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| 2004-12-27 10:12 |
OMAN CHAMBER OF COMMERCE AND INDUSTRY
COMMERCIAL AGENCIES LAW AND ITS REGULATIONS
INCLUDING LATEST AMENDMENTS UPTO 1997
Fifth Edition
July 1999
INTRODUCTION
This booklet published by Oman Chamber of Commerce and
Industry (OCCI) contains the text of the Royal Decree No. 26/77
promulgating the Commercial Agencies Law and its subsequent
amendments and the Ministerial Decision No. 11/85 amended by
Ministerial Decision No. 112/97 issuing the executive regulations
for the law, in Arabic with an unofficial translation into English.
The publication of this booklet comes as part of the keenness of
OCCI in promoting and supporting economic relations between the
Sultanate of Oman and other countries of the world and in order to
provide an opportunity for all those who deal with the Omani
market to get acquainted themselves with the laws and regulations
that govern in this regard.
We strongly believe that knowing and understanding of the
concerned laws are the beginning of the road to success for those
who aspire to establish successful business ventures.
OCCI does not bear any responsibility on the accuracy of the
English translation and the Arabic text as published in the official
Gazette shall be the authentic version.
With best wishes for success.
Muscat
July 1999
ROYAL DECREE NO. 26/77
Commercial Agencies Law
(Including latest amendments upto 1997)
We, Qaboos bin Said, Sultan of Oman, after perusal of the Law
governing the Administrative Apparatus of the State 26/75, Law
8/74 governing the Commercial Register, Law 4/74, governing the
Commercial Companies and Law 6/74 for protecting the
Developing Industries and in accordance with the suggestions
submitted to us by the Minister of Commerce and Industry after
consultation with the Diwan of Legislation.
Have decreed as follows:
General Regulations
Article 1:
For the purpose of applying the provisions of this Law, a
commercial agency shall mean any agreement whereby a
manufacturer or supplier outside the Sultanate assigns one or
more merchants or commercial companies in the Sultanate to sell,
promote or distribute goods and products or provide services
whether in his capacity as an agent, representative or intermediary
for the product or the original supplier who has no legal presence
in the Sultanate, against a profit or commission.
In all cases, the commercial agent shall run the business of his
agency and organise his normal commercial activity
independently.
Article 2:
It is not permissible for companies or individuals to carry on
commercial agency business or importation of various kinds of
goods within the Sultanate except on conditions laid down in the
following articles. Imports intended for personal use and not for
trading purposes are exempted.
Article 3:
Individuals and companies who practice the trade of import or
commercial agencies shall fulfill the following conditions.
Individual Merchant:
One) Should be an Omani citizen and his normal domicile in the
Sultanate.
Two) Should be not less than 18 years of age.
Three) Should be registered in the Commercial Register and is
a member of the Oman Chamber of Commerce and Industry
and his head office in Oman.
Four) Should not have been convicted of bankruptcy or fraud or
speculation in the prices of goods, or any crime affecting
honour or good reputation, unless he has been rehabilitated.
The Company:
One) Should be registered in the Commercial Registry and its
principal office should be in the Sultanate.
Two) Omani share in its capital should not be less than 51%.
Three) The purpose of the company includes import trade and
commercial agencies business.
Article 4:
Companies or individuals involved in commercial agency business
at the time of the promulgation of this law, shall notwithstanding
the regulations of the law, be granted a period of grace not
exceeding one year from the date this law takes effect to liquidate
their agencies. But a company or individual who fails to fulfill one
or more of the conditions of the previous article, may apply for the
registration of any agency in the Register of Commercial Agencies
as a temporary measure and continue to practice commercial
activity. Provided that such company or individual shall redress
their situation, in accordance with the provisions of this law,
during the period of grace referred to above, failing which the
Ministry shall delete their name from the Register of Commercial
Agencies and prohibit them from practicing commercial agency
business in the Sultanate.
Article 5:
Without prejudice to the provisions of Article 2 of this law, no
merchant or company shall be allowed to import goods subject of
an agency in the
Sultanate, from other than the original manufacturer or supplier
who has an agent in the Sultanate registered pursuant to the
provisions of this law.
The Minister of Commerce and Industry can prohibit import of
goods subject of the agency if the principal cancelled the agency on
his part without an acceptable reason.
Article 6:
Commercial Agency contracts are subject to the following
regulations in addition to any terms the contracting parties may
stipulate therein.
One) The agency contract or any amendment thereto shall be in
wirting and attested by Oman Chamber of Commerce and
Industry. As regards the agency contracts concluded outside
the Sultanate, the attestation shall be made by the Authority,
as specified in the law’s executive regulation.
