The Gulf Cooperation Council (GCC) comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates announced the creation of the GCC Customs Union at the conclusion of the 23rd Annual Summit held in Doha in late December 2002. The Customs Union commenced on January 1 2003.
The Customs Union is a big step forward in promoting trade and investment among the member states of the Council. The Customs Union is a single customs zone with a unified customs tariff of 5% on CIF value subject to certain exceptions. The GCC has also produced a list of goods and products that are to be exempt from customs duty (primarily consisting of basic foodstuffs, personal effects and used household items subject to certain conditions). Exempt goods include imports related to the manufacturing industry.
Saudi Arabia adopted the unified customs law and its explanatory memorandum with the recent publication of Royal Decree No M/41 of 3/11/1423 H in the Umm Al Qura (the official gazette).
Each member state will be permitted to maintain higher tariffs on particular goods and products important to the economy of the member state for a period not to exceed three years. Saudi Arabia, the largest economy in the GCC, has decided to place a higher external tariff than the standard 5% tariff on approximately 800 goods and products.
The GCC is now negotiating with the EU as a unified trading bloc to reduce tariffs on products of importance to the economies of the GCC, such as aluminium. The GCC also hopes to form a monetary union by 2005 and have a single currency throughout the GCC by 2010.
Stephen P Matthews and Nabil A Issa
© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.