The new system will be in place and all issues concerning a GCC customs union will be completed by the end of this year, Saeed Khalifa Saeed al-Marri, deputy director general of the UAE’s federal customs authority, said in an interview in Abu Dhabi.
The customs union has been beset by problems that have stopped it from being fully implemented since it was first introduced in 2003. A proposed Gulf single currency is dependent upon the formation of a Gulf common market, which, in turn, relies on the successful implementation of the customs union.
`It took some time to understand the concept of customs union for both governments and traders,’’ said al-Marri. “There has been huge progress. We are using the same tariff, and we are using the same point of entry for everyone.’’
The customs union stipulates that goods coming into the GCC are charged at a consistent tariff of 5% and can move around freely among the six member states. Under the current system, import duty is collected at the port of entry and is forwarded to the country of final destination.
The UAE, Saudi Arabia, Oman and Kuwait are backing a proposal to allow the country where the goods arrive to keep 95% of the duty paid and distribute the remaining 5% to the other GCC states based on a pre-determined formula, al-Marri said. Approximately 3% of GCC customs duties are currently redistributed under the final destination system, he said.
The UAE paid 2.1bn dirhams ($ 570mn) to its GCC neighbours under the final destination system in 2007, up from 136mn dirhams in 2003, according to federal customs data.
Other outstanding issues, such as a list of goods on which countries can charge more than 5% tariff, will be completed by the end of the year, al-Marri said.
Saudi Arabia’s list of more than 1,500 items has been reduced to around 300, while the UAE does not have one, al-Marri said.
