Implementation Procedures for the GCC Customs Union
Today's topic: Who collects the tariff?

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Implementation Procedures for the GCC Customs Union

The Supreme Council, in its 23rd Session held in Qatar (21 - 22 December 2002), approved the launch of the customs union of the GCC States as of 1st January 2003. It also approved the procedures and steps recommended by the Financial and Economic Cooperation Committee (The GCC Ministers of Finance and Economy) for the establishment of the customs union of the GCC States.

These procedures and steps comprise the following:

I. The date of setting up the customs union of the GCC States: The GCC customs union shall be implemented effective 1st January 2003.

II. Principles and Concept of the Customs Union of the GCC States:

1. Customs Union is the territory wherein customs duties "taxes" as well as the regulations and procedures restricting trade among the member States are abolished and wherein unified customs duties "taxes" and trade and customs regulations for trade with the non-member States are implemented.
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III. Single Point of Entry into the GCC States: The Single Point of Entry is one of the most important principles for the formation of the customs union of any economic community. The following are the most important requirements of the single point of entry into the GCC States:

1. Any land, sea or air customs port of the GCC States that has connection with the external world shall be deemed as a point of entry of the foreign goods into any member State.

2. The first customs port of the GCC States vis-à-vis the external world shall conduct the inspection of the goods imported to any member State, verify their conformity to the required documents, ensure that they do not contain any prohibited commodities and collect the applicable customs duties.
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6. The foreign goods imported into the GCC States from the free zones shall be subject to the customs duties when exiting these zones and shall be treated during movement to the other member States the same as other foreign goods.

IV. Unification of the Customs Tariff of the GCC Customs Union toward the external world:

1. The common customs tariff of the GCC Customs Union shall be 5% on all foreign goods imported from outside of the Customs union with effect from 1st January 2003.

2. The attached list (Appendix No. 1) incorporating 417 commodities (subheadings) shall be exempted from all customs duties "taxes", in addition to the exemptions provided for in the Unified Customs Regulation "Law" of the GCC States.

3. Ad valorem or specific customs duties "taxes" imposed on tobacco and products thereof in the member States of the Customs union shall be 100% (Products of chapter 24 of the H.S.- based Unified Customs Nomenclature for the Commodity Description and Coding of the GCC States). The max. limit of the specific duty or weight in the GCC Unified Customs Tariff shall be adopted. The customs revenues levied on tobacco and products thereof shall be considered the same as the revenues from any other commodity whose customs duties are collected within the common customs revenues of the CU member States.
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VI. Collection of the customs revenues in the GCC customs union: Customs duties are collected at the first customs point of entry of the GCC States with the external world as of 1st January 2003. The shares of the member States of the customs proceeds shall be distributed according to the final destination of the goods for the first three years following the establishment of the GCC customs union (Transitional Period) according to the following mechanism.
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VIII. Allowing the customs brokers to get engaged in the customs clearance in the GCC States: Nationals of the GCC States shall be allowed to engage in the business of customs clearance in the GCC States pursuant to Article (109) of the GCC Common Customs Law entitling GCC nationals to engage in the business of customs clearance in the member States.

IX. Internal Regulations of the Member States governing importation, exportation, Re-exportation and Transit: Matters closely related to the process of goods transportation in the GCC Customs Union member States and the principle of the Single Point of Entry shall be dealt with as follows:

1. Government Exemptions, Special Exemptions and Diplomatic Exemptions: Government Exemptions, Special Exemptions and Diplomatic Exemptions shall be limited to the provisions of the Common Customs Law of the GCC States approved by the Supreme Council. Any other exceptions shall be cancelled unless jointly agreed upon.

2. Controls for exempting the industry imports from customs duties "taxes" : Imports of the industrial installations in the GCC States (i.e. machinery, equipment, spare parts, raw materials, semi-manufactured materials and packing materials directly required for the industrial production) are granted exemption from customs duties "taxes" according to the controls agreed upon by the Council, provided that the customs office in any of the GCC States through which the goods have been imported shall facilitate the entry of imports whose certificate has been issued by the competent authority in any of the GCC States.
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