WT/TPR/M/338/Add.1 5 August 2016

149 Pages·2016·5.67 MB·English

WT/TPR/M/338/Add.1

5 August 2016
(16-4193) Page: 1/149
Trade Policy Review Body Original: English/Spanish
1 and 3 June 2016 anglais/espagnol
inglés/español

TRADE POLICY REVIEW
UNITED ARAB EMIRATES
MINUTES OF THE MEETING
Addendum
Chairperson: H.E. Ms. Irene Young (Hong Kong, China)
This document contains the advance written questions and additional questions by WTO
Members, and replies provided by the United Arab Emirates.1

Organe d'examen des politiques commerciales
1 et 3 juin 2016
EXAMEN DES POLITIQUES COMMERCIALES
ÉMIRATS ARABES UNIS
COMPTE RENDU DE LA RÉUNION
Addendum
Présidente: S.E. Mme. Irene Young (Hong Kong, Chine)
Le présent document contient les questions écrites communiquées à l'avance par les
Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par Émirats arabes
unis.1

Órgano de Examen de las Políticas Comerciales
1 y 3 de junio de 2016
EXAMEN DE LAS POLÍTICAS COMERCIALES
EMIRATOS ÁRABES UNIDOS
ACTA DE LA REUNIÓN
Addendum
Presidenta: Excma. Sra. Irene Young (Hong Kong, China)
En el presente documento figuran las preguntas presentadas anticipadamente por escrito y
las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por
Emiratos Árabes Unidos.1

1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.
WT/TPR/M/338/Add.1

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BRAZIL

Secretariat Report
1) Can the EAU provide an update on the implementation of the 2014 Gulf Cooperation Council
Guide for Control on Imported Foods, notified to the SPS Committee in documents
G/SPS/N/ARE/22 and Add.1?”

The GCC Guide for Control on Imported Foods is still experimentally applied and not mandatory
until 1st June2016. The first week of June there will be a GCC meeting to clarify on the way
forward among many other things. As for the period for feedback, this issue is still under
consultation between the GCC members.

The old certificates will still be accepted during the provisional application and all clarifications on
this issue should be addressed to the general secretariat to the Gulf Cooperation Council.
WT/TPR/M/338/Add.1

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CHINA
Part I. Questions based on Report by the Secretariat (WT/TPR/S/338)
Page 8, Para 16
16. The decline in oil prices since 2014 affected the UAE, with revenues and export receipts
falling. However, due to its successful diversification strategy, the UAE is managing to weather the
storm while maintaining growth and investment. The UAE continues to pursue a strategy of
diversification concentrating of high technology sector and high growth sectors such as the Islamic
economy. To be able to benefit fully from its efforts the UAE may need to speed up reforms such
as the full implementation of the Competition Policy Law, easing of restrictions on foreign
investment including the requirement of majority ownership by UAE nationals and further
improving the business environment.
According to China’s information, the following kinds of investment restrictions exist in the UAE:
1. According to the provisions of the Business Companies Act of the UAE, more than one of the
stockholders of the foreign investment companies outside of the free trade zone shall be citizens of
the UAE and they should hold more than 51% of the company’s shares. However, the cooperative
parties can reach an agreement of not sharing the profits by their capital share ratio. In addition,
the foreign shareholding of the representative offices and branches of the foreign companies can
reach 100 %, but a guarantor of the UAE nationality shall be hired.

2. The Business Companies Act also stipulates that the representative offices and branches of
foreign companies are not allowed to operate any specific business or carry out marketing of any
form. However, they can promote the products or service of the parent companies to facilitate the
deal between the parent companies and the clients in the UAE. The branches of the project
contracting enterprises are only allowed to carry out the subcontracting business.
3. According to the laws of the UAE, only the citizens of the UAE or the business entities fully
owned by the citizens of the UAE are allowed to provide the following services: business agent,
real estate service, automobile lease service, agriculture, hunting and forestry service including
veterinary drug, fishery service, human resource service, road transportation service, investigation
and security service.

4. According to the laws of the UAE, foreign companies are not allowed to own the land in the UAE,
which greatly weakens the investment enthusiasm of foreign investors and restricts the long-term
investment especially.

5. Petrochemical, hydroelectric and natural gas industries are owned and managed by the emirates
and the investment projects in the fields involved by foreign merchants are generally controlled by
the government.

