	(296218,28388,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8212 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"141\" height=\"650\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
	(296219,28388,'MetaLink','content'),
	(296220,28388,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8186&amp;action=edit'),
	(296221,28388,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8212 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"141\" height=\"650\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8212 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"119\" height=\"549\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
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	(296229,28389,'PostTitle','Regulation of Crypto Assets at ADGM'),
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	(296231,28389,'PostDate','2018-09-03 17:24:52'),
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	(296239,28390,'PostID','8186'),
	(296240,28390,'PostType','law_update_articles'),
	(296241,28390,'PostTitle','Regulation of Crypto Assets at ADGM'),
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	(296243,28390,'PostDate','2018-09-03 17:24:50'),
	(296244,28390,'PostUrl','http://localhost:8888/tamimi/?post_type=law_update_articles&p=8186'),
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	(296251,28391,'PostID','8186'),
	(296252,28391,'PostTitle','Regulation of Crypto Assets at ADGM'),
	(296253,28391,'PostStatus','draft'),
	(296254,28391,'PostType','law_update_articles'),
	(296255,28391,'PostDate','2018-09-03 17:25:16'),
	(296256,28391,'PostUrl','http://localhost:8888/tamimi/?post_type=law_update_articles&p=8186'),
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	(296258,28391,'MetaKey','content'),
	(296259,28391,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8212  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"106\" height=\"489\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
	(296260,28391,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8212 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"119\" height=\"549\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
	(296261,28391,'MetaLink','content'),
	(296262,28391,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8186&amp;action=edit'),
	(296263,28391,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright wp-image-8212 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"119\" height=\"549\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />|<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8212  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"106\" height=\"489\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
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	(296271,28392,'PostTitle','Regulation of Crypto Assets at ADGM'),
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	(296273,28392,'PostDate','2018-09-03 17:25:19'),
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	(296279,28392,'CurrentUserRoles','a:2:{i:0;s:13:\"administrator\";i:1;s:10:\"superadmin\";}'),
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	(296281,28393,'PostID','8186'),
	(296282,28393,'PostType','law_update_articles'),
	(296283,28393,'PostTitle','Regulation of Crypto Assets at ADGM'),
	(296284,28393,'PostStatus','draft'),
	(296285,28393,'PostDate','2018-09-03 17:25:16'),
	(296286,28393,'PostUrl','http://localhost:8888/tamimi/?post_type=law_update_articles&p=8186'),
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	(296288,28393,'ClientIP','83.111.236.141'),
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	(296293,28394,'PostID','8186'),
	(296294,28394,'PostTitle','Regulation of Crypto Assets at ADGM'),
	(296295,28394,'PostStatus','draft'),
	(296296,28394,'PostType','law_update_articles'),
	(296297,28394,'PostDate','2018-09-03 17:26:17'),
	(296298,28394,'PostUrl','http://localhost:8888/tamimi/?post_type=law_update_articles&p=8186'),
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	(296301,28394,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8212 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"106\" height=\"489\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n <img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
	(296302,28394,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8212  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"106\" height=\"489\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
	(296303,28394,'MetaLink','content'),
	(296304,28394,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8186&amp;action=edit'),
	(296305,28394,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8212  alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"106\" height=\"489\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n<img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />|<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-8212 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/1-222x1024.jpg\" alt=\"\" width=\"106\" height=\"489\" />Taking a lead on the regulation of crypto assets in the Abu Dhabi Global Market (\"ADGM\"), the Financial Services Regulatory Authority (\"FSRA\") issued <em>Guidance on Regulation of Crypto Asset Activities in ADGM</em> (the \"Regulations\"). The Regulations are supplementary to and should be read in conjunction with FSRA’s <em>Guidance on Regulation of Initial Coin/Token Offerings and Virtual Currencies under the Financial Services and Markets Regulations 2015</em> issued on 9 October 2017 (the \"ICO Guidance\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations together with applicable rules and regulations governing crypto assets, as issued by the FSRA, provides for a comprehensive Spot Crypto Asset Framework (the \"Framework\"). The Regulation sets out and limits the FSRA’s approach to the regulation of crypto asset activities in and from the ADGM, including activities conducted by crypto asset exchanges, crypto asset custodians and intermediaries engaged in crypto asset activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For purposes of the Regulations and the Framework, <em>Crypto Assets</em> are a digital representation of value that can be digitally traded and functions as a: (a) medium of exchange; (b) unit of account; and/or (c) a store of value. These: (i) do not have a legal tender status in any jurisdiction; (ii) are neither issued nor guaranteed by any jurisdiction and fulfil its functions only by agreement within the community of users of such assets; and (iii) are distinguished from fiat currencies including electronic money.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Initial Coin Offerings</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Framework is not intended to apply to initial token or coin offerings (\"ICOs\") and such offerings will continue to be regulated in accordance with the ICO Guidance. The ICO Guidance clarifies the nature of token offerings (utility or security) that are permissible in the ADGM.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Objectives of the Framework</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">While, the fact that crypto assets can be created, stored and transferred without the need of any third party makes it attractive for its users, it also raises significant regulatory concerns for regulatory authorities and law enforcement agencies worldwide, particularly in relation to money laundering, terrorism financing, consumer protection, market abuse, amongst other risks.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA under the Framework addresses these risks in addition to issues that may arise in connection with protection of client money, safe custody, technology governance and disclosure and transparency, which makes it an attractive and comparatively secure jurisdiction for conducting crypto related activities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Notwithstanding that crypto assets are deemed as commodities and are not considered a \"Specified Investment\" (for purposes of Financial Services and Markets Regulations, 2015, as may be amended from time to time (FSMR)), to ensure adequate consumer protection, while meeting demands in this market space, the FSRA has rightly provided for certain activities associated with crypto assets to be regulated. The diagram sets out FSRA’s approach in relation to different type of digital assets.