Law No. 5 of 2003 Approving the Unified Economic Agreement between the GCC States

Law No. 5 of 2003
Approving the Unified Economic Agreement between the GCC States

Promulgation Articles

Article One

The Unified Economic Agreement between the States of the Cooperation Council, signed in the city of Muscat, Sultanate of Oman, on 16 Shawwal 1422 AH, corresponding to 31 December 2001, the texts of which are attached to this Law, is hereby approved.

Article Two

The Ministers, each within his competence, shall implement this Law.

* Corrected by the Corrigendum published in Kuwait Al-Youm (Issue No. 608, 23 March 2003).

The Economic Agreement between the States of the Cooperation Council

The Member States of the Cooperation Council for the Arab States of the Gulf
In keeping with the Charter of the Cooperation Council, which calls for closer rapprochement and stronger ties among the GCC States.
In light of a review of the economic achievements made since the establishment of the Council, and in completion of what was accomplished by the Economic Agreement signed among the GCC States in 1981 in developing, expanding and strengthening the economic ties among them, and in bringing closer their economic, financial and monetary policies, their commercial and industrial legislation and the customs regulations applied therein, including the agreement on the customs union.
Seeking advanced stages of economic integration that lead to the common market and monetary and economic union among the GCC States within a specified timetable, while strengthening market mechanisms in the economies of the GCC States and developing the role of the private sector therein.
Desiring to strengthen the economies of the GCC States in light of global economic developments and the closer integration among the GCC States that they require, which strengthens their negotiating position and competitiveness in international markets.
In response to the aspirations and hopes of the citizens of the GCC States for achieving Gulf citizenship, including equal treatment in movement, residence, employment, investment, education, health and social services.
Have agreed as follows:

Chapter One – Trade Exchange

Article 1 – Customs Union

Trade exchange among the GCC States shall take place within a customs union to be applied no later than 1 January 2003, and which shall include, as a minimum:
(a) A unified customs tariff vis-à-vis the outside world.
(b) Unified customs regulations and procedures.
(c) A single point of entry at which the unified customs duties are collected.
(d) The movement of goods among the GCC States without customs or non-customs restrictions, taking into consideration the application of veterinary and agricultural quarantine regulations, and prohibited and restricted goods.
(e) The treatment of goods produced in any of the GCC States as national products.

Article 2 – International Economic Relations

With the aim of creating better terms and equal conditions in international economic dealings, the Member States shall formulate their economic policies and relations collectively vis-à-vis other States, blocs and regional groupings, and regional and international bodies and organisations.
The Member States shall take the measures necessary to achieve this aim, including:
(a) Following a collective negotiating strategy that supports the negotiating position of the GCC States.
(b) Concluding economic agreements collectively with trading partners.
(c) Unifying import and export procedures and systems.
(d) Unifying trade exchange policies with the outside world.

Chapter Two – The GCC Common Market

Article 3

Natural and legal person citizens of the GCC States shall be accorded, in any Member State, the same treatment as its own citizens, without differentiation or discrimination, in all economic fields, in particular:
1. Movement and residence.
2. Employment in the government and private sectors.
3. Social insurance and retirement.
4. Practising professions and crafts.
5. Engaging in all economic, investment and service activities.
6. Real estate ownership.
7. Movement of capital.
8. Tax treatment.
9. Trading in and purchasing shares, and establishing companies.
10. Education, health and social services.
The Member States agree to complete the implementing rules necessary to carry this out and to achieve the GCC Common Market.

Chapter Three – Monetary and Economic Union

Article 4 – Requirements of Monetary and Economic Union

With the aim of achieving monetary and economic union among the GCC States, including the unification of the currency, the Member States shall, in accordance with a specified timetable, fulfil the requirements of this union, including achieving a high level of convergence among the Member States in all economic policies, in particular fiscal and monetary policies, and banking legislation, and setting criteria for the convergence of economic performance rates of importance for achieving fiscal and monetary stability, such as deficit, indebtedness and price rates.

