.
4. KEetK leasing of aircraft with crew and, typically, fuel, maintenance, and insurance/ !y &(carriers is not restricted to &( companies or citi%ens.
. There are no nationality reuirements for crews engaged in domestic or international air passenger and freight services. Cowever, the G; has em!ar#ed on a nationali%ation programmesince 14. This has led to an increase in the num!er of &( nationals serving in the G;,including in the ir Traffic ;ontrol ;entre, and more generally in the ir 5avigation "ervicesdirectorate. ccording to the G;, this policy has resulted in + nationali%ation of the G;'stotal personnel. ccording to the authorities, the nationali%ation policy does not compromise theoverriding o!)ectives of ensuring safety and uality.
+@ miri 8ecree of 3 9e!ruary 2003.+A
General ;ivil viation uthority online information. vaila!le at< http<==www.gcaa.ae=en=.+4 s at anuary 200@, air services agreements, including in some cases open-s#ies agreements or
1. The &('s si$ international airports vary considera!ly in si%e and capacity. 8u!ai, theworld's 1@th in terms of international passenger throughput, and 1Ath in terms of cargo tonnage, has
!ecome the main aviation hu! in the 7iddle (ast. !u 8ha!i, 1A0 #m away, is competing rapidly,than#s to government support and the new airline (tihad irways, which is headuartered there.Ehile air transport services are regulated at federal level, airports are run at the emirate level.
2. 8u!ai irport is one of the !usiest in the region with over 10 airlines. Its rapid growth has !een concomitant with massive e$pansion of the supporting infrastructure. 8u!ai ;argo illage hostscargo facilities and services. In 2003, the illage handled over @,000 tonnes of cargo, up !y 21from the previous year. In addition, wor# started at e!el li in 9e!ruary 200 for the construction of another 8u!ai airport on an area covering 1+0 #m2, the largest of its #ind. The new airport city ate!el li will !e the largest air-sea transportation centre in the 7iddle (ast. The 8u!ai ;ivil viation
uthority controls and operates 8u!ai airports and has the tas# of raising funds to finance airport-related pro)ects* to date, most pro)ects have !een financed !y the 8u!ai Government.
3. Bassenger traffic through !u 8ha!i International irport grew !y 24 in the first uarter of 200+. The new services offered !y Gulf Traveller and the launch of (tihad irways partly e$plain thisgrowth* ongoing e$pansion is e$pected to dou!le passenger capacity. t present, 0 airlines operatefrom !u 8ha!i. !u 8ha!i ;argo illage, which opened in pril 2003, speciali%es in cargo,storage, and re-e$port operations, and is competing to !ecome one of the !iggest cargo hu!s in theregion. l in International irport, !u 8ha!i's second international airport, is located23 #ilometres from l in ;ity. Ten airlines, including Gulf ir, operate out of l in. The !u8ha!i 8epartment of ;ivil viation owns and operates !u 8ha!i and l in airports.
+. "har)ah International irport dates !ac# to 132 when Imperial irways the forerunner of Fritish irways constructed an airfield in the emirate as a stopover en route to India and ustralia.This was the first airport in the country. In 200+, the airport recorded a total of 1.@ million
passengers. "har)ah irport also has a ma)or e$pansion programme. It is a popular trans-shipment point, especially for inter-modal cargo arriving !y sea and air-freighted onwards. 9ollowing an miri8ecree, "har)ah International irport is a financially independent !ody, run autonomously !y the"har)ah irport uthority. 5on-aeronautical activities e.g. duty-free shops, car rentals, currencye$change/ are generally outsourced, as well as certain aeronautical services such as maintenanceoperations carried out !y G7;D - see !elow/, fire and crash rescue.
. The !u 8ha!i-!ased Gulf ircraft 7aintenance ;ompany G7;D/ commenced
operations in 14A to service Gulf ir, !ut has since e$panded its customer !ase to encompass other international airlines and military clients. G7;D has also ta#en over maintenance operations from"har)ah irport uthority. It is a )oint-venture !etween the Government of !u 8ha!i and Gulf ir.
d/ oad transport
1. The &( has a good highway transport system, which connects all the main cities of thecountry. There are a!out +,000 #m of mostly hard-surfaced roads. The &( is connected !y road to"audi ra!ia and Dman. oad and other pu!lic transport, including !etween (mirates, is regulated
!y the 7D;. ll road transport companies, li#e all companies in the &(, must !e ma)ority-owned !y &( nationals. oad transport companies generally employ foreign drivers.
