Free Zone Rules And Regulations Third Edition –March 2012

1. INTRODUCTION

This is the revised third edition of these Regulations, which supersede the first edition 2002 and second edition 2006.

The Authority is a Government of Dubai free zone authority established by Decision No. 4 of 2002 (as amended), and is dedicated to enhancing commodity trade flows through Dubai. In order to achieve this goal, the Authority has been granted ownership of, and jurisdiction to develop, manage and govern an area of land on which the Authority has created a purpose built development known as Jumeirah Lakes Towers, associated enterprise zones (which currently include Jewellery & Gemplex and Enterprise Zones 1-4), JLT Infrastructure, Parking Garages and various other areas of land that are yet to be developed, which together comprise the Free Zone. Through the implementation of the best practice and governance procedures

Outlined in these Regulations, the Authority aims to become the work

commodity focused economic free zone and an indispensable partner for its member

companies, and to establish an exclusive governance regime throughout the Free Zone that sets a world-class standard for the long-term management and administration of similar communities.

The map annexed as Schedule 2 sets out the current extent of the Free Zone. In addition to the areas described in section 1.2.above, the Free Zone may also include various other sub-developments that are created from time to time by the Authority, either from the land currently owned and governed by the Authority or any other land that may in the future be granted to it.

The Authority may also issue notices and implement additional policies from time to time in order to sustain and support its aim of implementing best practice, governance and management procedures for the Free Zone and ensuring consistency and certainty for affected parties. The provisions of any such notice or policy are mandatory on all entities and persons operating, living and working within the Free Zone and must be complied with at all times. Ignorance is no defence for non-compliance and those affected must keep themselves up to date with any amendments to these Regulations and any other notices or policies issued by the Authority or the Chairman from time to time.

These Regulations come into force on the date of issue and will be reviewed and updated by the Authority as and when considered appropriate. Amendments to the Regulations will be issued by circular. Circulars, notices and the latest edition of the Regulations can also be obtained online at. It is the duty of any person or entity operating, working or living within the Free Zone to check for updates to the Regulations and any new or amended notices and policies issued from time to time.

3. GOVERNANCE OF THE FREE ZONE

The Free Zone is managed and governed by the Authority. The Authority was granted jurisdiction over the Free Zone pursuant to the , Establishment Law, and is mandated to create policies and procedures appropriate for the nature of the Free Zone, its residential and business communities and owners, occupiers and invitees in order to broadly achieve the objectives specified in the , Establishment Law.

The Chairman has the power to supervise the activities of the Authority, lay down rules and regulations for the operation and management of the Free Zone, review and amend such rules and regulations at his discretion and implement the provisions of all laws and decisions under which the Authority has been established.

The Authority’s policy is to govern the Free the Free Zone is situated in a manner

that best promotes the long term economic and

strategic potential of the Free Zone, ensure consistency of application of these

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Regulations and other applicable laws, regulations and policies, obtain an appropriate return from its investment in planning, constructing and maintaining the JLT Infrastructure, achieve clarity in the setting and levying of the JLT Infrastructure Levy, set appropriate and consistent expectations for those living, working and doing business in the Free Zone and make the decisions necessary to support these objectives.

The above policy is supported by the rights and obligations granted to the Authority pursuant to the , Establishment Law. These include

a commitment to provide superstructure, JLT Infrastructure, buildings and services to those living, working and operating within the Free Zone;

the right to own, sell and lease real estate within the Free Zone;

the right to render services within the Free Zone and collect fees and charges for such services; and

to do anything else it sees as being necessary to achieve its objectives for the overall well being and management of the Free Zone, including issue policies in relation to the use of JLT Infrastructure, structure special forms of property ownership within the Free Zone, levy the JLT Infrastructure Levy, issue fines and sanctions relating to the non-compliance with these Regulations and other applicable agreements, rules and legislation, set appropriate planning strategies and generally make decisions regarding the operation of the Free Zone in its sole discretion.

