The UAE Ministry of Foreign Affairs issued a statement on Monday 5th June 2017 that United Arab Emirates, Saudi Arabia, Egypt and Bahrain were severing diplomatic ties with Qatar, as tensions escalate in the region over accusations that Doha sponsors terrorism.

It is important that all companies based in the UAE do comply with the current policy and we would like to outline to you what these developments mean for your company and which steps need to be considered to be in compliance.

The statement (copy attached) does not just cut diplomatic ties but goes further as under point 3 it was declared that all air and seaports will be closed for traffic to or from Qatar, independent of the vessels’ flag state.

In accordance with this decision, major UAE Ports have issued statements (attached) informing that vessels outbound from or calling to Qatar will have to leave UAE Ports immediately. Providing any kind of maintenance, crewing, bunkering, repairs or services is also not permitted anymore.

As many of our clients are either trading cargo to or from Qatar, having their ships calling Qatar, having financial transactions, insurance, flights etc. we have received many questions following the decision of the government and would like to address these as follows:

  1. The UAE Ports have been closed for ships outbound to Qatar or calling from Qatar.

By notifications sent on 6 June 2017, Abu Dhabi Ports and DP World have, with almost identical wording, banned the following vessels and cargo from calling to their ports or anchorages:

–          All Qatari flagged vessels;

–          Vessels going to / arriving from Qatar no matter the flag; and

–          Vessels having cargo destined for Qatar or coming form Qatar including transiting cargo.

Similarly, Fujairah and RAK Ports have already asked ships outbound to Qatar to leave. Also, bunkering, crewing etc. is not allowed anymore and alternative arrangements need to be made.

If a vessel is destined for Qatar, owners/charterers need to look at alternative Ports for bunkering, crewing, maintenance etc. We would strongly suggest to check with Bunker traders if your respective bunker is available in Qatar and you might need to deviate to other ports such as Sohar, Kuwait or Bandar Abas. These ports have confirmed that they are open for business, however, there is no guarantee and you need to monitor developments closely.

 

  1. A vessel inbound from Qatar with an interim call in Kuwait or any other port will be allowed to enter UAE Ports as currently the ports are only looking at the last port.

However, vessels carrying cargo loaded in Qatar will likewise not be allowed. We strongly recommend to monitor the developments closely as ports may change the process and might ask for the last five ports of calls.

 

  1. Financial Transactions

As per the attached update so far the UAE Central bank has not advised that financial transaction with Qatar will cease but is preparing guidelines and has asked banks to report their exposure to Qatari banks. Reportedly, Saudi Arabia’s central bank has advised banks not to trade with Qatari banks in Qatari riyals. Stakeholders are advised to check with their local bank as we have already received comments that banks have refused transfers.

 

  1. Charter Party Terminations

We have been asked by a couple of clients if charter parties with Qatar stated as destination can be terminated. It is of course to be looked at on case by case basis and may depend on the agreed terms and the applicable law. However, you may wish to look at your respective clauses on force majeure and frustration. If you have a specific query kindly give one of our lawyers a call.

 

  1. H&M Insurance provided by Qatar Insurance

So far we have seen no business interruption regarding hull and machinery cover taken out with Qatar Insurance, and we have not had any reports on problems with accepting that cover. If you have heard different kindly give us a call.

 

  1. Trading with Qatar

If your vessels are trading with Qatar and you are a UAE based company there are so far no consequences (save for the ones mentioned above) as the statement of the Ministry currently only focuses on closing Borders. However, if you are a branch of a Qatari company or vice versa your respective staff might be asked to leave the country as all Qatari citizens have been asked to leave the UAE within the next two weeks.

 

We will keep monitoring the developments and invite you to follow us on Twitter and Linkedin for further updates.

UAE cuts ties with Qatar – Recent Developments was last modified: June 22nd, 2017 by Fichte Legal