STA Law Firm https://www.stalawfirm.com/en.htmlSTA Law Firm - Court Uncourt (Blog) - Oman LawsenCopyright 2024 STA Law Firm All Rights Reserved<![CDATA[Evolution of Fintech in the Middle East]]> Evolution of Fintech in the Middle East

"The major winners will be the financial services companies that embrace technology."

With a population of about 600 million people, the Middle East is one of the world's most diverse areas, covering three continents and 21 countries. It is a culturally, politically, and economically diversified region that includes the Gulf Coordination Council's six Arab members. This culture is showcased in the FinTech sectors' various stages of development across the area. Beginning in 2017, Gulf area officials and regulators began establishing forward-thinking and flexible FinTech policies. Since then, there has been a significant attempt to create more diversified, competitive, and inventive economies.  The financial sector is a critical component of the major effort to transition Gulf countries away from a strong dependence on government spending and the energy industry and toward economies fueled by diversified private-sector investments, which have lower volatility and more sustainability. Indeed, promoting robust FinTech ecosystems is seen as a key component of the Gulf Cooperation Council's economic diversification strategy. Fintech is driven by tech innovation that improves existing financial services while also providing avenues for unbanked groups to access financial services in the Middle East.

Government backing, technological advancements, and high smartphone penetration have aided the growth of start-ups in the Middle East, particularly in the Gulf Cooperation Council (GCC). From a regulatory standpoint, regulatory environments in the UAE and Bahrain have hastened the growth of Middle Eastern startups by allowing for a bespoke, firm-specific licensing system for a limited testing time. Governments can also use these sandboxes to learn about emerging technology and modify policies accordingly. The Dubai International Financial Centre (DIFC), the Abu Dhabi Global Market (ADGM), and Bahrain are the three sandboxes operating in the Middle East. E-commerce and electronic signatures are recognized across the Middle East, with more recent e-commerce statutes encompassing electronic payments in some regimes, such as Kuwait. The article majorly talks about the evolution of the fintech market in the UAE, Egypt, Qatar, Saudi, Oman, and Bahrain.

UAE

Without question, the UAE is the most advanced in its FinTech path and the most internationally competitive country in the Middle East and North Africa.

"By providing FinTechs in the UAE with a holistic, dynamic ecosystem that includes an independent regulatory framework, an English Common Law judicial system, and world's economic exchange, start-ups will be better positioned to pitch investors on their innovative solutions and expansion ambitions." - Arif Amiri, Dubai International Financial Centre's top executive. The UAE is now the globe's 25th most competitive nation, up to two places last year. Significant increases in ICT use and skills - perhaps the most crucial engines of FinTech growth potential - helped it gain traction. These elements, according to the WEF, "supplement the UAE's long-standing competitive advantages, namely one stable macroeconomic climate, a robust product market, and well-developed facilities."

After a steep 6.1 percent drop in 2021, the UAE economy could not return to pre-pandemic levels in 2021, with a growth forecast at 4% in 2021. The sluggish rebound, according to Fitch, is due to relatively strict fiscal stimulus and a slow global economic recovery, both of which are expected to impact internal and international demand.        

Corporations founded in free zones, namely the ADGM and the DIFC, should still be licensed in the jurisdictions where their goods/services will be offered. At this time, the free zones do not issue passports to residents of other countries. This means that fintech entrepreneurs will still have to navigate several different rules prescribed by the UAE Central Bank for traditional banking and financing activities, the Emirates Securities and Commodities Authority (SCA) for securities and investment activities, and the UAE Insurance Authority for insurance activities, all of which are 'onshore' in the UAE (including insurance-based investment contracts commonly sold by IFAs in the UAE).

Bahrain

Bahrain's GDP was also hampered by fiscal restraints, with the growth of only 2.7 percent, which was expected in 2021, up from a 4.2 percent decrease in 2020. According to Fitch, Bahrain's fiscal position was by far the weakest in the GCC, and reduced oil prices will hasten Bahrain's budgetary reforms. On the other hand, the Bahraini government has a long-term economic strategy, dubbed Economic Vision 2030, to move away from an enormous public sector and toward a private-sector-led economy.

As per the Milken Institute, Bahrain has the most established financial hub in the GCC, with almost 400 regulated financial institutions. It claims that, unlike the UAE, Bahrain has adopted a national strategy to FinTech advancement, with the Central Bank of Bahrain regulating the finance sector and its Governor, Rasheed Mohammed Al Maraj, pushing Bahrain as a regional FinTech powerhouse with an innovative attitude.

Qatar

Qatar is predicted to muddle over the next few years, as it expanded by 3.1 percent in 2021 after declining by 2.2 percent in 2020. Non-oil activities will benefit from companies' growth ambitions in the run-up to the FIFA World Cup in 2022, which should result in a temporary increase in tourist visits. The impending passage of important FinTech laws, according to KPMG, will "significantly assist the build-up" of the banking services ecosystem. It is related to the formation of the FinTech Division, the Fintech Regulatory Sandbox, and the Qatar FinTech Hub by the Qatar Central Bank (QFTH).

Egypt

Egypt sees an increase in fintech businesses, owing to the Egyptian government and the Central Bank of Egypt's (CBE) desire to modernize payment methods and transition to a cashless economy. Payment services, mobile cash, and smart wallets are the most developed sectors. The Egyptian government and the Central Bank of Egypt collaborate effectively with ministries and other government agencies to create and promote fintech organizations to combine into the financial system.

Legislation signed by the President established the National Council for Payment. The President, the head of the CBE, and the director of the Financial Supervisory Authority are among its members. Its mandate is to improve the adoption of cashless payment systems. An e-commerce law is being debated, and a surge of financial regulatory reform is expected to be enacted in response to the rise of digital credit lending and fundraising.

Jordan

Jordanian fintech is still in its infancy, although it is steadily rising. Local businesses are putting in place systems to settle invoices online and accept payments via cell phones. However, the Jordanian government is working on digitizing Jordanian money to decrease the consumption of cash in circulation. It is actively encouraging the use of fintech in Jordan's public and private sectors, and it is pressuring governmental and non - governmental enterprises to integrate fintech into their day-to-day operations. Fintech products are being integrated into governmental services and the financial sector by Jordan's Central Bank (CBJ). This opens up numerous potential for fintech businesses to create themselves in the country.

Oman

The Central Bank of Oman (CBO) is developing a comprehensive strategy to encourage the growth and use of financial technology (fintech) services in the Sultanate to launch Oman into a $300 billion worldwide industry by 2025. According to the Executive President of the Central Bank, Oman's fintech strategy has the potential to accelerate the roll-out of new financial and banking instruments, encourage venture capitalism, promote entrepreneurship and job creation, and spur overall economic development.

Saudi Arabia

Saudi Arabia has the macroeconomic potential to become a future fintech center. Saudi Arabia is the MENA region's largest economy, with a large, young population (almost half of whom are under the age of 24) and one of the world's highest smartphone penetration rates (65 percent). It is also generally tolerant of technological advances and creative corporate practices. Saudi Arabia's "Vision 2030" and the National Transformation Program 2020 were launched in 2016 to lay out a roadmap for the Kingdom's development over the following decade. One of the main goals of Vision 2030 and the National Transformation Program 2020 is to diversify Saudi Arabia's economy and lessen its dependency on oil. This strategy is centered on technology.

Conclusion

The ability of humans to accommodate change is at the heart of all technological growth, and fintech is the outcome of one such human trait that stimulates innovation. The financial system is transitioning to an entirely new paradigm that will address everything from digital identification to digital sovereignty. Fintech services, which provide a wide range of financial services, will soon become prevalent in the financial system and fintech start-ups. Fintech, on the other hand, will suffer a reaction if the banking sector is disrupted in any way. Fintech companies' existence has cleared the door for financial inclusion, rendering banking services more convenient.

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Tue, 02 Aug 2022 06:06:00 GMT
<![CDATA[GCC VAT Agreement]]> GCC VAT Agreement

Introduction

Globally the VAT system has been around for a long time. However, for the most part, Arab countries have been operating tax-free in that respect. Over 160 countries around the world have adopted the indirect tax method to reduce the fiscal deficit and facilitate a steady increase in the country's GDP.

Following suit, an agreement between six GCC countries, namely, Bahrain, Qatar, Kuwait, Saudi Arabia, Oman, and the United Arab Emirates, had brought about a landmark change in the tax-free operations of these nations. While Saudi already had a draft VAT Law at the time of the drafting of this treaty, other GCC countries that are party to the treaty did not. However, after that, UAE and Bahrain also implemented a VAT Law in 2018 and 2019, respectively. Therefore, this treaty played a role in supplementing the development of a framework that enables countries to lay down laws regarding the implementation of the VAT system in a comprehensive manner.

The treaty is not strictly binding on the parties per se, in the sense that the countries have been provided with the option of practicing their discretion while implementing laws. Of course, there are some mandatory provisions, but there are also optional provisions to approach implementation as per their domestic and national needs.

It is important to note that this treaty is not a law; therefore, national implementation of laws in its respect is necessary for the treaty to come into force.

Background

Gulf nations heavily depend on their rich oil and energy reserves for the majority of their income. However, to survive as per global standards, diversification of the economy by utilizing other industries is becoming more and more critical. SINCE TIME IMMEMORIAL, the GCC states have been talking about improving their commercial practices and harmonizing the same with the rest of the world.

Similar to the EU, the GCC VAT Agreement also believes in a typical integrated market system. The typical market system allows a free flow of goods across nations; just like the EU, the GCC also aims to promote cross-border trade relations with their neighboring states.

Pulling inspiration from Europe, the GCC nations have made efforts to develop a common currency to strengthen their monetary union; however, those efforts were in vain due to non-acceptance by Oman and UAE.

Recent trends worldwide have required the GCC countries to pull up their socks and compete in their global market. To achieve this end, they need to diversify away from the oil and gas industry into different sectors of the economy like infrastructure, travel and tourism, VAT, etc., which is becoming a reality, slowly but surely.

Influence of Islamic Law

It is common knowledge that Shariah or Islamic law is the backbone of the legal system across the said GCC states. As per the Shariah law, there are five types of taxes, zakat playing a significant role in VAT implementation. The idea is that VAT paid to the government would allow them to provide services for the benefit of the general public. However, many GCC countries failed to institutionalize the zakat system, except Saudi Arabia. Therefore, the implementation of VAT will allow these countries to account for the funds collected.

Reasons for implementation

Dependence on oil for the majority of their revenue started to cause a deficit in the economies of GCC nations. Noticing this deficit, the International Monetary Fund (IMF) prepared a report that showed a decline in the private sector growth. Therefore, the introduction of a VAT scheme poised itself as the best solution to raise revenue. Despite VAT not being a cost-efficient exercise, global trends show that it is the most effective way of generating revenue.

The parties to the Agreement have agreed to a low rate of 5% VAT which is a good step of gradually easing into a full-fledged taxation system.

VAT benefits are not just limited to generating revenue; it facilitates consumers' discretionary spending on non-essential and harmful goods; for instance, Saudi Arabia and UAE have imposed taxes on fizzy drinks, cigarettes, etc. Further, the imposition of the Tax, even at a zero- rate, allows the government to keep in check on fraud and tax evasion, promoting economic and social growth.

Similarities between the EU and GCC VAT System

The basic principle of VAT is that its implementation differs according to the country's domestic legislation. Despite its complexities, it has been globally accepted. There are a few universally accepted principles that are implemented concerning the VAT regime, enumerated hereunder as follows;

  • The VAT is levied on a wide variety of supplies and services; this means that it is levied on all levels, right from the manufacturers to the suppliers; however, an established principle of imposing VAT is the business is not the ultimate bearer of Tax, the burden shifts from the supplier to the ultimate consumer of the product.
  • Further, VAT implementation is based on the destination principle; this principle lays down that, Tax is to be levied on the goods at its final destination. Therefore, exports can be transported free of Tax, whereas imports are liable to be taxed.
  • Legal Framework

  • The EU VAT system was incorporated by the EU Council Directives, which are essentially instructions that flow into legislation. These directives do not have the force of law but are binding on the states. The nature of the directives is quite flexible, therefore, allowing the states to take liberty in applying these directives in their domestic laws.
  • The EU Commission is the regulatory authority responsible for drafting treaties in the best interest of EU nations. The EU Council is an essential representative authority of the Commission. In EU law, treaties, regulations, and directives take precedence over domestic legislation. This precedence is so that the values of community loyalty and the direct effect of these treaties are upheld.
  • Like the EU Directives, the GCC VAT Agreement also refers to the GCC Charter and the GCC Economic Agreement. Therefore, the Charter and Economic Agreement are the basis on which the VAT system relies. The GCC VAT Agreement is also a blanket law that governs all nations' parties to the Agreement, just like the EU.
  • The GCC VAT Agreement further draws similarities with the EU VAT system since it facilitates cross-border trade activities.
  • Implementation

    Compared to the EU VAT system, VAT implementation in the GCC is more manageable, considering the volume of countries that would have to adopt the system and develop domestic laws to comply with the Agreement. The EU comprises 28 countries that require the implementation of the VAT Directives. On the other hand, six countries are party to the GCC VAT Agreement.

    Member states under both the EU and the GCC enjoy discretion about implementing the tax regime; the domestic laws may be designed as per the country's needs.

    Cross border trade

    Cross-border trade refers to the flow of trade from one state to another, as per the two distinct tax regimes, within the borders of the EU or the GCC nations, as the case may be. Both the EU and the GCC make a distinction between VAT charged on goods and services.

  • Tax is usually charged at the place where the goods end up eventually. The final destination of the goods. There are two aspects that the EU VAT system considers when it comes to the supply of goods; first being supply and the other being acquisition. The place of departure of goods is exempted from Tax, whereas the goods are acquired where Tax is imposed. Therefore, the buyer of the goods is ultimately responsible for paying VAT. This is concerning B2B.
  • In the case where goods are directly sold to the end consumer, i.e., B2C, the member state that is the supplier of goods is subject to the imposition of VAT.
  • As per the reverse charge mechanism, the consumer is liable to pay VAT through their periodic return.
  • The GCC system is very similar to the EU in this respect as well. However, all member states have yet to incorporate the Agreement into their domestic laws. The Agreement has more of a straightforward approach in that it applies the reverse charge mechanism directly to the consumers.

    Exemptions

    Both the EU and GCC have a standard, reduced, and zero-rated tax regime. However, specific sectors have been exempted from being taxed under this regime with the general public's interest in mind.

    The EU exempts VAT from being implemented on medical care, public postal services, welfare and security, and any other such goods or services that are essential. Moreover, the member states can practice their discretion to exempt VAT from imposing any other goods or services.

    The GCC exempts VAT from being charged on health, education, and domestic transport; they can further exempt Tax from being levied on; government entities, NGOs, charitable institutions, citizens of member countries, and any other sector they deem fit.

    Measures to improve the GCC VAT System

    The GCC VAT Agreement draws much inspiration from the EU VAT regime. The EU regime serves as a model law that allows the GCC to adopt any such part that would serve advantageous and omit the parts that did not align with their objectives. For example, imposing a uniform tax rate of 5% throughout the GCC was an important lesson learned from the shortfalls of the EU regime.

    Since parties to the GCC Agreement are relatively new to the whole idea of the tax regime, the actual use, that is, their registration, scope implications, should be clearly explained, and business owners should be educated about the topic to prevent legal complications. For example, double taxation.

    The objective value of Tax that has been imposed in the GCC at the rate of 5% may pose a threat to the liberty of business owners and give rise to distortion of competition in the market. The GCC has adopted the VAT system to open its market and recover from the financial crisis. Therefore, restricting competition in the market will be detrimental to the economic objectives that the Agreement aims to achieve.

    Conclusion

    The introduction of a new tax regime has its challenges. However, this is a step in the right direction to achieve economic goals such as foreign trade, competition, economic growth, and creating a global presence in the market. Further, slow and steady implementation of Tax will allow the general public to ease into the tax regime; it will also allow the government to amend the taxation as per changing trends in the economy.

    The GCC nations are foreigners to the concept of Tax since they have been running tax-free since their inception. However, model tax laws implemented worldwide allow these nations to strategically examine and implement the Tax in a way that will not cause chaos in the socio-economic climate.

    The effect of the Tax was seen to be an uncertain move since there was a possibility of a decrease in expenditure by the public. However, its implementation in Saudi, UAE, and Bahrain has shown that people have embraced this VAT regime, triggering a healthy social and economic response. 

     

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    Mon, 24 Jan 2022 05:47:00 GMT
    <![CDATA[Economic and Fraud Provisions in the Middle East]]> Economic and Fraud Provisions in the Middle East

    "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

    - Milton Friedman

    Economic fraud is a term that has been repeated over the years, so much so that the consequences it bears do not have any precedence or impact on the ones that hear it. For many companies and capitalist machinery, this term essentially triggers them to explore options to hide their fraudulent tracks and continue operating in the same manner. To have governments help them cover the tracks in certain jurisdictions ultimately defeats the purpose of the assignment.

    Despite the incongruent activities of individuals, companies, and governments from the expected norm of justice in many jurisdictions, other countries are tenacious to implement a regulatory framework that will eradicate such fraudulent activities in the market. This article will discuss the economic and fraud provisions established in the Middle East, their effectiveness, and the scope of reach it possesses about financial crime.

    What are the Economic and Fraud provisions in the Middle East?

    If one area of the economy has seen a steady increase in the past years, it would be the economic fraud prevalent in society. Regardless of the number of provisions that jurisdictions and international organizations establish to combat financial fraud, none of them seems sufficient. The parties involved in economic fraud and other fraudulent practices are constantly evolving to cover their tracks efficiently.

    Infamous scandals like Bernie Madoff and the Ponzi scheme leave one in absolute awe as it remains unclear, what is the culprit: the crime or the criminal? Many innocent parties, including employees and clients, were adversely affected by the ill-doings of these financial schemes. After the outburst of many scandals and its impact on many innocent individuals, jurisdictions are trying to fasten their pace to stay a step ahead of wrongdoers and hopefully eliminate the potential threats in the market.

    The introduction of new anti-economic fraud regulations has paved the way for potential investors to feel a sense of security over their investments within the market, along with the ability of the regulations to enforce justice. Over time, people have understood that the formation and establishment of an anti-fraud legal framework are not sufficient to ensure peace and harmony in the market, an iron fist must be imposed on fraudulent parties and companies to deter them from doing such activities in the future and serving it as a lesson for other participants in the market who bear similar intentions.

    The types of economic fraud can be quite varied and are spread across different industries and the scope of nature. These could include housing benefit fraud, tenancy fraud, council tax fraud, blue badge fraud, social care fraud, business rates fraud, insurance fraud, bribery, and money laundering. These are just a top layer of economic crimes prevalent in an ocean of fraudulent activities in the market. The crimes that are more coherent to the wrongdoings in the market include not declaring the business location, stating that a property is not in use while it is, dishonestly requesting for an exemption to pay for charges that are owed, or any unauthorized movement of money to make ill-gains.

    Often, economic crime is caused not by companies but by customers towards companies. The highest reported crime boost in the Middle East is through customer fraud and procurement fraud, which have proved to be the most disruptive fraud within an economic crime. In a survey conducted on a global platform, the number of customer frauds was comparatively more in the Middle Eastern region.

    In an ongoing effort to combat fraud together, many companies in the Middle East began investing in more stringent controls and implementation of the rules to avoid economic crime, while many others conducted a thorough examination into reasons after the occurrence of a crime in the company. Another issue that stands alongside customer fraud about its prominence is procurement fraud. This fraud entails the practice of favoring associates with vendor and supplier contracts.

    All these efforts are measures taken to mitigate the risks involved and ensure that proper prevention is taken by instilling the right technology and talent to deviate from any fraudulent prone routes.

    However, it is not easy to ensure that accountability will be maintained and transparent feedback is provided. Another limitation of this procedure is that advanced technologies to combat financial crime can be costly, which would further deplete if the company possesses insufficient resources to acquire and install the platform and is not equipped with properly trained employees to manage the technology. The lack of proper expertise to handle the in-place technology could attract various cyber threats, which allows a wrongdoer from any part of the world to infiltrate the company's system.

    With this in mind, companies must equip themselves from the arsenal of defenses to protect themself and the financial and reputational facets of the company. The extent of damage that infiltration of the company's system can cause to the operations is quite unfathomable. It would be better for companies to leave their vault of secrets wide open than installing an IT platform that is managed poorly. The necessity of combating such insecurities is proliferating and must be countered at the earliest. One would like to believe that the efforts of the legal jurisdictions in the Middle East to battle economic crime are practical and promptly applied. However, many of the jurisdictions still fail to provide a proper implementation of the provisions established against economic crime.

    The readiness of companies in the Middle East to confront the indecisive nature of economic crime and report any issues as they arise is still moving at a stagnant rate. The stark increase in cyberattacks and its potential threats is not a mystery to the companies in these regions. Nevertheless, they decide against preparing themselves in defense of such risks and attacks. The firms in the region and the governmental organizations must understand the types of threats that could arise in the economy and the nature of such economic crimes. Although this would seem like an insignificant step, this particular action could help achieve a more profound revelation of the gaps and vulnerabilities of the economy and its protective framework.

    Many would argue that the relationship of the Middle East with economic crime and fraud dates back ages. All the glitz and glamour and the boom of economies are incongruent with the fraudulent activities occurring within the firms and regions. A region's legal systems cannot enforce the regulatory frameworks established to fight against economic crime if the country's government does not implement the rulings.

