Monday, July 17, 2017

Navigating Oman's Alcohol Policies and Permits

General overview of alcohol usage in Oman:

Oman is a Muslim country.  Pursuant to the Basic Law of Oman promulgated by the Sultani Decree 101 of 1996, Islam is the official religion and Shariah (Islamic law) principles form the underlying basis for the nation’s laws.  Therefore, in keeping with Islam’s prohibitions against alcohol, the purchase and consumption (and marketing) of alcoholic beverages are generally forbidden in Oman. 

However, the Omani authorities have made certain exceptions to this general prohibition in order to accommodate the tourism sector and expatriates residing in Oman.  Alcoholic products (beer, wine and spirits) are allowed to be sold at (i) liquor shops, (ii) airport duty-free shops, and (iii) certain hotels and restaurants which hold liquor licences issued by the Royal Oman Police (ROP), the Government authority that regulates alcohol-related matters in Oman.  There is little publicly available information with respect to the rules around obtaining alcohol permits in Oman.  Alcohol licences are not governed by published Royal Decrees or Ministerial Decisions, but rather by the ROP acting pursuant to its internal regulations and, to a great extent, pursuant to its ongoing discretion.  In practice, we note that the ROP would only permit restaurant owners, hotels, alcohol suppliers or airport duty-free shops (Applicant) to supply/sell alcohol to the end users.

Process of obtaining an alcohol permit in Oman

In order to obtain an alcohol licence, the Applicant will need to comply with the following requirements or the following circumstances will be taken into consideration:
  1. The Applicant must submit a written request together with certain supporting documents for the liquor licence to the ROP. The ROP will review and evaluate the Applicant’s request and issue a decision on a case-by-case basis.
  2. The Applicant must ensure that the premises are not located within a one-kilometer radius of a mosque.
  3. Proximity of the Applicant’s premises to residential areas.
  4. Religious sensitivities such as restrictions from serving alcohol in areas which are publicly visible.
  5. Suitable classification of the establishment in accordance with the applicable rating described in Ministerial Decision 39 of 2016 of the Ministry of Tourism (MOT) to be submitted along with the written request.
In order to obtain a liquor licence, the Applicant (i.e., restaurant owner) should be classified as a first-grade category entity. This classification is issued by the MOT. The MOT would evaluate each application for the classification on a case-by-case basis and assess the restaurant on the basis of the restaurant’s degree of service and hospitality.

Further, Article 49 of Ministerial Decision 39 of 2016 provides that a restaurant licenced by the Municipality may apply to obtain classifications from the MOT in accordance with the following requirements: (i) the restaurant shall have operated for at least one year prior to the application; and (ii) the restaurant shall satisfy the requirements and standards of the approved classification system for restaurants set out by the MOT.

Marketing of alcoholic beverages in Oman

The Government’s stance on marketing of alcoholic beverages is that it is strictly prohibited.  In practice, however, modest forms of marketing, such as signage for branded alcoholic beverages, can be found in many of the venues where alcohol is allowed to be sold (e.g., liquor shops and hotel pubs).
It is prudent to bear the following general principles in mind:
  • ROP regulates all matters related to alcohol including marketing alcoholic beverages. 
  • Alcohol sales are allowed – and branded alcohol marketing can frequently be seen – in liquor shops, airport duty-free shops, and licenced hotels and restaurants.  However, alcohol sales are – and likewise alcoholic products marketing would be – strictly prohibited outside of these venues. 
  • In the above-mentioned venues where alcohol is allowed, the alcohol marketing materials that can be seen tend to be modest in nature – for example, branded signage and furniture.  A more aggressive form of alcohol products marketing (e.g., promotional models, contests, or sampling) could likely attract a penalty from the ROP.
Consequences (including sanctions and penalties) for failing to comply with the relevant laws and regulations 

It is difficult to give definitive guidance on the consequences for failing to comply with alcohol rules, as there is no publicly available written guidance on the rules for marketing alcoholic products in Oman or the penalties for any violation in this area.  The Omani Penal Code, Sultani Decree 7 of 1974, in Article 228 addresses only a few alcohol-related matters, such as penalties for (i) appearing in public in an inebriated state or disturbing the peace while intoxicated (10 days in jail and/or fine of OMR 200 and (ii) selling alcohol without a licence (6 months to 3 years in jail plus a fine of OMR 300).

The general approach of the ROP to alcohol-related offences by selling establishments is as follows:
  • For first offence, fine of OMR 1000 (US$2600). 
  • For second offence, fine of OMR 2000 (US$5200). 
  • For third offence, 3-month suspension of liquor licence. 
  • For fourth offence, cancellation of liquor licence.
Therefore, it is possible that the ROP could at any time, in its discretion, choose to characterise the display of any alcohol product marketing materials as an alcohol-related offence and thus levy penalties in accordance with the schedule above. Such penalties would most likely fall upon the venue displaying the marketing materials, but it is conceivable that the ROP could also levy penalties against the party that supplied the marketing materials to the venue.