Members of Polish 18th Mechanised Division and members of the US 82nd Airbourne Division participate in a joint military training in Nowa Deba, Poland, in April. Reuters
Members of Polish 18th Mechanised Division and members of the US 82nd Airbourne Division participate in a joint military training in Nowa Deba, Poland, in April. Reuters
Members of Polish 18th Mechanised Division and members of the US 82nd Airbourne Division participate in a joint military training in Nowa Deba, Poland, in April. Reuters
Members of Polish 18th Mechanised Division and members of the US 82nd Airbourne Division participate in a joint military training in Nowa Deba, Poland, in April. Reuters


Has Nato just erected a new Iron Curtain across Europe?


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June 30, 2022

From Finland in the north to Greece in the south, from Romania in the east to Portugal in the west, a new Iron Curtain is descending over Europe as Nato looks to strengthen its ability to withstand the threat of Russian aggression.

In the two decades that Russian President Vladimir Putin has been in power, one of his frequent complaints has been that there is “too much Nato”, a reference to the organisation’s eastward expansion since the end of the Cold War, which resulted in a number of former Soviet nations joining the alliance. Indeed, one of Mr Putin’s justifications for invading Ukraine in February was his concern that the country, a key part of the former Soviet Union, was seeking Nato membership.

But if Mr Putin’s goal has been to reduce Nato’s presence in Europe, his efforts have been in vain if the conclusions of this week’s alliance summit in Madrid are anything to go by. For, far from backing down in the face of Russia’s demands, Nato leaders have opted for the opposite course of action, increasing their military presence in Europe while at the same time expanding the alliance to include Finland and Sweden.

US President Joe Biden meets Turkish President Recep Tayyip Erdogan during the Nato summit in Madrid on Wednesday. AP Photo
US President Joe Biden meets Turkish President Recep Tayyip Erdogan during the Nato summit in Madrid on Wednesday. AP Photo
Nato's plan to increase the number of rapid deployment troops in Europe from about 40,000 troops to 300,000 by the end of next year

Arguably the most eye-catching announcement is their plan to increase the number of rapid deployment troops in Europe from about 40,000 troops to 300,000 by the end of next year, a force that is more than equal to the height of Russia’s military strength. In addition, Nato’s border with Russia is about to expand by a further 1,300 kilometres in north-eastern Europe after Turkey finally relented on its attempts to prevent Sweden and Finland from joining over claims that the two countries were providing a safe haven for Kurdish separatists.

Their admission is a blow for Mr Putin, as it dramatically increases Russia’s isolation in Europe. Previously, for their own historical reasons, both countries had studiously observed a policy of neutrality during the Cold War. Sweden’s neutrality dated back to the Napoleonic Wars in the early 19th century, while Finland, which suffered heavy casualties fighting the Soviets during the Second World War, adopted a similar policy during the Cold War so as not to cause further friction with Moscow, thereby coining the phrase “Finlandisation”.

In the wake of Russia’s military assault on Ukraine, though, both countries have now taken the decision to throw their lot in with Nato, a move both countries believe is essential to safeguard their security from potential future threats from Moscow. They will now be reassured by Nato’s commitment reinforce Europe’s defences.

The military build-up is being led by Washington, with the US planning to send more destroyers, troops and air defence systems to Eastern Europe in the coming months. Speaking at the summit, US President Joe Biden remarked: “I said Putin’s looking for the Finlandisation of Europe. He’s going to get the NATOisation of Europe. And that is exactly what he didn’t want, but exactly what needs to be done to guarantee security for Europe. And I think it’s necessary.”

Nato membership.
Nato membership.

The Pentagon has agreed to deploy a brigade combat team to Romania as the first of what will be a new rotational American presence in the country, a capability that Bucharest has long asked for. The US will also increase its presence in Poland, setting up a permanent V Corps headquarters, an army garrison headquarters and a field support battalion, with the new forces helping with logistics and planning military exercises across the east. The American military also aims to augment its armoured, aviation, air defence and special operations forces in the Baltic region, establish new air defence units in Germany and Italy, and sending two F-35 squadrons to the UK.

The most visible part of the deployments will probably be two more Arleigh Burke-class destroyers that will be home-ported in Rota, Spain, making a total of six US warships capable of performing air defence missions and launching cruise missiles well inland. The destroyers will help patrol the Mediterranean, where Russian cruisers and submarines have been more active over the past year, and provide missile defence for southern European allies.

Britain and Germany have also pledged to commit more forces to defend Nato’s eastern flank. British Defence Secretary Ben Wallace announced he will place more soldiers, warplanes and a Royal Navy aircraft carrier on standby to head to the region. An extra 1,000 soldiers are to be committed to Estonia, where there are already 2,000 troops. One of Britain’s two aircraft carriers and its escort ships, as well as other naval assets, would also be offered to the alliance.

Nato’s build-up comes after its members agreed a new “strategic concept” that seeks to establish a blueprint for the alliance’s key objectives for the next decade. Indeed, in what amounts to a radical change of policy towards Moscow, Russia has now been identified as posing “the most significant and direct threat to allies’ security and to peace and stability in the Euro-Atlantic area”. In the previous doctrine agreed in 2010, Russia was described as a “strategic partner”. For the first time, China also merits a mention, with Nato warning that its “coercive policies challenge our interests, security and values”.

Nato Secretary General Jens Stoltenberg said the alliance had agreed that a “fundamental shift” in which it would return to Cold War-style readiness to respond to the perceived increased threat posed by Russia.

The dramatic developments certainly represent a significant setback for Mr Putin, whose aim during the past two decades has been to reduce Nato’s presence. Instead, as British Prime Minister Boris Johnson observed at the summit, Mr Putin now finds himself “getting more Nato”.

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Bantamweight: Jalal Al Daaja (JOR) beat Hamza Bougamza (MAR)

Catchweight 67kg: Mohamed El Mesbahi (MAR) beat Fouad Mesdari (ALG)

Lightweight: Abdullah Mohammed Ali (UAE) beat Abdelhak Amhidra (MAR)

Catchweight 73kg: Mosatafa Ibrahim Radi (PAL) beat Yazid Chouchane (ALG)

Middleweight: Yousri Belgaroui (TUN) beat Badreddine Diani (MAR)

Catchweight 78KG: Rashed Dawood (UAE) beat Adnan Bushashy (ALG)

Middleweight: Sallah-Eddine Dekhissi (MAR) beat Abdel Enam (EGY)

Catchweight 65kg: Yanis Ghemmouri (ALG) beat Rachid Hazoume (MAR)

Lightweight: Mohammed Yahya (UAE) beat Azouz Anwar (EGY)

Catchweight 79kg: Souhil Tahiri (ALG) beat Omar Hussein (PAL)

Middleweight: Tarek Suleiman (SYR) beat Laid Zerhouni (ALG)

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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. 

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

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Bangladesh tour of Pakistan

January 24 – First T20, Lahore

January 25 – Second T20, Lahore

January 27 – Third T20, Lahore

February 7-11 – First Test, Rawalpindi

April 3 – One-off ODI, Karachi

April 5-9 – Second Test, Karachi

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Alexander Zverev (x3)
Marin Cilic (x5)
John Isner (x8)

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Kevin Anderson (x4)
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Updated: July 01, 2022, 6:33 AM