- Newsletter
- October 28, 2016
RIYADH: Deputy Crown Prince Mohammed bin Salman, second deputy premier and minister of defense, met with Jordanian Prime Minister and Minister of Defense Hani Al-Mulki at Al-Yamamah Palace here on 19.10.2016. Their meeting was the first of the Saudi-Jordanian Coordination Council.
The council later issued a joint statement.
During the meeting, the council reviewed the distinguished bilateral relations between the two countries in various fields, and discussed aspects of coordination in the areas referred to in the joint statement issued on 11/4/2016. The council confirmed its commitment to developing and enhancing these areas in order to achieve the aspirations of the leaderships of the two countries and serve the interests of both countries, the statement said.
During the meeting, a memorandum of understanding was signed between the Public Investment Fund and the Aqaba Economic Authority to establish an investment development project in Aqaba. An agreement was also reached between the two countries to avoid double taxation and prevent income tax evasion. A memorandum of understanding was reached for industrial cooperation between the two countries, as well as an executive program for cooperation between the Saudi Broadcasting Corporation in the Kingdom and the Jordanian Television and Broadcasting Institution.
The meeting was briefed on a decision of the Public Investment Fund in the Kingdom in accordance with the memorandum of understanding in the field of investment promotion signed in Amman on 25/08/2016 regarding the establishment of an investment company for economic projects in Jordan, and to be registered in line with the Jordan Investment Law with participation of Jordanian banks and financial institutions.
The two sides agreed to finalize all relevant procedures regarding registration of all investment companies as early as possible.
The two sides agreed on the continuation of efforts and work of the preparatory committee of the Joint Saudi-Jordanian Coordination Council, and to complete other draft agreements, especially those in the fields of electrical connectivity, nuclear energy, investment promotion, mining, military cooperation, and military industries, so as to submit these drafts to the council to take required procedures for signatures during a visit of Custodian of the Two Holy Mosques King Salman to Jordan.
The two sides emphasized the importance of ongoing cooperation between the two countries.
At the end of the meeting, Al-Mulki expressed appreciation for the warm Saudi hospitality.
Agreements reached
The following were the agreements reached between Saudi Arabia and Jordan during the first meeting of the Saudi-Jordanian Coordination Council in Riyadh on 19.10.2016:
- MoU signed between the Public Investment Fund and the Aqaba Economic Authority to establish an investment development project in Aqaba
- Agreement reached between the two countries to avoid double taxation and prevent income tax evasion
- MoU reached for industrial cooperation between the two countries
- Executive program for cooperation agreed between the Saudi Broadcasting Corporation and the Jordanian Television and Broadcasting Institution
- Newsletter
- October 28, 2016
RIYADH: The escalating tensions between Turkey and Iraq, as well as the bloodshed in Syria, will top the agenda of a high profile joint meeting of the foreign ministers of the six-nation Gulf Cooperation Council (GCC) and Turkey here on 13.10.2016.
The meeting will also focus on a range of key regional and international issues such as Yemen, Iran and international efforts to combat terrorism.
“The meeting will look into ways to further strengthen joint cooperation between the GCC as a bloc and Turkey,” said GCC secretary-general Abdullatif Al-Zayani on 12.10.2016. “The foreign ministers will discuss the latest political and security developments in the region, and the international efforts to combat terrorism,” he added.
The meeting is politically significant keeping in view the tensions between Ankara and Baghdad, which grew more intense on 11.10.2016 and 12.10.2016 after Turkish President Recep Tayyip Erdogan had a tiff with Iraqi Premier Haider Al-Abadi.
The GCC-Turkey ministerial meeting will be co-chaired by Foreign Minister Adel Al-Jubeir and Turkish Foreign Minister Mevlut Cavusoglu.
Speaking to Arab News 12.10.2016, Turkish Ambassador Yunus Demirer said that “the meeting has been convened within the framework of the strategic dialogue between the GCC and Turkey that was launched in 2008.” He pointed out that “two senior ministers from Turkey— Foreign Minister Cavusoglu and Economy Minister Nihat Zeybekci— will attend the GCC ministerial meeting.”
