Recent Legal Developments in Oman

Published in the January 2010 edition of the Business Today magazine in Oman

Taimur Malik

In line with the vision of HM Sultan Qaboos Bin Said, the legal system in the Sultanate of Oman continued to develop in 2009 as well. This article provides an overview of the important laws issued during the year and aims to highlight the varied nature of the topics covered by these laws.

FTA with Singapore

One of the significant Royal Decrees (RD) issued in 2009 is RD 8/2009 which relates to the ratification of the Free Trade Agreement (FTA) between the AGCC states and the Republic of Singapore. The FTA was signed on 15 December 2008 in Doha. It is the first FTA signed by the GCC bloc and includes comprehensive provisions on Trade in Goods, Rules of Origin, Customs Procedures, Trade in Services and Government Procurement.

Under the FTA, Singapore will give tariff free access to goods originating from the GCC countries and GCC member states will give duty free access to about 99% of the goods exported from Singapore. According to analysts, service sector firms are likely to benefit from this agreement as well because of enhanced access to the respective markets.

Amendments to the Labour Law

RD 63/2009 amends some provisions of the Labour Law. The amendments provide, inter alia, that employers shall be prohibited from (a) permitting any non-Omani employee whom they are authorized to employ to work with a third party, (b) employing any non-Omani employee who is permitted to work with a third party or who is unlawfully resident in the Sultanate, or (c) employing any non Omani employee in any occupation which has been Omanised. The non-Omani employee shall also be prohibited from working with anyone except the employer who is authorized to employ him.

The amendments also provide for stringent penalties and significant fines in the event of a violation of the provisions of the Labour Law (as amended). The amendments also clarify the compensation available to an employee in the event of wrongful termination by the employer.

These amendments to the Labour Law have wide ranging implications for small and large businesses alike and have been followed by a widespread crackdown on illegal workers (and companies employing them) in Oman.

IAEA Membership and Conventions

Oman became a member of the International Atomic Energy Agency (IAEA) in 2009 and RD 135/08 published in the Official Gazette of 03 January 2009 relates to this. The IAEA, with its headquarters in Vienna, now has 151 member states. Bahrain was the other GCC state which became a member of the IAEA in 2009. The IAEA is the world´s center of cooperation in the nuclear field. It was set up as the world´s “Atoms for Peace” organization in 1957 within the United Nations family. The IAEA works with its member states and other organizations worldwide to promote safe, secure and peaceful nuclear technologies.

Oman also acceded to two IAEA conventions in 2009 pursuant to RD 32/2009 and RD 33/2009. These include the Convention on Early Notification of a Nuclear Accident and Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency.

The Convention on Early Notification of a Nuclear Accident was adopted in 1986 following the Chernobyl nuclear plant accident, and establishes a notification system for nuclear accidents which have the potential for international transboundary release that could be of radiological safety significance for another state. It requires member states to report the accident’s time, location, radiation releases, and other data essential for assessing the situation.

The Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency was also adopted in 1986 and provides that if a member state needs assistance in the event of a nuclear accident or radiological emergency, it may call for such assistance from any other member state, directly or through the IAEA, and from the Agency, or, where appropriate, from other international intergovernmental organizations.

Avoidance of Double Taxation

As has been the case in previous years, Oman continued its drive to enter into avoidance of double taxation and investment protection agreements with various countries and many such agreements were concluded this year.

RD 6/2009 ratified the agreement on the avoidance of double taxation and income tax evasion between the government of Oman and the government of Belgium. RD 22/2009 is on the same subject in relation to Brunei and RD 38/2009 in relation to Uzbekistan.

RD 9/2009 relates to the ratification of the agreement on mutual encouragement and protection of investments with the government of the Kingdom of Netherlands. RD 14/2009 is on the same subject in relation to the Federal Republic of Germany, RD 43/2009 in relation to Uzbekistan and RD 73/2009 is with respect to the Belgian-Luxembourg Economic Union.

Income Tax Law

The new Income Tax Law was issued through RD 28/2009 and will take effect from 01 January 2010. Its implications have been discussed in detail in the earlier editions of this magazine.

Apostille Convention

RD 47/2009 relates to Oman’s accession to the Hague Convention on Abolishing the Requirement of Legalization for Foreign Public Documents (also known as the Apostille Convention).

The Apostille Convention facilitates the circulation of public documents executed in one state party to the Convention and to be produced in another State party to the Convention. It does so by replacing the cumbersome and often costly formalities of a full legalization process with the mere issuance of an Apostille. The citizens in the states party to the Convention enjoy the benefits of the Convention whenever they intend to produce a domestic public document in another state party which, for its part, requires authentication of the document concerned.

However, it should be noted that the Convention applies only to public documents. These are documents emanating from a public authority or official connected with a court or tribunal of the state. The main examples of public documents for which Apostilles are issued in practice include birth, marriage and death certificates; extracts from commercial registers and other registers; patents; court rulings; notarial acts and notarial attestations of signatures; and academic diplomas issued by public institutions etc.

Nawras Fixed Line Licence

RD 34/2009 relates to the grant of the first class licence to Omani Qatari Telecommunications Company S.A.O.C. (“Nawras”) for the establishment and operation of a common fixed telecommunications services system. As licence holder, Nawras is now entitled to provide fixed, data and international telecommunication services for customers in the Sultanate of Oman. The licence provides for the installation and operation of a fixed telecommunications services system for a period of 25 years, with frequency spectrum rights granted for 15 years. The entry of the second operator in the fixed line market segment is likely to prove beneficial for the customers as competition between the services providers will result in more competitive price plans.

Oil Agreements

Many RDs relate to the approval of Oil Agreements between the Government of the Sultanate of Oman and oil companies. RD 37/2009 approves the agreement with Petrotel (Oman) L.L.C., RD 15/2009 approves the agreement with Ibsilon Energy International Limited and RD 29/2009 with Harvest Oman B.V. and Oman Oil Company S.A.O.C.

Miscellaneous

A number of appointments to key government offices were made through Royal Decrees as well and these RDs related to the appointment of undersecretaries, non-resident ambassadors and advisers.
Meanwhile, RD 19/2009 ratified the Basic Statute of the AGCC Anti-Drugs Criminal Information Centre to be established in Qatar and RD 54/2009 related to the establishment of the National Centre for Field Research in the field of Environment Preservation.

Other important legislation include the RD 12/2009 which amended some of the provisions of RD 31/1996 (on the rules organizing investment of the funds of each of the Public Authority for Social Insurance and Pension and Retirement Funds), RD 26/2009 which ratified the agreement on mutual exemption of short residence visas for diplomatic, private and service passports between the Governments of the Sultanate of Oman and France, and RD 58/2009 which issued the Public Authority for Electricity and Water Law.

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