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02 Jan 2018

Investments Being Made In Omani Container Depot Facilities

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"It has been announced that Joint Tank Services (JTS) is to establish a new depot in Sohar Freezone, on a 20,000 m2 site, that will be dedicated to the cleaning, storage and repair of ISO tank containers. This investment is in response to what is described as being the ‘phenomenal’ growth of tank container traffic moving through the port of Sohar. As well as these tank container related support services, JTS plans to expand its portfolio in the future by developing new areas of business directly for the chemical industry. This could include chemical drumming, warehousing and distribution, the company suggests. Construction of the new JTS Tanker container depot facility is expected to start during the second quarter of 2018. If all goes to plan then trial operations should commence by the end of the year. According to Jamal Aziz, chief executive of Sohar Freezone, “As our new Liwa Plastics Project comes on stream at Sohar, we are going to see phenomenal growth in the petrochemical and downstream plastics industry here, with a consequent growth in the number and complexity of ISO tank containers being handled through the port. Having specialists like JTS on hand will help to create the kind of world-class cluster we are hoping for, putting Oman on the map as a major plastics producer.” In another development one of Oman’s leading logistics services providers, Al Madina Logistics Company, has unveiled plans to invest in a network of new inland ports and warehouse facilities across the Sultanate. The initiative is in line with the Omani government’s plans to develop the logistics sector and create the infrastructure required to make the country a regional hub for shipping and logistics services. Al Madina currently operates Muscat Container Depot, which is claimed to be the first, and so far only ICD in Oman with fully approved bonded facilities. The company is now looking to develop similar facilities near the ports of Sohar and Duqm over the next year, with plans for an ICD in Salalah in the foreseeable future."

30 Dec 2017

Saudi Aramco, partners announce the launch of the International Maritime Industries Company

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Saudi Aramco and its partners; Lamprell Plc, the National Shipping Company of Saudi Arabia (“Bahri”); and Hyundai Heavy Industries Co. Ltd. (HHI), today announced the official launch of their International Maritime Industries (IMI) joint venture. When fully operational in 2022, this integrated maritime yard will be one of the largest full-service maritime facilities. This new joint venture localizes essential links for Saudi Aramco’s supply chain related to offshore drilling and shipping activities, which will lead to optimized cost, reduced response times and improved agility for Saudi Aramco and its affiliates. The nearly 12 million square-meter facility will be the largest in the region in terms of production capacity and scale offering an unprecedented mix of products and services. This scope enables Saudi Aramco and its supply chain partners to meet their manufacturing and MRO requirements for offshore oil and gas rigs, offshore support vessels, and commercial vessels, including Very Large Crude Carriers (VLCC). The yard has an annual capacity to manufacture four offshore rigs, over 40 vessels including three VLCCs, and service over 260 maritime products. “By meeting Saudi Aramco’s offshore production and transport needs, International Maritime Industries will serve our strategic intent to become the world’s foremost integrated energy and chemicals company. Its combination of technology, supply chain efficiencies and lifecycle partnership will create a world-class company that offers customers a keen competitive advantage,” said Abdallah I. Al-Saadan, Chairman of the JV’s Board of Managers and Saudi Aramco’s Senior Vice President of Finance, Strategy & Development. He added: “What is unique about IMI is the powerful synergy of manufacturing and operational excellence delivered by four established global and regional entities in the energy and maritime industries. International Maritime Industries already has orders for more than 20 rigs and 52 ships over the next decade, demonstrating the trust of the JV partners in the Company’s ability to produce quality, bespoke ships and rigs in line with national and global environmental requirements. This enables building an integrated supply chain that is localized and highly responsive.” The formal appointment of International Maritime Industries’ senior executives was also announced today, including Fathi K. Al-Saleem as CEO. Al-Saleem has more than 23 years’ experience at Saudi Aramco and led the feasibility and commercial development stages of International Maritime Industries. He has managed high performing teams in New Business Development, Corporate Planning and Engineering Services. During his career, he has led the Corporate Portfolio Analysis & Decision Support function responsible for corporate decision support, enterprise risk management and portfolio analysis. Prior to that, Al-Saleem managed the capital planning and evaluation for upstream and downstream investments. Al-Saleem stated, “International Maritime Industries is positioned to be a global competitor and a regional hub for maritime products and services. Through our combination of technology, integrated facilities and supply chain efficiencies, we are redefining what it means to partner with customers for maritime advancement.” Initial production and service operations are expected to commence in 2019, with the facility reaching its full operational capacity by 2022. This initiative will contribute towards localizing expertise related to the maritime industry and job creation in the Kingdom.