About the meeting agenda, Demirer said that “all key regional and bilateral issues will be discussed.”
The diplomat also lambasted Iraq, saying that the removal of Turkey from the Iraqi agenda due to pressure from Iran will not create a new, prosperous and peaceful Iraq. Around 1,000 Turkish troops are stationed near Mosul in Iraq to protect interests of Turkey and its regional allies.
He said that the relations between Turkey and the GCC have been “progressively growing.” Ties between the GCC and Turkey are set to improve further as their interests fully align on key regional issues, as well as international subjects. Across regional conflicts, from Libya to Syria, Iraq and even Yemen, Turkey and Riyadh are more on the same page and have the same positions.
- Newsletter
- October 28, 2016
RIYADH: 09.10.2016 meetings between the visiting Japanese ministers and Saudi officials in Riyadh have given a fresh boost to their bilateral relations.
Custodian of the Two Holy Mosques King Salman received at Al-Yamamah Palace Japanese Minister of Economy, Trade and Industry, Hiroshige Seko and Minister of State for Foreign Affairs Kentaro Sonora and their accompanying delegation.
During the meeting, the relations between the Kingdom of Saudi Arabia and Japan as well as the prospects for bilateral cooperation between the two countries in various fields were reviewed. The audience was attended by a number of Saudi ministers and the ambassador of Japan to the Kingdom, Norihiro Okuda.
Deputy Crown Prince Mohammed bin Salman, second deputy premier and minister of defense, also reviewed with the visiting ministers the areas of partnership to realize Saudi Arabia’s Vision 2030.
The two parties discussed the role of Japanese companies and government in activating the achievement of the Vision, including the development of joint programs between the two countries since the start of the Joint Saudi-Japanese Group for Vision 2030. The meeting was attended by Minister of Economy and Planning Adel Fakeih.
At the meetings between the ministers, Japan and Saudi Arabia agreed to advance bilateral cooperation in fields such as network-connected devices and renewable energy.
In the first meeting held in the Saudi capital to support the Kingdom’s structural reform drive and help Japanese companies to make inroads, Trade Minister Hiroshige Seko said the occasion marks the beginning of bilateral cooperation in a concrete form.
“If combined with the Abenomics economy policy mix being pursued by the government of Prime Minister Shinzo Abe, Saudi Arabia’s reform efforts would create a “synergy” that yields great benefits,” Seko said at the outset of the meeting.
The ministerial-level meeting was attended by Adel Fakeih, minister of economy and planning, among other officials.
At the meeting, the two sides also agreed on Japanese support in such areas as talent development in animation and video games, energy conservation and nuclear power, martial arts seminars and athletic training, Japanese officials said.
Executives of about 30 Japanese companies accompanying Seko also met with Saudi officials and pitched their business plans.
The meeting was the result of an agreement reached between Abe and Deputy Crown Prince Mohammed bin Salman in Tokyo last month.
During the meeting between businessmen of the two countries held at the headquarters of the Council of Saudi Chambers on 09.10.2016, Japan and Saudi Arabia agreed to advance bilateral trade cooperation between the two private sectors.
Speaking on behalf of the Saudi team at the headquarters of the Council of Saudi Chambers, Tariq Al-Qahtani told the Japanese officials that there is the second largest trade partner to the Kingdom enjoying a bilateral trade of $57 billion in 2013. He said the recent visit of the deputy crown prince to Japan and an earlier visit of King Salman when he was crown prince, had boosted trade between the two countries.
Al-Qahtani recalled that during these visits, a number agreements were signed and they are now being successfully implemented to derive mutual benefits. The results of these agreements will affect technology transfer and boost small and medium enterprises in the Kingdom.
The executive president of JETRO said that Japan’s largest volume of oil comes from the Kingdom and Japan in turn exports a variety of products including automobiles and machinery to Saudi Arabia.
Describing trade between two countries as significant, he said Japan is interested in taking part actively in the implementation of the 2030 program.
