UAE firms can now do business with Israel
KHALIFA DECREE ABOLISHES ISRAEL BOYCOTT LAW OF 1972
President His Highness Shaikh Khalifa Bin Zayed Al Nahyan yesterday issued a Federal Decree abolishing the Israel Boycott Law.
The decree comes a little more than a fortnight after the UAE and Israel signed a peace accord. The Federal Decree— Law No. 04 of 2020, abolishing the Federal Law No. 15 of 1972 — provides for free movement of people and goods between UAE and Israel.
The Decree comes as part of the UAE’s efforts to expand diplomatic and commercial cooperation with Israel, and by laying out a roadmap towards launching joint cooperation, leading to bilateral relations by stimulating economic growth and promoting technological innovation, WAM reported.
Following the abolition of the Law, individuals and companies in the UAE may enter into agreements with bodies or individuals residing in Israel or belonging to it by their nationality, in terms of commercial, financial operations, or any other dealings of any nature.
Top US officials to travel on first Israeli flight to UAE
Based on the Decree, it will be permissible to enter, exchange or possess Israeli goods and products of all kinds in the UAE and trade in them.
The announcement came as
Israeli flag carrier El Al Israel Airlines Ltd prepared to operate the country’s first direct flight between Tel Aviv’s Ben Gurion Airport and Abu Dhabi. An Israeli government delegation and top aides to Trump, including his senior adviser Jared Kushner, are due to travel on the flight on August 31, a US official told Reuters.
UAE, Israeli banks in partnership talks
Meanwhile, talks for potential business partnership is underway between Dubai’s leading bank Emirates NBD and Bank Leumi of Israel, according to market sources.
Emirates NBD did not comment on the reports when approached by Gulf News.
Last Thursday, Bloomberg reported quoting Shmulik Arbel, head of Bank Leumi’s corporate division that the Tel Aviv-based lender is in cooperation talks with a ‘leading bank’ in Dubai without identifying the bank.
“The fact that Emirates NBD has not denied earlier reports of talks with the Israeli bank and the recent normalisation of diplomatic relations between the two countries point to something ‘really’ happening between two entities,” said a market source.
Mutually beneficial trade
Although the talks between the two entities are very significant as a first step towards the normalisation of business between the two countries, any deal of cooperation will require board level approvals of both banks and regulatory approvals of the central banks from both countries.
“The formalisation of ties with the State of Israel through this new law will pave way for more businesses in both countries to explore business opportunities,” said an analyst.
Analysts said the normalisation of ties would be mutually beneficial to both countries in terms of business and scientific cooperation.
Talks for potential business partnership is under way between Dubai’s leading bank Emirates NBD and Bank Leumi of Israel, according to market sources.
Emirates NBD did not comment on the reports when approached by Gulf News.
Last Thursday Bloomberg reported quoting Shmulik Arbel, head of Bank Leumi’s corporate division, that the Tel Aviv-based lender was in cooperation talks with a ‘leading bank’ in Dubai without identifying the bank.
“The fact that Emirates NBD has not denied earlier reports of talks with the Israeli bank and the recent normalisation of diplomatic relations between the two countries point to something ‘really’ happening between two entities,” said a market source.
Although the talks between the two entities are very significant as
a first step towards the normalisation of business between the two countries, any deal of cooperation will require board level approvals of both banks and regulatory approvals of the central banks from both countries.
Formalisation of ties
Following the announcement of the peace accord with Israel, President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, has issued a Federal Decree-Law No. 04 of 2020, abolishing the Federal Law No. 15 of 1972 regarding boycotting Israel and the penalties thereof. The Decree is expected to expand diplomatic and commercial cooperation with Israel.
“The formalisation of ties with the
State of Israel through this new law will pave way for more businesses in both countries to explore business opportunities,” said an analyst.
Analysts said the normalisation of ties would be mutually beneficial to both countries in terms of business and scientific cooperation.
“This [the normalised relations] will have important economic and geopolitical ramifications for both sovereigns, with the UAE particularly benefiting from enhanced tourism and transportation opportunities, while the formalisation of ties will support Israel’s improving security situation,” said Thaddeus Best, an analyst at Moody’s.
Analysts said with the law in place making the diplomatic and business relations now official, more business negotiations and cooperation agreements are likely in the days ahead.
Mutual benefits
According to rating agency Moody’s, over the medium term, the infusion of Israeli foreign investment, human capital and intellectual property could support the development of the knowledge economy in the UAE. “We expect it [Israel] will also benefit from the improving ties, particularly in sectors in which it can export expertise to the UAE such as IT, desalination technology, architecture, further medical cooperation and advanced agriculture,” said Best.
According to Israel’s Economy Ministry, the normalisation of ties could increase exports to the UAE to $300-$500 million annually (0.3%0.4% of Israeli exports), and UAE investments in Israel could reach $350 million a year (1.9% of inbound foreign direct investment). Israel will also benefit from access to more secure oil supplies, Moody’s said in a recent note.