    To know more about Economic and Fraud Provisions in the Middle East in Singapore Click here 

     

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    Mon, 27 Dec 2021 03:22:00 GMT
    <![CDATA[Family Law in the GCC]]> Family Law in GCC

    A Family is formed by considering several factors like the social, political, and monetary.

    Similarly, there is a legal design in framing a family. In a net shell a family law covers two fundamental fields one is the relationship between spouses and the other is the relationship between parents and their children. For many years Muslim nations were aiming to change the rules governing marriage and divorce.

    Kuwait 

    In Kuwait, family and personal law are governed by religious courts. The cases will be judged only by the code of law not by any previous judgments. The courts will never be influenced by precedents. The Kuwait family law contains 347 articles and the code was enacted in 1984. It consists of codes to deal with marriage, divorce, child custody, and inheritance. To handle family and personal matters there are different courts for both the Sunni and Shi'a.

    In Kuwait, Muslim marriage is an agreement between the groom and the representative of the bride's family. The marriage is formalized in the presence of an authorized person and two male witnesses.  The bride's representative can be her father, brother, uncle the officiator of the marriage can also sever as her legal representative.  The officiator prepares the agreement and this is signed by the groom, the bride's representative, the witnesses, and the officiator. The agreement also includes the details of the number of wives the groom has as the Islamic religion allows a man to have up to four 6wives of he is able to support them equally. It also contains the dowry amount.

    In Muslim countries the Islamic law allows husbands to divorce their wives just by "I divorce you." Without any reasons   Under Shi'a law, to get a divorce officially the man must appear before a judge. Under Sunni law, divorce needs to be recorded only with the registrar of the personal affairs court. In both systems judges usually grant a divorce petition after giving reasonable opportunities to reconcile out of court and to seek counselling before deciding on divorce. The husbands are required to pay monthly alimony for each child born of their marriage.  In custody issues favors the mother for small children and Girls to live with their mother until they get married.  Boys can choose after attaining puberty whether to reside with their mother or father. 

    Bahrain

    In Bahrain, both Sunnis and Shias have their own courts that deal with personal and family issues. The Family Law comprises of all matters arising in connection with marriage like dowry, maintenance, parentage, separation, and custody. Influential sections of the religious establishment oppose a codified family law, while the government has recently demonstrated a lack of interest in pursuing the matter.

    The main problem is that there are rules and norms but that they are not codified. For getting a divorce, women also need to face significant legal, financial, and societal difficulties. The Sunni men announce their divorce orally, while Shia men record their intention in writing. A Bahraini man can divorce his wife for any reason while women can only request divorce under specific circumstances but it is possible without the burden of evidence. A judicial divorce takes years during this time women are not supported financially.

    Divorced Shia women retain physical custody of their sons until they are seven and their daughters until they are nine. The new personal law allows Sunni mothers to retain custody of daughters until they are 17 years of age or married whichever comes first and sons until they are 15 Even if the mother has custody, the father remains as the children's legal guardian. For custody of children, the Bahraini courts consider the religion, permanent residence, income of parents. The parents can visit their child by prior arrangement of the competent court. 

    Saudi Arabia

    The jurisdiction of family-related matters falls in Sharia Court. Family related matters include marriage, divorce, children and inheritance. The laws are not codified. The government promotes polygamy as an Islamic value program. Polygamy is limited to four wives for men at any one time. As a result of oil wealth, the practice of polygamy has increased even among educated Hejazis. In 2001, the Grand Mufti the highest religious authority issued an opinion, that to fight against spinsterhood polygamy is very much essential in the context of Islamic Value. Later in 2019 marriages under the age of 15 were banned and prior permission from the specialized court was necessary for the marriages under the age of 18.

    Men have the right to divorce their wives without any legal justification.  The husband has to provide financial support for the divorced wife.  A woman can only obtain a divorce with the consent of her husband and, it is very difficult to obtain a judicial divorce. The fathers will have the right to have custody of sons from the age of 7 and daughters from the age of 9.

    Oman

     Article 17 in Oman's Basic Law gives liberty for women to marry freely but the Personal Status Law will be the authority in dealing with guardianship, child custody and inheritance. According to Sharia law, if a Muslim man can afford the expense to take care of four wives he can get married to four wives. A Muslim woman can restrict her husband from marrying other women by entering a clause in the marriage agreement.

    A man can divorce by simply saying 'I divorce you' three times. But in the case of a women even if she has good reason to seek a divorce she must go to a court. The husband is responsible to give maintenance to the divorced wife and his children from the marriage. The man can claim only after the son attains the age of ten.

    Qatar

    As per Sharia Law, a Muslim man can marry four wives if he is able to take care of them materially. In Qatar, the Muslim marriages are performed at the Sharia Court. A married Qatari Muslim man seeking a divorce by saying 'I divorce you' three times to his wife. The husband has to give maintenance to a divorced wife and his children from the marriage. In Qatari courts the provisions for divorce and family law matters are dealt within the code Family Law 22 of 2006.

     United Arab Emirates                                   

    The UAE had improvised its family law. And it was announced on 7th November 2020. The crisp of the amendment is that the Islamic law of the Sharia will no more be used for dealing family law for the non-citizens.

    There are many amendments to the country's family law. Law No. 28 of 2005 was overruled resulting in Decree-Law No. 5 of 2020 on August 28, 2020. These provisions look in the following matters. The financial support by the husband to wife, divorce by proxy, arbitration between the husband and wife and financial compensation. Earlier, Sharia law was applied to Muslim marriages, child custody issues, inheritance, maintenance etc. Till the amendment, the law allowed for non-citizens to be given option to select Sharia for their divorce proceedings or to request the court to follow the law of their home country.

    Conclusion

     Family is formed by various social, political, and monetary aspects. All GCC follows Sharia law for managing the matters related to the family. The husband is given more privileges than the wife. The Man can easily divorce his wife proclaiming Talaq and he can marry four wives if he is able to take care of them and their households. Now, these nations are aiming to change the rules governing marriage and divorce.

     

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    Sun, 14 Nov 2021 11:32:00 GMT
    <![CDATA[Electronic Privacy Laws in the GCC]]> A closer look at Electronic Privacy Laws in the GCC

    The cooperation council for the Arab State of the Gulf is commonly known as Gulf Cooperation Council (GCC). It is a regional, intergovernmental, political and economic union that consists of all Arab states of the Persian Gulf except Iraq. The GCC countries are Kuwait, Bahrain, Qatar, Saudi Arabia, Oman and The UAE.

    Nowadays, Electronic privacy is the centre of everybody's attention as the amount of data created today is very high with approximately 2.5 quintillion bytes per day, which is a very huge amount. So the sensitivity of data and its privacy goes up day by day. It's becoming increasingly important we should be focusing on how our data is being used.

    Data is collected in various forms like when going out for shopping and swiping up your credit card, getting on a website and registering yourself, sometimes even you don't have to provide any information and you just simply accept the cookies then you have provided some part of your personal information to them which can be knowingly or unknowingly. This article is about the electronic privacy laws in GCC countries individually.

    Bahrain:

    In Bahrain a Personal Data Protection Law (PDPL) has been created, where the data controller has been given to data subjects that mean the control is given to the general public. The companies should be abiding by the law and to manage electronic privacy, the data protection law was drafted in 2019.

    The purpose is to protect the data for the individuals and without the consent of the individual, the data should not be moved around. There is non-compliance and risk is also for companies who are not been able to manage the data they are supposed to manage as per the provision of this law. There is imprisonment for one year and a fine up to BHD 20000. The Ministry of Justice is the body that monitors the PDPL compliance maintain notice and authorisation of the register for data processing.

    Consent to the process, personal data unless required by law, legitimate interest or contractual obligation. Appointment of data protection guardian is done by impartiality and independently. Transferring data for processing outside of Bahrain is not going to be a straightforward process now. The person has got a list which is now proposed in the consultation paper but anyone outside the country needs to get permission on a case to case basis.

    Rights of data subjects like the right to blocking, object to direct marketing are back to the people, so they can now control the data usage and the framework for the data quality has now been expanded on one of the consultation papers.

    Qatar:

    In 2016, the Qatar government has introduced Law No. 13 which is related to the protection of personal data. Qatar is one of the first GCC states which have introduced the electronic privacy law, which says about the assembling, usage and release of personal data.

    When the law was published in the official gazette, there was six months' time period in which compliance of law was ensured.

    There electronic privacy laws levy restrictions on individuals as well as companies to distinguishable individuals using electronic means. The law provides an individual's right to give consent to the specific information which has to be published or not. Furthermore, the "specific" category include health status, birth status, religious belief, criminal records, marital status etc. It can only be procured with the permission of the Ministry of Transport and Communications.

    Concerning cross border transfers, personal information collected in Qatar from different jurisdictions should be easily accessible. But this rule does not apply when it is a matter related to the national security of the country, international relations or in case of investigation of criminal offences.

    Oman:

    In the current situation, Oman does not have any electronic privacy law but the right to the individuals' confidential data in all modes of communication is secured as per Oman' Constitution (Royal Decree No. 101 of 96). For the protection of electronic data privacy, the sultan of Oman established a Cyber Defence Centre (Royal Decree No. 64 of 2020).

    The abovementioned Cyber Defence Centre will directly report and help the Internal Security Service ("ISS") of Oman. All the mandatory laws for cybersecurity will be issued by the head of ISS and anything which goes contrary to the decree will be repealed.

    As per the Electronic Transactions Law, data collected from the e-commerce websites like electronic signature contains very fewer provisions for the protection of data but it includes some necessary provisions related to dissemination and retention of data. This law is only applicable to electronic transactions.

    The UAE:

    The UAE introduced a new comprehensive data law in the country. This new data law is being brought as part of the national programme called "Projects of the 50". At present, UAE does not have a singular comprehensive data protection law; this would be the UAE's first comprehensive data protection law to operate across the country's mainland.  But other existing laws have been used to deal with privacy and data security matters and certain data protection provisions have applied to certain sectors.

    The new data law will introduce certain rights for individuals such as the right to information, right to access, right to be forgotten. When the personal information is stored and monetized in some way or used for wrongful marketing purposes, so there will be certain provisions to stop this and it will ensure that the information will be used only with the consent and that it does not harm someone's privacy.

    Kuwait:

    Currently, Kuwait does not have any particular electronic privacy law. There are no specific guidelines on how retention and dissemination of data are done.  But the e-commerce law requires that any personal details like marital status, birthplace, health status, financial condition, personal status, and criminal record (if not to be disclosed) should be retained privately. The abovementioned information should not be disclosed without consulting the client and without the client's permission.

    Saudi Arabia:

    At present in the Kingdom of Saudi Arabia, there is no electronic privacy law related to data protection. Due to no data protection law, businesses in Saudi Arabia are getting affected as there is market awareness about the privacy of data. Currently, all the matters related to privacy in Saudi are governed by sharia law in the absence of any specific legislation.

    E-commerce law came into force in 2019, which applies to all the service providers who provide goods and services through an e-commerce platform, even outside of KSA to the people residing there. It is also prohibited in this law to seek a client's details.

     

     

     

     

    ]]>
    Tue, 19 Oct 2021 09:55:00 GMT
    <![CDATA[Transfer Pricing Regulations in the Middle East]]> Transfer Pricing Regulations in the Middle East

    The Transfer Pricing is a common mechanism which the countries use to transfer the tax base. The transfer is often from countries with high taxation to countries with low taxation. Transfer Pricing deprives states of their fair share of taxes from global corporations. In the case of Transfer Pricing, countries are competing for the presence of multinationals by adopting ways to make their jurisdiction more attractive. One such adopted way is by decreasing its corporation tax. No doubt that the Transfer Pricing legislation has been in Europe and North America for around 50 years, but the Middle Eastern countries are newcomers in this field. 

     In the European Union, many public authorities introduced Transfer Pricing Regulations; however, the effectiveness of these regulations has been in question. Some consider the regulations as a contributory factor to the increasing complexity of tax laws and an additional cost for companies. The common consolidated corporate tax base was primarily introduced to solve the Transfer Pricing problem in the European Union.

    Middle Eastern countries have witnessed significant developments in the taxation sector. The Middle East was popular for relying heavily on the Oil and Gas sector to contribute to its national revenues. However, seeing a decrease in the energy prices which lowered the total revenue by about 60 percent between 2012 and 2016, many countries introduced Value Added Tax in 2018. The Middle East also signed up to international Transfer Pricing recommendations from the Organization for Economic Cooperation and Development, as an attempt to counter the erosion of national revenue and further minimize capital flight.

    Kingdom of Saudi Arabia

    The Kingdom of Saudi Arabia (KSA) introduced its Transfer Pricing legislation in December 2018, with its final roll-out in February 2019. The KSA's General Authority for Zakat and Income Tax introduced reforms, where companies operating in the KSA must comply with the 3-tiered documentation required by Article 13 (covering transfer pricing documentation and country by country reporting (CbCR)). Firms must supply the following:

  • Master file; 
  • Local file- containing additional information required by the OECD, such as industry analysis; and  
  • CbC report. 
  • The companies are also required to submit a Transfer Pricing disclosure, providing details on enclosed transactions and Transfer Pricing policy. These requirements are as per the recommendations of OECD. 

    The KSA framework introduces four minimum standards for business to follow.

  • Article 5 covers harmful tax practices;
  • Article 6 covers treaty abuses;
  • Article 13 covers transfer pricing documentation and country by country reporting (CbCR); and
  • Article 14 - covers dispute resolution.
  • In 2019, Bahrain, Egypt, Qatar and the United Arab Emirates also introduced new Transfer Pricing regulations. Bahrain and Oman are expected to introduce new transfer pricing regulations as well.

    The increased focus on Transfer Pricing by the Middle Eastern countries is a result of compliance with commitments on tax

    cooperation. Many jurisdictions in the Middle East continue to commit to the OECD's Inclusive Framework for the implementation of minimum standards. 

    Recent changes to the Transfer Pricing requirements: 

    United Arab Emirates

    The UAE Cabinet issued the Cabinet of Ministers Resolution Number 31 of 2019 concerning economic substance regulations in the UAE on 30 April 2019. The Regulations require the UAE entities ("Relevant Entities") that carry out any of the activities listed as "Relevant Activities" in the Regulations to have demonstrable economic substance in the UAE from 30 April 2019. In addition, CbC reporting is required for MNEs with consolidated group revenue of a minimum of USD 860 million. MNEs must notify the UAE government of the CbC filer's tax residency. The entities subject to the economic substance regulations must file an annual notification declaring the business and activities being performed and if the economic substance test is being met.

    The Regulations were introduced to honor the UAE's commitment as a member of the Organization for Economic Cooperation and Development Inclusive Framework on Base Erosion and Profit Shifting and in response to European Union's review of the UAE tax framework. The Regulations ensure that the Relevant Entities undertaking Relevant Activities are not being used to artificially inflate profits that are not in commensuration with the economic activity undertaken in the UAE. The objective of the Regulations is to determine the requirements and set out the standard to confirm that the Licensee carries out the activity in the State that achieves economic substance interest. 

    The Regulations came into force on 30 April 2019, guidance on the Regulations was issued on 11 September 2019, the Regulatory Authorities were identified in a Ministerial Resolution issued on 4 September 2019 and amendments were made to the Regulations in Cabinet Decree Number 7 of 2020 issued on 19 January 2020 (the "2020 Regulations"). As per the 2020 Regulations the provisions of the Regulations do not apply to any commercial company, as defined in Article 8 of Federal Law Number 2 of 2015 concerning Commercial Companies, as amended, in which the Federal Government, the Government of any Emirate of the State, any Government Authority or entity affiliated to either of them owns directly or indirectly at least fifty-one percent (51%) of the share capital. The Regulations apply to a licensee carrying out Relevant Activities. Under the Regulations, "Relevant Activities" are:  

  • Banking  
  • Insurance  
  • Fund management  
  • Lease-finance  
  • Headquarters  
  • Shipping  
  • Holding company  
  • Intellectual property (IP)  
  • Distribution and Service Centre 
  • The Relevant Entity must comply with the economic substance requirements by: 

  • Conducting the core income-generating activities in the UAE;  
  • Being "directed and managed" in the UAE; and  
  • Considering the level of activities performed in the UAE:  
  • Having an adequate number of qualified full-time employees in the UAE  

  • Incurring an adequate amount of operating expenditure in the UAE  

  • Having adequate physical assets in the UAE.  

  •   A Relevant Entity which only undertakes a Holding Company Business will be subject to less stringent economic substance requirements. However, if a Relevant Entity carries out high-risk IP related activities, additional requirements shall apply. It is mandatory that the economic substance requirements be met for each of the Relevant Activities in case a Relevant Entity is carrying out more than one Relevant Activity. 

    The penalty for failure to demonstrate sufficient economic substance in the UAE or to notify or to provide accurate or complete information or for the relevant Financial Year ranges from AED10,000 - AED50,000. 

    Bahrain 

    Bahrain's rules, effective from January 2019, require profits generated by the companies of Bahrain to comply with the actual economic activity in Bahrain. The new rules protect situations where the Bahrain entities accrue profits concerning the attribution of specific functions; albeit, in reality, it does not have the required level of substance for managing and controlling such functions. The entities that fall under the definition of "Relevant Entities" are subject to the rules and are required to file an annual Economic Substance Report within a period of three months from the end of the financial year. 

    Egypt 

    Egypt, similar to the KSA, introduced master file and local file documentation requirements, effective from January 2019. The rules apply to tax years beginning on or after 1 January 2018. However, there is no minimum threshold for the preparation of a master file and local file. A CbC report is also required for MNEs with consolidated group revenue of a minimum of USD 190 million. 

    Oman 

    There are currently no specific Transfer Pricing documentation requirements; however, Oman has also joined the OECD's Inclusive Framework for the implementation of minimum standards. As a result, Oman may introduce its CbC reporting requirements accordingly.

    Turkey 

    On 25 February 2020, Turkey adopted the three-tiered transfer pricing documentation, including the preparation of a master file, local file and CbC report. A master file is required for MNEs with assets and revenues of a minimum of USD 75 million. A local file is a requirement for all entities with related-party cross-border transactions. Companies with revenues and assets of a minimum of USD 15 million USD must submit a detailed form on related parties and intercompany transactions. CbC reporting is required for MNEs with consolidated group revenue of a minimum of USD 820 million.

    Qatar 

    At the end of 2019, Qatar also published its Executive Regulations to the Income Tax Law introducing Transfer Pricing documentation requirements for tax years ending on or after 31 December 2019. Along with the master file and local file requirements, which supplement the CbC reporting requirements that have been in effect since 2018, the new rules also require a Transfer Pricing questionnaire to be submitted with the annual tax return. The threshold for preparation of a CbC report is USD 825 million. 

    Conclusion

    With the adoption of Transfer Pricing regulations, the GCC authorities signing the Base Erosion and Profit Shifting Inclusive Framework and further having committed to applying four minimum standards, Transfer Pricing in the Middle East shall permit and regulate the Pricing Transactions internally within businesses as well as between companies which operate under common control or ownership, including cross border transactions. The MNEs having their operations in the Middle East must carefully take the changes to the Transfer Pricing documentation requirements and their deadlines into consideration. The Middle Eastern countries require the preparation of Transfer Pricing documentation in compliance with the Organization for Economic Co-operation and Development's base erosion and profit shifting initiative. The Middle Eastern countries in the region did not previously have Transfer Pricing documentation requirements. The documentation obligations have increased by adding the preparation of documentation that is consistent with the OECD's three-tiered approach.

    ]]>
    Fri, 27 Aug 2021 12:00:00 GMT
    <![CDATA[Competition 2020 Oman]]> Competition Law in Oman (Updated in 2020) 

    1. What is the name of the main regulator/ regulators governing the competition law in this jurisdiction?

  • The Competition Protection and Monopoly Prevention Centre (The Centre)
  • The Board of the Centre (The Board)
  • 2. In the context of a merger acquisition in what circumstances, are the seller and/or the purchaser required to notify the competition regulator?

    Under Article 11 of Oman Sultani Decree No. 67/2014, the entity intending to take action resulting in economic concentration will submit a written request to the Centre. The Centre will consider the request and issue the relevant decision related to it within 90 days of receiving the request. However, on the expiry of the 90-day period without a decision being reached, it will be considered to have approved it. The Centre may cancel the request after approving it when it is proven the information submitted by the applicant is untrue or incorrect or marred with fraud or forgery. The approval may not be given to any action resulting in economic concentration leading to the acquisition of a rate exceeding 50% of the relevant market.

    3. What steps will a competition regulator take if there are potential concerns around a company obtaining a dominant market position following a merger/purchase of a competitor?

    Centre personnel who are judicial officers under the Law will peruse the cases of monopoly and economic concentration and investigate the forbidden practices. They will also have the powers and authority to scrutinise and audit the required information, particulars and records.

    4. How would a dominant market position be derived?

    The ability demonstrated by any individual or a group of people directly or indirectly engaging in control over the relevant market and therefore acquiring a rate exceeding 35% of the volume of this particular market is domination.

    5. Is it possible to appeal a decision by the competition regulator- how does this work?

    The entity which submitted an application regarding economic concentration may submit a complaint to the Chairman of the Centre within 60 days of the date of the rejection being issued. The complaint will be determined within 30 days of its submission date. The lapsing of the period without any reply will serve as an approval of the complaint.

