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Customs Authority draft law goes to Rulers

posted on 01/01/2003: 838 views

The UAE federal customs authority draft law is now under the review by Their Highnesses the Rulers and will be forwarded to President His Highness Sheikh Zayed bin Sultan Al Nahyan for final approval. The new federal authority will replace the UAE Customs Council and will be responsible for implementing and following-up the GCC customs union and supervising customs activities in the UAE, said Dr. Mohammed Khalfan bin Kharbash, Minister of State for Finance and Industry.

Kharbash explained that the duty will be collected on behalf of the rest of the GCC countries on quarterly basis, through a clearing system. He expected today's implementation of the GCC unified 5 per cent tax and customs union to push forward the coming negotiations with the EU scheduled in March in Doha. Kharbash said the new law is applicable here on all goods cleared after 12.00 midnight while those cleared before December 31, were taxed at the four per cent rate.

"The draft law is with Their Highnesses the Rulers for ratification. It will be shown afterwards to President His Highness Sheikh Zayed bin Sultan Al Nahyan for final authentication," said Kharbash, following a meeting yesterday with customs director generals to discuss the customs union implementation. The UAE Ministry of Finance and Industry is also a member of the GCC customs union follow-up committee along with the seven customs departments. The UAE plans to regularly train its customs officers and employees on the implementation of the union.

"The GCC began with the trade free zone in 1983 and moved today to the union. The GCC countries have faced lots of challenges in the free trade zone but moved ahead." The customs union phase will end in December 2006 and the following phase, the common market, will start on January 1, 2007. "The monetary union will begin on January 1, 2010. All these phases are inter-linked, but the most important ones are the customs and monetary unions, because they are the steps for economic integration.

"All obstacles will also be resolved and all these phases will push for an effective economic power in GCC-EU negotiations. Kharbash said the customs union does not aim at increasing or reducing the revenues of a GCC country, but the creation of a single customs zone under which goods will move smoothly on a larger scale. "The real revenue is the union." Asked how will GCC countries that used to levy higher taxes make up for their lost revenues, Kharbash said, "The tax was unified with unanimous approval as all GCC countries wanted to create a bigger customs union.

"All collectively worked towards the establishment of a the bigger complex - the customs union - that will ensure a smoother flow of goods." Kharbash said the collection will depend on the final destination system. "For example, if the goods are going to Kuwait through the UAE, the UAE will collect duty on its behalf and transfer it to Kuwait through a clearing account. The GCC states will get their collected revenues on quarterly basis." "But if the final destination is Kuwait and part of the goods were consumed here, the duty will be calculated on the basis of the remaining quantity and that sent to Kuwait."

In the third case covering goods bought in the local market, Kharbash explained, "If documents prove that the goods were going to a final destination, then the duty will be collected on behalf of that destination while being re-exported." Kharbash believed the unified customs law will help reduce smuggling and duty evasions, especially that it is more comprehensive and its unified lists of banned and exempted goods are far more transparent.

He also pointed out that all concerned UAE ministries and government departments will cooperate on the implementation of the GCC customs union and will coordinate with their GCC counterparts because the UAE is the Gulf's major partner in this issue. Yesterday's meeting reviewed the GCC unified economic agreement which stipulated that GCC trade will be exchanged under a customs union and a 5 per cent unified tax, the single entry point, movement of goods move between the GCC countries, vet test and quarantines, treatment of GCC-manufactured products and the list of exempted products including the 53 basic good and 417 sub goods. (The Gulf News)


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