Iran Sanctions and Iran-Oman Trade – Part I Oman is a close neighbor and a significant trading partner of the Islamic Republic of Iran, which is located just across the Strait of Hormuz from the Sultanate. Iran accounts for approximately 4% of Oman’s exports. As reported in the Omani press, Oman and Iran recently held the 13th round of the Omani-Iranian Joint Committee to discuss ways to strengthen their trade relationship in areas such as investment, transportation, banking, tourism, mining, oil and gas, petrochemicals, shipping and telecommunications. However, numerous aspects of Omani-Iranian trade are likely to come under stress as a result of the sanctions that have been imposed against Iran in recent months by the international community. Nuclear Program Prompts Sanctions In response to Iran’s nuclear development program, which many suspect of pursuing nuclear weapons, the United Nations (“U.N.”) Security Council, the United States of America, and the European Union have all imposed sanctions relating to trade with Iran. All of these sanctions have the potential to affect Omani companies that do business, directly or indirectly, with Iran. This month we discuss the U.N. Security Council resolution against Iran, Resolution 1929. In next month’s Client Alert, Part II of this article will discuss the sanctions that the United States and the European Union have imposed against Iran. U.N. Security Council Resolution 1929 In recent years, the United States, many European nations, and other countries have grown increasingly alarmed at the prospect of Iran developing nuclear weapons, and have urged the larger international community to take measures to rein in Iran’s nuclear program. On June 9, 2010, the U.N. Security Council passed Resolution 1929, holding Iran in violation of its non-proliferation obligations under international law and instituting a fourth round of sanctions. Resolution 1929 was passed by the Security Council with twelve votes in favor, one abstaining, and two against. Under Chapter VII of the U.N. Charter, Security Council resolutions finding a threat to the peace, such as Resolution 1929, are binding upon member states and require implementation of their provisions via national law. Accordingly, all U.N. member states, including Oman, are obligated to implement and enforce Resolution 1929. Resolution 1929 institutes a number of measures targeting Iranian military and nuclear capabilities, as well as entities that provide financial or transportation services related to Iran’s military or nuclear activities. Among other measures, the resolution seeks to ban the sale of weapons and military equipment to Iran. Furthermore, all U.N. member states are prohibited from allowing Iranian investment in uranium mines, enrichment facilities and other nuclear technology. Finally, Resolution 1929 calls on U.N. member states to ban travel by, and freeze the assets of, specifically named Iranian officials and entities tied to the Iranian government, in particular those connected to the Islamic Revolutionary Guard Corps.
Tuesday, January 4, 2011
Tuesday, July 13, 2010
Ministerial Decision Clarifies Telecom Dispute Procedure
For telecommunications companies that have grappled with uncertainty over the handling of disputes between licensees, a recent Ministerial Decision provides some welcome clarity. Ministerial Decision No. 44/2010, issued by the Omani Telecommunications Regulatory Authority (“TRA”), has set out clearly the procedures for the resolution of such disputes, as well as the process whereby Licensees can appeal TRA decisions. Preliminary Settlement Attempt Required Prior to filing any case, a petitioning licensee must serve a notice on the other licensee. Within 14 days of this notice, senior executives of the respective licensees are required to meet and attempt to reach a settlement. If a settlement cannot be agreed, the matter must be escalated to the respective chairmen of the two licensees within 20 days of the original notice, and the two chairmen must attempt to reach a settlement within 30 days of the original notice (although the chairmen may agree to extend the settlement period). Minutes must be recorded for all meetings, but non-compliance by one licensee will not delay any of the procedures. TRA Disputes Hearings: Key Features If the settlement attempts described above have taken place and have failed to resolve the dispute, the petitioning licensee may file a claim with the TRA. Within 15 days of this filing, the TRA will perform preliminary scrutiny of the case and decide whether, prima facie, the dispute falls within the TRA's purview. If the TRA deems that it does, it will constitute a panel to hear the dispute. Perhaps the most important thing for companies to understand from the outset about the TRA dispute hearing process is that Ministerial Decision No. 44/2010 grants these panels very extensive powers, such as the discretion to: (i) introduce additional parties to the dispute; (ii) appoint an expert to provide an opinion; (iii) require any party to take measures or refrain from any action until the end of the dispute; or (iv) issue orders for interim or precautionary measures. Another noteworthy feature of TRA dispute resolution hearings is that the proceedings are required to take place in Arabic, although the chairman of the panel may at his discretion approve the use of a foreign language for all or part of the proceedings. Regardless of the languages used in the proceedings, the final decision will be rendered in Arabic (although if some of the proceedings have taken place in another language, there may be limited use of that foreign language in the decision). Panel Proceedings Once the TRA has constituted a panel to hear the dispute, the chairman of the panel will provide the defendant licensee with a copy of the petitioner licensee’s statement of claim, together with any decision the chairman has made concerning the language of the proceedings. The chairman shall grant the defendant licensee a period of at least 15 days to file a reply, and once the chairman receives this reply he shall provide a copy of it to the petitioner licensee. If either party requests a quasi-court hearing based on grounds deemed acceptable by the panel, then the panel must convene such a hearing, and the chairman of the panel will be responsible for the conduct of the hearing. The panel may also convene a quasi-court hearing on its own initiative, if it deems this necessary. When the panel has concluded its deliberations, the parties will be notified that the matter is reserved for a decision, which will be rendered within two weeks of such notice. This notice marks the cut-off point beyond which neither party may submit any further documentation. The panel’s decision will be given in writing and signed by the chairman. Appealing the Panel’s Decision Either party may appeal the panel’s decision by filing an appeal with the TRA within 30 days of being notified of the decision. Although the filing of an appeal does not automatically suspend the enforcement of the decision, enforcement may be suspended if deemed necessary by the TRA. Within 30 days of the appeal being filed, the TRA will issue a judgment to (i) uphold the decision, (ii) amend/revoke the decision or (iii) refer the dispute, or any part of it, back to the original panel, or to another panel, for resolution. Article 35(4) of Ministerial Decision No. 44/2010 states that the ultimate judgment on the appeal will be final and binding. In summary, this new Ministerial Decision promulgated by the TRA provides a helpful measure of clarity for understanding the dispute process for the telecommunications sector, yet it also prescribes a very lengthy and detailed set of rules to which the parties must adhere. We therefore suggest that companies consult legal advisors as early as possible in the process when a dispute arises.