06 Dec 2017

VAT in Saudi Arabia and the UAE - how do they compare?

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"As the UAE and Saudi Arabia continue to lead the GCC VAT drive, this article compares the key features of the future value added tax (VAT) regime in these countries including the treatment of different industry sectors based on what is currently known. The latest status In line with the recent trend where Saudi is the first to circulate any laws agreed at the GCC level, the country has become the first in the GCC to issue its final VAT law - doing so on July 28 after making the draft available for public consultation on May 29. Saudi Arabia has also published its VAT implementing regulations on July 19 for feedback which is required by August 19. Given the rapid pace at which the country is progressing its VAT related legislation, the regulations are expected to be finalised shortly after the feedback period is closed. The Saudi Arabia VAT law requires the regulations to be issued within 30 days of the issue of the law. No other GCC state has published its VAT law or regulations even in draft form. The UAE is expected to issue its VAT law and the related executive regulations within weeks. Implementation date Saudi Arabia will be implementing VAT with effect from January 1 2018 and this has been confirmed by the final VAT law. The UAE is also fully committed to this date, however, the VAT legislation is yet to be issued. Scope of VAT The UAE and Saudi Arabia have adopted a broad tax base with limited exceptions. VAT will apply to the supply of goods and services in the UAE and Saudi and to imports into the countries respectively. Certain supplies of goods and services may be exempt or subject to zero rate. Unless the supply of goods and services falls within a category that is specifically exempt or is subject to the zero rate, VAT will apply at the standard rate. The standard VAT rate will be 5 per cent. VAT registration The Saudi tax authority had already started registering large businesses automatically based on existing information on taxpayers held by it. The country's VAT law requires all persons liable to register for VAT to register within 30 days from the issue of the law. The UAE Ministry of Finance has indicated that electronic VAT registration will be open on a voluntary basis during the third quarter of 2017. VAT registration is expected to become compulsory from the final quarter of 2017. In both countries, the mandatory registration threshold will be 375,000 dirhams and 375,000 Saudi riyals and the voluntary registration threshold will be 187,500 dirhams and 187,500 riyals. Businesses must register for VAT if their annual turnover exceeds the mandatory registration threshold while it is optional for them to register if the taxable supply and imports are below the mandatory registration threshold but exceed the voluntary registration threshold. In Saudi Arabia, small businesses with turnover of less than 1m will be given the opportunity to delay registration until January 1, 2019. Group registration will be available in both countries for related parties subject to certain conditions. In the kingdom, it is interesting to note that businesses that make zero rated supplies are not liable to register whereas the UAE may require such businesses to register. Clearly it will be in the interest of businesses to register to recover any VAT paid on their purchases. VAT treatment of industry sectors In the light of the flexibility provided by the GCC VAT framework agreement, it is likely that industry sectors may be treated differently for VAT purposes in individual GCC countries. Even where the sector may have the same headline VAT treatment, the definitions may vary from country to country resulting in potentially different VAT outcomes for the same services. The above can be seen in the case of the VAT treatment in the UAE and KSA for the education and healthcare sectors. Based on Saudi Arabia's draft VAT implementing regulations, where education and healthcare services are neither exempt or zero rated, education and healthcare providers will generally be subject to VAT at the standard rate (with public education and healthcare providers potentially not subject to VAT). The UAE, however, has announced that certain education and healthcare services will be subject to VAT at the zero rate. It remains to be seen how the Emirates will define the type of education and healthcare services that be taxed at the zero rate and which education and healthcare services will be excluded from this definition. It is possible that the zero-rated VAT treatment is dependent on whether education provider is engaged in pre-school, primary, secondary or higher education and on whether the healthcare provider or educational institute is public or private. Both nations are expected to treat financial services and insurance in the same way. It is expected that margin-based financial services will be exempt while fee-based products will be subject to the standard rate of VAT. General insurance services will be subject to the standard rate of VAT except life insurance, which will be exempt. In terms of real estate, both will exempt the supply of residential real estate except that the Emirates will subject the first sale of residential real estate to VAT at zero rate. The UAE will also exempt the supply of bare land. The supply of commercial real estate will be subject to the tax at the standard rate in both countries. As noted above, the definition of “commercial” and “residential” real estate may differ between the two nations. Subject to certain conditions, the supply of medicine and medical equipment will be zero rated in accordance with the GCC VAT framework agreement in both countries. Although there was a list of 100 items of foods which could have been zero rated under the GCC VAT framework agreement, both are expected to subject these items to VAT at the standard rate. Another example of different VAT treatment is local passenger transport. The UAE has announced that this will be exempt whereas Saudi's implementing regulations indicate that this will be subject to VAT at the standard rate. Government authorities that are performing a public function will not be considered to be carrying on an economic activity, as such supplies made by them will not be subject to VAT in both countries. However, where they are involved in the supply of goods and services in competition with the private sector, they will be regarded as carrying on a commercial activity and subject to VAT in the normal way. VAT compliance In the UAE, VAT returns will generally be required to be submitted on a quarterly basis depending on the returns and payments due within 28 days after the end of the period. In Saudi, companies with annual income in excess of 40m must file returns on a monthly basis while other companies must file their returns on a quarterly basis with payments required to be made within a month of the end of the relevant period. Transitional provisions Both nations will have special rules to protect businesses for contracts that straddle VAT implementation. In the UAE, under normal circumstances, where the contract is silent on VAT, the price will be deemed to be inclusive of VAT. However, where the contract was concluded prior to the implementation date and a part of the supply is made after the implementation date, suppliers will be able to charge the tax to the customer where the latter is able to recover it. In the kingdom, for contracts that were entered into before May 31 this year and are silent on VAT, the supply can be treated as zero rated until the end of the contract or December 31 2022 where the customer is entitled to deduct input VAT. Are you ready for VAT? As there are less than five months remaining before VAT is implemented, the concern is that there is insufficient time for businesses that have not yet taken any proactive measures to prepare and such businesses will find it very difficult to be ready in time. It has therefore become critical for organisations to assess the impact of VAT on their businesses and implement any changes necessary to be compliant with the VAT law and minimise costs and cash flow impact."

