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Charity is considered as one of the prime noble deeds which helps needy and downtrodden people. However, in the recent times, it has been observed that money raised from the charity is used for illegal purposes such as promoting terrorism and smuggling. So, in order to curb all these illegal activities, the UAE government recently issued Federal Law No. 3 of 2021 (UAE Fundraising Law). This law strictly prohibits the individuals from conducting fundraising without having a legal permit.

The essential condition for fundraising is that the concerned individual or the organisation must have a valid license issued by the competent authority. Even, if you have a permit, it is important to note that the collection of fundraising shall be done through the charity associations

If a person violates these rules, he/she shall be subject to a minimum fine of AED 150,000 which can be extended up to 300, 000. In addition to this, the person may be subject to the criminal punishment and may face jail term. The amount collected through this illegal fundraising will also be confiscated by the courts.

In this new law, a strict check has been placed over the activities of all the charity organisations. They all are digitally linked to a government system in which all the information regarding these organisations are kept. This helps the government to ensure that the donor’s money shall be used only for lawful purposes.

This law is inspired by the Fundraising Law of Dubai Emirates, which came into force in 2015.

Laws Governing Fundraising in Dubai

In addition to the above discussed fundraising law, the provisions of Decree No. 9 of 2015 (Regulating the Raising of Donations) is also applicable in the Emirates of Dubai.

As per Article 3(a) of Dubai Fundraising Law, if a person is interested in fundraising, he must take prior written permission from the Islamic Affairs and Charitable Activities Department (the ‘IACAD’). The procedure for taking permission has been provided under Article 5 of the Dubai Fundraising Law. At first, the interested person needs to submit an application with IACAD, which is normally answered within 15 days. However, if your application remains unanswered, it shall be presumed that it has been rejected and you are not legally entitled to raise funds.

In Short

As a fundraiser, it is essential to have a valid license permit beforehand. The non-compliance of this provision will attract a huge monetary penalty  and  in extreme case penal provisions may also be attracted. The main objective of the New Fundraising Law is to protect the funds from being used in illegal activities such as money laundering and global terrorism.

In order to ensure that the provisions of this law are enforced on the grass root level, the local authorities and ministries have been assigned a responsibility to conduct field visits and make people aware about this new law.

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