UAE severance of diplomatic relations with Qatar – How does it affect you and your company?

As the UAE severed its diplomatic relations with Qatar on 5^th June 2017, this has already had a direct impact on a number of individuals and companies living, located or operating within the UAE. Some of the ways in which this may affect you and your company are set out below:

• Qatari diplomats were given 48 hours and Qatari citizens 14 days in which to leave the UAE (from 5^th June 2017), although recent exemptions have been introduced on humanitarian grounds where Qatari citizens are married to UAE citizens.
• Ex-patriate residents of Qatar are no longer eligible for UAE visit visas for GCC residents and are banned from international flights passing through the UAE.
• UAE has banned its citizens from travelling to, through or staying in Qatar, although recent exemptions have been introduced on humanitarian grounds where Qatari citizens are married to UAE citizens.
• Qatar has now banned UAE, Saudi Arabian and Bahraini citizens from visiting or travelling through Qatar, although Qatar is not currently taking measures against residents of Qatar who are citizens of countries that have severed diplomatic ties with them.
• UAE/Bahrain/Saudi airspaces are closed for aircrafts whose journey originates in Qatar.
• Emirates, Etihad, Air Arabia, Flydubai, Gulf Air and Saudi Airlines have all suspended flights to and from Qatar. Qatar has stopped flights to destinations in Saudi Arabia, UAE and Bahrain.
• In line with the UAE Federal Transport Authority – Land & Maritime Circular No.2/2/1023 dated 11^th June 2017, all UAE ports must implement the following:

1. Not to receive any vessels carrying the Qatari flag, or owned by Qatari companies, or Qatari individuals;
2. Not to load/unload any cargo of Qatari origin in any port or water of the UAE; and
3. Not to allow ships to load any cargo of UAE origin to the State of Qatar.

• Emirates Postal services to Qatar have been suspended, along with some courier services. Other courier services are re-routing their carriers to avoid Qatar.
• Al Jazeera and beIN Sports have been banned in the UAE.
• Consular services in the UAE and Qatar have been affected for anyone who wants to use documents originating from the UAE in Qatar and vice versa. Although there is a diplomatic cooperation treaty between the UAE and Kuwait (subject to a special authorisation being issued) which authorises each to perform consular services for the other, potentially meaning that Qatar documents can be attested by the Kuwaiti Embassy in Qatar. However, it is unlikely that the Ministry of Foreign Affairs in the UAE will attest documents originating from Qatar.
• The UAE Central Bank has asked its banks to report to it their exposure to Qatari banks (including treasury investments, loans, letters of credit, trade finance facilities, equities, bonds, and interbank funds) and to undergo enhanced customer due diligence on any accounts they hold belonging to six Qatari banks; Qatar Islamic Bank, Qatar International Islamic Bank, Barwa Bank, Masraf Al Rayan, Qatar National Bank and Doha Bank.

• Qatar’s Central Bank has asked commercial banks to provide information on their foreign exchange trading on a daily basis. They have also been asked to provide a daily statement of withdrawals and transfers from deposits worth in excess of 10 million Saudi Riyals and for information on cash withdrawals and deposits on a daily basis (previously this information was only required on a monthly basis).
• Parties to contracts governed by Qatari or UAE law may find that due to the severing of diplomatic ties between the two States, one or both parties may give/receive notification of a force majeure event, under the terms of the contract or under the prevailing law. Anyone considering/receiving such notification is advised to seek professional legal advice as soon as possible.
• Both the UAE and Qatar are party to a number of treaties, including reciprocal recognition of court judgments. Anyone considering litigation, or attempting to enforce a judgement from the UAE in Qatar (and vice versa) may face difficulties in doing so.

• The UAE Attorney-General announced that the UAE has taken a firm stance against Qatar’s hostile and irresponsible policies. “Strict and firm action will be taken against anyone who shows sympathy or any form of bias towards Qatar, or against anyone who objects to the position of the United Arab Emirates, whether it be through the means of social media, or any type of written, visual or verbal form.”  The UAE Federal Public Prosecution has warned that according to the Federal Penal Code and the Federal Law Decree on Combating Information Technology Crimes, anyone who threatens the interests, national unity and stability of the UAE will face a jail term from 3 to 15 years, and a fine of not less than Dhs 500,000.

Although care has been taken to ensure that the above information is currently correct, the position is changing on a daily, if not hourly, basis. Therefore, we intend to issue regular reviews of this Blog to keep our clients as up to date as possible on the current status, and how it affects you and your company.

Other countries which have also recently severed diplomatic ties with Qatar are: Bahrain, Saudi Arabia, the Comoros, Djibouti, Egypt, Libya, Jordan, Maldives, Mauritius, Mauritania, Senegal and Yemen.

James B. Berry

Managing Partner

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