Middle East - International Legal Developments Year in Review: 2021

This article surveys significant legal developments in the Middle East in 2021.

I. Egypt

After a lengthy legal reform process that was initiated in 2017 by the Egyptian Competition Authority (ECA), the Egyptian Council of Ministers announced in late November 2020 that they had approved a draft new competition law. The law will, among other things, overhaul the country’s merger control regime—moving it from a post-closing to a pre-closing notification requirement. In February 2021, the Economic Committee approved the draft law. To date, the legislator has, however, neither published the draft law nor communicated a date on which the new law will be published and will enter into force.

II. Iran

A. The Family Protection and Population Rejuvenation Act

During the past few years, Iran has taken essential steps towards changing the descending slope of the birth rate by enacting new regulations to encourage larger families. Accordingly, on November 10, 2021, Iran’s Parliament enacted the Family Protection and Population Rejuvenation Act (Act), which consists of seventy-three detailed articles. The Act—by outlining a wide-ranging set of financial benefits from loans to purchase houses and cars, to raising the maternity leave to nine months, and reducing the retirement age of mothers to forty-three years—provides a comprehensive package of encouraging assistance. Despite the extensive benefits, there are also valid concerns about the regulation, because the Act restricts abortion unless a pregnancy threatens a woman’s health, outlaws sterilization, and outlaws the free distribution of contraceptives in the public health care system.

B. The Value Added Tax Act

On May 23, 2021, the Parliament of Iran, in order to increase the Government’s income, enacted an unprecedent tax reform act, which consists of fifty-eight articles. Articles IX and X of the Value Added Tax Act grant tax exemptions for some basic commodities such as food and medicine, agricultural products, meat and fish products, books, immovable properties, one- to three-star hotels, public transportation services, and hand woven Persian rugs. More importantly, the Act grants tax exemptions to the importation of currencies, gold, platin, and jewelry to the country.

C. The Punishment Law of Betting in Cyberspace

Since the formation of Islamic Republic of Iran in 1979, Iran, like most countries under Islamic law, has had a ban on all forms of gambling. During the last few years and after the emergence of online gambling, the Government enacted new and specific regulations targeting the practice. Hence, on November 14, 2021, the Parliament passed Articles 705-711 of the Fifth Book of the Islamic Punishment Law, which addresses punishment of gambling in cyberspace. Among other proscriptions, the articles emphasize that if the verboten activities are carried out repeatedly by a group, they will be arrested. Thereafter, their insistence on committing the felony and lack of remorse may be considered by judges as disruption of Iran’s economic system and subsequently, corruption on Earth that would levy the death penalty. Notably, Article 705 grants exceptions for gambling on horse racing, camel racing, swordsmanship, and archery.

III. Iraq: Adverse Developments for Iraqi and Afghan P-2 Program Applicants

There are three programs that exist for immigration to the United States of Iraqis and Afghans who worked with U.S. forces: (1) Special Immigrant Visas (SIV) for Iraqi and Afghan Translators/Interpreters, or the Translators program, for short (remains active for both countries); (2) the Special Immigrant Visas program for Iraqi and Afghan nationals who were employed by/on behalf of the U.S. government, or the Allies program (which was discontinued for Iraqis, but continues for Afghans); and (3) the Direct Access P-2 Program under the U.S. Refugee Admissions Program (P-2 for short) for U.S.-affiliated Iraqis and Afghans who are not eligible for an SIV.

Earlier this year, the P-2 program for Iraqis was suspended by the Biden Administration because of widespread fraud, raising doubts about the integrity of this program for Afghans who were only recently designated for P-2 admissions weeks before the collapse of the U.S.-backed Kabul government.

The “Special Immigrant Visas (SIV) program for Iraqi nationals who were employed by/on behalf of the U.S. government” stopped accepting applications as of September 30, 2014. While the “Special Immigrant Visas for Afghan nationals who were employed by or on behalf of the U.S. government,” continues to offer protection to Afghan allies. The “Special Immigrant Visas for Iraqi and Afghan Translators/Interpreters” remains active.

With the termination of the SIV Allies program for Iraqi nationals, those (other than translators/interpreters) who face security threats because of their direct or indirect collaboration with the U.S. government could still, until recently, use the Direct Access Program (or P-2 category) available under the U.S. Refugee Admissions Program (USRAP) for an opportunity to resettle in the United States.

