MENA Talks: Corporations

Liquefied Natural Gas (LNG) has grown in importance, and within Middle East and North Africa (MENA) markets, Qatar and Algeria are among the largest exporters globally. Oil price volatility has significantly impacted the LNG market making it more affordable for countries across the globe. Asian markets in particular have seen an increased demand for LNG, especially China as they address environmental concerns. Vietnam, India and Thailand, have also shown a growing preference for LNG and governments are rethinking policies to meet consumption needs. In this episode of MENA Talks, Anne-Katrin Brevik, Global Head of Research and Forecasting for LNG at Thomson Reuters, discusses the market outlook, trade flow activity, the impact on long-term contracts and the future for LNG.

Across the MENA region, governments and independent organisations are encouraging entrepreneurship and small businesses. From planning and ideation to finance, operations and growth, what do businesses need in order to survive in an increasingly cut-throat local market? Neveen El-Tahri, whose company, Delta Shield, supports and incubates startups and small businesses, speaks to us about all the provisions that already exist and all the hurdles that still remain.

Financial transparency has become a priority for many governments and agencies around the world, ensuring that effective due diligence is now mission critical for certain organizations. It is no longer possible to enter into a contract or business relationship without detailed, documented knowledge of the target entity without incurring substantial risk. Until recently, it was possible to keep financial interests confidential, but the regulatory environment has tightened to such an extent that this is no longer possible. Governments keen to attract investment are eager to show that they offer a healthy environment to do business, and that there is no place for corruption, fraud, human trafficking or threat finance, as well as many other ills. Financial secrecy doesn’t always hide financial wrongdoing, however. It is entirely possible to be on the right side of the law but be ethically challenged. We saw this in the release of the Panama Papers – whilst there was little evidence of financial crime, it was not for nothing that people chose to place their money in offshore bank accounts, and that was to avoid scrutiny. While no law has been broken, this creates a great deal of public unease and a sense of injustice, and heightens the risk of regulatory degradation. The Panama Papers therefore serve to illustrate the importance of conducting proper due diligence. It is now vitally important to identify the ultimate beneficial owner of any companies you may have an interest in – a failure to do so can result in a substantial fine and / or reputational damage. Unfortunately, regulators appear to assume that the task of obtaining ownership information is straightforward, it is however anything but. While ownership documentation is often required as part of the onboarding process, the task of continuously monitoring ownership changes and verifying client-provided details can present serious challenges due to the lack of transparency, especially for privately-held companies. In this podcast, James Swenson, Head of Financial Crime and Reputational Risk Managed Services at Thomson Reuters, speaks to Former Rear Admiral Chris Parry about the various issues of understanding ultimate beneficial ownership and why it is an increasing challenge for compliance officers.

Infrastructure is a key component of ambitious government development plans across the Middle East. Public Private Partnerships, or PPPs, have started to gain precedence as a way of structuring and funding large-scale projects in the region. New legislation is being proposed, amended and enacted to facilitate PPP programs and attract developers to MENA. But what challenges do these developers face? And what are the opportunities for foreign investors, contractors and debt providers? We discuss these issues and more with Udayan Mukherjee, Managing Partner for Dentons in Dubai.

Every oil and gas company wants to achieve optimum exploration, production and efficient processing. The management of risk in the supply chain plays an essential role in achieving this. Supply chains have become increasingly complex and fluid, making them challenging to manage at a time of growing regulatory risk. Quite often the management of supply chains is the responsibility of the procurement department, but with the inherent risk of these chains, there is the suggestion that senior executives oversee the function. Yet with dramatically falling oil prices, reductions in headcount and uncertainty about the future, the global oil and gas industry is under mounting pressure to make every penny count. Companies are looking for immediate cost savings, but the question is, what function gets sacrificed? Rising labour costs are placing the industry’s productivity levels under increasing pressure and leaving organizations vulnerable. There is no longer the headcount that there used to be, and many of the headcount reductions are said to occur in the purchasing and supply chain departments. This means that there is no longer the resource to conduct proper validation, prequalification and auditing of their suppliers. It’s crucial during such times, when everyone is feeling the pinch, that risk is carefully and cautiously managed, especially supply chain risk. Failure to carry out reviews of suppliers puts main contractors in a significant position of risk, since supply chain problems can affect firms’ financial position and reputation. How do compliance professionals cope, what steps do they take to reduce risk and is there a point when they have to follow their conscience? MENA Talks speaks to Tamer Nasser, Head of Compliance for Dragon Oil, about supply chain risk in the oil and gas industry, and asked him how best to manage, not just supply chains, but senior management.