05 Dec 2017

Iran: Chabahar Port promise and nuclear deal threat

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"Iran has launched one of its major post-nuclear deal projects - the port of Chabahar - pushing further for engagement with the global community, days before the US Congress' expected decision on whether Washington will pull out of the landmark international accord. On Sunday, President Hassan Rouhani officially inaugurated the southeastern port in Iran's Sistan and Baluchestan province with great fanfare as officials from 17 countries attended a ceremony marking the opening of a new extension of the strategic trade corridor. The Chabahar port's development was accelerated after Tehran signed the nuclear pact, formally known as the Joint Comprehensive Plan of Action, with Washington and five other major powers in 2015 to put curbs on its disputed nuclear programme in exchange for relief from punishing economic sanctions. In a visit by reporters earlier last week, Swiss-made cranes installed in the first operational jetty were unloading containers bearing the trademark of Iran's national shipping company - Islamic Republic of Iran Shipping Lines (IRISL) - off a vessel that had just arrived from India carrying wheat shipments, which will be trucked to Afghanistan. It was the third consignment arriving this year as part of a contract to transit 1.1 million tonnes of wheat from Indian ports to the landlocked neighbouring country. Containers are moved to the vast empty area of the Shahid Beheshti container terminal whose construction was recently completed. Equipment financed through an $85m investment by India will be supplied by companies in Europe and Asia to fill the empty lot. Soon, Shanghai Zhenhua Heavy Industries Co Ltd (ZPMC) will supply four gantry cranes to accommodate large container ships in the first 8.5 million-tonne jetty. Once two-thirds of this capacity is realised, five other jetties will be built to increase the capacity of the port to 82-85 million tonnes. Planned completion of another under-construction multi-purpose terminal and a 610km north-south railway to Afghanistan and Central Asia will turn the port into a strategic asset to India in the face of its geopolitical rivalry with China and Pakistan. Those nations are developing the $46bn China Pakistan Economic Corridor that winds down to Pakistan's port of Gwadar, less than 100km from Chabahar. ""This is a strategic route for India,"" Amirhossein Esmaeili, director of Shahid Beheshti Port Terminal's Development project, told Al Jazeera. ""For them to carry goods to Afghanistan via Pakistan is either impossible because of security concerns or it is subject to excessive costs."" At a press conference last week, the head of Sistan-Baluchestan's Ports and Maritime Bureau said costs for each 20-foot container were $1,000 lower if transported through Chabahar to Afghanistan compared with the Pakistan route. Nuclear deal spoils A few months after the nuclear deal with Iran went into effect in January 2016 and sanctions were lifted, Indian Prime Minister Narendra Modi visited the country where he agreed to open a $500m line of credit to develop the port - nearly half of what Iran is planning to invest. The lifting of embargoes enabled Iran to enter negotiations with India, China, and Europe on investment and supply of equipment. However, the burgeoning success of Chabahar and other post-sanctions deals Iran has signed are now overshadowed by United States' opposition to the nuclear deal. Despite International Atomic Energy Agency saying Iran has fully adhered to the terms of JCPOA, US President Donald Trump - an outspoken opponent of the accord - refused to ""certify"" that Iran was in compliance. This gave the Republican-dominated Congress 60 days to decide if Washington should put sanctions back in place. Iranian officials have noted the fact that other signatories to the nuclear deal - China, Russia, Germany, the UK, and France - still stand by it. Asked whether Iran is prepared for the US to return to sanctions, Mohammad Rastad, Iran's Deputy Transport Minister in ports and maritime affairs, said: ""Nothing's happened as yet, has it?"" ""We have held successful negotiations with international partners following the JCPOA,"" Rastad told Al Jazeera. ""We think these investments will help further foster our international relations. We hope this will help us bring about better future for our port and maritime activities."" Billions of trade and investment deals were signed in the wake of the nuclear deal between Iranian companies and those in India, China, Russia, Western Europe and the US itself. Aside from the United States, all other parties to the nuclear deal have defended it, stressing it has been