Manufacturers cry foul over certificates of origin rule

Emirati manufacturers and exporters criticise Ministry of Economy rule with regards to getting certificates of origin for their products exported to GCC countries, despite the cancellation of the same by GCC states since 2003.

This impedes UAE trade with other GCC nations, they said. When the words 'Made in UAE' is clearly seen on the products what is the need for a certificate of origin?, argue exporters.

Abdullah Sultan Al Fa’an Shamsi, Advisor at Ministry of Economy for industry, said: "The ministry has not made it mandatory for all products. It is limited to goods not packaged as it is easy to remove label from the same."

The unified Customs Law of GCC countries in place since 2003, issued by the Federal Decree No 85 of 2007, says "the goods produced in any of the GCC country is treated as national products." It also provides to allow these products to move freely between the GCC member states under local invoices and customs declaration with its own exemption from the certificate of origin as long as it is labelled mentioning the origin and product name.

The law requires a certificate of origin only for non-packaged goods that are difficult to install or items such as cement and iron rods wherein indication of origin on them is difficult.

The Ministry of Economy imposes Dh20 - Dh400 fees to issue certificates of origin in accordance with the value of export bills. And the ministry is considering to increase the fees to a minimum Dh200 for goods worth a million dirhams, that is up to one per cent of the value of exported goods in the invoices of items in excess of Dh1m.

Meanwhile, informed sources, said the bill proposing fee hike by the Ministry of Economy is against the GCC Customs Law. They said the ministry is not coordinating with the Committee of Financial and Economic Cooperation of the GCC with regards to certificates of origin fees.

Saudi Arabia and Oman call for certificates of origin for goods imported following insistence of the UAE Ministry of Economy, said sources.

"The ministry ignores the real problems facing the industry, such as high cost of production, land rents and fees for visas, employment, prices of fuel, energy, electricity, high price of raw materials coming to the UAE, etc," sources said. Giving examples, they said good quality paper scraps are exported from the UAE at cheap prices, while those imported from Pakistan, India and Indonesia are at double price. "Similaraly, scrap iron imported from countries which have high radiation rates; our factories complain but Ministry of Economy  has so far not acted", they said.

The ministry gains only a few tens of millions of dirhams per year from such certificates of origin.

Abdullah Jankan, General Manager, Jankan Industries, specialising in the manufacture of generators and water pumps said though he got a certificate of origin of the product from the Dubai Chamber of Commerce and Industry, Customs of Qatar demanded a certificate issued by the Ministry of Economy called the 'Gulf certificate of origin', and imposed a duty of five per cent of the value of the goods before it was allowed into Qatar.

When Jankan approached the Ministry of Economy with a complaint, he was referred to the Federal Customs Authority, which has so far not accepted his complaint, he added.

Thereafter, Jankan said he was particular in getting certificates of origin for each export, however, the procedures for different countries are not clear, he added.

He said if the certificate is imposed by the Ministry of Economy it will be inconsistent with the laws of the Federation of GCC countries.

Mahdhi Hosni who runs about 15 factories producing foodstuffs, plastics, paper and carton and exports products to all GCC countries, Africa, Europe, Canada and the US, says he got certificates of origin for each shipment of export and was not informed that it had been cancelled.

Official source at the Chamber of Sharjah Commerce and Industry justified the Ministry of Economy's insistance of certificate of origin to ascertain the link between it and the factories in the country. He added licences for industrial plants issued by the departments of economic development is not valid.

Al Shamsi denied that the Ministry of Economy is forcing exporters to get certificates of origin for national products exchanged between GCC countries. He said the ministry urges certificates for industrial, agricultural and animal products to facilitate exports.

He explained the certificate of origin has many advantages where it helps determine rates of custom duties imposed in various countries. He revealed there are 10 kinds of certificates of origin for Arab and Gulf agricultural produce, natural resources, industry products, etc. There are other certificates such as American Visa for textiles and clothing, other European textiles and clothing, and Canadian textiles and clothing, and model (A), and a certificate of origin in general, and the Kimberley certificate.