Two) The contract shall consist of the basic elements of the rules
and conditions of the commercial agency and in particular:
(1) Name of both the principal and the agent and their
nationalities.
(2) The assets, goods and services of the agency, its
commercial name (if available) and the rights and
obligations of both the principal and the agent.
(3) The term of the agency and the area the agency covers.
Three) The contract between the original manufacturer or
supplier shall be made in the country of origin without an
intermediary and if the manufacturer had more than one
country or origin, the contracting can be made with one of
them.
Four) The contract shall be entered in the register designed for this
purpose at the Ministry in accordance with the provisions of
this law.
Article 7:
The principal cannot ? throughout the agency contract validity
period ? resort to selling or disposing off his products, goods or
services by himself or by an intermediary in the Sultanate through
other than the agent. In the event of infringement, the agent shall
be entitled to the profit or commission as agreed upon in the
agency contract on the deal which the principal concludes by
himself or through the intermediary, even if the agent had no effort
in such a deal.
Article 8:
The principal shall compensate the agent for his expenses and
absolve him from his obligations for the purpose of executing the
agency agreement.
Article 9:
Agents shall supply consumers in all cases with:
One) All the guarantees that are normally given by the original
manufacturers or suppliers for the goods which are
distributed or sold by the agents.
Two) The spare parts necessary for the repair and maintenance or
vehicles, engines, machinery, electricity and electronic
equipment, mechanical tools etc. which are distributed or
sold by the commercial agency.
Three) The necessary workshops for repairs in respect of all
items mentioned in the previous paragraph.
The Ministry may relieve the agents from their obligations in
para (b) and (c) of this article, if they submit evidence that
the spare parts and workshops are in fact available with other
agents or technicians in the Sultanate or in the area, which
the agency covers.
Article 10:
The following are examples where abuse of a right has been
practiced and for which suitable compensation shall be made:
One) When any of the two parties terminates the unlimited term of
the agency contract, without the other party committing a
breach to justify such an action.
Two) When the principal refuses to renew the term of the agency
contract after it expires if the agent proves that his activity
(efforts) has led to an evident success in the distribution and
promoting the sales of the products of the principal, and that
the refusal of the latter to renew the contract, would deprive
the agent from the benefits expected as a result of his effort
unless the principal can prove that the agent has committed a
breach that justifies his refusal to renew the contract.
Three) If the agent renounces the agency suddenly without
justifiable cause to the detriment of the principal.
Registration of Commercial Agencies (Procedures &
Conditions)
Article 11:
One) A register to be known as the “Register of Agents and
Commercial Agencies” shall be maintained and kept at the
Ministry and the necessary forms shall be issued for the
purpose of implementing the provisions of this law in
accordance with the rules and instructions of the Minister or
an officer the Minister appoints from the employees of the
Ministry as Registrar.
Two) Any person who wishes to practice commercial agency
business shall first complete the registration of his agency in
the Register designed for this purpose before commencing
any business.
Three) The commercial agencies existing at the time this law
becomes effective and every person who acts as an agent in
accordance with the provisions of this law, should register
their names in the register during 60 days from the date this
law becomes effective.
Four) The agency shall be considered as existing from the date of
its registration in accordance with the provisions of this law.
Any agency which is not registered shall not be recognized
and any case concerning it shall not be heard.
Article 12:
Applications for registration of Commercial companies should be
submitted on a prescribed form designed for this purpose in the
Ministry with the supporting documents attached to the
application.
Article 13:
The Ministry shall decide on the application for registration with
days from the date of its submission and shall provide the agent
with a signed certificate confirming his entry in the register. The
Ministry shall also announce the entry through the medium as
specified by the executive regulation for that.
The Ministry shall have the right to reject any application for
registration, by giving reasons for rejecting. It shall send the
concerned person a copy of the decision to reject by registered
post.
Any person may obtain from the Ministry extracts from the
register.
Article 14:
The Council of Ministers, in accordance with the recommendation
of the Minister of Commerce and Industry may limit the number of
agencies allowed for every agent, and their types, also the number
of agencies allowed in the Sultanate or its various regions.
The Ministry also, upon the approval of the Council of Ministers
may import supplies and goods on its own or through merchants
appointed by the Ministry for this purpose, in cases of necessity,
without being bound by the rules and regulations of this law.
Article 15:
The Ministry shall delete the agency entry if it was proved that the
entry was made on a wrong basis or on the strength of false data or
for any other reason stipulated by the law.