    6. How quickly is any decision on a competition risk as a result of a merger/company purchase normally taken?

    The Centre will consider the requests for economic concentration and issue the relevant Decision within 90 days.

    7. What remedies are generally taken when a dominant market position is established which would a merger or acquisition?

    Centre personnel who are judicial officers under the Law will peruse the cases of monopoly and economic concentration and investigate the forbidden practices. They will also have the powers and authority to scrutinise and audit the required information, particulars and records.

    8. What penalties apply for failure to follow competition law in a merger or acquisition?

  • Anyone who enters into any agreement or contract for the purpose of monopolisation or to take any form of monopoly which may negatively affect the market or enters into an agreement or contract for the purpose of preventing, eliminating or undermining competition or who has a dominant position, practices any activities which may infringe, negatively affect the competition, eliminate or prevent competition will be jailed for between three months and three years and fined an amount which is equal to the gain in terms of profits from selling the products which are the cause of the violation They will also be fined between 5% and 10% of the total annual sales of the products which are the cause of the violation gained by the violator during the last financial year.
  • The entity intending to take action resulting in economic concentration will submit a written request to the Centre and an entity which fails to submit the request will be jailed for between one month and three years and/or fined between 10,000 and 100,000 Rials. Anyone who has breached the Centre resolution rendered under Article 11 of Oman Sultani Decree No. 67/2014 will be penalised in the same way.
  • Anyone who prevents any judicial execution officer from entering the establishment, annexes and head offices or conceals any information required, or gives information considered irrelevant or misleading, hiding or damaging any documents or deeds required in the investigation process will be jailed for between one month and three years and/or fined between 10.000 and 100.000 Rials Officers acquainted with any information, particulars and records because of their position, not keeping them confidential or allows any third parties to get acquainted with them will face the same penalties.
  • If the violations are repeated, the penalties will be doubled and the business or enterprise will also be shut down or their commercial activity suspended providing the period does not exceed 30 days.
  • The president may impose administrative fines provided the fine does not exceed 5,000 Rials and the fine will be doubled for a repeat offence. Anyone who commits a similar offence in the next five years will be considered a recurrence in the application of the provisions of the Law. If the violation continues, an administrative fine of between 500 a day up to 10,000 application of the provisions of the Law. If the violation continues, an administrative fine of between 500 a day up to 10,000 Rials may be imposed.for the duration of the violation.
  • 9. Are there any rules governing the way a company seen as having a dominant market position must sell or market their products - which are the most important ones?

    Anyone having a dominant position will not practice any activities which will infringe, negatively affect, eliminate or prevent competition, including but not limited to:

  • Selling the product at a lower price than its actual price to prevent certain competitors from entering the market, excluding them or exposing them to losses with which they will not be able to perform their activities.
  •  Imposing restrictions on supplying the product to create an artificial shortage in an endeavour to increase the prices.
  • Imposing specific requirements regulating the sale or purchase or dealing with another person to weaken the competitive position concerning the other competitive persons.
  • Refrain from dealing with any other person without reasonable cause to prevent that person from entering into the market or in an attempt to force them out of the market.
  • Stipulating the supply or sale of a certain commodity or rendering specific services against the purchase of certain commodity or performance of the service from that person or another person.
  • Pricing or direct or indirect determination of the conditions for the resale of the products.
  • Enforce certain obligation to cease the manufacturing, production or distribution concerning a certain product for a limited period.
  • Purchasing, storing or spoiling certain commodities to increase the prices or prevent the reduction of the same.
  • Reducing or increasing the quantities available of a certain product in a way which creates a shortage or artificial abundance.
  • Discriminating without a reasonable cause amongst the clients concluding similar contracts in terms of prices, sale or purchase terms and conditions.
  • Inducing dealers not to permit a certain competitor to use it may be in need of it concerning facilities or services.
  • Keeping a manufacturer or supplier under an obligation not to deal with any other competitor.
  • Pending conclusion or execution of a contract or agreement on condition of accepting obligations, irrelevant to the subject matter of the agreement.
  • 10. What are the penalties for failure to apply competition rules when selling or marketing products?

    Those who violate the Law will have to:

  • Legalise their status or rectify the violation within a fixed amount of time, which will be determined by the court, provided the period does not exceed three months.
  • Dispose of some assets, shares or right equity or take other actions to procure the removal and rectification of the violation effects.
  • Keeping the violator under an obligation for settling a fine on a daily basis until the violation is rectified, which will be between 100 and 10,000 Rials.
  • 11. Are there any rules which prevent companies from colluding with competitors in the market when setting prices?

    Article 9 of Oman Sultani Decree No. 67/2014 prohibits any agreement or contract entered into either inside or outside Oman or any procedures or practices, whether written or oral implied or expressed, for the purpose of preventing, eliminating or undermining competition, particularly with regard to the prices, discounts, sale or purchase terms and conditions or provisions of the services. The forbidden practices include agreements between suppliers or competitors. The prohibition on restrictive agreements in the Law is not limited to agreements concluded between enterprises where  one, a few or all have a dominant position. The prohibition also applies to any enterprise and to all types of agreements, whether horizontal orvertical. The only test is if the arrangements would result in the prevention, reduction or elimination of competition.

    12. What are the penalties for colluding with competitors?

    The violating individual will be jailed for between three months and three years. They will also fined an amount equal to the gain in terms of profits from selling the products which are the cause of the violation. A rate of between 5% and 10% of the total annual sales of the products which are the subject of the violation gained by the violator during the last financial year.

    13. Are there any rules governing the way a company seen as having a dominant market position as related to one product is able to sell or market other products?

    There are no specific rules as the rules laid down are for a company having a dominant market position in general.

    14. Are there any specific industries, which have particular competition rules? Give examples of some of the main ones- and the legislation governing this regime.

    The Law applies to all production and trade activities and services or any other economic or commercial activities practised in Oman or any other economic or commercial activities to be practised outside Oman, and will have consequences in Oman. The Law will apply to any violation relating to intellectual property rights, trademarks, patents and copyrights, provided it has a negative or adverse impact on competition.

    However, the Law does not apply to activities of public utilities owned and operated by the State in full as well as research and development activities carried out by public or private entities.

    15. Do the free zones have a different competition regime from mainland?

    No.

    16. Are there any industries in which only state or public owned enterprises are allowed to operate? Give the main examples.

    Oman Sultani Decree No. 50/2019 enacted the new Foreign Capital Investment Law which came into force on 1 January 2020. The Commerce and Industry Minister issued a negative list of 37 business activities in which foreign investment is prohibited.

    These include:

  • Services of photocopying and typing of documents;
  • Translation and interpretation activities;
  • Transactions clearance;
  • Tailoring of Arabic menswear, of non-Arab menswear, of Arabic and non-Arab women's clothes, of sportswear and of military uniforms;
  • Manufacture of Omani kimmah and of women's Abaia;
  • Electrical repairs of a motor vehicle and recharging of batteries;
  • Repair and clean of vehicle radiators, repair of motor vehicle air conditioners and exhaust sounds for cars;
  • Wheel balance, service stations of washing and lubrication of cars, change car oil, washing and polishing cars and tyre and tube repairs;
  • Transporting and selling drinking water;
  • Labour recruitment offices and employment placement offices;
  • Driving training;
  • Laundering of all kinds of clothing and textiles, clothes ironing and laundry steam;
  • Hair trimming and cutting, hairdressing, shaving and beard trimming for men, hairdressing and other beauty treatment for women and hair trimming and cutting, hairdressing for children;
  • Taxi operations;
  • Marine fishing and freshwater fish fishing;
  • Education for handicapped;
  • Homes for the elderly, orphanages, rehabilitation centres and specialised rehabilitation centres.
  • 17. Are there any industries where fixed/state regulated pricing must apply? Give the main examples.

    The promotions and price discounting are strictly regulated by the Public Authority for Consumer Protection in Oman.

    18. What restrictions govern the inclusion of non-compete clauses in employee's contracts?

    Non-compete clauses are regulated under Article 661 of Oman Sultani Decree 29/2013 (the Civil Code). Under Article 661 of Oman Sultani Decree No. 29/2013, the former employee can only be restricted for a limited time. The time limit must be fair, reasonable and not arbitrary to the employee. The duration will depend on the industry and the employee's level of expertise.(Recent Supreme Court Judgment). The former employee, under Article 661 of Oman Sultani Decree No. 29/2013 may only be restricted from competing within a certain geographical scope.

    The Royal Oman Police issued Oman Decision No. 157/2020 on 6 June 2020 amending Article 24 of the Executive Regulations of the Foreigners Residency Law (Oman Sultani Decree No. 63/1996), which comes into force in January 2021.

    It means expatriates working in Oman can move jobs without having to obtain a No Objection Certificate (NOC) from their previous employer. Under the previous law, if a NOC was not given by the employer, the individual was required to spend two years outside of Oman. The requirement for the NOC has operated indirectly as an effective non-compete tool for employers in relation to their expatriate workforce, dispensing the need to include non-compete restrictions in the majority of employment contracts.

     

    ]]>
    Mon, 05 Jul 2021 01:49:00 GMT
    <![CDATA[The Securities Regulation in the State of Oman]]> The Securities and Securities Activities Regulation in the Sultanate of Oman

    The Muscat Securities Market (the MSM) was established on 21 June 1988 to regulate and control the Omani Securities Market. While it was a loosely regulated market in its initial stages, enactments such as Royal Decrees 80/98 and 82/98 have helped with restructuring the marketplace.

    The Capital Market Law (the CML) establishes two bodies in relation to the Securities Market:

  • Muscat Securities Market, established by Royal Decree (53/88); and
  • Capital Market Authority, established by Royal Decree (80/98) 
  • MSM was established for the purpose of trading, and the CMA was established for the purpose of regulating said market trade. While trading Securities in Muscat is legal and in practice, there are no standalone provisions governing this type of trade, except for Joint-Stock Companies that are issuing Securities. The option of trading in derivatives such as regulations stated as per CMA's Capital Law and Commercial Companies Law will have to be abided as per applicability. Decision Number 1/2009, Issuing Executive Regulation of the Capital Market Law is the legislation that states the various regulations, conditions to be followed by any company that is dealing in Securities and establishing itself with the Oman Market.

    Powers of the Authority

    Chapter One of Part 4 of the Legislation Regulating Securities and Listed Companies provide for the Authority's powers such as:

  • organize, license and monitor the issue and trading of Securities;
  • Supervise the operation of the Muscat Securities Market;
  • Supervise all companies operating in the Field of Securities;
  • Supervise public joint-stock companies;
  • Supervise Insurance companies;
  • Licensing and regulation of credit rating companies; and
  • Licensing and regulation of special purpose vehicle.
  • Definition of Securities and Securities Activities 

    Part one of the Royal Decree Number 80/98, Legislations Regulating Companies Operating in the Field of Securities and Listed Companies states the various definitions pertaining to the Act. As per the Act, Securities is defined as,

    "Shares and bonds issued by the Government and its Public Authorities, treasury bonds and bills, and other Securities negotiable in the market."

    Although Derivatives or other Financial Instruments are not specified under the aforementioned definition for the sake of traders in other instruments could consider their securities covered under the ambit of 'Other Securities' as per the aforementioned definition. The fact that although the definition is narrow, the fact that CMA regulates any kind of investments that are offered in the market is a supporting factor to trading in other Securities such as CFDs.

    While the current regulations in place do not provide for a multitude of Securities to be traded in, it is to be noted that there is legislation underway for the purpose of regulating exempted Securities and that it is at its final stages of implementation, estimated to be passed as law during the publishing of this Article.

    Activities conducted by companies dealing with Securities is mentioned under Article 25, Part 3 of First Volume as any company that:

  • Promotes and underwrites Securities;
  • Finances Investment in Securities;
  • Participates in establishing the capital of companies using Securities;
  • Deposits, clears and settles Securities transactions;
  • Establishes and manages Securities portfolio and investment funds;
  • Conducts brokering in Securities; or
  • Manages trust accounts and custodianship of Securities. 
  • Criteria

    The legislation provides for various criteria to be fulfilled for issuing any of the companies that want a license to conduct the aforementioned activities. These are:

  • Applicant must be a commercial company registered in Oman or a branch of a foreign company.
  • The objective of the company must be confined to the practice of one or more activities mentioned above.
  • Issued capital and paid-up capital upon incorporation must not be less than the minimum amount specified, depending on the type and objectives of the company.
  • Managers of the company must have the experience and efficiency required for the business of the company in the manner to be specified by a decision made by the Authority.
  • Insurance needs to be obtained, the value of which shall be specified by the Authority.
  • None of the founders, directors, or board members must have been convicted during the five years preceding the date of application.
  • Establishment and Licensing

    Licenses for branches of licensed companies are stated as

  • Market Maker in MSM
  • Custodian
  • Margin Financing
  • Issuer of Structured Instruments
  • Brokerage
  • Portfolio Management 
  • Managing Investment Funds 
  • Issue Management 
  • Investment Advice and Research 
  • Marketing non- Omani Securities 
  • Agent for Bondholders 
  • There are minimum capital requirements for these activities that are mentioned in the Article.

    Foreign company's activities are granted as per Article 126, for the purpose of:

  • Investment Advice and Research;
  • Marketing non-Omani Securities;
  • Issue Management; and
  • Portfolio Management.
  • Anybody issuing Securities for trading shall be listed on the market, and the application for listing shall be submitted within one month from the date of registration in the Commercial Register. 

    Article 15 states that dealing in Securities in Oman is confined to dealing on the floor. Any dealing that takes place outside the floor is considered null and void.

    As regulations are narrowly defined, any other form of dealing can be appealed to the Authority's Board of Directors, who passes a case by case decision in pursuance to its Internal Regulations and Guidelines.

    Application for foreign companies has various requirements to be fulfilled as per mentioned in Part IV of regulating legislations. In order to obtain approval for establishment, a company needs to submit the following:

  • Payment receipt of application vetting fees.
  • Names and nationalities of founders.
  • Evidence of the founder's good reputation and that they were not declared bankrupt during the last five years preceding the application or convicted in a felony or breach of trust as per Commercial Companies Law.
  • Statement of the activities the company desires to carry out.
  • Authorization by the founders or directors or their deputies to carry out establishment procedures and obtaining the license.
  • Approval of Central Bank of Oman if the applicant is a bank with a separate investment banking division. 
  • Prospectus

    If the securities offered are for public subscription, it is mandatory for a Prospectus to be established by the company. This prospectus is to be filed in Arabic, disclosing the financial statements and all relevant information regarding the issuing company. The issue manager may translate the prospectus provided that in the event of a dispute, the Arabic one shall prevail. The issue manager and company shall be responsible for the accuracy of information. The prospectus must contain:

  • Statements to be disclosed to the investors;
  • Information relating to investment decision to be taken; and
  • If there is concealed information, it shall be stated as to why it is concealed.
  • Renewal

    While these aforementioned documents are to be submitted for the establishment of a company for securities, Article 118 lists for documents relating to carrying out business for the first time and for the purpose of renewal:

  • Payment receipt of licensing fees and the fees for carrying out the business.
  • Certificate of registration in the commercial register and date, number, and place of registration. 
  • Copy of MOA, AOA, of the incorporated branch as well as the parent company, and any other documents in regards to the incorporation of a company.
  • Bank Guarantee Evidence.
  • Statement on the directors and officers and their qualifications and experience. 
  • Statement of fulfillment for the minimum number of employees.
  • Appointment of Auditor as per CMA accreditation.
  • Insurance Policy taken against liability for loss or damage to clients due to fault of company, officers, employees, loss, damage, or theft.
  • Internal Regulations copy.
  • Statement that the parent company is carrying out the activities the branch desires to carry out.
  • Five plus years' validity on the license granted to the parent company in its country of origin.
  • Unconditional Bank Guarantee from the operating bank and authorized to the extent of 1 percent of paid-up capital of the company, not exceeding 15,000 Omani Riyal. 
  • Any other documents; if required.
  • While these aforementioned criteria for conducting business is for all companies, branches of foreign companies require further additional documents to be submitted. These are:

  • True copy of constitutive memorandum and articles of association of the parent company in the country of origin and any other documents relating to the incorporation of the company.
  • Statement that the parent company is carrying out the activities the branch is desired to carry out.
  • The license granted to the parent company in the country of origin has been valid for not less than the last five years.
  • Copy of the annual reports of parent company containing the audited financial statement for the past five years.
  • Statement on the business of the parent company, subsidiaries and associates and their locations.
  • Statement that the paid-up capital and shareholders' equity of the parent company is not less than 2 Million Omani Riyals as per the last audited financial statements.
  • Statement that the parent company will supervise the branch in the Sultanate and its compliance with the applicable laws, regulations and directives.
  • Certificate from the regulatory authority in the county where the principal place of business of the applicant is located indicating the license granted to the company, date of commencement of business and continuation.
  • Statement from the regulatory authority in the country where the principal place of business is located indicating approval for the company to carry out the business of the companies operating in securities in the Sultanate. 
  • Bank guarantee from the branch of a foreign company shall be 50,000 Omani Riyals
  • Latest Legislation

    After 20 years of established Securities Market, the Authorities have finally legislated regulation that has been long overdue for various types of securities and derivatives such as swaps, forwards, futures, mortgage-backed securities, and options. This legislation also has potential for trading in commodity derivatives, currency swaps, interest rate futures, credit default swaps, CFDs, international indices and more. This would mean legislation separate for capital markets and securities markets. Royal Decree 50/2019 was passed earlier this year which provides for various permissions and regulations for foreign investors in the capital market.

    ]]>
    Tue, 06 Apr 2021 03:56:00 GMT
    <![CDATA[Initial Public Offering - Oman]]> Initial Public Offering - Oman

    The Market

    The Muscat Securities Market (MSM) was established in 1988 with the aim to develop methods and measures to deal with securities, and raise awareness about the market. MSM allows trading in joint stock companies, government bonds, corporate bonds, investment funds and financial instruments approved by MSM.

    To cope with the growing international market, the Capital Market Law (CML) restructured the MSM to enhance control and regulation of market activities, protect investors and create an environment that attracts investment.

    Legal Framework

    Legislative and Regulatory

    Two separate entities have been created by the CML in order to overlook and regulate all market activities, namely:

    • CMA- it is a regulatory authority incorporated to overlook and organize issuance of trade securities in Oman.
    • MSM- it functions independently of the CMA, but is subject to its supervision.

    The laws and regulations established in order to govern admissions to listing and ongoing disclosure obligations in the Market include:

    • The CML- is responsible for the creation of CMA, and includes a myriad of provisions and regulations.

    The CML was further amended in November 2014 to include provisions for violations of CML with increased penalties for the following:

  • False statements or announcement that could potentially misguide investors
  • Carrying out activities in the market without a license
  • Insider trading/ disclosing confidential market information
  • Making unrealistic demands for securities/ creating circumstances that make potential investors believe that prices of securities may fluctuate
  • Furnishing false or inaccurate information in the prospectus of a joint stock company
    • The Executive Regulation of CML (ER 1/ 2009)- aims at implementing the CML and consolidating directives that regulate the capital market sector
    • The Listing Rules contained in ER 1/ 2009
    • Royal Decree No. 82/ 1998 – established the Muscat Depository and Securities Registration Company (MDSRC)
    • The Commercial Company Law (CCL) – this law applies to all commercial companies that operate within the limits of the Sultanate of Oman.

    Regulatory Oversight

    After the repeal of the Ministerial Decision No. 4/ 2001, the sole power for regulation of MSM was vested in the CMA. For public joint stock companies the provisions of CCL, CML and ER 1/2009 apply, whereas the CCL alone applies to private joint stock companies and limited liability companies. 

    Retail Offer and Institutional Offer

    A retail offer caters to  individual investors who are non-professional and invest in shares for their own personal accounts, however, an institutional offer caters to insurance companies, investment banks, etc.

    There is a  distinction between retail and institutional offers on the basis of target investors. The retail is open to the public at large, whereas an institutional offer, invites only certain categories of people to subscribe to the shares of a joint stock company.

    Though an institutional offer can be availed by a certain category of people, that category is not expressly defined unlike other jurisdictions. Regardless of the type of offer, a prospectus must be issued, in accordance with the requirements of the CMA.

    Eligibility for IPO

    Regulatory Requirements

    There are three markets within MSM wherein the issuer can list securities being offered, based on their characteristics, these securities must meet the requirements laid down in Royal Decree No. 80/98 & ER 1/ 2009 in order to be eligible which are as follows:

    • The Regular Market:
  • The paid up capital should not be less than RO 5 million
  • Shareholders' equity should not be less than 120% of the paid up capital
  • Ratio of free float shares or units is 40% of the paid up share capital as minimum
  • The company has achieved net profit during the last two years at 5% of the paid up capital
    • Parallel Market:
  • Public joint stock companies and investment funds listed for the first time
  • Public joint stock companies and investment funds who failed to satisfy the requirements of the Regular Market
  • the ER 1/ 2009 lists companies only if they are eligible as follows:

  • It  is a newly established joint stock company
  • The shareholders' equity in the joint stock company is not less than 50% of the paid up share capital
  • The public joint stock company has not satisfied the requirements of the Regular Market
    • Third Market:
  • Closed joint stock companies
  • Investment funds offered in private placement
  • Further, the ER 1/ 2009 lists companies if they are eligible as follows:

  • If the entity is a private joint stock company
  • The shareholders' equity of the private joint stock company is less than 50% of the paid up share capital
  • If the entity is not eligible to be listed under the Regular Market
  • Foreign Ownership and Sector Specific Restrictions

    The CMA's approval is not mandatory for a foreign investor to own securities of a listed company in Oman. However, there are certain regulations and restrictions imposed as follows:

    • Foreign shareholding- These shareholdings must not exceed 70% of the issue share capital of the issuer. This restriction is not applicable to those companies that are enumerated under the Oman Free Trade Agreement.
    • Restrictions that apply to the AoA of a Joint stock company listed in the MSM -  the AoA may specify limitations or prohibitions with regards to the shareholdings
    • Government - owned joint stock companies are barred from offering their shares to foreign investors
    • As per the Banking Royal Decree 114/2000 the approval of the CBO is mandatory for transfer of any securities, in cases when the issuer is a bank or an establishment engaged in banking business

    Dual/ Secondary Listings

    The MSM is permitted to enter into cross- listing agreements with other stock exchanges keeping adhering to the conditions that are applicable in that regard.