1. The &( has reached one of the highest telephone penetration rates in the world in recentyears Ta!le I.4/. 7o!ile telephone penetration increased from + to 1 in four years, and to !y the third uarter of 200 with 3. million cellular services su!scri!ers/. The num!er of fi$edtelephony lines has grown recently !y a!out + per year, although the num!er of main lines per 100 inha!itants felt from 3 at end 2000 to 2 at end 200+ 1.1+ million su!scri!ers/, primarily due to
population growth outstripping line growth. The dou!le-digit annual growth rate of mo!ilesu!scri!ers is not slowing, suggesting that the &( mar#et is not yet at saturation level. Theestimated num!er of Internet users is also increasing rapidly.
2. Important institutional and regulatory changes have ta#en place, although the sole supplier remains in 8ecem!er 200/ the incum!ent operator (tisalat, a @0 state-owned monopoly. (tisalat's
profits reached &"62@ million in 200+, mainly spurred !y the growth of cell phone services. &nder
the conditions in place in 200, (tisalat pays the 9ederal Government a royalty of 0 of its total net profit. (tisalat offers fi$ed-line local calls for free. It was not possi!le to ascertain, on the !asis of availa!le data, whether (tisalat funds one line of !usiness with another, as no separate accounts aremaintained !etween domestic and international activities, or !etween fi$ed and mo!ile services. second full service provider, with some federal government participation, is e$pected to enter themar#et in 200@.
3. Telecommunications services are among the few activities effectively supervised at federallevel, !y means of the 9ederal aw !y 8ecree 3=2003 and the ($ecutive Drder 5o. 3/ of 200+. + The"upreme ;ommittee for the "upervision of the Telecommunications "ector, consisting of four mem!ers appointed !y 9ederal 8ecree, is entrusted with formulating and implementing the general200@-10 policy on telecommunications services. The "upreme ;ommittee is also responsi!le for issuing licences to providers of regulated activities. The telecommunications law does not precludeother operators from !eing licensed, should the "upreme ;ommittee so decide.
+. new Telecommunications egulatory uthority T/ !egan operations in 5ovem!er 200+.0 The T, together with the new regulatory and policy framewor# descri!ed !elow, is designed to facilitate the development of the countryRs telecommunication and informationtechnology infrastructure and services, in order to meet national, regional, and internationalo!)ectives. The T is managed !y a !oard of directors appointed !y the "upreme ;ommittee.
. The law outlines the o!)ectives of the T. In particular, the T must< ensure thatsufficient services are provided to users throughout the "tate* ensure that licensees a!ide !y uality
standards* enhance service level to the !enefit of users, security and pu!lic safety, and promote anddevelop the telecommunications and information technology industries in the "tate* and Kwor# on thedevelopment and upgrading of the telecommunication system in the "tate through training, ualifying,esta!lishing relevant educational institutions and attaining the latest releases of the apparatus,euipment and facilities in the telecommunications technologyK.
+
9ederal aw !y 8ecree 5o. 3 of 2003 egarding the Drganisation of the Telecommunications "ector,issued on 3 pril 200+, and its ($ecutive order are availa!le at< http<==www.tra.ae=main.html.
0 Information on the T is availa!le at< http<==www=tra=ae=main.
a ;onnection charge includes standard telephone set. ! "u!scription charged uarterly at 8h + a uarter.c Includes the 0 royalty to the 9ederal Government.d This refers to the num!er of shared we! hosting su!scri!ers.e ;onsist of dial-up and l "hamil users.f ;onsist of dial-up, Fusiness Dne, and leased line users.g This is the num!er of l 7awrood, (tisalat's Internet cafX !rand.h ;onsist of l "hamil and Fusiness Dne su!scri!ers.
5ote< ($change rate< 8h 3.@A2-&"6.
Source: (tisalat and Telecommunication egulatory uthority.
@. The T has full authority for issuing and implementing regulations for telecom services andall licensed operators. It is also responsi!le for the management of the freuency spectrum, for
esta!lishing and implementing standards for type approval of euipment, and for national num!ering policy. Cowever, in 200, these approvals were still performed !y the incum!ent (tisalat, under contract !y the T. The T also has full authority on interconne$ion and price regulation. In
practice, new prices for telecommunications services were set !y (tisalat in 200 and su!)ect to prior approval !y the T. ;ross-su!sidi%ation is su!)ect to reporting o!ligations under the ($ecutiveDrder. icensees are o!liged to K#eep separate accounts for the licensed activities and to organi%e thefinancial su!sidy e$change !etween these activitiesK. ppeal procedures are in place against Tdecisions made in connection with interconnection disputes.1
A. Broviders of telecommunications services are reuired to ensure porta!ility of num!ers, andfreedom of choice in the selection of suppliers of national and international connections. The onlyuniversal service o!ligation &"D/ e$plicitly mentioned in the ($ecutive Drder is the provision of
free-of-charge calls to emergency services. Cowever, according to the authorities, it is li#ely that(tisalat would !e o!liged to provide additional universal services should the need e$ist in the future.
4. The T is reuired to prepare a national plan on the management of internet networ#s, to !esu!mitted to the "upreme ;ommittee for approval. Internet service providers reuire a licence issued
!y the "upreme ;ommittee/ that specifies the conditions and standards for their activities.
