Ministry of Oil

H.H. Shaikh Khalifa Bin Salman Al KhalifaHis Majesty King Hamad Bin Isa Al KhalifaH.H. Shaikh Salman Bin Hamad Al Khalifa The Prime Minister The King of Kingdom of Bahrain The Crown Prince and Commander-In-Chief of the Bahrain Defence Force KINGDOM OF BAHRAIN MINISTRY OF INDUSTRY

LAWS GOVERNING INDUSTRY IN KINGDOM OF BAHRAIN INTRODUCTION

The Kingdom of Bahrain has always placed a special focus on industrialization. As part of this attention, the Government has introduced several laws and regulations to streamline the industrial activities in Bahrain. While some of such regulations are intended to regulate the business of the local industrial sector, other regulations are issued by virtue of Bahrain’s membership of the Gulf Cooperation Council. We are now pleased to present to investors, researchers and industrialists a booklet comprising various regulations with respect to organising and supporting industry in Bahrain. It is designed to be used as a reference and guide for starting industrial projects and for applying for industrial incentives. Undoubtedly, the current industrial progress in Bahrain would have not been possible without the full support and guidance of the political leadership of His Majesty King Hamad bin Isa Al-Khalifa, His Highness the prime Minister, Shaikh Khalifa bin Salman Al-Khalifa, and His Highness the Crown Prince and Commander-in-Chief of the Bahrain Defence Force, Shaikh Salman bin Hamad Al-Khalifa. It is their enthusiastic Policy to encourage industrialization as a strategic option for the total economic development, a source of attracting local and foreign capitals, a means of transferring technology and a process of creating further employment opportunities for citizens.

Hassan Abdulla Fakhro Minister of Industry

5 CONTENTS INTRODUCTION ...... 5

1. LEGISLATIVE DECREE NO. 6 OF 1984 GOVERNING THE ORGANISATION OF INDUSTRY CHAPTER 1 – INDUSTRIAL LICENCES ...... 7-16

LEGISLATIVE DECREE NO. 6 OF 1984 CHAPTER 2 – INDUSTRIAL REGISTRY

LEGISLATIVE DECREE NO. 6 OF 1984 CHAPTER 3 – GENERAL & FINAL PROVISIONS

2. MINISTERIAL RESOLUTION NO. 1 OF 1986 WITH RESPECT TO PROMULGATING THE IMPLEMENTING REGULATIONS OF LEGISLATIVE DECREE NO. 6 OF 1984 GOVERNING THE ORGANISATION OF INDUSTRY ...... 17-23

IMPLEMENTING REGULATIONS TO THE ACT GOVERNING THE ORGANISATION OF INDUSTRY

3. LEGISLATIVE DECREE NO. 11 OF 1985 WITH RESPECT TO THE PROTECTION AND SUPPORT OF NATIONAL INDUSTRY ...... 24-27

4. DECREE-LAW NO. 16 OF 1987 AMENDING CLAUSE 5 OF ARTICLE FOUR OF DECREE-LAW NO. 11 OF 1985 WITH RESPECT TO THE PROTECTION AND SUPPORT OF NATIONAL INDUSTRIES ...... 28-29

5. PRIME MINISTERIAL EDICT NO. 21 OF 1987 WITH RESPECT TO UNIFIED RULES FOR GIVING PRIORITY IN GOVERNMENT PURCHASES TO NATIONAL PRODUCTS AND PRODUCTS OF NATIONAL ORIGIN ...... 30-33

6. LEGISLATIVE DECREE NO. 6 OF 1989 WITH RESPECT TO PROTECTION OF INDUSTRIES OF NATIONAL ORIGIN ...... 34-35

7. PRIME MINISTERIAL EDICT NO. 8 OF 1989 WITH RESPECT TO UNIFIED STANDARD RULES FOR PROTECTION OF INDUSTRIAL PRODUCTS OF A NATIONAL ORIGIN OF GCC STATES ...... 36-41

8. DECREE-LAW NO. 35 OF 2000 AMENDING ARTICLE ONE OF DECREE-LAW NO. 6 OF 1989 WITH RESPECT TO THE PROTECTION OF NATIONAL ORIGINAL INDUSTRIES ...... 42-43

6 LEGISLATIVE DECREE NO. 6 OF 1984 GOVERNING THE ORGANISATION OF INDUSTRY

We, Hamad bin Isa Al Khalifa, Deputy Amir of the State of Bahrain, having examined the Constitution, and Amiri Order No. 4 of 1975, and Amiri Order No. 3 of 1984, and upon the submission of the Minister of Development and Industry, and with the consent of the Council of Ministers,

DO HEREBY ENACT THE FOLLOWING ACT :

CHAPTER ONE INDUSTRIAL LICENCES

Article 1 For the purposes of enforcing this Act, an industrial establishment is defined as every establishment having the principal objects of con- verting raw materials into fully manufactured or semi-manufactured products or turning the latter products into fully manufactured products. This shall also include the blending, assembly packing or pack- aging of products through the use of mechanical power.

Article 2 It shall not be permitted to set up or manage an industrial establishment to which the provisions of this Act apply or to enlarge it, to move it or alter its principal objects except after obtaining a licence from the Ministry of Development and Industry, in which he shall specify the terms and conditions under which the licence is granted.

N.B. 1. The ‘Directorate of Industry’ referred to in this guide will henceforth be referred to as the ‘Directorate of Industrial Protection and Registration.’

2. In the event of dispute reference will be made only to the law as stated in the Arabic version.

7 Article 3 As from the effective date of this Act, the licences referred to in the preceding Article shall not be granted except to Bahraini persons and companies incorporated in accordance with the provisions of the Commercial Companies Law. Non-Bahrainis who own industrial establishments existing on the effective date of this Act shall satisfy the conditions provided for in this Article by obtaining a licence according to the provisions of this Act during the period set forth in Article 15, otherwise, they shall be required to liquidate their business activities within two years from the effective date of this Act.

