x Abu Dhabi, UAEWednesday 24 January 2018

GCC customs union will accelerate trade

The time it takes to move goods within the GCC will be slashed when member states unify their customs procedures in January.

The time it takes to move goods within the GCC will be slashed when the six member states unify their customs procedures in January, a senior official has said. Saeed Khalifa Saeed al Marri, the deputy director of the UAE's Federal Customs Authority, said the union, which has long been a key objective as the GCC moves towards a single currency, would help make trade easier while improving security through joint operations to fight smuggling and counterfeit goods.

"This is a volatile region. There is drug smuggling, arms trafficking, nuclear weapons, terrorism. Everything is here, the whole mixture," he said. "We have a huge volume of trade that we want to facilitate, and at the same time there are obligations. We know that customs is the first line of defence for each country. "This is the trick: how to facilitate and apply more security at the same time."

Mr Marri said the union would bring huge benefits to business in the region. At present, it can take a lorry three days to clear customs when entering Saudi Arabia from the UAE, but new technology and more co-operation between states should reduce that wait to less than 24 hours. "The UAE is involved in 70 per cent of the trade that takes place within the GCC," he said. "Every day, more than 3,000 trucks take goods from here to Saudi Arabia, and that does not include freight taken by air or sea. That is a huge volume of work for customs."

By sharing information with other member states about cargo entering the GCC, customs agencies will be able to avoid duplicating each other's work, he said. "At the moment, for example, cargo is inspected when it enters the UAE, and then again when it enters Saudi Arabia or elsewhere. By sharing data electronically, as soon as a container is inspected here in the UAE, that information is passed to our counterparts in the rest of the GCC so it will not have to be checked again."

The heart of the system will be a customs information centre that is under construction in Riyadh. Mr Marri said although there had been "some issues" with the company contracted to build the multimillion-dollar facility, he was confident that any remaining hurdles would be cleared by the Jan 1 deadline. "There has been a huge push by King Abdullah of Saudi Arabia and the other GCC leaders to deal with the last few issues, and we have almost solved everything. Inshallah, we will be ready by January."

By the end of this month, customs agencies in all six states will have agreed on a common list of prohibited goods, although there will still be room for individual countries to decide what they will and will not allow into their territories. Products such as alcohol, which is legal in the UAE but not in a number of other GCC states, will be allowed only to be shipped directly to the country where they are to be sold.

Working with the GCC Industry Committee and other bodies, the customs agencies are working towards introducing common tariffs and duties on imports, including a possible increase of taxes on tobacco products from the current 100 per cent to 200 per cent. "There are a number of studies we are looking at, and there will probably be a recommendation to ministers in January," said Mr Marri, who was at pains to deny reports that a decision had already been taken. "The main reason for looking at this is because of health. We want the price of tobacco to go up because we don't want people to buy it, we don't children to buy it.

"When you consider raising import duties like this you have to look at all the issues surrounding it. One issue we are looking at is, if we increase the duty, will that actually increase smuggling of cigarettes? "At the moment that is not a very big problem in the UAE. We are in contact with some of the larger Arab countries outside of the GCC, like Egypt, to see what their experience has been."

Mr Marri also hopes that close co-operation with his counterparts throughout the GCC will help curtail the huge regional trade in counterfeit goods. "We are especially concerned about things like fake medicines and fake car parts, which can put lives at risk," he said. "The GCC is working with partners from around the world to try and tackle this issue. As an example, the Chinese government is sending experts to train our people how to spot fake goods from China.

"The majority of counterfeit goods in this region originate in the Far East, but part of the problem is that most US and European industries are opening plants in the Far East, so it can be very difficult to tell what are genuine goods and what are fakes." Mr Marri said the increased co-operation between the GCC states, combined with advances in technology, meant that customs officials were better equipped than ever to deal with the increasingly sophisticated international criminals.

"When I first started in customs it was a very complicated job," he said. "A common way for people to smuggle things is to build a false wall in a container - if you are just looking at it, you cannot tell that inside the container is two feet shorter than outside. Now, inspectors can use a laser device that measures how big the container is from the outside and from the inside. It is very quick and accurate.

"Even so, we can't inspect everything. We have to apply risk management, to know which cargoes we should pay more attention to. The way to do that is to co-operate more with other countries, and we are finding that everyone, in the GCC and further away, is happy to co-operate with us." @Email:gmcclenaghan@thenational.ae