</p>\r\n <img class=\"aligncenter wp-image-8188 size-large\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/Article-Graph-1-1024x525.jpg\" alt=\"\" width=\"640\" height=\"328\" />\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Operating a Crypto Asset Business</h3>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\">Who can Operate a Crypto Asset Business (\"OCAB\") in and from the ADGM?</h4>\r\n<ul>\r\n 	<li dir=\"LTR\">new applicants;</li>\r\n 	<li dir=\"LTR\">authorised persons (i.e. persons authorised to carry on other regulated activities within the ADGM); and</li>\r\n 	<li dir=\"LTR\">recognised investment exchanges.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Amongst these, applicants that qualify for authorisation under the Framework will be granted a Financial Service Permission (\"FSP\") to carry on regulated activity of OCAB.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">OCAB permits undertaking of one or more crypto asset activities, which include:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">buying, selling or exercising any right in accepted crypto assets (whether as principal or agent);</li>\r\n 	<li dir=\"LTR\">managing accepted crypto assets belonging to another person;</li>\r\n 	<li dir=\"LTR\">making arrangements with a view to another person (whether as principal or agent) buying, selling or providing custody of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">marketing of accepted crypto assets;</li>\r\n 	<li dir=\"LTR\">advising on the merits of buying or selling of accepted crypto assets or any rights conferred by such buying or selling; and</li>\r\n 	<li dir=\"LTR\">operating a crypto asset exchange or operating as a crypto asset custodian.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The FSRA’s approach to the regulatory treatment of crypto assets in the ADGM is encouraging. The Framework makes it evident that: (a) crypto asset activities may only be permitted in connection with crypto assets that are categorised as \"Accepted Crypto Assets\" i.e. those crypto assets that fulfil criteria prescribed by the FSRA; and (b) any person dealing with such accepted crypto assets including intermediaries (such as brokers/dealers, asset managers, crypto asset exchanges, crypto asset custodians) involved in dealing, managing or arranging Accepted Crypto Assets, would require an FSP to operate in and from the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However: (i) creation or administration of crypto assets; (ii) development, dissemination or use of software for the purpose of creating or mining a crypto asset; (iii) transmission of crypto assets; (iv) loyalty points scheme denominated in crypto assets; and (v) such other activity as may be determined by the FSRA to not constitute OCAB, shall not constitute OCAB and therefore will not be subject to the Framework.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Crypto Asset Exchanges and Crypto Asset Custodians</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst most of the crypto asset activities are subject to similar regulations within the Framework, the FRSA considers the crypto asset activities conducted by crypto asset exchanges and crypto asset custodians a key crypto activity in the ADGM. Therefore the Framework levies specific additional requirements applicable to such participants.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Exchanges</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the requirements applicable to other crypto asset activities, additional requirements for a crypto asset exchange would include substantial commercial, governance, compliance, technical, information technology and human resources presence within the ADGM. A recognised investment exchange may operate as a crypto asset exchange, as part of the regulated activity of OCAB, provided that recognition order of such exchange includes a stipulation, permitting it to do so. In such cases, such exchanges would be subject to the Framework (including fees applicable for conducting OCAB) in addition to other regulations and fees (including market infrastructure rule), it already is subject to.</p>\r\n&nbsp;\r\n<h4 dir=\"LTR\" align=\"LEFT\"><em>Crypto Asset Custodians</em></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">As regards crypto asset custodians, the FRSA has taken a similar approach to that of other custodian activities permitted within the ADGM. In order to afford the same protection the FSRA offers to other similar products within the FSMR (including relevant rule books) it has widened the scope of definitions of \"Providing Custody\", \"Client Assets\", \"Client Investments\" and \"Investment Business\" (as defined under the FSMR) to include crypto assets and OCAB.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Fees</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The fees for OCAB are comparatively higher than most other regulated activities within the ADGM. In addition to the fees applicable to crypto asset exchanges, a trading fees is levied on such exchanges, which is payable on a monthly basis. This is calculated as a percentage of trades conducted for each month.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations are a welcome change and seem to address regulatory requirements around crypto asset activities within the ADGM. We are hopeful that this would encourage other financial regulators within the region to issue regulations and therefore provide options to potential applicants.</p>\r\n<em>Al Tamimi &amp; Company’s banking and finance team regularly advises on issues in relation to crypto assets. For further information please contact Ms. <a href=\"http://localhost:8888/tamimi/lawyer/divya-abrol-gambhir/\">Divya Abrol Gambhir</a> (<a href=\"mailto:d.abrol@tamimi.com\">d.abrol@tamimi.com</a>) or Mr. <a href=\"http://localhost:8888/tamimi/lawyer/ashish-banga/\">Ashish Banga</a> (<a href=\"mailto:a.banga@tamimi.com\">a.banga@tamimi.com</a>).</em>\r\n\r\n&nbsp;\r\n\r\n<img class=\"aligncenter wp-image-8213 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/2.jpg\" alt=\"\" width=\"1597\" height=\"118\" />'),
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	(296367,28399,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\"size-full wp-image-8221 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"596\" height=\"284\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.');

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The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. 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Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n\r\n<dir>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n\r\n</dir>\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.|<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\"size-full wp-image-8221 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"596\" height=\"284\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296413,28403,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\"size-full wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"596\" height=\"284\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
	(296414,28403,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\"size-full wp-image-8221 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"596\" height=\"284\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296417,28403,'ReportText','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\"size-full wp-image-8221 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"596\" height=\"284\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.|<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\"size-full wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"596\" height=\"284\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296455,28406,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"634\" height=\"302\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
