Aiming to protect domestic producers from unfair practices, Saudi Arabia has decided to approve new customs rules on imports from other Gulf Cooperation Council (GCC) countries.
Accordingly, following the coordination with the Ministry of Industry and Mineral Resources, the Ministry of Trade and the General Authority for Foreign Trade, on July 3 the chairman of the Board of the Department of Zakat, Tax and Customs Authority in Saudi Arabia has issued a new resolution, according to which new import customs procedures are approved in Saudi Arabia. Specifically, effective from the date of circulation all products, regardless finished or semi-finished, coming out from free zones across the GCC will be considered as if they were foreign imports. In addition, the decree stipulates that goods that contain components produced by firms partially or fully owned by Israeli companies would not enjoy any reduced duties. Goods produced by companies which are guided by workforce nationalization principles (with local employees not less than 25 percent of the total number of employees) and in particular, goods with not less than 40 percent of added value may enjoy preferential tarrifs. “Saudi manufacturers have been facing unfair competition by having to comply with lots of requirements for local content, while our competitors from the GCC are not subjected to the same rules and costs,” an official at Saudi-based rebar mill commented with regard to the abovementioned announcement.
In the steel segment, the announced measure is expected to affect billet and rebar imports to the country significantly, with a few cargoes having been reported as already impacted. “Six trailers carrying billet from Oman were slapped with twenty percent yesterday. They are trying to find out the real reason, but there is total confusion now in the market,” a market source stated. “We are trying to get some clarity on it. However, the real reason seems to be that some companies based in the UAE and Oman have screwed up the Saudi market with very low prices,” a GCC-based steel market source commented.