. The &( has not made any specific commitments on telecommunications under the GT"*this reflects the monopoly situation prior to the 200+-0 reforms. 2 (tisalat is pursuing a strategy toinvest a!road. In 200+, (tisalat won a licence to operate as a second mo!ile service provider in "audira!ia. It also led the Panartel consortium that won a licence to supply fi$ed line services in "udan.
10. recent report, comparing competition in ra! cellular mar#ets, reveals that the &( isamong the least competitive, with a relatively high level of "tate involvement, !y regional standards.3
#iv$ To,ri-7 -ervice-
1. Dver the last decade, the authorities have targeted tourism as one of the main sources of future growth in the &(. This policy has !een successful, and tourism is among the fastest growingsu!sectors in the country, accounting for a large share 12/ of G8B in 2003. 5either the war in Iranor the regional political insta!ility have affected the sector's performance.
2. Dver the past decade, the num!er of visitors to the &( has grown from 1 to @ millionannually, representing an annual growth of three times the world tourism growth rate over the same
period. The growth rate even accelerated during 2000-0+ despite the difficult geopoliticalenvironment. mong the possi!le e$planations for this impressive performance are< large pu!lic
investment in airports, airlines, and other transport infrastructure, ma#ing it possi!le to travel to the&( easily* large investment in hotels* and large and varied sports and leisure pro)ects that respondto wealthy consumers' preferences, such as the shopping festival, prestigious horse races, tennistournaments, car rallies, and other highly-pri%ed sports events.
3. "ome three uarters of tourism revenues and tourist arrivals relate to the (mirate of 8u!ai*this share has !een rising.+ In 2002, 8u!ai was ran#ed as the fastest growing tourist destination !ythe Eorld Tourism Drganisation, with 31 growth in the num!er of visitors. 8u!ai's hotel revenueswere in the order of &"61 !illion in 2003 Ta!le I./.
ra! dvisors Group 200/.+ 9or data on tourism revenues, see 7inistry of (conomy and Blanning online information. vaila!leat< http<==www.uae.gov.ae=mop=Cotel=hotel03.htm.
Source: 7inistry of (conomy and Blanning, Issues: Hotels. vaila!le at< http<==www.uae.gov.ae=mop=(Lhome.htm>1 "eptem!er 200?.
+. Tourism services are regulated at the emirate level. 8u!ai Tourism and ;ommerce 7ar#eting8T;7/ is responsi!le for the promotion, planning, supervision, and development of tourism in8u!ai. 8u!ai's government has !een particularly instrumental in developing tourism, as a long-termalternative to reliance on oil revenues. In particular, the Government of 8u!ai has made very large-scale investments in tourism development pro)ects Fo$ I.1/. In addition, consistent pro-!usiness
policies have com!ined with an investor-friendly environment. 9or e$ample, 8u!ai is the onlyemirate to allow property ownership !y foreigners in certain cases, although the law on foreign realestate ownership is still in draft form anuary 200@/ ;hapter II //.
. &nder the GT", the &( has !ound, without limitations, provision of hotel and restaurantservices through modes 1 to 3, i.e. cross-!order supply, consumption a!road, and commercial
presence. Cowever, commercial presence is permitted with a ma$imum foreign euity participationof +.
8u!ai 8epartment of Tourism and ;ommerce 7ar#eting online information. vaila!le at<http<==www.du!aitourism.ae=a!out=default.asp >20 "eptem!er 200?.
In Dcto!er 2000, 8u!ai Internet ;ity opened as a technology free-%one, launching 8u!aiRs uest to !ecome aregional hu! for a host of strategic sectors. The model was su!seuently replicated for, inter alia, media,finance, healthcare, and microchips.
In 200+, 8u!ai Cealthcare ;ity, a newly created free %one, !egan providing speciali%ed medical and healthcareservices with the help of partners and investors from regional and international clinics. The pro)ect targetscustomers from the G;;, the Indian su!continent, (ast frica, and ;entral sia. turnover of &"61 !illionwas e$pected in 200.
The Government of 8u!ai is progressively implementing plans to set up the 8u!ai International 9inancial;entre 8I9;/, a dollar-!ased financial free %one designed to mirror many aspects of the ondon (uromar#ets.The 8I9; is located in a multi-!illion dollar comple$ of modern structures, called ;apital 8u!ai, on whichconstruction !egan in 2003. The 8I9; will encompass a comprehensive set of international financial functions,including institutional and investment !an#ing, asset management, insurance and re-insurance, Islamic finance,
!ac#-office operations, and the 8I9S, an international e$change that will trade a full range of financialinstruments. Dperations reportedly !egan in "eptem!er 200 with a!out 20-2 firms. num!er of ma)or international firms have announced plans to participate and some #ey !ond issuers, including the Eorld Fan#,have committed to listing issues on the 8I9S.