effective. Siding with Iran's regional rival Saudi Arabia and arch foe Israel, the Trump administration has accused Tehran and its elite military force, the Islamic Revolutionary Guards Corp (IRGC), of creating instability in the region by test firing long-range missiles and trying to increase influence in Yemen, Iraq, Syria, and Lebanon by supporting militias there. Iran says its missile programme is for defensive purposes and denies the other accusations. In late October, the US Treasury Department added major IRGC-linked companies such as the port construction and operation companies Tidewater Middle East Co and Iran Marine Industrial Company to its SDN list. IRGC-affiliated firms have had a significant share in Iran's port activities. IRGC's economic arm, Khatam Al-Anbia Construction Headquarters, has been a big player in the construction of the port of Chabahar in particular. So far, India has received the go-ahead from the US with regards to its economic activities in Chabahar. US Secretary of State Rex Tillerson was quoted as saying in a visit to India in October that his country does not want to ""interfere with legitimate business"" done with Iran, ""whether they be from Europe, India or agreements that are in place or promote economic development and activity to the benefit of our friends and allies"". Whether Tillerson's words still stand remains to be seen."

10 Nov 2017

Pakistani Shipbreaking Yard Closed

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"This is the same floating oil production tanker that blew up on 1 November last year – an explosion that caused the death of 31 workers and seriously injured at least another 58 workers. Fortunately, reports seem to indicate that no workers got caught in the flames of yesterday’s fire on the ACES. After having been left untouched and unbroken in the same yard since last year’s catastrophic explosion, the Pakistan Department of Environment gave permission last week for the continued breaking of the ACES. Shockingly, on the very first day that the breaking commenced, a massive fire broke out again as the oil residues inside the tanker had not been removed. While there have been no reported fatalities or injuries as a result of the fire, yesterday’s event goes far in demonstrating the Pakistani Government’s negligent attitude towards workers’ rights and safety, as well as enforcing proper environmental standards. “Clearly, no lessons have been learnt from the series of tragedies that have hit Gadani in the last year”, says Dr Muhammad Irfan Khan, member of the NGO Shipbeaking Platform’s Board. “More investments are sorely needed to ensure institutional capacity build-up. For the industry to be allowed to continue operating in Pakistan, authorities need to guarantee the protection of shipbreaking workers and the enforcement of existing environmental regulations”, he adds. Following the major blast on 1 November 2016, dubbed the worst tragedy in shipbreaking history and caused by several gas cylinder explosions, workers have over and over rallied in Gadani to protest against the deplorable working conditions and the lack of Government support in enforcing safety and occupational health laws. Evidently, by authorising the breaking of the ACES to commence again, without having even ensured that the tanks were cleaned, Pakistani authorities blatantly ignore workers’ calls as yards are allowed to return to business as usual and perpetuate the industry’s violent legacy. The appalling working conditions at Gadani are well-known, yet European ships are still being sold to Pakistan for breaking. In the third quarter of 2017 alone, seven ships – five German, one Greek, and one Norwegian – were sold to the Gadani beach for breaking. NGO Shipbreaking Platform “It is shameful that European ship-owners benefit from a situation where worker’s lives are continuously put at risk. Unless the yards are moved to industrial platforms away from the tidal beach where the safety of workers and the containment of pollutants can be ensured, we do not recommend the breaking of ships in Pakistan”, says Ingvild Jenssen, Director of the NGO Shipbreaking Platform. “How many more accidents and deaths at the Gadani beach is the global shipping industry ready to accept?”, she adds. Following yesterday’s fire, the Deputy Commissioner of Hub District – Mr. Mangal – set up an inquiry committee to look into to the EPA approval to resume breaking of the ACES and sealed the shipbreaking yard where it is beached. The Platform urges the Government to ensure that end-of-life ships are dismantled in safe and clean ship recycling facilities off the beach. Only then will safe working conditions and the protection of the coastal environment from pollution be safeguarded."

