Steel and cement traders in Abu Dhabi have claimed that the Abu Dhabi customs department is violating the decision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to exempt cement and steel from the five per cent customs duties.
The complaint comes at a time when the price of cement and steel in the capital has risen considerably. A tonne of cement was selling for Dh4,200 yesterday, compared to Dh3,780 two weeks ago. The price of a bag of cement ranged from Dh28 to Dh30, up from Dh24.
Saeed Al Muhairi, Director General of Abu Dhabi Customs Department, refuted the allegation by traders and said that his department has complied with the exemption decision ever since it was issued on March 16.
Al Muhairi said there was a huge demand in the market for cement and steel to meet the needs of real estate projects, especially those launched by Aldar Properties, Sorouh, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank.
He said certain section of traders were using Sheikh Mohammed’s decision to demand exemption for shipments that had entered Abu Dhabi four months ago.
Some had even demanded a refund of duties paid several months ago and asked for the decision to have retroactive effect.
“Unfortunately, traders are not satisfied with the big profits they made when the prices were high and want more profits at the expense of consumers and the future of the emirate. Even now, some are making big efforts to starve the market of cement and steel in an effort to raise their prices,” he said.
Saeed Khalifa Al Marri, Deputy Director General of the Federal Customs Authority, agreed with Al Muhairi, adding that the authority has received complaints against traders who deliberately cut down their imports of cement and steel to hurt supply and push the prices up.
Al Marri said the Federal Customs Authority has asked complainants to go to the Ministry of Economy as it is the government body authorised to handle such complaints. He said the authority has not received any complaints from traders or consumers against the country’s customs departments about violations of the exemption decision.
“Perhaps some customs offices have been late in enforcing the decision, since it was first issued by Sheikh Mohammed in his capacity as Ruler of Dubai. Dubai Customs enforced it the same day,” Al Marri said. “Government bodies had asked us to issue an exemption decision at the national level and to put it forward to the Cabinet so that it would be binding on all emirates.”
Al Marri said the Federal Customs Authority was careful to formulate the decision in such a way as to not be in conflict with the provisions of the GCC customs union.
“There were several procedures involved in the formulation and execution of the decision and it needed approval from more then one body. Therefore, the decision might have reached some customs departments late.
“The Federal Customs Authority has not received a copy of the Cabinet order yet. And some customs departments in other emirates were confused for some time whether the Dubai Government decision applied to them as well. But everybody is now complying with the decision,” Al Marri said.
He said some traders were trying to manipulate the local market and it was necessary to take them head on.
Traders of items such as cement, steel or foodstuffs had formed alliances and blocs or cartels. They are pressurising government and non-government bodies to give in to their demands to raise prices under the pretext that the market is in need of more commodities and there is a lot of liquidity coupled with rising demand, said Al Marri.
He added that traders are working for their own vested interests and all their decisions were against consumers in the short term and against the country in the long term. Such cartels, which harm the national economy, should be countered, he said. “If we overcome them, prices will retreat or stabilise.”
Dr Hashim Al Nuaimi, Director of the Consumer Protection Department of the Ministry of Economy, said that contrary to traders’ claims, a study by inspectors has shown that customs departments, especially in the northern emirates and Abu Dhabi, were exempting cement and steel from duties.
Al Nuaimi said the ministry has asked cement factories not to raise prices. It has set the price of a sack of cement at Dh17 for the factory and Dh19 for the trader.
The ministry is currently studying a fixed price for steel, he added.
Customs officials deny traders’ allegations