Article 4 An application for a Licence shall be filed with the Directorate of Industry at the Ministry of Development and Industry on the form to be prescribed by order of the Minister of Development and Industry accompanied by such necessary drawings and documents evidencing the validity of the details required under the terms of the resolutions to be issued for the implementation of this Act. If the applicant is an already established company such company shall provide evidence of its incorporation in accordance with the provisions of the Commercial Companies Law.

Article 5 The Ministry of Development and Industry shall, upon the recommendations of the Directorate of Industry, make a decision on the application for the licence referred to in Article 2 within sixty days from the date of filing the application and completing all documents and studies relating thereto.

Article 6 Subject to the conditions to be made by any other government authority with the intention of preserving security, public health and environ- ment, the Ministry of Development and Industry shall by ministerial resolutions determine the conditions applicable to each type of such establishments.

8 Article 7 The Directorate of Industry may introduce technical modifications it deems fit to the drawings and specifications before issuing the licence. The applicant shall be bound to effect such modifications at its own expenses on the specified date. If one year elapses from the specified date without effecting the said modifications, the applicant shall be deemed to have relinquished his application.

Article 8 A licence issued for an establishment shall specify a period of time for commencing execution of the works, which period shall not be more than one year and may be extended by a resolution from the Minister of Development and Industry for such period as he deems fit at the request of the applicant concerned should the latter give acceptable reasons for the delay. Article 9 For issuing a licence, the following shall be taken into consideration: a) The country’s economic needs and the possibility of local consumption and export. b) Requirements of the Country’s development programmes. c) The objects of the establishment shall not be contrary to public order or public interest. d) The capacity of the local market as regards the setting up of an establishment similar to existing establishments. Article 10 No modifications shall be made to a licensed establishment without the consent of the Ministry of Development and Industry. An example of such modifications shall include everything affecting the establishment’s facilities whether inside or outside the establishment, or the method of operating its machinery, or the kind of know-how used therein, method of manufacture, addition of a new activity or increas- ing the mechanical power used.

9 Article 11 In case of sale, lease of assignment of all or part of the establishment and in the case of fully or partially ceasing to operative, the person concerned shall be bound to give notice thereof to the Ministry of Development and Industry stating the reasons for the situation. Failure to comply with such procedures shall result in depriving the establishment of all or some of the privileges granted by the State to such industrial establishment.

Article 12 The Minister of Development and Industry may, upon a recommendation from the Undersecretary of the Ministry of Development and Industry, terminate any industrial licence or close the establishment by an administrative order at the occurrence of the following events.

1. Setting up, expanding, relocating or altering the principal objectives of an industrial establishment without a licence. 2. Cessation of the establishment’s operations for one year without justifiable reasons. 3. Notifying the Directorate of Industry by a registered letter of the desire of the establishment’s proprietor to cease the operations of the establishment. 4. Demolition of the establishment premises, even if they are rebuilt. 5. Modification of the establishment without obtaining the consent of the Ministry of Development and Industry. 6. Contravening the conditions of the licence. 7. Failure to start construction within the period specified in the licence.

Cancellation of the licence pursuant to the events referred to in this Article shall not prevent the person concerned from seeking the insurance of a new licence should the conditions thereof be fulfilled.

10 Article 13 An applicant for a licence or a licensee shall have the right to appeal against the decision rejecting his application for a licence, cancellation thereof or closure of the establishment before the High Civil Court within sixty days from the date of notifying it/him of such decision.

Article 14 The provisions of this Chapter shall apply to the industrial establishments which are specified by the Minister of Development and Industry’s resolutions.

Article 15 Industrial establishments already in existence on the effective date of this Act shall, within 3 months from its coming into effect, apply to the Ministry of Development and Industry for the registration thereof in accordance with the required terms and conditions

11 CHAPTER TWO INDUSTRIAL REGISTRY

Article 16 A Registry shall be established at the Ministry of Development and Industry for the registration of various types of industrial establishments which are subject to the provisions of this Act.

Article 17 Proprietors of establishments which are subject to the provisions of this Act shall apply to the Ministry of Development and Industry for registration in the Industrial Registry within two months from the date of commencing actual production, and such Registration shall be renewed within thirty days after the elapse of one year from the date of registration or the last renewal thereof. The Executive Regulations shall determine the particulars to be recorded in the aforesaid Registry and the requirements of applications for registration and renewal and manner of filing them.

Article 18 The Ministry of Development and Industry shall deliver to the establishment a certificate of registration with the Industrial Registry, renewal of registration or altering particulars thereof within 30 days from filing an application and completing its particulars.

Article 19 Proprietors of industrial establishments and officers responsible for the management thereof shall notify the Ministry of Development and Industry in writing of any alteration to the particulars registered in the Industry Registry within 90 days from the date of such alteration subject to the terms and conditions to be determined by the Executive Regulations.

12 Article 20 In the event of contravening the provisions of Articles 17 and 19, the Minister of Development and Industry may, upon a recommendation from the Directorate of Industry, close the establishment by an administrative order.

Article 21 An establishment shall be struck off the Registry in any of the following events: a. Upon an application from a concerned party owing to the liquidation thereof. b. If it finally ceases production. c. Issuance of a judicial decree for the removal thereof.

Article 22 A concerned party may appeal to the Minister of Development and Industry against the decisions taken in pursuance of the provisions of this Chapter within 60 days from his notification of the decision appealed against.

