General UAE Legal Questions LawCabinet Resolution No. (29) of 2021 Concerning the Executive Regulations of Federal Law No. (4) of 2020 Securing Rights in Moveable Assets

Article (1) Definitions The definitions contained in Federal Law No. (4) of 2020 mentioned above shall apply to this Resolution. Otherwise, the following words and expressions shall have the meanings assigned thereto respectively unless the context requires otherwise: Identification Number : The information provided for in Para. (b) of Clause (1) of Article (10) of this Resolution. Control Agreement : A written agreement which is concluded by and between the financial institution, Pledgor, and Pledgee and under which the financial institution agrees to follow the Pledgee's instructions in respect of payment of the amounts deposited in the current account or deposit account without obtaining…

Article (2) Functions of the Register The Register shall: 1. Register rights in accordance with the provisions of the Law, including any amendment or cancellation thereof. 2. Save and classify the registrations in the Database of the Register. 3. Enable the public to search the Database of the Register and to have access to the registrations contained therein. 4. Issue certified paper or electronic reports including information saved in the Database of the Register in accordance with provisions of Law and this Resolution.

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Cabinet Resolution of 2021, Concerning the Executive Regulations of Federal Law of 2020 on Securing Rights in Movable Assets 3 5. Save the certified search…

Article (3) Responsibility for The Documentation Information 1. The Register may not verify the contents of the registration or search application. 2. The Register shall not be responsible for the validity or accuracy of the information included in the registration or the information entered in the Database of the Register. Requirements for Utilizing the Register Services

Article (4) Authorization for documenting the Registration 1. A security contract shall be concluded in writing whether in the form of a formal or informal document. 2. The security contract or any other authorization prior to the conclusion thereof shall be deemed sufficient evidence of the Pledgor's approval of the registration. 3. The Register may not request a proof of the Pledgor's approval of the registration.

Article (5) Procedures for Documenting the Registration 1. In order to document a registration, a person shall have a client account on the Register’s website according to the procedures determined by the Register for this purpose. 2. Registration shall be documented in the Register immediately upon fulfillment of requirements and entry of information provided for in the Law and in this Resolution. 3. The Register shall issue an electronic confirmation upon documenting the registration. The confirmation shall include the registration date, time, and number, and the information contained therein, unless otherwise provided for in this Resolution.

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Article (6) Procedures for Searching the Database of the Register 1. Any person may search the Database of the Register through entry of any of the following search parameters: a. Documentation number; or b. The identification number. 2. Search shall be performed using the parameters set forth in Clause (1) of this Article exclusively. 3. Any person who searches the Database of the Register may print a search report. 4. The information contained in the search report shall include the following: a. Presence of a registration registered in accordance with provisions of the Law and of this Resolution; b. Date and time of documenting the registration; c. The information included in Article (9) o…

Article (7) Search Report 1. Any person may submit an application to the Register to obtain a paper or electronic search report authenticated by the Register and issued in accordance with the provisions of Article (7) of the Law. 2. The application for obtaining the report shall be submitted by accessing the reports page available at the Register’s website and filling in the form designated for this purpose. 3. The search report shall include the information referred to in Paras. (4) and (5) of Article (6) of this Resolution.

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Article (8) Rejection of Registration or Search Application 1. The Register shall reject to document the registration in the event that any of the data specified in any of the mandatory fields is not provided, or if the information entered is illegible. 2. The Register may reject a search application if the information required to be entered in one of the search parameters is not entered, or if the information entered is illegible. 3. Except for the cases stipulated in Clauses (1) and (2) of this Article, the Register may not reject applications for documenting the registration or search applications. 4. In case of rejection of documenting the registrations or search applications, the Regist…

Article (9) Registration Information Registration shall include the following information: 1. Pledgor's and Pledgee's data pursuant to Article (10) of this Resolution; 2. Description of the Pledge pursuant to Article (11) of this Resolution; 3. Documentation validity period; and 4. Any other data required by the Register.

