The French stealth frigate Courbet is docked at Naval Base Guam, near Hagatna, Guam; France is suspending its involvement in a NATO naval operation of Libya's coast after a standoff with a Turkish ship and amid growing tensions within the military alliance over Libya AP
The French stealth frigate Courbet is docked at Naval Base Guam, near Hagatna, Guam; France is suspending its involvement in a NATO naval operation of Libya's coast after a standoff with a Turkish ship and amid growing tensions within the military alliance over Libya AP
The French stealth frigate Courbet is docked at Naval Base Guam, near Hagatna, Guam; France is suspending its involvement in a NATO naval operation of Libya's coast after a standoff with a Turkish ship and amid growing tensions within the military alliance over Libya AP
The French stealth frigate Courbet is docked at Naval Base Guam, near Hagatna, Guam; France is suspending its involvement in a NATO naval operation of Libya's coast after a standoff with a Turkish shi

France pulls out of Nato’s Mediterranean mission as it presses for sanctions on Turkey


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France has formally withdrawn from Nato’s naval mission in the Mediterranean Sea and called for fresh EU sanctions against Turkey over Ankara’s intervention in Libya.

Speaking at a security and defence committee meeting at the European Parliament, France’s Minister for the Armed Forces, Florence Parly, confirmed on Thursday that her country was withdrawing from operation Sea Guardian, the alliance’s security mission in the Mediterranean.

Ms Parly’s statements come as relations between France and Turkey, two Nato allies, reach a fresh nadir after a naval incident on June 10 in the eastern Mediterranean.

France had sought a Nato censure over the incident in which it claims its frigate, the Courbet, was harassed by Turkish vessels as it attempted to inspect a Tanzanian-flagged cargo ship suspected of being used by Turkey to flout Libya's arms embargo.

Ankara has denied the ship, the Cirkin, was supplying weapons to the Government of National Accord (GNA), which it supports in Tripoli, but has claimed instead that the vessel was carrying medical supplies.

Different viewpoints: Recep Tayyip Erdogan and Emmanuel Macron differ over future EU prospects for Turkey AP
Different viewpoints: Recep Tayyip Erdogan and Emmanuel Macron differ over future EU prospects for Turkey AP

The UAE has backed France in its standoff with Turkey. In the aftermath of the June 10 incident, Dr Anwar Gargash, UAE Minister of State for Foreign Affairs, said on Twitter that Abu Dhabi condemned the targeting of the French naval vessel.

Ms Parly is to speak with Minister of State for Defence Affairs Mohammed Al Bawardi later on Thursday.

Frustrated by an inconclusive probe by Nato into the maritime incident, Paris has now changed tack and is seeking EU sanctions against Ankara over its recent decisive intervention in Libya.

Ankara has turned the tide of Libya’s civil war in recent months, delivering air support and thousands of mercenaries to the GNA to end a year-long offensive on Tripoli by Field Marshal Khalifa Haftar's Libyan National Army.

Ankara has regularly accused Paris of backing Mr Haftar, though French officials have denied this.

A Libyan street vendor sells corn on the roadside by the waterfront promenade in the eastern port city of Benghazi AFP
A Libyan street vendor sells corn on the roadside by the waterfront promenade in the eastern port city of Benghazi AFP

France’s Foreign Minister Jean Yves Le Drian has called for a meeting of his EU counterparts on July 13 to discuss the possibility of further sanctions against Turkey.

Brussels has already imposed sanctions on Turkish officials linked to drilling operations in waters in the eastern Mediterranean.

However, the standoff in the region, centred on the decades-old dispute over Cyprus and the island’s frozen conflict, has increasingly come to intersect with the civil war in Libya.

In December 2019 the GNA and Turkey confirmed a new maritime border deal in the Mediterranean in exchange for subsequent military co-operation, which has had a profound effect on the ground in the North African nation.

The UAE, Egypt, France, Cyprus and Greece condemned the agreements that would give Turkey access to potentially lucrative natural gas reserves in the area.

Members of the Libyan National Army special forces gather in the city of Benghazi. AFP
Members of the Libyan National Army special forces gather in the city of Benghazi. AFP

Next Thursday, the European Parliament is to examine Turkey's role in the eastern Mediterranean, Libya and the incident with the Courbet.

The debate will be held at the request of the European People’s Party, a centre-right coalition in the parliament which includes the parties of Greek Prime Minister Kyriakos Mitsotakis and Cypriot President Nicos Anastasiades.

In Greece last week the EU’s foreign policy chief Josep Borrell travelled to the Greek border at Evros to indicate the bloc’s ongoing support for Athens in the face of ongoing Turkish hostility.

After the last round of sanctions brought by the EU against Turkey in November, Turkish President Recep Tayyip Erdogan said Ankara could step up its deportation of EU nationals who fought with ISIS and said he could renege on his country’s migration deal with the EU and allow millions of Syrian refugees to cross into mainland Europe.

Greece, which was the principal point of entry for illegal immigrants into Europe in 2019, has vowed to defend its borders and has not ruled out the possibility of a military confrontation with Turkey.

The EU has sought to secure Nato support for its own naval mission, Operation Irini, to impose the UN weapons embargo on Libya, but Turkey would be likely to block any such moves.

Despite its withdrawal from Operation Sea Guardian, France continues to contribute to Irini with its frigate Jean Bart.

The creation of the EU mission was one of the main conclusions of the Berlin Conference on Libya at the start of this year. However, at the same time as the conflict in Libya has fractured the Nato alliance, Irini has exposed differences in the EU between Italy and Malta on the one hand and France, Greece and Cyprus on the other.

During a virtual discussion with the Libyan National Army on Wednesday, the US stressed its opposition to all foreign interference in Libya and emphasised the need for an immediate ceasefire and return to UN-facilitated negotiations, the State Department said.

In a statement released on Thursday, it said the US delegation emphasised that the LNA's affiliation with the Wagner group, a Russian Ministry of Defence proxy, and perpetuation of the oil shutdown are at odds with US and Libyan interests and undermine Libyan sovereignty, increasing the risk of a conflict that could damage critical oil infrastructure.

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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.

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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

Timeline

2012-2015

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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

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December 2024

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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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