The 8I9; is to !e regulated !y separate ena!ling laws and a separate regulator, the 8u!ai 9inancial "ervicesuthority 89"/, and )udiciary, !oth at the emirate level. This approach has !een legitimated !y aconstitutional amendment and a &( federal law, which allow emirates to form financial free %ones,independent of the civil and commercial !ut not criminal/ laws of the &( and of the emirates. ccording tothe I79, since !oth the operating and regulatory arms of the 8I9; are su!ordinate to the Government of 8u!ai,the governance structure holds the potential for conflicts of interest.
The 8I9; is intended to !e segregated from the domestic financial sector. Fan#ing operations in the 8I9; areconfined to institutional wholesale !an#ing* !oth deposit ta#ing and dealing in dirham are prohi!ited. s noted
!y the I79, given the currency peg !etween the dirham and the dollar, loss of monetary control arising from thelea#age of funds !etween the sectors is not a ma)or issue* however, the opportunity will !e there for financialinnovations to e$ploit regulatory ar!itrage and produce shifts of funds !etween the 8I9; and the &(.
The &"63 !illion Balm Island pro)ect for the construction of two artificial, palm-shaped islands off 8u!ai'scoast, is a !y-product of the e!el li har!our e$pansion. (ach island will have around @0 #m of coastline. Theislands will house residential homes and hotels, as well as entertainment and retail outlets. Infrastructure wor# on the first island was completed in 200+. In addition, there are plans to !uild a similar group of 200 artificialislands in the shape of the world map.
Eith a total investment of almost &"6@ !illion and an assigned space of + !illion suare feet, 8u!ailand is oneof the world's largest self-contained tourism pro)ects, offering leisure, sport, retail, and entertainment attractions.The launch phase, covering initial infrastructure li#e road wor#s and utility provision, will e$tend from 200+ to200@. The main construction phase will !e completed !y 2010. 9inancing is mostly from the private sector,
domestic and foreign. Dther pro)ects include the construction of the world's first lu$ury underwater hotel, aswell as the only indoor s#iing centre in the Gulf region, 8u!ai "now Eorld. In 200+, 8u!ai Colding wasesta!lished as a 8u!ai government-owned organi%ation charged with running some of the emirateRs ma)or ventures. They include 8u!ailand, 8u!ai Internet ;ity, and umeirah Feach esidence.
1. Fan#ing and financial intermediation services are regulated at federal level !y the ;entralFan# of the &(* insurance services are also regulated at federal level under the authority of the7inistry of (conomy and Blanning. In addition, the Government of 8u!ai launched the 8u!ai
International 9inancial ;entre, in early 200, offering insurance, !an#ing, and financialintermediation services Fo$ I.1/.
a/ Insurance services
2. Total insurance e$penditure in the &(, as measured !y "wiss e in terms of total premiumvalue, was &"61. !illion in 200+. This represents average annual growth of 12 in nominal terms/relative to the value in 1@, the year of the &('s ETD accession. ($penditure, as a share of totalworld e$penditure, increased to 0.0. Ber capita insurance e$penditure was &"630 in 200+, of which &"621 on non-life insurance and &"6@0 on life insurance. alue added in the insurancesu!sector corresponds to a!out 1.@ of G8B, up from 1.1 in 1@.@ The figures are relativelymodest given the country's high per capita income, !ut are rapidly increasing, particularly in the lifeinsurance !usiness.A
3. In 2003, +@ insurance companies were incorporated in the &(, half of which were foreign.7ost companies are !ased in !u 8ha!i or 8u!ai, and carry out the full range of insurance !usinessTa!le I.10/* life policies still account for only a small proportion of overall !usiness. The oilsu!sector represents a large share of insurance !usiness. There are also 1@ &( insurance agentsonly &( citi%ens can !e insurance agents/, 1@@ national and nine foreign !ro#ers, and @0 surveyand damage assessment e$perts.
Source: 7inistry of (conomy and Blanning, Issues: Insurance. vaila!le at< http<==www.uae.gov.ae=mop=(Lhome.htm>1@ "eptem!er 200?.
+. The insurance su!sector is under the responsi!ility of the 7inistry of (conomy and Blanning
7(B/. 9ederal Insurance aw 5o. of 14+ is the main law covering the supply of insuranceservices. 5o new foreign insurance companies were allowed to esta!lish in the &( from 1A4 to200+.
. The &( made no specific commitments in its GT" "chedule regarding insurance services.;ross-!order supply of insurance services is not possi!le for companies located a!road. ll assetsand ris#s in the &( must !e insured domestically !y domestic companies or !y local !ranches of foreign companies, or !y KagenciesK see !elow//. The ma$imum foreign ownership of domesticinsurance companies allowed !y law is +. epresentative offices cannot engage in !usiness or actas agents. This does not apply to reinsurance services, for which commercial presence is not reuired<&( insurance companies can reinsure their ris#s from international reinsurance mar#ets. &(-
!ased companies can insure ris#s located a!road.
