UAE Gears Up For GCC Customs Union

by Lorys Charalambous, Tax-News.com, Cyprus

30 May 2002

The UAE Ministry of Finance and Industry has begun work on a draft unified customs law and on the formation of a new federal customs authority, in anticipation of the GCC Customs Union, due to come into operation in January 2003.

The European Union and the GCC have been in discussion over the possibility of putting in place a free trade agreement for over 13 years, as the six oil-rich nations are keen to address the high taxes imposed by the EU on Gulf petrochemical and aluminium products. However, progress in negotiations has been stalled by the absence of a GCC customs accord, which the European Union has always insisted upon as a pre-condition to serious free trade agreement talks.

Following the decision last December to put such an accord in place two years ahead of schedule, and to push for GCC monetary union by 2010, however, it is now all systems go for GCC members, as they work to put the necessary legislative framework in place.

Speaking to the Gulf News service on Tuesday following a meeting of the UAE Ministerial Committee for GCC Affairs, Minister of State for Finance and Industry, Dr Mohammed Khalfan Kharbash announced that: 'The UAE federal customs law will be prepared in line with the GCC unified customs system.'

With regard to the formation of the new customs authority, Dr Kharbash revealed that the Committee had stressed the importance of speeding the body's formation so that it is ready for action when the customs union becomes effective in January.

'The new authority will be beneficial to the UAE,' he told the newspaper. 'It demonstrates the UAE's commitment towards other countries and global blocs and towards the formation of the unified UAE system.'

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