Gulf States Express Grave Concern Over European Legislation Threatening Joint Investment and Unleashing Unprecedented Economic Repercussions
London, United Kingdom – December 6, 2025
Gulf States Express Grave Concern Over European Legislation Threatening Joint Investment
The Gulf Cooperation Council (GCC) states have issued a unified warning through their diplomatic and economic channels, expressing grave concern over a package of new European legislation, which they see as a direct threat to the volume of joint investment and the smooth flow of trade between the two regions.
These concerns come in the wake of the European Union’s adoption of several new laws, most notably those related to “Corporate Sustainability Due Diligence” (CSDDD) and “Sustainability Reporting” (CSRD) requirements.
Riyadh, Abu Dhabi, and Doha fear that these laws will impose heavy and unrealistic administrative and logistical burdens on Gulf companies operating in Europe, potentially creating unprecedented economic repercussions and negatively impacting the flow of vital investments.
The new European legislation is part of the EU Green Strategy, which requires major European companies to track and assess the impact of their supply chains on human rights and the environment globally.
While Gulf states welcome the principle of sustainability, they believe the implementation lacks flexibility and fails to account for the structural and legislative differences of non-European markets.
A high-level Gulf diplomatic source told CJ Global that the new bureaucracy imposed by these laws could make it unprofitable for some small and medium-sized Gulf companies, which have a significant portion of their investments in Europe, to remain in the European market, potentially leading to a reduction in Gulf investment portfolios on the continent.
The challenges posed by this European legislation are compounded by overlapping and ambiguous provisions.
For example, some clauses require levels of transparency in sustainability reporting that may conflict with local laws in some Gulf states, particularly regarding data privacy and the confidentiality of commercial information.
This legislative inconsistency presents companies with a difficult choice: full compliance, which could be costly and logistically impossible, or reducing their presence in the European market.
The Gulf Cooperation Council (GCC) states are calling for further dialogue and negotiations with Brussels to find “workable” implementation mechanisms that take into account the long-term interests of trading partners, especially since the European Union is one of the region’s largest trading and economic partners.
The GCC states have emphasized that implementing these laws without amendments will have adverse consequences, potentially limiting the Gulf financial flows needed to fund clean energy and infrastructure projects in Europe itself.
There are fears that their deep concern could escalate into a trade crisis, leading to a reassessment of strategic economic relations between the two sides and the diversion of some of their substantial investments to more resilient markets, such as Asia and the United States.
This legislative confrontation indicates that economic globalization is increasingly governed by Western environmental and social regulations, forcing emerging economies to reformulate their strategies to avoid trade isolation.
Highlights of the Report:
Source of Concern:
The Gulf states express their deep concern regarding the new European legislation package related to “corporate sustainability due diligence” and “sustainability reporting.”
Economic Threat:
Concerns center on the administrative and financial burdens imposed by the new laws, which could lead to a reduction in the volume of Gulf investments in Europe.
Legislative Conflict:
European provisions require levels of transparency that may conflict with local laws in some Gulf countries, creating legislative conflicts.
Call for Dialogue: A
unified call from the Gulf states for the European Union to engage in further dialogue and negotiations to amend implementation mechanisms in a way that takes into account the interests of regional partners.
Potential Repercussions:
Warnings of adverse repercussions, including the diversion of some of the massive Gulf investments to alternative markets in Asia and the United States.