Question 1

Does the UAE have any plan for liberalizing the above restrictions? If so, please introduce the plan
and its expected timetable.
The UAE is continuously introducing, upgrading and amending its laws and regulations when there
is a need with a special focus on economic, trade and investment areas. This includes some areas
mentioned above either on the multilateral level (UAE submitted its services conditional offer
under the DDA) or at the regional and bilateral levels (Free Trade Agreements negotiations).
WT/TPR/M/338/Add.1

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CHINA ADDITIONAL QUESTIONS
Part I. Questions based on Report by the Secretariat (WT/TPR/S/338)

Page 27, Para 2.39
The GSFTA entered into force on 1 January 2015. The Agreement covers trade in goods and
services, customs procedures, technical regulations and standards, rules of origin, e-commerce,
and government procurement.
Question 1:
What advantageous influences have been generated after the GSFTA entered into force? What
inspirations does it provide to the free trade negotiation between China and the UAE?
GSFTA entered into force in January 2015. The UAE believed that implementation of this
agreement will contribute to increase the flow of trade and investments between the parties. The
trade exchange between UAE and Singapore has increased. The agreement was concluded on the
basis of mutual benefit for both parties. We look forward towards concluding the GCC-China FTA
negotiations on a mutual benefit basis for the benefit of all parties.

Page 27, Para 2.41
Specifically, Singapore and the GCC have committed to liberalize various services sectors beyond
its WTO commitments. Broadly, the schedule of specific commitments include the following
sectors: environmental services; financial services.

Question 2:
Does the openness of the environmental service of the GSFTA signed by the UAE reach the top
level among its FTAs signed?

The level of liberalization on all trade in services sectors including environmental services within
any FTA negotiations depends on various elements such as the list of requests and offers
exchanged between the parties in the agreement. In the GSFTA, the UAE has a high level of
commitments in many sectors including on the environmental services.

Question 3:
Does the UAE have qualification requirement and access condition of providing environmental
services for the foreign companies (CPC94)?

Yes, as other services, there are qualifications required for providing environmental services. The
requirements are regulated by the Ministry of Climate Change and environment and the
environment agencies in each Emirate.

Page 28, Para 2.48
There are four major federal laws affecting foreign investment in the UAE: the Companies Law, the
Commercial Agencies Law, the Industry Law, and the Government Tenders Law. Although the legal
framework in the UAE favours local over foreign investors, investment laws and regulations are
being reconsidered and supplemented to make the investment regime more transparent and
investor-friendly, including the introduction of a new Foreign Direct Investment Law.

Question 4:
Does the UAE have any related mechanism of solving investment dispute? If so, please specify it in
detail.

Within the UAE territory, there are various channels of resolving investment dispute depending on
the contract signed between the parties like, local courts or through arbitration centers, also via
the international centre of settling investment dispute.

Page 37, Table 3.2
WT/TPR/M/338/Add.1

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Question 5:
As shown in the table, the average MFN duty rate applied by the UAE is adjusted to 4.7% from
4.9% and the textile tariff rate is 5.0%. However, China has large scale textiles exports to the
UAE. Is there any tax reduction arrangement in the future regarding MFN duty rate, especially
textiles? If so, please specify it in detail.

The reduction of the MFN tariff rates is a goal for all WTO member States and the textile is of
interest for a good number of them. The UAE, in coordination with the GCC countries, would
consider revising the tariff lines on trade in goods including textile in the context of the DDA
package subject to the overall outcome of the negotiations. This is also applied on the context of
the FTAs negotiations.

Page 44, Para 3.50
The Dubai Government-owned Export Credit Insurance Company of the Emirates (ECIE) provides a
Comprehensive Short-Term Policy for trade credit insurance to companies based in the UAE that
are engaged in manufacturing, value-added trading, and exports of services, the product range
includes short-term risk cover on an insurable turnover basis (i.e. all open credit sales), single
buyer insurance and equity investment insurance, and medium/long-term risk cover up to a
maximum of seven years.
Question 6:
What are the requirements for the local exporting companies of the UAE to obtain the ECIE
insurance support?
UAE Exporter requested to submit a trade credit insurance questionnaire / Application along with
below requirements:
 Commercial license
 Audited financials for the last 3 years
 YTD in house financials
 Geographic and product wise break up of sales
 Break up and Ageing of receivables and inventory
 List of top buyers along with details on length of relationship, percentage contribution to
sales and payment terms.
 List of top suppliers along with details on length of relationship, percentage contribution to
purchases and payment terms.
 Details and background on key management personnel (experience, length of service in the
company etc.), staff strength and area of the office, factory and warehouse

Accordingly, it is important that you provide as complete an application form as possible. In most
cases, the form is no more than 4 pages of basic questions about the business, along with tables
for listing the coverage limits you want and reporting significant past due accounts.

