The UAE has made another step to eliminate the lack of transparency and accountability in the nonprofit sector. According to a new Cabinet resolution under which administrative penalties will be imposed on a public benefit institution that does not adhere to Federal Decree-Law No. (50) of 2023, there are legal requirements regulating the operations of Law.
The government is undertaking such penalties as an attempt to promote the cause of better governance, the financial action, and the regulation of the institutions in the interest of the people.
What Are Public Benefit Institutions?
The nonprofit organizations, charities, foundations, and associations in the UAE which promote social, humanitarian, cultural or educational benefits are considered to be the institutions of the public good. Such organizations should be licensed and have set regulations outlined by the ministry of community development or other regulation authorities.
New Penalties: Key Violations and Fines
Institutions that violate the new framework will be subjected to fines of Dh1,000 to Dh30,000 and even suspension of activities in case the rule is repeated, although it depends on the type and frequency of violation.
Failure to Notify Changes within the Institution
Failure to Notify Changes within the Institution
- 1st & 2nd Violation Warning
- 3rd Breach: Dh1,000 penality
- 4th Violation: Closure of a month
Unauthorised Participation in Events
- 1st Violation: Warning
- 2nd Offence: Fine Dh, 1000
- 3rd Violation: a penalty of Dh 2,000 will be imposed.
- 4th Violation: Closure of a month
Hosting Local Guests Without Approval
- 1st Violation: Warning
- 2nd Offence: Fine Dh, 1000
- 3rd Violation: a penalty of Dh 2,000 will be imposed.
Hosting International Guests Without Approval
- 1st Violation Fine: Dh2,000
- 2nd Violation: Dh 4,000 fine
- 3rd Violation: dh6,000
- 4th Violation: Closure of a month
Unapproved Participation in Foreign Activities
- 1st Offence: Dh5,000 fine
- 2nd Violation: Fine of Dh10,000
- 3rd Violation: Fine of Dh 15000
Unauthorized Membership in Foreign Organizations
- 1st violation: Penalty of Dh10,000
- 2st violation: Dh20,000 fine
- 3rd violation: Dh30, 000
Improper Fund Management
- 1st Violation Warning
- 2nd Violation: Dh5,000 fine
- 3rd Violation: D10,000 fine
What This Means for Institutions
The new regulations point to the transparency and legal government by the government in the UAE. Institutions must:
- Report any internal operational changes in time.
- Grant oneself the relative permissions to host or engage in an event, especially when involving foreign entities.
- Have sufficient finance covering controls and reporting available.
- Form affiliation or membership with international bodies on prior written approval.
Stay Compliant
It is highly recommended that organizations take a look at the Federal Decree-Law No. (50) of 2023 and be fully compliant with everything it entails. I will not be able to use this excuse and the punishment may go very high.
Institutions may call the Ministry of Community Development or visit their local regulator information for additional details or assistance on how they can comply.