Leading Japanese bank Mizuho Financial Group, Inc. and state-owned Saudi Arabian Oil Co. (Saudi Aramco) recently signed a major agreement for business cooperation with the aim to support Japanese companies investing in the Kingdom. The move will go a long way in expanding ties between the two countries, especially in the energy sector.
With the memorandum of understanding, Mizuho, the sole Japanese bank to have an office in Saudi Arabia, is expected to work more closely with the Kingdom and provide enhanced support to Aramco, which works to transform its business portfolio, the Tokyo-based financial group said in a press statement, while referring to the visit of Deputy Crown Prince Mohammed bin Salman to Tokyo.
The statement said that “Mizuho will use Aramco’s knowhow and network to introduce Japanese companies, in particular SMEs and middle-marketers which have unique technological advantages, to Aramco and other Saudi companies as their business partners.”
- Newsletter
- October 28, 2016
RIYADH: Saudi Arabia and Singapore have identified education and health as potential areas of cooperation.
“Top Saudi officials will be traveling to Singapore, an island city-state in Southeast Asia, in the near future to explore possibilities to work closely in these sectors,” said Singapore Ambassador Lawrence Anderson.
Anderson, who was speaking on the occasion of Singapore’s national day, said that “Singapore has a lot to offer to the Kingdom within the framework of the Saudi Vision 2030 … With 2017 marking the 40th anniversary of the establishment of bilateral relations, there is a great interest to further strengthen Singapore-Saudi ties through various commercial opportunities presented by the Vision 2030 reforms,” he added.
Singapore has “one of the most successful health care systems in the world, in terms of both efficiency in financing, and the results achieved in community health outcomes. Since the 1990s in the field of education, Singapore has consistently been among the top performing countries.” To this end, the diplomat noted that efforts will be made to develop modalities to enhance bilateral relations under the new cooperation plan, especially in learning “best practices” in health and education.
The envoy further pointed out that “science, technology, IT, training and skills development are other potential areas in which the two countries can further cooperate.”
Referring to commercial relations, Anderson said that Saudi Arabia has been Singapore’s second largest trading partner in the Middle East with bilateral trade reaching $10 billion last year. “At the end of 2015, the total number of Saudi companies with their presence in Singapore increased to 45 from 20 in 2006,” he noted.
The envoy, who on 07.10.2016 night hosted a reception for Singaporeans based in Riyadh, said that “the national day event organized by the embassy was a way of bringing the community together.”
Framing his speech under the three themes of “Remembrance, Rejoicing, and Thankfulness,” Anderson said that Singapore was entering a new era with the passing of its first generation of leaders like former President S.R. Nathan and founding father PM Lee Kuan Yew, who had led the country for decades to prosperity.
Anderson reminded the community of the valuable lessons of loyalty, hard work, honesty and respect for family, neighbors and friends, that these pioneer leaders espoused.
On the theme of “rejoicing,” Anderson spoke about how Singaporeans collectively cheered on their athletes Joseph Schooling and Yip Pin Xiu who won gold medals in swimming at this year’s summer Olympics and Paralympics respectively.
He highlighted the challenges that Singapore will have to face in the new era of disruptive technology, economic uncertainty, and the threats posed by terrorism.
He emphasized that the most important criteria to Singapore’s continued success was the importance of preserving its hard-fought unity as a multi-racial and multi-religious country. “If we can all pull together as one united people, regardless of race, language or religion, then we can truly look forward to the future with confidence,” Ambassador Anderson said.
The city-state 09.10.2016 is considered a barometer of global economic health owing to its high dependence on external trade. Its foreign trade and capital flows is 407.9% of its GDP.
- Newsletter
- October 28, 2016
The Gulf Cooperation Council will start implementing VAT at a rate of 5% from 1 January 2018.
The Gulf Cooperation Council (GCC) – of which the UAE and Qatar are member states along with Saudi Arabia, Kuwait, Bahrain, and Oman – will start implementing the Value Added Tax (VAT) at a rate of 5% from 1 January 2018.
