A minefield in the Donetsk region, a scene of much fighting in recent years. AFP
A minefield in the Donetsk region, a scene of much fighting in recent years. AFP
A minefield in the Donetsk region, a scene of much fighting in recent years. AFP
A minefield in the Donetsk region, a scene of much fighting in recent years. AFP


The window for diplomacy in Russia-Nato tensions is closing


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January 13, 2022

With an estimated 100,000 Russian troops camped on the Ukrainian border, there has never been a more urgent need for Russian and Nato leaders to find a way to resolve their differences.

Even though the Kremlin has consistently denied that it has any plans to invade Ukraine, and that the troops massed on its southern neighbour’s border are undertaking a routine military exercise, concerns persist as to the Russian force’s ultimate objectives.

Speculation has been mounting that Russia is preparing to launch a full-scale invasion of Ukraine since Moscow first began deploying its forces near Ukraine in November, with some analysts predicting that the offensive would take place this month.

Washington is now warning that the operation has only been delayed because the region has experienced an unusually mild winter, prompting US President Joe Biden to order a team of meteorologists to help forecast when a possible Russian invasion might take place. US officials have reported that the relatively mild weather makes a January invasion now unlikely, with large areas across the border and near the frontline constituting a muddy quagmire, providing less-than-ideal conditions for fighting.

Hopes of de-escalating tensions in the area have not been helped, though, by the Russian decision earlier this week to move helicopters and fighter jets towards the Ukrainian border.

The move follows Russia’s recent military intervention in Kazakhstan, labelled a "peacekeeping" mission by Moscow, which is being seen as a clear demonstration of the Kremlin’s willingness to act in decisive fashion when it comes to defending what it believes to be its overseas interests.

The increased activity on the Ukrainian border has certainly increased tensions at a time when intensive diplomatic efforts are underway to de-escalate the situation, with Russian and Western officials engaging in a series of high-level talks throughout the week.

  • A satellite image shows a Russian battle group deployment in the Kursk Training Area, Russia, on December 21, 2021. Reuters
    A satellite image shows a Russian battle group deployment in the Kursk Training Area, Russia, on December 21, 2021. Reuters
  • Russian forces in Soloti, Russia, on September 7, 2021. Reuters
    Russian forces in Soloti, Russia, on September 7, 2021. Reuters
  • A satellite image shows Russian forces in Soloti, Russia, on December 5, 2021. Reuters
    A satellite image shows Russian forces in Soloti, Russia, on December 5, 2021. Reuters
  • Russian forces in Soloti, Russia, on September 7, 2021. Reuters
    Russian forces in Soloti, Russia, on September 7, 2021. Reuters
  • A satellite image released by Maxar Technologies shows Russian armoured units training in the Pogonovo Training Area near Voronezh, Russia, on November 26, 2021. Reuters
    A satellite image released by Maxar Technologies shows Russian armoured units training in the Pogonovo Training Area near Voronezh, Russia, on November 26, 2021. Reuters
  • A satellite image released by Maxar Technologies reportedly shows Russian ground forces deployed at the Opuk Training Area on December 22, 2021. AFP
    A satellite image released by Maxar Technologies reportedly shows Russian ground forces deployed at the Opuk Training Area on December 22, 2021. AFP
  • Russian ground forces deployed at the Opuk Training Area on December 22, 2021. AFP
    Russian ground forces deployed at the Opuk Training Area on December 22, 2021. AFP
  • A satellite image of a Russian troop location in Soloti, Russia, provided by Maxar Technologies and taken on December 5, 2021. AP
    A satellite image of a Russian troop location in Soloti, Russia, provided by Maxar Technologies and taken on December 5, 2021. AP
  • A Russian troop location in Bakhchysarai, Russia. AP
    A Russian troop location in Bakhchysarai, Russia. AP

The talks have been convened after Russia set out a contentious set of demands at the end of last year, which sought to limit any extension of Nato influence in nations, such as Ukraine, that were formerly members of the Soviet Union.

Top of Moscow’s demands was that Nato provide a commitment that the likes of Ukraine and Georgia – another former Soviet state – would never be allowed to join the Nato alliance. In addition, Russia is calling on Nato to limit its military operations in eastern Europe, which Moscow views as a direct threat to its own security.

Tensions between Russia and the West have been steadily on the increase since Moscow’s 2014 military action against Ukraine, which resulted in the capture and annexation of Crimea, a move that has resulted in Moscow being subjected to wide-ranging sanctions.

Ukraine currently enjoys partner status with Nato, and Ukrainian President Volodymyr Zelenskiy has expressed interest in becoming a full Nato member, a move which would commit the alliance to protecting Ukraine’s sovereign integrity.

Another important factor in the dispute is that, under the terms of the 1994 Budapest Memorandum that Ukraine, together with Belarus and Kazakhstan, signed with the Organisation for Security and Co-operation in Europe (OSCE), the West agreed to provide the country with security guarantees in return for Kiev giving up its nuclear weapons.

