MUSCAT : As per the Resolution, an administrative fine of OMR 5,000 will be imposed on those practicing hidden trades; the fine will be doubled to OMR 10,000 for repeat offenders, and tripled to OMR 15,000 for third time offenders.

The Resolution, issued in cooperation with a number of government agencies, will help combat hidden trade in Oman and restrict its economic and social repercussions on business owners and the society. The decision, which was issued in response to successive appeals from citizens over the past years to stop such practice, will be implemented 90 days from the date of its publication in the Official Gazette.

The Resolution comes from the Ministry’s keenness to avoid negative effects of hidden trade on the national economy and local markets, corresponding to the increasing cases of commercial fraud and its impact on the organization of labour market as well as unequal competition between entrepreneurs and small and medium enterprises, tax evasion, and circumvention of applicable procedures.

The provisions of the decision will be implemented in accordance with the mechanism determined by the Ministry of Commerce, Industry and Investment Promotion, taking into account the nature and size of each activity. It also indicates that every person who becomes aware of any other’s conduct of hidden trade must inform the Ministry immediately, with evidence of the violation stipulated in the decision.

The Ministry may also assign some of its specialized employees to monitor establishments, conduct inspections to ensure implementation of the provisions of this decision, and take the necessary measures regarding the violations committed.

An activity will be deemed as hidden trade if the establishment’s revenues, profits, or proceeds of contracts concluded, directly or indirectly, are transferred to a personal account or another account, and not to the account of the establishment. It also includes anyone, apart from owner of the establishment, receiving proceeds of the sale or transfers assets or liquidation of the establishment to the personal account, or obtains a return or variable financial compensation of any kind that is not commensurate with the nature of the work entrusted in the establishment; it will take account the work contracts that determine the right of the worker to obtain a percentage of the profits or revenues of the establishment.

Activities will be deemed as hidden trade if incorrect data or information has been submitted during the setting of the establishment, during the application for obtaining a license, or in the accounts of the establishment. It also applies to facilities where the owner of the facility grants an expatriate the power for absolute disposal of the facility or if the facility uses another bank account that is not registered in its name in its dealings related to its commercial activity are also deemed as hidden trade.

Article 10 of the Resolution specifies the following penalties for violators:

• Cancellation of the activity from the commercial register
• Administrative fine of OMR 5,000
• Administrative fine of OMR 10,000 if the violation is committed for the second time, with suspension of activity for a period of three months
• Administrative fee of OMR 15,000 if the violation is repeated for the third time, with the activity being struck off from the commercial register; the activity may be re-registered except a gap of one year

The Ministry of Commerce, Industry and Investment Promotion confirmed that the decision to combat hidden trade came as a part of its decision to implement the executive regulations of the Foreign Capital Investment Law and create an attractive investment environment and appropriate conditions for registering foreign institutions and companies.

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