Article 23 A committee shall be formed by a resolution from the Minister of Development and Industry, the membership of which may include representatives from relevant ministries and other governmental departments. The said committee shall be responsible for deciding on the appeals referred to it by the Minister of Development and Industry pursuant to the preceding Article. The committee shall decide on the appeal within 60 days from the date of reference thereof and its decision shall be supported by reasons. Once confirmed by the Minister of Development and Industry, the committee’s decisions shall be final, and the appellant shall be notified in writing of the committee’s confirmed decision. The Executive Regulations shall determine the committee’s terms of reference and the procedures to be followed for handling the appeals.

13 Article 24 A person whose appeal has been dismissed may re-appeal against the resolution dismissing his appeal before the High Civil Court within 60 days from the date of receiving notice of the said resolution.

Article 25 The Ministry of Development and Industry shall publish a statistical bulletin for the registered industrial establishments. The bulletin shall contain particulars determined by Executive Regulations.

Article 26 The Ministry of Development and Industry shall register the industrial establishments the proprietors of which have failed to apply for registration thereof with the Industrial registry and shall update and alter the particulars contained in the said Registry.

Article 27 Save for the particulars contained in the statistical bulletin provided for in Article 26: a) The officers in charge of enforcing the provisions of this Act shall maintain the confidentiality of the particulars in the Industrial Registry. b) Third parties may obtain registration certificate of the particulars contained in the Industrial Registry pursuant to a resolution from the Minister of Development and Industry to that effect.

14 CHAPTER THREE GENERAL AND FINAL PROVISIONS

Article 28 The authorised officers of the Ministry of Development and Industry who are designated by a resolution from the Minister of Development and Industry shall have the right to inspect the establishments which are subject to the provisions of this Act and have access to their records and documents to ascertain their fitness to operate in accordance with the licence granted thereto and the accuracy of the particulars recorded in the Industrial Registry.

Article 29 Without prejudice to any severe penalty specified under any other law, any person who contravenes the provisions of Article 2, 11, 15, 17 and 19 of this Act shall be punished with a fine of not less than BD 100 and not more than BD 500. In the event of the second contravention, the Court shall order the closure of the establishment for a period not exceeding three months. For the third contravention, the court shall order the establishment to be closed finally.

Article 30 Without prejudice to any severe penalty specified under any other law, any person who provides or gives false information with the intent to obtain an industrial licence or registration with the Industrial Registry shall be punished with imprisonment for a period not exceeding one month and with a fine not less than BD 100 or with any of them.

Article 31 Without prejudice to any severe penalty specified under any other law, every civil servant who is in charge of enforcing the provisions of this Act and who contravenes Article 27(a) thereof shall be subject to dis- ciplinary penalties prescribed under the civil service regulations.

15 Article 32 The Minister of Development and Industry shall issue Executive Regulations and resolutions required for the implementation of the provisions of this Act.

Article 33 The Ministers, each in his respective capacity, shall implement the provisions of this Act which shall come into force after six months from the date of its publication in the Official Gazette.

Signed : Hamad bin Isa Al Khalifa Deputy Amir of the State of Bahrain

Issued at Riffa Palace on 22 Rajab, 1404 Hijra corresponding to 23 April 1984

16 MINISTERIAL RESOLUTION MINISTRY OF DEVELOPMENT AND INDUSTRY

MINISTERIAL RESOLUTION NO. 1 OF 1986 WITH RESPECT TO PROMULGATING THE IMPLEMENTING REGULATIONS OF THE LEGISLATIVE DECREE NO. 6 OF 1984 GOVERNING THE ORGANISATION OF INDUSTRY

The Minister of Development and Industry, having examined legislative Decree No. 6 of 1984 governing the Organisation of Industry, and upon the submission of the Undersecretary of the Ministry of Development and Industry, HEREBY RESOLVES THE FOLLOWING:

Article 1 The provisions of the Implementing Regulations attached to the Act governing the organisation of Industry shall come into force.

Article 2 This resolution shall be published in the Official Gazette and be enforced from the date of its publication.

Signed : Yousuf Ahmed Al Shirawi Minister of Development and Industry

Dated : 6 April 1986

17 MINISTRY OF DEVELOPMENT AND INDUSTRY

IMPLEMENTING REGULATIONS TO THE ACT GOVERNING THE ORGANISATION OF INDUSTRY.

Article 1 Any person wishing to set up a new industrial establishment or effect any change in an existing industrial establishment as regards its capacity, output, location or industrial objectives shall obtain a licence for this purpose from the Ministry of Development and Industry.

Article 2 The Owner of the project or establishment, or whoever deputizes for him by a special power of attorney, shall submit the application for a permit to the Directorate of Industry, at the Ministry of Development and Industry, which shall examine the matter and issue the necessary recommendations in respect thereof.

Article 3 An application for a permit to set up a new industrial establishment shall contain the details recorded on Form No. AS/1 or Form No. AS/2, as the case might be.

The application for a permit to effect any alteration in an industrial establishment as to its capacity, output, location or industrial objectives shall include the particulars recorded on the above mentioned two forms as the case might be.

Article 4 Before making a recommendation concerning the permit, the Directorate of Industry may hear the views and statements of the applicant or his attorney, and may instruct him to submit any particulars, clarifications or documents necessary for examining his application.

18 Article 5 Upon approving the application, the permit shall be issued to concerned persons including the terms and conditions of granting such permit, which terms and conditions shall be written on the prescribed licence certificate according to Form AS/3.

Article 6 A Register shall be established at the Ministry of Development and Industry wherein industrial establishments already in existence in Bahrain and all the particulars set forth in these implementing Regulations shall be recorded. This Register shall be maintained by a special section to be called the Industrial Register Section.

