Law regulating fundraising..protection of funds and beneficiaries

Abu Dhabi: Imad Eddin Khalil
Fundraising is regulated by Federal Act No. 3 of 2021, issued on 11 April 2021, and its purpose is to protect donor funds. It defines the scope of its application to any party wishing to collect or provide donations, including free zones, by means of a special system for measuring efficiency and evaluation, and puts it The Ministry of Community Development, in coordination with local authorities .

The law, which came into effect in mid-October 2021, included the establishment of a “unified electronic register” at the Ministry of Community Development, which records data and information on donors, fundraising proceeds, exchanges and beneficiaries.

But what are the rules for organizing fundraising in the UAE?

* What are the most important conditions?

The law defines a set of definitions, the most important of which are “donations”, which are “whatever money raised is of any kind, cash or in kind, movable or fixed, including national currency, foreign currencies, bonds, sukuk and shares. , and whatever their form, including electronic or digital, is spent on various aspects. ” land or the provision of charitable or humanitarian services and assistance.

* Are there certain licensed bodies?

Yes: Charities, federal, local and private bodies and institutions whose founding laws, decrees or decisions allow them to collect, receive and provide donations.

* What are the prohibition provisions?

It is prohibited to collect donations, with the exception of authorized entities, and it is not permissible for any entity to establish, organize or perform any act for the purpose of collecting donations, except after obtaining a permit from the competent authority, which requests and issues a decision to approve or reject it within 20 working days from the date of its submission.

* Are there conditions for granting a permit?

The applicant must be a legal entity, collect donations through a charity, and state in the permit application: the purpose of the collection of donations, the identities of those responsible for collecting donations, the beneficiary entity or parties, the manner in which on which the donations will be collected, their locations, collection period and the period for making donations to The beneficiary, the charity’s approval of the collection, and the percentage of administrative and operating expenses that will be deducted for the charity.

Is there a certain number of permits?

No entity may be granted more than 4 permits for one year, except by a decision of the head of the competent authority, and the local entity is obliged to keep an electronic record of donations. It is also not permissible for the authorized entities to publish or broadcast propaganda or advertisements to collect donations without obtaining the approval of the competent authority.

* What about external donations?

The licensed and authorized entities may not collect or receive donations, or accept gifts, bequests or subsidies from any person or entity from outside the country, except in accordance with the controls and procedures specified by the executive regulations of the Act. Detailed about it. within 15 working days from the date of receipt thereof. It is also not permissible to make, offer or transfer donations to any person or entity outside the country, except in accordance with the control measures and procedures specified by the executive regulations of the law. Banks and financial institutions in the country may also not make any financial transfers outside the country through bank accounts for donations, except in accordance with the controls and procedures determined by the relevant authorities.

Is it possible to open a checking account to collect donations?

Yes, the licensed authorities must open one or more current accounts with any of the national banks operating in the country to collect donations, and they must notify the competent authority of the name of the bank and the account number within 10 working days from the date of opening the account. Charities must open independent current accounts through which the amounts resulting from donation fundraising permits are paid. It will provide the competent authority with the data and details of these accounts within 10 working days from the date of their opening.

* What are the prohibition provisions?

Licensed entities are prohibited from depositing any money other than the money obtained from the collection of donations into the aforementioned accounts, and banks and financial institutions may not open any accounts to collect or receive donations for any party, except in terms of a letter from the head of the competent authority or his authorized representative.

* How to deal with bank accounts with illegal donations?

The executive regulation of this law defines the rules and controls for the disposal and closure of the bank accounts in which the donations were collected in violation of the provisions of this law or the decisions issued in its implementation, and the mechanism for dealing with these donations, and the mechanism for handling these donations. .

Can the donation money be invested?

can not be; Where the law provides that it is prohibited for authorized and authorized entities to trade in donation funds, engage in financial speculation, distribute any income or proceeds to its members or employees, and take any action while collecting donations, accept or offers that harm the public order, or national security, public morals, or the encouragement of any sectarian, ethnic, racial, religious or cultural disputes, or any illegal purpose in accordance with the laws in force in the country.

* What about raising funds for donations?

The authorized authorities are obliged to provide the competent authority with a number of reports, including a report on the proceeds of the donations collected, within a period not exceeding 15 days from the date of receipt of the donations, a report on the beneficiaries, within a period not exceeding 15 days from the date of donations, and a report on the final accounts or the audited financial statements showing the amount of donations collected and the aspects of their disbursement, within a period of not more than 30 days from the date of expiry of the permit.

Is it permissible to make food or medicine donations in kind?

The law provides that it is prohibited for the licensed and authorized entities to accept, transfer, preserve or provide in kind food or drug donations offered within the country, which violates the specifications specified in the legislation country is in force, and it is not permissible to accept any in-nature food or drug donations for distribution outside the country, except in accordance with the provisions of the law The following requirements: Ensure that it is suitable for use for ‘ a period of not less than 6 months from the date of receipt These materials are collected, transported and distributed, in an appropriate manner to ensure their validity, safety and usability, and they have the appropriate places to store them in accordance with the controls and requirements.

* What are the penalties for offenders?
Any person who contravenes the provisions of Clause (1) of Section (13) and Section (20) of the Act shall be punished by imprisonment and a fine of not less than 200 000 dirhams and not more than 500 000 dirhams, or one of these two penalties Imprisonment and a fine of not less than 150,000 dirhams and not more than 300,000 dirhams, or one of the two penalties, whichever violates any of the provisions of Articles (6, 12, 14, 17, 21, 26, 31).

The penalty will be doubled in case of return. In all cases, the court orders the confiscation of the donations collected in violation of the provisions of this law, and the deportation of the alien after the execution of the sentence imposed on him .

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