“This Direct Access Program was suspended indefinitely at the beginning of 2021.” U.S. officials announced in January [2021] the 90-day suspension of the Direct Access Program for U.S.-Affiliated Iraqis to address fraud vulnerabilities:

As the result of a joint investigation by the U.S. Department of State’s Diplomatic Security Service and the Department of Homeland Security’s Office of the Inspector General, the Department of Justice is prosecuting individuals for stealing U.S. government records from the Department of State’s Worldwide Refugee Admissions Processing System to take advantage of the Direct Access Program for U.S.-Affiliated Iraqis. This scheme specifically targeted applications for direct access to the U.S. Refugee Admissions Program made possible by the Refugee Crisis in Iraq Act of 2007.

“Eligible applicants include Iraqis inside or outside Iraq in danger because they worked for the U.S. government, as well as certain family members.” “More than 47,570 Iraqis have been resettled in the United States through the program, according to one State Department document.” According to an American pro bono attorney who works on Iraqi cases and requested her name not be revealed so as not to jeopardize her clients’ applications currently pending before the International Office for Migration (IOM), the Resettlement Support Center (RSC) for the Middle East and North Africa (MENA) based in Amman, Jordan, informed her in November 2021 that:

As announced by then Acting Secretary of State, as of January 22 the U.S. Government has suspended processing for all Iraqi P-2 applications pending further review. As of April 22, the Department of State has determined it is necessary to extend the suspension of the Iraqi P-2 program beyond the initial 90-day period as reviews are ongoing. Therefore, these cases have been placed on hold.

One prominent Iraqi human rights organizer who wishes to remain anonymous for safety reasons, stated that this pause “leaves Iraqis who worked for the American Army and their families in grave danger as these families are deemed to be traitors in the eyes of their Iraqi neighbors.” The Biden Administration has not set forth any deadline to restart the program and all pending applications have been placed on hold indefinitely.

IV. Kuwait

Following Saudi Arabia, Kuwait issued a new competition law (Law 27/2020) that shifted the Emirate’s merger control regime from market share-based, to a turnover and asset value-based notification threshold. While the thresholds were initially not specified, the Kuwaiti Council of Ministers defined these in late September 2021 by Ministerial Decree 26/202. According to the Decree, any transaction that involves a party which has an annual turnover in Kuwait exceeding 500,000 Kuwaiti dinar (KWD) (approximately $1.6 million); the parties to which have a combined annual turnover in Kuwait exceeding 750,000 KWD (approximately $2.5 million); or own assets in Kuwait with a combined value of 2.5 million KWD (approximately $8.3 million), requires notification under the Kuwaiti merger control regime. Thus, while similar to the Saudi merger control regime, the Kuwaiti regime relies on domestic instead of worldwide turnover thresholds, in contrast to the Saudi regime.

V. Lebanon

On August 4, 2020, a large quantity of ammonium nitrate exploded at the Port of Beirut, killing 218 people, displacing 300,000, and damaging approximately $15 billion worth of property. Less than one week later, Lebanese Prime Minister Hassan Diab resigned due to the blast. He and three former ministers were subsequently charged with negligence. But the probe against Diab was at least temporarily suspended in late October 2021, after he filed a suit questioning investigating Judge Tarek Bitar’s authority. As of publication, no party has been found legally culpable in connection with the explosion.

The Port of Beirut blast occurred while Lebanon was already suffering from one of the worst economic crises of the past 150 years. The Lebanese lira lost more than ninety percent of its value in recent years, and the Lebanese economy shrank by forty percent. This economic collapse was reportedly caused by political corruption, poor banking practices, economic isolation due to Lebanon’s close relationship with Iran, and overly ambitious government spending. The downward trend was exacerbated by the outbreak of COVID-19, the global economic crisis, and the 2020 explosion.

To make matters worse, Lebanon’s electrical network collapsed in October, after the state-owned utility had already reduced its supply to a few hours of power per day over the preceding months. Political actors in Lebanon also dickered over proposed changes to a key law impacting the scheduled legislative elections for March 2022. All of this occurred in a country that ranks second in the world in terms of the ratio of refugees to its native population.