Article 7 Every proprietor or manager of an industrial establishment, whether already in existence or under formation on the effective date of the Organisation of Industry Act 1984, (Act No. 6) must apply to the Industrial Register Section at the Ministry of Development and Industry within 3 months from the effective date of enforcing the Act for the registration of his establishment in the Industrial Register according to the conditions specified in the Act and in these Implementing Regulations pursuant to Forms Nos. AS/4 and AS/5. As regards establishments set up after the enforcement of the Act, registration thereof shall be effected within two months from the date of actually going on stream.

Article 8 Following the final approval of the application for the permit, the Industrial Register Section shall enter the particulars of the application in the Industrial Register in addition to the licence number concerning the setting up of an industrial establishment and date thereof.

Article 9 The owner of an industrial establishment or his heirs, as the case may be shall apply according to registration rules for the cancellation of the establishment’s registration in the following events:

19 1. Relinquishing the establishment by the owner thereof. 2. Death of owner. 3. Liquidation of the establishment.

The application must be filed within one month from the date of the occurrence involving cancellation of registration. Should the concerned persons fail to submit the application, the Industrial Register Section shall, on it own accord, cancel the registration.

Article 10 A separate page shall be set aside in the Industrial Register for each industrial establishment. The pages of the Register shall have serial numbers, and they shall be endorsed with the official seal of the Industrial Register Section.

Article 11 Applications for registration, entry in the Industrial Register or cancellation therefrom shall be written on the forms designed for this purpose which shall be accompanied by the supporting documents.

Article 12 Registration and entry particulars must be noted down in legible hand- writing without any abbreviation, alteration, insertion or deletion. The applicant shall sign on every addition or correction on the margin thereof. He shall count the number of words added or deleted, which words shall be entered in by the Industrial Register Section to prove that checking has been made.

Article 13 Accepted applications shall be given serial numbers according to the date of filing them, and the Industrial Register Section shall write down on each application the serial number thereof and the date of deposit- ing it. A receipt to this effect shall be given to the applicant.

20 Article 14 The applications referred to in the preceding Article shall be entered in the Industrial Register according to the succession of approving them. This shall be effected by noting down the particulars thereof in the relevant columns of the Industrial Register. Entries in the Register shall always be given serial numbers.

Article 15 In case an application for registration or entry is rejected, the Industrial Register Section shall notify the applicant of the reasons for rejection.

Article 16 Any person who has registered his establishment in the Industrial Register may obtain a copy of the details thereof which have been recorded in the Register in accordance with Form No. AS/6.

Article 17 In the event of entering particulars which may cause alteration or amendment to the details recorded in the Industrial Register, such details shall be deleted and the new particulars shall be entered in the same relevant column, and the date of entry thereof and the docu- ment supporting such amendments and its date shall be noted in the margin of the Register.

Article 18 The following recorded details or any amendments thereto in the Industrial Register shall be published in the Official Gazette:

1. Date of registration and number thereof. 2. Name of industrial establishment, type and name of owner. 3. Location of the industrial establishment.

21 Article 19 Registration with the Industrial Register shall be renewed within thirty days after one year from the date of registration or the last renewal thereof in accordance with the applicable terms and conditions of registration.

Article 20 The Ministry of Development and Industry may publish a statistical bulletin of the registered industrial establishments. Such bulletin shall contain the following particulars:

1. Name of the industrial establishment. 2. The legal status of the establishment. 3. Location. 4. Address. 5. Capital of the establishment. 6. Production capacity. 7. Kinds of products. 8. Manager in charge of the project.

Article 21 Appeals against the decisions provided for in Article 22 of the Organisation of Industry Act 1984 (Act No. 6) shall be filed with the Minister of Development and Industry or mailed to him by a registered letter with an acknowledgement slip within sixty days from the date of giving notice to the appellant of the decision appealed against.

Article 22 The appeal must include the following details:

1. Name of the appellant, designation and address.

2. Date of the decision appealed against and date of notifying the appellant of the said decision.

22 3. Subject of the decision appealed against and the reasons for the appeal. The appeal shall be accompanied by the documents which the appellant deems necessary.

Article 23 The committee referred to in Article 23 of Legislative Decree No. 6 of 1984 shall receive the appeals and enter them under serial numbers in a special register wherein the date of filing or receipt thereof shall be indicated. A receipt showing the appeal number and date of filing thereof shall either be given to the appellant or sent to him by a registered letter.

Article 24 After completion of the documents, the Committee shall examine them and decide on the appeal. The decision shall be submitted to the Minister of Development and Industry for confirmation within a period of thirty days from the date of placing the appeal before the Committee.

Article 25 Appellant shall be notified by a registered letter of the confirmed decision taken in respect of the appeal and the reasons for taking thereof.

23 LEGISLATIVE DECREE NO. 11 OF 1985 WITH RESPECT TO THE PROTECTION AND SUPPORT OF NATIONAL INDUSTRY

We Isa bin Salman Al Khalifa, Amir of the State of Bahrain, having examined the Constitution, and upon the submission of the Minister of Development and Industry, and with the approval of the Council of Ministers, HEREBY DECREE THE FOLLOWING ACT:

Article 1 A national industrial establishment is defined as every establishment the principal object of which is to convert raw materials into fully or semi-manufactured products, to transform semi-manufactured products into fully manufactured products or mixing, assembling, packing or wrapping products using mechanical power, provided that Bahrainis and GCC nationals, being natural or corporate persons, shall have a shareholding of no less than 51% in the capital of such establishment.

Article 2 Protection is defined as the methods used for protection of national industrial products by levying customs duties on imports of products similar to national products, limiting imports thereof and such other methods.