Question 7:
Does ECIE have any related policy in supporting export of the local companies to the emerging
economics? If so, please specify it in detail.
ECIE do bear attention to all markets around the world based on the needs of the exporter who
would like to use its service, so it’s more about where the exporter would like to insure to and
ECIE currently don’t have any specific program toward a certain markets or economic blocs.

Question 8:
Does ECIE have special supportive policy for the export in renting form? If so, please specify it in
detail.
The ECIE don’t offer leasing insurance product. However, this service is provided by multilateral
org’s.
WT/TPR/M/338/Add.1

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Question 9:
The business scope of ECIE was 740millioin dirham in 2014 and the net profit that year was
657,000 dirham. Could you please introduce the underwriting coverage, premium income, settled
claim, claim compensation income, the main supportive industries and the countries of ECIE in the
recent three years?
Such insurance business details /information treated confidentiality.

Question 10:
Besides short-term export credit insurance service, does ECIE provide long-term credit insurance
such as the products of export buyer’s credit and seller’s credit on exports?

ECIE doesn’t provide buyer credit / seller credit financing facility to the importer bank

Page 49, Para 3.86
3.86. A variety of innovative free zones have been established in Dubai since 2000, most notably
the Dubai Creative Cluster free zone (previously known as TECOM – Technology, Electronic
Commerce and Media free zone). The Dubai Creative Cluster houses both Internet City and Media
City, two subdivisions which cater for the information technology and media sectors respectively.
Dubai Creative Cluster offers a high bandwidth and state-of-the-art IT infrastructure. Other Dubai
free zones include the Dubai Multi Commodities Centre (DMCC), with over 8,000 licensed
businesses trading across a range of commodities including gold, diamonds, pearls, precious
metals, and tea; and Dubai Healthcare City, specializing in medical products and services. In
addition, Dubai International Financial Centre (DIFC) is an offshore financial centre, offering a
platform for leading financial institutions and service providers. The DIFC was established as part
of the vision to position Dubai as an international hub for financial services and as the regional
gateway for capital and investment. Internet usage in the free zones is not censored as it is
elsewhere in the UAE.

Question11:
Is the traditional Chinese medicine service allowed in the Dubai Healthcare City? If so, please
provide the laws and regulations in detailon its market access. If it is not allowed currently, Does
the UAE have a timetable of liberating the market access of traditional Chinese medicine service?

This kind of activity (TCM) is allowed to be conducted in the United Arab Emirates including free
zones, conditional that it should be certified and licensed by the UAE Ministry of Health &
Prevention. Thus, we always urge investors to inquire about this niche of medicine services
according to the UAE legislations of this field.

The UAE support all kind of investments in healthcare sector including the unique TCM with
undertaking the understanding of the customs and norms of the country.

Page 73, Para 4.65
The insurance sector in the UAE comprises 34 national insurance companies and 26 foreign
insurance companies. Eleven national companies and two foreign companies offer complete
insurance services (life, property, liability and operation of fund formation). There are 20 national
firms and 17 foreign firms that offer property and liability insurance only; two national companies
and eight foreign companies offer life assurance and operation of fund formation services and
there is only one national firm providing export credit insurance.

Question12:
Are there any local or foreign invested private insurance companies engaged in short-term export
credit insurance? If so, please provide a list of the companies.

Insurance Authority granted licenses for insurance companies in UAE to practice insurance
activities in one of the following two types of insurance activities:

1 - Insurance of persons and fund accumulation (life).
2 - Property & Liability insurance (general).
WT/TPR/M/338/Add.1

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There are 48 licensed insurance company as Property & Liability (General). According to the
federal law on establishment of the Insurance Authority in UAE, short term export credit insurance
product comes under property and liability insurance activities, so any licensed general insurance
company in UAE has the ability to underwrite business in this type.

