Ben Ewing, Partner, CMS: Viewpoint

Viewpoint: Ben Ewing

There have only been a few changes to the legal framework and tax in Oman in 2018. Some of the more noteworthy enactments have centred on the introduction of stricter penalties following the introduction of a new penal code and through existing competition and anti-monopoly laws, and consumer protection laws. These changes have placed greater pressure on businesses and employers to protect the rights of consumers, employees, individuals and other businesses.

The New Penal Code (New Code), as promulgated by Royal Decree No. 7 of 2018, which replaced the previous Penal Code (Old Code), as promulgated by Royal Decree No. 7 of 1974 as amended, came into effect in January 2018. Not only has the New Code introduced stricter punishments for certain criminal offences that existed under the Old Code, it has also introduced new punishments for crimes that did not exist previously.

The New Code also deals with cheque-related crimes, which is the primary cause of most of the criminal cases currently arising in Oman. Unlike other jurisdictions where cheque-related issues are considered a purely civil or commercial matter, under the laws of the sultanate, default on payment made by way of cheque can potentially give rise to criminal liability. In order for the case to be lodged, a complaint by a natural or juristic person needs to be made at the police station.

At a high level, anyone intending to do business – particularly with regards to consumer goods – should be cognisant of the pivotal role that is played by the Public Authority for Consumer Protection (PACP). Its mandate remains diverse, covering a broad range of responsibilities, including: the implementation of the sultanate’s general policy on consumer protection; designing plans and programmes necessary for consumer protection; performing market inspection, so as to ensure that pricing protection rules are adhered to, and there is general availability of quality goods at reasonable prices; ensuring that there is fair competition in the market place and that there are effective anti-monopoly measures in place; encouraging competition; and promoting international cooperation.

Part of the responsibility of the PACP was previously to supervise the implementation of the Competition Protection and Monopoly Prevention Law (the Anti-Monopoly Law), as promulgated by Royal Decree No. 67 of 2014. The Anti-Monopoly Law sets forth some harsh penalties for any monopolistic activities, and prohibits the entry into any agreements that would result in abuse of market dominance. From a legal perspective, the PACP adopts a strict approach to overall enforcement and is largely successful in the majority of cases that it decides to prosecute.

Responsibility for the implementation of the Anti-Monopoly Law has since transferred to a newly established and dedicated Competition Protection and Monopoly Prevention Centre (CPMPC), which is a separate entity that is overseen by the Ministry of Commerce and Industry established pursuant to Royal Decree No. 2 of 2018. The precise details of the application of the Anti-Monopoly Law were largely intended to be left for implementing regulations, however, no such regulations were implemented during the tenure of PACP. We are waiting to see if CPMPC issues these regulations or some further guidance in the near future.

In addition to the implementation of these stated regulations, we have seen more penalties being introduced by various government entities, including the Ministry of Manpower, which has been trying to remedy the ever-increasing issues that arise between employers and employees. In their latest ministerial decision, Decision No. 270 of 2018, the Ministry of Manpower introduced new penalties for absconding employees, in the hope of reducing their increasing numbers. These penalties are set for both the employees and employers. Penalties are imposed on employers if they do not follow the provisions of the ministerial decision, which is set at OR500 ($1300). The penalties on employees are to range from OR400 ($1040) to OR800 ($2080).