The federal law governing the activities of commercial agencies is to be amended to protect UAE national agents from arbitrary and illegal actions by those based abroad.

A draft of the revisions was approved by the Federal National Council (FNC) yesterday at a meeting attended by Minister of Economy Sultan bin Saeed Al Mansouri, who described the actions of some foreign agents as "tyranny".

The new rules say an agency provider cannot terminate a contract or block its renewal if there is no essential reason that justifies such action. And it stresses that an agency cannot be reregistered in the record of commercial agents under the name of another agent even if a specific-period contract was signed for the previous agency.

But the agency can be re-registered if it was cancelled through agreement by the agent and agency provider or there were essential reasons justifying the agency's cancellation or its non-renewal that are approved by the commercial agencies committee or a judicial sentence is issued to cancel the agency.

The FNC also approved the establishment of a commercial agencies committee. It is expected that the Cabinet will issue an order to set up of the committee, organise its meetings, determine committee members' remuneration and set the charges for dealing with disputes.

Al Mansouri said the application of the Commercial Agencies Law over past two years had caused great harm to UAE national agents. Many foreign agency providers had ended their contracts with UAE national agents in an arbitrary and illegal way. He said there had been 43 such cases. A further 37 agencies were currently facing cancellation and more than 1,000 agencies were at risk.

"The main reason behind the new modifications is the protection of UAE national agents from the tyranny of foreign agency providers and this is a very sensitive issue," said Al Mansouri.

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.