@ "wiss e, Si)ma, various issues. vaila!le at http<==www.swissre.com.A 7inistry of (conomy and Blanning 200+/.
@. 7inisterial 8ecision 5o. 333 issued !y the 7(B on 2 5ovem!er 200+ changed theconditions of licensing for foreign insurance companies. In particular, the 8ecision specifies
economic needs criteria, such as the level of domestic demand for classes of insurance offered or whether new classes of insurance coverage are to !e introduced !y the applicant. In addition, the8ecision reuires the appointment of a minimum num!er of &( nationals as staff K10 of the staff and at least two persons in the first year, rising to 2 of the staff and at least 12 persons in the fourthyearK/. The authorities indicate that a few foreign companies have applied for licences under the newconditions since Dcto!er 200+, and one foreign company has !een granted a licence as a !ranch.
A. Insurance companies wishing to esta!lish in an emirate must first apply to the emirateauthorities for a licence* the authorities then su!mit the application to the 7(B. (ligi!le foreigninsurance companies can either open a !ranch or enter into an agency contract with a local insuranceagent representing them. Foth domestic companies and foreign !ranches must have minimum fully
paid-up capital of 8h 0 million &"613.@ million/, and must deposit 8h +. million for non-life, and
8h 3 million for life insurance with a local !an#. ;om!ined life and non-life or non-insurance-relatedoperations are not allowed. The manager of a foreign !ranch must !e resident in the &(. Theapplicant must specify the e$pected premium rates to !e applied, and the volume of e$pected localinsurance !usiness. The foreign !ranch must, in addition, appoint a Klocal sponsorK, whose mainfunction is to facilitate licensing and registration.
4. s noted, foreign companies may also supply the &( mar#et through the appointment of alocal agent to represent them and mar#et their products as distinct from the local sponsor employed
!y the !ranch/. copy of the agency contract !etween the company and the local agent must !eregistered at the 7(B.
. 5o ta$es or stamp duty are levied at federal or emirate level on settlements from life and non-life insurance, on insurance companies.
!/ Fan#ing
1. The &( has a large financial su!sector relative to its si%e and population Ta!le I.11/. tend 200+, &( !an#s accounted for a!out one fifth of the total euity of the ra! !an#ing mar#et.The &( has +@ commercial !an#s, of which 21 are national with 343 !ranches as at 8ecem!er 200+/ and 2 foreign with 112 !ranches/. In addition, some 0 representative offices of foreign
!an#s are present in the mar#et, !ut may not conduct transactions, accept deposits, open accounts,e$tend loans, perform or participate in any transactions.4
2. The &( !an#ing su!sector is also generally sound and profita!le< in 200+, all +@ !an#soperating in the country met the minimum 10 capital-assets ratio* and this ratio e$ceeded 1@ tier 1 capital to assets ratio/ for the su!sector as a whole. The gross non-performing loan 5B/ ratio wasrelatively high at 12. at end 200+, !ut considera!le provisions for loan loss coverage +./ !ringthe net 5B ratio !elow 1. Fan# loans have grown su!stantially, with assets and depositsincreasing at dou!le digit rates on average !etween end 2001 and end 200+, and are well distri!utedacross industries. Brofita!ility of !an#s remained strong in 2003 and 200+, and was e$pected to haveincreased further in 200. recent study suggests that the &( !an#ing mar#et is relatively efficientand competitive* the mar#et share of the three largest !an#s declined from 3A.+ in 1 to 3+.2 in2002.
Tale IV.11
Selec+ed 7o)e+ary a)d a)9i)g i)dica+or- 255554
4 Foard esolution 5o. A=3=@ of 1@. l-Parasneh and 9atheldin 200/.
a Including a restricted licence !an# until 31..2003 ! 5ot including inter-!an# deposits.c 5ot including loans to !an#s.d Including pay offices, customer service units and automated !ranchese Including a pay office and customer service unitsf ($cluding drivers, messengers, and guards.
3. The (mirates Fan#s ssociation, founded in 142, aims to represent and defend the interestsof its domestic and foreign mem!er !an#s and to e$change information regionally andinternationally.@0 7em!ership, which is not compulsory, covered 3A !an#s at end 200+.
+. Fan#ing and financial intermediation services are regulated at federal level !y theindependent ;entral Fan# of the &(@1, under 9ederal aw 5o. 10 of 140. This law esta!lishes five
principal categories of institutions< commercial !an#s, investment !an#s, financial esta!lishments,financial intermediaries, and monetary intermediaries, each of which must !e licensed !y the ;entralFan#. 9oreign !an#s are reuired to have the legal form of a !ranch, licensed and regulated !y the;entral Fan#. (very commercial !an#, including !ranches of foreign !an#s, must have a minimum
paid-up capital of 8h +0 million &"610. million/, or 10 of ris# weighted assets in the &(,
whichever is greater.