Currently the GCC is in the process of approving a common legal framework for the introduction of a VAT system. This VAT framework is expected to be finalised at the next meeting of the GCC Financial and Economic Cooperation Committee, now in October 2016.
The common VAT framework will form the basis for a national VAT system that will be implemented in each of the GCC states. Each member state would still be required to issue its own national VAT legislation, and will have the authority to determine specific VAT rules in certain areas. The objective of the common VAT framework is to introduce a standard, fully-fledged VAT system in each member state.
What is VAT in the GCC?
The VAT in the GCC will – most likely – be based on the European system and will be charged at each step of the ‘supply chain’. Ultimate consumers generally bear the VAT cost while businesses collect and account for the tax, in a way acting as a tax collector on behalf of the government. A business pays the government the tax that it collects from the customers while it may also receive a refund from the government on tax that it has paid to its suppliers. The net result is that tax receipts to the government reflect the ‘value add’ throughout the supply chain.
If a business doesn’t collect the VAT from its customers where it should, it is actually the business that becomes liable for the VAT. It is therefore very important for any businesses to ensure their VAT compliance process is functioning perfectly. As VAT is a turnover tax, it also means the liabilities, or missed opportunities on the recovery side, can build up fast.
Registering for VAT
Not all GCC businesses will need to register for VAT. In simple terms, only businesses that meet a minimum of AED 3.75m of annual turnover will have to register for VAT. Between AED 1.78m and AED 3.75m the registration for VAT is voluntary.
Also, businesses may not need to register with the government if they only provide goods and services which are not subject to VAT.
What are the VAT-related responsibilities of businesses?
All businesses in GCC member states will need to record their financial transactions and ensure that their financial records are accurate and up-to-date. Businesses that meet the minimum annual turnover requirement (as evidenced by their financial records) will be required to register for VAT. Businesses that do not think they should be VAT-registered should maintain their financial records in any event, in case they later need to establish whether they should be registered.
VAT-registered businesses
These businesses generally:
- must charge VAT on taxable goods or services they supply
- may reclaim any VAT they’ve paid on business-related goods or services
- need to keep a range of business records which will allow the government to check that they are compliant.
A VAT-registered business must report the amount of VAT it has charged and the amount of VAT it has paid to the government on a regular basis. This will be a formal submission. If a business has charged more VAT than it has paid, it must pay the difference to the government. If a business has paid more VAT than it has charged, it can reclaim the difference.
- Article
- October 25, 2016
Introduction
Tough days are still on for all six countries of Gulf Cooperation Council (GCC). Various reports and survey including report of World Bank provides for slashing growth rate and tightening of monetary and fiscal policies and increased fiscal deficits. World Bank agrees that the prime reason for this forecast is majorly due to expectation that oil prices will continue to trade on lower levels in comparison to previous years’ prices. Oil prices may marginally increase from current prices but large gap still exists.
What is the Concern?
Although the growth rate for all the countries in the region is predicted to be on a declining mode, United Arab Emirates (UAE) and Qatar are still in better position than other counties in the region. Kingdom of Saudi Arabia (KSA) is expected to be having the worst growth rate decline among all the countries.
The economic outlook for all oil producing counties is deteriorated ever since the start of collapse in prices of oil, gas and energy. Economies that have already diversified their economy are in better position like UAE is expected to outperform its counterparts because a large portion of its GDP now comes from infrastructure and tourism.
Qatar though largely dependent upon oil and gas output but is still going strong because strong financial reserves and large reserves of natural gas.
Other nations, namely, Oman, Bahrain, Kuwait and KSA are hit strongly after an era of rapid growth. A report issued by BMI goes on say that growth rate of KSA is expected to be only 1% for year 2017 and GCC posting a budget deficit of 11% in 2016 with KSA being the worst offender. Oman and Bahrain will also be the bigger contributors to this deficit, report says.
Though there is no sortilege for any of GCC economies going into recession in coming year but a sharp slowdown is forseen. Increased cost of fuel and energy, reduced purchasing power of consumers and continuously falling oil prices have substantially shaken the investor’s confidence resulting in lower investments and increased financial costs due to tightening of liquidity norms.