The Ministry shall also delete the agency registration based on the
request of the principal upon expiry of its term and for nonagreement
for renewing the contract, provided that the agent
should have informed of the principal’s lack of interest in renewing
the contract, within the agreed upon period, whereby the notice
period shall not be less than three months from the expiry of the
contract, failing to which the agency shall be deemed renewed for
the same period as agreed upon in the contract.
Article 16:
Every person concerned whose application for registering his
agency has been rejected in the cases mentioned in Article 15
above, shall have the right to appeal against the decision within a
month from the date of intimating him of the decision. The appeal
shall be submitted to the Minister, stating the reasons on which he
has based his appeal. The Minister’s decision in this regard shall
be final.
Article 17:
The agent, his deputy or his heirs (in the event of his death) and
also the Manager of the company or its legal representative shall,
upon cancellation of the agency or expiry of its specified period and
not renewing, apply to the Ministry to delete the agency’s
registration from its records within one month from the date of
death, cancellation or expiry. This application shall be
accompanied with supporting documents. If the concerned
persons did not apply to the Ministry to delete registration within
the above-said period, the Ministry may delete it by itself and
inform the concerned parties accordingly.
The Authority for Settlement of Commercial Disputes
and its Powers
Article 18:
The Authority for Settlement of Commercial Disputes (ASCD) shall
decide on all matters and disputes between the principal and the
agent relating to the application of the provisions of the agency
contract. ASCD shall decide and determine the suitable
compensation, guided by the local trade practices, laws of justice
and fairness, unless the parties agree to resort to arbitration.
Penalties
Article 19:
(One) Notwithstanding any penalties stipulated in any other law,
any person who violates the provisions of Article 3 and 4 or
does not fulfill his undertakings or commitments in
accordance with the provisions of Article 9 or violates the
provisions of Article 11 of this law shall be liable to a
minimum fine of RO 500/- and not exceeding RO 10,000/-.
In case the contravention is repeated the fine shall be
doubled in both its minimum and maximum limits and the
commercial place or that part thereof which the contravenor
has allotted for running the business of the Commercial
Agency shall be closed and both his name and that of his
agency shall be deleted from the Commercial Register.
Two) Notwithstanding any penalties stipulated in any other law, a
fine not less than RO 100/- and not exceeding RO 1,000/-
shall be imposed on:
(a) Every person who deliberately submit to the Register
false statements or documents relating to the agency or
its registration in the Register. In this case ASCD shall
issue an order to the person concerned to correct the
documents or statements within the dates fixed by
ASCD. If ASCD sees that this is not possible, then it
will order the cancellation of the registration
completely.
(b) Any person who falsely mentions himself in the
correspondence or publications related to the business
of his Commercial Agency or published in any of the
publication and advertisement media as the agent of a
company or foreign products, material, commodity or
goods.
Article 20:
The Minister may issue a written order authorizing any of the
employees of the Ministry to examine the books, documents and
papers pertaining to any commercial agency for the purpose of
ensuring that such an agency is genuine and that the principal had
appointed an agent for the agency in the Sultanate without the
intervention of others and other matters relating to the
implementation of the provisions of this law.
Article 21:
The Minister of Commerce and Industry shall be responsible for
the execution of this law and for issuing the necessary regulations
for the application and execution of the law to include:
1. The organizing and supervision of the Register provided for
in Article 11 of this law, the method of keeping the register
and examining it and the statements, that may be given to
those concerned.
2. Fixing the registration fees, renewals and obtaining the
testimonials, statements. etc.
Article 22:
This decree shall be published in the official Gazette and shall take
effect from the date of its publication.
9th May, 1977 Qaboos Bin Said
Sultan of Oman
MINISTRY OF COMMERCE AND INDUSTRY
Ministerial Decision No. 11/85
Amended by the Ministerial Decision No. 112/97*
Concerning the Regulations implementing the
Royal Decree No. 26/1977
Promulgating the Commercial Agencies Law
The Minister of Commerce and Industry,
After perusal of Royal Decree No. 26/1975 promulgating the law
setting up the Administrative Apparatus of the State and its
amendments, and of the Commercial Agencies Law issued by Royal
Decree No. 26/1977 has decided.
Section 1 ? Commercial Agencies
Article 1:
A register (to be known as the Register of Commercial Agents and
Agencies) is to be set up in the Directorate General of Commerce
(Commercial Agencies and Trade Marks Department) and
applications are to be recorded in it which have been accepted in
accordance with the provisions of the Law of Commercial Agencies
No. 26/1977 referred to above, and with the provisions of this
Decision. The Director General of Commerce shall organise the
supervision of the register and the method of registration.
