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Middle East & North Africa

Oman risk report

Updated:

Corruption is generally not an obstacle for businesses in Oman. Nonetheless, risks are higher when dealing with the elite as nepotism is widespread in the higher echelons of the government. The intertwined business interests of the political elite have resulted in perceived widespread political corruption. Businesses face a high corruption risk when operating in the public procurement sector. However, petty corruption does not constitute a barrier for business, and the practice of bribery is not common in Oman. Efforts to curb corruption among government officials have led to the prosecution of several high-ranking officials for crimes of corruption and abuse of office in recent years. The Omani Penal Code and the Law for the Protection of Public Funds and Avoidance of Conflicts of Interest constitute the legal framework to tackle corruption, and the government generally implements these laws effectively. Gifts that are intended to influence the acts of public officials are criminalized in Oman.

Judicial system Very low risk

Oman's judicial system carries a low corruption risk for companies. The courts are perceived as impartial and independent (HRR 2014), and irregular payments and bribes are seldom exchanged in return for obtaining favorable judicial decisions (GCR 2015-2016). Judicial proceedings for corruption cases usually take place behind closed doors; this is particularly true for corruption cases involving members of the royal family (HHR 2014). Business executives perceive the courts to be moderately effective in settling disputes and in challenging government regulations (GCR 2015-2016). Enforcing contracts is less costly and less time-consuming than elsewhere in the regional (DB 2016). Nonetheless, enforcing contracts is a slow process (ICS 2015).

In November 2015, the government of Oman set up the Public Funds Court, which will deal only with cases involving administrative and financial corruption (Gulf News, Nov. 2015).

Police Very low risk

Businesses face a low corruption risk when dealing with the police in Oman, despite isolated instances of police corruption (HRR 2014). Companies perceive the police as very reliable in enforcing the law and protecting business from crime (GCR 2015-2016).

Police corruption is not tolerated: In one 2012 case, a senior official from the Royal Oman Police was sentenced to three years in prison and fined USD 233,000 for bribery and embezzlement of public funds (HRR 2013).

Public services Very low risk

The public services sector carries a low corruption risk for companies in Oman; irregular payments are rare (GCR 2015-2016). Inefficient government bureaucracy is ranked as the second most problematic factor for business in Oman (GCR 2015-2016). Starting a business is less time-consuming and less costly than the average in the region (DB 2016).

Land administration Very low risk

There is a very low risk of corruption when dealing with Oman's land administration authorities. Property rights are well-defined and well-protected (ICS 2015), and registering property is less time-consuming and less costly compared to the regional average (DB 2016).

Anti-corruption violations in the sector are punished. In 2014, the undersecretary of the housing ministry and the secretary general of the former Supreme Committee for Town Planning were sentenced to three years in prison for abusing their positions to issue land title deeds in the state of Duqm. The lands had been confiscated for the development of the country’s industrial base. Twenty-one others connected to the case, including the governor of Duqm and one of his aids, were sentenced to one year’s imprisonment. All 23 defendants were fined OMR 1,000, and their land deeds were revoked (The National, Feb. 2014).

Tax administration Very low risk

Corruption is a very low risk in the Omani tax administration. Bribes are rarely exchanged when dealing with tax officials in the country, and tax rates and tax regulations do not represent an obstacle for business (GCR 2015-2016). The government recently further reduced tax rates by fixing the rates on profit for local and foreign companies (BTI 2016). Dealing with tax payments is less costly and less time-consuming in Oman than in the rest of the Middle East (DB 2016).

Customs administration Very low risk

The Omani customs administration carries a low corruption risk for businesses. There's a high level of transparency at the border, and demands for irregular payments are rare (GETR 2014). Trading across borders in Oman is less costly and less time-consuming compared to regional averages (DB 2016).

Public procurement Very high risk

Corruption is widespread in Oman's public procurement sector, presenting a high risk for business. Irregular payments and bribes are often exchanged in the process of awarding public contracts (GCR 2015-2016). In addition, businesses believe that favoritism taints the decisions of procurement officials and believe that public funds are sometimes diverted to companies or individuals due to corruption (GCR 2015-2016). Several members of the ruling elite (including members of the cabinet, senior office holders and prominent members of the ruling family) hold direct stakes in companies that benefit from public contracts (BTI 2016).

Exemptions from public tenders are provided for all of Oman's defense procurement, and military procurement contracts with suppliers do not include anti-corruption requirements (Government Defence Index 2015).

In a 2014 case, a former minister of commerce, Mohamed Al-Khusaibi, was sentenced to three years in prison and fined more than USD 1 million for offering the ex-undersecretary of the Ministry of Transport and Communication, Mohamed Al-Amri, a USD 1 million bribe in return for awarding a contract for the Muscat International Airport to a company in which Al-Khusaibi is a shareholder. Al-Amri also received a three-year prison sentence, was fined more than USD 3 million and was barred from public office for 30 years (FitW 2015; Reuters, May 2014).

Natural resources

There is very little information available on the extent of corruption in the Omani natural resources sector. In one corruption instance, however, the Omani National Gas Company announced in February 2016 that it has dismissed its chief executive officer, Goutam Sen, due to corruption allegations involving the bribery of government officials (Gulf News, Feb. 2016).

Legislation

The Omani Penal Code and the Law for the Protection of Public Funds and Avoidance of Conflicts of Interest make up the legal framework covering corruption offenses; the government enforces anti-corruption laws effectively (HRR 2014). Omani law criminalizes abuse of office, passive and active bribery and embezzlement. The Law for the Protection of Public Funds and Avoidance of Conflicts of Interest applies to corruption offenses committed by government officials and employees of the public sector or companies in which the government holds at least 40% shares. The Law is also applicable to private companies involved in corruption cases connected to government bodies or officials (ICS 2015). No anti-corruption law in Oman provides a proper definition of gifts, but any person accepting a bribe, whatever its form, is criminalized under Omani law. Money laundering is regulated under the Law of Money Laundering, and offenders can receive a prison sentence of three to ten years (BTI 2016). Public officials are subject to financial disclosure laws; when required by government auditors, officials have to list their financial assets and business interests as well as those of their spouses and children (HRR 2014). Non-compliance with disclosure laws may result in fines (HRR 2014). Government officials are not allowed to hold positions outside their government job without prior approval, but enforcement is very weak as several cabinet members have direct or indirect business interests (BTI 2016). Oman has ratified the UN Convention Against Corruption.

Civil society

Omani law provides for freedoms of speech and press, but the government does not respect these freedoms in practice (HRR 2014). Provisions in Oman's restrictive Press and Publication Law ensure the press remains censored and subdued (FotP 2015). A climate of fear and intimidation severely limits citizens' freedom of expression, and journalists frequently practice self-censorship (HRR 2014). In one instance, the newspaper Al-Zaman was shut down for a month and its editor-in-chief and one of its reporters received a sentence of five months in prison after publishing evidence of corruption within the Omani Ministry of Justice (BTI 2016). The government controls internet content (FotP 2015). In late 2014, authorities arrested writer and intellectual Ali Al-Rawahi for his posts on social media in which he accused the government of corruption (HRR 2014). Omani laws do not provide for public access to information (FotP 2014). The media environment in Oman is described as "not free" (FotP 2015).

Freedom of assembly is limited under Omani law, and these rights are further restricted in practice (HRR 2014). Traditions for civil society and civic engagement are poorly developed (BTI 2014).

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