Bottom Line
GCC nations have already identified the need of hour and started diversifying their economies from oil and gas products on one side and formulating and amending the existing Corporate and Financial Laws to bring them in line with international laws on the other side. KSA already implemented new Company Law, Employment Law, trademark law and arbitration law and will soon be implementing International Financial Reporting Standards for recording of financial statements to increase confidence of international investors. Many other nations are also following the same model to give a boost to their economy and keep the track of rapid growth going on.
For more details reach us at [email protected]
- Article
- October 21, 2016
Introduction
International Financial Reporting Standards (IFRS) is the set of accounting standards developed, issued and maintained by International Accounting Standard Board (IASB) with an objective to provide uniform accounting standards globally. These standards are already been followed by more than hundred countries including European Union and majority of G20 countries. Many internationally recognized organizations have continuously praised IASB’s initiatives for global accounting standards.
Kingdom of Saudi Arabia (KSA) has also started the process of implementation of IFRS. It will be done in two phases. In first phase all the listed companies will be mandated to follow IFRS with effect from March 2017 and in the second phase all unlisted companies shall be mandated to follow IFRS for SME framework from March 2018. Currently the companies follow local standards issued by Saudi Organization of Certified Public Accountants (SOCPA). Implementation of IFRS is a part of SOCPA Project for Transition to International Accounting and Auditing Standards to bring the financial reporting and transparency level of Saudi Companies at par with their international counterparts and gain confidence of international investors.
The Transition
The deadline of SOCPA to Saudi company for maintaining and reporting of financial records as per IFRS is very close and the companies in the region are concerned about various issues related with transition from old local standards to new international standards. Currently, only banks and Insurance providers follow IFRS in KSA.
It is definitely not going to be a simple process as there are many fundamental differences between the existing and new standards. Many are finding these changes an aid to provide a boon to business, other are concerned about lack of clarity and increased burden of maintaining and reporting requirements.
SOCPA has also added additional disclosure requirements to some IFRS primarily to meet the requirements of Shariah and local law. SOCPA also keeps the power to amend or modify any IFRS if its requirements contradict with Sharia or local law.
How will it impact?
Though majority feels that the impacts will be significant for both businesses and investors, there are still a few who feels it will be less of an impact. Some of the major impacts of these standards will be on calculation of earnings per share (EPS), revenue recognition and cost structures specially for large corporate having complex structures.
One of the major changes for Saudi companies will be revaluation of fixed assets as the current standards do not require any regular valuation of assets and the book value is generally the price paid for acquiring the asset while IFRS require residual value calculation to be done annually. It will significantly impact the asset value the companies. While the companies into real estate will see a sharp upside movement in their asset value, industrial companies will face otherwise, because they have to show depreciated value of their decade old machines whose purchase and installation cost is much higher than their depreciated value on the current date.
Introduction of IFRS will substantially change the shape of balance sheet of Corporates and this will significantly impact the credit ratings and borrowing costs which may result in decreased confidence of international investors and directly brunt to the stock markets in the country.
Bottom Line
Initial few years after implementation of IFRS will be challenging for already grappling economy but in the long run it shall definitely benefit the companies to stand at par with their international counterparts. It can also help the companies to recognize the actual present value of their assets since as per existing standard only historic value of assets are depicted in the books. IFRS will be implemented in the next year and the actual picture will be revealed only after implementation as it is difficult to predict its true impact before practically applying it. It is tough to judge the impact of implantation of IFRS as there are many big companies having many foreign affiliates and already maintaining the records as per global standards.
For more details reach us at [email protected]
- Article
- October 11, 2016
Introduction
Dubai is one of the best and prosperous cities in world to live and work. The city has tremendously transformed itself to a city that provides best of infrastructure and facilities from a city ignominious for uncertainty and instability a couple decades ago. This transformation has resulted in multiplying growth for the Emirate and property situated herein. In addition to that liberalized policies for acquisition of immovable assets in the region have given a new height to property market in the region. A large number of expats now prefer to buy property rather than renting it. However, it will be prudent to do some due diligence before putting a handsome amount into a property.