	(296456,28406,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. 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The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. 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Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. 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The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\"size-full wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"596\" height=\"284\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.|<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"634\" height=\"302\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296497,28409,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"422\" height=\"201\" />\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
	(296498,28409,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"634\" height=\"302\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296501,28409,'ReportText','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"634\" height=\"302\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.|<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"422\" height=\"201\" />\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296539,28412,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"449\" height=\"214\" />\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. 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Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. 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Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"422\" height=\"201\" />\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296543,28412,'ReportText','<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"422\" height=\"201\" />\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.|<p dir=\"LTR\" align=\"LEFT\">The Saudi National Center for Privatization and PPP (\"NCP\") was established last year with a remit to act as the gatekeeper for the government’s ambitious privatization programme foreshadowed in its Vision 2030 and National Transformation Programmes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since its establishment, the NCP and the sectoral supervisory committees that are the key decision-making bodies for projects have been through a process of recruitment and institution building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The NCP has recently published a Privatization Projects Manual (the \"Manual\") which will serve as the \"enabling\" roadmap for privatization and PPP projects in the Kingdom. The Manual is the first tangible product of the newly established NCP and is a key indicator of its strategy and approach.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A letter from the NCP’s Chairman of Board of Directors (Mr. Mohammad Mazyad Al-Tuwajiri) is included as a preface to the document and makes explicit the intention of the NCP to keep the Manual under continuous review; updates will be made as needed to ensure that the privatization and PPP programmes are consistent with international practice.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Hard on the heels of the Manual a draft Private Sector Participation Law has also been published – giving further authority and depth to the contents of the Manual. That draft law was open for public consultation until 29 July 2018. The combination of the Manual and the draft law will be powerful enablers of private sector participation in the economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Of particular interest to foreign investors will be draft articles 56 and 57, which permit participation in healthcare and education PPP schemes. This is consistent with the developing approach of the Saudi Arabian General Investment Authority (\"SAGIA\") which facilitates foreign ownership of schools subject to Ministry of Education approval.</p>\r\n<img class=\" wp-image-8221 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/10.jpg\" alt=\"\" width=\"449\" height=\"214\" />\r\n<p dir=\"LTR\" align=\"LEFT\">A frequent refrain of the contracting and advisory communities in the Kingdom has been that the Government Tenders and Procurement Law (\"GTPL\") regime is not suitable for complex privatizations and public/private partnerships – for example, the GTPL did not permit a multi-phase bidding process. The risk with the new Manual was that the GTPL would continue to apply in the gaps thereby causing some uncertainty. Moreover, the GTPL is itself in the process of reform with a new draft law in circulation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These concerns have very recently been addressed. Royal Decree No. (101) dated 20/10/1439 AH (04/07/2018) and published on 18 July 2018 specifically disapplies the GTPL from privatization contracts. It provides as follows:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"All contracts, necessary for execution of the privatization operations shall not be governed by the Government Tenders and Procurement Law.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">An analogous provision directed at PPP schemes is included in the new draft law, which contains (at Chapter 15) a comprehensive list of other laws which are proposed to be adjusted in order to facilitate private sector participation. However, Royal Decree No.101 is now in force and provides a very important first step – even if this is limited only to addressing the GTPL.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual is a decisive and welcome step to break away from the GTPL \"straightjacket\" which will obviate the need for enabling decrees for these projects.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">So what does the Manual say?</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">First, the Manual is crystal clear that it must be applied and there is no escape or workaround the Manual. Deviations from the Manual’s provisions require explicit NCP approval (more on which below). The well-understood procedural steps in the GTPL for managing receipt of bids are largely replicated and amplified/adjusted as necessary. The Manual also provides for an appeal process for disgruntled parties with the establishment of a new appellate body – \"the Privatization Procurement Appeals Board\". Further detail on this new body will be available later in the year (its procedures are already elaborated under the draft law).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Second, the Manual provides clarity and transparency around the gateway processes for approval of projects. The four \"file\" approval framework (Pre-Feasibility Study; Partial Business Case; Full Business Case and post competition Final Business Case) is consistent with best practice elsewhere. This process is likely to give confidence to the market that a project will stand a good chance of closing. The process is designed to identify key challenges as early as possible in the process, for example, issues relating to offtakes and government guarantees (if any) on termination must be exposed at the Partial Business Case stage. The process envisaged is similar in many respects to the old \"negotiated procedure\" under EU procurement rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Third, there are some interesting innovations. For example, the notion that the private sector actors can approach the NCP with projects (and potentially be rewarded for their origination efforts) is clearly intended to encourage investors and contractors to have a fresh look at the National Transformation Program with a view to engaging with the NCP pro-actively.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Manual requires a draft privatization contract to be in play at the time of File Three (Full Business Case) submission to the NCP as part of the overall Procurement Plan. However, the Manual also signposts not only a Privatization Standard Contract – deviations from which must be approved – but also a standard Heads of Terms. The Manual provides a process for securing deviations from the NCP but neither the standard contract nor the standard heads of terms are yet in circulation.