UAE Waqf / Islamic Endowments LawLaw No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai

Article (2) The following words and expressions, wherever mentioned in this Law, will have the meaning indicated opposite each of them unless the context implies otherwise: UAE: The United Arab Emirates. Emirate: The Emirate of Dubai. AMAF: The Awqaf and Minors Affairs Foundation. MBRGCEC: The Mohammed bin Rashid Global Centre for Endowment Consultancy. Competent Court: The Dubai Courts. Endowed Property: The property and things that a Donor owns or over which he holds the right of disposition. These include, but are not limited to, movable and immovable property; shares; stocks; bonds; securities; usufruct rights; tenancy rights; and other personal, real, and moral rights that may be endowed. Endowment: A scheme under which the proceeds from Endowed Property are dedicated to Beneficiaries or to charity while keeping the principal intact. Donor: A person who renders Endowed Property inalienable through an Endowment with the intent to allocate its proceeds to an individual, a category of individuals, an entity, an initiative, or a project.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 3 of 21 Beneficiary: An individual, a category of individuals, or an entity to whom the proceeds of an Endowment are dedicated. Trustee: A natural or legal person who is appointed to manage an Endowment. Endowment Deed: A document issued by the Competent Court to validate an Endowment. Register: A register maintained by the AMAF for registering Endowments based on Endowment Deeds. Dubai Endowment Sign: A sign awarded by the MBRGCEC to individuals, public entities, and private entities that make Endowment-related socially responsible contributions. Endowment Foundation: A non-profit foundation, having legal personality, licensed by the AMAF, funded exclusively by Endowment proceeds, and utilising these proceeds to fund its programmes, initiatives, and activities. Gift: The movable or immovable property which is donated in accordance with this Law and other applicable legislation for the benefit of an individual, a category of individuals, an entity, an initiative, or a project. Objectives of the Law

Article (3) This Law aims to: 1. implement the UAE vision of consolidating the values of altruism, philanthropic giving, and performing charitable deeds without expecting anything in return; 2. develop an integrated legal framework that meets modern-day requirements and the need of society for the regulation, management, operation, and preservation of Endowments and Gifts; 3. create an environment that encourages charitable work and social contribution to education, health, culture, arts, the environment, sports, social solidarity, and other relevant fields; 4. encourage Endowments and Gifts through innovative initiatives that meet the needs of the community, individuals, and various other categories;

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 4 of 21 5. determine the role of concerned entities and the rules and procedures governing Endowments and Gifts, their management and development, and the allocation of their proceeds to individuals, categories of individuals, entities, initiatives, and projects that are worthy of support; 6. diversify the forms and channels of distribution of Endowment proceeds and Gifts through traditional and innovative methods; and 7. develop a clear system of governance for the Endowment Foundations established in the Emirate. Scope of Application

Article (5) a. An Endowment will be established by the expression of the legally valid intent of the Donor as evidenced by an Endowment Deed recorded in the Register. b. An Endowment Deed must contain a statement of intent of the Donor to render the principal of the Endowed Property inalienable and to distribute its proceeds among the Beneficiaries he specifies and under the terms he prescribes. It must also contain all information about the Donor, the Endowed Property, the Beneficiary, the Trustee, and the term of the Endowment. c. An Endowment Deed will be legally binding on all persons, including the Donor and his universal and particular successors. d. An Endowment established prior to the effective date of this Law may be proven by all means of evidence.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 5 of 21 e. Any Endowment established contrary to the provisions of this Law will be deemed void and will have no legal effect. Types of Endowments

Article (6) a. Endowments are categorised according to type of Beneficiary as follows: 1. Family Endowment: an Endowment established for the benefit of the Donor himself, his offspring, or any other persons he specifies by name or description whether or not they are from amongst the Donor’s relatives; 2. Charitable Endowment: an Endowment whose proceeds are allocated to the public, a specific entity, an initiative, or a project; and 3. Joint Endowment: an Endowment whose proceeds are allocated to the Donor’s offspring and to public charity. b. Endowments are categorised according to their term as follows: 1. Permanent Endowment: an Endowment which is not limited in time; and 2. Term Endowment: an Endowment for which the Donor determines a specific period or a specific generation of his offspring; c. Endowments are categorised according to scope as follows: 1. Specific-purpose Endowment: an Endowment established by the Donor for a specific purpose; and 2. Public Charity Endowment: an Endowment established by the Donor for multiple purposes or for public charitable activities. Endowment Term