. "ince 141, there has !een a moratorium on the licensing of new foreign !an#s* thismoratorium followed a !an#ing crisis with a run on the local currency in 1AA. 9oreign !an#s withmore than eight !ranches had to close down the e$cess !ranches, those with less than eight had thenum!er of !ranches fro%en. ccording to the authorities, there are numerous pending applications for new foreign !an#s. The ;entral Fan# has reportedly announced that it will !e issuing new licences to
!an#s and allow e$isting foreign !an#s to open new !ranches provided they comply withemirati%ation uotas see Fo$ I.1/. This had not yet ta#en place anuary 200@/.
@. 9oreign !an#s pay a 20 local emirate ta$ on profits in each emirate.@2 There are norestrictions on the presence of foreign senior staff in foreign !an#s in early 200@/, !ut this is li#ely to
change. ll !an#s in the &( are reuired to employ a minimum of 10 &( nationals in total staff e$cluding au$iliary staff/ as per ;entral Fan# regulations, and there is a proposal to increase this
percentage in the near future. dditionally, ;ouncil of 7inisters 8ecree 5o. 10 of 14 effectiveanuary 1, reuires all !an#s to increase the num!er of &(-national staff !y + annually. 8ue tothe demographic structure of the &(, where!y &( nationals represent only appro$imately of the total wor#force, compliance with these regulations has not !een achieved !y many !an#s.Cowever, the ;entral Fan# and other authorities continue to encourage adherence, and have resortedto implementing penalties. ;ertain senior &( !an# figures reportedly consider that encouragingsuch la!our mar#et rigidities will not increase the &('s comparative advantage, and run counter toits efforts to attract domestic and foreign investment.@3
A. In its specific commitments under the GT", the &( has, with limitations, made
commitments on all !an#ing and other financial services as specified on the ;entral Broducts;lassification list, with the e$ception of settlement and clearing services for financial assets* accordingto the authorities, this e$ception was due to the a!sence of a stoc# e$change in 1@ when the &(
!ecame a mem!er of the ETD. The &( has !ound measures on all these services for cross-!order supply and consumption a!road without limitation. 7easures affecting mode 3 supply commercial
presence/ remain un!ound for new licences to operate !an# !ranches, and to e$pand activities of e$isting financial entities.
c/ 9inancial intermediation services
1. t the end of 200+, there were seven financial investment companies of which three wereforeign/, seven finance companies, twelve financial consultancies all locally incorporated/, and twoinvestment !an#s. There is no moratorium on the licensing of new financial institutions or onesta!lishing !ranches of e$isting ones.
2. The &('s two securities mar#ets were esta!lished in !u 8ha!i and 8u!ai in 2000 under (mirate laws. They are regulated !y the "ecurities and ;ommodities uthority an independent !ody,chaired !y the 7inister of (conomy and Blanning/ under 9ederal aw 5o. + of 2000. Fro#erswishing to operate on the &( e$changes must have at least 1 national ownership. ;apital must
!e at least 8h 10 million and financial guarantees must !e provided. There is also a securities mar#et,the 8u!ai International 9inancial ($change 8I9S/, with its own regulator, within the 8u!aiInternational 9inancial ;entre 8I9;/ free %one. There are no nationality restrictions in the 8I9;*however, transacting !usiness in dirhams is not permitted, nor is the acceptance of deposits in any
currency from a natural or )uridical person in the &(.
3. egulations on investment funds are set out in ;entral Fan# esolution 5o. 1@+=4=+. Thefund manager must !e a company licensed !y the ;entral Fan#* the latter can permit foreigncompanies to set up !ranches or representative offices. ll companies must nevertheless have a
principal centre of administration in the &(. Investment funds=products must !e mar#eted !y a;entral Fan# licensed financial institution !an# or securities mar#et/.
+. ;urrently, there is only one commodities e$change in the &(, the 8u!ai Gold and;ommodities ($change 8G;S/, which operates from the 8u!ai 7etals and ;ommodities ;entre87;;/. The 8G;S commenced trading in 5ovem!er 200. It is a )oint venture !etween the87;; and two Indian companies. "ince the 8G;S is a financial free %one, foreign !ro#ing and
@2 The legislation differs from emirate to emirate, although the rate of 20 applies in all emirates.@3 (conomist Intelligence &nit 200+/.
trading companies can operate freely. In practice, the licensing procedure is in two stages< operatorsfirst apply for mem!ership to the 8G;S, which reuires full disclosure as to ownership, directors,
financial conditions, home regulator and suita!ility to act as !ro#ers or traders in a commodity futuresmar#et* companies are given initial approval, and the information is passed to the "; for finalapproval.