There are number of companies who are dealing with this product such as:

1-Export Credit Insurance Company of the Emirates.
2-Alliance Insurance.
3-American Home Insurance Company.
4-Oman insurance company.
5-Orient Insurance Company.

Question13:
Doe the government of the UAE have any restriction on the insurance coverage of ECIE in short-
term export credit insurance? If so, please specify it in detail.

There is no restriction on export credit insurance but our overall activity is regulated and overseen
by federal insurance authority in the UAE.
WT/TPR/M/338/Add.1

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COSTA RICA
Secretariat Report
1) Can the UAE confirm if, apart from the customs duties and charges related to legalization of
documents, there are any value-added taxes charged on imports?

Currently there are no value added taxes charged on imports.
2) Can UAE please provide more detail on the specific documents or information that importers
need to submit in order to get this import license?

The Trade activity in Alcoholic beverages is a categorized as a touristic activity, and it is licensed
through Tourism Authority. The licenses are issued for the hotel restaurants. As for the pork meat,
there is no specific category for this and it does fall under the meat trading activity. It only
requires a permission from food and drug department and the police to open a section in the store
for selling the pork meat for the non-Muslims. The issue of the permission might vary of the source
of issuance between the Emirates that some might be issued from the municipality or so.
3) Can UAE please provide more information about when this guideline will become mandatory?
After this date, will it be mandatory for all countries?

The GCC Guide for Control on Imported Foods is still experimentally applied and not mandatory
until 1st June2016. The first week of June there will be a GCC meeting to clarify on the way
forward among many other things. As for the period for feedback, this issue is still under
consultation between the GCC members.
The old certificates will still be accepted during the provisional application and all clarifications on
this issue should be addressed to the general secretariat to the Gulf Cooperation Council.

4) Can UAE please provide more detail and information about these agreements? Also can UAE
indicate if this information is available to the public and how to obtain it?

These memorandums of understandings are of a general framework nature with a view to
strengthen cooperation to facilitate cooperation and future trade for the interest of the parties on
various aspects including; sustainability, researches, exchange of information and trades. That
memorandum of understandings should be available upon request through the official channels.

Government Report

5) Can UAE give further detail on the approach they are giving in all constituent emirates to
address renewable energy options? Can the UAE please explain if there have been actions taken to
address fossil fuel subsidies, particularly under the current global context of oil prices?

The UAE is committed to fuel subsidy reform and introduced many initiatives on renewable energy
and attaches strong emphasis on the sustainable development goals of the UN.
UAE will take into consideration to study the communique of the fossil fuel subsidy reform in
coordination with the various stakeholders at the domestic level.
WT/TPR/M/338/Add.1

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HONG KONG, CHINA
Secretariat Report

1) Can UAE update Members whether the thresholds have been issued, and if not, when. Please
also explain the considerations involved in determining the thresholds.

de minimis exemption for restrictive agreements
The key consideration for determining a Minimis exemption for the restrictive agreements is to
rationalize the efforts provided by the Ministry of economy in controlling and monitoring this kind
of agreements and to ensure optimal use of its resources in fulfilling this mission. The aim is to
concentrate on the cases that would substantially prevent, restrict or distort the competition. To
do so, a threshold will be determined, and the cases/agreements representing a market share that
is beneath this threshold will not be considered, as they constitute a level of risk that is too small
to be concerned with.
Market share thresholds for dominant position and economic concentration
Different legislations of other countries or regional groupings, including but not limited to the EU
and Singapore, have been taken as a reference point in determining these thresholds.
According to the cabinet resolution no. 13 of 2016 the percentage of economic concentration and
the dominant position have been set as 40% and for weak effect agreements 10%.
2) Besides “Emirati-owned small and medium enterprises”, “Emirati entrepreneurs” and “Emirati
business owners”, would the support measures under the SME Law benefit SMEs that are partly or
fully foreign owned? For clarity, could UAE advise on the official definition of ‘SME’?