The Authority’s policy and working, commitment operating and doing to those

business in the Free Zone is to comply with the above obligations and exercise the

above rights through:

Investment in JLT Infrastructure: The Authority has planned and constructed, and continues to own and manage, the JLT Infrastructure for the long-term mutual benefit of those living, working, operating and doing business within the Free Zone, together with implementing appropriate policies to ensure consistency of ownership and access to the JLT Infrastructure across the entire Free Zone for the long term benefit of the community;

Ownership of JLT Infrastructure: The Authority has implemented and is authorised pursuant to the , Establishment Law to retain ownership of the JLT

Infrastructure or any part of it.

for use by those living, working or operating within the Free Zone on agreed terms;

Sub-development: The Authority has designated certain parts of the Free Zone that it considers does not include JLT Infrastructure, as development areas. This is intended to allow for the construction of residential, retail and commercial spaces by the Authority or Sub-Developers, and the sale or lease to third parties in order to allow for the growth and development of the general Free Zone community. The Authority may from time to time alter, extend or redevelop certain parts of the Free Zone in order to achieve the aims of this policy;

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d) Certainty of JLT Infrastructure Levies: The Authority has introduced a policy

for the calculation and levying of the JLT Infrastructure Levy payable by those who

benefit from the JLT Infrastructure. This is intended to help ensure that all users

make a fair and equitable contribution to the JLT I

regeneration; Compliance with Laws and Authority Policies: The Authority has introduced policies to ensure that all those living, working, operating and undertaking any business or commercial activity within the Free Zone comply with these Regulations and any Applicable Rules and other applicable contracts, rules, laws or policies. In order to ensure consistent compliance, the Authority levies fines and penalties against those the Authority deems to be non-compliant on such terms as it deems appropriate from time to time. The Authority also retains the authority and jurisdiction to make any other decision, levy any other penalties or issue any other sanctions it deems appropriate and the Authority may also levy sanctions in accordance with section 17 of these Regulations in respect of any breach of any of the Applicable Rules;

Free Zone Planning: The Authority’s policy is to coord dictate all planning and

zoning policies within the Free Zone. This includes the

right to determine and amend different use areas (including adding to or removing JLT Infrastructure at its sole discretion), approve subdivisions, issue planning and design approvals, determine built up areas, approve, issue and register affection and site plans, issue related plot and registration numbers and consent to the change of use of any areas of the Free Zone on such terms as it deems appropriate from time to time;

Determination of Jurisdiction: Pursuant to rights granted to it under the , Establishment Law and/or the Applicable Rules, the Authority reserves the right to consider and determine those matters and issues within the Free Zone that it has jurisdiction over, and those matters and issues it chooses to allow a Relevant

Authority to have jurisdiction over. The Au generally reserve jurisdiction over

all matters concerning the Free Zone but it may,

on a case by case basis and at its sole discretion, choose to temporarily cede jurisdiction to a Relevant Authority for matters of convenience or practicality, or where the ceding of such jurisdiction does not have the effect of undermining any current policy of the Authority as may be recorded in these Regulations and/or any Applicable Rules.

, Group Security: The general security and safety of the Free Zone area,

including without limitation to the towers within the Free Zone shall be governed

andmanaged by the Authority’sd:“,secuGroupity Secuta

, Group Security has full power and authority to take any security & safety measures and perform any acts it considers necessary or desirable to achieve its responsibilities of ensuring the safety of the Free Zone and to make decisions in

respectof the entire Free Zone Community’s

The Authority considers that these policies will best achieve the objectives set out in the , Establishment Law. For the avoidance of doubt:

those individuals and entities purchasing a freehold interest in real estate within the Free Zone will not be granted any ownership interest in the JLT Infrastructure by the Authority;

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all JLT Infrastructure remains the property of the Authority and is not jointly owned or communal property under the JOP Law or otherwise;

the Authority has the power and discretion to calculate and levy the JLT Infrastructure Levy without reference to any other body or authority;

4. GENERAL RULES

All entities or persons (including Contractors and Sub-Developers) working, operating, living, owning or leasing real estate or otherwise having an interest or carrying out business of any kind in the Free Zone are subject to and must comply with these Regulations insofar as they apply to them, along with all other laws, rules, policies and regulations promulgated by the Authority pertaining to the Free Zone.

The Authority has the sole and exclusive right to approve or decline any application for Registration or the grant of a Licence in the Free Zone by any person or entity and accepts no liability for any loss arising as a result of such decision.

5. FREE ZONE LICENSES

The categories of Licence available within the Free Zone are as follows:

Trading Licence: To carry out trading activities specified in the Licence; Service Licence: To carry out service activities specified in the Licence; and

Industrial Licence: To carry out light manufacturing activities as specified in the Licence.

Licensees whose activities fall under different categories should apply for separate licences for each category of activity.

6. CANCELLATION, REVOCATION OR SUSPENSION OF A LICENCE

The Authority may cancel or revoke a Licence immediately upon written notice to a

Licensee either upon the Licensee’s request

7. FREE ZONE FREEHOLDS AND LEASES

All applications for a Licence must be made in conjunction with an application for commercial property, including but not limited to, a Freehold or Lease of either office space, commercial unit, warehouse space or development land within the Free Zone from which the Licensee can operate. Licensees are not permitted to operate from residential properties and a Freehold or Lease of a residential property shall be deemed insufficient for the grant of a Licence.

