News & Insights
The UAE stands at the crossroads of the entire globe, creating an exotic mix of cultures, nationalities and religions under one centralised banner of unity. Since ancient times, Arabs have been known worldwide for their hospitality, generosity and charity. The tales of the Arab legend Hatim Tai, of the 6th century CE, espoused a gold standard of almsgiving. Upon the advent of Islam in the 7th Century, charity became regulated through a bifurcation. Primarily, through the third Islamic Pillar of faith known as Zakah (purification of wealth), followed by the non-obligatory almsgiving known as Sadaqaat (charity in God’s name) and Khairaat (good deeds attained through charity).
Unfortunately, in recent times, some fundraising campaigns were not used for charitable purposes and hence due to this compelling changing global environment, the authorities became alert in the UAE. Upon inquiry, it was found that some individuals and organisations in the UAE have been crowdfunding for the wrong objectives including but not limited to political gains, terrorist funding and drug dealings, elsewhere in the world.
Hence the UAE Authorities, in general, and the Government of Dubai in particular, made subsequent steps in the right direction. New laws were promulgated by the UAE authorities to curb any misuse of charitable money. The General Authority of Islamic Affairs and Endowments (GAIAE) was appointed at the Federal level, to grant permissions before any donations activity. In the Emirate of Dubai alone, Amiri Decree no. 9 of 2015 regulates the scope of all philanthropic activities. Article 3 of the promulgated statute stipulates:
“No Donations may be raised, and no raising of Donations may be permitted in the Emirate or announced through print, audio, visual, or other means of communication and media, without first obtaining the written approval of the IACAD.
- The prohibition referred to in paragraph (a) of this Article will not apply to:
- Donations raised based on initiatives by His Highness the President of the UAE, His Highness the Vice President of the UAE, members of the Federal Supreme Council, and crown princes and deputy rulers of the emirates of the UAE;
- Donations raised by Government Entities, provided that raising such Donations is coordinated in advance with the IACAD; and
- Any other entity determined by the Director General, in accordance with the public interest”.
Hence, the above directives dictate the terms and conditions of a charitable campaign. Fundraising, crowdfunding, donations, charity and almsgiving are all under the purview of the GAIAE, and the authorisation of fundraising or the announcement of fundraising is prohibited unless there is prior approval from its regulatory board. The chairman of the IACAD will be the person in charge of the committee to decide on any inconceivable charity allocations. The licensing also plays an instrumental role. In the case of Ramadan donations, the Red Crescent Society holds the privilege to donate food supplies to the Mosques and other areas dedicated for breaking of fast. Other contributions need to be licensed under the purview of the new law.
Hitherto, whoever violates the provisions above of the Donation Law of Dubai will be penalised with fines ranging from AED 5,000 to AED 100,000 and or imprisonment for not less than one month. This is under Article 10 of the Donation Law of Dubai, which states:
“Without prejudice to any stricter penalty stipulated in any other legislation, a person who violates the provisions of this decree or the resolutions issued in pursuance hereof will be punished by an imprisonment for not less than one month and not more than one year, by a fine of not less than AED 5,000 and not more than AED 100,000 or by both penalties.”
Courts will further determine the course of action, upon recommendation by the IACAD. The offenders will be directed to competent authorities if a violation seems to be noticed.
Like any other regulated law, the UAE laws corroborate enacted fines for violations. Another aspect of fundraising is through the online portals of various websites. These activities are also monitored, and violators are subjected to penalties. As per Article 27 of the Federal Law No. 5 of 2012 on combating Cyber Crimes, it is illegal to propagate, promote and collect donations online without first obtaining the proper permission and licensing from the relevant authorities. The penalty is either jail sentence up to three years or a fine ranging from AED 200,000 to AED 500,000, depending on the nature of the expedition and the volume it entailed. If the crime exceeds the above provisions, it is the prerogative of the courts to charge a violator with both penalties.
In the event of a violation, subsequent fines should not be imposed spontaneously.
In the event of a breach of this law, a plausible arrangement can be attained with IACAD (through their respective prerogative) through one or all of the actions:
- Issuance of a legalised memo of the violation and an undertaking by the accused, disbanding the action;
- Double reimbursement of the donated amount;
- Relinquishing of the respective premise, where the donations were collected.
The penalties will be awarded according to the nature of the funding. Supposedly, if the funding was done for any dangerous purpose, then criminal proceedings may also entail apart from the stipulated fines.
Hitherto, we are not discouraging anyone from the lawful act of charity. The authorities have regulated the process of charity for the betterment of society. During yesteryears, schools, colleges and universities would campaign for causes associated with themselves or with foreign aid to academic projects elsewhere: they were protected by an exemption under the Federal Law (Federal Law No. 2 of 2008 governing Public Welfare Associations). This exemption has been repealed through the latest enactment. The remedy of any financial campaign can be addressed through registering an online account with one of the approved charities and through the usage of that particular bank account for any online portfolios or campaigns. Some of the registered entities include the Dubai Charity Association, Dar Al Ber Society, Dubai Autism Centre, Beit Al Kheir, the UAE Red Crescent Authority, Awqaf & Minors Affairs Foundation, and The Relief Committee.
Furthermore, charities specific for ladies and children affairs include the Dubai Foundation for Women and Children, the Al Jalila Foundation, and for medical treatments like the pandemic itself or any other form of terminal illness, please register with the ‘Friends of Cancer Patients’.
Any other charity organisations or individuals are barred from collecting donations within the UAE. As a matter of fact, even promoting them can be a severe criminal offence. From now onwards, our advice is to remain abreast with all the laws and keep a safe social distancing from any individual or social campaign which is unauthorised to collect funds. Kindly also report such suspicious activities to the police on an immediate basis. Our advice is to seek prior approval with the authorities and then only proceed towards the initiation of any campaign. Upon receiving approvals, try to please keep the campaign indoors within the respective institutions, as a door to door activities may expose the individuals to subsequent inquiries, which may not be a plausible result of the effort. Moreover, tirades of all forms may descend chaos in the campaign.
This article, and any other BBA’s publication, is for general information only and in no case can be considered as legal advice on any specific situation, fact or dispute. This article may not be quoted or mentioned in any other document without BBA’s previous written consent. The mailing and receiving of this article are for informational purposes only and do not create an attorney-client relationship between sender and receiver. The content reflects the personal view of the authors and does not reflect necessarily those of BBA.