Article 5 – Investment Environment

With the aim of developing domestic, intra-GCC and foreign investment in the GCC States, and providing an investment environment characterised by transparency and stability, the Member States agree to take the following measures:
1. Unifying their regulations and laws relating to investment.
2. Granting national treatment, in all Member States, to investments owned by natural and legal person citizens of the GCC States.
3. Integrating the financial markets in the GCC States and unifying the policies and regulations relating to them.
4. Adopting unified standards and specifications for all goods in accordance with the Statute of the «Standards and Metrology Organization for the GCC States».

Article 6 – International and Regional Aid

The Member States shall coordinate their policies at the external level in the field of providing international and regional development aid.

Chapter Four – Development Integration

Article 7 – Comprehensive Development

The Member States shall adopt the policies necessary to achieve an integrated development process for the GCC States in all fields and to deepen coordination among the activities included in national development plans, including the implementation of the «Long-Term Comprehensive Development Strategy for the GCC States».

Article 8 – Industrial Development

(a) The Member States shall adopt the policies necessary to increase the contribution of the industrial sector to the economy, and to coordinate industrial activity among them on an integrative basis, including the implementation of the «Unified Industrial Development Strategy for the States of the Cooperation Council for the Arab States of the Gulf».
(b) The Member States shall unify the industrial legislation and regulations among them, including industry promotion systems, anti-dumping and safeguard measures.

Article 9 – Oil, Gas and Natural Resources

With the aim of achieving integration among the GCC States in the fields of the petroleum and mining industries and other natural resources, and enhancing the competitive position of the GCC States:
1. The Member States shall adopt integrative policies in all stages of the oil, gas and minerals industry so as to achieve the optimal exploitation of natural resources, taking into account environmental considerations and the interests of future generations.
2. The Member States shall set unified policies for oil and gas and shall adopt, in this field, common positions vis-à-vis the outside world and in international and specialised organisations.
3. The Member States and the oil and gas companies operating in them shall cooperate to support and develop research in the fields of oil, gas and natural resources and to enhance cooperation with universities in these fields.

Article 10 – Agricultural Development

The Member States shall adopt the policies necessary to achieve agricultural integration among the GCC States and the optimal long-term use of available resources, particularly water, including the implementation of the «Common Agricultural Policy of the GCC States» and the related regulations in the GCC States.

Article 11 – Environmental Protection

The Member States shall adopt the policies and mechanisms necessary to protect the environment in accordance with the regulations and resolutions issued within the framework of the Cooperation Council in this regard, considering them as the minimum for national legislation and regulations.

Article 12 – Joint Projects

With the aim of supporting productive interlinkage among the GCC States and benefiting from their economies of scale, achieving economic integration and improving the distribution of its gains among them, the Member States shall take the measures necessary to support, finance and establish private and public joint projects, including:
1. Adopting integrative economic policies among the GCC States in infrastructure and basic services projects, such as transport, communications, electricity, information technology, health, education and tourism projects, and the oil and gas industry.
2. Establishing joint projects on bases that take into account the comparative advantages of the GCC States.
3. Providing additional incentives to the private sector to establish joint projects that lead to linking the economic interests of citizens in the GCC States.
4. Removing the procedural obstacles faced by joint projects, and treating them as national projects as a minimum.

Chapter Five – Human Resources Development

Article 13 – Population Strategy

The Member States shall implement the «General Framework of the Population Strategy for the GCC States» and adopt the policies necessary to achieve the development of human resources and their full and optimal use, provide health care and social services, enhance the role of women in development, and achieve balance in the population structure and the labour force, so as to ensure the homogeneity of society in the GCC States, affirm its Arab and Islamic identity and preserve its stability and cohesion.

Article 14 – Eradication of Illiteracy and Compulsory Basic Education

1. The Member States shall adopt the programmes necessary for the comprehensive eradication of illiteracy in all GCC States within a specified timetable, and shall enact the legislation necessary for that purpose.
2. The Member States shall set a timetable for implementing compulsory basic education, and shall enact the legislation necessary to ensure it.