Article 3 Subsidies are defined as grants, facilities or concessions obtained by national industrial establishments and all means which are conducive to the encouragement and development of the national industry.

Article 4 The Council of Ministers shall, upon recommendation from the National Industry Protection and Support Committee, extend to national industrial establishments any general support or protection, especially the following:

24 1. Levying protective customs duties on imported industrial products at the rates to be determined by the Council of Ministers. 2. Restricting the import of industrial products similar to national industrial items for a specific period of time. 3. Exempting imports of capital machinery, plant and equipment required for the setting up of a factory or boosting its production capacity from customs duties. 4. Exempting raw material and semi-manufactured materials required by the establishment from customs duties, and exemption of exports from export duties. 5. Giving preference in tenders and purchases of the Government and its institutions to national industrial products even if the value thereof is in excess of their imported counter parts by a maximum of 10%, provided that such products shall meet the standard specifications as to kind and quality.

Article 5 Protection or support may be obtained in pursuance of the provision of the foregoing Article according to the following conditions: 1. The elements of local production included in the manufacture from the date of commencing protection shall not be less than 20% in the first three years and such percentage shall rise to more than 40% after five years from this date. 2. One year shall have elapsed from the commencement of production. 3. Products of the establishment seeking protection shall be of a high standard of quality. 4. The establishment’s production shall meet a reasonable propor- tion of local consumption to be determined by the concerned authorities. 5. The establishment shall properly exploit the factors of production such as raw materials, manpower and the like.

25 6. All the information requested by the Committee shall be provided, and the management of the establishment shall undertake to facil- itate the task of experts and technical personnel designated by the Committee to verify the accuracy of the information provided and the extent of the efficiency of using the factors of production. The following conditions shall apply to new industrial projects: 1. Submission of economic and technical feasibility studies to be sat- isfactory to the Ministry of Development and Industry. 2. Availing employment and training opportunities for Bahraini manpower. 3. The project shall contribute to the support of industrial development, particularly as regards replacement of imports, promoting exports and using locally available factors of production.

Article 6 A Committee shall be formed by Prime Ministerial Edict under the name of National Industry Protection and Support Committee (NIPSC) consisting of representatives of the Ministry of Development and Industry, Ministry of Finance and National Economy and Ministry of Commerce and Agriculture.

The NIPSC’s duties and terms of reference shall be set forth in the said Edict.

Article 7 An application for protection or support shall be filed with the Directorate of Industry on the form prepared for this purpose by the NIPSC. Such application shall be referred to the NIPSC for study and verifi- cation of the details contained therein and preparing a report contain- ing its recommendations in respect thereof. The NIPSC shall refer its report to the Minister of Development and Industry, who shall, in turn, refer it to the Council of Ministers accompanied by a memorandum.

26 An applicant shall be given notice of acceptance or rejection by a registered letter pursuant to a resolution to be issued by the Minister of Development and Industry.

Article 8 The Council of Ministers shall, upon a proposal of the Minister of Development and Industry, deprive any establishment of all or some of the privileges provided for under this Act in case of contravening its provisions or provisions of the resolutions issued for its implementation. The establishment concerned shall be notified of the action by a registered letter pursuant to a resolution to be issued by the Minister of Development and Industry.

Article 9 Any person whose application for support, or protection has been rejected or who has been deprived of all or some of the privileges set forth in this Act, shall appeal against the resolution referred to in Paragraph 2 of the preceding Article before the High Civil Court within 30 days from the date of being notified of the said resolution.

The elapse of one year from the date of filing an application for support or protection shall be considered as a rejection of such application.

Article 10 The Minister of Development and Industry shall issue the necessary resolutions for implementing the provisions of this Act.

Article 11 The Ministers, each in his respective capacity shall implement this Act which shall come into force from the date of its publication in the Official Gazette. Signed : Isa bin Salman Al Khalifa Amir of the State of Bahrain Issued at Riffa Palace on 15 Shaaban 1405 corresponding to 5 May 1985.

27 DECREE-LAW NO. 16/1987 AMENDING CLAUSE 5 OF ARTICLE FOUR OF DECREE- LAW NO. 11/1985 WITH RESPECT TO THE PROTECTION AND SUPPORT OF NATIONAL INDUSTRIES

We, Isa bin Salman Al-Khalifa, Amir of the State of Bahrain; In pursuance of the Constitution and: Amiri Order No. 4/1975; Decree-Law No. 26/1981 with respect to the Endorsement of the Consolidated Economic Convention of the Gulf Cooperation Council (GCC) countries; Decree-Law No. 6/1984 with respect to the Regulation of Industry; Decree-Law No. 11/1985 with respect to the Protection and Support of National Industries, as amended by Decree-Law No. 16/1987; Decree-Law 6/1989 with respect to the Protection of National Origin Industries; and GCC Summit Resolution at the 20th session in Abu Dhabi in 1986 with respect to the consolidated regulations for giving preference in governmental purchases to national products and national origin manufactured goods; In accordance with the recommendation submitted by the Minister of Finance & National Economy; After approval of the Council of Ministers;

Have enacted the following the law;

Article One The provision of Clause 5 of Article Four of Decree-Law No. 11/1985 with respect to the Protection and Support of National Industries is hereby replaced to read as follows:

“5) In government purchases, the national products shall be given price preference of 10% higher than similar foreign products and 5% over national origin products. Where the national products required are not available, national origin products shall be given price preference of 10% over similar foreign products.

28 For the purposes of this law, a national product shall mean any product manufactured in the State of Bahrain and considered to be as such by the laws of Bahrain.

A national origin product is meant to be a product of which the added value arising from manufacturing it in one or more member countries of the Gulf Cooperation Council is not less than 40% of its final value as a finished product and the ownership of citizens of such countries in the manufacturing establishment concerned is not less than 51% as verified by a certificate of origin.”

