The Investment Law has been amended a number of times since 1990 in order to meet the requirements of foreign and local investors. The main features of Investment Law No. 22 of 2002 are as follows:

• Parity between a foreign and a local investor in terms of rights, privileges and obligations.
• A foreign investor may solely own their investment project without the sponsorship or participation of a Yemeni national and may also own land.
• Exemption from income tax, profit tax, real estate tax and other fees for a period of up to seven years.
• Exemption from Customs Duty on all machinery, equipment and materials needed for the project.
• Repatriation of profits and capitol and a number of other relevant privileges granted to investors from other countries.

The Commercial Courts have exclusive jurisdiction to deal with and look into matters relating to investment projects.

Whereas the above mentioned incentives offered by the Investment Law are certainly very attractive to a foreign investor, he will be concerned about a number of surrounding factors such as political stability, the independence of the judiciary, and an efficient and clean civil service which are vital to him and which have so far hindered foreign investment in Yemen.

In this respect it is to be noted that stability in Yemen has been steadily and gradually improving. Yemen has sound relationships with the United States of America and the European Community countries. The World Bank projects are on the increase and are progressing satisfactorily. The International Monetary Fund (IMF) deals with the country’s monetary problems sympathetically. The International Finance Corporation (IFC) has fully opened its doors to give loans to the private sector and the UNDP reports are more than encouraging. The donor countries are showing more interest in Yemen than ever before.

These signs answer the concerns of foreign investors mentioned above. It may be added here that the degree of instability differs from area to area within the country. A foreign investor can choose the area suitable to his needs in this respect. Whereas inefficiency and the integrity of the Civil Service are questionable, there are a few good ministries and a number of first class civil servants perform their jobs honorably. The Investment Authority is one such body. Whereas the independence of the judiciary is again questionable, good independent judges do function independently in the Courts.

The Law Offices of Sheikh Tariq Abdullah carry out accurate due diligence on behalf of their clients and are in a position to advise on every aspect of joint venture and investment projects and to guide their clients to follow the best and the easiest course.

By the Law Offices of Sheikh Tariq Abdullah

The practice of vessels being detained by receivers at ports in Yemen without the authority of the local Courts has been of great concern to vessel owners and their P&I Clubs for a number of years. Indeed, a few years ago one of the International Group of P&I Clubs published an article on this subject titled “Held to ransom in Yemen”. However, as we will outline below, if a vessel is detained without a Court Order there are steps that should be taken immediately to protect the owners’ interests.

Yemen’s Maritime Law provides as follows:

1. Precautionary arrest shall not be made on vessels unless by the order of a competent court and such arrest shall not be made except for a satisfaction of a maritime debt. The competent court in this context is the Commercial Court.

2. An Order for arrest may be made even if the vessel is ready to sail.

The Maritime Law lists those claims that would be regarded as a maritime debt. For example, contracts relating to carriage of goods as per a charterparty agreement or bill of lading or otherwise, and damage to goods and chattels which are being carried by the vessel.

Notwithstanding the above provisions, a practice has developed at ports in Yemen for the agents to withhold the vessel’s outward clearance to sail on instructions from the cargo receivers pending the settlement of the claim in cash or formal arrest of the vessel through the local Court.

Usually vessels are detained by claimants to obtain cash payments. Such cash payments create unhealthy precedents and make difficulties in the future, not only for the owners involved, but also for other owners and their P&I Clubs. In the past we have found that if security is given and the claim strongly defended, even taking costs into account, it can result in a saving in the amount paid for the claim. In addition it discourages receivers from asking for cash settlements and putting pressure on owners while their ships are in port.

It is to be noted that the agent is appointed by the shipowner and as such is required to act only in the interest of the shipowner. As such, it is absolutely essential that shipowners appoint only the most reliable and reputable shipping agents. The Courts are aware of the collusion between the receivers and the shipping agents. Therefore, if a shipowner complains to the Court and can establish that the detention was due to the wrongful act of the shipping agent, the Court would treat the matter with the utmost seriousness.