Examining the Title
The initial concern for buying a property is definitely examining the righteous title holder of the property. Before buying you must request a copy of the property title deed and site plan from the dealer. It will not involve much of time and cost to find the reality behind seller’s claims about title ship of the property by making an enquiry to Dubai Land Department. It will also help the prospective buyer to find if the property is restricted from sale under a court’s order or already having a mortgage which prevents its sale. But Land department require a valid power of attorney to carry out any such investigation if the owner of property is present in Dubai. Land department can also help in finding the actual value of property in question.
Developers of Property can help you know better
Potential buyers may approach the master developers for enquiring about the property that they wish to purchase to ensure that all the charges levied or community fees included under cost of property are actually have been paid to date. It will also help to check if any penalties have been levied by the developer and successful clearance received by the seller. A Power of attorney from the owner of property will be required for making such enquiries from developer.
Dubai Municipality can help
Investigation from Dubai Municipality can be a great help to ensure that there are no outstanding violations or penalties related with property’s construction and zoning and to verify the permitted use of the property.
Technical Due Diligence
Buyers should also use a third party licensed technical inspection company to verify the area measurements and dimensions of the property as the sellers’ claim and ensures no defect in the property. Once a buyer has done these due diligence with the help of outside parties, he can proceed to draft an agreement which is generally called a memorandum of understanding (MoU) to state the key terms of the property transaction. In Dubai, the parties are mandatorily required to sign and file Form – F to Dubai Land Department and any additional terms and conditions in the MoU should be attached as an addendum to Form F.
The Final Step
The parties would be required to appear before the Dubai Land Department or at the Registration Trustee offices with all the necessary documents recommended by the authority to finalize the transfer. In the case of corporate purchasers, all the key documents e.g. trade license, Certificate of Incorporation, Memorandum and articles of association etc. would be required to get duly notarized and attested and translated into Arabic and must disclose the ultimate beneficiary of the buyer entity. If the purchaser entity has corporate shareholder(s), all the documents of each corporate shareholder should be notarized, attested and translated to Arabic should be presented to Dubai Land Department for assessment of the ultimate beneficiary. The seller will be required surrender its original title deed and the buyer will receive a new title deed mentioning its name upon completion of registration of property. This process usually takes approximately one to two hours provided all the required documentation is complete.
Bottom Line
Due diligence can help and gives some assertion and confidence that the property has a clear title, it is not impossible for the seller to make any alterations to the property after the completion of the due diligence by the prospective buyer and the buyer should verify the findings of the investigation and due diligence on a day closer to the actual transfer date to ensure that the property status remains unchanged and he will actually receive a clean and free property.
For more details reach us at [email protected]
- Article
- October 4, 2016
Introduction
Gulf region is largely recognized for its large amount natural resources especially of oil and gas. With the remarkable growth in the economy, it has attracted the eyes of investors from all over the world. With an ambitious objective to promote co-operation of member nations and become knowledge based economies Gulf Cooperation Council (GCC) was formed in 1981 by six countries namely, United Arab Emirates (UAE), Kingdom of Saudi Arabia (KSA), Kuwait, Bahrain, Qatar and Oman.
Workforce and population in GCC countries are dominated by foreigners, a fact that escalates the need to preserve the originality and innovation to provide sense of security to external trade in the region. Protection of IPR is gaining due attention of brands operating in the area. Government and judicial authorities are taking effective steps for protection of IPR and at the same time a large number of private groups are also creative awareness and nourishing a better and positive future for intellectual property rights.
The Regulators
Most of the countries in GCC have their separate laws for protection and regulation of IP rights and at the same time also governed by unified laws issued by GCC for regulation and protection of IPR. In other words, GCC have issued IPR laws ensuring they are in congruence with the domestic policies and needs of all the countries in the council and are binding for the business operating in the region.