Article Two The Ministers, each within his own jurisdiction, shall implement this law, which shall come into force as from the date of its publication in the Official Gazette.

Amir of the State of Bahrain Isa bin Salman Al-Khalifa

Issued at Riffa’s Palace on: 29th Rabi al-Thani, 1408 A.H. 20th December 1987

29 PRIME MINISTERIAL EDICT

PRIME MINISTERIAL EDICT NO. 21 OF 1987 WITH RESPECT TO UNIFIED RULES FOR GIVING PRIORITY IN GOVERNMENT PUR- CHASES TO NATIONAL PRODUCTS AND PRODUCTS OF A NATIONAL ORIGIN IN THE ARAB GULF STATES COOPERATION COUNCIL.

The Acting Prime Minister, having reviewed Amiri Order No. 14 of 1987, and the resolution of the G.C.C. Supreme Council adopted at its 7th Session in Abu Dhabi in 1986 with respect to the Common Rules for Giving Priority in Government Purchases to National Products and Products of a National Origin, and Legislative Decree No. 11 of 1985 with respect to the Protection and Support of National Industries as amended by Legislative Decree No. 16 of 1987, and upon the submission of the Minister of Finance and National Economy, and with the approval of the Council of Ministers, HEREBY RESOLVES THE FOLLOWING :

Article 1 Ministries, public authorities, government organisations and companies and companies in which the Government participates with not less than 51% of its share capital shall satisfy all their purchasing requirements in accordance with the rules laid down in this Edict.

Article 2 National products shall be given preference in Government purchases in terms of prices over their foreign counterparts by no less than 10% and over similar products of a national origin by not more than 5%. In case a national product is not available, products of a national origin shall be given preference by 10% over their foreign counterparts.

30 A national product shall be defined as every product which is manufactured in Bahrain and is deemed as a national product subject to the laws of the State of Bahrain. Products of a national origin are defined as such products in which the added value arising from the manufacture thereof in a G.C.C. state is not less than 40% of their final value upon completing the manufacture thereof. Shareholdings by G.C.C. nationals in the industrial establishment shall not be less than 51% according to the Certificate of Origin.

Article 3 a) In case of insufficiency of national products to meet all the requirements of government departments and agencies of a particular product, the said departments and agencies shall satisfy the remaining requirements from products of a national origin, than from foreign products subject to the provisions of the preceding article and to quality and delivery conditions. b) Prices shall be calculated for the preference purposes provided for in Article 2 of this Edict on the basis of delivery to Government stores. In the cases where foreign products are exempted from customs duties or any other exemptions, the value thereof shall be added for the purpose of comparison. c) National products, products of a national origin and foreign products shall meet the specifications laid down by the G.C.C. Measurements and Specifications Organisation approved in Bahrain or with the specifications and measurements applicable in the State of Bahrain, if any. Where neither specifications are available, the international specifications shall be applicable.

Article 4 Subject to the conditions of price, quality and delivery, all government departments and agencies shall secure all their purchase requirements from national products or products of a national origin including all agricultural, animal and industrial products whether in primary form or in any subsequent stage of processing or manufacture.

31 Article 5 In preparing their contracts for supply, public works, maintenance, operation or other contracts, the government agencies shall ensure that the said contracts shall include an express provision obliging the contractor or supplier to purchase its requirements of materials or items of national products or products of national origin in accordance with the terms of Article 2 of this Edict.

Failure by a supplier or contractor to comply with the obligation referred to in the preceding paragraph shall be deemed as a breach of the fundamental obligations arising from the contract resulting in payment of a fine of 20% of the value of the purchases in addition to enforcement of the other terms and penalties under the terms of the contract and provisions of the Law.

Article 6 All government departments and agencies shall, upon contracting with consultancy firms for preparing designs and laying down general specifications and of general conditions for their projects, shall include in the forms of contracts and specifications of the required works a clause ensuring that all requirements shall be met from the available national products or products of a national origin that satisfy the intended purposes. Consultants or technical authorities in government departments shall ensure upon laying down specifications that they are compatible with the specifications of the available national products or products of a national origin.

Article 7 Government agencies contracts must contain a provision which prevent any foreign contractor executing government projects, whether as a main contractor or sub-contractor, from establishing any manufacturing unit for meeting the project’s construction requirements.

A foreign contractor must purchase all of their requirements from national products or products of a national origin, if available.

32 Article 8 Government agencies must provide in their notices for supplies or tenders for purchases, projects, maintenance or commissioning works and in the forms of contracts they conclude for this purpose that such notices, tenders and contracts shall be subject to the unified rules for giving priority to national products and products of a national origin.

Article 9 (a) A breach of any of the obligations set forth in Articles 6 and 7 by a foreign consultant or contractor shall be deemed as a breach of one of the fundamental obligations arising from the contract, which breach shall have the consequence of enforcing the conditions and penalties relating to the breach by a contracting party of its obligations in accordance with the terms of the contract and provisions of the law. (b) Without prejudice to any other legal penalty, a contract with a supplier, contractor, undertaker or consultant may be terminated in addition to banning him from dealing with any government agency for a period of 2 years in case of committing an act of deceit or fraud by giving false information about the products, including the display trade marks of national products or products of a national origin on foreign products.

Such acts shall be reported to the country that has issued the certificate of origin in order to inflict the appropriate penalties against any person committing an act of deceit or fraud and to the remaining G.C.C. member states to take the measures they deem fit.

Article 10 The Ministers, each in his respective capacity, shall implement the provisions of this Edict which shall come into force from the date of its publication in the Official Gazette.