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Comment</h3>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite all the good elements of the Manual, there remain some issues which will have to be clarified under the draft law (which have not been addressed by Royal Decree 101). So, for example, the draft law will allow arbitration in government contracts (Article 54) with prior approval. Currently, government contracts may not provide for an arbitration-based dispute resolution process unless this has been approved by the Royal Court. Foreign investors will likely monitor this aspect very closely.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There are also areas where additional clarity would be useful, for example, whether it is acceptable for bidders (whether in consortium or not) to be able to contract with public authorities through a special purpose vehicle without exposing their parent entities to joint and several liability. The Manual certainly seems to anticipate the use of SPVs but bidders may consider it desirable to obtain the explicit approval of the NCP at the RFQ stage for the structure of their bid and the scope of any underpinning parent company guarantee. Likewise, on the government side of the equation a number of new companies are being established to act as the counterparties under PPP style arrangements; the level of budgetary commitment and/or sovereign guarantee in these structures will have to be assessed on a case-by-case basis.</p>\r\nIn the last year or so there have been a number of changes in KSA corporate, foreign investment and banking laws which combine to bolster the realization of Vision 2030. The Manual is an important step in that journey. In combination with the new draft law (and Royal Decree 101) it is a welcome and much needed embellishment of the Vision 2030 and the NCP enabling process. The draft law, once enacted, will fire the starting pistol for foreign investment in education PPP schemes.'),
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	(296605,28417,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">We previously looked at the <a href=\"http://localhost:8888/tamimi/law-update-articles/safeguarding-children-in-a-uae-education-context/\">UAE Child Rights Law</a> (UAE Federal Law No. 3 of 2016) and the evolving landscape in the UAE in relation to child rights and safeguarding children.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The focus of the previous article was in relation to HR issues around background checks and how to deal with issues when they arise. The focus of this article is in relation to safeguarding children generally and aims to bring readers up to speed on the latest developments in this evolving area and look at what is coming down the track.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Units</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of brief recap on the Child Rights Law which was enacted in 2016. The key pillars of it are:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It enshrines the basic principle that children have the right to life and safety, and specifically provides that every child is entitled to an education.</li>\r\n 	<li dir=\"LTR\">It seeks to prevent all kinds of violence in educational institutions and to preserve children’s dignity in an education context. The law states that a child’s mental, psychological, physical or ethical safety must not be prejudiced.</li>\r\n 	<li dir=\"LTR\">The law envisages that dedicated Child Protection Units (\"CPUs\") would be established in the relevant Ministries aimed at developing and implementing child protection mechanisms.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The executive regulations to the law, which set out the details and mechanics of how it will be implemented, have not been issued yet. The regulations will determinate the competencies of the CPU’s and operating mechanisms within each ministry.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We do have an idea of what the new safeguarding regime will look like.</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It is envisaged that each Ministry that has a remit for children will have a dedicated CPU within it; so for example the Ministry of Education (MOE), Ministry of Health (MOH) etc. These CPUs will deal with any safeguarding/child’s rights issues arising from institutions/schools etc that are under its remit. So education providers would naturally fall under the remit of the MOE and healthcare providers under the MOH etc.</li>\r\n 	<li dir=\"LTR\">The legislation provides for child protection specialists to carry out a significant role in relation to the implementation of the law.</li>\r\n</ul>\r\n<img class=\"size-full wp-image-8215 aligncenter\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/4.jpg\" alt=\"\" width=\"752\" height=\"372\" />\r\n<h2><span lang=\"EN\">“</span>Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.”</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Specialists</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">One of the major features of the law is the creation of an official child protection specialist role (\"CPS\") with sweeping powers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We understand that it is envisaged that private entities may have a member of their own staff appointed as a CPS. So in the education space a child protection officer from a school or college could be appointed to this official role of CPS, which carries with it quasi-judicial powers including:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">perform preventive and therapeutic intervention in any case where there is a risk to the child’s health, physical, psychological, ethical or mental safety;</li>\r\n 	<li dir=\"LTR\">power to collect evidence regarding any reported incidents;</li>\r\n 	<li dir=\"LTR\">enter the premises where the child is present;</li>\r\n 	<li dir=\"LTR\">take appropriate preventive measures to protect the child;</li>\r\n 	<li dir=\"LTR\">in situations where a threat to the child’s health or safety is established, the CPS will have authority to propose to place the child temporarily in an alternative family, an association, or an appropriate social, educational or health institution;</li>\r\n 	<li dir=\"LTR\">assistance in investigations and trials.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The CPS would receive training prior to appointment and would have the full backup and authority of the law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Without doubt this is a very significant development and will be welcomed by education providers.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Reporting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In the meantime, and prior to the establishment of the CPUs and the CPS system, schools can report any suspicions of abuse to the Ministry of Interior. The Ministry, which has remit over a wide range of functions including the police, has a dedicated child protection unit. The unit deals with child protection complaints from the general public, schools and any other sources. Contact details are as follows:</p>\r\n&nbsp;\r\n<h4><em>Hotline phone number: 116 111</em></h4>\r\n<h4><em>Email address: <a href=\"mailto:childprotection@moi-cpc.gov.ae\">childprotection@moi-cpc.gov.ae</a></em></h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A complaint can be made anonymously or otherwise. The unit will then contact the child protection unit of the local police force.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Even after the establishment of the CPUs it is expected that any allegation of sexual abuse would be reported to the police directly or via the Ministry of Interior.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/employment-incentives/\">employment team</a> regularly advises on all aspects of the employment relationship in the UAE, in relation to the education sector and across all other sectors and industries. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/ivor-mcgettigan/\">Ivor McGettigan</a> (<a href=\"mailto:i.mcgettigan@tamimi.com\">i.mcgettigan@tamimi.com</a>).</em></p>'),
