Nine countries, including the Arab nations of Saudi Arabia, the United Arab Emirates (UAE), Egypt, Bahrain and Yemen, recently imposed sanctions on Qatar, accusing it of destabilizing the region by supporting extremist groups. These sanctions have resulted in a far-reaching boycott of Qatar.
As part of this boycott, these nine countries have terminated all diplomatic and consular ties with Qatar. Additionally, they have ended all land, sea, and air contact with the country. As a result, many EU companies face challenges due to the fact that much EU-Qatar trade goes via hubs in the region (for example, via the ports of the UAE). As a consequence of the current sanctions, it is no longer possible to use these “normal” shipping routes to Qatar.
Alternative shipping routes, for example via Oman, may be considered. In this respect, note that the current situation in the region is highly insecure and fragile. It is therefore very difficult to predict what the next moves of the various parties involved will be and whether other countries in the region (e.g., Oman) would impose similar sanctions.
In addition, companies need to be aware that the countries imposing sanctions have made clear in directives that any sympathy towards or direct interaction between individual citizens or companies with Qatar will result in criminal charges. EU companies with business operations directed towards Qatar should closely review the involvement of local branches/entities in the countries imposing sanctions. Furthermore, the re-routing of shipments via other countries, such as Oman, must be closely scrutinized from a circumvention point of view.
Lastly, this is an ongoing issue, and the situation is changing every day. The latest status is that the countries imposing sanctions have given Qatar a list of 13 demands to end the blockade. This list includes the shutdown of Al-Jazeera news channel and its affiliate stations.
Read a June 2017 report prepared by the KPMG member firm in the Netherlands
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.