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Article (10) Identification of Parties 1. Pledgor's data shall be identified through the following: a. Name; b. Identification number as follows: 1. ID Card Number if it is a natural person having the nationality of the State or residing therein; 2. Passport number if it is a natural person not having the nationality of the State or not residing therein; 3. Registering number or registering licence number if it is a legal person registered inside the State; or 4. Nationality and registering number if it is a legal person registered outside the State; or c. Nationality if it is a natural person not having the nationality of the State, or is a legal person not registered inside the State. 2. P…

Article (11) Description of the Pledge and Secured Liabilities 1. Description of the Pledge shall be deemed sufficient if the Pledge is reasonably identified through the following: a. Kind, class, or quantity; or insertion of the Pledge into a specific list; b. Presence of a phrase stating that the Pledge includes all the Pledgor's assets, whether current or future; c. Presence of phrase stating that it includes a specific type or class of securities, whether it is current or future, such as "all equipment" or "all current or future accounts receivable".

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Article (12) Registration Language Registration shall be formulated on the Register website in Arabic or in English.

Article (13) Entry of Registration into Force 1. Registration for the first time or registration of amendment shall enter into force from the date and time of entry of registration information in the Database of the Register in a manner allowing the registration to appear in case of searching the register; 2. Registration for the first time or registration of amendment shall be deemed non- enforceable in case of presence of wrong entry of identification number in the Database of the Register and said error would result into inability to recover information included in the registration by searching the Database of the Register using the right identification number as a search parameter;

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Article (14) Registration of Amendments 1. Pledgee may amend the registration by documenting the registration of amendments including the following: a. Number of documenting the registration subject of amendment; and b. Pledgees who agreed to the amendment. 2. Pledgor's approval of documenting the registration of amendment which adds Pledges or Pledgors shall be obtained. 3. Amendment shall be deemed enforceable against Pledgees who approved documenting the registration; 4. Registration of amendment adding new Pledge or new Pledgor shall enter into force from the date on which it becomes possible for the amendment to appear upon searching the register; 5. Non-amendment of registration of any…

Article (15) Registration of Extension 1. Pledgee may amend registration for the purpose of extending validity period thereof by way of documenting an extension registration including the following: a. Documentation number of the registration subject of extension; b. Pledgees who approved the extension; and c. Date and time of expiry of the documentation. 2. Extension shall be enforceable against Pledgees who approved the documentation of the registration.

Article (16) Registration of Voluntary Cancellation 1. Cancellation of documented registration shall be enforced only against Pledgees who approved cancellation from the date and time of effecting the cancellation registration. 2. The registration shall remain documented on the Database of the Register available for searching processes unless Pledgees approve cancellation thereof.

Article (17) Mandatory Registration 1. In the event that Pledgee does not document the cancellation registration pursuant to provisions of Article (16) of the Law, the person whose name is mentioned as a Pledgor in a registration may send a written letter indicating its identity, first time registration, or the registration of amendment desired to be canceled. Pledgee may not make Pledgor bear any fees or expenses as a result of compliance with Pledgor's request for cancellation. 2. In case of repayment of secured liabilities under provisions of Article (16) of the Law, the person whose name is mentioned as a Pledgor in a registration may not request the documentation of the amendment regist…

Article (18) Control 1. The security right established on credit accounts only may be enforced against third parties by way of control; 2. The security right established on credit accounts shall be enforceable against third parties in either of the following two cases: a. If established in favor of the financial institution holding the credit accounts; and/ or b. If the Pledgor, Pledgee and the financial institution holding the credit account conclude a control agreement. Priorities

Article (19) Priority of Rights Established Under Court Rulings 1. Priority of right established on the Pledge over tangible movables in accordance with an order or judgement issued to impose the precautionary or executive attachment on Pledge shall be specified from the date and time of registration of the order or judgement on the register pursuant to Clause (2) of Article (15) of the Law, or from the date and time of possession of the Pledge by seizure thereof, or on the date and time of defendant's debtor's or prevailing party's receipt of the attachment notice, whichever is earlier. 2. Security right for financing purchase which has been registered on the register pursuant to provisions…

Article (20) Notice of Purchase Financing Served by Pledgee Holder of Security Right Notice of purchase financing served by Pledgee holder of security right shall be deemed sufficient if served to Pledgee who has documented a registration of security right created in its favor over accounts receivable and addressed to its address mentioned in said registration.