#vi$ Trade i) ,-i)e-- a)d 0ro*e--io)al -ervice-
1. The &('s la!our mar#et is generally open to foreigners* 1 of the &( wor# force is foreign.s trade in !usiness services in general, and professional services in particular, relies to a large e$tenton movement of physical persons, suppliers are particularly favoured !y the li!eral conditionsregarding !oth the movement of natural persons 7ode + in GT" terminology/, and long-termemployment of foreigners.@+
2. 9oreign professionals are permitted to practice !usiness services and professions such asauditing, medical services, engineering, legal practice and consultancies, computer consultancies andsimilar services, provided they hold a valid &( residence permit* o!tain a professional licence fromthe government of the emirate in which they intend to operate* and have signed a service agencycontract with a local services agent that is a &( national, and the contract has !een authenticated !ythe notary pu!lic. n agent's duties and o!ligations towards the foreign professional are limited tofacilitating the practice of an activity in the emirate, such as assisting in o!taining and renewing wor#
permits issued !y the 7inistry of a!our and "ocial ffairs, and other government authorities. Thelocal service agent holds no share in the firm and does not interfere in its management.
3. In its GT" schedule of specific commitments, the &( has !ound measures affecting cross- !order supply, consumption a!road, and commercial presence modes 1-3/ for accounting, auditingand !oo#-#eeping services* for certain ta$ation services* for architectural, engineering, ur!an planningand landscape services* and for veterinary services.@
a/ egal services
+. egal services, including advocates, lawyers, and counsellors, are regulated !oth at emirateand federal level. 9ederal aw 5o. 23 of 11, concerning the dvocates Drdinance andmendments thereof, regulates the advocacy profession in the &(. dvocates are free to movewithin the country once they o!tained a licence, e$cept for the emirates of 8u!ai and a's alPhaimah< to practice advocacy in the emirates of 8u!ai and a's al Phaimah, a local licence isreuired. 8u!ai regulations reuire lawyers to have an office in 8u!ai in order to appear in a 8u!ai;ourt.
. aw firms must !e 100 owned !y &( nationals. In the five emirates applying 9ederalaw 5o. 23, foreign lawyers can offer legal advice on foreign, international, and local law, and canrepresent clients in the court of appeal for a ma$imum of four years, and in the court of first instancefor a ma$imum of eight years. foreign lawyer must o!tain a permit from the 7inistry of ustice,which reuires a diploma from a foreign professional !ody recogni%ed !y the 7inistry of (ducation.The lawyer must !e registered in the !ar of his home country, have 1 years of e$perience and meetconditions of good reputation. There is no prior residency reuirement. The reuest for a licence is
presented to the 7inistry of ustice through the local law firm. If all procedural conditions are met,
@+ The movement of natural persons, as understood under the GT", is temporary !y nature and is
e$ecuted only for a very particular purpose* it does not cover permanent employment of foreigners in domesticfirms* nor the conditions for foreigners to wor# permanently in domestic industries.
the 7inistry of ustice registers the applicant as a lawyer and allows him to practice, !ut only as anemployee of the local law firm.
@. ecently, the 7inistry of ustice has !een putting pressure on law firms to meet the reuirementsof the emirati%ation policy section !/ !elow and ;hapter I1//. icences, for !oth foreign and locallawyers are renewed annually. In principle, they can !e revo#ed only for professional reasons.
A. The &( does not have a Far ssociation.
!/ ccounting and auditing services
1. ccounting services are regulated at federal level. 9ederal aw 5o. 22 of 1 and relevantministerial decisions cover auditors and certified accountants, !oth firms and individuals.ccountants !enefit from free movement within the country, ena!ling them to operate in an emirate
other than the one in which they are registered, without reuiring a special licence. s a rule, for eachactivity, the physical rather than the moral person is licensed e.g. who signs the !oo#s/. Theinternational financial reporting standards I9"/ are applied in the &(.
2. 9oreign accounting firms have !een a!le to practice audit and accounting services freely in the&(, !ut the situation is changing. "ome 2@+ foreign individual auditors, 204 local or G;;/individual auditors, +A local firms and 12 foreign firms operate in the &(, the latter in the form of
!ranches. (ach foreign !ranch may !e 100 foreign-owned and have several su!-!ranches operatingin the various emirates. s noted, foreign firms must have a local services agent. ll of the foreigncompanies were esta!lished under legislation in place !efore 1* no foreign accounting firm has
!een esta!lished since 1.