	(296606,28417,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">We previously looked at the <a href=\"http://localhost:8888/tamimi/law-update-articles/safeguarding-children-in-a-uae-education-context/\">UAE Child Rights Law</a> (UAE Federal Law No. 3 of 2016) and the evolving landscape in the UAE in relation to child rights and safeguarding children.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The focus of the previous article was in relation to HR issues around background checks and how to deal with issues when they arise. The focus of this article is in relation to safeguarding children generally and aims to bring readers up to speed on the latest developments in this evolving area and look at what is coming down the track.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Units</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of brief recap on the Child Rights Law which was enacted in 2016. The key pillars of it are:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It enshrines the basic principle that children have the right to life and safety, and specifically provides that every child is entitled to an education.</li>\r\n 	<li dir=\"LTR\">It seeks to prevent all kinds of violence in educational institutions and to preserve children’s dignity in an education context. The law states that a child’s mental, psychological, physical or ethical safety must not be prejudiced.</li>\r\n 	<li dir=\"LTR\">The law envisages that dedicated Child Protection Units (\"CPUs\") would be established in the relevant Ministries aimed at developing and implementing child protection mechanisms.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The executive regulations to the law, which set out the details and mechanics of how it will be implemented, have not been issued yet. The regulations will determinate the competencies of the CPU’s and operating mechanisms within each ministry.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We do have an idea of what the new safeguarding regime will look like.</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It is envisaged that each Ministry that has a remit for children will have a dedicated CPU within it; so for example the Ministry of Education (MOE), Ministry of Health (MOH) etc. These CPUs will deal with any safeguarding/child’s rights issues arising from institutions/schools etc that are under its remit. So education providers would naturally fall under the remit of the MOE and healthcare providers under the MOH etc.</li>\r\n 	<li dir=\"LTR\">The legislation provides for child protection specialists to carry out a significant role in relation to the implementation of the law.</li>\r\n</ul>\r\n&nbsp;\r\n<h2><span lang=\"EN\">“</span>Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.”</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Specialists</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">One of the major features of the law is the creation of an official child protection specialist role (\"CPS\") with sweeping powers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We understand that it is envisaged that private entities may have a member of their own staff appointed as a CPS. So in the education space a child protection officer from a school or college could be appointed to this official role of CPS, which carries with it quasi-judicial powers including:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">perform preventive and therapeutic intervention in any case where there is a risk to the child’s health, physical, psychological, ethical or mental safety;</li>\r\n 	<li dir=\"LTR\">power to collect evidence regarding any reported incidents;</li>\r\n 	<li dir=\"LTR\">enter the premises where the child is present;</li>\r\n 	<li dir=\"LTR\">take appropriate preventive measures to protect the child;</li>\r\n 	<li dir=\"LTR\">in situations where a threat to the child’s health or safety is established, the CPS will have authority to propose to place the child temporarily in an alternative family, an association, or an appropriate social, educational or health institution;</li>\r\n 	<li dir=\"LTR\">assistance in investigations and trials.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The CPS would receive training prior to appointment and would have the full backup and authority of the law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Without doubt this is a very significant development and will be welcomed by education providers.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Reporting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In the meantime, and prior to the establishment of the CPUs and the CPS system, schools can report any suspicions of abuse to the Ministry of Interior. The Ministry, which has remit over a wide range of functions including the police, has a dedicated child protection unit. The unit deals with child protection complaints from the general public, schools and any other sources. Contact details are as follows:</p>\r\n&nbsp;\r\n<h4><em>Hotline phone number: 116 111</em></h4>\r\n<h4><em>Email address: <a href=\"mailto:childprotection@moi-cpc.gov.ae\">childprotection@moi-cpc.gov.ae</a></em></h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A complaint can be made anonymously or otherwise. The unit will then contact the child protection unit of the local police force.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Even after the establishment of the CPUs it is expected that any allegation of sexual abuse would be reported to the police directly or via the Ministry of Interior.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/employment-incentives/\">employment team</a> regularly advises on all aspects of the employment relationship in the UAE, in relation to the education sector and across all other sectors and industries. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/ivor-mcgettigan/\">Ivor McGettigan</a> (<a href=\"mailto:i.mcgettigan@tamimi.com\">i.mcgettigan@tamimi.com</a>).</em></p>'),
	(296607,28417,'MetaLink','content'),
	(296608,28417,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8194&amp;action=edit'),
	(296609,28417,'ReportText','<p dir=\"LTR\" align=\"LEFT\">We previously looked at the <a href=\"http://localhost:8888/tamimi/law-update-articles/safeguarding-children-in-a-uae-education-context/\">UAE Child Rights Law</a> (UAE Federal Law No. 3 of 2016) and the evolving landscape in the UAE in relation to child rights and safeguarding children.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The focus of the previous article was in relation to HR issues around background checks and how to deal with issues when they arise. The focus of this article is in relation to safeguarding children generally and aims to bring readers up to speed on the latest developments in this evolving area and look at what is coming down the track.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Units</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of brief recap on the Child Rights Law which was enacted in 2016. The key pillars of it are:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It enshrines the basic principle that children have the right to life and safety, and specifically provides that every child is entitled to an education.</li>\r\n 	<li dir=\"LTR\">It seeks to prevent all kinds of violence in educational institutions and to preserve children’s dignity in an education context. The law states that a child’s mental, psychological, physical or ethical safety must not be prejudiced.</li>\r\n 	<li dir=\"LTR\">The law envisages that dedicated Child Protection Units (\"CPUs\") would be established in the relevant Ministries aimed at developing and implementing child protection mechanisms.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The executive regulations to the law, which set out the details and mechanics of how it will be implemented, have not been issued yet. The regulations will determinate the competencies of the CPU’s and operating mechanisms within each ministry.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We do have an idea of what the new safeguarding regime will look like.