1- The UAE Law intentionally chose to keep the SME definition out of the texts of the law and to
be issued by the Cabinet so that the SME definition can be always appropriate and responsive to
the market. Yet, the SME Law has identified three internationally recognized criteria upon which
the SME definition is made:
a. Number of Employees/workers
b. Annual turnover
c. Capital

2- Just like every country in the world, the UAE has provided incentives and stimulus to its own
citizens in order to compete in wining procurement and services contracts in accordance with the
tender requirements. Yet, partly or fully foreign owned SMEs can benefit greatly from the SME law
and the incentives given to UAE citizens by forging a joint venture with SME companies or via the
subcontract system whereby they can become direct suppliers of goods and services to the UAE
entrepreneur.
3- The SME Definition has completed all the process on the federal and local levels and has been
submitted to the Cabinet and will be issued at any time now.
3) Are there general statistics on the distribution/ proportion of companies with local (UAE/GCC)
ownership and foreign (other than local) ownership operating in free zones? If yes, could UAE
share the statistics with us?

As collective numbers with proportions this data is not available at the time , however the
following links will provide the data at each Emirate level:
Federal Competitiveness and Statistics authority http://www.fcsa.gov.ae/.
Abu Dhabi Statistics Centre http://www.scad.ae/.
Dubai Statistics Centre http://www.dsc.gov.ae/.
Ministry of finance (statistic on economic activities on licenses issued for GCC nationals)
http://www.mof.gov.ae/.
WT/TPR/M/338/Add.1

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For numbers of companies in free zones please refer to each free zone website.
http://www.uaefreezones.com/.
(Attach a copy of statistics from Jafza on the ownership operating in Jafza).
4) Are the requirements for domestic and foreign banks different under the new regulations? If
so, what factors has the Central Bank taken into account in imposing the different requirements on
domestic and foreign banks? Furthermore, would the industry be provided with transitional period
or assistance for adjustment under the new regulations?

Domestic and foreign banks are treated the same under new regulations issued (and to be issued)
by the central Bank. Where some form of proportionality is required (e.g. corporate governance
structures for branches of foreign banks) then this will be taken into account provided the
necessary alternative protections are in place to allow for this.

The Central Bank is undertaking full consultation with the industry on all new regulations. As part
of the consultation process consideration is given as to the need for and appropriateness of,
allowing for transitional arrangements to be put in place.

5) How long does it usually take for a foreign insurance company to obtain a licence to open a
branch in the UAE? How many applications from foreign insurance companies are approved and
rejected during the review period? Would the UAE Government consider reviewing the conditions
for granting of licences and those for opening a foreign branch?

The complete application of foreign company takes usually three months.
1 Licensing and registration Office maximum of 7 working days to review.
2 General Director shall consider the application and make decision either by granting or
rejected non complete application within maximum 7 days.
3 Board of Director issue its resolution either to approve or reject the application within 60
days.
4 Register the company within 30 days after approval of board of directors.

How many applications from foreign insurance companies are approved and rejected
during the review period?
from 2009 to 2015
Insurance Authority received 9 applications
One application for foreign branch approved in 2015.
Would the UAE Government consider reviewing the conditions for granting of licenses
and those for opening a foreign branch?
In this stage our main concern as Insurance Authority to adopt the New Financial Regulations that
puts the UAE insurance Sector at the forefront of the Middle East with regard to adopting the latest
solvency requirements similar to the European model, The Financial Regulations provide a
relatively well advanced set of rules to introduce a risk based capital adequacy, provisioning and
supervisory regime for insurers operating in the UAE and mark a fundamental shift in the
supervision of insurers in the UAE, The detailed requirements will need time to be implemented by
insurers, including those foreign branches in the UAE, over the next one to three years , in this
regards no intention to change conditions of licensing & registration for opening a foreign branch
till adopting all requirement of these new financial regulations.
6) Why are ground handling services for Emirates provided by its Airport Services Department
instead of dnata Ground Handling Services? Does Emirates enjoy any special treatments or
preferences when ground handling services are provided by its department? Is it possible for other
airlines to choose their own ground handling services provider?

Dnata holds an exclusive concession to provide below-the-wing ground handling services at Dubai
International Airport. All carriers, including Emirates, use Dnata for their below-the-wing ground
handling needs. Emirates contracts with Dnata on arm’s length terms and Dnata does not extend
any preferential treatment to Emirates vis-a-vis other carriers.