Payment in Middle East Still a Question Mark


For the second time in less than a year at an FCIB multi-day event, the topic of opportunity in the Middle East again was a hot one. And the jury once again noted there is a high level of opportunity to sell products and services that is only going to escalate in the coming years. However, it's not always so easy to get paid on deals that have been agreed upon.

FCIB 23rd Annual Global Conference Speaker Adolf Renaud, ICCE, of Tekelec Global, told attendees that he travels to the Middle East about every six or so weeks because of the amount of money that can be made in the region. Part of the reasoning is the cultural need there to slowly build the relationship and trust, not to mention that there regularly are obstacles to getting paid in any kind of timely fashion.

"If you think you can pick up the phone or send and email to get a payment, it's not going to work," Renaud said. "You have to be over there and spend time in the region. You also need to do exactly what they want...make sure you are specific and meticulous on things like invoices. It's not that they don't want to pay; it has to do with bureaucracy that has been in existence there for 50 years."

Panelist Charles Hallab, of Baker & McKenzie LLP, noted that even with an eye for these factors, payments have been a regular problem in the Middle East. One major mistake is making the assumption, albeit a reasonable one, that a high ranking official might be the most reliable to deal with in the region.

"Nonpayment, late payment, partial payment takes up a log of our time," he noted. "People come to us surprised that they're dealing with a major governmental agency or a prince and can't understand why payment is not forthcoming. Sometimes those are the worst counterparties to deal with in the Middle East. Track record is much more important than title."

-Brian Shappell, CBA, NACM staff writer
 

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