</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It is envisaged that each Ministry that has a remit for children will have a dedicated CPU within it; so for example the Ministry of Education (MOE), Ministry of Health (MOH) etc. These CPUs will deal with any safeguarding/child’s rights issues arising from institutions/schools etc that are under its remit. So education providers would naturally fall under the remit of the MOE and healthcare providers under the MOH etc.</li>\r\n 	<li dir=\"LTR\">The legislation provides for child protection specialists to carry out a significant role in relation to the implementation of the law.</li>\r\n</ul>\r\n&nbsp;\r\n<h2><span lang=\"EN\">“</span>Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.”</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Specialists</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">One of the major features of the law is the creation of an official child protection specialist role (\"CPS\") with sweeping powers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We understand that it is envisaged that private entities may have a member of their own staff appointed as a CPS. So in the education space a child protection officer from a school or college could be appointed to this official role of CPS, which carries with it quasi-judicial powers including:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">perform preventive and therapeutic intervention in any case where there is a risk to the child’s health, physical, psychological, ethical or mental safety;</li>\r\n 	<li dir=\"LTR\">power to collect evidence regarding any reported incidents;</li>\r\n 	<li dir=\"LTR\">enter the premises where the child is present;</li>\r\n 	<li dir=\"LTR\">take appropriate preventive measures to protect the child;</li>\r\n 	<li dir=\"LTR\">in situations where a threat to the child’s health or safety is established, the CPS will have authority to propose to place the child temporarily in an alternative family, an association, or an appropriate social, educational or health institution;</li>\r\n 	<li dir=\"LTR\">assistance in investigations and trials.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The CPS would receive training prior to appointment and would have the full backup and authority of the law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Without doubt this is a very significant development and will be welcomed by education providers.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Reporting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In the meantime, and prior to the establishment of the CPUs and the CPS system, schools can report any suspicions of abuse to the Ministry of Interior. The Ministry, which has remit over a wide range of functions including the police, has a dedicated child protection unit. The unit deals with child protection complaints from the general public, schools and any other sources. Contact details are as follows:</p>\r\n&nbsp;\r\n<h4><em>Hotline phone number: 116 111</em></h4>\r\n<h4><em>Email address: <a href=\"mailto:childprotection@moi-cpc.gov.ae\">childprotection@moi-cpc.gov.ae</a></em></h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A complaint can be made anonymously or otherwise. The unit will then contact the child protection unit of the local police force.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Even after the establishment of the CPUs it is expected that any allegation of sexual abuse would be reported to the police directly or via the Ministry of Interior.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/employment-incentives/\">employment team</a> regularly advises on all aspects of the employment relationship in the UAE, in relation to the education sector and across all other sectors and industries. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/ivor-mcgettigan/\">Ivor McGettigan</a> (<a href=\"mailto:i.mcgettigan@tamimi.com\">i.mcgettigan@tamimi.com</a>).</em></p>|<p dir=\"LTR\" align=\"LEFT\">We previously looked at the <a href=\"http://localhost:8888/tamimi/law-update-articles/safeguarding-children-in-a-uae-education-context/\">UAE Child Rights Law</a> (UAE Federal Law No. 3 of 2016) and the evolving landscape in the UAE in relation to child rights and safeguarding children.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The focus of the previous article was in relation to HR issues around background checks and how to deal with issues when they arise. The focus of this article is in relation to safeguarding children generally and aims to bring readers up to speed on the latest developments in this evolving area and look at what is coming down the track.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Units</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of brief recap on the Child Rights Law which was enacted in 2016. The key pillars of it are:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It enshrines the basic principle that children have the right to life and safety, and specifically provides that every child is entitled to an education.</li>\r\n 	<li dir=\"LTR\">It seeks to prevent all kinds of violence in educational institutions and to preserve children’s dignity in an education context. The law states that a child’s mental, psychological, physical or ethical safety must not be prejudiced.</li>\r\n 	<li dir=\"LTR\">The law envisages that dedicated Child Protection Units (\"CPUs\") would be established in the relevant Ministries aimed at developing and implementing child protection mechanisms.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The executive regulations to the law, which set out the details and mechanics of how it will be implemented, have not been issued yet. The regulations will determinate the competencies of the CPU’s and operating mechanisms within each ministry.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We do have an idea of what the new safeguarding regime will look like.</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">It is envisaged that each Ministry that has a remit for children will have a dedicated CPU within it; so for example the Ministry of Education (MOE), Ministry of Health (MOH) etc. These CPUs will deal with any safeguarding/child’s rights issues arising from institutions/schools etc that are under its remit. So education providers would naturally fall under the remit of the MOE and healthcare providers under the MOH etc.</li>\r\n 	<li dir=\"LTR\">The legislation provides for child protection specialists to carry out a significant role in relation to the implementation of the law.</li>\r\n</ul>\r\n<img class=\"size-full wp-image-8215 aligncenter\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/4.jpg\" alt=\"\" width=\"752\" height=\"372\" />\r\n<h2><span lang=\"EN\">“</span>Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.”</h2>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Child Protection Specialists</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">One of the major features of the law is the creation of an official child protection specialist role (\"CPS\") with sweeping powers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We understand that it is envisaged that private entities may have a member of their own staff appointed as a CPS. So in the education space a child protection officer from a school or college could be appointed to this official role of CPS, which carries with it quasi-judicial powers including:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">perform preventive and therapeutic intervention in any case where there is a risk to the child’s health, physical, psychological, ethical or mental safety;</li>\r\n 	<li dir=\"LTR\">power to collect evidence regarding any reported incidents;</li>\r\n 	<li dir=\"LTR\">enter the premises where the child is present;</li>\r\n 	<li dir=\"LTR\">take appropriate preventive measures to protect the child;</li>\r\n 	<li dir=\"LTR\">in situations where a threat to the child’s health or safety is established, the CPS will have authority to propose to place the child temporarily in an alternative family, an association, or an appropriate social, educational or health institution;</li>\r\n 	<li dir=\"LTR\">assistance in investigations and trials.