Legal studies

دراسة للإطار التشريعى الأساسى لبناء كويت صناعية .

At this stage, when Kuwait is actively moving towards economic reform and diversification of income sources, the best strategic step is to turn it into an industrial country to accelerate its economic development. Yet, there are major challenges to shaping an economic climate which ought to be open and competitive, and these challenged face the industrial sector in particular and the business sector in general. They are as follow: 1- Upgrading Kuwaiti products, by increasing production quality, and building their competitiveness at a global level which should strengthen their position in local markets. 2- Keeping pace with the rapid changes in world markets. To meet such a challenge, flexible mechanisms of management, design, production and marketing need to be developed. 3- Attracting local and foreign investments and building a solid technical base is the most pressing target to build and develop a successful industrial future. 4- Preparing the legal setting for the industrial sector in Kuwait, by legislating specific economic laws aimed at mainstreaming and organizing the work. 5- Giving attention to sustainable development and the preservation of the industrial environment. 6- One of the crucial factors that have become a necessity is developing the skills of the Kuwaiti industrial workforce along with adapting the work culture. 7- Advancing the industrial management to improve performance and productivity in industrial facilities, as the industrial sector significantly depends on efficiency and technical skills. 8- Large plants should rely on medium and small factories to secure their basic supplies of other products. 9- Intensifying government efforts in cooperation with the private and foreign sectors to nurture the investment climate thereby increasing the rates of industrial investment in Kuwait. 10- Restructuring the economic cities and establishing special and integrated industrial cities guided by the positive experience of Saudi Arabia and the UAE. Kuwait Industrial Law outlines the industrial establishment in Article (2) as ‘any establishment whose primary purpose is to convert raw materials into completed, semi-manufactured or intermediate products, or to convert semi-finished or intermediate products into completed products. This includes the processes of mixing, separating, forming, remodelling, assembly and packaging, provided that this work is principally carried out and managed by a mechanical force.’ On the other hand, Article (3) of the same law defines the industrial craft as ‘any activity in the production or industry areas which relies on technical manual skill, minorly employs a machine, and is not a typical product.’ The Industrial Law of Qatar adds other aspects to the definition in the form of Industrial Law No. 19 of 1995, where the national industrial product was defined as ‘a product whose value includes at least 40% local ingredients, and the national capital ratio in the industrial project as a whole is no less than 51% of the total capital. All in addition to introducing Protection as a term and identifying the means used to protect the national industrial production, such as the imposition of customs duties on imported products similar to national products in accordance with Article (1) of the same law. The UAE Industrial Law is distinguished from those of Kuwait and Qatar in its Article (8): Establishment of Industrial Projects Section. The article stipulates that a license for the establishment of an industrial project should be granted to citizens of the UAE or to companies whose capital includes no less than 51% national capital. It further requires the director in charge of these companies or institutions to be a UAE citizen, or its board of directors to consist of members, the majority of whom are UAE citizens.Unlike what Article (6) of the Kuwaiti law states where the nationals of the the GCC Arab countries are given the right to establish an industrial project on the lands of Kuwait. In addition, it did not address the issue of management or Board members, which means leaving them according to the regulations of the Kuwaiti Company law. * After reviewing Article (12) of the Kuwaiti Law which states that «no production of any industrial or crafting project may start before being recorded in the industrial register. The register shall record all modifications or alterations to the license in accordance with the rules prescribed». * As for Federal Law No. 1 for the year 1979 regarding the regulation of the industry affairs, the definition of an industrial project was amended through simple additions, where it is defined as follows: An industrial project is an investment process whose main purpose is to convert raw materials in essence, composition, shape or appearance in order to turn them into finished products or intermediate materials. This also includes converting intermediate products into full products, including blending, assembling, breaking down, packaging, as well as increasing production capacity or establishing new production assets that replace older depreciated or expired assets. All of this shall be in accordance with what the project approval determines according to a set plan. * UAE and Qatari law have focused on establishing a competent Consulting and Industrial Committee according to the laws. However, the Qatari law has vested the jurisdiction of the Committee to the competent Minister to decide. This is unlike the UAE law, where the jurisdiction of the committee was restricted, as an example. The competent Minister was given wide authority in accordance with article (4) of the UAE (federal) law. Article (6) of the same law stipulates the mechanism of the decision making for the committee in matters that fall within its jurisdiction. These decisions must have been issued based on technical and economic studies in the light of industrial policy and the general plan of the State. * Article 3 of the Emirati law regarding the arrangement of committee members selection, where the people of the UAE must be involved in issuing decisions related to industrial activity in accordance with paragraph (3) and paragraph (4) of Article (3) relating to the selection of a representative of the citizens chosen by each Emirate Governor, as well as the choice of two private industry experts, who are appointed by the Minister after being nominated by the Federation of Chambers of Commerce and Industry in the State, for a renewable term of two years. * Qatari law is unique in its interest in the seriousness of industrial records registration in order to avoid licensing fake industrial projects. Articles (11-12) of Section IV stipulate that the industrial record must register licensed industrial projects that have already begun real production. Therefore, the owner of the project is not entitled to apply to register in the industrial record except within 60 days from the date on which actual production commences. Article (11) stipulates that « The department may make an industrial record where it registers all licensed industrial projects that have already begun real production in accordance with the provisions of this law». Article (12) stipulates that «The project owner must submit to the department an application to be registered in the industrial record within 60 days from the date on which real production starts». * The Kuwaiti legislature would be better advised to follow such a step so that an entry in the industrial record is made only after the project begins real production so as to ensure that the project already exists. * UAE law follows a different path in order to resolve the issue of licensing fake factories.

Areej A/R Hamadah

2017-07-18

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