Saudi trade clearance delays problematic

 

Dubai companies experience most difficulties when trading with Saudi Arabia compared to other Gulf Co-operation Council countries, said  Dubai Chamber of Commerce and Industry (DCCI).

In its latest research of Dubai companies, the chamber said 71 per cent surveyed reported difficulties with the Kingdom’s custom procedures, while 60 per cent said they experienced delays in trade clearance.

Forty-five per cent of the surveyed companies said they experienced inconsistent fee structures and 28 per cent cited having variances in product specifications, DCCI said in an e-mailed statement yesterday.

“In all cases Saudi Arabia was found to be the most problematic country in the GCC,” the statement said.The Kingdom was also reported to be the most problematic for Dubai traders in terms of double taxation, availability of trade and investment information, and differences in accounting standards, according to the chamber’s survey.

Bahrain was found to be the least problematic in these aspects, while surveyors cited Oman as the easiest country to find trade partners with.

Dubai-based firms also found Bahrain to pose the least problems with regards to customs checkpoints. Only 12 per cent of respondents cited having any difficulties, compared to 64 per cent in Saudi Arabia and 34 per cent in Kuwait.

The GCC member countries in 2001 formally adopted an external tariff of five per cent for most products – to be effective from January 2003 under the GCC Customs Union – in an effort to increase intra-GCC trade and to promote further regional co-operation.

The establishment of a Customs Union was a prerequisite for a common market in the GCC – introduced in January – and a move towards a monetary union and single currency in 2010.

The common market gives citizens from each of the six member states the same rights and entitlements in each country. Under the agreement, citizens have the same rights in areas such as employment, healthcare, education, social security and residence, as well as in economic activities such as trading on stock markets, setting up companies and buying and selling properties.

 

The main aims of the Customs Union are to unify customs laws and procedures across the GCC, to have a single point-of-entry with internally free movement of goods, and to treat all goods as national within the GCC.

According to Dubai Chamber, businesses surveyed said that the Customs Union has eased intra-GCC trade, but that some non-tariff barriers still exist.

The majority of Dubai’s traders have cited seeing improvements in overall procedures since the Customs Union was introduced. Seventy-one per cent claimed the Customs Union has made trade with GCC countries easier and 59 per cent have found Gulf markets more accessible, the report said.

However, the Dubai Chamber report added that about half of the companies surveyed said they have encountered problems with double tariff charges on more than one occasion.

Nearly a third of respondents have also been required to produce unnecessary certificates of origin when entering a GCC country, and almost two thirds have experienced differences in the product standards between the member states.

“Other [non-tariff barriers] to trade between GCC member states come in the form of delays in clearance at borders, differentiation in transport fees and differences in product specification,” said the report.

DCCI added that almost 65 per cent of the Dubai companies surveyed reported differences in product specification as a barrier to intra-GCC trade.

“Trade in machinery and equipment was found to have the largest variances in product specification, followed by the trade of food and then chemical products.”

Bahrain was found to be least problematic than any other GCC country in terms of quality specification and the value estimation of products, according to the survey.