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The CPS would receive training prior to appointment and would have the full backup and authority of the law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Without doubt this is a very significant development and will be welcomed by education providers.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Reporting</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In the meantime, and prior to the establishment of the CPUs and the CPS system, schools can report any suspicions of abuse to the Ministry of Interior. The Ministry, which has remit over a wide range of functions including the police, has a dedicated child protection unit. The unit deals with child protection complaints from the general public, schools and any other sources. Contact details are as follows:</p>\r\n&nbsp;\r\n<h4><em>Hotline phone number: 116 111</em></h4>\r\n<h4><em>Email address: <a href=\"mailto:childprotection@moi-cpc.gov.ae\">childprotection@moi-cpc.gov.ae</a></em></h4>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">A complaint can be made anonymously or otherwise. The unit will then contact the child protection unit of the local police force.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Even after the establishment of the CPUs it is expected that any allegation of sexual abuse would be reported to the police directly or via the Ministry of Interior.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">Conclusion</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Significant and welcome changes are imminent in the child protection space. The authorities are working on what appears to be well thought-out procedures and processes which will involve educational institutions becoming integrated in the framework and solution.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/employment-incentives/\">employment team</a> regularly advises on all aspects of the employment relationship in the UAE, in relation to the education sector and across all other sectors and industries. For further information please contact <a href=\"http://localhost:8888/tamimi/lawyer/ivor-mcgettigan/\">Ivor McGettigan</a> (<a href=\"mailto:i.mcgettigan@tamimi.com\">i.mcgettigan@tamimi.com</a>).</em></p>'),
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	(296647,28420,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"712\" height=\"495\" /></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"640\" height=\"403\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
	(296648,28420,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
	(296649,28420,'MetaLink','content'),
	(296650,28420,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8199&amp;action=edit'),
	(296651,28420,'ReportText','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n&nbsp;\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"712\" height=\"495\" /></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"640\" height=\"403\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
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	(296689,28423,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft  wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"489\" height=\"340\" /></h3>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"480\" height=\"302\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>');

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	(296690,28423,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"712\" height=\"495\" /></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"640\" height=\"403\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
	(296691,28423,'MetaLink','content'),
	(296692,28423,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=8199&amp;action=edit'),
	(296693,28423,'ReportText','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"712\" height=\"495\" /></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"640\" height=\"403\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft  wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"489\" height=\"340\" /></h3>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"480\" height=\"302\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
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	(296731,28426,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft  wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"410\" height=\"285\" /></h3>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"401\" height=\"252\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
	(296732,28426,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft  wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"489\" height=\"340\" /></h3>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"480\" height=\"302\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
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	(296735,28426,'ReportText','<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft  wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"489\" height=\"340\" /></h3>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"480\" height=\"302\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\">The <a href=\"http://localhost:8888/tamimi/law-update-articles/getting-to-grips-with-vat-implementation/\">introduction of value added tax</a> (VAT) in the UAE and KSA raises complexities for education providers, even as both countries are now moving towards the eighth month since the implementation of VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we will examine the UAE VAT treatment of supplies made in the education sector and the VAT issues which arise in the industry.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT story so far in the Education Sector in the UAE</h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft  wp-image-8217\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/6.jpg\" alt=\"\" width=\"410\" height=\"285\" /></h3>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment in the education sector?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">By way of background, VAT is imposed at the standard rate of 5% on the taxable supply of most goods and services (unless the supply is zero-rated (0%) or exempt) made in the UAE by a taxable person for consideration in the course of conducting business in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The main difference between standard rated, zero rated and exempt supplies is that input tax incurred in connection with standard rated or zero rated supplies is as a general rule recoverable (subject to the normal rules of input tax recovery). Conversely, input VAT incurred in connection with exempt supplies is not generally recoverable.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, the supply of educational services and related goods and services for nurseries, preschool, school education, and higher educational institutions owned or funded by Federal or local Government is subject to VAT at the zero-rate.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a supply of educational services to qualify for zero-rating, the following conditions prescribed under the UAE VAT Executive Regulations should be fulfilled:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the supply of educational services must be provided in accordance with a curriculum recognised by the federal/local competent government entity;</li>\r\n 	<li dir=\"LTR\">the supplier of the educational services is an educational institution which is accredited by the federal/local competent government entity; and</li>\r\n 	<li dir=\"LTR\">where the supplier of educational services is a higher education institution, the institution is either (i) owned by the federal or local government; or (ii) receiving at least 50% of its annual funding directly from the federal or local government.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also avail of the zero-rating treatment in respect of the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">a supply of goods or services that is directly related to the provision of a zero-rated educational service; and</li>\r\n 	<li dir=\"LTR\">printed and digital reading material which are related to the curriculum of an education.