Nice in theory, not so in practice?
60 trucks have been detained indefinitely at the UAE-Saudi border despite a GCC customs union that took effect on January 1, 2003.
Sixty trucks are stuck at the Al Batha border point awaiting permission to enter Saudi Arabia, despite having paid customs duty in the UAE, according to Saudi Arabia’s Al Watan newspaper.
The convoy of trucks were stopped at the Saudi-UAE border because of the lack of information as to the procedures governing imports into the Kingdom. Under the terms of the GCC customs union, effective January 1, 2003, goods entering the GCC pay 5% duty at the point of entry and can then move freely throughout the six member states. The customs union covers more than 1,500 imported items.
“Based on the information I got, the border has not been informed fully by Riyadh. It is a pity, in fact, that these things happen. Perhaps it could have been avoided,” Guy Duriau, business development manager at Al Futtaim Logistics, told Arabian Business.
Al Futtaim is responsible for six of the grounded trucks. According to Duriau, the trucks have, “everything which is allowed into Saudi Arabia, and nothing that is banned.”
“I am from Europe [and] we went through the same thing 10-15 years ago and then we started with a grace period. So this meant that they allowed for three months workers to get over the old system without blocking the trucks. If they would have done that I think things would have been a bit smoother,” Duriau added.
Effective January 2003, duty free access should be extended to products originating in GCC countries if 40% of the value added is from the GCC region, and if a citizen or entity from the GCC area owns 51% or more of the exporting enterprise.
Al Zamil Steel, which is listed on the Saudi stock exchange, dismissed talk about a number of its trucks and equipment being held up at the border. “As of now we have no trucks on the Saudi border,” Nawaf Al Zamil, purchasing manager for Zamil Steel, told Arabian Business. “We had two or three trucks at the beginning of the month at the border but they were let through,” he added.
“If there is unification then in fact all the borders and custom offices should be closed like in Europe. This means there could be customs checks and controls but there should not be any stops any more at the borders,” said Duriau.
Johnny Abedrabbo, a senior economist at Saudi Arabia’s largest bank, the National Commercial Bank agrees. “It symbolises the lack of coordination between the different customs agencies. They actually agreed on the customs union but they haven’t communicated the rules and regulations to their employees. That’s the problem.”