Nato needs to rapidly develop a new defence strategy to combat the reality of Russia being directly on its borders, a former US deputy defence secretary has said.
Jim Townsend said that if Russia conquers Ukraine along with controlling Belarus, the alliance will have to rip up its current defence doctrine and station heavy armour and troops on its eastern flank.
There will also have to be a considerable increase in European defence spending, potentially rising well above the current target, 2 per cent of GDP, set for Nato members, Mr Townsend and leading strategist Dr Jamie Shea told Britain’s Defence Committee.
European powers will also have to provide much of their own defensive power, with the US now more focused on the Pacific and the China threat.
Nato required a “whole new concept” to address President Vladimir Putin and it was no longer time to for “soft pedalling” by labelling Russia as a competitor rather than an enemy, said Mr Townsend, whose duties covered Russia and Nato policy during President Barack Obama’s administration.
“We’re going to have to really put the screws on all the allies to make sure we have what it takes to deter Putin,” he told MPs. “We have to assume he will be here, and that’s going to call for our allies to be doing a lot more than they’re doing now and Germany’s going to have to lead the way.”
But he said Nato had “played a great role” in demonstrating European unity against Russian aggression, although it would not put forces in Ukraine unless there was a “coalition of the willing”.
“There is nothing like fear to not only pull an alliance together but to get nations to do the right thing and the great example of that is Germany,” the former Pentagon official said. “Putin has done a great service to Nato and to the West by putting the fear of the wolf inside the house.”
Shortly after the Russian invasion, Germany announced it was increasing its defence budget to $100 billion a year and would exceed the requirement of 2 per cent GDP spending for Nato members.
With the extra funding Berlin is now expected to become a key Nato player in developing new weapons systems as well as increasing the size of its armed forces.
But there are deep concerns over the outcome of the war. If Russia loses, Mr Putin will be marginalised and perhaps resort to greater violence, including the use of nuclear weapons.
“What we don’t want to have is a Putin trapped if things don't go very well, we don't want him to be a wounded animal. We’ve got to figure out a way that we can help him to de-escalate,” said Mr Townsend, who is also of the Centre for a New American Security.
If the Russian leader conquers Ukraine, that will present other problems.
“If Ukraine collapses then it’s game over and we're going to deal with a rabid Putin on our hands.”
But even if Mr Putin did achieve his military objectives he will be left with a population incandescent at the needless deaths, Mr Townsend said.
“What will he do with a nation that is furious and has an armed insurgency? How does he expect to keep a puppet in Kiev? How does he go occupy that country and it not be very painful? It’s not just the fighting we have to worry about but what comes afterwards.”
The new Russian threat meant that Nato now had to “tear up” its post-Cold War defence strategy and make the “big choice” of stationing far more troops in the east, said Dr Jamie Shea, president of the Centre for War Studies at Southern Denmark University.
“The Russian threat to Nato has become so ominous that whatever the outcome of this crisis, substantial Russian forces are going to be in Belarus and in Ukraine with heavy armour,” he told MPs.
“They are going to be much closer to Nato, giving Nato far less warning time of a major attack.”
With Nato member Poland particularly under more pressure, the West must prepare “for a spill-over of the conflict on to Nato territory”.
Instead of having troops in home countries, with the flexibility to deal with civil emergencies such as flooding or Covid, they needed to be stationed in permanent bases in the east.
“Put the bulk of the armed forces on the front lines, as we did in the Cold War, with the understanding that we need a very heavy direct defence and that the best reinforcement is to have the troops already there,” Dr Shea said.
“This is the big choice that Nato has to make.”
Militaries must also accelerate production of new weaponry, such as drones, hypersonic missiles and space weapons, as well produce more tanks and rocket launchers to defeat the new Russia threat, he said.
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UAE%20ILT20
%3Cp%3E%3Cstrong%3EMarquee%20players%3A%3C%2Fstrong%3E%3Cbr%3EMoeen%20Ali%2C%20Andre%20Russell%2C%20Dawid%20Malan%2C%20Wanindu%20Hasiranga%2C%20Sunil%20Narine%2C%20Evin%20Lewis%2C%20Colin%20Munro%2C%20Fabien%20Allen%2C%20Sam%20Billings%2C%20Tom%20Curran%2C%20Alex%20Hales%2C%20Dushmantha%20Chameera%2C%20Shimron%20Hetmyer%2C%20Akeal%20Hosein%2C%20Chris%20Jordan%2C%20Tom%20Banton%2C%20Sandeep%20Lamichhane%2C%20Chris%20Lynn%2C%20Rovman%20Powell%2C%20Bhanuka%20Rajapaksa%2C%20Mujeeb%20Ul%20Rahman%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInternational%20players%3A%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3ELahiru%20Kumara%2C%20Seekugge%20Prassanna%2C%20Charith%20Asalanka%2C%20Colin%20Ingram%2C%20Paul%20Stirling%2C%20Kennar%20Lewis%2C%20Ali%20Khan%2C%20Brandon%20Glover%2C%20Ravi%20Rampaul%2C%20Raymon%20Reifer%2C%20Isuru%20Udana%2C%20Blessing%20Muzarabani%2C%20Niroshan%20Dickwella%2C%20Hazaratullah%20Zazai%2C%20Frederick%20Klassen%2C%20Sikandar%20Raja%2C%20George%20Munsey%2C%20Dan%20Lawrence%2C%20Dominic%20Drakes%2C%20Jamie%20Overton%2C%20Liam%20Dawson%2C%20David%20Wiese%2C%20Qais%20Ahmed%2C%20Richard%20Gleeson%2C%20James%20Vince%2C%20Noor%20Ahmed%2C%20Rahmanullah%20Gurbaz%2C%20Navin%20Ul%20Haq%2C%20Sherfane%20Rutherford%2C%20Saqib%20Mahmood%2C%20Ben%20Duckett%2C%20Benny%20Howell%2C%20Ruben%20Trumpelman%3C%2Fp%3E%0A
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
EMERGENCY PHONE NUMBERS
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
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Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
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UAE's role in anti-extremism recognised
General John Allen, President of the Brookings Institution research group, commended the role the UAE has played in the fight against terrorism and violent extremism.
He told a Globsec debate of the UAE’s "hugely outsized" role in the fight against Isis.
"It’s trite these days to say that any country punches above its weight, but in every possible way the Emirates did, both militarily, and very importantly, the UAE was extraordinarily helpful on getting to the issue of violent extremism," he said.
He also noted the impact that Hedayah, among others in the UAE, has played in addressing violent extremism.