Firms bid for contracts to fight pirates


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DUBAI // Eager to capitalise on the rising threat of Somali piracy, private security firms are lining up to win contracts to train maritime forces in Somalia.

And while the international community backs the idea of building up Somali forces fight piracy, it is raising eyebrows about the prospect of unregulated training and arming programmes that could later backfire.

Still, over 100 security firms have made pitches for contracts, said Saeed Mohamed Rage, the government minister overseeing counter-piracy for the Somali region of Puntland, where most pirates come from.

Some 20 firms had made offers in two days at an anti-piracy conference that ended here yesterday, he said. “Mostly they are European companies, Germans, Americans - a lot.”

Conference participants - including senior UN and government officials and industry executives from 50 countries - acknowledged the need for such a force.

In a statement, they endorsed “the provision of coordinated training as well as material and financial resources to improve land-based security capacity.”

Likewise Jack Lang, until recently the UN special adviser on piracy, identified local security as one of three pillars for his recommended solution, which was largely incorporated into a UN Security Council resolution passed last week.

“Police and on-land coast guards must be reinstalled in the pirate zones,” he said in a speech yesterday. “The international community must support this initiative... notably through training.”

But the prospect of privately trained forces in Somalia - already a warring, fractionalised and heavily armed country - has raised concerns.

Though the international community cannot ban private security firms from the country, under a UN arms embargo, the UN would need to approve any weapons they supplied.

The many firms eyeing the counter-piracy market needed to be open about their activities, said Col RJ Steed, a senior military adviser with the UN Political Office for Somalia.

“Private security companies must comply with the sanctions monitoring regime and they can only be used in a clear, transparent and open way so that their activities do not destabilise the region,” he said.

“We need to be very careful.”

The UN is training 500 Somali police officers in a $10 million programme,  but not in counter-piracy.

The only firm known to have secured a contract in Somalia so far is Saracen International, which, according to media reports, has ties to Blackwater founder Erik Prince and received backing from the UAE.

Mr Rage, the Puntland minister, said that since last June the firm has fulfiled a multi-million dollar contract to train 350 forces in counter-piracy. He said his government had not paid the contract, but declined to say who had.

The Puntland authorities plan to invite the UN to inspect the forces and seek permission to arm them, Mr Rage said. For now the men are waiting without pay.

The government has a letter of intent for a second contract with Saracen to train over 1,000 additional troops, he said.

The collaboration, which was revealed by the media in January, prompted international players like the US to step in.

“Our diplomats worked with all the usual folks to say, this is really going to create a problem, this is really not something that you want to do,” said Donna Hopkins, counter-piracy coordinator for the US State Department.

Security firms should wait until Somalia passes a law regulating such forces, and ensure that their forces will be sustainable, she said.

“Buying a bunch of boats and sticking guns in the hands of sailors that are half-trained is a backwards way to do it,” she said.

“First you develop the laws, then you build up the structures, then you develop the revenue streams, then you buy the equipment, then you train the people.”

Halliday Finch, a Nairobi-based firm that is seeking funds to build a 1,500-strong maritime police force on behalf of the government in Mogadishu, said it follows such steps.

The company has already trained 500 non-maritime police, said CEO Sam Mattock, and has kept the UN and other organisations abreast of its activities.

“We’ve said, let’s do this properly, let’s make it transparent,” he said. “No secrets.”

The firm has drafted a law for the government to submit to parliament that would regulate maritime police.

To ensure the force is sustainable, the firm aims to spend $52 million in the first year and train up an officer corps within two years. With a Kuwaiti partner, Mr Mattock said, he plans to solicit the funds from the Kuwaiti government.

Like others, he stressed the need to enable Somalis to fight piracy themselves. For one, they can police on land - stopping pirates before take to sea.

He faces stiff competition, he said. “There’s plenty out there.”

Some security firms, though, feel the possible harm outweighs the benefit.

“If you train up a special police group, and five years later it turns out that group is pretty despicable... It’s just too dangerous,” said one executive who declined to be named. “We have to be 100 per cent sure.”

chuang@thenational.ae

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.”

Timeline

2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

November 2025

180 Petrofac employees laid off in the UAE

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THE SPECS

2020 Toyota Corolla Hybrid LE

Engine: 1.8 litre combined with 16-volt electric motors

Transmission: Automatic with manual shifting mode

Power: 121hp

Torque: 142Nm

Price: Dh95,900

Know your Camel lingo

The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home

Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless

Asayel camels - sleek, short-haired hound-like racers

Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s

Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival

TEST SQUADS

Bangladesh: Mushfiqur Rahim (captain), Tamim Iqbal, Soumya Sarkar, Imrul Kayes, Liton Das, Shakib Al Hasan, Mominul Haque, Nasir Hossain, Sabbir Rahman, Mehedi Hasan, Shafiul Islam, Taijul Islam, Mustafizur Rahman and Taskin Ahmed.

Australia: Steve Smith (captain), David Warner, Ashton Agar, Hilton Cartwright, Pat Cummins, Peter Handscomb, Matthew Wade, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Glenn Maxwell, Matt Renshaw, Mitchell Swepson and Jackson Bird.

The specs

Engine: 2.2-litre, turbodiesel

Transmission: 6-speed auto

Power: 160hp

Torque: 385Nm

Price: Dh116,900

On sale: now

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

Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

Torque: 390Nm

Price: From Dh126,000

Available: Now