The final interim rule will apply to Pakistan and 35 other countries, including many that were part of the former Soviet Union. EPA
The final interim rule will apply to Pakistan and 35 other countries, including many that were part of the former Soviet Union. EPA
The final interim rule will apply to Pakistan and 35 other countries, including many that were part of the former Soviet Union. EPA
The final interim rule will apply to Pakistan and 35 other countries, including many that were part of the former Soviet Union. EPA

Israel exempt from new US firearms export restrictions


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The US on Friday exempted Israel from a new set of firearms export controls designed to reduce the risk of the weapons being used to add to regional instability, human rights abuses and drug trafficking.

“Too often, firearms exports fall into the wrong hands and end up being used in ways that directly undermine US national security and foreign policy interests,” Commerce Secretary Gina Raimondo said.

On October 27, the Commerce Department's Bureau of Industry and Security issued a 90-day “pause” on the issuing of new export licences for some firearms to “assess and mitigate risk of firearms being diverted to entities or activities that promote regional instability, violate human rights, or fuel criminal activities”.

Under the new rule, the department will apply “presumption of denial” to countries deemed by the State Department to be “high risk”.

The final interim rule, which takes effect on May 30, will apply to Pakistan and 35 other countries, including many that were part of the former Soviet Union.

The State Department said the countries pose a substantial risk that could lead to the misuse or diversion of firearms exports that could harm national security and foreign policy.

“These changes will help to enhance us national security and to promote US foreign policy interests, including by advancing human rights and fostering greater regional stability,” the Commerce Department said.

Israel, Ukraine and other US allies have been excluded from the list.

The department said in October it would continue to review licence applications for exports to Israel, Ukraine and other exempted countries.

This final interim rule comes months after a group of UN experts called on the US and other countries to halt the transfer of weapons to Israel that could be used in Gaza, saying it “is likely to violate international humanitarian law”.

The Human Rights Council has also recently backed a call to halt the sale, transfer and diversion of firearms and other military equipment to Israel.

State Department spokesman Matthew Miller told reporters in March that Washington has not found Israel to be in breach of humanitarian law.

The department will report to Congress in May if Israel's assurances that is has not violated international law are credible.

Canada, Spain, Japan, the Netherlands, Belgium and Italy have all suspended the shipment of weapons and other military equipment to Israel since October 7.

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UAE squad Rohan Mustafa (c), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Company profile

Name: Thndr

Started: October 2020

Founders: Ahmad Hammouda and Seif Amr

Based: Cairo, Egypt

Sector: FinTech

Initial investment: pre-seed of $800,000

Funding stage: series A; $20 million

Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC,  Rabacap and MSA Capital

Updated: April 26, 2024, 6:17 PM