VI. Saudi Arabia

In July 2021, the Saudi Merger Control Authority issued comprehensive merger guidelines. Following the overhaul of the Saudi merger control regime in September 2019, the guidelines provide clarification on merger control review procedures and introduce change of control and local effects tests. Both change of control and local effects tests remain comparatively broad, doing little to limit the application of the Saudi merger control regime. For instance, sales (or potential sales) of one party involved in the transaction may trigger a filing obligation. Aside from the changes in the merger control regime, the Saudi legislature took steps to require foreign investors to establish closer ties to the Kingdom. According to the pending headquarters law, businesses seeking to contract with the public sector will be required to domicile their Middle East headquarters in Saudi Arabia as of January 1, 2024. In addition, Saudi Arabia ceased extending preferential customs treatment to goods manufactured in other Gulf Cooperation Council countries unless they comply with strict local content requirements. Finally, with the Saudi data protection law, the Kingdom significantly limited the ability of businesses to store and process data outside of the country.

VII. United Arab Emirates

The United Arab Emirates (UAE) has taken a constructive step forward to enact a first of its kind law that seeks to provide a resilient and efficacious judicial framework to strengthen family laws, particularly for non-Muslims. The desire to maintain its status as a revered commercial focal point has led the UAE to bring its family laws on par with international best practices. Such practices include allowing an individual to freely practice religion and expression. The present legislation effectively amends its civil law to allow non-Muslims to pursue marriage, divorce, and seek joint custody of children. It further addresses associated issues relating to inheritance, paternity, and alimony, with an aim of bringing parity between men and women.

The enactment coincides with other legal developments in the State, such as the decriminalization of premarital sex. These developments provide the UAE space to modernize and realign its legal justice system with its global economic interests. The law further allows non-Muslims to marry at their will based on the consent of a woman, rather than the previous requirement to seek permission from her guardian. An expedient divorce mechanism has been established that abrogates the compulsory mediation rules and permits parties to pursue proceedings without claiming infliction of harm. It also allows parties to secure divorce at the first hearing with liberty to submit a request for alimony subsequently, which shall be considered on distinct factors such as the financial status of parties, their physical and emotional health, standards of living, and the need for financial support.

The custody provision gives due regard to the psychological health of a child and establishes custody as a joint and equal right. In the event of dispute, the welfare of child shall be the primary concern. Specialized courts shall be established to deal with family law of non-Muslims and for the efficient resolution of disputes. The proceedings shall be conducted in Arabic as well as English, to ensure judicial transparency.

In addition, the law institutes an elaborative framework for inheritance, wherein a non-Muslim spouse is required to register their will during the signing of a marriage certificate. In the absence of a will, the property shall be divided in equal shares between the surviving spouse and the children. In a case in which the deceased is not survived by children or spouse, property will reside with parents or siblings by default.

These legal developments are set forth as a part of the “Projects of the 50,” which aims to establish the UAE as a global hub for investment and talent. In addition to the establishment of individual family rights for non-Muslims, the initiative includes a data law drafted in conjunction with private technology companies that stresses upon individuals’ right to privacy and limits commercial entities’ ability to autonomously commoditize data.

VIII. Yemen

In February 2021, President Joe Biden announced that the United States was ending its support for the Saudi Arabian war against the Houthi government in Yemen. The Biden administration also reversed one of former President Trump’s last acts in office: the designation of the Houthis as a terrorist organization. The terrorist designation threatened to worsen the humanitarian crisis in Yemen by preventing civilian access to basic commodities like food and fuel—due to the chilling effect on importers who could have faced criminal penalties if products were to fall under Houthi control.

Despite Biden’s promise to step up “diplomacy to end the war in Yemen,” the fighting continued unabated through much of 2021. Saudi Arabia bombed targets in the country and maintained its blockade over both the Houthi-controlled port of Hodeidah and Sanaa’s International Airport. Meanwhile, Houthi troops gained new territory in the energy-rich eastern provinces of Shabwa and Marib, and prepared for a major offensive to restore control of some Red Sea coastal land south of Hodeidah that had been taken by UAE-backed forces in 2018.

In October, the UN Human Rights Council narrowly voted to reject a resolution, supported by a number of European nations, to allow independent investigators another two years to examine potential war crimes in the Yemeni war. Bahrain, Russia, China, and Pakistan were among the countries voting against the measure, the first time in the Council’s fifteen-year history that a resolution was rejected.

Tragically, Yemen continues to suffer what has been described by UNICEF as the world’s worst humanitarian crisis. Over 10,000 children have been killed or maimed since the war began in 2015, and “more than [eleven] million children (four in five) need humanitarian assistance.” Yemen’s GDP has dropped forty percent in that time, and one United Nations’ official has described the country as “on the brink of total collapse.”