Over the past week, various reports from news outlets and other sources have suggested that some of the restrictions on the movements of goods between the United Arab Emirates (UAE) and Qatar imposed by the UAE, Saudi Arabia, Bahrain and Egypt (Boycotting States) in June 2017 as part of the boycott on Qatar have been partially lifted.
This followed a revised Direction issued by the Abu Dhabi Ports earlier in February 2019 and an almost identical Circular issued by DP World suggesting that restrictions would only apply to prohibit Qatari owned or flagged vessels from calling at Abu Dhabi ports and DP World ports and to prohibit UAE owned or flagged vessels from calling at Qatari ports. This was interpreted by some commentators as a change in policy, effectively allowing cargo to be moved directly to or from Qatar on vessels owned or flagged by countries not participating in the boycott.
However, in a statement issued on 21 February 2019, the UAE Federal Transport Authority (FTA) refuted the suggestion of a partial easing of the Qatar boycott and confirmed that there is no change in its policy regarding access to Qatar via UAE ports and border crossings. The FTA clarified that the news reports regarding exports and imports to and from Qatar are “inaccurate and misconstrued”. In addition, we understand from the UAE Federal Customs Authority that there has been no recent development in relation to the Qatar boycott. Similarly, the Qatar Ports Management Company (Mwani Qatar) has confirmed that there has been no change in policy from the Qatar perspective.
In light of these statements and until further information becomes available or the situation is further clarified by the FTA or the customs authorities in the UAE, parties should continue to operate on the basis that there has been no relief or relaxation of the boycott whether on the part of the UAE or Qatar.
What does this mean for you?
On the movement of goods
Given that the situation remains unchanged, we expect to see the UAE ports continue to:
i. Prohibit any vessels hosting the Qatari flag or owned by Qatari companies or individuals from passing through their ports
ii. Prohibit the unloading of any cargo of Qatari origin in any port or waters of the UAE; and
iii. Prohibit vessels (regardless of their flags or ownership) to load any cargo of UAE origin, destined to Qatar. In practice, this prohibition extends to any goods loaded at a UAE port that are destined to Qatar, irrespective of their country of origin.
Equally, we expect to see Qatar continuing its policy of prohibiting the import of goods with certificates of origin from any of the Boycotting States even if they pass through other countries (indirect shipments).
Qatar’s General Authority of Customs will also continue to reject (or at least delay) any imports in circumstances where documentation submitted to clear the goods for import refer to or have any nexus with any of the Boycotting States. We are also aware of cases where the import of goods was delayed (or ultimately was rejected) where the supply chain involved any parties domiciled in one of the Boycotting States or were owned by entities registered in one of the Boycotting States.
On the supply of services
We are not aware of any announcements, regulations, ministerial decrees or practice by the Qatari authorities suggesting that the provision of services to Qatar by any legal entity incorporated in, or any natural person resident in or a national of any of the Boycotting States is prohibited.
That said, if any such services are linked to the delivery of goods to Qatar, then this could jeopardize the import of such goods if documentation referring to such services is required and presented for clearance by Qatar Customs. For example, transportation and freight services provided by UAE entities in relation to goods being exported to Qatar could result in those goods not being cleared at the port of entry if the names of the UAE entities appear in the shipping documents.
What’s next?
The dispute between the Boycotting States and Qatar is unlikely to be resolved anytime in the foreseeable future. As the situation continues to evolve, we will continue to monitor developments and provide updates from time to time.
For a more comprehensive overview of the status of the Qatar boycott, please visit our dedicated website. You can also subscribe to our Middle East Insights blog to receive future updates.
