• Lebanese President Michel Aoun, right, and US senior adviser for energy security Amos Hochstein with a letter of agreement over the maritime deal. EPA
    Lebanese President Michel Aoun, right, and US senior adviser for energy security Amos Hochstein with a letter of agreement over the maritime deal. EPA
  • Mr Aoun signs the US-brokered border deal at the Presidential Palace in Beirut. EPA
    Mr Aoun signs the US-brokered border deal at the Presidential Palace in Beirut. EPA
  • Israeli Prime Minister Yair Lapid, centre, at a special Cabinet meeting in Jerusalem to approve the deal. EPA
    Israeli Prime Minister Yair Lapid, centre, at a special Cabinet meeting in Jerusalem to approve the deal. EPA
  • Mr Lapid signs the agreement, which sets a maritime border between Israel and Lebanon. EPA
    Mr Lapid signs the agreement, which sets a maritime border between Israel and Lebanon. EPA
  • UN peacekeepers stand guard as Lebanese troops sit on an armored vehicle in Naqoura, near the Israeli border. Reuters
    UN peacekeepers stand guard as Lebanese troops sit on an armored vehicle in Naqoura, near the Israeli border. Reuters
  • London-based Energean's ship begins drilling at the Karish natural gas field off Israel. Reuters
    London-based Energean's ship begins drilling at the Karish natural gas field off Israel. Reuters
  • Israel gave London-listed Energean permission to begin producing gas from Karish, the offshore field at the heart of a maritime border agreement. Reuters
    Israel gave London-listed Energean permission to begin producing gas from Karish, the offshore field at the heart of a maritime border agreement. Reuters
  • Members of the UN peacekeeping force stand guard at a Lebanese-Israeli border crossing in Naqura. AFP
    Members of the UN peacekeeping force stand guard at a Lebanese-Israeli border crossing in Naqura. AFP
  • UN peacekeeping vehicles patrol Naqura. AFP
    UN peacekeeping vehicles patrol Naqura. AFP
  • Lebanese bathers swim at the southernmost border area of Naqura. AFP
    Lebanese bathers swim at the southernmost border area of Naqura. AFP
  • An Israeli military boat patrols Mediterranean waters around a border-marking buoy, off Naqura. AFP
    An Israeli military boat patrols Mediterranean waters around a border-marking buoy, off Naqura. AFP
  • Mr Lapid attends a Cabinet meeting in Jerusalem. Reuters
    Mr Lapid attends a Cabinet meeting in Jerusalem. Reuters
  • Mr Aoun, left, receives the final draft of the maritime border agreement with Israel. AP
    Mr Aoun, left, receives the final draft of the maritime border agreement with Israel. AP

Lebanon and Israel officially sign US-mediated maritime deal


Jamie Prentis
  • English
  • Arabic

Lebanon and Israel officially signed off on a maritime deal with each other, a milestone for two countries that technically remain at war.

Lebanese President Michel Aoun and Israeli Prime Minister Yair Lapid separately signed their respective versions, which finally demarcate their borders within the Mediterranean.

“This agreement was written with the idea in mind that it was between two countries that don’t have diplomatic relations,” said Amos Hochstein, the US energy envoy who mediated the indirect negotiations, after meeting Mr Aoun and other senior Lebanese officials at the presidential palace in Baabda.

The deal could in theory reduce the chances of conflict between Israel and Iran-backed Hezbollah, the influential Lebanese armed group and political party that had threatened Israel over any planned exploration of disputed areas before an agreement was reached.

Hezbollah chief Hassan Nasrallah said on Thursday that the signing of the deal is a “very big victory for Lebanon”. The Lebanese government had been careful not to take any steps “that even smelt of normalisation,” he said.

Mr Nasrallah said the “exceptional” military measures his group had taken in recent months against Israel had now ended with the conclusion of the deal. In July, Israel shot down three surveillance drones that Hezbollah had sent to a gasfield that was part of the dispute.

“All the exceptional and special measures and mobilisation carried out by the resistance for several months are now declared over,” Mr Nasrallah said.

Elias Bou Saab, Lebanon's Deputy Parliament Speaker and lead negotiator, said the demarcation agreement signalled the start of “a new era”.

The letter signed by Mr Aoun, which signalled Beirut's acceptance of the deal, was given to the UN in the presence of US officials at Lebanon's southernmost border point of Naqoura later on Thursday, he said.

Mr Aoun signed the deal in Baabda while Mr Lapid did so in Jerusalem.

The Lebanese president later insisted the deal did not represent a change in Lebanon's foreign policy.

The countries have never had diplomatic relations since Israel was created in 1948, with their border patrolled by a UN peacekeeping mission.

Mr Lapid had earlier on Thursday claimed that “it is not every day that an enemy country recognises the state of Israel, in a written agreement, in view of the international community”.

Israeli Prime Minister Yair Lapid signs the deal setting a maritime border between Israel and Lebanon. AP
Israeli Prime Minister Yair Lapid signs the deal setting a maritime border between Israel and Lebanon. AP

Lebanese officials have repeatedly insisted that the deal does not represent a working relationship, let alone a step towards normalisation between the countries.

US President Joe Biden offered his congratulations as the parties “took the final steps to bring the agreement into force and submitted the final paperwork” at Naqoura.

“As I said when this historic agreement was announced, it will secure the interests of both Israel and Lebanon, and it sets the stage for a more stable and prosperous region.

“The United States will continue to serve as a facilitator as the parties work to uphold their commitments and implement this agreement. Energy — particularly in the Eastern Mediterranean — should not be a cause for conflict, but a tool for cooperation, stability, security, and prosperity,” he said.

Both countries announced their verbal approval of the deal two weeks ago after months of negotiations mediated by Mr Hochstein.

Under the agreement, the disputed waters will be divided along a line that straddles the Qana prospect gasfield. Production and exploration will be based on the Lebanese side but Israel will be compensated for any gas extracted from its side of the line.

After meeting Mr Hochstein on Thursday morning, the office of Lebanon's caretaker prime minister Najib Mikati expressed hope that “what we have achieved will be an essential step on the path to benefiting from Lebanon's wealth of gas and oil, which will contribute to solving the financial and economic crises that Lebanon is going through, and help the Lebanese state to rise again”.

However, it will be years before Lebanon reaps any potential benefit from the Qana prospect. It remains unclear how viable Qana is for hydrocarbon exploration.

Lebanon is in dire need of any economic impetus that it can get amid a financial crisis described by the World Bank as one of the worst in modern history.

Much of the population has now been plunged into poverty, with widespread shortages of clean water, bread, medicines, electricity and other basic essentials.

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Profile of Bitex UAE

Date of launch: November 2018

Founder: Monark Modi

Based: Business Bay, Dubai

Sector: Financial services

Size: Eight employees

Investors: Self-funded to date with $1m of personal savings

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Lexus LX700h specs

Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor

Power: 464hp at 5,200rpm

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Fuel consumption: 11.7L/100km

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Company name/date started: Abwaab Technologies / September 2019

Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO

Based: Amman, Jordan

Sector: Education Technology

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Stage: early-stage startup 

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Updated: October 27, 2022, 2:44 PM