She confirmed that the “Movable Funds” law excluded expenditures, wages and compensation

“Finance”: It is not permissible to mortgage workers ’salaries and rights as collateral for loans

The “Transferred Funds” law excludes public funds, endowment funds, and diplomatic corps funds.

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The Ministry of Finance stated that it is not permissible for companies of all kinds to mortgage workers ’salaries and rights as a guarantee for taking bank loans, explaining that the recently issued“ Transferred Funds ”law exempted from its provisions expenses, wages, salaries and workers compensation.

However, the ministry indicated to Emirates Today that the lending bank, if its right is guaranteed and has priority, can obtain its right first before any other rights, whether they are public rights or the right of workers or others.

Provisions

In detail, the Ministry of Finance confirmed that workers ’salaries and entitlements, and the sums allocated for retirement, health insurance, or any other entitlements, should not be used by the owners of companies of all kinds, whether large, medium or small, as a guarantee for taking bank loans under the umbrella of the recently issued" transferred funds "law.

In response to Emirates Today’s inquiries, the ministry clarified that the law stipulates that “expenditures, wages, salaries and workers compensation are excluded from its provisions, meaning that they cannot be used as money that can be pledged as a guarantee for loans”.

She added that «if the company has an independent account in which sums of money are set aside to pay salaries, labor guarantees, health insurance, retirement benefits, or upon injury during work, and this amount is permanently set aside for the employees’ account, companies cannot use it as a guarantee to obtain a loan. In the interest of the workers ».

Priority

Al-Maliya stated that, on the other hand, the law guarantees to the secured creditor the priority of obtaining his right in order to move the markets and preserve the economy, meaning that the lending bank, if his right is guaranteed and has priority, can obtain his right first before any other rights, whether they are public rights or Really for workers or others.

Intellectual property

And she continued, “Intellectual property rights have been recognized starting with the Civil Transactions and Commercial Transactions Law, then finally the Movable Money Law, so that the moral rights can be presented as guarantees that are evaluated such as trademarks and trade names and others because they have a great financial value sometimes, but in the end the matter is subject to agreement. With the bank lender ».

communication Web-sites"

Al Maliah reported that with regard to the social media pages, it is difficult on the ground to evaluate them and transfer the right to them to other owners. She wondered how they would be mortgaged given that those pages were controlled by technology companies, explaining how an account belonging to a company would be set up. "Facebook", for example, is at the disposal of a bank as collateral, which allows the bank to implement the material income generated through these and other pages.

She emphasized that the acceptance of these pages depends on whether or not the owner registered a moral right on them, and if the bank accepted them as a guarantee or not.

Exception

The ministry explained that the law also excluded movable funds that require the legislation in force to record the guarantee rights that are received in private records, as well as public funds, endowment funds, funds of foreign diplomatic and consular bodies and international governmental organizations.

Take advantage of the law

The federal law regarding guaranteeing rights to movable funds enables companies operating in various business sectors, primarily the small and medium enterprises sector, to benefit from their various movable assets (such as machinery, stored goods, and assets of the company as a whole, and intangible rights such as a trade name or trademark or rights. Intellectual property, receivables and cash flows, etc.), in order to guarantee its bank and commercial loans, which strengthens the position of the UAE in indicators of global competitiveness, ease of doing business, and establishes its attractiveness to attract foreign capital.

The ministry confirmed the difficulty of placing social media pages at the bank's disposal as a guarantee.

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