A report of the annual conference on settling disputes in the MENA region revealed a set of risks and benefits looming on the horizon this year, indicating that the year 2019 was characterized by a state of continuing geopolitical uncertainty and market fluctuations, especially as companies operating in the MENA region North Africa faced a number of emerging risks along with a steady increase in the growing complex conflicts in all sectors of industry.
The report pointed to the expectations and opportunities expected during the year 2020 to a promising outlook, but there are a number of challenges on the horizon locally and globally, which all companies in the region must be aware of. Pointing to the expected risks and opportunities expected during the next year concentrated in the areas of arbitration, construction, electronic crime, employment, banking services, taxes and insolvency.
With regard to arbitration, the report said, companies should exercise caution and ensure that the arbitration agreement is entered into, by reviewing the commercial license and the company's articles of association, or in some cases reviewing the shareholders ’decision. Noting that with regard to information technology crimes, recent years have witnessed an increase in the number of reported IT crimes, and authorities such as the Ministry of Interior and Dubai Police have developed innovative ways to facilitate and accelerate the reporting of cybercrime (including the e-crime service and the smart police center). Likewise, the procedures for recording cases and applying temporary measures (such as freezing bank accounts) were expedited; these procedures can usually be implemented within 24 hours.
He pointed out that, despite the best regional efforts by law enforcement agencies, there are still important challenges with regard to the effective definition of IT crime and its bringing to justice. The important thing for companies is to ensure that they take the necessary measures to improve their resilience in cyberspace and mitigate the potential impact on their activities (such as training employees, appointing a dedicated data / information security official and establishing effective contracts with external suppliers).
With regard to tax issues, the report pointed out, the past few years have witnessed massive tax reforms in the Middle East region with a stronger focus on implementation by tax authorities. The comprehensive tax framework covers the submission of tax returns, tax reviews and assessments by tax authorities, and objections by taxpayers. Any objections invoked by the tax authorities can be appealed before the specialized tax disputes resolution committees, but the taxes and fines that are the subject of the dispute must be paid at this point.
The report noted that the new UAE insolvency law was promulgated and published on August 29, 2019, and entered into force on November 30, 2019. The new law applies to natural persons who face financial default and cannot settle their debts. Noting that the new law introduces the "voluntary settlement" plan, which somehow equates to a "bankruptcy protection" procedure under the UAE bankruptcy law 2016 (and its amendments), the debtor can initiate the procedure only as long as it is not considered "insolvent" yet (meaning that it is The debtor has not stopped paying its debts on maturities for more than 50 consecutive working days). This measure aims to protect the debtor from insolvency by developing a settlement plan while at the same time enabling the debtor to continue to carry out its activities during the settlement procedure.