On Thursday 13 August 2020, the United Arab Emirates ("UAE") and Israel reached a landmark agreement: the two nations agreed to normalise diplomatic relations for the first time. The agreement, to be known as the Abraham Accord, was formally announced by the President of the USA and concluded between His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and the Prime Minister of Israel, Benjamin Netanyahu.

The Abraham Accord marks a historic occasion, with the two nations previously having no formal diplomatic ties. The Arab League (of which the UAE is a member) ratified an agreement on Joint Defence and Economic Cooperation in 1950, which resolved to expel any Arab state which reached a separate economic, political or military agreement with Israel. This position was formalised by legislation in the UAE in 1972, which made it illegal in the UAE to trade in Israeli goods and with individuals of Israeli nationality (UAE Boycott of Israel Law, Federal Law No 15 of 1972).

The UAE is only the third Arab state to enter into such an agreement with Israel, following Egypt which signed a bi-lateral peace agreement in 1979 and Jordan which signed a treaty with Israel in 1994.

The two states have announced that the objectives of the Abraham Accord are to drive economic growth and encourage technological and scientific advancement in the region. According to the US Administration's announcement, under the terms of the Abraham Accord, the UAE and Israel have agreed to cooperate to set a roadmap towards establishing a bilateral relationship. This includes the reciprocal establishment of embassies for the first time in almost 50 years and the commencement of discussions on a range of areas including tourism, education, healthcare, trade, and security between the two countries.

It is anticipated the Abraham Accord will open up trade links between the two countries and freedom of movement and exchange of goods, services, expertise and labour. It is also expected that direct flights will also become available as well as the amendment (and relaxation) of existing visa processes for nationals of the two countries.

Further, it has also been reported that performance of the Abraham Accord is conditional on the Israeli government suspending annexation of Israeli-occupied West Bank territory.

The first step towards the normalisation of relations between the two countries has already been taken, with telephone lines between the countries opening last week. Previously it was not possible to make a call to Israel from the UAE.

We understand the UAE and Israel are expected to meet at the end of August/ early September to finalise bilateral agreements regarding investment, tourism, direct flights, security, telecommunications, technology, energy, healthcare, culture, the environment, the establishment of reciprocal embassies, and what has been described as "other areas of mutual benefit."

In a joint statement, it was also announced that the two countries will now immediately expand and accelerate cooperation regarding the treatment of coronavirus patients and the development of a vaccine.

This historic bi-lateral push for economic growth, with a focus on technology and sciences is consistent with the plans of many states in the region, including the UAE, to move away from oil-reliant industries and to diversify their economies. It has been widely reported that other Gulf countries are expected to announce similar agreements with Israel in the immediate future. We will keep you updated as and when that happens.

If you would like to discuss how the Abraham Accord will affect you or any other related issues, please feel free to contact us.

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