Legal Overview
GCC Patent Law: Introduced in 1989, this law provides for protection of patents in all six member nations for an application approved by GCC Patent office (GCCPO). The application approved GCCPO do not require any further country validation in member nations and generally, member nations who accept patent applications merely assign a filing date and filing number and do not take any further actions.
GCC Trademark Law: With an objective to nullify separate trademark laws in member countries and to create a uniform regulations, GCC Trademark laws was accorded consent in 2006. However, it is important to note here that law does not merge the trade mark offices in member nations and each nation continues to have their separate trade mark registration office. The law provides for protection of medium and small trademarks and imposes stringent punitive provisions for violators.
IPR Protection Measures in UAE
IP Laws are still evolving in the entire GCC region and all the states are developing laws and policies in congruence with GCC Laws. Department of Economic Development (DED) is the primary agency to regulate businesses operating in Dubai and very recently it has launched a quarterly index for protecting intellectual property rights. The index is launched with an aim to promote innovation and protect economic rights of the innovators and patent owners. Index also aims to promote sustainable development by measuring intellectual property protection in five criteria.
DED has also joined hands and signed a Memorandum of Understanding (MoU) with Korean Intellectual Property Office (KPIO) to develop mechanism for protection of intellectual property rights in the region and to examine various applications received in UAE for patent registration.
Conclusion
As more and more countries are diverting their investment and business in the region, IPR protection is becoming a crucial factor of consideration. Though the awareness is increasing and regulators are taking effective steps for protection of interest of stakeholders, laws relating to protection of IPR still have a long way to go in GCC. Though the regulators are committed to provide security and ensure protection of IPR, the region still requires proactive and comprehensive procedures to retain and maintain the confidence of international innovators.
For more details reach us at [email protected]
- Article
- October 4, 2016
The Sultanate of Oman’s evolving competition and anti-trust law has not yet been enacted or applied by way of enforcement action. But, the potential investors, who are planning to expand their business in the Sultanate, should tighten their belts and take every step to understand the soon to be effective law to ensure compliance.
Major Definitions
In Oman the Consumer Protection Authority along with its other significant powers and responsibilities regulates the freshly formulated anti-trust and competition law.Law defines Dominance as the ability of a person or group of persons, whether natural or judicial who jointly or severally attempt to ‘directly or indirectly’ concaving control over a particular market, and thereby acquiring a share exceeding thirty-five percent of the total volume of this particular market.
‘Economic Concentration’ includes any act which results in partial or full transfer of the interests, monies, assets (physical or intangible), shares, benefits or liabilities from one person to another and includes mergers or any other arrangement which results in a person or groups of persons being in a dominant position in direct or indirect way.
As per the provisions of Article 11 of the Law,a written request should be submitted to the authority by the persons who desire to execute any transaction which would result in an economic concentration providing details of such transaction.
The Authority is empowered to scrutinize the application and grant a judgment within a period of ninety days from the date of filing the application. If the authority fails to give any order within ninety days, it will be presumed as consent from the authority.
Penalties
The laws provides for very strict punitive provisions. However, applicant aggrieved from the decision of the authority has the right to make an appeal within 60 days in case of rejection of his application. The authority shall consider the appeal within 30 days from the date of submission by the applicant. If the authority fails to give any order within ninety days, it will be presumed as consent from the authority.
Though the Authority is granted with the powers to cancel any approval, previously granted, if it comes to the knowledge of the authority that the information provided by the applicant(s) is not true, correct or is fraudulent or made with malafide intensions.
The Law further provides that no transaction shall be approved which will result in economic concentration through acquisition of more than fifty percent of the relevant market.
Conclusions
As more and more countries are diverting their investment and business in the region, restraining monopolistic trade practices is becoming a crucial factor of consideration for the authorities in Oman. Though the awareness is increasing and regulators are taking effective steps for protection of interest of stakeholders, laws relating to promoting healthy competition and restricting monopoly still have a long way to go. Though the regulators are committed to provide effective system, the region still requires proactive and comprehensive procedures to retain and maintain the confidence of international investors.
For more information reach us at [email protected]
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