Article (11) For an Endowment to be valid, the Donor must meet the following requirements: 1. He must be of full capacity and not be prohibited from making donations. 2. He must be the owner of the property to be endowed or have the right of legal disposition over it. 3. He must not be liable for a debt incurred prior to establishing the Endowment, where the settlement of the debt consumes the Donor’s entire property or where the Donor’s property in excess of the Endowment will not cover that debt, unless the Endowment is permitted by the creditor. 4. Neither the conditions stipulated by the Donor nor the purpose of the Endowment may aim at evading the repayment of a debt; at impeding the exercise of a right of pre- emption; at circumventing inheritance provisions; or at violating applicable legislation, public order, or public morals. Requirements for Endowed Property

Article (13) A Beneficiary must: 1. be specified by the Donor. Where no person is specified by the Donor, the poor will be deemed as Beneficiary. A Donor may, during his lifetime, specify another Beneficiary. Where the Beneficiary passes away without specifying a Beneficiary, the proceeds of the Endowment will continue to be disbursed to the poor; 2. have a legitimate interest in the Endowment;

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 8 of 21 3. exist or be likely to exist in the future. The Donor may during his lifetime reallocate entitlement to Endowment proceeds from a Beneficiary to another; 4. be legally eligible for being identified as a Beneficiary of an Endowment; and 5. not have any interest that conflicts with public interest. Endowment Proceeds in Excess of Beneficiary Needs

Article (16) a. An Endowment will take effect from the date on which it is recorded in the Register. An Endowment may be recorded in the Register only after the Endowment Deed is issued. b. Recording an Endowment in the Register will have the following effects: 1. The Endowment will have legal personality, financial and administrative autonomy, and the right to sue and be sued in its own name. 2. Ownership and possession of the Endowed Property will be vested in the Endowment. 3. The conditions of the Endowment will come into force. 4. The Endowment will become binding on all persons.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 9 of 21 Appointment of Trustees

Article (19) A Trustee must: 1. satisfy the conditions stipulated by the Donor in terms of time and place; 2. preserve the Endowed Property from dilapidation or damage, and ensure that the repair and preservation of Endowed Property takes precedence over disbursing its proceeds among the Beneficiaries.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 10 of 21 3. manage and preserve the Endowment, and distribute its proceeds among the Beneficiaries as stipulated in the Endowment Deed, this Law, and the resolutions issued by the AMAF; 4. exercise due diligence in developing and investing the Endowed Property, whether by himself or through contracting any other experts and specialists; 5. not dispose of the Endowed Property in any manner that involves transfer of ownership or pledging it as debt collateral, unless this is required for the preservation of the Endowed Property and only after obtaining the Donor’s or the Competent Court’s approval, otherwise the disposition will be deemed null and void; 6. invest, manage, or use the Endowed Property for its intended purposes; 7. not lease out or utilise the Endowed Property at lower rates than those of similar property; 8. prepare the annual budget of the Endowment, prepare its final accounts by the end of each financial year, and prepare and maintain its accounting records and financial documents; and submit the required reports on the financial position of the Endowment to the Donor, to the person he names in the Endowment Deed, or to the AMAF, as the case may be, in accordance with the Endowment Deed and the procedures adopted by the AMAF in this respect; 9. deposit Endowment proceeds in the name of the Endowment in an account with any of the banks licensed in the UAE; 10. expend Endowment proceeds through its proper channels as per the Donor’s conditions and public interest exigencies; 11. settle any liabilities incurred by the Endowment including the repayment of debts and other outstanding amounts, subject to serving the interest of the Endowment; and 12. undertake the legal dispositions stipulated by the Donor in the Endowment Deed, provided that such stipulation is valid. Rights of Trustees

