US president-elect Joe Biden nominated retired four-star general Lloyd Austin as his defence secretary, adding an experienced Middle East hand with knowledge of regional uncertainties to his Cabinet.
Mr Austin, 67, if confirmed by the Senate, will be the first black secretary of defence and the third retired general since 1947 to take the position.
But his military past is a point of contention – some Democrats said they would prefer a civilian.
Mr Biden announced his choice on Tuesday afternoon. "Gen Austin shares my profound belief that our nation is at its strongest when we lead not only by the example of our power, but by the power of our example," the president-elect said. He emphasised that rebuilding US alliances, co-operating in facing threats and revitalising the military would be part of his nominee's mission.
To take up the position, Mr Austin will require a waiver from Congress, because he left the military only four years ago. According to the rules, an officer must be out of the military for seven years before taking up a civilian government position.
If confirmed as the 28th head of the Department of Defence, Mr Austin would bring years of experience in the Middle East.
He served as the commander of US Central Command between 2013 and 2016 and as the commanding general of US forces in Iraq between 2010 and 2011, overseeing the US withdrawal from the country under the administration of Barack Obama.
During his time in Iraq, he reportedly became close to Beau Biden, the late son of Joe Biden. Beau Biden, at the time holding the rank of Major, served on the staff of Gen Austin, and the two men often attended Catholic Mass together, remaining friends after their Iraq deployment. Beau Biden died of a brain tumor in 2015.
These shared experiences helped forge a working relationship between Mr Biden, who was vice president at the time, and Mr Austin.
It also exposed him to criticism for underestimating ISIS – the extremists took Mosul under his watch in Iraq in 2014 – and for the Obama administration’s unsuccessful efforts to train a rebel force in Syria.
But experts see Mr Austin as a trusted hand for Mr Biden and someone who understands the Middle East’s military situation as possible engagement between the US and Iran on a new nuclear deal advances.
Nicholas Heras, a defence analyst and director of government relations at the Institute for the Study of War, expected Iraq to be of crucial importance for the nominee.
"Gen Austin understands Iraq's role in Middle East policy like few other national security professionals, which is important because Iraq is a flashpoint between the US and Iran that if not managed properly could torpedo the Biden team's grand goal to reset with Iran," Mr Heras told The National.
He said that as the Biden administration prepares to negotiate with Iran over the nuclear deal, which President Donald Trump abandoned in 2015, Mr Austin would bring stability to the US military presence in the region.
“Gen Austin understands the strategic dilemma that Iran presents to the US in the Middle East," Mr Heras said.
"He saw first hand in Iraq how Iran's regional activities threaten the US and its partners, but also how the US can prioritise and execute a nuclear non-proliferation policy process towards Iran at the same time.”
Ryan Bohl, a Middle East and North Africa analyst at the US intelligence company Stratfor, said Mr Austin would bring restraint and balance to US military activity.
“He's likely to help hone the mission in Syria, which requires both restraint and nuance, and to shore up America's goals in Iraq and Afghanistan with what remaining forces the Trump administration leaves,” Mr Bohl said.
The Trump administration has ordered the withdrawal of 2,500 troops from Afghanistan, 500 from Iraq and nearly 700 from Somalia in recent weeks.
But Mr Austin, having seen the damage caused by rushed withdrawals from Iraq, is likely to show restraint.
Mr Bohl said, however, that too much restraint might embolden Tehran.
“Iran is highly likely to try some harassment tactics as the Biden administration takes power to test US resolve and pressure it to make concessions,” he said.
Mr Bohl said Mr Austin's mission for Gulf security would be unclear.
He said the Biden team “would push for GCC reconciliation between Saudi, the UAE, Bahrain, Egypt and Qatar to shore up the Gulf Arab side.
"But how they would respond to Iranian provocations is less clear.”
Mr Austin is on the advisory board for Raytheon, one of the world’s largest defence contractors.
It is a position he would relinquish, but it provides another reason for progressives to grill him during his nomination hearings.
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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