Abu Dhabi // The frayed US-Saudi relationship is on course for further turbulence after a bill that would allow Riyadh to be sued by 9/11 victims’ families passed the senate unanimously.
The Justice Against Sponsors of Terrorism Act, approved by a voice vote in the United States senate on Tuesday, will now be taken up by the lower chamber of the US congress, putting the legislature on a collision course with the president.
The White House has said Barack Obama will veto the bill, arguing that the removal of sovereign immunity for foreign governments in domestic courts will set a precedent that will put Americans and US assets at legal risk abroad.
The bill, in particular, would allow lawsuits against Saudi Arabia, brought by 9/11 victims’ families in New York federal court, to proceed. These lawsuits are currently blocked by the 1976 Foreign Sovereign Immunities Act.
“Given the concerns that we’ve expressed, it’s difficult to imagine the president signing this legislation,” White House spokesman Josh Earnest said after the senate vote. The US administration may seek to have the bill altered to address its concerns or have it killed in the house altogether, Mr Earnest added.
The bill’s Democratic sponsor, senior senator Charles Schumer of New York, predicted that enough of his fellow party members would support an override of the veto to reach the requisite two-thirds congressional supermajority. He argued that because the legislation only pertains to terrorism carried out inside the country it will not open the door for lawsuits against the US overseas.
“If the Saudis did not participate in this terrorism, they have nothing to fear about going to court,” Mr Schumer said. “If they did, they should be held accountable.”
But if the Justice Against Sponsors of Terrorism Act eventually becomes law, it could seriously undermine ties with Riyadh.
The New York Times reported in April that Saudi foreign minister Adel Al Jubeir had warned members of congress his country would sell US$750 billion (Dh2.75 trillion) in US assets if the bill was passed. In a statement issued earlier this month, however, Mr Al Jubeir denied making this threat.
On Monday, the US treasury made public for the first time in more than 40 years the size of Riyadh’s holdings of US treasury debt – $116.8bn – though its overall assets in the US are likely worth more.
“In fact what they are doing is stripping the principle of sovereign immunities, which would turn the world of international law into the law of the jungle,” Mr Al Jubeir said in the statement.
Economists and analysts doubt that Riyadh would actually follow through in selling off its holdings, as it would have dire economic repercussions at a time of increasing fiscal pressures in the kingdom.
The bill, which was unsuccessfully put forward twice before, has emerged again as calls increase on the White House to declassify a controversial 28-page portion of the US 9/11 Commission report on the attacks. The pages allegedly include details on the role played by lower-level Saudi diplomats in the US in providing financial and logistical support for a number of the hijackers during their time in America ahead of the attacks.
Earlier this month the White House said it was nearing completion of a review of whether to declassify the pages.
In 2004, after an investigation of any official Saudi role, the commission said it found no evidence that the Saudi government “as an institution” was part of the plot or that “senior officials” were involved. The co-chairmen of the report issued a statement last month warning that the pages contain “raw, unvetted material”, that might incorrectly implicate innocent people
But in recent weeks, senior members of the commission have said publicly that there is evidence in those pages that indicate a number of low-level Saudi diplomats in the US, at least one of whom was suspected of being an intelligence agent, were part of a support network for a number of the attackers.
Over the past year and a half, the US National Archives has quietly declassified a number of documents from the commission’s 2004 investigation that provide a window into the content of the 28 pages. The documents are memos by the commission’s staff that include notes on the interrogations in the kingdom of former Saudi officials suspected of being part of the support network, but who were never prosecuted. The memos also catalogue connections between a handful of former officials and the hijackers.
At the time of the 2004 investigation, the then Saudi foreign minister, Saud Al Faisal, said Riyadh supported the declassification of the 28 pages, as it would show 9/11 was not a plot supported by the Saudi state.
tkhan@thenational.ae
Day 5, Abu Dhabi Test: At a glance
Moment of the day When Dilruwan Perera dismissed Yasir Shah to end Pakistan’s limp resistance, the Sri Lankans charged around the field with the fevered delirium of a side not used to winning. Trouble was, they had not. The delivery was deemed a no ball. Sri Lanka had a nervy wait, but it was merely a stay of execution for the beleaguered hosts.
Stat of the day – 5 Pakistan have lost all 10 wickets on the fifth day of a Test five times since the start of 2016. It is an alarming departure for a side who had apparently erased regular collapses from their resume. “The only thing I can say, it’s not a mitigating excuse at all, but that’s a young batting line up, obviously trying to find their way,” said Mickey Arthur, Pakistan’s coach.
The verdict Test matches in the UAE are known for speeding up on the last two days, but this was extreme. The first two innings of this Test took 11 sessions to complete. The remaining two were done in less than four. The nature of Pakistan’s capitulation at the end showed just how difficult the transition is going to be in the post Misbah-ul-Haq era.
Muslim Council of Elders condemns terrorism on religious sites
The Muslim Council of Elders has strongly condemned the criminal attacks on religious sites in Britain.
It firmly rejected “acts of terrorism, which constitute a flagrant violation of the sanctity of houses of worship”.
“Attacking places of worship is a form of terrorism and extremism that threatens peace and stability within societies,” it said.
The council also warned against the rise of hate speech, racism, extremism and Islamophobia. It urged the international community to join efforts to promote tolerance and peaceful coexistence.
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
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
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.”
World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
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Silent Hill f
Publisher: Konami
Platforms: PlayStation 5, Xbox Series X/S, PC
Rating: 4.5/5