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Sat 11 Dec 2010 11:52 AM

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Supreme Council urges setting up of GCC Customs Union

Council urged the removal of customs and non-customs barriers among member states

Supreme Council urges setting up of GCC Customs Union
CUSTOM UNION: Business leaders have for a long time called for easing of red tape on the transport of goods in the GCC (Getty Images)

The prospect of a GCC wide customs union moved a step closer following instructions this week by the Supreme Council for authorities to speed up the removal of customs and non-customs barriers among GCC member states.

In the closing statement of the 31st GCC Summit in Abu Dhabi the council said: “The Supreme Council examined the report on the meetings of the Ministerial Council, Financial and Economic Cooperation Committee and the other relevant committees and gave directives to each of the Ministerial Committees to speed up work on the development of mechanisms of the Customs Union.”

The Council also urged the “removal of customs and non-customs barriers among the member states to facilitate smooth flow of intra-GCC trade as well as trade with foreign countries.”

Business leaders have for a long time called for easing of red tape on the transport of goods in the GCC and last month Mohammed Abdulaziz Alshaya, executive chairman of Kuwait based MH Alshaya Co told the Arabian Business conference this was one of the main obstacles to doing business in the region.

“There is still too much red tape. Too much paperwork… [the] challenge of moving goods is very frustrating,” said Alshaya, whose company manages around 55 brands and plans to open 1,250 new stores across the Gulf over the next five years.

In November, a senior official at the UAE finance ministry said GCC members were in the final stages of reaching a deal on how to distribute revenues from customs duties.

The introduction of a customs union in 2003 had been hailed by officials as a major achievement countering critics' claims that the Gulf bloc would be unable to realise economic integration.

But differences have delayed an agreement on how to introduce a permanent system to distribute custom receipts among six members of the GCC.

Younis Al Khouri, undersecretary and director general at the UAE finance ministry said: "The customs were unified in 2003 at five percent and a common market would require the customs barriers to be removed."

"We are still in the final stages of agreeing on how to distribute the amount received from the customs," he said on the sidelines of a conference about the GCC common market in Dubai.