Article (22) a. A Trustee may invest the Endowed Property for the benefit of the Endowment until the commencement of construction works. b. A Trustee may obtain loans to develop or repair the Endowed Property. However, he may not pledge the Endowed Property as debt collateral. c. Where the proceeds of the Endowment are not sufficient to repair damaged Endowed Property and where no surplus proceeds are generated from another Endowment, the Trustee may, subject to approval of the Donor or the Competent Court, sell part of the Endowed Property to pay for repairing the other parts. d. A person who demolishes Endowed Property in whole or in part must restore the Endowed Property to its original state, failing which he will be liable for the value of the property and for damages. A person who causes damage to Endowed Property in whole or in part will be liable for restitution in kind or in value. e. A Donor may stipulate a change or substitution of an Endowed Property. f. Endowed Property consisting of moveable property may be replaced where no party is financially supporting it and it is at risk of loss, or is no longer usable, and fails to deliver the benefits for which it is endowed. Where such Endowed Property is sold, the sale proceeds will be used to purchase a similar property where possible. g. Endowed Property consisting of real property which is dilapidated and no longer usable may be sold and replaced by another property provided that the sale proceeds are used to purchase a similar property.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 12 of 21 h. A Trustee may, upon the Donor’s or the Competent Court’s permission, purchase new property with the sale proceeds of the replaced property, invest such proceeds in any legal manner, and expend the returns on such investment through the original disbursement channels of the Endowment. Assignment of Trusteeship

Article (25) A Donor or the AMAF, as the case may be, may take any of the following measures against a Trustee: 1. suspend him and appoint a replacement Trustee where he repeatedly delays in submitting Endowment annual budgets, final accounts, and the documents supporting the collection and disbursement of Endowment proceeds; 2. where he receives trusteeship remuneration, deprive him of this remuneration in whole or in part in case of negligence or omission; 3. remove him where he is proven to have committed a breach against the Endowed Property or to have committed any omission or negligence in respect of his Endowment trusteeship; 4. have recourse against him for any damages where he causes loss or damage to the Endowed Property; and 5. refer him to the competent judicial authorities where he commits any act that may compromise the Endowed Property or its proceeds in any manner whatsoever.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 13 of 21 Trusteeship by the AMAF

Article (28) a. A Trustee must, within the time frame determined by the AMAF, submit to the AMAF periodic reports, accompanied with supporting documents, on the state of the Endowment, the proceeds that have been distributed among the Beneficiaries, the proceeds deposited in the Endowment bank account, the amounts expended in preserving and maintaining the Endowment, and any other information required by the AMAF. b. A predecessor Trustee of an Endowment must present to the successor Trustee a final report on all matters related to the Endowment in which he details the information determined by the AMAF. He must also surrender to the successor Trustee all the funds, property, and documents of the Endowment within thirty (30) days from the end of his trusteeship. The predecessor Trustee will remain responsible for the preservation of the Endowed Property until it is surrendered to the successor Trustee. Penalty for Misappropriation of Endowment Funds

Article (30) The AMAF will identify the Family Endowments which are recorded in its registers and whose Beneficiaries are unspecified. The details of these Endowments will be published in two (2) widely-circulated daily newspapers, and will be posted at the AMAF premises and at police stations in whose jurisdiction Endowed Property is located for sixty (60) days. Affected persons may claim their dues from the Endowment proceeds within two (2) years from the date of publication. Any unclaimed share will constitute a separate Endowed Property whose proceeds will be dedicated to charity. The AMAF must return the principal of the Endowment, excluding proceeds for the previous period of time, to its owners or to their heirs whenever they present their claims. Entitlements of Beneficiaries

Article (31) a. Endowment proceeds must, depending on the type of Endowed Property, be expended on the Beneficiary that the Donor identifies and in the manner prescribed in the Endowment Deed or in this Law. b. Entitlement of a Beneficiary will be limited to the proceeds of the Endowed Property, and will not include the principal. c. Subject to the Donor’s approval if he is alive, or the AMAF’s approval where the Donor is deceased, Charitable Endowment proceeds may be expended through channels that are not mentioned in the Endowment Deed if this achieves public interest. d. Where a Donor's parent, offspring, spouse, or relative up to the fourth degree is stricken by poverty, proceeds of a Charitable Endowment will be disbursed to that needy person to meet his basic needs within the limits determined by the AMAF. e. A Trustee may, upon the Donor’s approval if he is alive or upon the AMAF’s approval if he is deceased, expend part of a Charitable Endowment proceeds or part of the charitable share in a Joint Endowment, or use Endowment assets for public disaster relief. f. Endowment proceeds will be dedicated to public charity in the following cases: 1. where the Donor does not specify a particular disbursement channel for the Endowment proceeds;

