UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance


TheDubaiMulti-CommoditiesCenter(“DMCC”) hosts the Dubai Diamond Exchange (“DDE”), which was established in 2004 in order to facilitate the development of the diamond market, establish logistical support, and provide a secure regulated trading environment for diamonds in the UAE. 

The DMCC was established in 2002 by Royal Decree with a mandate to enhance commodity trade flows through the emirate ofDubaiby providing the infrastructure and regulatory framework required for such trade. In addition to the standard UAE free zone services, the DMCC free zone provides a straightforward company licensing process, zero taxation, comprehensive  infrastructure and facilities, and a strong regulatory environment. 

By offering a strong and reliable regulatory framework, modern infrastructure, freehold property, innovative products and cost efficient, value-added services, DMCC continually attracts key participants in the commodities sectors including international diamantaires in addition to a range of non-commodity related businesses to incorporate within the DMCC free zone.

As of date, the DMCC free zone has registered over 3,000 companies with 90% of new registrations being businesses that are new toDubaiincluding multi-nationals, major regional industry participants as well as small to medium sized businesses and entrepreneurs.  Approximately 550 diamond companies are registered within this estimated number of DMCC company registrants.

Through the solidly structured DMCC, the DDE accommodates every facet of the diamond industry from manufacturing facilities and trading platforms to diamond boiling and certification and vaulting solutions.  Since the inception of the DDE in 2004,Dubai’s diamond trade has catapulted from a small regional operation to the fourth largest diamond trading center in the world joining the ranks of leading diamond centers such asAntwerp,New Yorkand Mumbai.  In 2010, total diamond trade volumes inDubaireached a record value of US$35 billion growing from US$5 billion prior to the 2002 inception of the DMCC.  

In 2010, the DDE saw total diamond trade volumes for the year reach 268.7 million carats, up  50 percent from 178.1 million carats, while the value doubled from US$17.9bn to US$35bn. Polished diamond imports during 2010 rose 88 percent to 90 million carats (US$13.3bn) and polished diamond exports rose 128 percent to 73.6 million carats (US$14.6bn).  Dubaialso recorded a 100 percent increase in the volume of total polished diamonds traded, reaching 163.8 million carats.  In addition in January 2011, polished diamonds valued at US$7.2 million were offered at auction on the DDE, the first auction event of this kind in theMiddle East.  Rough diamond imports rose by  13 percent during 2010 recording 50.4 million carats and exports by three percent at 54.7 million carats. The value of rough diamonds imported rose 83 percent to US$3.3bn and rough diamonds exported by 81 percent to US$3.8bn. 

DDE is the first Arab member of the World Federation of Diamond Bourse (WFDB).  Founded in 1947, the WFDB provides a legal framework and regularly convenes to enact regulations for its member diamond bourses.  As part of the WFDB, DDE members have access to and follow the same trading practices as other WFDB member bourses. 

Furthermore, the UAE has enacted Union Law No. 13 Regarding Supervision of Import/Export and Transit of Rough Diamonds which implements the Kimberly Process Certification Scheme (“KPCS”).

The UAE is the first Arab country to adhere to the KPCS and the DMCC is the only entry and exit point for rough diamonds in the UAE, thereby helping to ensure that the KPCS is adhered to in the UAE diamond trade.  Therefore, the strong regulatory framework and solid infrastructure of the DMCC free zone and the DDE platform has allowedDubaito become one of the leading diamond trading hubs in the world.

Issued on 20/7 / 2004


Corresponding to 2 Jamadi Al – Akher 1425 H.


Amended by:


Federal Law no . 4/2008 dated 27/4/2008.


We , Zayed Bin Sultan Al Nahyan , President of the United Arab Emirates State,


Pursuant to the perusal of the Constitution; and


Federal Law no. 1 of 1972 regarding the Jurisdiction of the Ministries and the Powers of the Ministers and the amending laws thereof; and


Federal Law no . 3 of 1987 issuing the Penal Code; and


Federal Law no . 35 of 1992 issuing the Criminal Procedural Code; and


Federal Law no . 9 of 1993 regarding Controlling Trading in Valuable Stones and Precious Metals and their Hallmark; and


Federal Law no . 1 of 2003 regarding the Establishment of Federal Customs Authority; and


Acting upon the proposal of the Minister of Economy and Commerce, and the approval of the Council of Ministers and the Federal National Council and ratification of the Federal Supreme Council,


Have promulgated the following Law:




The following words and terms shall have the meanings stated opposite to each unless the context indicates otherwise:


The State: The United Arab Emirates State .


The Ministry: The Ministry of Economy and Commerce.


The Minister: The Minister of Economy and Commerce.


The Competent authority: The Custom authority at the concerned Emirate.


Kimberly Process: International regulation of ratification concerning international trade of raw diamond.


The concerned authority: The Ministry of Economy and Commerce.


Diamond: Natural metal containing crystallized Carbon within Isometric regulation and of relative resistance to scratch of average 10 and grade density of approximately 3.52 , and fracture factor of average 2.42.


Raw diamond: Diamond not fabricated or sawn in simple form , split or refined mentioned in the sections of the regulation coordinating symbolization and classification of goods no . 7102.10,7102.21 and 7102.31 mentioned in Kimberly procedure.


Disputes diamond: Diamond used by rebellious movements or its alliances in financing the dispute aiming to weakening lawful governments ; according to the relevant decisions of the International Security Council in effect or any other decisions adopted by the Security Council in the future , and according to the decision of the Assembly General of the United Nation no . 55/56 or any other similar decisions adopted by the Assembly General of the United Nation in the future.


Source Country: The country wherein the shipment of raw diamond is mined or extracted.


Country of exportation: The last participant country wherein exportation process of the raw diamond shipment is performed pursuant to the information recorded in the importation deed.


Exportation: Exit from any part of the geographical territory of the State.


Exporting Body: The body designated by the participant which the raw diamond shipment leaves its territories and delegated to ratify the Kimberly procedure certificate.


Importation: Entering into any part of the geographical territory of the State.


Importing Body: The body or bodies designated by the participant wherein the raw diamond shipment is imported into its territories and shall complete all the importation procedures especially the verification of the attached certificate.


The State’s certificate: Kimberly procedure certificate issued by the concerned authority in the State.


Kimberly procedure certificate: Deed against spoilage or forgery and adopt a certain form indicating that the shipment of raw diamond is fulfilling the requirements of Kimberly procedure.


The parcel : One or several parcels of diamond packaged together and not individually.


The participant : Any State , international organization or region dependant of the State or customs region subject to Kimberly procedure.


The shipment : One or several parcels actually imported or exported.


Crossing : Natural crossing across the participant or non – participant region by transshipment , storage or changing transportation means or by any other way where this crossing is a part of a complete journey and ends behind the frontiers of the participant or non – participant.


The inspector : The person designated by the concerned body and the competent authority having the capacity of judicial officers.

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

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