Back in 29 August 2020, the United Arab Emirates Government's Emirates New Agency (Wakalat Anba'a al Emarat, or 'WAM') publicly announced that H.H. Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, issued Federal Decree Law No. 4 of 2020, abolishing Federal Decree Law No. 15 of 1972 Concerning the Arab League Boycott of Israel. Civil Lawyers of Dubai have previously discussed the concerns of the treaty in a separate article, however, in this article, we will discuss the impact of this abolition treaty on trade between two countries.
The Abraham Accords was a joint statement between Israel, the United Arab Emirates and the United States, reached on August 13, 2020. It was subsequently also used to refer collectively to agreements between Israel and the United Arab Emirates (the Israel–United Arab Emirates normalization agreement) and Bahrain, respectively (the Bahrain–Israel normalization agreement). The statement marked the first normalization of relations between an Arab country and Israel since that of Egypt in 1979 and Jordan in 1994. The agreement with the UAE was officially titled the Abraham Accords Peace Agreement.
The changes explained in detail
Earlier UAE companies were not allowed from opening branches in Israel or conducting businesses or any kind of commercial activity in Israel. There was also prohibition on import or export of goods from Israel. The ban was to such an extent that they didn't even import goods having one or more component manufactured in Israel and there also used to be a requirement for products to have an undertaking on their labels declaring product had not been manufactured in Israel. UAE companies were also prohibited from shipping goods through Israel. These developments also impact SMEs in both countries. This could result in USD 500 million in bilateral trade and investment. As it is still a lot to learn about this decree it is advised to consult a legal expert for commercially practical legal solutions. As there are no Emirati embassies in Israel this makes document authentication for company and bank account setup a challenge. Violations of these Commerce Regulations are punishable by civil penalties.
While the two countries had long-maintained de facto recognition in areas of business including the diamond trade and high-tech industries including artificial intelligence and defence, the accord opened the door to a much wider range of economic cooperation, including formal investments. Companies based in UAE can now freely enter into commercial contracts with Israel. This can be mutually benefitting. Abu Dhabi Investment Office opened its first overseas branch in Israel. A number of kosher restaurants were opened in the UAE to cater to Jewish visitors. This was one of the first, and possibly the most important, steps to expand trade cooperation with Israel. Among other benefits this will provide for a broader global trading partnership with the UAE's business-friendly culture. The historic UAE-Israel Abraham Accords aim to further advance peace in the Middle East and to open up the region in a number of ways, including in wider trade and investment and technological innovation. Implementation is yet to be discussed and it could be some time before any changes occur.
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