    Licensed brokers outside Oman and the GCC can also purchase and sell Omani listed companies.

    IPO Process

    The Initial Public Offering (IPO) process allows privately owned businesses to open up to the public by offering its securities in the Stock Market viz. the Muscat Securities Exchange.

    First, the issuer is required to take the approval of the Promotes and the Board of Directors. Once the approval is taken appropriate advisors (lawyers, accountants, underwriters,etc) must be appointed.

    To know more about Initial Public Offering – Oman Click here 

     

     

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    Sat, 05 Dec 2020 12:00:00 GMT
    <![CDATA[Intellectual Property Rights: Exhaustion of Ownership and Parallel Imports]]>  Parallel Imports in Middle East and India

    Introduction

    Parallel Imports 

    The term parallel import denotes importation of goods legitimately acquired from the owner of the goods subsequently sold in an unauthorized manner through unauthorized trade channels. 

    These goods may also be referred to as grey market goods, since, despite being legitimate, they lose their value when they are sold through unauthorized trade channels. An owner of a registered trademark earns goodwill through the sale of his goods through a particular channel as authorized by them; however, once the goods leave that channel, it compromises the integrity and reputation of the goods that have been registered as a trademark.

    There are two types of parallel imports, namely, active parallel imports and passive parallel imports.  

  • Active Parallel imports
  • When a licensee of the trademark owner sells goods in the jurisdiction of the right holder itself or in the jurisdiction of another licensee who is in direct competition thereof, in this type of parallel import the breach arises when the licensee acts in contravention of the contract between him and the right holder.

  • Passive Parallel imports
  • This kind of parallel import is much more common; it arises when a third-party purchases goods owned by the right holder from one country and resell the same in another country. 

    A breach of an agreement between the parties regarding parallel imports is done with the intention of gaining higher profits due to price differences of identical goods. When such a breach arises, it contravenes any such provisions regarding international licensing and distribution as agreed upon between the licensee and the right holder. Therefore, it is imperative to keep watch on where the goods are being distributed and to ban the distribution of goods in such countries as prohibited by the right holder. 

    Doctrine of Exhaustion 

    An owner of an intellectual property right possesses the sole exploitation rights over his goods. He is further empowered to be protected by such laws in the country where such protection is granted to him. The Doctrine of Exhaustion or first sale doctrine is basically an exception to this rule, and it entails the exhaustion of rights of the right holder once he has consented to the lawful sale of the products covered under the intellectual property rights held by him. 

    To understand this concept better, let's take the example of reselling preowned cars. A manufacturer or a right holder has the authority to prohibit other manufacturers from selling his product; however, this right is exhausted once the car is sold lawfully to a customer and that customer decides to resell the same to a third party. The right holder shall then, not have any rights over prohibiting such resale. This basically means that the right to sale over the same goods cannot be practiced twice by the right holder.  

    The doctrine of exhaustion can be divided into the following types: 

  • Regional Exhaustion 
  • The doctrine of regional exhaustion has been adopted by the European Union. This doctrine basically imposes a disability on the right holder to prevent the subsequent sale of a product in the same region (here, the EU) or any other country that is part of the same region. 

  • National Exhaustion 
  • This doctrine relates to the domestic market. Once the first sale has been made within the domestic market, the right holder is prohibited from receiving any further profits or claiming any rights over a subsequent transaction that takes place in that regard. This doctrine basically prevents the right holder from receiving profits multiple times out of the same transaction or from goods that have been sold by him once. It, therefore, protects the rights over profits of the party, making the subsequent sale of goods. 

  • International Exhaustion 
  • This doctrine is based on the presumption that once the goods are placed on the market, they leave the control of the right holder. Therefore, this doctrine basically views the international market as a singular market; hence, goods sold by the right holder, for the first time, anywhere across the borders, cause the right holder to relinquish his rights thereof. 

    It is imperative to note that, the abovementioned doctrines can only be adopted as per the regime that is chosen by the country concerned in order to curb such practice. 

    For instance, A, a right holder, sells his product to a third party within his territory who further sells those products to B, in another country. The question that would arise in such a situation would be whether A's rights have been exhausted once the first sale of the product is completed. This question can only be answered by taking into consideration the international exhaustion regimes adopted by A's country. 

    TRIPs on Parallel Imports

    The Agreement on Trade-Related Aspects of Intellectual Property Rights (popularly known as TRIPs Agreement) is an international agreement between member nations of the WTO, and this agreement lays down provisions regarding effective implementation of trade-related intellectual property protection. 

    That being said, the TRIPs agreement does not contain any such concrete provision regarding parallel imports. Dispute settlement mechanisms under the agreement allow right holders to bring action against another state; however, Article 6 of the Agreement states that no complaint can be entertained with regards to exhaustion. 

    Further, the TRIPs agreement, with regards to English and Japanese law, does not contain any such provision barring importation of goods subject to a notice being given about restrictions regarding such importation.

    Despite not containing any such provisions regarding parallel imports within its Articles, it is important to note that, it gives States the right to choose any such regime that they may think fit regarding international exhaustion within their domestic laws. 

    Parallel imports in the Middle East 

    Many Middle Eastern countries do not have any laws prohibiting parallel imports in the country. Countries like Kuwait, Bahrain, and Turkey etc. are a few that do not prohibit parallel imports under their trademark law. However, the following countries have other provisions that may be implemented to bar parallel imports;

  • Kingdom of Saudi Arabia 
  • Though KSA does not recognize the term parallel imports in its trademark laws, there are provisions in the customs law prohibiting imports/ exports of goods by unauthorized agents. The rights holder may register themselves with the Customs along with a list of those agents, as authorized by them. An agent or distributor selling goods in an unauthorized fashion may be issued a cease and desist notice and further can be dragged to court for non-compliance of the same before the Ministry of Commerce. 

    Further, in Saudi Arabia parallel imports of copyright material is prohibited. The Copyright legislation in KSA prohibits the import and exports of copies that are not authorized for distribution, any such unauthorized sale, import or export shall be deemed to be infringement under Copyright Law. Moreover, copies of printed material and computer programs can be distributed subject to the prior assent of the Ministry of Culture and Information.

  • Jordan 
  • Genuine import and export of goods are allowed regardless of whether the agent importing/exporting it is authorized or not. However, as per customs law, action can be brought about in case of counterfeit goods. 

    As per Article 37 of the Law on Patents of Invention of the Kingdom of Jordan (Law No. 32, of 1999, as amended by Temporary Law No. 71, of 2001); the law prohibits any person from importing any material or goods from a third party in an unauthorized manner, when the owner of the patent rights enjoys protection thereof. However, if such an importation is lawful, the person engaged in importation of such materials or goods must comply with the principles of commercial competition. Article 37, also requires the person importing to take into account the economic value of the patent concerned. Under Jordanian Law patent rights are subject to international exhaustion, however, in cases when the parallel import fails to comply with the principles of commercial competition, the patent owner is entitled to oppose it.

  • Qatar 
  • The right holder having a trademark registered within the territory of Qatar is not entitled to bring any action regarding parallel imports. However, under their Agency Laws, the right holder may bring action against an unauthorized agent. 

    Further, Qatar has certain provisions regarding parallel imports under its custom laws owning to its participation in the GCC custom union. Under Qatari Law, all imported products are subject to authentication by the Qatari Embassy in the country of origin, with respect to parallel imports, a commission of 5% is chargeable on certain products. This commission is imposed in the interest of local agents who hold distribution rights.
  • UAE 
  • The UAE is no stranger to the phenomenon of parallel imports. However, the concept of parallel import is not recognized by UAE trademark laws. Thus, in order to cease parallel imports in the country Agency Laws may be applied to prohibit the same. The Agency Laws entitles an Agent to have exclusive rights to sell within a country as per the terms of contract entered into. In order to avail the remedy under this law, the Agency Agreement should be registered with the Ministry of Economy, the absence of which may render the Agreement void. Parallel imports in the UAE are further discussed in detail herein below.

  • Oman
  • Oman's Ministerial Decree Number 38 of 2000 paved way for legal recognition of domestic and international copyright laws and legal protection on trademarks. The Ministry of Commerce is generally responsible for brand registration. Importation of goods and products entails delivering goods or products within the Sultanate through Customs by land, sea or air in accordance with the requisite legal framework. Clearance of imported products requires an official permit for import or a copy of commercial registration and valid trade license, a copy of certificate issued by Oman Chamber of Commerce and Industry, list containing packagin information, manufacturer's valid production certificate, a quotation or invoice, bill of lading, cargo details, permission to deliver goods from shipping agent, customs clearance certificate, and a completed form of import declaration.    In 1996, an agency decree was passed that permits the importation of food products by importers other than registered agents. Oman permits parallel imports.

    Parallel Imports in the UAE 

    The UAE, like several other Middle Eastern countries, does not contain provisions relating to parallel imports in their trademark laws. However, in order to cease the flow of parallel import goods in an unauthorized manner, Agency Laws may be applied. 

    Commercial Agency Law by Federal Number 18 of 1981 amended by Federal Law Number 2 of 2010 lays down certain requirements of a commercial agent:

  • A commercial agent shall be a UAE national or a company in the UAE owned in 100 percent capacity thereof by a national. 
  • Only agents registered under the Ministry of Economy and Commerce are authorized to engage in business.
  • The agent and the principle are to be bound by a written agreement, which must be registered with the Ministry of Economy and Commerce.
  • Therefore, as per the above, any goods imported in contravention of the above are liable to be ceased by Customs, and the Police is entitled to take custody thereof. Further, action can only be invoked if the above conditions are satisfied. If an agreement is entered into unaccompanied by registration, the agreement is void ab initio. 

    It is important to note that counterfeit and unauthorized goods being sold with regard to the pharmaceutical sector poses a major threat to public health and safety. Especially in GCC countries wherein, the IPR laws are not as stringent regarding parallel imports. With regards to pharmaceutical products, it is important for the right holder to have full control over the distributional channels that their products pass through. Therefore, GCC countries must put in place policies that prevent illicit trade. GCC countries should also focus on scrutinizing free zones to rule out the possibility of counterfeiting.

    Further, the UAE enables manufacturers and trademark holders to approach the courts regarding parallel importation under anti-piracy laws as well. A landmark case saw the imprisonment of six foreign nationals who engaged in importing goods from another country without the permission of the right holder. In this case, the six persons including the shop manager engaging in the sale of such goods were arrested following a raid of their shop, with imprisonment of the manager for a period of two months along with a fine of AED 20,000 and deportation. This ruling set a precedent and further strengthened UAE's as a safe business hub. 

    Indian Perspective 

    Trademark rights are exclusive in nature, and this exclusivity is recognized by the Trademarks Act of 1999. Unlike several other jurisdictions, India has adopted specific regulations regarding exhaustion of rights on a national level; however, the same is not identified for international exhaustion. Section 30 of the Trademark Act affirms the aforementioned. The provisions enumerated under Section 30 lay down that an owner of a registered trademark may oppose further dealings of goods provided a legitimate reason exists in that regard.  

    The concept of international and national exhaustion was disputed in the case of Kapil Wadhwa vs. Samsung Electronics before the Delhi High Court. In the aforementioned case, the main issue was whether international exhaustion recognized by the Act. The defendant herein was an authorized dealer of Samsung products; however, it was argued by the plaintiff that the defendant failed to follow the norms that were set by them regarding pricing and the defendant was selling legitimate Samsung products at a price lower than the standard price set. To which the defendant argued that the sale of genuine products does not amount to infringement under Section 30

    The judges in the matter held that the defendant should be restrained from importing products from other countries and displaying the same in their shop. It was further held that, if any product is being imported from another country and being sold in the domestic market, the shop owner must clearly display the same therein. In favor of the plaintiff, it was held that they are not entitled to give any warranty with regards to such products that have been imported and the duty to provide the consumer with a warranty lay solely on the defendant. 

    Conclusion 

    Parallel imports have significance in both the legal and economic sphere. The legal connotation establishes that the goodwill of a trademark holder shall not be compromised by causing deception and confusion in the minds of the consumers. However, the economic aspect of parallel imports promotes the availability of goods across borders and in turn, prevents the possibility of monopoly over a certain market. 

    Therefore, parallel imports have both positive and negative ramifications depending on the perspective adopted. The consumers face the positive impacts wherein they are able to buy goods at lower prices, whereas, the trade owners face the negatives, with regards to losing integrity and credibility of their brand. 

    ]]>
    Sun, 25 Oct 2020 12:00:00 GMT
    <![CDATA[Copyright Registration in the Middle East ]]> Copyright Registration in the Middle East 

    Admittedly, the Middle East has something of a "Wild West" reputation, when it comes to some business behaviors. One of the most protuberant of these is the Middle Eastern perception of copying someone as a form of flattery, rather than as theft. In this era, where platforms like Instagram and Pinterest reign supreme, the idea of free design has been distorted. While people are happy to pay for construction, because that is tangible, the design is thought to be 'just a piece of paper'. However, the impression that the Law here does not protect designers is, to an acute degree, unfounded. In the UAE, the Ministry of Economy is the highly competent authority that registers and protects intellectual property. 

    However, it is important to note that the number of copyrights registered annually in the GCC countries is a relatively small figure, and furthermore, that copyright litigation here is rare. When it does occur, it ends up being a time-consuming, and cost-ineffective ordeal for copyright holders. While a unified system pertaining to copyrights in the GCC countries does not exist, copyright registration is recommended in order to maximize protection; this ensures that infringers shall be subject to limited damages, fines and possible imprisonment. 

    This article shall explore copyright registration in the GCC countries- a domain that should be taken into consideration in order to evade the possibility of continued infringement. 

    Copyright Registration in the United Arab Emirates 

    Upon the creation of the object to be copyrighted, copyrights can be registered in the United Arab Emirates in accordance with the UAE Federal Law Number 7 of the Year 2002 Concerning Copyrights and Neighboring Rights.

    For it to be eligible to be copyrighted, the object should have been the direct result of intellectual work, as opposed to plagiarism, and should be expressed in any objective form. The copyright can be registered in the UAE upon the filling out of a simple form, and the deposition of one sample of the work to the office of one of the following organizations:

  • The Copyright Department of the UAE Ministry of Economy (Copyright Department) – response may be expected within 1 - 3 months;
  • The Dubai Copyright Office (the local hand of International Online Copyright Office INTEROCO, European Union) - response may be expected within ten days;
  • The U.S. Copyright Office (they may be reached via post).   
  • Is the registration of a company or product logo/ insignia/ brand mandatory in the United Arab Emirates? 

    It must be noted that the registration of a copyrighted object is a voluntary right of author/ registrant in the UAE. However, in case these very trademarks or copyrighted objects are being employed in the market in order to promulgate goods/services to customers, the registration of their copyrights is mandatory, in order to avoid penalties that may be levied on account of deception of UAE consumers (as per the UAE Executive Regulation of the Consumer Protection Law). 

    How does UAE Law define copyright?

    As per the United Arab Emirates Federal Law Concerning Copyrights and Neighboring Rights, copyrighted work refers to any created compilation, that may lie in the scope of letters, arts, sciences, in whatsoever mode of expression, and intended for whatsoever purpose. 

    To faintly capture the jurisdiction of this term, the term 'copyrighted work' could be used to refer to registered logos, books, pamphlets, essays and other written works, computer programs and applications, databases, lectures, addresses, sermons, dramatic, dramatic-musical works and shows, verbal or non- verbal music compositions, sound and audiovisual works, architectural works, engineering plans and layouts, works of drawing, painting, sculpture and lithography, and engravings or similar works in the scope of fine arts, photographic works and works analogous to photography, works of applied and plastic art, illustrations, geographical maps, sketches, three-dimensional works relative to geography, topography and architectural designs. 

    Characteristics of the awarded Copyright Certificate 

    As previously established, the copyright registration process is about six months long if the approached authority is the U.S. Copyright Office, and about ten days if the request is issued to the INTEROCO European Copyright Office. The issued copyright certificate shall stay valid over the rest of the course of the author's life, and fifty years after his death. The jurisdictions that the certificate covers shall be the 167 countries that are party to the Bern Convention, of which the UAE has been a signatory since 2004. The authorship of the copyright may be privately held. Either a private individual or a legal entity may be the right-holder; interestingly, partial ownership by physical persons and companies is allowed. The price of copyright registration in the country is USD 4000, with the registering organizations of the INTEROCO or the U.S. Copyright Office. We shall delve further into the intricacies of these vis-à-vis the questions posed below.  

    How long does the copyright protection last? 

    The registered copyright object is protected in the UAE, all through the lifetime of the author, and an additional fifty years beginning from the first day of the calendar year following the death. Correspondingly, the economic rights of the authors of collective works (except those of the authors of applied arts) shall be protected for a period of fifty years beginning from the first day of the next calendar year, in case the author is a legal person.  

    Who is eligible to be an author to copyright in the UAE? 

    The author of copyright could be any physical person, or a group of private individuals, whose information is elucidated upon in the application form. These UAE authors' rights are recognized and protected in all countries that are signatories to the Berne Convention for the Protection of Literary and Artistic Works. As per UAE Copyright Law, the author is the individual responsible for the creation of the work, or the individual who has his name mentioned on the work; if the work has been attributed to him at the time of publication, this author is eligible. 

    Which are the documents that need to be prepared for lawful copyright registration in the UAE? 

    The documents that require to be presented include: 

  • the application
  • a sample of the work to be copyrighted
  • the photo I.D. or passport of the person who is to assume authorship
  • essential information about the right-holder (owner) 
  • a confirmation receipt of the official registration fee payment
  • the contact details of the applicant
  • Is the UAE a signatory to the Berne Convention governing international copyrighting? 

    The United Arab Emirates is indeed party to the Berne Convention for the Protection of Literary and Artistic Works, as of 14 July 2004. The Berne Convention is an international agreement governing copyrights; it was first ratified in Berne, Switzerland, in 1886. It was precisely this Convention that formally set in stone several aspects of modern copyright law; it introduced the novel concept that a copyright exists the very moment that a work is "fixed". It also puts forth, and actively enforced a requirement that countries recognize copyrights held by the citizens of all other countries that are signatories to the Convention. The World Intellectual Property Organization administrates the Berne Convention. 

    Copyright Registration in the Kingdom of Saudi Arabia 

    While there certainly are a large number of myths afloat in the ether about copyright protection in Saudi Arabia, some of which ring to the tune of- "it is not possible for non-Saudi nationals, and foreign companies to benefit from copyright protection", this is simply not the case.

    Like the UAE, the Kingdom is also party to the Berne Convention, which sets out the quintessential intellectual property principles including "national treatment" and the "automatic" protection of copyright works.

    Is Copyright protection available in Saudi Arabia?

    Saudi Arabia certainly has copyright legislation in place in order to secure the protection of copyrighted objects. The Law, Royal Decree Number M/41, dated 30 August 2003, and its corresponding implementing regulations are possessive of detailed provisions on the subject matters of protection, infringement, exceptions, ownerships clauses, and procedure to enforce rights. 

    Which objects are eligible for copyright protection in Saudi Arabia? 

    Literary, artistic and scientific works are protected in Saudi Arabia. Literary work is a term that could be employed to refer to books, articles, magazines, software, and artistic work (which may include paintings, photography, sculpture, lithography and maps etc.) 

    What is the process for registration of Copyright in Saudi Arabia?

    As of now, there is no concrete procedure in place for copyright registration. Nonetheless, as previously established, since Saudi Arabia is privy to the Berne Convention, any work which falls in the purview of protectable subject matter, and fulfils the condition of originality and authenticity, shall be protected without registration. Provisions pertaining to copyrights in TRIPS agreements are also applicable in Saudi Arabia, given that it is a member of WTO.

    Which ministerial authority in the country is responsible for Copyright protection?

    In Saudi Arabia, the Ministry of Culture and Information is responsible for the protection and enforcement of copyrights in Saudi Arabia. The Copyright Protection Division is a highly germane department that has significant oversight within the ministry. 

    How long does copyright protection stay in effect? 

    In the Kingdom of Saudi Arabia, it greatly depends upon the type of work involved. 

  • The protection of work for a singular author extends to span his/her lifetime, and for 50 years after the death of the author.
  • With regard to joint work, the protection shall extend over the span of the lifetime of the authors, and for 50 years after the death of the last surviving author.
  • With regard to corporate entities, the protection of fifty years shall start from the date of the first publication of work onwards. 
  • Photographs are all protected for a definitive period of 25 years.
  • The SAIP Launch of the Optional Copyright Registration System – A Paradigm Shift

    Notably, in December 2019, the Saudi Authority for Intellectual Property announced the launch of the optional registration service with regard to the copyright system; this allows the authority to register credited work and documentation, and serves as an electronic database for them. The works that currently are able to enjoy the optional registration service include computer software and apps, in addition to architectural designs.