3. "ince the introduction of the emirati%ation policy in 1A, foreign ownership in new foreign firmsesta!lishing in the &( is limited to A.@@ This reuirement also applies, in principle, to firmsesta!lished !efore 1, which have !een given a transition period, currently until 200A, to find local
partners in that proportion.@A
+. The egister includes local G;; and other foreign natural persons and firms. There arethree categories in the egistry< practicing auditors* non-practicing auditors study, sic#ness, travel,etc/* and trainees. The latter is for nationals who, having completed the theoretical part of theeducation, are performing the three years of supervised professional practice reuired to ualify as anauditor in the &(. Trainees receive a monthly remuneration amounting to 8h ,000.
. egistration conditions for foreigners include a university degree in accounting or aneuivalent degree* three years of e$perience in accounting* and fellowship or mem!ership in anauditing professional !ody recogni%ed !y the 7(B e.g. the Institute of ;hartered ccountants in(ngland and Eales, the merican Institute of ;ertified Bu!lic ccountants or the ;anadian Instituteof ;hartered ccountants/* and evidence of a partnership with a &( citi%en or company or acertificate of employment therewith.
@. uditing firms must meet the following conditions< one of the partners or managers must !ea &( national registered as a practicing auditor in the egistry* the partnership contract should !enotari%ed !y the official authorities* and all partners should !e registered in as practicing auditors. If
@@ 7inisterial esolution 5o. A of 1A egarding the egistration of 9oreign Dffices and ;ompanies
in the egister of uditors.@A ;ouncil of 7inisters 8ecision 5o. 3@@=+ of 200. G;; citi%ens are treated as &( citi%ens for the purpose of this reuirement.
one of the partners is a firm esta!lished outside the &(, that foreign firm must hold a certifiedlicence for practicing as an auditor in its country of registration. In all cases the firm must !e
esta!lished as a )oint-lia!ility company.
A. The professional !ody for accountants in &( is the ccountants and uditors ssociation/. It was esta!lished in 1A !y a esolution of the 7inistry of a!our and "ocial ffairs5o. 22A=A/. uditors are not o!liged to register with the .
c/ (ngineering services
1. 9oreign engineering firms and professionals are allowed to practice in the &(, on the ma)or speciali%ed construction pro)ects. The engineering profession is regulated at emirate level. There arethree forms through which a foreign engineering consultant or contractor can operate< a )oint-venturewith a local firm, a partnership with a local engineering firm, or a foreign !ranch with a local service
agent/. In certain cases large pro)ects/, foreign engineering contractors can !e invited to tender without having to incorporate locally. ll engineers, local and foreign, must !e registered with the(ngineers "ociety of the &(.
2. ccording to the authorities, conditions for supplying engineering services are similar across theemirates. Cowever, information was availa!le only for the (mirate of 8u!ai. ccording to the 8u!ai7unicipality conditions, a licence for the practice of engineering consultancy reuires the applicant to
!e a fully competent &( national, of good conduct and reputation* to hold a F"c. in engineeringfrom a recogni%ed university in one of the engineering fields for which the licence is reuested* tohave at least three years of e$perience in the speciali%ed field after o!taining the university degree*and to !e a mem!er of the engineers' association of the country of study. The Drder regulating the
profession in 8u!ai also reuires that the applicant is not an owner of, or a partner in any of thecontracting companies or in !uilding materials trading companies.@4
3. ccording to the Drder, a foreign engineering !ranch office is defined as the !ranchesta!lished in the emirate !y one of the foreign speciali%ed engineering firms. icensing of theforeign !ranch is limited to the fields of speciali%ation not commonly provided !y local engineeringfirms. The head office of the foreign firm should have e$isted for not less than fifteen years, andcarried out a num!er of pro)ects of large technical and financial value.
+. The firm's manager must !e registered in the registry for engineering consultancy professionand have no less than 1 years of e$perience in the practice of the profession. The foreign !ranchmust have technical staff for each of the licensed fields of activity to !e practiced, !e led !y anengineer with no less than 1 years in the speciali%ation, assisted !y a num!er of assistant engineersconsistent with the volume of the current wor#s assigned to the firm/ with no less than seven-yearse$perience* the head office must underta#e to appoint the reuired staff to reside in the emirate.
@4 rticle + of ocal Drder 5o. 4 of 1+ on egulating the Bractice of the (ngineering ;onsultancy
&.". 8epartment of "tate 200/, Doin) Business in United Arab Emirates A ountr8 ommercial
!uide .or U>S> ompanies. vaila!le at < http<==www.!uyusainfo.net=docs=$L3@A+@@.pdf.
&.". 8epartment of "tate 200/, Doin) Business in United Arab Emirates A ountr8 ommercial
!uide .or U>S> ompanies. vaila!le at < http<==www.!uyusainfo.net=docs=$L3@A+@@.pdf.
&.". International Trade dministration 200+/, Government Brocurement egulations &nited ra!(mirates, availa!le electronically at http<==we!.ita.doc.gov.
&5;T8 200+/, +e,ie- o. 'aritime &ransport> vaila!le at< http<==www.unctad.org.