Nato Secretary General Jens Stoltenberg in Brest. AP
Nato Secretary General Jens Stoltenberg in Brest. AP

But any attempt by Ukraine to press for Nato membership will be fiercely resisted by Mr Putin, who regards Ukraine as historically falling within Moscow’s sphere of influence and is bitterly opposed to the move.

Nor is the Ukraine issue the only one driving the recent increase in tensions between Moscow and the West. Apart from seeking to limit Nato from continuing its expansion in eastern Europe, a process that began with the fall of the collapse of the Soviet Union, Western diplomats believe Russia’s conduct on Ukraine’s border is also aimed at getting sanctions on its economy lifted. Moscow is also pressing for Europe to give approval for the controversial Nord Stream 2 gas pipeline, which runs from Russia to Germany, to become operational.

Hopes of any immediate breakthrough in the stand-off, though, have so far failed to materialise following four hours of talks between Nato and Russian officials in Brussels which ended on Wednesday with Western leaders flatly rejecting Moscow’s demands for no further expansion of alliance membership and the withdrawal of Nato forces from Eastern Europe.

Following the meeting, which followed a previous session of bilateral talks between the US and Russia, Nato Secretary-General Jens Stoltenberg said the allies were adamant they would not accede to Russia’s demand for a guarantee that Ukraine and Georgia never join the alliance, nor would they allow Moscow to dictate where allied countries choose to position their forces.

“We can discuss many issues but we cannot discuss some core principles,” he said. “There is a real risk of a new armed conflict in Europe,” Mr Stoltenberg said. “We are clear-eyed. So we also conveyed a message to Russia that if they use military force there will be severe consequences; economic sanctions; political sanctions.”

During the talks at Nato headquarters in Brussels, Nato officials proposed a series of additional meetings, but the Russians neither accepted nor rejected the offer, Stoltenberg said.

For the moment, diplomatic efforts to resolve the crisis are set to continue, with the dispute topping the agenda at Thursday’s OSCE meeting in Vienna, where the permanent council of the world’s largest security body, constituting 57 member states, will seek to break the impasse.

In an interview with the independent Russian TV channel Dozhd, Michael Carpenter, US ambassador to the OSCE, played down any immediate prospects of a breakthrough.

"I don't think there will be any concrete results this week," he said. "Our main goal is, in principle, to establish a dialogue. Yes, our positions are polar, but this does not mean that there are no elements and areas on which we cannot agree."

Nevertheless, with so much at stake, it is clearly in the interests of both sides to resolve their differences if a potentially disastrous conflict in Ukraine is to be avoided.

Gulf Under 19s final

Dubai College A 50-12 Dubai College B

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Ten tax points to be aware of in 2026

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. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

If you go

The flights

Emirates flies from Dubai to Seattle from Dh5,555 return, including taxes. Portland is a 260 km drive from Seattle and Emirates offers codeshare flights to Portland with its partner Alaska Airlines.

The car

Hertz (www.hertz.ae) offers compact car rental from about $300 per week, including taxes. Emirates Skywards members can earn points on their car hire through Hertz.

Parks and accommodation

For information on Crater Lake National Park, visit www.nps.gov/crla/index.htm . Because of the altitude, large parts of the park are closed in winter due to snow. While the park’s summer season is May 22-October 31, typically, the full loop of the Rim Drive is only possible from late July until the end of October. Entry costs $25 per car for a day. For accommodation, see www.travelcraterlake.com. For information on Umpqua Hot Springs, see www.fs.usda.gov and https://soakoregon.com/umpqua-hot-springs/. For Bend, see https://www.visitbend.com/.

Pox that threatens the Middle East's native species

Camelpox

Caused by a virus related to the one that causes human smallpox, camelpox typically causes fever, swelling of lymph nodes and skin lesions in camels aged over three, but the animal usually recovers after a month or so. Younger animals may develop a more acute form that causes internal lesions and diarrhoea, and is often fatal, especially when secondary infections result. It is found across the Middle East as well as in parts of Asia, Africa, Russia and India.

Falconpox

Falconpox can cause a variety of types of lesions, which can affect, for example, the eyelids, feet and the areas above and below the beak. It is a problem among captive falcons and is one of many types of avian pox or avipox diseases that together affect dozens of bird species across the world. Among the other forms are pigeonpox, turkeypox, starlingpox and canarypox. Avipox viruses are spread by mosquitoes and direct bird-to-bird contact.

Houbarapox

Houbarapox is, like falconpox, one of the many forms of avipox diseases. It exists in various forms, with a type that causes skin lesions being least likely to result in death. Other forms cause more severe lesions, including internal lesions, and are more likely to kill the bird, often because secondary infections develop. This summer the CVRL reported an outbreak of pox in houbaras after rains in spring led to an increase in mosquito numbers.

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Famous left-handers

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- David Bowie

- Paul McCartney

- Albert Einstein

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Updated: January 13, 2022, 2:45 PM