    With the single-minded goal of the establishment of a safe atmosphere to harbor innovators, the approval for the optional registration list of copyrighted works was adopted upon the issuance of the approval of the Board of Directors of the Saudi Authority for Intellectual Property, pursuant to the missions and prerogatives assigned to it, as per the Council of Ministers Resolution Number 496, dated 9/14/1439 A.H. In its third article, it stipulates that the authority shall bear the onus for the organization of the domains of intellectual property in the Kingdom, and their development, nurturance, protection, and elevation. 

    Copyright Registration in Bahrain

    Like the UAE and the KSA, Bahrain is also a member of the Berne Convention, according to Law Number 30 of 1996, in addition to the WIPO Copyright Treaty as per Law Number 14 of 2004. Bahrain's membership in both of these treaties was effectively translated into the local legislative system, with the goal of throwing a net of copyright protection, with respect to both moral and financial rights.

    The Copyright Law of 2006 sets the Bahrain intellectual property scene apart by establishing the protection period to be the authors' life plus 70 years, as opposed to the common 50 years, and by adding specific provisions with regard to customs and preliminary procedures. 

    What are the Bahraini copyright registration formalities, if any? 

    Like the majority of the countries in the GCC, and as delineated by the Berne Convention, copyright protection can be availed of automatically, without the need for registration or other formalities. However, should the copyrighted work be deposited before the Ministry of Information, evidence of ownership shall become governmentally touted; this would greatly assist the resolution of ownership disputes, document assignments, and any other financial transactions.

    The legislative component of the Copyright Protection machine in Bahrain is admirably robust, with the laws and regulations in the Kingdom being fine-tuned to perfection. However, the wedge in the cogs is posed by the minuscule number of judicial and administrative precedents, especially with regard to I.P. enforcement– most of the provisions have been left untested. 

    Copyright Registration in Kuwait 

    By virtue of the Berne Convention, of which Kuwait also happens to be a signatory, copyrighted work stands to be protected, without mandating the formality of registration or deposition with the National Library. However, in order to wield the power of a prima facie ownership claim, it is recommended to adopt a formal registration procedure that guarantees protection.

    What are the legal requirements to obtain a copyright in Kuwait? 

    In order to obtain copyright protection, the work at hand is required to be; distinct, novel, and genuinely produced. It goes without saying that the work must have been manifested in a creative fashion, that is completely bereft of imitation, or plagiarism, so to speak.  

    The procedures to obtain a copyright are elucidated upon in the following steps:

  • The relevant application from the National Library is to be filled out. 
  • Two copies of the work-to-be-copyrighted are to be provided.
  • All pertinent information is to be compiled in the CD format.
  • A Power of Attorney is required to be issued the workup to the Kuwaiti consulate. 
  • If the agent is foreign, a local agent is required to be present. 
  • Can copyrights be registered? 

    In Kuwait, copyrights can certainly be registered with the National Library, in order to protect the copyrighted work from misuse. 

    What are the formalities for copyright registration in Kuwait? 

    Under the new Kuwaiti Copyright Law of 2017, the administration of registration has been assigned to The National Library. The applicant is expected to file an application addressed to the National Library, bundled with a copy of his work. In the Law, the Library has prescribed asset of varied procedures for different types of objects and an official fee. Within two to three months, the Library shall issue a depository number to the applicants, once the formal filing has been made.

    What is the tenure of active, registered copyright? 

    Like many other GCC countries, the period of protection of the copyright is the life of the author, in addition to another fifty years starting from the year of death of the author. 

    The period of protection for compilations published by individuals sheltering under a pseudonym, or cinematic compilations, photography works, applied arts, software or posthumously published compilations is 50 years. 

    With regard to works owned by broadcasting entities, the period of protection extends to twenty years from the end of the year in which it was the first broadcast.

    Copyright Registration in Oman

    By now, a pattern is discernible- on account of it being a signatory to the Berne Convention like the other GCC countries, copyrighted works do not need to be registered in order to acquire protection in Oman.

    However, the government provides nationals with a voluntary right– they are provided with a mechanism for copyright registration if they wish to engage in the same. While this certainly does not grant those, who register with any special rights, it can certainly be said to be a potential tool to serve as additional evidence, in the event of ownership being contested. Once or twice a year, the Ministry of Commerce and Industry issued the details of the works that have been deposited for copyright registration in the Official Gazette. 

    Conclusion

    It can be universally conceded that strong profits and lax enforcement are possessive of sway, that might encourage traders to illegally market, and distribute infringed products. Regrettably, famous copyrights are routinely used, and capitalized upon for profit, without permission throughout the Middle East; this leads one to believe that a set of unified I.P. laws in the GCC is of the essence. This has the potential to eliminate a variety of infringements in the member states and clear the path for heavy-handed I.P. enforcement. Companies and industries that are registrants under this proposed system would also indubitably benefit from the unified front it proffers– it would make their I.P. impregnability more absolute. 

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    Sat, 05 Sep 2020 12:00:00 GMT
    <![CDATA[Oman: Health Insurance Regulations]]> Health Insurance in Oman

    The sharp sell-off in global oil prices that began in mid-2014 triggered an economic slowdown across the Gulf Cooperation Council (GCC) states, with enormous consequences for many sectors, including the health insurance industry. Despite this unexpected turmoil, however, significant changes in government health insurance regulations and rising populations are expected to generate some growth opportunities for private health insurers over the coming years, especially in the Kingdom of Saudi Arabia (KSA), where the private health insurance market is expected to grow by more than 9 percent annually through 2021, according to projections from Oxford Economics. Economics forecasts that the private health insurance market in KSA will grow to reach USD 3.5 billion in 2021, from an estimated USD 2.4 billion in 2016, representing an overall rise of 45 percent. The sudden decline in oil prices has forced the GCC states to think more strategically about how to diversify their economies. And, in many states, developing a more robust health care environment has emerged as an essential element of their growth plans. Many, like the KSA, are moving to mandatory health insurance programs to help boost the medical infrastructure and decrease the tendencies of some Saudi residents to leave the country for medical treatment. This, in turn, is expected to boost premium revenues in the sector. The single largest economy of the GCC states, with a population of 32 million, the KSA now requires, as of 2017, health insurance for all employees in the private sector, as well as their families. Similar rules are now also in place in Dubai and Abu Dhabi in the United Arab Emirates (UAE). 

    Only one percent of the total policies registered with insurance companies in Oman is for health as compared to 75.4 percent of vehicle insurance, as per the figures of National Statistics and Information. The figures look surprising because 70 percent of the mortality cases reported in Oman is because of Non-Communicable Diseases such as diabetes, cancer, cardiovascular problems and chronic respiratory diseases. High premiums for insurance policies as well as the free treatment of Omanis in government hospitals are the reasons for the low demand for policies. The Health insurance market has now mandated health insurance law in Oman. Residents in Oman are required to have a minimum level of medical insurance coverage with minimum benefits pursuant to the Resolution Number 34 of 2019 for the Issue of Unified Healthcare Insurance Policy Form, also known as Dhamani, issued by the Capital Markets Authority (CMA) in March 2019 and is now in force ("the Law"). The Law applies towards the employer market and the beneficiaries arising from those relationships including employer, employee as well as the dependents. The Law applies a "Basic Benefits" as well as an "Optional Benefits" coverage, standard form "Policy Schedule" for parties' signature. For the pre-contractual disclosure requirements, the Law applies a standard "Insurance Application".

    Chapter One of the Law states a "Unified Health Insurance Policy" ("the Policy"). The term "Insured" is defined as "natural or unnatural person responsible for paying the insurance premium" and the term "Beneficiary" is defined as "employee or employee dependent for whom the Insurer performs the duties assigned by the provisions of the Policy". The Dependents include employee's legally wedded spouse, residing in Oman, employee's children who are under 21 years age and any person residing in Oman and is dependent on the employee. This includes the employee's parents and other relatives based in Oman, maid or house help who are sponsored by the employee.

    An Insurer has been defined to be an "Insurance company licensed to practice health insurance business in the Sultanate". A completed Policy must be submitted by the Insured as a legal obligation. The Law covers application, coverage, mandatory minimum benefits and claims management.

    Chapter Two of the Law defines a wide interpretation of what shall constitute the contract of health insurance, and includes all basic information, details and common practices in healthcare insurance contracts. The Insurers will need to take care regarding their pre-contractual documents, as these may unintentionally constitute the contract of insurance. Chapter Two places obligations on the insured to disclose correct and accurate information. The CMA issued the Code of Conduct for Insurance Business which requires the Insurers to inform the Insureds of their duty to disclose any relevant information. The Law, therefore, applies the duty of utmost good faith (uberrimae fidei).

    The combined limit under the Policy is OMR 4,500 in terms of financial spend, which is much lower than the KSA and UAE mandated schemes. The in-patient treatment limits for the policy year is capped at OMR 3,000 and includes a usual basic cover of admission in hospital or daycare, room cost, cost of treatment, consultant fees, diagnosis and test, medicine, companion cost and ambulance cost. This also includes the cost for pre-existing and chronic conditions for the in-patient treatment, while the latter is excluded from an out-patient treatment. The hospital admission as per the Policy must be in a joint room limited to 30 days for each instance, whereas the ambulance cover is limited at OMR 100 each trip. Out-patient treatment is limited to OMR 500 for each policy year, and the cover is limited to consultancy fees, diagnosis and tests, lab fee and pharmacy fees. The Policy also includes the cost of repatriating a deceased Beneficiary to their country of origin, for which the limit allocated is OMR 1000.

    Any deviation or departure from the basic benefits is not permitted unless agreed as a Schedule to the Policy and is signed by both the parties. When any additional benefits are opted for by the Insured, they must be set out in the Optional Benefit Schedule format provided under Appendix 3 of the Law.

    The Law sets out specific obligations on how it will be administered:

  • The Health Insurance Claim Management systems of the providers must be compatible with the system of electronic claims applicable in Oman;
  • The Insurers will bear the cost of a medical Consultation only if there is a prior referral from a licensed physician;
  • The providers must seek prior approval for all in-patient treatment and for all out-patient treatment where costs exceed OMR 100, however for emergency cases treatment must start immediately;
  • The providers must upload all details in the online application for approvals, and the Insurer must respond within 30 minutes with their decision, failing which it will be deemed as approved;
  • The provider is also required to respond to any inquiries or observation by the Insurer within 30 minutes of the inquiry or observation being made;
  • For any claim made outside the network, the Insured must make a claim within 120 days of the claim, and the Insurer shall compensate the Beneficiary within 15 days from the date of receiving documents in support of the claim; and
  • When any claim is rejected by the Insurer, the Insurer provides to the Beneficiary, within 10 days of rejection a written statement stating the reasons for the rejection.
  • The mandatory basic minimum coverage of the Policy is set out under Appendix 4 of the Law, providing two options to the Insured based on which premium will be determined by the Insurer. Both the options apply the same coverage terms and limits; however, the first option provides for deductibles on certain categories while the second option does not require any deductibles to be paid by the Beneficiary. The deductibles under the first option are limited to out-patient treatment only and are set at 10 percent for medicine, subject to the limit of OMR 5 per visit and 15 percent for consultancy fees, lab fee and diagnosis for providers within a network, with a cap of OMR 20 per visit, and at 30 percent for providers outside the network, with no cap.

    Mandatory health insurance rules, Decision Number 78/2019, issued by Oman's CMA, establishes the regulatory infrastructure for the health system, Dhamani. The CMA developed the rules covering four aspects of the mandatory health insurance system:

  • General provisions which govern the health insurance market.
  • Licensing requirements for insurance companies.
  • Obligations for the main parties in the insurance relationship, third-party administrators (TPAs), employers, employees and health services providers.
  • Dispute resolution.
  • Licensed insurance companies, health service providers, TPAs and others will have to use the electronic "Dhamani Platform." The purpose of this electronic platform is primarily to digitalize the private healthcare system and health insurance services in Oman and enhance the monitoring of the overall system in Oman. As of October 2019, the CMA aims to launch the e-healthcare system by mid-2020. The regulations also restrict insurance companies from retaining more than 40 percent of the insurance premiums in Oman.

    Health Vision 2050

    Since 1976 Oman has been through three distinct phases of development concerning the health care sector. The first phase ran until 1990 and was directed at building Oman's health infrastructure. The second phase ran from 1991 to 2005 and focused on the development of various components of the health system. The third phase began in 2005 and is now targeted at providing comprehensive health care coverage by using high-level strategic planning to address the specific needs of the sector.

    In 2014 the government of Oman released a long-term plan for the country's health care sector, Health Vision 2050. The plan envisages large-scale investment in the health care sector to further create a well-organized efficient health system.

    With the population of Oman expected to double by 2050, Health Vision 2050 aims to establish up to 10,000 health centers to meet the demands of a growing and increasingly urban population. Health Vision 2050 aims to move the treatment of non-communicable diseases out of the hospitals and provide health care closer to the patients' homes. 

    Health Vision 2050 points to the growing need for geriatric care facilities, considering the number of elderly people living in Oman over the age of 60 are expected to increase from 6.1 percent of the population to 13.1 percent through to 2050. Home care should be provided for geriatric patients finding it difficult to attend health facilities as well as the terminally ill and those with chronic long-term conditions. Oman has made impressive steps in building sturdy health infrastructure, mobilizing the community, and promoting greater access in health care delivery to ensure the universal human right to health.

    Across the GCC, health care is intimately connected to the macroeconomic outlook for oil prices and continuing efforts by governments to improve the delivery of health care services for their people, both local citizens, as well as expatriate workers. As each state seeks to diversify its economic base, the health care industry is poised to expand further, as will the demands for health insurance. In some of the region's larger economies, such as the UAE and the KSA, high premium growth is expected to persist, making the region relatively attractive to health insurance providers.

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    Mon, 03 Aug 2020 03:25:00 GMT
    <![CDATA[Commercial Companies Law in Oman]]> Commercial Companies Law in Oman

    N Anand

    The new Commercial Companies Law (CCL) in Oman was enacted by the Royal Decree Number 18 of 2019, (the Law) and published in the official gazette on 17 February 2019. The Law came into effect within 60 days of its publication, being, 17 April 2019 and repeals the previous Commercial Companies Law in Oman (Law Number 4 of 1974, as amended). The current Law is seen as one of the modern-day companies' enactment and has attempted to do away with complex and cumbersome governance and other related procedures. For the first time, the Law also paves way for a natural/legal person to set up a single person company and lays down extensive set of provisions dealing with manager's liability and that of the corporate shareholders. Article 3 of the new CCL defines a commercial entity as a 'for profit' business established by two or more persons. In line with Article 13 of the Law, investors can form a company provided that their principal place of business is in the mainland. With respect to free zones, it is stated that such free zone entities shall be governed by the regulations of respective free zone as approved by the Council of Ministers. In the absence of any such legislation governing the free zone companies, it is safe to say that such a company shall be governed by the CCL. Companies that are fully owned by nationals of Oman shall enjoy all the rights that are limited by the Companies law of Oman. In the previous law, commercial companies could adopt any of the 6 forms of a company including a general partnership, limited partnership, joint venture, joint stock company and limited liability company. The new Law provides for a seventh form, a one-person company under Article 4 of the Law. In this Article, we aim to discuss the changes brought about in mainly three forms of companies which are joint stock companies, limited liability companies and joint venture companies.

    Joint stock companies

    Significant changes have been introduced in joint stock companies (JSC) in the Oman's CCL and have been summarized and discussed below:

  • Uneven Number of Members - In the old law, the board of members in a JSC had to consist of a maximum of 12 members, whereas under the new CCL, the board has to consist of an odd number of members and the maximum number of members would be 11. In order to comply with the provisions under the new law, an existing company with an even number of board of directors will have to either remove or add new directors to get the total number of such director's equivalent to an odd number of members (Article 179).
  • Quorum of Board Meetings – A quorum of one half of the members (50%) was needed to pass any decision which implies a relative majority was needed under the old law. This has been increased to two-thirds of members required to be present in a meeting under the new CCL. Resolutions in such meetings shall be approved by an absolute majority unless the articles of association provide for a higher percentage (Article 192). However, what would constitute an 'absolute majority' has not been defined on which further guidance is needed by the law.
  • Minutes of Board Meetings- The minutes of the board meetings shall be prepared by the secretary of board of directors and shall be signed by the secretary and all the members who attended the meeting. An objection by any member towards any resolution passed shall be recorded in the minutes and the signatories of these minutes shall be accountable for the data laid down in the minutes of the meeting (Article 194)
  • Board Members Resignation- If any board member fails to attend three consecutive board meetings without a reasonable and valid excuse, then such a person shall be considered to have 'resigned as a matter of law' (Article 195). Hence, a board member will need a valid excuse that will be accepted by the rest of the members of the board to skip three consecutive meetings. Failure of attending three back to back meetings shall deem fatal for a member, as the company shall imply that such a person has resigned from the company.
  • Means of Communication in Meeting- A maximum of two board meetings could he held via video conferencing in each financial year under the old law. Whereas under the new CCL, no such restriction has been imposed on the number of meetings that can be held via video conferencing.  Article 191 of CCL mandates that the board of directors may collectively decide to convene meetings through the use of correct means of communications as they deem necessary. Any verbal or visual communication can be facilitated between members of the company not present in one place, as long as the secretary of board is able to identify and record such discussions.
  • General Meeting - Earlier shareholders were required to meet own a minimum of 25% shares in a company to call for a general meeting. The same has been reduced to 10% under the new law (Article 164), thus, providing shareholders with increased protection.
  • Agenda of General Meeting - In the old law, shareholders owning 10% of the company's shares could request to include an agenda item for a general meeting, whereas, under the new law this has been reduced to 5% (Article 165).
  • Minutes of General Meeting – The minutes of a general meeting were required to be signed within 15 days from the date of the commencement of meeting pursuant to the old law. Whereas, under the new CCL, board minutes need to be signed and lodged by all board members within 7 calendar days from the date of the commencement of the meeting. However, the new law does not clarify the implication of failure to obtain such signatures of board members and further guidance is required on the same (Article 167)
  • Chairman of General Meeting – The chairman of the board of directors shall manage the general meetings. The absence of such a chairman shall put the deputy of such a chairman in charge and further the absence of the deputy will put the person appointed by the board in charge. If the board fails to appoint such a person, then the auditor shall have the authority to appoint a person and put him in charge of the general meeting (Article 171).
  • Quorum of General Meetings –  A general meeting shall be attended by shareholders or by proxies (proxy has to be in writing) with a minimum ownership of at least one half of the shares in the company. The failure to establish such a quorum shall lead to the adjournment of such a meeting and the same shall be reconvened any time within 7 days of such adjournment. The second meeting shall be valid irrespective of the number of shares owned by persons attending the meeting and all resolutions passed shall be adopted by a simple majority of the shares represented in the meeting (Article 173)
  • Increased Shareholder Protection- Pursuant to Article 148, the shareholder's interests are protected by providing them increased protection in a JSC. A regulator can be appointed to take care of shareholders if the company acts against the interests of the shareholders or creditors. Following a warning, the regulator will be entitled to eliminate any work by the company causing any damage to any of the shareholders or creditors of the company. A board observer can be appointed to overlook the meetings of the company and can obligate the chairman to convene a general meeting for taking any necessary action required to remedy any risks arising against the shareholders. Such a regulator can also dissolve the board and instead appoint a temporary board to overlook matters of the company. The regulator will hold full authority to prohibit the company from effecting any activity causing danger to the shareholders of the company.
  • Voting Rights for Articles of Association of Company- Article 122 of CCL provides that the Articles of Association of a JSC may establish privileges, rights and limitations for any class of shares of the company and such information can be amended provided that a minimum majority of two-thirds of the owners of such class of shares, vote for such an amendment at a general meeting.
  • Voting Rights for Securities and Bonds - Pursuant to Article 158 of CCL, a general meeting in a JSC can be convened for the holders of securities and bonds shall require a voting majority of two-thirds of such holders present at the meeting. Such a meeting shall be convened if holders representing at least two-thirds of the securities or bonds attend such a meeting, failing which holders representing one-third of the securities and bonds shall hold a second general meeting within 30 days of the commencement of the first general meeting.
  • To know more about Dispute Resolution in Oman,Click here 

     

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    Tue, 05 May 2020 03:02:00 GMT
    <![CDATA[Country Guide: Consumer Protection and Product Liability in Bahrain and Oman]]> Q&A on Consumer Protection and Product Liability in Bahrain and Oman

    Sources of law

    Q1. What are the principal legislation and regulation pertaining to product liability?

    The main areas of law and regulation relating to product liability are:

    I. Oman

    Product liability is regulated by the:

  • Consumer Protection Law (Royal Decree No 66 of 2014), which sets out liabilities for providers and advertisers.
  • Commercial Agency Law (Royal Decree No 26 of 1977, as amended) under which registered agents must pass on the benefit of manufacturers' warranties to consumers
  • II. Bahrain

    In Bahrain, product liability is regulated by the Civil Code, Consumer Protection Law No 35 of 2012 for protection of the consumer and Executive Regulations via Resolution Number 66 of 2014. The seller must provide the buyer with all the necessary information about the item being sold. The seller shall be liable to the consumer for selling the defective goods.