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 15 of 21 2. where the Endowment proceeds disbursement channels cannot be identified; 3. where the Beneficiary is unknown or ceased to exist; or 4. where an Endowment is rejected by the Beneficiary. g. Where the Endowment Deed of a Joint Endowment does not stipulate distribution of shares, proceeds will be equally divided between Beneficiaries and public charity; h. Proceeds of Family Endowments will be equally divided amongst male and female Beneficiaries, unless the Donor stipulates otherwise in the Endowment Deed. i. Where a Family Endowment follows a family hierarchy, and one of the Beneficiaries passes away or forfeits his share of the Endowment, the conditions, if any, prescribed by the Donor must be honoured in respect of that Beneficiary's share, otherwise it will devolve on his offspring. In the absence of offspring, his share will devolve on another person within the same family hierarchy level. In the absence of such person, his share will devolve on the next lower family hierarchy level. Where a child is born at the higher family hierarchy level, that Beneficiary's share will devolve on the new-born Beneficiary effective from the date of birth. Where no progeny is left for the Donor, proceeds of the Endowed Property will revert to the AMAF for use in public charity. j. Unless the Endowment Deed stipulates otherwise, a Family Endowment which follows no family hierarchy will expire where no Beneficiary is left. k. Unless the Endowment Deed stipulates otherwise, Endowed Property proceeds will devolve on heirs of the Beneficiary upon his death. Upon extinction of the Beneficiary’s offspring, Endowed Property will revert to the Donor himself or devolve on his heirs upon his death. Where none manifests, Endowed Property will revert to the AMAF for use in public charity. Forfeiture of Entitlements

Article (32) A Beneficiary will forfeit his share in the Endowment proceeds if he is convicted by a definitive court judgement of wilful murder of the Donor, the person from whom he receives Endowment proceeds, any other Beneficiary, or any other person whose death will lead to an increase in the share of the Beneficiary or will expedite his entitlement to the proceeds. Forfeiture by the Beneficiary of his share of the proceeds will not prejudice the rights of those murderer’s offspring who did not take part in the murder if they are entitled to such Endowment proceeds.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 16 of 21 Time Limit on Entitlement to Endowment Proceeds

Article (34) a. Endowed Property may not be divided or apportioned among Beneficiaries. Beneficiaries may neither dispose of nor pledge Endowed Property. A judgement may not be enforced against it. No third party may create any principal or accessory real right or interest over it. Any such disposition will be null and void unless authorised by law. b. Endowed Property will not be included in the bankruptcy estate of a Donor or Beneficiary, and may not be subject to attachment for the purpose of repayment of the debts of either of them. c. Endowed Property may not be encroached upon or confiscated. It may be expropriated only as stipulated by law. It may not be taken possession of, and its proceeds may not be claimed except where Beneficiaries and the Donor’s progeny ceases to exist, in which case Endowed Property will revert to the AMAF for use in public charity. Privileges of Charitable Endowments and Joint Endowments

Article (35) a. Debts owed to a Charitable Endowment and to the charitable share in a Joint Endowment will be deemed as privileged as public debts, will have priority over debtors’ property, and will be collected in the same manner in which public funds are collected. b. Charitable Endowments and the charitable share in a Joint Endowment will be exempt from all taxes and fees, including court fees. c. In implementing the provisions of penal legislation, a Charitable Endowment and the charitable share in a Joint Endowment will be deemed Public Funds, and the paper- based and electronic documents, records, and registers thereof will be deemed official documents. A Trustee and those working for an Endowment will be deemed civil servants.

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Law No. (14) of 2017 Regulating Endowments and Gifts in the Emirate of Dubai Page 17 of 21 Chapter Four Expiry of Endowments Cases of Endowment Expiry