Comparative Guides
Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.
Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.
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Results: 4 Answers
Anti-Corruption & Bribery
3.
Corruption and bribery
3.1
How are gifts, hospitality and expenses treated in your jurisdiction?
 
United Arab Emirates
Specific provisions govern expenses of this type for public officials.

Articles 234 and 237 of the Federal Penal Code punish the recipient of a bribe, the offeror of a bribe and any intermediaries involved, and also regulates the acceptance of any benefits.

Article 234 states as follows:

Any public servant or person entrusted with a public service, a foreign public servant or an employee of an international organization who requests or accepts, whether directly or indirectly, a gift, benefit or other grant that is not due, or is promised the same; whether to the benefit of the employee himself or for another entity or establishment, in order for such employee to commit or omit an act included in his duties even if he has intended not to commit or omit such act, or if the request, acceptance or promise is made after the fulfilment or omission of such act, shall be sentenced to temporary imprisonment.

Article 237 states as follows:

Any person who promises, offers or gives a public servant or a person entrusted with a public service, a foreign public servant or an employee of an international organisation, a gift, benefit or grant that is not due, either directly or indirectly, whether to the benefit of the employee himself or for another person or entity, for such employee to commit or omit an act included in his duties, shall be sentenced to imprisonment for no more than five years.

Article 237 bis states as follows:

Any person who promises, offers, grants or gives, either directly or indirectly, a public servant or any other person, a gift, benefit or grant that is not due, to abet that public officer or person to abuse his power, whether actual or presumed, to obtain, from a public department of authority, an unlawful benefit for the benefit of the original abettor of such act or for the benefit of any other person.

Any public servant or any other person who requests or accepts a benefit, gift or grant that is not due, whether for himself or for another person, either directly or indirectly, so as such public servant or person abuse his power, whether actual or presumed, to obtain, from a public department or authority, that unlawful benefit.

Finally, Article 237 bis 2 states as follows:

An intermediary between the briber and a bribe-taker to offer, request, accept, take a briber or any promise thereof shall be sentenced to imprisonment for no more than five years.

As is evident from these provisions, it is clearly prohibited for public officials - whether foreign or local - to accept any form of hospitality, travel or entertainment expenses of any kind.

Any gifts that are of a symbolic nature or promotional material must have the gifter’s logo on the material.

For more information about this answer please contact: Nadim Bardawil from BSA Ahmad Bin Hezeem & Associates LLP
3.2
How are facilitation payments treated in your jurisdiction?
 
United Arab Emirates
Facilitation payments are regulated; Articles 234 and 237 of the Federal Penal Code again come into play here. The code was updated in 2016 to allow for the inclusion of foreign public officials, specifically to combat such issues. The penalties under Articles 234 and 237 will also apply in this case.

For more information about this answer please contact: Nadim Bardawil from BSA Ahmad Bin Hezeem & Associates LLP
3.3
How is bribery through intermediaries and other third parties treated in your jurisdiction? Can those third parties be held liable?
 
United Arab Emirates
Yes: under Articles 234 and 237 of the Federal Penal Code, intermediaries will face the same penalties as the parties that offer and accept the bribe.

For more information about this answer please contact: Nadim Bardawil from BSA Ahmad Bin Hezeem & Associates LLP
3.4
Can a company be held liable for bribery committed by management or other employees?
 
United Arab Emirates
Yes. Article 65(1) of the Federal Penal Code (as amended) states that legal persons (other than government services, government departments, public organisations and institutions) shall be held liable for the crimes of their representatives, directors and agents that were carried out in the legal person’s name.

The company can be sued if a third party suffered damages as a result of the bribery. As regards the criminal consequences of bribery, fines and penalties can also be imposed on the company up to a maximum of AED 50,000. The person who committed the crime will be held fully liable to the extent of the laws of the United Arab Emirates.

For more information about this answer please contact: Nadim Bardawil from BSA Ahmad Bin Hezeem & Associates LLP
3.5
Can a company be held liable for bribery committed by domestic or foreign subsidiaries?
 
United Arab Emirates
This is highly unlikely, except in the event of collusion.

The principle that a person cannot be held liable for the actions of another is fundamentally ingrained within the UAE law.

Article 2 of the Federal Penal Code states that no one shall be answerable for the crimes committed by another, and that a person is innocent until proven guilty. Legal persons are regarded as separate persons.

Article 65 (as amended) of the code further extends the principle expressed in Article 2 by specifically stating that a legal person can be held liable for the actions of its agents.

In Penal Case 4542/2015 the Court of Cassation upheld the above principles and found that the parent entity was not liable for the actions of its subsidiary.

For more information about this answer please contact: Nadim Bardawil from BSA Ahmad Bin Hezeem & Associates LLP
3.6
Post-merger or acquisition, can a successor company be held liable for bribery committed by legacy companies?
 
United Arab Emirates
Under Article 291 of the Law on Commercial Companies, as a result of a merger, the merged company or companies shall cease to be a corporate person(s) and the merging company or the new company shall replace such company or companies in all their rights and obligations. The merging company shall be a legal successor of the merged company or companies.

In terms of Article 281 of the Companies Law, in the event a company is converted to another company, the following applies:

  • Upon conversion, every partner or shareholder shall have a number of shares or stocks in the new company equal to the value of its shares or stocks in the company prior to conversion. If the value of the shares or stocks of a partner or shareholder is less than the applicable minimum limit of the nominal value of the new shares or stocks, the difference shall be completed in cash; failing which such partner or shareholder shall be deemed to have withdrawn from the company. The value of its shares or stocks shall be paid according to their market or book value on the date of conversion, whichever is higher.
  • Upon its conversion and re-registration under its new legal form, the company shall maintain its corporate personality and its rights and obligations prior to such conversion. Such conversion shall not discharge the acting partners from the obligations of the company prior to the conversion, unless the creditors agree thereto in writing.

It is clear from the above that a successor company can be held liable for bribery committed by legacy companies.

For more information about this answer please contact: Nadim Bardawil from BSA Ahmad Bin Hezeem & Associates LLP