    The National Committee for Consumer Protection (NCCP) provides for oversight over such instances.

    Q2. How to establish liability under the most causes? When is a product said to be defective? Does strict liability apply in certain circumstances?

    In almost all GCC nations, to establish liability, the consumer may file the case on the grounds of a tort, liability under the contract and breach of the relevant consumer protection legislation.

    The following must be established to prove liability in tort:

  • duty of care from the supplier / manufacturer towards the consumer.
  • Breach of that duty of care due to manufacture, defective design, or warnings or instructions.
  • Causation link between the defect in the product and the damage that customer faced.
  • As per Oman Royal Decree 66 of 2014 defect is defined as any reduction in the value of a commodity/service for the purpose it was manufactured or produced and that prevents the consumer from benefiting from it or render the same unfit for the intended purpose in a manner that is beyond the control of the consumer.

    According to Bahrain's Resolution Number 66 of 2014: Any mistake in designing, manufacturing, producing, or storing the commodity that would lead to harm to the consumer, or to depriving him completely or partially of their benefit, or a decrease in their value or benefit.

    Product liability claims are based on strict liability claims, and hence manufacturers are liable irrespective of that fact they were negligent or not.

    Q3. Who is shall be liable for a defective product? What duties do they have and towards whom?

    The liability for defective products falls on both manufacturers and suppliers.

    Under Oman Royal Decree 66/2014, Article 22 lays down that despite the legal guarantees/ agreements for the protection of the customer, the provider of goods and services shall guarantee the quality delivered to the customer as per the standards of health, safety and environmental conditions. Under Bahrain Executive Regulations, A written declaration issued by the supplier or his representative, that the product subject to the warranty is free from defects and conforms to the specifications approved by law, and his pledge to fix any defect or damage to it within a specified period

    Excluding/limiting liability

    Q4. How can supplier limit its liability for defective products and any statutory restrictions on a supplier doing this? Is there a mandatory warranty period for the products?

    A supplier may limit its liability for defective products by inserting relevant warnings on products, for example, but this will not necessarily protect it. The relevant Consumer Protection Authorities and the courts of the GCC nations are rather pro-consumer when it comes to consumer complaints.

    In Oman, the law is silent on this point, and the court shall determine such questions with regards to such question, but the courts generally resort to principles of law laid down in Oman's Civil Code and Civil Transaction Law.

    In Bahrain, Article 11 lays down that the supplier shall bear the costs of transporting the defective product, as well as the costs of sending technicians to replace or repair the defective part of it, and all costs of recovering the product. The Executive Regulations lays down that the provider shall be exempted from the liability if he is not the manufacturer of that product.

    Product Liability Litigation

    Q5. Which courts are competent to try product liability cases?

    In Oman, the Public Authority for Consumer Protection (PACP) is empowered to oversee and enforce the consumer protection law in Oman. The complaint is usually resolved either through amicable resolution between the consumer and the trader or in case the consumer does not accept PACP's decision, then PACP refers the matter to the public prosecution for framing charges against the trader/dealer/manufacturer of goods and services. In Bahrain, Consumer Protection Directorate Services under the Ministry of Industry, Commerce and Tourism, receives and responds to the consumer complaints.

    To know more about Consumer Protection and Product Liability in Bahrain and Oman Click here 

     

     

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    Tue, 21 Apr 2020 07:10:00 GMT
    <![CDATA[CCTV & Invasion to Privacy in the GCC]]> CCTV & Invasion to Privacy in the GCC

    The world in this millennium is techno-dependent for almost every aspect of life whether its payment of debts through credit card, entering into contracts by parties distant through online, i.e. e-contracts, e-booking of railway or air tickets and even social networking platforms. The technology and communication revolution is at a global level, as this revolution has crossed political boundaries, demolished economic barriers and proved effective in making up of cultural differences. Technology has spread its roots in even far-flung areas so that individuals from different corners of the world can communicate freely and cost-effectively. This has compelled governments all over the world to review the laws and policies related to information technology.

    Privacy as defined in Black's Dictionary right of a person and the persons' property to be free from unwarranted public scrutiny and exposure. Privacy as a right has changed by leaps and bounds in recent times. One of the most basic liberties of the individuals after the right to life is right to privacy that has been incorporated in the legal system through legislative measures or through judicial pronouncements in various jurisdictions. The right to privacy holds high pedestal as privacy helps to create barriers and manage boundaries to defend ourselves from unwarranted interference with our personal lives and allows us to negotiate who we are and how we desire to engage with the outside world. Privacy essentially limits access to domains related to us. For example, limiting who has access to our personal details, communications and information. Also, significant to bear in mind is that there is a slew of international conventions and charters which exist to reinforce the norm that right to privacy is an essential component of human life which makes life more than mere animal existence. Some of the international conventions and charters which uphold right of privacy are as follows:

    • Article 12 of Universal Declaration of Human Rights;
    • Article 17 of the International Covenant on Civil and Political Rights;
    • Articles 16 and 21 of the Arab Charter on Human Rights;
    • Article 14 of the United Nations Convention on Migrant Workers;
    • Article 16 of the UN Convention on the Rights of the Child;
    • Article 10 of the African Charter on the Rights and Welfare of the Child;
    • Article 4 of the African Union Principles on Freedom of Expression (the right of access to information);
    • Article 11 of the American Convention on Human Rights;
    • Article 5 of the American Declaration of the Rights and Duties of Man,
    • Article 21 of the ASEAN Human Rights Declaration; and
    • Article 8 of the European Convention on Human Rights.

    Relevant conventions for our perusal in the aforementioned list are:

    • Article 12, Universal Declaration of Human Rights: No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.
    • Article 17, International Covenant on Civil and Political Rights: (1) No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour or reputation. (2) Everyone has the right to the protection of the law against such interference or attacks."
    • Article 16(8) of the Arab Charter of Human Rights: The right to respect for his security of person and his privacy in all circumstances.
    • Article 21 of Arab Charter of Human Rights: (1) No one shall be subjected to arbitrary or unlawful interference with regard to his privacy, family, home or correspondence, nor to unlawful attacks on his honour or his reputation. (2) Everyone has the right to the protection of the law against such interference or attacks

    Similarly, in line with the discussion in above paragraphs the legal regime of protecting privacy intrusion through CCTV is covered by mainly two legislations- firstly, Article 378 of the Federal Law Number 3 of 1987 of UAE Penal Code (the UAE Penal Code) as amended by Federal Law Number 34 of 2005 states as follows: 

    "Shall be sentenced to detention and to a fine, whoever violates the private or familial life of individuals, by perpetrating one of the following acts, unless authorized by law, or without the victim's consent:

    i. If he lends his ears, records or transmits, through an apparatus of any kind, conversations that took place in a private place or through the telephone or any other apparatus.

    ii. Captures or transmits, through any kind of apparatus, the picture of a person in a private place. Should the acts, referred to in the two-preceding paragraph, be perpetrated during a meeting in front of the attending persons, their consent shall be presumed.

    Shall be sentenced to the same penalty, whoever publishes through any means of publicity, news or pictures or comments related to the secrecy of private or familial life of the individuals, even if correct.

    Shall be sentenced to detention for a maximum period of seven years and to a fine, the public servant who perpetrates one of the acts mentioned in the present article relying on the strength of the authority of his position.

    The apparatuses and other objects that that may have been used in perpetrating the crime shall, in all cases, be confiscated and order shall be given to erase all relative recordings and destroy the same."

    Secondly, Article 21 of Federal Decree Law Number 5 of 2012 On Combating Cybercrimes states: "Shall be punished by imprisonment of a period of at least six months and a fine not less than one hundred and fifty thousand dirhams and not in excess of five hundred thousand dirhams or either of these two penalties whoever uses a computer network or and electronic information system or any information technology means for the invasion of privacy of another person in other than the cases allowed by the law and by any of the following ways:

  • Eavesdropping, interception, recording, transferring, transmitting or disclosure of conversations or communications, or audio or visual materials.
  • Photographing others or creating, transferring, disclosing, copying or saving electronic photos.
  • Publishing news, electronic photos or photographs, scenes, comments, statements or information even if true and correct. Shall also be punished by imprisonment for a period of at least one year and a fine not less than two hundred and fifty thousand dirhams and not in excess of five hundred thousand dirhams or either of these two penalties whoever uses an electronic information system or any information technology means for amending or processing a record, photo or scene for the purpose of defamation of or offending another person or for attacking or invading his privacy"
  • There has been an increasing number of incidences in UAE in which usage of CCTV as an apparatus to commit infringement of privacy have come into light. CCTV recording the details such as our face, the time of our presence, car numbers or our leisure time with family and friends. Though there is no law at Federal level with regards to CCTV control and regulation but certain Emirates have regulation such as Dubai Law Number 24 of 2008 which has Article 16 according to which the business concerns that must satisfy certain security specifications including employing CCTV such as: hotels and short-stay residences, financial and monetary institutions, manufacture and sale of precious metals and stones, shooting ranges, military and hunting equipment stores, shopping and leisure centers, precious materials storage facilities, hazardous materials storage facilities, precious commodities stores/outlets, large department stores, petrol stations, internet services, storage services, aircraft and balloon clubs. Besides Dubai, even Abu Dhabi under Smart Abu Dhabi Vision Abu Dhabi Law Number 5 of 2011 was passed by the Executive Council with statutory aims of:

  • establish Monitoring and Control Centre;
  • Electronic monitoring of public and private places and establishments; and
  • developing the infrastructure of follow-up and control systems to serve the competent authorities of Emirates.
  • Also, operating monitoring devices without Monitoring and Control Center's (MCC's) approval is an offence punishable by imprisonment of up to two years and/or a fine of no less than AED 50,000 to AED 200,000.

    Similarly, Kuwait under Law Number 61 of 2015 concerned the regulation and installation of surveillance cameras and security also provides for installation of CCTV at hotels and hotel apartments, commercial complexes, cooperative societies and residential complexes, banks and money exchange shops and shops selling gold and jewelry, sporting and cultural clubs and youth centers, shopping malls, entertainment, hospitals, clinics, warehouses and stores precious materials and hazardous materials and refueling stations, and other facilities to be determined by a decision of the Council Minister at Kuwait.

    Oman has stipulated law for CCTV to be installed at food eateries, according to which CCTV is mandatory and in event of its malfunctioning or stopping the establishment would be fined RO 100 minimum to RO 3000 maximum.

    Though howsoever, genuine the CCTV regulations may be and which serve the purpose of security and protection of people from anti-social and criminal elements there has been news report which reveals how CCTV recordings have been used as an intrusion to privacy of another person for malicious fun or as a nuisance. Recently, three government officials were accused of breaching the privacy through use of CCTV and the case is under hearing at Al Ain Misdemeanour Court. Also, in UAE taxis have started installing the CCTV cameras which are sparking anger from the customers. But given GCC being new domain for regulation for such sensitive and sophisticated CCTV regulations and surveillance much depends to be seen how the legal regime works.

    In conclusion, it could be said that institutions are keeping an electronic eye on people without involving the subjects how the information collected should be processed.  The law and technology should balance the national security concerns with individual rights of privacy.

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    Sun, 09 Feb 2020 11:28:00 GMT
    <![CDATA[Omani Banking Regulations]]> Omani  Banking Regulations

    The banking business is an extremely vital activity in any economy and banks have a primary and synergist task to carry out. The behaviour of the banking and finance industry is dependent on the investors' trust, and trust will be rested and held by how banks work together, associatively adding to development, strength and stability.

    It is nevertheless fitting that the sectoral precision, consistency and validity are kept up by efficiently and straightforwardly set guidelines. Laws and guidelines, essential enactments, add to them with elaborations, explanations and direction originating from roundabout guidelines. In Sultanate of Oman, there are established laws like Oman Commercial Law and Commercial Companies Law.

    Explicit laws like Banking Law and Capital Market Law structure establishments for banking organizations and capital market-related foundations, while bank related requirements are guided by required judiciousness, capital market guidelines revolve around disclosure.

    Banks in Oman can do widespread international banking and finance, i.e., both business and speculation banking business - subject to explicit licenses and necessities. While Banking Law accommodates authorizing, directing and overseeing Islamic banking as well, there are other strong laws on Combating Money Laundering and Terrorism Financing moreover.

    Banking Law, like different laws, is drafted on best industry practices and universally certify principles. The requirements alongside guidelines and directions and rules get refreshed for new and advancing needs and models and add to huge open premiums including reasonable financial practices and shopper security other than encouraging money related consideration and steadiness and differentiated development.

    Banking Law 2000, an amendment of 1974 Law, sets its goals, among others, to be the advancement of improvement of banking establishments to guarantee financial strength and development and engaging the Central Bank for support of estimation of the residential cash and supervision of banking business.

    The Law has figured certify worldwide gauges and standards and best Central Banking practices and engages the Board of Governors appropriately and features the elements of the Central Bank, expansive parameters on authorizing, controlling and regulating banks and banking business and specific prudential standards and restrictions - other than path forward during the time spent willful or automatic exit of banks.

    Some ongoing alterations incorporate forces for the Board of Governors to receive fitting proposals of global offices and supra-national associations and expansion of Title Six to empower approve, direct and regulate Islamic Banking in Oman. The outlook for Oman's banking industry is constructive and wholesome profits increase has only been slightly toughened by way of the advent of new accounting necessities.

    Shifting regulatory changes over the past 12 months, combined with the muted financial increase, have now not adversely affected the banking sector. Directives and policy amendments issued via the Central Bank of Oman imply Oman's intention to align with first-rate global practices in phrases of prudent marketplace law and client protection.

    Despite these trends, Omani banks have recorded healthy growth in margins. So as opposed to taking a step returned, banks can utilize these surroundings as a possibility to innovate and fill gaps inside the marketplace, potentially improving operational efficiency and aggressive positioning.

    The approach that is carried by the banks has been substantially changed or instead transformed by way of implementation of the International Financial Revenue Standards (IFRS) 9, which took place in the year 2018. Enhanced digitalization and expectations from the customers for the world-class experience, may have led the majority of the banks to exercise Customer Identity and Access Management (CIAM) for building strong relations with the customers.

    CIAM's salient features assist in addressing diverse needs, which includes delivery of the personalized experience, protection against cyber fraud and intelligent solutions and easiness of digital interaction.

    The risk functions associated with the banks are operating against the background of the regulatory evolution. The London Interbank Offered Rate (LIBOR) is undergoing a phase-out which is to be replaced by various alternatives like Risk-Free Rate (RFR). The banking institutions are advised for incorporating a reduction in exposures to LIBOR and building RFR-like products.

    The operational risk is in the spotlight when the issues surrounding anti-money laundering fines, cyber threat and third-party is concerned. To avoid financial frauds, it is highly essential to comply with. These compliance regulations have been outlined by the Central Bank of Oman where the rules for governance along with identification, assessment, mitigation and control as well as business continuity management and information technology.

    Risk around financial crimes may evidence substantial reduction by exploiting machine learning for maximizing operational efficiency and risk mitigation techniques for complying with regulatory provisions and sanction prepared for the Financial Action Task Force (FATF) Mutual Evaluation which is expected for the year 2021.

    The critical growth aspect in Oman is Islamic finance, where the country enters into a consolidation stage as an international economic hub. Steady growth is encouraged together with greater transparency and improving with the more Islamic banking and finance experts. This, in turn, strengthens the public's confidence in products and services that are Shariah-compliant.

    It is reported in the sustainability report that Omani banking and finance regulations have been mostly considered for the benefit of the sector. Banks have been benefitted by the sustainability disclosure where new market access has been provided, and the implementation of more all-rounded risk management is undertaken.

    Objectives of the Oman Banking Law Royal Decree Number 114 of 2000:

    1.    Promotion of the development of the banking and financial institutions for ensuring the maintenance of financial stability and contribution to the industrial, economic and commercial growth

    2.    Enhancing the position and situation of the country within the international financial spectrum

    3.    Empowering the Omani Central Bank for issuance of currency and maintenance of the domestic and foreign currency value.

    4.    Supervisions of the banks and the banking business for advising the government of Oman and the international economic affairs

    Powers of the Board of Governors:

    1.    The Board of Governors is authorized and empowered to establish an effective monetary policy for the country.

    2.    Examining the accounts, records, books and any other affairs of the bank.

    3.    Reviewing the reports and the bank applications for the requests for establishing branches and taking actions in the event suitable supervision and regulations is concerned.

    Regulatory framework of the Oman Central Bank:

    With the adoption of the IFRS with effective from 1 January 2019, the banks in Oman are under an obligation to comply with the other established laws of the country. The Islamic banking entities will also be governed by the remote Islamic banking and regulatory framework.

    Oman's Islamic Banking:

    The Islamic Banking in Oman is comparatively younger as compared to the other jurisdiction. This system was launched in 2013 when the Central Bank of Oman gave license to the first two ever Sharia-compliant banks, i.e. Al Izz Islamic Bank and Bank Nizwa.

    The Central Bank of Oman regulations does not permit the products that the banks are allowed to trade in certain other parts of the GCC.

    New regulations:

    For facilitating the development of the Islamic banking segment, the Central Bank of Oman is working towards creating liquidity management tools to be sharia-compliant deposits and reposition for the Islamic banking entities. The additional regulatory initiative is the deposit insurance scheme introduced for the banking segment together with takaful that is the Islamic insurance principles.

    Conclusion:

    The Omani banking sector is highly regulated, which has undoubtedly helped the reliability on the regulations despite the economic slump due to the sudden fall in the global energy prices. The new regulatory requirements consolidate the industry's stability. But it is an essential initiative that the improvements in the oil prices are intended to reinforce the liquidity in the banking and finance system.

    In the meantime, the technological improvements and the pressure from the concerned authorities are driving the financial inclusions. The banking system is set to develop rapidly and further increase its lending share by moving to reinforce the sector via the liquidity-management tools and the proposed takaful insurance scheme.

     

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    Mon, 11 Nov 2019 03:21:00 GMT
    <![CDATA[Patent Infringements - Global Overview]]> A Guide to Patent Infringement: A Global Perspective

    Ideas and innovation are the cornerstones of any successful corporation. Given that modernisation and globalisation has had a significant impact on corporations, it is only fair that the ideas defining these businesses are given protection from being misused, manipulated or stolen. Stolen ideas is a modern-day problem playing on capitalism by generating revenue to the 'thief'. With the view of preventing this, ideas and innovations are being granted patents now.

    A patent, in simpler terms, is a right granted to an inventor over his invention by a sovereign authority providing the inventor with exclusive rights over the ownership of the process, design or invention. A patent granted to the investor is for a set period in return for disclosure of the invention. Infringing such a right gives the inventor a right to claim for remedies against the infringer. The claim includes and is not limited to injunctions, damages, account of profits, declarations and so much more depending on the jurisdiction of the disputed invention.

    Infringement of patents reign in all industries, from Apple making a claim against Samsung over an infringing patent on their smartphones and tablets to the 'Da Vin Ci Code' book to movie rights disputed.  This article aims to give a global perspective on patent infringement by analysing the different rules and regulations governing these jurisdictions and the various remedies available, respectively.

    United Kingdom (UK)

    Governing Law and Overview

    Patent infringement is a statutory tort as per the common law. In the United Kingdom, there exist well-structured legislations to govern patent rights and infringement. The Patent Act 1977 (as amended) (PA 1977) sets out the various rights and remedies governing patents in the UK. The later legislation Patent Rules passed in 2007 deals with the procedure involved in filing a patent with the UK Patent Office (known as the Intellectual Property Office), filing a patent infringement lawsuit, challenging the validity of the patent, opposing the grant of a patent and other related matters. There are Civil Procedure Rules governing patent rights in the UK as well however these CPR apply exclusively to England and Wales and not to Scotland and Northern Ireland as they have their own rules and regulations in the local courts.

    Overview

    As with all jurisdictions, in the UK a patent is perceived to be infringed when the invention is put to use by someone who is not authorised. Section 60 of Patent Act 1977 states that a person/entity is said to have infringed a patent only if the patent is granted and in force.

    Additionally, the person/entity in question should have done any of the following without the consent of the proprietor to have infringed a patent in the UK:

    • If the invention is a product: the person/entity disposes of, offers to dispose of, uses or imports the original product
    • If the invention is a process: the person/entity uses or offers the process of creation in the UK in addition to the point mentioned above

    To understand how to apply for a patent in the UK, firstly, it is essential to note that patent right is a negative right granted to the applicant, which prohibits an action relating to his invention. However, for this act, there would be no infringement if the patent is used for non-commercial, research, anti-terrorism, experimental medicines and related purposes. The reason for this was explained in the case of Corvalve Inc v Edwards Lifesciences AG [2009] EWHC 6 (Pat) where the courts held that experiments with the patent are allowed to encourage scientific research while still protecting the legitimate interest of the patentee. However, there is some debate over this subject as experimentation often leads to commercial gain (case of Monsanto v Stauffer [1985] RPC 515.)

    Procedure

    Section 1 of PA 1977 states that for a patent to be valid and granted it needs to be new, should involve an inventive step, should be capable of industrial application and is not excluded from being protected as a patent. Once the validity of the patent is granted and is deemed valid, opposing parties can apply directly to the courts to revoke the patent or declare infringement of the patent, regardless of whether the inventor of the patent or the owner is threatened with litigation.