Article 2:
Applications for registration are to be set out on the relevant form
and the Directorate General for Commerce in each area shall
specify the number of copies required. If the applicant wishes to
record his name as an agent for more than one manufacturer or
supplier, he must present a separate application form in respect of
each one.
(*) Articles (7), (18a3 & b3), (20) and (23) of the Executive Regulations were
deleted
by the Ministerial Decision No. 112/97 issued on 16th September 1997.
Article 3:
Applications for registration must include the following
declarations:
(One) Declaration in respect of a natural agent:
Full Name, age, nationality, place of residence, Head office of
the business, commercial name, number and date of
Commercial Registration, number and date of Oman
Chamber of Commerce and Industry subscription.
(Two) Declaration in respect of juristic agent:
Commercial name, number and date of Commercial
Registration. Import and commercial agencies activities
should be among the objectives of the Company and the
Omani share in its capital should not be less than 51%.
(Three) Declarations in respect of the principal and the agency:
(1) The name of the principal, his headquarters, his
nationality and title in respect of the agency.
(2) The commencement and expiry date of the agency.
(3) The exact location and geographical area of the agency in
the Sultanate.
(4) The objects of the agency, its name and the trademark
under which it operates.
Article 4:
The application for registration must be accompanied by
documents corroborating the declarations set out in the previous
Article, and the following documents in particular:
1. A copy of the agency contract attested by Oman Chamber of
Commerce and Industry or by the Sultanate of Oman’s
Embassy in the country of the principal or by the Embassy of
any Arab country if Oman’s Embassy was not available in
that country. The competent authority of that country
should attest the contract, showing the rights and
responsibilities of both the principal and the agent and the
rate of commission, if any. The contract should be between
the agent and manufacturer or the supplier in the country of
origin without an intermediary, and if the product was
manufactured in more than one country, then the contract
can be made with any those countries.
Where the agreement indicates that the manufactured goods
are produced by another factory, evidence must be furnished
that the principal is the original supplier of these goods.
2. A declaration detailing the manner in which the agent
discharges the obligations stipulated in Article 9 of the Law
of Commercial Agencies, and in particular the opening of a
maintenance workshop in the areas designated by the
Ministry.
3. A copy of the Foreign Business and Investment Licence in
respect of companies subject to the Foreign Business and
Investment Law.
4. A declaration from the applicant that he has not been
convicted for breach of honour, improper conduct or
bankruptcy, unless rehabilitated.
5. Any other documents required to fulfil any other relevant
law.
Article 5:
Applications for registration will be recorded in a special ledger
known as the Applications Ledger, and will be numbered in order
of their appearance. The applicant will be given a receipt
containing this number.
Article 6:
The Directorate General of Commerce (Commercial Agencies and
Trade Marks Department) will review these applications and will
decide on them within 15 days from the date when the required
documents have been filed. The Directorate will inform the
applicant of the result of the review of the required documents by
registered letter. The application shall be considered null and void,
if six months after the date of notification no steps are taken on
this matter.
Article 7: …………………………………………………………..
Article 8:
If the application is accepted it will be recorded in the register
referred to in Article 1 hereof by number and date consecutively.
From this date all the stipulations and procedures decreed in the
law and in these regulations will become effective. The agent shall
be given a copy of the approved fee, shall be given a certificate of
registration.
Article 9:
In the event of rejecting the registration, the Directorate General of
Commerce shall notify the applicant accordingly, by a registered
letter, citing therein the reasons for such refusal. The applicant
shall have the right to appeal to the Minister of Commerce and
Industry against the refusal decision within one month from the
date of notification and the Minister’s decision in this regard shall
be final.
Article 10:
The registration of the agency must be renewed every three years
from the date of initial registration in the register or from the date
of last renewal. The application must be presented 30 days before
the period expires. However, the application will be accepted if
presented within 90 days of the expiry period provided that a
double fee is paid.
The registration of the agency will be cancelled if an application for
renewal is not presented within 90 days of receipt of a registered
letter containing a written warning, unless there is a dispute
concerning the agency, with the Authority for Settlement of
Commercial Disputes.
The cancellation will be effected by a decision made by a
committee set up at the Directorate General of Commerce chaired
by the Director General of Commerce and whose members are the
Company Affairs Department, the Director of the Commercial
Agencies and Trade Marks Department and the Director of
Internal Trade.