31 Oct 2017

RTI reply reveals 2 Indian seafarers logded in Egytian jail on charges of drug smuggling.

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"I had filed and RTI to know how many Indian Seafarers are in various Jails worldwide. Each Embassy shall reply in due course. I am thankful to Egypt Embassy for their reply. Presently there are two Indian Seafarers imprisoned in Egypt. Six Indian Seafarers were released form Egypt Jail in the year 2015. Let's brief our young joiners. Embassy of India Cairo Sub: Reply to RTI request no. MEACA/R/2017/50004 receipt dated 24/10/2017 From Capt Sanjay Prashar RTI Reply ad seriatim is as follows: 1. How many Indian Seafarers are in Egypt Country Prisons as on 24th Oct 2017. Please send us names of Indian Seafarers and give us records as well as details of the case against them Presently there are two Indian Seafarers imprisoned in Egypt (1) Mr Pavan Kumar Ruttla (2) Mr. Ramana Baggu These two Indian Seafarers were part of 7 member crew of Iranian Ship MV Abadan arrested by Egyptian authorities on 17th December, 2016 on charges of drug trafficking. The Egyptian Navy recovered 171 Kilograms of Heroin from the ship MV Abadan. They are presently lodged in a cell attached to El Quseir Police Station in Red Sea Governorate. The trial of this case started in April, 2017 and is still continuing in Safaga Court, Red Sea Governorate. The court held four hearings (9th April,2017, 11th June,2017, 6th August,2017 and 18th October,2017) of the case so far. The next hearing is slated on 12th December, 2017. 2. How many Indian Seafarers were released from Egypt prisons in the calendar year 2014, 2015, 2016 & 2017. Please send us names of Indian Seafarers and give us records as well as details of the case against them Indian Seafarers released from prisons in Egypt. (1) 2014 – Nil (2) 2015 – 6 (3) 2016 – Nil (4) 2017 – Nil 3. How many Indian Seafarers last remaining mortals were brought back to India from Egypt by PGE MEA in the Calendar year 2016 & 2017. Please send us country wise name of Indian Seafarers and give us records as well as details of the case against them. Nil 4. How many Indian Seafarers who reported as stranded in Egypt ports. Please send us names of Indian Seafarers and give us records as well as details of the reason for being stranded on ships. Presently no Indian Seafarer is stranded in Egypt Capt. Sanjay Prashar Managing Director V R Maritime Services Pvt Ltd"

20 Oct 2017

UAE and ITF to work together to solve abandonment cases

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"The United Arab Emirates (UAE) Federal Transport Authority (FTA) and the International Transport Workers' Federation (ITF) have agreed to work together to tackle abandonment cases in UAE waters. FTA and ITF officials met this week to discuss the increasing number of abandonment cases faced by the UAE and the Gulf State's desire to bring an end to the problem. Both parties agreed to develop a protocol to govern a closer working relationship, including increased cooperation and information exchange. The FTA officials announced that they would push for the UAE to ratify the Maritime Labour Convention 2006, and the ITF committed to provide advice, training and expertise to assist with this. David Heindel, chair of the ITF seafarers' section, said: ""I'm heartened that the FTA is taking this issue seriously. The scourge of shipowners who think that they can dump their ships and leave their crews without pay and essential supplies must be brought to an end. It is good to know that the FTA is taking the initiative and have already banned the vessels of one shipowner who repeatedly abused seafarers’ rights. This is setting a good example to other states in the region and I hope they will follow suit."""

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