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Are there any exceptions to the zero-rating rule?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Not all supplies made by qualifying educational institutions benefit from this zero-rating rule. The following supplies are specifically excluded from this treatment and will therefore be subject to VAT at the standard rate:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">goods and services supplied to persons who are not enrolled in the educational institution;</li>\r\n 	<li dir=\"LTR\">any goods other than educational materials provided by the educational institution;</li>\r\n 	<li dir=\"LTR\">uniforms or any other clothing required to be worn by the educational institution;</li>\r\n 	<li dir=\"LTR\">electronic devices in relation to educational services;</li>\r\n 	<li dir=\"LTR\">food and beverages at the educational institution;</li>\r\n 	<li dir=\"LTR\">recreational field trips;</li>\r\n 	<li dir=\"LTR\">extracurricular activities provided for an additional fee; and</li>\r\n 	<li dir=\"LTR\">student organisation memberships.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the supply of residential accommodation for students or school pupils is exempt from VAT. This means that qualifying educational institutions will be unable to recover any input VAT paid on expenses that are related to the supply of residential accommodation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Would qualifying educational institutions need to register for VAT in the UAE?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions are required to register for VAT in the UAE if the value of their annual taxable turnover meets the mandatory registration threshold of AED 375,000. In calculating the value of taxable turnover, the value of standard rated and zero-rated supplied made by the qualifying educational institutions must be taken into account.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Qualifying educational institutions may also apply for an exception to register for VAT in the UAE if they make wholly zero-rated supplies. If the application is approved, the educational institution will be exempted from any VAT obligations such as filing VAT returns. However, in doing so, educational institutions will be unable to recover any input VAT incurred on their expenses. In determining whether to apply for the exception to register for VAT, educational institutions should carefully assess the potential VAT compliance costs against the amount of recoverable input VAT.</p>\r\n<img class=\"alignleft wp-image-8218 \" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/09/7.jpg\" alt=\"\" width=\"401\" height=\"252\" />\r\n<h2 dir=\"LTR\" align=\"LEFT\">\"While the primary supply of most educational services is zero-rated in the UAE, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation would continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions.\"</h2>\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\">The VAT issues</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What type of supplies are \"directly related\" to the provision of a zero-rated educational service?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">As noted above, a supply of goods or services made by educational institutions is treated as zero-rated where the supply is directly related to the provision of a zero-rated educational service. However, the UAE VAT Executive Regulations do not provide further guidance on what constitutes supplies which are \"directly related\" to the provision of a zero-rated educational service. This uncertainty will likely give rise to challenges in ascertaining the VAT treatment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For example, a qualifying educational institution provides music courses. As part of the course requirements, students of the institution are required to perform in a musical concert held at the institution. Only the students’ family members and friends who received a special invitation are allowed to attend the musical concert. The concert tickets are sold at a reduced fee to cover some of the costs of running the musical concert. Can the supply of the musical performances be treated as a supply \"directly related\" to the provision of an educational service?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is arguable that the supply of the musical performance may be \"directly related\" to the provision of educational service considering that:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">the principal supply of the qualifying educational institution is zero-rated educational service; and\\</li>\r\n 	<li dir=\"LTR\">the practical training arising from the supply of musical performances forms a necessary and essential part of the curriculum;</li>\r\n 	<li dir=\"LTR\">therefore, the supply of musical performances is ancillary to the principal supply; and</li>\r\n 	<li dir=\"LTR\">the musical concert is not in competition with any commercial enterprise and not generating additional profits.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">On the other hand, the supply of the musical performances may also be regarded as falling under the scope of the exception to the zero-rating rule, and therefore be subject to VAT at the standard rate. It can be contended that the musical performances are supplied to third parties, rather than the intended recipient of educational services, i.e., the students. Further, the supply of musical performances itself will generally be treated as standard rated if it was conducted in the course of business.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>What is the VAT treatment of grants and sponsorships?</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is common for the government or third parties to provide educational institutions with financial support such as grants or sponsorships. While the VAT legislation does not prescribe the VAT treatment of grants or sponsorships, the general principle is that if a monetary grant or sponsorship is freely given without receiving anything in return, the grant or sponsorship will not constitute consideration for any supply. Therefore, the grant or sponsorship would fall outside the scope of UAE VAT.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Conversely, if the grantor or sponsor receives a benefit or something in return from the educational institution for the monetary grant or sponsorship, the grant or sponsorship may be subject to VAT. The benefit provided by the educational institution will be rated as a taxable supply and the educational institution will have to account for VAT on the benefit. Currently, determining what constitutes a benefit is a grey area. As such, it is open to question as to whether an inclusion of the sponsor in a list of supporters in a notice or naming a university building after the sponsor may be considered as benefits.</p>\r\n&nbsp;\r\n<h3 dir=\"LTR\" align=\"LEFT\"></h3>\r\n<h3 dir=\"LTR\" align=\"LEFT\">Final remarks</h3>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the primary supply of most educational services is zero-rated in the UAE to the extent the educational services are provided in accordance with an accredited curriculum by qualifying educational institutions. Notwithstanding this, the VAT treatment of some activities may not always be straightforward. Given that the VAT regime is still in its early stages of implementation, it is expected that the VAT legislation will continue to evolve. Educational institutions should continuously ensure that the correct VAT treatment is applied to all of its transactions, in compliance with the current VAT legislation.</p>\r\n<em>Al Tamimi &amp; Company’s <a href=\"http://localhost:8888/tamimi/practice/tax/\">tax team</a> regularly advises on VAT and other tax matters. For further information, please contact <a href=\"http://localhost:8888/tamimi/lawyer/shiraz-khan/\">Shiraz Khan</a> (<a href=\"mailto:s.khan@tamimi.com\">s.khan@tamimi.com</a>) or <a href=\"http://localhost:8888/tamimi/lawyer/janet-gooi/\">Janet Gooi</a> (<a href=\"mailto:j.gooi@tamimi.com\">j.gooi@tamimi.com</a>).</em>'),