Article 15 – Education

1. The Member States shall cooperate in developing the programmes and curricula of general, higher and technical education to ensure a high level of scientific content and compatibility with the development needs of the GCC States.
2. The Member States shall achieve integration among the universities of the GCC States in all fields.
3. The Member States shall set the appropriate policies and mechanisms to achieve compatibility between the outputs of university education and scientific and technical research on the one hand, and the needs of the labour market and economic development on the other.

Article 16 – Localisation of Manpower

1. The Member States shall adopt the policies necessary to develop and unify their labour regulations and legislation, remove the obstacles impeding the movement of national manpower among the GCC States, and count citizens of the GCC States working outside their own States within the percentages required for the localisation of employment.
2. The Member States shall adopt unified standards for the occupational classification and description of all categories of professions and crafts in the various sectors, and shall develop and exchange information relating to the labour market in the GCC States, including unemployment rates, job opportunities and training programmes.

Article 17 – Increasing the Contribution of National Manpower and Its Training

(a) The Member States shall set effective policies to increase the contribution of national manpower to the labour market, particularly in high-skill jobs, and shall adopt effective programmes to raise the skill level of national manpower, establish on-the-job training programmes and contribute to their financing, provide incentives to those wishing to work in the private sector, and link the assistance granted to the private sector to the adoption of programmes for the employment and training of national manpower.
(b) The Member States shall adopt the policies necessary to rationalise the recruitment of expatriate manpower.

Chapter Six – Fields of Scientific and Technical Research

Article 18 – Scientific and Technical Research

The Member States shall support joint scientific and technical research and develop a joint, self-reliant scientific, technical and information base, considering it among the basic priorities of development, including the adoption of the following policies:
1. Increasing the funding allocated to the fields of scientific and technical research.
2. Encouraging the private sector to contribute to financing specialised scientific and technical research, and setting the necessary incentives for that purpose.
3. Emphasising that international companies operating in the GCC States adopt specialised scientific and technical research programmes in the Member States.
4. Localising the scientific, technical and information base, and making full use in that regard of the expertise of international and regional organisations.
5. Achieving integration among scientific research institutions in the GCC States to develop and activate the scientific, technical and information base, and working towards establishing joint research centres.

Article 19 – The Scientific, Technical and Information Base

With the aim of activating the scientific, technical and information base, the Member States shall take the following measures as a minimum:
1. Determining a mechanism to make use of scientific and technical research in the public and private sectors, and ongoing coordination between executive bodies on the one hand and the outputs of the scientific, technical and information base on the other.
2. Making the outputs of the scientific, technical and information base available to specialists and researchers, as well as businessmen and investors, through simplified procedures.
3. Supporting and developing technical information centres, systems and networks, and adopting programmes that facilitate the dissemination and exchange of information among scientific and technical research institutions in the GCC States.

Article 20 – Intellectual Property

The Member States shall set programmes to encourage the gifted and to support innovation and invention, shall cooperate in the field of intellectual property and in developing the regulations and procedures that ensure the protection of the rights of creators and inventors, and shall coordinate their policies in these fields vis-à-vis other States and regional groupings and regional and international organisations.

Chapter Seven – Transport, Communications and Infrastructure

Article 21 – Means of Transport

The Member States shall treat the means of passenger and goods transport belonging to any Member State, passing through their territories or destined for any of them, as national means of transport, including the level of fees and taxes and facilities.

Article 22 – Maritime Transport Services

The Member States shall permit the means of maritime transport belonging to any of them, and their cargo, to use all facilities, with the same treatment and preferences granted to their national counterparts, whether when berthing at or passing through their ports, including fees and taxes, and pilotage, berthing, shipping, unloading, loading, maintenance, repair and storage services.

Article 23 – Infrastructure Integration

1. The Member States shall adopt integrative policies in establishing infrastructure projects such as ports, airports, water desalination plants, electricity and roads, so as to facilitate trade exchange, achieve joint economic development and interlink economic activities.
2. The Member States shall take the measures necessary to integrate aviation and air transport policies among them.
3. The Member States shall work towards developing and integrating land and maritime means of transport to facilitate the movement of citizens and goods and to achieve economies of scale.

