Ground Breaking Israel-United Arab Emirates Peace Deal Marks a Change in the Regional Business and Legal Landscape
On August 13, 2020, Israel and the United Arab Emirates (the “UAE”) announced a landmark peace deal – dubbed the “Abraham Accord.” The deal was announced after a call between Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi, US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu. The three leaders agreed to the “full normalization of relations” between Israel and the UAE. The UAE is now the first Gulf state and the third Arab country, after Egypt and Jordan, to establish diplomatic relations with Israel.
Following this announcement, the UAE President, Sheikh Khalifa bin Zayed Al Nahyan, issued Federal Decree Law No. 4 of 2020, which abolished Federal Law No. 15 of 1972 (the former Israel Boycott Law) as part of the UAE’s efforts to expand diplomatic and commercial cooperation with Israel, leading to the establishment of bilateral relations. This step officially revoked the UAE economic boycott against Israel, thereby allowing trade and financial agreements between the UAE and Israel in a key step towards normalizing ties between the two countries.
Companies and individuals in the UAE can now legally enter into agreements with companies, individuals or bodies residing in Israel or belonging to it by nationality as part of commercial or financial operations or other dealings. Specifically, the UAE and Israel have now opened up trade channels and investments in a wide range of sectors, and Israeli products can now be imported into and sold in the UAE. On August 29, 2020, the UAE’s Apex National Investment Company and Israel’s TeraGroup signed a “Strategic Commercial Agreement” to collaborate on research into COVID-19 and the development of a virus testing device. This marks the first publicly announced private sector business deal involving companies from the two countries since the normalization of ties.
The two countries are also expected to open channels for direct regular commercial flights, as well as establish embassies and appoint trade ambassadors. The first direct commercial flight from Israel to the UAE (using Saudi Arabian airspace) took place on August 31, 2020 carrying high-ranking US and Israeli delegations to the UAE capital, Abu Dhabi. The delegations will meet with UAE officials in the coming weeks to discuss and sign agreements related to investment, tourism, trade, defense, security, telecommunications, technology, healthcare, energy, culture and other areas. Israel is also expected to participate in the UAE’s delayed Expo 2020 in 2021 and have formal representation at the International Renewable Energy Agency in Abu Dhabi.
Following the Abraham Accord, on September 11, 2020, President Donald Trump announced an agreement between the Kingdom of Bahrain (“Bahrain”) and Israel and the beginning of a similar initiative for Bahrain and Israel to normalize diplomatic relations. The official signing ceremony took place at the White House on September 15, 2020. The US-Israel delegation is expected to travel to Qatar, Oman and Saudi Arabia at a later stage for broader regional peace negotiations.
Through our market-leading Dubai office and our broader Middle East practice, Mayer Brown lawyers provide on-the-ground legal counsel to clients across a broad spectrum of industries and geographies on various inbound and outbound matters, and on a wide range of intraregional matters. With decades of experience, our team’s deep personal and professional knowledge of the region, our fluency with both local and Western regimes and cultures, as well as our tried-and-tested network of trusted relationships all allow us to understand both the legal and the non-legal intricacies of doing business in and through the UAE and around the Gulf region, and to ensure businesses and investors avoid the many pitfalls of operating there. Likewise, Mayer Brown maintains a dedicated and diversified Israel practice with a longstanding commitment to the Israeli market, advising Israeli companies, investors and financial advisers for over 30 years. To learn more about how we can assist you and your business in respect of the UAE, Israel or the broader Middle East, please review our practice pages, or contact us directly.