    A patent awarded to the United Kingdom is through either the United Kingdom Intellectual Property Office (UKIPO) or the European Patent Office (EPO). Additionally, the possibility of joining either process under the Patent Cooperation Treaty (PCT) can be made through a foreign request. When issued, a patent provides an exclusive and absolute right to exploit what is protected by the patent and can provide coverage for 20 years as long as it is renewed (and the applicable fee paid) every year from the fourth anniversary of the filing date. A term of protection can be expanded by applying for a Supplementary Protection Certificate (SPC).

    Infringement in the UK

    It is an infringement to sell a patented process for use in the United Kingdom if the person making the offer understands, or it is apparent to a reasonable person, that using the method without the permission of the proprietor would be an infringement of the patent. Furthermore, Section 60(2) Patent Act 1977 also allows the patent proprietor to prevent an unauthorized person from supplying or offering to in the United Kingdom means relating to an essential element of the invention when they know, or a reasonable person would have known, that the element was suitable for and intended to be used in order to put the invention into effect in the United Kingdom. This is referred to as contributory infringement.

    Section 60(3) Patents Act 1977 exempts commercial staple products from this provision: -a patent proprietor can not prohibit someone from selling standard commercial objects merely because they could be used to assemble an infringing device, or even if the manufacturer knows that they are intended for that reason. For instance, according to the precedent in Menashe Business Mercantile Ltd v William Hill Organisation Ltd [2002], computer software is a patented entity although the manual to use it would not be.

    The nature of the various infringing acts in themselves is rarely ambiguous. Nonetheless, one issue that arises is whether fixing a copyrighted item can be infringed as a "making" operation. The response depends on the extent of the repair. Several factors such as the possible lifetime of different components, have to be considered. As per Schutz (UK) Ltd v Werit UK Ltd [2013], if the worn or damaged product continues to embody the entire claimed invention, excluding the component requiring replacement or repair, then it is likely that repair by replacing that component does not "make" the patented product.

    Another question arises when the product supplied is a package of parts that helps the user to assemble the component. Since the consumer has protection under Section 60(5)(a) Patents Act (discussed below), it can be argued that the selling of the package does not result in an infringing act of "making''. A similar argument occurs when the package is manufactured for sale so that there is no violation outside the jurisdiction. Nevertheless, these claims were not checked in case law. In any event, a supplier of such a kit might also be liable for contributory infringement. It is also essential to distinguish between direct and indirect patent infringement.

    Court Proceedings

    It is mainly in London that court proceedings involving UK and EP (UK) patents take place. They are heard either before the Patents Court (a High Court division) or before the Patents County Court, depending on the value and complexity of the case-more complicated cases or cases where the value of the case is more than £ 500,000 are heard before the Patents Court. The judges make their judgments; no jury exists. The procedure at the Patents Court is thorough and generally involves:

    • discovery of documents;
    • experiments (when necessary);
    • written facts and expert evidence (experts are appointed by a party, not appointed by a court); and
    • witness cross-examination at trial.

    In the United Kingdom, copyright disputes and patent validity issues were resolved in one court.  In comparison, in Germany, the two issues are addressed in separate trials (so-called 'bifurcation'). The Patents County Court provides a cheaper alternative to the Patents Court procedure. The level of complicated research information presented and the volume of cross-examination will be reviewed in the Patents County Court, providing small and medium-sized businesses and private individuals with a more open and generally cheaper process. If any party to a case at the Patents County Court thinks that the Patents Court is more suitable, a transfer request may be made.

    Damages

    In claims that proceed in the Enterprise Court of Intellectual Property, the court will make a summary assessment of the party's costs in favour of which any cost order is made. The extensive assessment is not valid. The court will not require a party to pay total costs in excess of:

    • £ 50,000 on the final determination of a negligence claim; and
    • £ 25,000 on a claim for damages or benefit account.

    The maximum amount of scale costs imposed by the court is as specified for each point of the case.

    Remedies

    Remedies for the patent proprietor, in either case, include a temporary or permanent order, products being shipped or destroyed, damages being paid, or an account of the infringer's earnings, or legal costs being incurred. UK patent judges ' decisions are also taken into account and often carry persuasive weight in circumstances where the same patent is litigated in other European countries

    European Union

    Concerning the EU, Section 60 of the PA 1977  of the infringing acts stems from the Community Patent Convention (Articles 25 and 26), revised and replaced by the Community Patent Agreement (89/695/EEC) (OJ 1989 L 401/1) (CPC). Similar provisions are introduced by other European countries. Section 60 was framed in compliance with Section 130(7) of the PA 1977 to have the same consequences in the United Kingdom as almost as possible as the relevant provisions of the CPC. Section 130(7) stems from the Community Patent Joint Declaration Agreement (OJ 1989 L 401/57) which is further implemented by the EEC member states.

    In Bristol Myers Squibb v Baker Norton Pharmaceuticals [ 1999 ] RPC 253, Jacob J held that since there was no distinction between Articles 25 and 26 of the CPC and the relevant provisions of section 60, it was easier to work based on the direct effect of the CPC provisions. Nevertheless, as section 60 has tended to focus mainly on that provision, this report is equally based on that provision as it represents the law in the UK and UK case law. Nonetheless, when interpreting the provision, the UK courts often turn to national European (mainly German) case law.

    To know more about Patent Infringements globally including patent infringement in UAE, Click here 

     

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    Wed, 06 Nov 2019 12:41:00 GMT
    <![CDATA[Tax Regulations in the GCC : Guide]]> Guide on Tax in UAE, Saudi Arabia, Kuwait, Bahrain and Oman

    Introduction:

    Gulf co-operation council is the abbreviated form of GCC. It came into force in 1981.   It is the union of all Arab state except Iraq and UAE is one of its member states. Saudi Arabia has head first a proposal to make the GCC into Gulf union for the betterment of its administrative functions. There are six gulf countries Bahrain, Oman, Kuwait, Qatar, Saudi Arabia and UAE are the main GCC countries. The purpose of GCC is to maintain unity among its member countries. The main objectives for the formation of GCC countries are for the common currency, common market and customs union which was set forth by the GCC supreme council. And the other objectives include formulating rules in the field of trade, finance, legislation. scientific progress in the field of agriculture, mining, and encouraging the private sector and bonding with the people.  The economic growth of the GCC countries depends  on its vast petroleum, oil and natural gas resources , but at present situation many countries have found out its own oil and natural resources hence its effect the economic development of Gulf countries as a result of it the gulf countries introduced the lowest rate tax of 5 per cent in order make a stable economic development. A common market system was established for the nice movement of goods and services in the GCC countries, it provides equality for the GCC citizens to work in all fields mainly public and private sector but the disadvantage is some bar in the movement of goods and services.  Coordination of taxation system, accounting and civil legislation is still in progress.

    Tax:

    Tax is a compulsory payment of financial charge which is imposed on individual or entity by the governmental organization in order to develop various public expenditure. Non- payment of tax is punishable by the law. The State can impose civil penalties or criminal penalties for the non- payment of tax fully.  Taxes are of two types Direct tax and Indirect tax.

    Tax in GCC:

    It was in the year of 2015 the oil and petroleum price of Gulf countries came to its much lowest price. So, in order to meet future needs, the GCC countries representative agreed to sing the VAT treaty. It was in the year 2016 they entered into this agreement. it was not the oil and gas which made the economic growth of the GCC countries disappeared completely, the true fact is that many countries started using non- renewable resources.  For example, the developed countries like the United States they started producing their own oil and petroleum hence it becomes a tough competition for the Gulf countries because they were the sole distributors of oil and gas in the whole world. By keeping it in mind the gulf countries planned for the future and contributed money for the future growth of their nation. But it was in the year 2015 they faced a budget deficit. So, to overcome this deficit they realized the need for a new source of income and they thought about tax. Hence in the year 2016, each representative of the GCC countries signed the VAT agreement.  The VAT is value added tax by entering into this agreement the GCC countries started imposing VAT at a rate of 5 per cent on some goods and services.  Health and education are exempted from the VAT. Now people in the GCC need to pay a VAT of 5 % per cent on food, cars and other entertainments.

    In Saudi Arabia and in UAE the VAT system has started smoothly these two countries had only met the deadline of VAT treaty in the year 2018 and other member countries are still on the run. Bahrain is the only GCC country who had not introduced the VAT.  Even though the implementation of VAT has been done smoothly in two countries but in the business, many problems are arising as they are confused that how to apply the VAT system in goods and services mainly in the Free Trade Zone area of these countries.

    Following are the types of taxes in GCC: 

    Corporate Tax: It is imposed on the profit of the entities. UAE corporate tax is levied on oil companies and foreign banks only. As per the GCC rules, residents are not subject to corporate or withholding tax.

    Withholding Tax: This tax is imposed on any income. It is imposed when the income is transfer to another country. Withholding tax applies to corporate income and the income of private persons.

    Zakat: Zakat is an Islamic tax, which is made compulsory to every abled individual to serve the needy ones in Islam.

    VAT: Value Added Tax is a tax imposed on the supply of goods and services. The GCC countries have agreed to implement VAT at a rate of five per cent. VAT provides UAE with a new source of income and it also provides a high quality of public service. The GCC VAT Agreement lays down a broad principle that needs to be followed by all the GCC countries in their VAT laws providing flexibility in certain matters.  Every GCC country will be having its own VAT legislation. Value added tax came into force in UAE on the 1st of January 2018. The Implication of VAT on Individuals: VAT general consumption tax is mainly levied on the transaction of goods and services. As a result, the cost of living of people will increase slightly, but this will depend on an individual's lifestyle.

    The Implication of VAT on business: Businesses will be responsible for all their business transactions and auditing. Mainly documenting their business income, costs and associated VAT charges.  All registered businesses and traders will levy VAT from all of their customers and also incur it from the goods and services which they buy from the supplying agents.

    Excise Tax: it is an indirect tax imposed on goods which are harmful to human life and property and also to the environment at large. for preventing the use of these harmful commodities, the GCC countries agreed to enact the excise tax by signing the excise tax agreement.

    Customs Duty: GCC countries have an amalgamation of customs duty rules. whenever any goods are transported into the GCC countries for the first time they impose customs duty on the goods. The customs duty of imported goods is at the rate of 5 per cent of the invoice value. Some goods may be imposed with the highest rate and some will be totally exempted.

    Stamp Duty: It is levied on documents such as legal documents. it is imposed on the transfer or registration of real estate in Oman and also in Bahrain. In the UAE whenever ownership of land or shares of a company is transferred a registration fee is levied on both.

    Sectors in VAT Implementation

    • Real estate and construction

    • Tourism

    • Oil and gas

    Real estate and construction industry are a huge importance for the GCC countries because it provides many benefits like supporting a large number of livelihoods, providing residential places to live which is one source of income for the GCC countries and it also develops a region. By introducing the VAT by GCC countries it does not create any problem to the real estate and the construction fields future project.  It's a positive approach by the government to make the real estate and construction field to contribute to the welfare of the state. Because a large sum of money is coming from this field. Supply of real estate is taxable at a standard rate in G C C.

    The Tourism industry contributes a huge sum to the Gulf economy and it provides many opportunities for individual tour operators in the G C C.  But the main challenge which they face is how to implement VAT. This industry is an amalgamation of various sectors which includes airlines, tour operators, travel agents, accommodation and so on, so by the introduction of VAT in this industry will affect each by one or the other way.

    The oil sector plays a very important role in the Gulf countries. Many multinational oil and gas companies are in the countries. Business in the sector includes international, national, and other oil companies.  VAT implementation will create a huge impact on this industry. There is complexity in the field of oil and gas industry and by the introduction of VAT in the G C C need to be given consideration in businesses.  Each and every industry in the Gulf countries is one way or the other is affected by the implementation of VAT and the more affected field is the tourism industry because it comprises various sections of employment. Click here to read more.

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    Sat, 29 Jun 2019 02:58:00 GMT
    <![CDATA[International Anti-Terrorism Conventions]]> A Global Purview of Counter-Terrorism Efforts

    With nearly 41% of all terrorist attacks resulting in casualty, and a dramatic increase in public targeted incidents, governing bodies representing both domestic and international interests alike have invested countless resources into better understanding why terrorism occurs, and how legislatively, it can be stopped. The result has led to an intriguing conceptualization of terrorism commencement theory, international convention prohibitions, and domestic statute adoptions.

    Understanding Terrorism: Scope, Scale, and Premeditative Factors Guiding Legislative Enactment

    Statistically, post-1990, approximately 100 to 200 international terrorist attacks have occurred each year. Of this number, 40% of offenses were directly targeted against U.S. interests. Heinous acts of terrorism such as the U.S. 9/11 Twin Towers attack and 2007 London Bombing have demonstrated that atrocities stemming from terrorism extend beyond the loss of life or injury. Rather, both domestic and international acts of terrorism hold the significant capacity to adversely impact socio-political and economic sectors. Empirical evidence has suggested that terrorism, directly and indirectly, results in: infrastructural damage, unemployment, weakened commerce, an elevated need for security, counterterrorism budgeting, and escalated insurance premiums. Globally, the vast majority of attacks have occurred within the Middle East and Europe, however, the highest rates of mortality have occurred within Africa, Asia, and the Middle East.

    To fully comprehend why terrorism has become an increasingly widespread phenomenon within the last half-century, one must first grasp what constitutes terrorism, and how domestic and international acts of terrorism differentiate. For an atrocity to be classified as an act of "terrorism," intentions must target "…premeditated political violence against civilians with the objective of maximizing media exposure to the act and, ultimately, to the terror group and/or to its cause. Political violence is achieved when either an individual (independent of the state) or the state itself commits assault with the purpose of obtaining a political goal. For the scope of this article, two primary forms of terrorism will be discussed: domestic and international incidents.

    • Domestic: Domestic terrorist attacks occur when a perpetrator commits an act of political violence within their own nation's jurisdiction. Consequences of a domestic attack are intended only to impact the venue country (whether that be its structural institutions, citizens, or policies). Within a domestic attack, the offenders, their victims, and the overarching goal exist within one territorial jurisdiction.
    • International: Transnational terrorist attacks engage offenders, victims, and targets of multiple nations. 

    There is significant debate existing between international governing bodies as to why acts of terrorism are committed. Despite a dramatic surge in research funding, the enactment of fifteen international counter-terrorism conventions, and enforcement of domestic counter-terrorism legislation worldwide (such as the UK Counter-terrorism and Security Act 2015), conclusions have remained predominately elusive. Lacking unanimous agreement, three theories have been generally accepted by members of the international community. At the legislative level, understanding these hypotheses has been absolutely essential for constructing laws aimed at curtailing terrorism. Succinctly, research has suggested:

    • Domestic political instability and international terrorism are intrinsically connected.  This perspective, coined the Escalation Effect, proposes: "…domestic political instability drives international terrorism…[in that] politically unstable countries offer propitious conditions" for civil war outbreak, guerrilla warfare, sophisticated "terror" training, and the accumulation of terrorist human capital.
    • Terrorism is most likely to arise out of territories with meager political development and a deteriorated economy.
    • International terrorism commences as the result of a "weak" state. This concept is referred to as the "failed state hypothesis." Weakness is determined by evaluating the social, economic, and political welfare of a nation.  

    Together, these speculations have helped guide the evolution of national and international conventions, resolutions, acts, and codes governing anti-terrorism legislation.

    Evaluating the Aims of Anti-Terrorism Legislation

    There are two central focal points specific to preventative counter-terrorism legislative efforts internationally: collective security and human rights. On the international scale, the United Nations Security Council has enacted a variety of resolutions since 21 January 1992 to combat and condemn global acts of terrorism. According to Article 24 of the UN Charter, the function of the Security Council is to maintain international peace and security amongst member states. In regards to counter-terrorism, the Council is predominantly concerned with managing collective security. The UN assessment of terrorist insurgency began in the mid-1960s through the formation of several multilateral treaties, which included the Tokyo Convention of 1963 and the Montreal Convention of 1971. These conventions "…categorized the main forms of terrorist acts as criminal…[defining] crimes and obligated state parties to prosecute or extradite suspected offenders.] Although UN treaties such as these serve punitive and deterrent roles, their effectiveness at mitigating incidents of terrorism is highly controversial. As tragedies resulting from terrorist acts have demonstrated, a discrepancy often exists between a state's claim of procedural duty follow-through and reality.  The 1988 Lockerbie tragedy demonstrates just this. Although the trial of the two Lockerbie bombing suspects was "achieved partly through the intercession of the [UN] Security Council, utilizing its collective security powers to deal with a past act of terrorism…[it was] an indication of future behavior by Libya in supporting terrorism." Following this realization, and upon criticism of targeted sanctions, the UN Security Council declared that states not only have a duty to satisfy collective security obligations but also, adhere to their duties of protecting human rights.  The General Assembly's Global Counter-Terrorism Strategy adopted by UN Member states in 2006 affirmed this declaration. The Strategy made clear that "…states must ensure that any measures taken to combat terrorism complies with their obligations under international law, particularly human rights law and international humanitarian law.

    International Anti-Terrorism Conventions

    From an international purview, all counter-terrorism conventions are enacted under the UN. Conventions worth analyzing in this article include:

    • 1997 International Convention for the Suppression of Terrorist Bombings (Ratified by 169 states)

    Through this convention, the UN confronts the increasingly widespread prevalence of explosives and other lethal devices used in terrorist attacks. Noting foregoing provisions did not directly prohibit such incidents, Article 2 is designed to outline committable offenses under this topic. The article states, "Any person commits an offense within the meaning of this Convention if that person unlawfully and intentionally delivers, places, discharges or detonates an explosive or other lethal device in, into or against a place of public use, a State or government facility, a public transportation system or an infrastructure facility...." Under the 1997 Convention, explosive and lethal devices were defined as weaponry or equipment holding the capacity to induce severe material/economic damage, kill, or cause bodily harm. Article 2 also asserts guilt if an individual acts as an accomplice in or directs others to commit the act of terrorism. The Convention, in Article 4 requires State Parties to implement measures "to establish criminal offenses under its domestic law the offenses set forth in article 2…[and] To make those offenses punishable by appropriate penalties which take into account the grave nature of those offenses." As with all of the anti-terrorism conventions set forth by the UN, the jurisdiction of an offense is dependent on three conditions. A State may claim authority over a terrorist attack if: it takes place in the Member states' territory, a flying vessel is registered under the States' laws, or the offender is a State national. It is also worth noting that the Convention excludes (in Article 19) "…activities of armed forces during an armed conflict…" from governance as international humanitarian law supervises activities executed by armed force.

    • 1999 International Convention for the Suppression of the Financing of Terrorism (Ratified by 187 states)

    Noting that financial terrorism had evolved into a grave matter of concern for the international community and that a vast majority of international terrorism acts were committed due to financial backing assistance, the 1999 Convention stressed the need to devise preventative measures to eradicate the financing of terrorism. Similar in design to the previous convention, Article 2 outlines committable offenses. The Article specifies an offense is committed under the Convention if an individual "…directly or indirectly, unlawfully and wilfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used... [to] cause death or serious bodily injury to a civilian…." The Convention is non-applicable (under Article 3) to offenses performed by nationals of the State in which the act occurred, or when an offense occurs "within a single State."  The Convention also prescribes ratifying states to adopt measures of enforcement/deferral. A State Party is strongly advised (where necessary) to institute criminal offenses and proportionate penalties for the actions prohibited in Article 2. 

    • 2010 Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft (Ratified by 22 states)

    Created as a supplement to the 1970 Convention for the Suppression of Unlawful Seizure of Aircraft, the 2010 Protocol amended many previous articles of the Convention. Discussed in the Protocol's preamble, the international community was "deeply concerned" with the intensification of civil aviation offenses. The intended aim of creating this Protocol was to subdue future "seizure or exercise of control of aircraft." Article 2 of the Protocol replaced Article 1 of the Convention. Under the amendment, "Any person commits an offense if that person unlawfully and intentionally seizes or exercises control of an aircraft in service by force…or by coercion…." Additionally, the threat of aircraft seizure, the attempt of the offense, serving as an accomplice, or directing others to commit the offense is all punishable acts under the Protocol. Article 3 (replacing Article 2 of the Convention) classifies offenses as "punishable by severe penalties."

    • The 16th Proposed Comprehensive Convention on International Terrorism (Not yet ratified)

    Currently, the UN is in the negotiation phase of their 16th counter-terrorism convention. The Comprehensive Convention on International Terrorism is intended to ban all types of international terrorism, revoke terrorism fund access, ban terrorist access to arms, and deny terrorists refuge.  The proposal is undergoing a negotiation deadlock, as unclarity surrounds whether or not a state's armed forces or self-determination could classify as an act of terrorism.

    State Anti-Terrorism Legislation:

    From a national jurisdiction enforcement perspective, the United States and the United Kingdom have both enacted comprehensive legislative doctrine condemning acts of terrorism. Listed below are two of the countries' most all-embracive legislative attempts at counter-terrorism:

    UK Counter-Terrorism and Security Act (2015)

    Receiving Royal Assent 12 February 2015, the UK Counter-Terrorism and Security Act was passed by Parliament with the intent of: inhibiting terrorist activity resulting from entry to or exit from the United Kingdom, enhancing the monitoring of potential wrongdoers, fighting theory backing terrorism, granting law enforcement investigative authority to seize passports upon entry to the country, producing a Temporary Exclusion Order, modernizing aviation/maritime/rail border security, and guaranteeing the financing of terrorism is eradicated.

    18 U.S. Code Chapter 113-B

    U.S. Chapter 113-B provides numerous sections defining punishable crimes and penalties under the act of terrorism.