Article 24 – Communications

The Member States shall take the measures necessary to integrate communications policies, including telephone, postal and information network services, so as to improve the level of their services and their economic efficiency, and to strengthen the ties among the citizens of the GCC States and their private and public institutions.

Article 25 – Electronic Commerce

The Member States shall take the measures necessary to facilitate trade exchange and banking transactions through electronic means of communication, and to unify the legislation relating to electronic commerce.

Chapter Eight – Implementation and Follow-up Mechanisms

Article 26 – Implementation of the Agreement

1. The committees operating within the framework of the Council shall, each within its competence, implement this Agreement.
2. The General Secretariat shall follow up implementation.
3. The Member States shall provide the General Secretariat with periodic reports on the implementation of the provisions of this Agreement and the resolutions issued in application thereof, and in light of these reports the Secretary-General shall submit a comprehensive periodic report to the Supreme Council; and the General Secretariat shall set the mechanism for preparing these reports, their contents and the dates of their completion.

Article 27 – Settlement of Disputes

1. The General Secretariat shall consider claims of non-implementation of the provisions of this Agreement or of the ratified resolutions issued in application of its provisions, filed by any of the official authorities or citizens of the GCC States; and shall seek to settle them amicably.
2. If the General Secretariat is unable to reach an amicable settlement, the claim shall be referred, by agreement of the two parties, to the Commercial Arbitration Centre of the GCC States for consideration in accordance with its Statute; and if they do not agree to arbitration, or if the claim falls outside the jurisdiction of the Centre, it shall be referred to the judicial body provided for in paragraph (3) of this Article.
3. A competent judicial body shall be formed whenever necessary to consider claims arising from the implementation of the provisions of this Agreement or of the resolutions issued in application of its provisions. The Financial and Economic Cooperation Committee shall propose the statute of this body.
4. Until the statute of the judicial body provided for in paragraph (3) of this Article comes into effect, claims in which the two parties do not agree to arbitration and which the General Secretariat is unable to settle amicably shall be referred to the competent committees within the framework of the Council for decision.

Chapter Nine – Final Provisions

Article 28 – Ratification and Publication

The Member States shall take the measures necessary to ratify this Agreement and the resolutions issued in application of its provisions, to publish them through official means of publication and to put them into effect.

Article 29 – Entry into Force of the Agreement

This Agreement shall enter into force after its ratification by the Member States, and the General Secretariat shall notify the Member States of the date of its entry into force.

Article 30 – Exception

Any Member State may be granted a temporary exception from the application of certain provisions of the Agreement in cases of necessity required by temporary local conditions therein or by particular circumstances it faces; the exception shall be for a specified period, and by resolution of the Supreme Council.

Article 31 – Bilateral Agreements outside the Framework of the Council

A Member State may not grant any preferential advantage to another non-member State exceeding that granted in this Agreement, nor conclude any agreement that conflicts with the provisions of this Agreement.

Article 32 – Priority of the Provisions of the Agreement

1. The provisions of this Agreement shall have priority in application when they conflict with the domestic laws and regulations of the Member States.
2. This Agreement shall replace the Economic Agreement signed among the GCC States in 1402 AH (1981 AD), and the provisions contained in this Agreement shall replace the similar provisions contained in bilateral agreements.
3. Until the customs union of the GCC States is applied, the provisions of Article (3) of the Economic Agreement signed among the GCC States in 1402 AH (1981 AD) shall continue to apply, and the value-added percentage provided for in that Article may be amended by resolution of the Financial and Economic Cooperation Committee.

Article 33 – Amendment and Interpretation

1. This Agreement may not be amended except with the approval of the Supreme Council.
2. The Financial and Economic Cooperation Committee is authorised to interpret this Agreement.

This Agreement was signed in the city of Muscat (Sultanate of Oman) on Monday, 16 Shawwal 1422 AH, corresponding to 31 December 2001 AD.

Issued on 18 February 2003 and published in the Official Gazette Kuwait Al-Youm on 24 February 2003.