The agency registration shall be cancelled if it was not renewed
with 30 days from the date of notifying the agent by a registered
letter, if the agent was a sole agent. The registration shall also be
cancelled upon the request of the principal upon its expiry and if it
was not renewed further with mutual consent of the principal and
the agent, provided that the agent should have been notified that
the agent is not interested in renewing the agency within the
agreed upon date. Otherwise, the agency shall be renewing
automatically for the same period agreed upon in the contract.
Article 11:
The following documents must be submitted with an application
for renewal:
1. Documents demonstrating that the agent is continuing the
agency.
2. Documents demonstrating that the obligations set out in
Article 9 of the Law of Commercial Agencies have been
discharged.
3. Documents indicating the continuous registration of the
agent in the Commercial Register and Oman Chamber of
Commerce and Industry.
Article 12:
The commercial agent must notify to the Directorate General of
Commerce (the Department of Commercial Agencies and Trade
Marks) of any amendments in the particulars concerning the
commercial agency or agencies registered in his name, and in
particular any amendment or a separate agreement in respect of
the amount of the commission or its percentage or the rights and
duties of each party to the agency agreement.
Application for additions to or amendments of or cancellation of a
commercial agency agreement must be presented on the
applicant’s official letterhead accompanied by the necessary
documentation. The Director General of Commerce must enter
such additions, or amendments or cancellations, in the register
after considering and accepting them.
Article 13:
All agency registrations or alterations or renewal or deletion of
details entered in the register shall published by Oman Chamber of
Commerce and Industry’s bulletin.
Section 2 ? Importation
Article 14:
Any merchant or company may import the goods subject of any
agency in the Sultanate from anyone other than the original
manufacturer or supplier who has an agency registered in the
Sultanate.
Article 15:
Importation other than for personal use must be carried out in
accordance with the procedures set out in the following Articles.
Article 16:
The Minister of Commerce and Industry will decide upon those
materials which may not be imported from abroad in accordance
with what has been decided in the public interest.
Article 17:
No person, natural or juristic, shall be allowed to import the
commodity for the purpose of trading in it, if he was not registered
with the Commercial Registry and a certificate (from) has been
issued to him in respect of the commodity permitted to import,
provided that it should be one among his licensed commercial
activities.
Article 18:
Any one engaged in importation must fulfill the following
conditions:
(One) Merchants:
(1) He must be a natural Omani citizen or have been
naturalised for three years.
(2) He must be not less than 18 years old.
(3) His head office must be in Oman.
(4) There must be no previous convictions against him of
bankruptcy or dishonesty.
(Two) Companies:
(1) It must be established in accordance with the provisions
of the laws of the Sultanate and the proportion of Omani
share capital shall not be less than 51%.
(2) Its head office must be in Oman and the company must
include importation among its objects.
Article 19:
Registration applications shall be submitted to the Commercial
Affairs Department at the Ministry of Commerce and Industry or
to its regional offices, accompanied with documents proving the
carrying out of the activity.
Import licence shall be granted according to the following:
One) For manufacturing and services projects, licence to import
material required by them to carry out their activities, under
a one year import licence.
Two) For trading establishments, licence to import commodities
for personal use and not for trading purpose, within the
limits of the requirements of the licenced activity.
Article 20: ………………………………………………………………
Article 21:
The importer shall produce the approval of the concerned
authority if the commodity came under the purview of such
authorities.
Article 22:
The Ministry shall have the right to refuse import licence
applications if they were not fulfilling the conditions set out.
However, the applicant may appeal to the Minister of Commerce
and Industry against the decision within 30 days from the date of
notifying the refusal and the Minister’s decision in this regard shall
be final.
Article 23: ………………………………………………………………
SECTION 3 ? GENERAL REGULATIONS
Article 24:
All commercial agents and importers must cease carrying out their
activities when informed to do so by the Directorate General of
Commerce within a month from the date of being so informed.
Article 25:
The Commercial Agencies and Trade Marks Department shall
prepare an index of the names of registered agents, types of the
products and services covered by their agencies. Similarly the
Commercial Register shall also prepare lists of registered
importers.
Article 26:
The Directorate General of Commerce shall give the person
concerned, certificates concerning the information contained in
the registers after ascertaining their particulars and payment.
Article 27:
The provisions of the above referred Ministerial Decision No.
204/93 and the amendments thereto shall continue to be effective
as far as the fees set out are concerned.
Article 28:
All that contradicts with the provisions of this Decision shall stand
cancelled.
Article 29:
This Decision shall be published in the official Gazette and shall
come into effect as from the date of its publication.
Salim Bin Abdullah Al Ghazali
Minister of Commerce and Industry
Issued On: 22nd January 1985
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