In the event that a vessel is detained at Aden without an Arrest Order, the shipowners may make a written complaint to the Director General of Yemen Ports Authority (Port of Aden), explaining the agents’ conduct. If sufficient complaints are made about agents detaining vessels that have not been arrested by a Court Order it may encourage the authorities in Yemen to take positive steps in the future.

By Khalid Abdullah, Law Offices of Sheikh Tariq Abdullah

Following the terrorist attacks of 11th September 2001 the United States government proposed that the International Maritime Organisation (IMO) should address the issue of terrorism at sea. As a result, the IMO held a conference in London from 9th to 13th December 2002 on Maritime Security. The conference was attended by 108 countries all of which were signatories to the 1974 Safety of Life at Sea (SOLAS) Convention. The conference adopted a number of amendments to the 1974 SOLAS Convention, the most significant of which was the adoption of the International Ship and Port Facility Security Code (ISPS Code).

The foreward to the Code states that its aim is to “establish an international framework involving co-operation between Contracting Governments, Government agencies, local administrations and the shipping and port industries to detect/assess security threats and take preventive measures against security incidents affecting ships or port facilities used in international trade”.

More importantly, the Code aims “to ensure the early and efficient collation and exchange of security-related information” between ports, the IMO, and those who will benefit from such information for the fight against terrorism.

Following the terrorist attacks on the USS “Cole” in October 2000 and the oil tanker “Limburg” in October 2002, the Government of Yemen is determined to make its ports safe and has taken the following steps to implement the ISPS Code by 1st July 2004:

• December 2002 – New port security measures were initiated at Aden Outer and Inner Harbours defining restricted areas that were enforced by the Marine Police and Navy. Any small craft not already registered were brought into a strict registration process.
  
• March 2003 - A Security Assessment was carried out at five main ports and terminals in Yemen by security specialists certified by a major Classification Society. Recommendations were produced and implementation of these was initiated.
  
• August 2003 - At the request of the insurance market, the Security Assessment was revalidated by the same specialists and recommendations on outstanding items to be implemented were produced. The specialists Hudson Trident were appointed as the Recognised Security Organisation (RSO) by the Government of Yemen.
  
• January 2004 – A Port Facility Security Assessment for Aden and other ports was drafted by the RSO, who also conducted a four day ISPS Port Facility Security Officer (PFSO) training course for coastguard officers in Aden.
  
• January 2004 – Decisions on Port and Terminal Security were taken by the Ministerial Security Committee, the Maritime Affairs Administration (MAA) appointed by the Government of Yemen to issue Certificates of Compliance with the ISPS Code for port facilities and terminals. The Yemeni coastguard were made responsible for security in Yemeni ports and terminals, so that in the future a single organization would be responsible, rather than the present situation where several are involved.
  
• March 2004 – The Port Facility Security Assessment for Aden and other Yemeni ports was finalised and recommendations were circulated to ports and terminals for comment and implementation. The fencing at Aden Oil Harbour was well advanced by this stage and security at the terminal had been considerably improved.
  
• April 2004 – A Coastguard Service was inaugurated at Aden following the training of coastguard officers abroad.

In June 2004 the new Automatic Identification System (AIS) for ships will be installed in the Aden Port Control Tower. This is the target date for Yemen to achieve compliance with the ISPS Code for all main ports and to report to the IMO that this has been done.

Yemen’s economy primarily depends on its ports, so its future prosperity will depend upon the safety of its ports and terminals. The Government of Yemen is determined to wipe out the country’s reputation for instability due to repeat acts of terrorism in one form or another. It has turned over a new leaf and is steadily moving towards stability. The United States of America, the European Union and the donor countries, as well as the World Bank, the International Monetary Fund and the International Finance Corporation are appreciative of the overall steps that Yemen has taken to implement reforms. Serious implementation of the ISPS Code is further proof of Yemen’s commitment to making its ports safe.