MoF assigns ‘Mortgage of Movable Property’ project to EDB

DUBAI, 17th July, 2017 (WAM) -- The Ministry of Finance, MoF, has assigned Emirates Development Bank, EDB, to create an electronic register to publicise related rights to ‘Mortgage of Movable Property’.

Khalid Ali Al Bustani, Assistant Under-Secretary of International Financial Relations Sector at the ministry and Rashid Mahboob Misbah, Acting CEO of EDB, in Dubai signed an agreement to this effect. The collaboration aims to provide a legal and legislative environment for companies and projects to pledge their movable properties as security for loans from banks and financial institutions. The register grants the public access to the database.

The EDB will implement, develop and support developmental projects in the country inclusive of industrial, real estate, crafting and agricultural projects, in addition to facilitate real estate credit allocated to the construction, maintenance and development of buildings intended for personal housings, and accepting deposits, opening bank accounts and other banking and financial activities.

The agreement stipulates committing to a number of measures including establishing and managing the electronic registry in accordance with international best practices, as well as holding regular meetings and workshops in collaboration with the Ministry of Justice, as well as specialists and experts to introduce law implementation procedures.

The ministry completed the feasibility study over two years (2012-2013) on the draft law for ‘Mortgage of Movable Property’ draft to secure project financing. The study included implementing a basic survey for different practices of current loans in the UAE and identifying the best international practices in this field. It also included holding workshops with related entities in the UAE to discuss the draft and identify challenges faced by the SME sector. The Ministry completed all documents related to the registration process and public policies, and an evaluation was carried to identify the various legal and institutional development aspects necessary to establish a secure transaction system for movable properties according to the best practices and in line with UAE’s Privacy Policy.

In 29 May, 2013, the Ministerial Development Council resolution No. (82/5/4) which assigns Ministry of Finance to prepare a federal draft law to record mortgage of movable properties to secure projects, in coordination with the Ministry of Economy and the UAE Central Bank, and transfer it to the Technical Committee for Legislations to study it.

MoF built an internal legal team formed of legal experts from related entities and the International Finance Corporation to prepare a draft federal law on ‘Mortgaging of Movable Properties’ as security for debts. The ministry held over 40 meetings with related entities in the UAE to discuss and prepare a draft law. The final draft was discussed with related entities and the Technical Committee for Legislations through multiple meetings.

In December 2016, the Federal Law No.20 of 2016 on the pledge of moveable properties as security for debts was issued and adopted by the Federal National Council. It is also stated to come into force 90 days from the date of publication in the Official Gazette as per the Article No. (47). The executive regulations are due to be published within six months of the new pledge law coming into effect, as stipulated in Article No. (46).