     Section 2332a. "Use of weapons of mass destruction," states that in the case of an offense committed in the United States against a U.S. national: any person (without lawful consent) who threatens to use or does use a weapon of mass destruction against a U.S. national, individual or property within U.S. territory, or property under ownership by the United States, "shall be imprisoned for any term of years or for life, and if death results, shall be punished by death…."

    Section 2332b. "Acts of terrorism transcending national boundaries," prohibits the following acts: killing, maiming, kidnapping, committing assault with a dangerous weapon, and causing (or conspiring to create) bodily injury through inflicting structural damage. Punishment ranges from 10 years to life in prison.

    Section 2332d. "Financial transactions," asserts any U.S. person with knowledge that another nation is supporting international terrorism, and "engages in a financial transaction with the government of that country, shall be fined under this title, imprisoned for not more than 10 years, or both."

    Section 2332f. "Bombings of places of public use, government facilities, public transportation systems, and infrastructure facilities," classifies chargeable actions as the delivery or detonation of an explosive in a public place, government facility, transportation system, or infrastructural structure. The detonation must be done with an intention of causing bodily harm, death, or damage. Additionally, individuals who conspire to commit an offense previously listed in this section will be charged. Penalties for such charges under this section are the same as the penalties under Section 2332a.

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    Thu, 31 Jan 2019 01:29:00 GMT
    <![CDATA[Medical Negligence Claims and Liability in Gulf Countries: a Critical Analysis]]> Medical Negligence Claims and Liability in Gulf Countries: a Critical Analysis

    WILLES.J opines, "Negligence is a negative word. It is the absence of such care, skill, and diligence as it was the duty of the person to bring to the performance of work, which he is said not to have performed".

    Introduction

    The medical profession is known to be one of the prestigious jobs which deserve appreciation and respect. The relationship between a patient and doctor is based on trust and faith. George Bernard Shaw said, "We have not lost faith, but we have transferred it from god to the medical profession". There are two essential things that we value namely life and health. It is the doctors and medical professionals who possess the knowledge and skill that is put into a position which improves our health and vitality. Over a previous couple of decades, we have begun witnessed a new phase of globalization, commercialization and technological advancement in various aspects of our life and the medical profession is no exception to this phenomenon. As such nowadays, the medical profession is becoming more money oriented and because of this reason the claims regarding medical negligence has become a severe issue in today's era. In the earlier civilizations, medical negligence was considered more of a crime rather than as a tort. The early tribal and communal law depend on the legal practice and customs for controlling the various activities of the medical professionals. In Yajnavalakya Smriti mentions 100 Pana as the highest penalty for medical negligence.

    Medical negligence occurs following a medical practitioner fails to provide proper care and attention and exercise those skills which a prudent, qualified person would do under similar circumstances. The liability of medical negligence gives rise to both civil as well as criminal liability. In the civil process, the aggrieved person can go civilly by filing a suit or by lodging a complaint to claim his compensation. On the other hand, in criminal procedure, the victim needs to bring a criminal action against the doctor before the police.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Contents

  • Introduction
  • Medical Negligence as Tort
  • Medical Negligence as an Occupational Crime
  • When Medical Error Occurs?
  • An Overview of Medical Negligence Legislation, and Various Regulatory Authorities in the United Arab Emirates
  • The criminalization of Medical Negligence in Saudi Arabia
  • The criminalization of Medical Negligence in Bahrain
  • The criminalization of Medical Negligence in Oman
  • The criminalization of Medical Negligence in Kuwait
  • Conclusion
  • Medical Negligence as Tort:

    Tort is in simple words means a civil wrong. Winfield has defined Tort in the following words:

    "Negligence as a tort which is the breach of a legal duty to take care which results in damage, undesired by the  defendant to the plaintiff."

     It is an act or an omission of one that gives rise to injury and harm to the victim for which the court imposes liability. Negligence as a tort is the breach of the duty caused by the omission to do something which a reasonable person, under a given set of circumstances, would or doing some which a prudent and wise man would not do. The doctors have the legal obligation to the patients to adhere to a standard of reasonable care.

    The medical negligence is provided with the following conditions:

  • When there is a breach of the duty of care on the part of the doctors to the patients.
  • When he has committed a violation that duty
  • The patient is suffering consequential damage as a result.
  • Medical Negligence as an Occupational Crime:

    The term "Occupational Crime" refers to those crimes which are committed mainly within the context of a legitimate occupation. Occupational crimes primarily include those crimes that are related to the various occupation, for instance, medical, academy, religion, law etc. Professional crimes are generally less visible than any other conventional forms of adverse actions, and as such in such cases the offenders often go undetected. Medical Negligence is considered to be a severe form of occupational crime which undermines the integrity and nobility of the profession. Some of the Medical Negligence crime includes fee-splitting, taking and offering kickbacks, price fixing, fraudulent billing, performing unnecessary surgery, upcoding, misrepresenting services etc. Nowadays most of the health care professionals are primarily motivated by profit and benefit which involves an intentional deception. The doctors and medical professionals engage in various illegal activities to obtain some benefit. It might be tough for the patient to believe that they could be a victim of medical crime and that the doctors whom they trust with their health are criminal.

    When Medical Error occurs?

    Medicine is considered to be an inexact science, and as such sometimes a responsible doctor may not give an assurance to achieve a particular result. A medical error occurs when a doctor provides an inaccurate and incomplete diagnosis and treatment of a disease, injury, infection or any other such ailment. There may be multiple factors in the errors in medical treatment. It is very common that even after adopting all the possible medical procedures, a qualified doctor may be subject to medical error. As per the various legislations in UAE and the other Gulf countries, it is established that a doctor and a medical professional may not be liable for medical negligence or any medical deficiency although some errors are committed in his/her treatment if he/ she is proved to be acted as per as the procedures of the practicing profession. As per as Article 6 of Federal Law Number 4 of 2016 of UAE, a medical error is an error committed by a practitioner due to the following reasons:

  • If there is any ignorance of the technical matters that are supposed to be known by any practitioner of the same degree and specialization.
  • If there is any non-compliance with the recognized professional and medical principles.
  • When the practitioner is not exercising due diligence.
  • When there is negligence on the part of the physician, and he/she is not paying attention to the treatment.
  • The new UAE medical law (Federal Law Number 4 of 2016) provides numerous cases in which excepts medical liability. Some of these cases are:

  • If any of the reasons do not cause the harm, set out in Article 6 of this legislation.
  • If the damage is caused by the patient's action or his refusal of the treatment or his failure to follow the medical instructions given to him by those responsible for his treatment.
  • If the physician uses a particular therapeutic method in the treatment contrary to those of the other physician in the same specialization so long as such way confirms to generally accepted medical principles.
  • If known or unseen therapeutic effects and complications in the field of medical practice take place but are attributable to the medical error.
  • An Overview of Medical Negligence Legislation and Various Regulatory Authorities in UAE

    Over the prior two decades, we have seen an enormous expansion in the healthcare sector in UAE. The medical liability law in UAE now specially provides that the medical professionals will be liable in the event if they commit any medical error with an intention and motive of any profit-making activity or any other benefit. In the UAE Civil Code, there is a general theory of tort that a person who commits harm to others will be responsible for the loss or injury to the claimant.

    Article 389 of the Civil Code states:

    "The criterion for an aggravated party to be entitled to compensation is that the damage should have been suffered directly as a result of the default and that it has already happened or will happen in the future. The potential damage that is not ascertained will happen in the future is not the subject of mandatory compensation unless it has happened."Click here to read more.

     

     

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    Wed, 28 Nov 2018 12:31:00 GMT
    <![CDATA[Arbitration and Expedited Proceedings]]> Emergency Arbitration and Expedited Proceedings

    Introduction

    There never really seems to be ample time available to get the problematic and wary things done. At the same time, when there is nothing to be done, time cannot seem to move fast enough; this can seem frustrating to one when deadlines approach more quickly than they can are achievable, and there is seemingly no more straightforward route about it.

    It can be much the same for court proceedings. Issues brought before the court are often complex, as would be expected since a resolution was not possible beyond the court. However, complex problems require in-depth analysis from external parties, and therefore, there are often large amounts of evidence to be pored over. Still, even considering all of this, a case can go on for months or even longer. A further reason for this may be court processes that require observation. There will be numerous cases occurring at the same time, and with limited time in the day, days turn to weeks and so on.

    There are cases, however, that require the utmost attention from the get-go, and would suffer as a result of lengthy processes and a lengthy or delayed judgment. The age-old adage of 'Justice delayed is justice denied' comes to mind. Should a delay result in a party not receiving a just verdict due to the duration of time that has passed, justice may not be deemed wholly served; this is an issue that is well known, and governmental bodies and authorities around the world are aware of this. To bring about change though, the administrative regulations of countries will require changing to accommodate for cases that need haste. However, for a legal system to be the best it can be, this change is one which is necessary.

    Court attention is precious, and their time is one of the most significant value. Wasted court time is an equivalent to lost money. As such, there have been various implementations in different nations which attempt to streamline the processes, or 'trim the fat'.

    The UAE (the Emirate of Dubai to be more specific) has recently implemented the likes of the Penal Order Law Number 1 of 2017 which has put in place 24 hours long, 2 step verdicts; this will allow for the dealing of the more straightforward cases to be swift from start to finish, and leave more time for the more significant matters.

    Expediting Court Proceedings

    The above mentioned Penal Order Law has been one of the steps taken to help facilitate the court processes. One of the new implementations is that of a one-day court. Cases that are deemed to fall into specific categories (those simple enough or small enough) can then go through and conclude within 24 hours.

    The court will specifically cover small misdemeanor cases. Often these are brought before a court, which could be spending their time on complex and challenging situations. Now, they will be able to do so. The amount of money that can saveable as a result of this is predicted to be around AED 40 million per year, and it will have the added benefit of clearing up the ordinary courts' schedule.

    This specific one day court is currently only in effect in Dubai for the time being and is already dealing with large quantities of cases. Following the introduction, the judges began to settle thousands of cases per month, with varying types of situations handled. The most common form of cases is those relating to bounced checks, with one judge stating that around 80% of the cases he seemed to deal with related to just this topic. They also deal with matters regarding alcohol (illegal consumption and possession), begging, illicit vendors and sex outside of marriage to name the primary culprits. There are a total of close to 20 types of situations and cases that this court is equipped to deal with and matters such as these have clear regulations which prevent them, and the repercussions are generally quite simple to arrive to, and issue from the judges' end. For example, any claim concerning a bounced check of which the value is over AED 150,000 will result in a jail sentence, and anything less will carry a monetary fine relative to the total.

    The cases are brought to this new court by the police stations in the city. As of March 8, 2018, it has been their responsibility to bring any misdemeanor cases they come into contact with before the one-day court. There are numerous advantages to this, including the fact that, since the police and the court will be working together, they can bypass the standard court procedures entirely. The police officers catch the act of misdemeanor, or it is brought to their attention as one would expect, and then it is their responsibility to commence the necessary procedures; this forms an entirely separate system, and it is this disconnect that is partially the cause of the forecasted savings.

    Of course, the court deals merely with the individual involved in the misdemeanor. However, they can often be cases in which the activities impact further individuals. If this is the case, those individuals will still be able to proceed through the regular Civil courts in seeking compensation.

    Of course, another major point to consider here is that time-saving occurs on all fronts. Wastage of Court time will not happen as well as the time of the people involved. From the time of their initial apprehension at the hands of the police to the time their sentence is passed will take a few days at most. It has been further stated that the general waiting times for cases to be heard will also fall by approximately 60%, thus streamlining the entire system.

    What steps are being taken for emergency Arbitration?

    In cases where the issue is not one that is criminal, but instead, Civil, the one day court will not be of much help though; this is compounded further when looking towards commercial agreements. Businesses often will choose to take the route of arbitration at least as a first resort. The reason for this is as it may allow for mutual agreements and favorable outcomes for all parties involved; this could mean that in the future, the entities can continue to work together peacefully, with no hostility held between them.

    The Dubai International Arbitration Centre (DIAC) is the body that manages all aspects of arbitration from the cases to the regulations that cover the area. Established in 1994, and until relatively recently, utilizing the Federal Law Number 11 of 1992. There have been further regulations introduced throughout the years though, and the most recent addition has been the Federal Decree Number 6 of 2018 added earlier in the year. This law is now the governing regulation on the topic of arbitration in the UAE.

    A further reason for the introduction of this law is that Arbitration is an international issue. In order to stand upon the global stage with the rest of the developed world, a country requires the most up to date and complementary regulation on a topic.

    In the cases which demand instant results from arbitration, there are options available. For example, under the new regulations, there is the section on interim measures. Article 21 covers the scope of when and why interim steps should arise, and within it is stated that upon agreement between the parties involved, the tribunal covering the case may:

  • Place an order for the preservation or protection of evidence that could hold weight during the remainder of the case;
  • Further, goods that require protection may also, through interim measures, relocate to a place where they will receive the necessary protection;
  • Resorting issues to their normal states for the remaining duration of the case; and
  • Take specific action that could prevent harm to any individuals.
  • These last two points could have some interesting implications for future cases. Generally, all of the points as mentioned above will mean that should there be anything which requires immediate attention, it is up to one or both of the parties to bring it to the attention of the tribunal in charge of their case and more immediate action can be taken to protect assets etc.

    What will all of this achieve?

    The critical thing to be taken away from all of this is that the UAE is attempting to streamline its legal processes whether that be the court or the arbitration system. The court changes will allow for greater saving of court money and the time of general individuals and the courts.

    Arbitration regulations will affect the international standing of the country due to the global nature of the processes and rules. The new 2018 regulations have refreshed the system and will allow for greater pushes to make arbitration the norm in most situations in which it may be applicable.

    As a whole, these steps are indeed required within the country; especially the Arbitration Law update due to its international nature. The improved standing it will provide the state internationally is invaluable. The one day court concept, while currently specific to Dubai does have similar counterparts within the rest of the country. The single-day idea may not be the same or the issues the court deals with may vary, though rapid case verdicts on more straightforward cases are essential. Ras al Khaimah's one-day Civil court deals with minor Civil and generally attempts to have them completed within a day.

    This changing landscape is indeed a good trend and one that could save the country tens or even hundreds of millions of dirhams annually once entirely nationally implemented as well as save court time and the time of other individuals on wait within the court system.

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    Sat, 17 Nov 2018 01:17:00 GMT
    <![CDATA[Consumer Protection Law - Country Focus: Oman]]> Oman Consumer Protection Law

    "Competition is not only the basis of protection to the consumer but is the incentive to progress" – Herbert Hoover

    Introduction

    Consumer protection is a vital part of a healthy economy. Every country has its regulations in place to ensure the consumers are treated fairly and receive the protection that they deserve and require. The relationships between consumers and the companies they interact with and make purchases from is a complex one. On the one hand, it may appear as though the business entities have a higher level of power over their target audience as they are often large and highly profitable organizations. However, we can also consider this from the opposite angle. The consumers and the choices they make are what give the entity any power it may have, and so in a way, they may be the more important and influential.

    The key here is that while both sides are undoubtedly essential and hold sway in this argument, it is generally clear and evident that the strength of the consumers come from their freedom of choice and vast numbers. Individually, one person cannot hope to sway a company, and this could potentially lead to abuse of power. However, this has been noted and is the very reason behind the consumer protection legislation.

    Consumer protection law generally covers a few essential areas and rights. These include:

  • The consumer's right to correct information for what they are looking to purchase;
  • The right to be free to choose where they wish to make their purchases from;
  • The right to receive products of an appropriate quality to what one would expect and to what the advertisements showed or demonstrated;
  • The guarantee of a product that is of the proper health and safety standard;
  • Fair compensation when and where it is necessary for the event of damages suffered; and
  • The right to not receive discrimination based on their religious values, customs, and beliefs.
  • While these are the rights of the consumer, it is also the obligation of the producers, advertisers and other bodies that are involved in the process to ensure violations of these rights do not occur

    Oman's national consumer protection legislation is the Royal Decree Number 66 of 2014 (the Consumer Protection Law)

    Royal Decree Number 66 of 2014

    Decree Number 66 is the Sultanate of Oman's central regulation on the matter of consumer protection. It came into effect upon its publication in the national gazette on November 30, 2014. It covers all of the basics relating to both the rights and protections of the consumer and also the responsibilities and duties placed upon the producers to ensure the realization of those rights.

    Chapter 1 of the regulation covers the definitions and overarching provisions of the law and is the basis for the remainder of the Legislation.

    Beyond the basic concepts of rights and duties that are specified, the matter of regulatory violations and penalties also receive attention within the law.

    Chapter 3 relates to the duties and requirements upon the provider and Article 20 states that:

    -        The provider and advertiser shall be under an obligation for transparency and credibly and shall refrain from any acts of misleading publicity and advertisement upon the promotion of the commodity or the services offered to the consumer.

    A case which relates to this occurred around November of 2016, in which a consumer purchased a motorcycle. However, they realized once they received the bike that is was not to the specifications as advertised and promised. The engine size and power of the motorcycle acquired were below what the producer promised, and so the consumer sued them. The court ruled in the consumer's favor, with the defense party receiving a fine of OMR 100, and the court fees were to be paid by them. Further, the contract between the parties was then also terminated. The court finally ordered that the original agreement should then be satisfied by the producer.

    Article 23 of the regulation states that:

    -        Optimally providing services to the consumers is critical, and a deadline should be provided for when the service will fully complete, and this deadline should also further be realistic. Failure to ensure this shall result in the producer being liable to refund the consumer the value of the good or service or a similar such repercussion.

    A case in which this regulation came into play was also in 2016. Here, the consumer hired a tailoring company to produce for them custom curtains and couch designs, and also to design their bedroom. The producer failed to do so within the set time, and so the consumer filed a claim against them. Similar to the case mentioned above, the court ruled in favor of the claimant, and the producer received a sentence of 10 days in prison as well as an OMR 100 fine.

    Chapter 2 Article 14 of the regulation stipulates all of the rights of the consumer, and they are very much in line with and include all of the points stated in the introduction to this piece.

    While this is the critical regulation in place for the area of consumer protection, there is also the Public Authority for Consumer Protection within the country.

    Public Authority for Consumer Protection (PACP)

    The PACP first arose through the Royal Decree Number 26/2011. The formation of this body aimed to ensure that an establishment existed within the country that could be relied on by consumers to cover them and ensure they do not experience unfair treatment or are not taken advantage of by large organizations; this was published in the official gazette and commenced on February 28, 2011

    Further to Royal Decree Number 26/2011, there is also the Royal Decree Number 53/2011 which promulgated the law; this was also published in the official gazette at a later time and commenced on April 6, 2011.

    Both of these regulations came into effect upon their publications in their corresponding gazettes.

    The general duties of the PACP are generally all consumer protection related, and some of their key responsibilities are as follows:

  • Ensure the implementation of the Sultanates general policies relating to consumer protection in coordination with the other government bodies;
  • They should ensure through the use of questionnaires and surveys that consumers are in a good position, and just how this can be improved;
  • They should ensure that consumers are aware of their rights through the laws; achieving this could occur through the distribution of magazines and pamphlets;
  • Encourage fair and plentiful competition across all industries to provide the people with a wide variety and prevent the formation of monopolies; this will help more mainly with the growth and well-being of the country's economy as a whole; and
  • Look to promote international cooperation in the field of consumer protection.
  • These are the general aims, and so it is clear that the PACP plays a significant part in ensuring the healthy economic growth of the Sultanate. Competition is key to any economy as it provides that companies profit based on their products and services as well as their treatment of consumers. Further, it will push businesses of all types to improve continuously to attract clients through their hard work and commitment. Readers are welcome to drop any specific inquiries on PACP to our team of lawyers in Oman and Lawyers in Dubai.

    International cooperation in this area will allow for Oman to make a name for itself and become known around the globe as a place of fair trading and protection of its people's rights, which could further help to boost its economy. It would do this by attracting more international business into the nation, which would have a ripple effect of furthering the levels of competition even more significantly.

    Another role of the PACP is that of being somewhat of an available figure by the consumers. Should they have a matter in violation of their consumer protection rights, they can approach the PACP and begin proceedings against the company in violation.

    An example of this is that of a case that occurred in the year 2016 in which a consumer approached them with a situation in which they did not receive the appropriate change from a commercial center. The PACP visited the center to confirm this, and following their investigation, they found this to be the case. The case then proceeded to a court, and the accused received a sentence of three months of imprisonment.

    While the PACP themselves cannot act as the judging party in the cases brought before them, they do function as somewhat of an available official body that can look into these issues. Should they investigate and find something to violate the consumer protection regulations, they can escalate the case to the courts for a final verdict and the delivery of the appropriate penalty.

    The General State of Consumer Protection in the Sultanate of Oman

    The consumer protection rights as they are at this time established within Oman, are relatively new, with the regulatory body arising in only 2011 and the Consumer Protection Law being created and implemented in 2014.

    However, the idea is right and appropriate, and more so than merely protecting consumers once damage has already occurred, there is a larger goal to be achieved. With the overarching aim of increasing competition and preventing the rise of monopolies, the area is receiving opposition from the roots. The regulations are concise and straightforward leaving no room for misunderstanding.

    Finally, the international exposure that is part of the PACP's goals may have a significant effect on exposing the country's markets and standards to the world, and this could have great profound long-term outcomes.

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    Mon, 05 Nov 2018 12:26:00 GMT