Dubai lawyer keeps a watchful eye on corruption

Lawyer Sheila Shadmand says the Middle East culture of hospitality can coexist with international anti-corruption laws.

Sheila Shadmand, partner-in-charge at Jones Day, at her DIFC office in Dubai. Sarah Dea / The National

Sheila Shadmand moved to Dubai from Washington, DC in 2008 to open the Middle East offices of her law firm, Jones Day. The Iranian-American, 40, specialises in international litigation, arbitration and US regulatory compliance including anti-corruption. Here she talks about perceptions of corruption in the UAE and how the Middle East culture of hospitality can coexist with anti-corruption laws.

Why anti-corruption work?

I find it very interesting as a substantive area of law but I also think that corruption in general is harmful for public society and, in particular, harmful for public society in parts of the world where they don’t necessarily have access to a strong judicial system or strong rule of law. The people who suffer are the people who are in impoverished nations and people who don’t have a stronger voice. I conduct training programmes for clients all over the world and one of the things I often get asked is why the US government is trying to impose its policies on the rest of the world. I try to explain that corruption is something that really does touch all of us. For example, in India and Bangladesh we’ve had a few tragic examples where buildings have collapsed and people have been killed; those things happen and they can be bred to happen when you have an environment where public officials are being paid [bribed] to sign off on the health and safety code of a building when it’s not up to health and safety standards.

Is it correct to say the UAE is perceived as having low levels of corruption?

Transparency International [the global civil society organisation fighting corruption] does rank the UAE and Qatar pretty closely together and pretty closely with other western nations such as the US as having a low corruption perception. The perception of corruption is what prohibits people from investing; if a country has a high perception there many be a number of businesses and internationals who don’t want to take the risk and don’t invest in those countries. The perception of corruption can actually be harmful to a country’s economy.

Is the UAE putting the right legislation in place to create an environment free of corruption?

I definitely think so and I think that is reflected in why the UAE has a relatively low corruption perception. It is what makes investors feel much more comfortable with bringing their business to the UAE instead of some other Middle Eastern or Gulf country. Having a strong regulatory environment is very helpful; the DIFC is a perfect example of that. It’s a regulatory beacon in the Middle East where investors from around the world feel there is a strong and enforced regulatory environment. It makes people more comfortable when talking about investment. The stability of the government is a big factor as well. Understanding that there is a strong economy and a stable economy helps people understand that corruption is not a necessary means of doing business but rather the inverse is true: that it’s a strong competitive environment where the best goods and services are winning at the end of the day.

Is there any sense that people with the right political connections will win more deals here?

What the UAE has done very well is try to make sure the best of the world is here and what that engenders is the type of competition where the best goods and the best service is probably going to win the bid. When you have an economy that is as open as it is here, when it is open to international companies and international business, that provides a somewhat level playing field. That helps promote competition, fairness and further investment because people feel that if they have a better service or product they can come to this country and legitimately compete for it.

Is the Middle Eastern culture of hospitality and gifts at odds with efforts to eradicate corruption and bribery?

To some extent at surface level it is. But corruption is very much focused on the intent behind the gift and UAE anti-corruption laws are very much focused on that. So if you are generally promoting your service and product without that corrupt intent or [in expectation of a] quid pro quo or to unlawfully try to endure someone to change their mind about something through the gift or the hospitality, then that would be a violation of the laws. You can have an environment where gifts and hospitality of a reasonable nature are still allowed to legally coexist with a strong anti-corruption compliance programme. A number of companies here do have that. It’s just a matter of knowing what your policies are and setting out very standard procedures where clear lines are drawn, where there is no grey area.

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