Signed : Hamad bin Isa Al Khalifa Acting Prime Minister

Dated : 20 December 1987

33 LEGISLATIVE DECREE

LEGISLATIVE DECREE NO. 6 OF 1989 WITH RESPECT TO PRO- TECTION OF INDUSTRIES OF A NATIONAL ORIGIN

We, Isa bin Salman Al Khalifa, Amir of the State of Bahrain, having examined the Constitution, and Amiri Resolution No. 4 of 1975, and Legislative Decree No. 26 of 1981 with respect to Approving the Gulf Co-operation Council Unified Economic Agreement, and Legislative Decree No. 6 of 1984 Governing the Organisation of Industry, and Legislative Decree No. 11 of 1985 with respect to the Protection and Support of the National Industry as amended by Legislative Decree No. 16 of 1987, and the Resolution adopted by the Gulf Co-operation Council, Supreme Council at its 9th Session in Manama in 1988 with respect to the United System for Protection of the National Industry in the G.C.C. countries, and upon the submission of the Minister of Finance and National Economy, and with the approval of the Council of Ministers, HEREBY DECREE THE FOLLOWING ACT :

Article 1 Products of a national origin shall be defined as such products in which the shareholdings by G.C.C. nationals in the industrial establishment manufacturing them shall not be less than 51% and the added value arising from the manufacture thereof in one G.C.C. state or several states shall not be less than 40% of their final value upon completing the manufacture.

34 Article 2 Protection shall be defined as the ways and means which shall be determined by the Arabian Gulf States Financial and Economic Co- operation Committee upon a recommendation of the G.C.C. National Industry Protection Committee. Such ways and means shall include the levying of tariffs at the rates prescribed by the Standard Rules for Protection of Industrial Products of a national origin, whether on the quantity of the imported items or its value or both, or the quantitative restriction on imports or banning it or any other method to be proposed by the aforesaid National Industry Protection Committee.

Article 3 The Council of Ministers shall issue an Edict with respect to the unified Standard Rules for Protection of Industrial Products of a National Origin.

Article 4 The Prime Minister and Ministers each in his respective capacity shall implement this Act which shall come into force as from the date of its publication in the Official Gazette.

Signed : Isa bin Salman Al Khalifa Amir of the State of Bahrain

Dated : 19 March 1989

35 PRIME MINISTERIAL EDICT

PRIME MINISTERIAL EDICT NO. 8 OF 1989 WITH RESPECT TO THE UNIFIED STANDARD RULES FOR PROTECTION OF INDUS- TRIAL PRODUCTS OF A NATIONAL ORIGIN OF THE GULF CO- OPERATION COUNCIL MEMBER STATES

The Prime Minister, having examined Legislative Decree No. 6 of 1989 with respect to the Protection of the National Industry. and Legislative Decree No. 11 of 1985 with respect to Protection and Support of National Industry as amended by Legislative Decree No. 16 of 1987, and the Resolution adopted by the Gulf Co-operation Council Supreme Council at its 9th Session in Manama, in 1988 with respect to the Unified Standard Rules for Protection of Industrial Products of a National Origin in the G.C.C. Countries, and upon the submission of the Minister of Finance and National Economy and the Minister of Development and Industry. HEREBY RESOLVES THE FOLLOWING:

Article 1 DEFINITIONS The words and phrases in this Edict shall have the specific meanings for each as shown below: A PRODUCT OF A NATIONAL ORIGIN A Product of a National Origin shall mean, such products in which the shareholdings by G.C.C. Nationals in the industrial establishment manufacturing them shall not be less than 51% and the added value arising from the manufacture thereof in one G.C.C. state or several states shall not be less than 40% of their final value upon completing the manufacture thereof.

36 PROTECTION Shall include one or more of the following methods:

Protection Tariffs: Shall mean the levying of customs duties whether on the quantity of the imported items or their value or both, and in case of dumping the method shall in addition to the limitation of the imported quantity, include banning of imports or any other method to be proposed by the Protection Committee.

Protection Committee: Shall mean the Committee for the Protection of Industrial Products of a National Origin of the G.C.C. states which shall be formed of authorised Representatives from each of the member States from the authorities concerned with Finance and Industry or any other authority designated by the concerned state.

Article 2 OBJECTIVES OF THE PROTECTION OF INDUSTRIAL PROD- UCTS OF A NATIONAL ORIGIN. The Protection of Industrial Products of a National Origin aims to realise the following:

(a) Reinforcement of the competitive capacity of the Industrial products of a national origin against unfair competition from foreign industrial products such as the dumping policy and the use of bad quality products.

(b) Steering of investment and other resources towards industrial products which conform with the priorities of the local supplemen- tary industrialisation programmes.

(c) Giving the opportunity to growing national industries to acquire expertise and the necessary technical, administrative and market- ing skills to reduce production and distribution costs so as

37 to enhance their competitive capability in the face of foreign industries which enjoy wide experience.

(d) Boosting the exploitation of resources to meet the G.C.C. market’s requirements. (e) Encouraging and promoting trade in the field of industrial products of a national origin between the G.C.C. member states.

Article 3 CRITERIA FOR PROTECTION OF INDUSTRIES OF A NATIONAL ORIGIN Protection of products of a national origin shall take place subject to methods and procedures which are temporary by nature, according to the following criteria :

(a) Protection shall not be granted to any industrial product which does not meet a percentage of the G.C.C. countries market requirements to be determined by the Protection Committee for each individual product according to the conditions of its manufacture and distribution.

(b) Protection shall not be granted to any industrial product of a national origin which fails to conform to the standard specifications issued by the G.C.C. Specifications and Measurements Organisation, if any, or the local or international specifications approved and accepted by the Protection Committee.