9. BUILDING AND OPERATION CONTROLS

Licensees constructing their own facilities must liaise with the Relevant Authority, Agent(s), or any other authorities nominated by the Authority pursuant to section 3.5(g) of these Regulations in order to obtain the necessary inspections and approvals once construction work has been completed, including but not limited to obtaining a NOC if required by the Authority. Once the construction works have been completed, the Authority requires a BCC from the Relevant Authority and/or any other relevant approvals before allowing occupation of the facilities and authorising connection of any services. Any NOC for a BCC will not be issued by the Authority, or occupation or service connection authorised, if any re-submission or other related fees are outstanding.

INSPECTION OF PREMISES

The Authority or its nominated Agent(s) may premises from time to time to monitor compliance with these Regulations and to

review operations, staff and premises layout, the terms of the applicable Licence and any Lease or other agreement between the Authority and the Licensee. The Authority will endeavour to arrange any such inspection so that the potential for

disturbance or disruption to the Licensee’s b

INSURANCE

Property

All Licensees and owners of residential units are required to hold and maintain valid policies of insurance as set out in their Licence and/or the Lease and/or Freehold sale and purchase agreement and these Regulations

The Authority may at its discretion arrange property all-risks insurance and third party liability insurance in respect of all property owned by the Authority including the JLT Infrastructure, the costs of which will form part of the JLT Infrastructure Levy.

EMPLOYMENT AFFAIRS

General

The Authority will provide employment related services to Licensees subject to the provisions of these Regulations. Such services may include, without limitation, the processing of entry permits, employee sponsorship and visa services, work permits and other matters concerning employees.

An employee of a Licensee may not work outside the Free Zone prior to written approval by the Authority and any other concerned authority having jurisdiction over such matters in the place where the employee intends to work.

An employee of a Licensee must not work inside the Free Zone until they have been provided with an Employment Card and a residency and access card by the Authority.

The Authority may, in its absolute discretion, set limits on the number of employees for a particular Licensee.

Employee Sponsorship

Where the Authority stands as the sponsor for will not confer any obligation of an

employer on the Authority. The Licensee will, at

all times, remain the employer of all sponsored employees and will be primarily responsible for the payment of wages, benefits and all other obligations and duties owed to the sponsored employees under the terms of the employment contract or at law. The Authority will not be liable to a Licensee under any circumstances for any act, default or omission on the part of a sponsored employee.

The number of visas to be issued to a Licensee is to be determined at the absolute discretion of the Authority based on the Licence activity and size of the premises the Licensee is operating from.

Licensees must ensure that all employees comply with the general laws and customs of the UAE and these Regulations.

12.10 The Authority may terminate the sponsorship of any sponsored employee on reasonable written notice to the Licensee if:

the Licensee has failed to renew its Licence or Lease;

the Licensee becomes insolvent or otherwise enters into liquidation;

the Licensee is not operating or otherwise carrying on business;

the sponsored employee has failed to abide by the laws of the UAE or is or has acted in a manner which the Authority reasonably believes is detrimental or prejudicial to the reputation and interests of the Authority, the Free Zone, the Emirate of Dubai or Federal Laws of the UAE; or

any other reason that the Authority may, in its sole discretion, determine.

EMPLOYER/EMPLOYEE RELATIONSHIP

Licensees will be responsible for discharging all of their duties in relation

to their employees in accordance with Federal Labour Law No.

Law”)The. Labour Law will apply to all persons employed in the Free Zone in addition to the provisions of this section 13.

Recruitment

Contract of Employment

A Licensee must have a written contract of employment with each employee. The terms and conditions of such contract of employment are a matter of negotiation

between the Licensee and the employee. The contract of employment must, as a minimum, comply with the provisions of the Labour Law.

Working hours

All Licensees will be bound by the provisions of the Labour Law in relation to working hours (including provisions relating to overtime, Ramadan timing and summer working.)

Basic Work Rules

13.6 All Licensees should establish a set of basic work rules for the benefit of all employees. As a minimum, such work rules should include details of working hours, employee health and safety in the workplace, employee conduct and the Licensees grievance and disciplinary procedures.

Employee Passports

All Licensees are reminded that employee passports are the property of the issuing country. No Licensee may hold the passport of prior and genuine consent. Where an employee has consented to a Licensee holding

his or her passport the Licensee must have effective procedures and controls in place to ensure that retained passports are held in a safe and secure facility and can and

will be returned to the employee.