With the introduction of VAT to the GCC as of 2018, businesses need to understand how best to prepare. And how can technology play a role throughout this period? Listen to Stewart Nivision, Global Head of Indirect Tax at Thomson Reuters, discuss how technology can steamline the process of VAT implementation.

Recently, there has been a lot of sensational media coverage surrounding the changes to the Virtual Private Networks (VPNs)  laws in the UAE. However, the question remains – what has actually changed? What is now considered criminal behavior? What constitutes illegal use that would warrant the level of financial penalties that we have seen in the reported media? In this episode of MENA Talks, we speak to Kelly Tymburski, Partner in the Telecoms, Media & Technology (TMT) Group at Dentons about the changes in the legal framework and its  impact on technology usage (VOIP),  what it actually means for businesses and individuals here, and importantly, the practical steps they can take to ensure they are protected from these new changes.

Demand for energy in the Middle East is rising at four times that of the global average, and the advancement of renewable energy is gathering pace. According to a 2016 report by the National Bank of Abu Dhabi (NBAD), the volumes of renewable energy have been greater in the developing world than in OECD nations. Developing countries have the opportunity to implement more intelligent energy solutions, and the financial markets can act as a catalyst for this evolution. The business landscape in the Middle East offers a number of opportunities to tailor financing to the requirements of the renewable energy sector. The existing public private partnership model is an advantage, and the region can also look to mature markets for key takeaways on how the financial community can make the best investment decisions. But is the Middle East fully prepared to take up this challenge? Most renewable energy is intermittent by nature, so are there enough smart storage solutions? With more efficient technology increasingly available, could renewable energy be a game changer? In this episode of MENA Talks, we hear from Nathan Weatherstone, the head of Renewables Energy at NBAD, as we discuss the opportunities, challenges and potential rewards of renewable energy investment. To listen to the podcast, please complete the form below.

Conversion to IFRS Standards in Saudi Arabia are already underway with publicly listed companies required to report using the new financial reporting framework as of 2017, and SMEs following suit in 2018. Adoption of IFRS Standards is part of the ‘Project for Transition to International Accounting and Auditing Standards’ introduced by the Saudi Organization for Certified Public Accountants (SOCPA). A key advantage in the introduction of IFRS is the standardization of reporting, allowing entities across the world to be compared in a consistent way. In this episode of MENA Talks, we hear from Andrew Hay, Global Head of Accounts Production for Thomson Reuters, talk through some of the obstacles and opportunities associated with IFRS conversion, based on his first-hand experience in Australia.

In recent years, there has been a huge increase in the demand for talented compliance staff. Demand for GRC skills and expertise has grown exponentially, and at a time of increasing enforcement activity, skilled professionals are scarce on the ground. For many organizations, upskilling an existing workforce is one of the most workable solutions, but how do you retain the much sought after skills once you’ve produced them? The compliance function is under more pressure than ever before, and senior executives have great expectations. In such a fast-moving environment, organizations need to keep their valued compliance staff to ensure business continuity. The compliance function has changed in recent years and has moved from a back room operation to a central player, key to the success and growth of the organization. Experienced compliance officers are expected to be involved in a wide range of activities and the skills now required for compliance officers include leadership, understanding business lines and products, operational change management and the ability to deal with regulators. There is far more pressure on compliance professionals to track and analyse regulatory developments, and to be able to quickly assimilate their impact. The combination of skills which financial institutions now require can be hard to find in the first place, and is becoming increasingly difficult to retain. Senior executives will need to think carefully about how to retain talent which, in many cases, they will have trained. In future, compliance staff will have higher expectations about their career development and will look at the opportunities both within the business and elsewhere. Businesses will need to distinguish themselves as a good place to work, do more to show they appreciate and value compliance staff and must plan carefully how they will retain the talent they need. In this podcast we speak to Basem Al-Issa, the Deputy Managing Director of the Kuwait Petroleum Corporation. Basem is responsible for training and career development at KPC and has responsibility for over 30,000 employees and contractors, a massive task. We asked him how he found his key compliance people, how he held onto them, and what he thought were the core skills that would help safeguard the company for the next 10 years at least.

Thomson Reuters MENA’s Tarek Toumas talks to Omar Mehanna, Head of Merchant Banking at NBAD, about the region’s M&A landscape, the state of IPOs in the region, the strength of family businesses across MENA and what to expect in 2016.

The regional and global tax landscape is undergoing considerable change. With the introduction of VAT in the GCC quickly approaching and the BEPS Action 15 impacting international tax regulations, the need for clear information is critical. Listen to Bert Brys, Head of Tax Policy Unit, OECD, discuss these ongoing tax issues and the implications for the region.