(c) In granting protection, regard shall be had for consumers’ inter- ests and reduction of any adverse effects against them.

(d) Protection shall not be granted to any industrial product of National origin if the national capital of its manufacturing establishment is less than 51% or if the added value arising from its manufacture in one G.C.C. state or several G.C.C. states is less than 40% of its final value upon completing its manufacture.

38 Article 4 FUNCTIONS OF THE PROTECTION COMMITTEE The Committee for Protection of Industrial Products of a National Origin in the G.C.C. states shall carry out the following functions : (a) Reviewing applications for protection of industrial products of a national origin submitted by the G.C.C. states and issuing the appropriate recommendations concerning them, including the determination of the suitable period for protection should it be rec- ommended. (b) Controlling and following up the implementation of the protection decisions taken by the Financial and Economic Co-operation Committee in co-ordination with both the Industrial Co-operation Committee and the G.C.C. General Secretariat, especially super- vising the price and quality of the protected products, the development in the utilisation of the unused production capacity during the protection period and referring its views in this regard to the G.C.C. Financial and Economic Co-operation Committee. (c) Studying the positive and negative effects of the protection decisions and raising its views in this regard to the G.C.C. Financial and Economic Co-operation Committee and Industrial Co-operation Committee. (d) Recommending the cancellation of the protection resolutions if the majority owners of the protected industries failed to discharge their duties specified in these rules. (e) Suggesting the proper measures to be taken against the dumping cases. (f) Any other functions the committee is entrusted with by the Financial and Economic Co-operation Committee in co-ordination with the Industrial Co-operation Committee. The Protection Committee shall issue its recommendations with the unanimous agreement of the member states subject to its applicable internal organisation.

39 Article 5 Procedures for the protection of industries of a National Origin shall be as follows:

(a) The member states shall send the protection applications to the GCC General Secretariat to include them in the Protection Committee’s draft agenda two months before its meeting. The GCC General Secretariat shall refer copies of the applications and their enclosures to the committee members five weeks before the date of the committee meeting.

(b) The Financial and Economic Co-operation Committee shall issue the protection resolutions upon the recommendation of the protection committee after the approval of the Industrial Co-operation Committee. The resolutions shall be enforced in all member states two months after the date of their issuance unless anoth- er date is determined by the resolution.

Article 6 OBLIGATIONS OF OWNERS OF INDUSTRIAL PROJECTS OF A NATIONAL ORIGIN The owners of the Industrial Projects of a National Origin for which protection has been granted according to these rules shall be bound by the following:

(a) Any industry protected according to these rules shall not be allowed to raise the prices of its protected products above the appropriate average prices.

(b) The establishment requesting protection for its products is required to permit the representatives of the authority designated by the protection committee to have access to (the establishment’s site or the management site or any other location belong- ing thereto) all the necessary information required to perform their duties.

40 (c) The establishment whose products have enjoyed protection shall be bound to maintain quality standards of the protected products, according to the specifications and measurements approved and accepted by the Protection Committee during the protection period and the Protection Committee shall be enabled to verifying that.

(d) The establishment which enjoys protection shall seek during that period to raise productivity, reduce the costs and to abide by the conditions of the sale contracts it has entered into.

Article 7 GENERAL PROVISIONS 1. The protection tariff percentage shall not be more than 25% of the value of the goods at the port of arrival or the value which shall be determined by the Protection Committee. In case of dumping, the Committee shall deal with each case using the appropriate protection methods. 2. During the protection period, it should be observed that no such licences shall be issued for the manufacture of the products protected according to these rules unless the product fulfill the conditions of the product of a National Origin in addition to the economic viability and all other conditions required for the licensing. 3. The provisions of this Edict shall not be applied to the products manufactured in the free zones which are not subject to the criteria for protection of Industrial Products of a National Origin.

Article 8 The Ministers, each in his respective capacity, shall implement this Edict which shall be published in the Official Gazette and come into force as from 1st April 1989.

Signed: Khalifa bin Salman Al Khalifa Prime Minister

Dated : 19 March 1989

41 DECREE-LAW NO. 35/2000

AMENDING ARTICLE ONE OF DECREE-LAW NO. 6/1989 WITH RESPECT TO THE PROTECTION OF NATIONAL ORIGINAL INDUSTRIES We, Hamad bin Isa Al-Khalifa, Amir of the State of Bahrain; In pursuance of the Constitution and: Amiri Order No. 4/1975; Decree-Law No. 26/1981 with respect to the Endorsement of the Consolidated Economic Convention of the Gulf Cooperation Council (GCC) countries; Decree-Law No. 6/1984 with respect to the Protection and Support of National Industries, as amended by Decree-Law No. 16/1987; Decree-Law 6/1989 with respect to the Protection of National Origin Industries; and GCC Summit Resolution at the 20th session in Riyadh in 1999 with respect to the revocation of proprietorship requirements provided for in the Consolidated Economic Convention; In accordance with the recommendation submitted by both the Minister of Oil & Industry and the Minister of Finance & National Economy; Having sought the opinion of the Shura Council; After approval of the Council of Ministers; Have enacted the following law:

Article One The provision of Article One of Decree-Law No. 6/1989 with respect to the Protection of National Origin Industries is hereby replaced to read as follows: “Article One: A national origin industrial product is meant to be a product of which the added value arising from manufacturing it in one or more member countries of the Gulf Cooperation Council is not less than 40% of its final value as a finished product.”

42 Article Two The Prime Minister and the Ministers, each within his own jurisdiction, shall implement this law, which shall come into force as from the date of its publication in the Official Gazette.

Amir of the State of Bahrain Hamad bin Isa Al-Khalifa

Issued at Riffa’a Palace on: 24th Ramadhan 1421 A.H. 20th December 2000