On 29 August 2020, H.H. Sheikh Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates (UAE), issued Federal Decree Law No. 4 of 2020 (the new UAE Decree), abolishing Federal Decree Law No. 15 of 1972 (the Israel Boycott Law). The new UAE Decree follows the announcement of the historic peace agreement between the UAE and Israel (also known as the UAE-Israel Abraham Accord) on 13 August 2020. Under the UAE-Israel Abraham Accord, the two Arab states agreed to establish full diplomatic ties in exchange for Israel’s suspension of further annexation of Palestinian territories. The accord came into effect following a call among H.H. Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu.
The new UAE Decree will allow individuals and companies in the UAE to enter into agreements with Israeli firms, citizens and residents as part of commercial or financial operations or dealings of any other nature. It will be permissible to enter, exchange or possess Israeli goods and products of all kinds and trade in them in the UAE.
The historic UAE-Israel Abraham Accord aims to further advance peace in the Middle East and to open up the region in a number of ways, including in wider trade and investment and technological innovation. This development is also a step towards potential diplomatic breakthroughs between Israel and other Arab nations in the future. Currently, the only Arab states with full diplomatic relations are Jordan and Egypt, with a few other Gulf nations, including Qatar and Oman, having ties with Israel.
The new UAE Decree has far-reaching political and economic implications particularly for companies with multiple operations and nationalities across the Gulf including in Israel. Notwithstanding the new UAE Decree, companies will still need to consider carefully their position on doing business with Israel in light of the continuing prohibitions that exist in other Gulf countries on doing business or otherwise engaging with Israeli persons. These prohibitions may continue to apply to the citizens of those Gulf states that continue to adhere to the Arab League embargo of Israel, wherever they reside.