Medical Insurance

All Licensees must procure and maintain a medical insurance policy for all of its employees in accordance with applicable law. Evidence of a valid medical insurance policy must be provided to the Authority upon request.

Termination of Employment

Where an employee’s contract of employment i renewed both the

Licensee and the employee must

deliver a signed letter of confirmation, in such format as may be specified by the Authority from time to time,

conforming that the employment has terminated and that the Licensee has paid and the employee has received all sums due and owing to the employee (including, without limitation, any applicable end of service gratuity payment). Failure by the Licensee to promptly notify the Authority of a terminated employee will attract a fine as set out in the Tariff.

Absconding Employees

13.10 If an employee is absent from work without approval for seven (7) consecutive days or is otherwise believed to have absconded from his or her employment the Licensee must promptly file a report of such unauthorised absence with the Authority. The Licensee will be liable to pay all applicable fines (e.g. immigration fines) and fees (as set out in the Tariff) in relation to such absconding employee.

13.11 Failure by the Licensee to promptly notify the Authority of an absconding employee will attract a fine and penalties as set out in the Tariff.

TRAFFIC AFFAIRS

The roads within the Free Zone are treated as public highways for licensing and Registration purposes. The Authority may request a Licensee to produce evidence that all drivers, operators and vehicles are properly licensed and registered with the

Dubai Roads and Transport RTA”) other Authority UAE Governmen(“

HEALTH, SAFETY AND ENVIRONMENT (HSE)

General

All entities or persons (including contractors and Sub-Developers) working or operating within the Free Zone must comply with the rules, regulations and guidelines set out in the JLT HSEQ Manual. The JLT HSEQ Manual provides a basic framework for insuring excellence in health, safety and environmental performance and the protection of persons and property within the Free Zone.

All Licensees that have purchased or leased development land are required to comply with Green Building Regulations issued by the Authority or any relevant regulatory authority. All Licensees are expected to monitor their operations and be able to demonstrate that their operations meet or improve upon the standards for sustainability established by the Authority or any relevant regulatory authority from time to time.

Accidents and Emergencies

All Licensees are required to provide the Authority with written details of an authorised person that may be contacted 24/7 in the event of any fire, flood or

other emergency. Such contact may either be another authorised individual.

In the event an emergency situation arises unmanned, unguarded,

closed or locked the Authority reserves the right to make a

forced entry to such premises where there is reasonable justification to do so or where a failure to act could result in significant losses or damage.

Waste Management

All Licensees must adhere to the Authority’s an

concerning waste management. Waste may only be disposed of at authorised

locations. Any person, company or organisation found to be dumping waste at an unauthorised location anywhere in the Free Zone will be reported to the authorities and will be liable for a fine as set out in the Tariff.

HOTEL LEVIES

All Hotels operating within the Free Zone are required to pay the Authority an annual Hotel Levy. The Hotel Levy shall be payable by the Hotel Operator quarterly in arrears. The Hotel Operator shall be responsible for the timely and accurate calculation and payment of the Hotel Levy to the Authority on such terms as the Authority may direct from time to time.

A Hotel’s obligation to pay the Hotel Levy c

Hotel obtains its BCC.

VIOLATION OF REGULATIONS

Ignorance of any provision of these Regulations, Licence and/or any of the Applicable Rules will not be accepted as an excuse for lack of compliance with the relevant provisions.

Any Licensee which is found to be in violation of any provision of these Regulations shall be guilty of an offence which, if not remedied within the time frame required by, and to the satisfaction of the Authority, shall render the Licensee liable to fines and sanctions in accordance with these Regulations, or such other sanctions as the Authority may implement from time to time.

DISPUTE RESOLUTION

Any dispute or Dispute object”)arionsing(“ from the

Authori these Regulations and/or in applying the Applicable Rules including the levying of

any fine or issuance of any sanction may, at the written request of the disputing party, be raised with any committee established by the Authority for dealing with such Dispute from Committee time”).to time (“

MISCELLANEOUS

Any delay in application of or failure to enforce these Regulations shall not operate as a waiver in respect of any breach of these Regulations.

Unless specifically provided otherwise by the Authority, rights arising under these Regulations are cumulative and do not exclude rights provided by law or at contract.

References

Abedini, J., & Péridy, N. (2008). The Greater Arab Free Trade Area (GAFTA): an estimation of its trade effects. Journal of Economic Integration, 23(4), 848-872.

Dennis, A. (2006). The impact of regional trade agreements and trade facilitation in the Middle East and North Africa region. World Bank Policy Research Working Paper, (3837).

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