Ruling Against Saudis May Affect Newcastle Deal

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Saudi Arabia violated the World Trade Organization’s intellectual-property rules when it failed to crack down on pirated broadcasts of Qatari television, the Geneva-based trade body said in a ruling.

The decision issued on Tuesday may hurt the kingdom’s effort to acquire Premier League soccer team Newcastle United, and may even have implications for the legality of U.S. steel and aluminum tariffs.

Qatar had brought the case against Saudi-based satellite-TV broadcaster and streaming service BeoutQ, which retransmitted TV content produced by the Qatari-based sports broadcaster BeIN Media Group LLC.

“Qatar has established that Saudi Arabia has not provided for criminal procedures and penalties to be applied to beoutQ” despite established evidence that it’s operated by people or entities under Saudi jurisdiction, the panel said in its decision on Tuesday.

Ali Al Kuwari, Qatar’s Minister of Commerce and Industry, called the ruling “a resounding victory” and Stephen Nathan, a lawyer for BeIN Media Group, hailed “a historic vindication of intellectual property rights.”

Saudi Arabia’s government took a different view, saying the WTO panel had rejected claims that it supported the alleged copyright piracy. It said it would appeal the ruling.

”Saudi Arabia has a strong track record in protecting intellectual property and it continues to apply its national regulations and procedures,” the kingdom’s representative to the WTO said in a statement carried by the official Saudi Press Agency.

BeoutQ boxes are no longer widely available in Saudi Arabia, and some Saudis who had bought them earlier said their broadcasts no longer work.

The dispute has weighed on the pending bid by Saudi’s sovereign wealth fund and other investors for Newcastle United. In April, BeIN CEO Yousef Al-Obaidly urged heads of English Premier League teams to “fully interrogate” the people and money behind the deal.

“Not only has the potential acquirer of Newcastle United caused huge damage to your club’s and the Premier League’s commercial revenues; but the legacy of the illegal service will continue to impact you going forward,” Al-Obaidly wrote, according to a copy of one of the letters that was seen by Bloomberg. BeIN owns the broadcasting rights for English Premier League matches in the Middle East.

The Saudi Arabian government has denied any links to BeoutQ and invoked the WTO’s national security exemption, which permit governments to take “any action which it considers necessary for the protection of its essential security interests.”

Trump Tariffs

BeoutQ emerged in 2017 after Saudi Arabia, Bahrain, Egypt and the United Arab Emirates abruptly severed diplomatic ties with Qatar. BeIN devices were banned from import in Saudi Arabia, but BeoutQ soon took its place, broadcasting the same games and commentary as the Qatari broadcaster.

More recently, Gulf leaders have pointed to fresh attempts to resolve the rift between Qatar and its neighbors. The Saudi-led quartet claims the Qatari government funds terrorism and interferes in their domestic affairs, allegations that Doha denies. Past attempts to rectify the dispute have stalled.

The ruling on Tuesday may also have implications for steel and aluminum tariffs imposed by the U.S. government. President Donald Trump’s administration invoked an interpretation of a Cold-War era national security law and argued that the WTO cannot mediate national security disputes.

However, the decision on Qatar marks the second time that the WTO has asserted authority to rule in a trade case where one side has declared it a matter of national security.

— Bloomberg

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