As he sets out priorities for his administration, US President Joe Biden has made it clear that he seeks to dissociate himself entirely from his predecessor Donald Trump.
While Mr Trump left Mr Biden few plans on how to deal with major domestic crises, he did leave behind a smart blueprint for America’s relations in the Arabian Peninsula. Embedded within it was a useful tool for helping to resolve the seemingly intractable conflict in Yemen, which has plagued Yemen and the region for nearly six years.
As a parting shot for the administration, Mike Pompeo, Mr Trump's secretary of state, announced in January that the Houthi rebel group controlling most of Yemen would be formally designated a terrorist organisation by the US. The designation, according to Mr Pompeo, was "intended to hold them accountable for terrorist acts, including cross-border attacks threatening civilian populations". But it was also, he noted, "intended to advance efforts to achieve a peaceful, sovereign and united Yemen that is both free from Iranian interference and at peace with its neighbours".
It is difficult to argue with any of those intentions, or the facts underwriting them. Since overthrowing Yemen's government in 2014, the Houthis have imposed a brutal regime. They have hardened further an already-extremist ideology ("Death to Jews" is a popular Houthi cry) and preached propaganda to the population, glorifying violence and promoting false conspiracy theories, including about coronavirus. The Houthis have conscripted child soldiers into their forces, murdered dissenters and sought to destroy much of Yemen's critical infrastructure. On December 30, the group attacked Aden's airport, injuring one of The National's reporters, among others.
The Houthis have also cultivated a dangerous relationship with Iran, which has supplied them with strategic advice, money and weapons. By entering the Iranian tent, they hope to join a regional network of proxies that subvert peace and promote sectarianism in the name of a supposed revolution. But there is no revolutionary vision – only a naked attempt by Tehran to accrue power for power's sake. It is telling that when the UN's Yemen envoy Martin Griffiths embarked on a diplomatic mission yesterday to seek an end to the Yemen crisis, his plane took him to Tehran.
Houthi supporters chant slogans as they attend a demonstration against the United States over its decision to designate the Houthis a foreign terrorist organization in Sanaa, Yemen. AP Photo
A member of security forces loyal to Yemen's Houthi rebels stands guard as supporters attend a rally denouncing the United States and the Trump administration's decision to apply the "terrorist" designation to the Iran-backed movement. AFP
A Houthi supporter holds his weapon during a demonstration against the United States over its decision to designate the Houthis a foreign terrorist organization in Sanaa, Yemen. AP
Opposers of Yemen's Houthi rebels shout slogans during a rally in support of the United States and the Trump administration's decision to apply the "terrorist" designation to the Iran-backed movement, in Yemen's third city of Taez. AFP
Opposers of Yemen's Houthi rebels shout slogans during a rally in support of the United States and the outgoing Trump administration's decision to apply the "terrorist" designation to the Iran-backed movement, in Yemen's third city of Taez. AFP
Yemenis opposed to the country's Houthi rebels take part in a rally in support of a recent decision by the United States' outgoing administration blacklisting the Houthi group as a "terrorist" organisation in Yemen's third city of Taez. AFP
A joint Saudi-backed Sudanese-Yemeni force removes landmines, which they said were planted by the Iran-aligned Houthi rebels in Yemen's northern coastal town of Midi, in the Hajjah governorate. AFP
The Saudi-backed Sudanese-Yemeni force removes and de-activates landmines in the Hajjah governorate near the border with Saudi Arabia on the Red Sea. AFP
The force collected some 5,000 landmines. AFP
A shot shows landmines collected by the Sudanese-Yemeni force. AFP
An expAFP
The Houthis have conscripted child soldiers
Designating the Houthis terrorists seemed, at the very least, an exercise in stating the obvious. But it also provided the Biden administration with leverage to use in the much-needed peace negotiations that will prove the only way to solve Yemen’s crisis. Last week, however, Mr Biden reversed Mr Pompeo’s move, under pressure from critics in Washington who feared that the designation, which sanctioned entities that deal with the Houthis, would obstruct the flow of aid to the Yemeni people. This is despite the fact that the work of relief agencies have been affected by the actions of the Houthis, who have taxed aid and extorted aid workers, in addition to occasionally blocking their activities altogether.
The war in Yemen has come at a significant humanitarian cost. The UAE withdrew its own forces last October and has continued to push for diplomatic solutions since. But the foremost obstacle to these solutions is the Houthis – who have enthusiastically exploited the humanitarian disaster and the presence of UN agencies for their own profit.
The consolation is that as Mr Biden cast aside one valuable tool, he replaced it with another. He has chosen for his Yemen envoy Timothy Lenderking, a foreign policy veteran with strong relationships with Gulf allies and a deep knowledge of Yemen. These are excellent qualities of which Mr Lenderking can avail himself as he works in the service of peace. But with the Houthis only digging in and Washington’s leverage fading, he will need also need some luck.
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
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