Dubai is the capital city of the United Arab Emirates, boasting one of the world’s largest seaports and trade centres. Over two-thirds of the import items to the UAE are directed to Dubai. But because Dubai’s three largest export cities are run by controversial governments, the United Arab Emirates has taken extra policy precautions to ensure uninterrupted trade among its allies. According to the UAE’s embassy to Washington, D.C., “The UAE strongly supports and fully enforces UN sanctions.” Although Dubai’s major export recipients are Iran, India and Saudi Arabia, the country insists that it takes commitment to global harmony importantly.
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Upholding United Nations Resolutions
The current UAE export laws contain strict restriction provisions against export and re-export of goods that carry threat against “national security, foreign policy, natural resources, public health and safety, or the environment.” The law also bans export of “arms and military hardware, chemical and biological materials, and dual-use items without a special license.” These 2007 law revisions were amended in 2009 with the creation/addition of the UAE Committee on Commodities Subject to Import and Export Control. According to UAE, transparency and oversight are an important mantra in the war against terrorism.
According to a 2009 article in Arms Control Today, “The UAE is implementing new export control laws put in place at Washington's recommendation. In order to crack down on Iranian front companies, the UAE in 2008 sharply reduced the number of business licenses and work visas to Iranian citizens.” In addition, the UAE has proved active in shutting down companies found in violation of the Non-proliferation Treaty and other UN resolutions.
Tariffs & Licenses
Most goods entering the UAE are subject to a standardised 5 per cent Gulf Cooperation Council (GCC) tariff on the CIF (cost, insurance freight) value of the goods. Generally, import duty is 10 per cent on luxury goods and 4 per cent on everything else. Tobacco products are subject to special duties of 100 per cent, while alcoholic beverages have duties of 50 per cent. For religious and security reasons, there are certain restrictions on import of alcohol, tobacco, firearms, and pork products.
Each Emirate follows its own specific customs authority, although they are similar. Besides Dubai, most goods travel through Abu Dhabi and Sharjah, and each has its own website with specific laws.
Import licenses are generally not required for import of goods intended for personal use, but importers of products intended for resale may only import those products for which they are licensed. Imports from Gulf Cooperation Council (GCC) countries are not subject to custom duties. According to the Abu Dhabi Chamber Of Commerce & Industry, "All imported beef and poultry products require a health certificate from the country of origin and a halal slaughter certificate issued by an approved Islamic centre in the country of origin."
Free Zones and Free Trade
Out of six international free zones, three currently operate in the UAE and the largest of these is Dubai’s Jebel Ali Free Zone (JAFZ). According to Abu Dhabi Chamber Of Commerce & Industry, "Since UAE tariffs are low and are not levied against most imports, the chief attraction of the free zones is the waiver of the requirement for majority local ownership. In the free zones, foreigners may own up to 100 per cent of the equity in an enterprise. Each free zone offers special incentives to attract tenants, such as no taxation for many years, subsidised energy rates, and full repatriation of capital and profits. In addition, for a nominal fee the zone authorities provide significant support services, such as sponsorship, worker housing, dining facilities, recruitment, and security.”
The UAE is a member of the Gulf Cooperation Council (GCC). In 1981, the GCC issued the Unified Economic Agreement, a plan for complete economic integration among the six member states (Saudi Arabia, Kuwait, the UAE, Bahrain, Qatar, and Oman). In practice, the provisions of this agreement have not all been implemented.
Under the agreement, all agricultural, animal, industrial, and natural resource products from member states (including Saudi Arabia, Kuwait, Bahrain, Oman, and Qatar as well as the UAE) are exempt from duties and other charges when trading among member states. The GCC has been also been trying unsuccessfully to negotiate with the European Community in establishing a free trade agreement between the respective. Also, according to Abu Dhabi Chamber Of Commerce & Industry, “The GCC also conducts economic dialogues with Japan and the U.S.”
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