Article (21) Priority In Respect of Credit Accounts 1. The security right established on a credit account in favor of the financial institution holding the account shall have priority over competing security rights enforceable against third parties. 2. The security right established on a credit account and enforceable against third parties by virtue of a control agreement shall have priority over competing security rights, except for security right of the financial institution provided for in Clause (1) of this Article. 3. Priority of competing security rights over a credit account which became enforceable against third parties by virtue of conclusion of control agreements shall be determine…

Article (22) Notice of Execution 1. The Pledgee shall include the following in the Notice of Execution mentioned in Article (27) of the Law: a. Notification of its intent to acquire the Pledge, and execute thereon; b. Identification of the Pledgor and Pledge executed thereon; c. Method of execution; and d. Time and place of disposal of the Pledge. 2. The notice mentioned in Clause (1) of this Article shall be deemed sufficient even if it includes additional information or minor errors which would not lead to serious misleading of third parties.

Article (23) Report on the Procedures of Sale The Pledgee who has executed on a Pledge under the provisions of Article (33) of the Law shall deposit the proceeds of execution in the treasury of the Court within whose jurisdiction the sale was made within two working days, according to the form of report on procedures of sale appended to this Resolution. Law Applicable to Security Rights on Intangible Funds

Article (24) Domicile of Pledgor Law of the Domicile of Pledgor shall apply to the establishment of security right, its enforcement against third parties, the priority and execution of security right on the Pledge if it is an intangible movable, provided that domicile of Pledgor shall be determined as follows: 1. The State wherein the head office of its business is located; 2. The State wherein the administrative office is located in case that the Pledgor has offices in more than one country; or 3. The State where it usually resides if it does not have headquarters.

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Article (25) Previous Security Rights Rights which became enforceable against third parties through registration on the register pursuant to the provisions of Federal Law No. (20) of 2016 on Mortgaging of Movable Assets as Security for Debts shall remain enforceable against third parties until expiry of enforcement thereof against third parties under the Law.

Article (26) Charges In exchange for the services provided by the entity in charge of the Register and specified in the schedule appended to this Resolution, the charges assigned to each of these services shall be collected by the means determined by the Ministry.

Article (27) Issuance of Resolutions 1. The entity responsible for managing the Register shall prepare all forms provided for in the Law, this Resolution, and the directives issued in implementation thereof; provided that the Minister shall issue a Resolution to this effect. 2. Forms and directives shall be published on the Register’s website within (3) three working days from the date of issuance thereof by the Minister.

Article (28) Executive Resolutions The Minister shall issue the resolutions necessary for implementing the provisions of this Resolution.

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Article (29) Repeals Any provision contradicting or in conflict with the provisions of this Resolution is hereby repealed.

Article (30) Publication and Entry into Force This Resolution shall be published in the Official Gazette and shall enter into force from the day following the date of publication hereof. Mohammed Bin Rashid Al Maktoum Prime Minister Issued by Us On: 7 Sha'ban 1442 A.H. Corresponding to: 21 March 2021 AD.

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Cabinet Resolution of 2021, Concerning the Executive Regulations of Federal Law of 2020 on Securing Rights in Movable Assets 15 Appendix (1) Appended to Cabinet Resolution No. (29) of 2021 Sale Procedures Report Form SN. Service Description Registration Timeframe Fees (in AED) 1 Issuance of certified paper or electronic report Not applicable AED (200) per registration 2 Regi…