What to do with a paper with references but no citations? I just received a paper for review that does not have a single citation (in the text) of its references.

I wonder if this is common in other areas non-CS related.

Since it is a conference, I don't think I should contact the editor, but I do think it should lose many points in its evaluation. 

Overall the paper is well written, and they do not seem amateurish people writing their first paper.

What would you do in this case?
Reject.

No work exists in isolation. The authors need to position their work in relation to existing work, and this requires more than just putting a bunch of papers in the bibliography section: it requires a detailed comparison. The authors failed to do this. 

In any case,  there will always be another conference for them to resubmit to.