Law No. 10 of 2003 Promulgating the Unified Customs Law of the GCC States

Law No. 10 of 2003
Promulgating the Unified Customs Law of the GCC States

Articles of Promulgation

Article One

The Unified Customs (Law) of the States of the Cooperation Council for the Arab States of the Gulf is hereby approved in its attached form.

Article Two

Goods entering the territory of the State of Kuwait shall be subject to customs tax and the other prescribed fees at the rate of 5% of their value, plus shipping and insurance expenses and such other expenses as are specified by a decision of the Competent Minister, up to the port of arrival.
Certain imported goods may be exempted from customs tax by decree, and other customs tax rates may be set by decree, provided that they do not exceed the customs tax prescribed in the GCC States.

Article Three

Industrial establishments shall be granted an exemption from customs taxes on their imports of machinery, equipment, spare parts, primary raw materials, semi-finished materials and packing and packaging materials directly required for industrial production, three months after the start of application of the Unified Customs Tariff of the GCC States. This shall be in accordance with the controls agreed upon between the GCC States, in respect of which a decree shall be issued, provided that the exemptions prescribed for industrial establishments under the provisions of the aforementioned Industry Law No. 56 of 1996 shall continue to apply for three months from the date of the start of application of the Unified Customs Tariff of the GCC States.

Article Four

The aforementioned Decree-Law No. 13 of 1980 is hereby repealed, and the provisions of the attached Unified Customs Law shall be applied. The rules and regulations in force before its entry into force shall continue to apply, insofar as they do not conflict with its provisions and the provisions of its Executive Regulations, until the decisions implementing it are issued.

Article Five

The Prime Minister and the Ministers, each within his competence, shall implement this Law, which shall come into force from the date on which its Executive Regulations come into force.

Unified Customs Regulation (Law) of the GCC States

Part One – Definitions and General Provisions

Article 1

This Regulation (Law) shall be called (the Unified Customs Regulation (Law) of the Cooperation Council for the Arab States of the Gulf).

Article 2

The following words and expressions, wherever they appear in this Regulation (Law), shall have the meanings assigned to each of them, unless the context requires otherwise:
1. Council: the Cooperation Council for the Arab States of the Gulf.
2. Minister: the Minister to whom the General Administration of Customs reports.
3. Competent authority: the authority to which the General Administration of Customs reports.
4. Director General: the Director General of Customs.
5. Director: the director of the customs office.
6. Administration: the General Administration of Customs.
7. Customs office: the area determined by the Minister in each sea, air or land port, or in any other place where there is an office of the Administration, in which all or some customs procedures are authorised to be completed.
8. The Regulation (Law): the rules and provisions governing customs work, and any other rules or provisions supplementing, completing or amending it.
9. Customs zone: the part of the land or sea subject to customs control and procedures specified in this Regulation (Law), and it comprises:
a- Maritime customs zone: comprising the sea area lying between the shores and the outer limit of the territorial waters.
b- Land customs zone: comprising the land lying between the shores or the land borders on the one hand and an inner line on the other, to be determined by a decision of the Minister or the competent authority.
10. Customs line: the line coinciding with the political borders separating the State from its neighbouring states and with the shores of the seas surrounding the State.
11. Customs tariff: the schedule containing the descriptions of goods and the rates of customs tax (duties) to which they are subject, and the rules and notes contained therein for the kinds and classes of goods.
12. Customs tax (duties): the amounts levied on goods in accordance with the provisions of this Regulation (Law).
13. Fees: the amounts collected by Customs in consideration for the performance of a service.
14. Goods: any natural substance, or animal, agricultural, industrial or intellectual product.
15. Kind of goods: the description set out in the customs tariff schedule.
16. Price actually paid or payable: means the total payment made or to be made to the seller, whether directly or indirectly, by or for the benefit of the buyer for the imported goods.
17. Imported goods being valued: means the goods whose value for customs purposes is being determined.
18. Identical goods: means goods which are the same in all respects, including physical characteristics, quality and commercial reputation; minor differences in appearance shall not preclude goods from being regarded as identical.
19. Similar goods: means goods which, although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable; the quality of the goods, their reputation and the existence of a trademark are among the factors to be considered in determining whether goods are similar.
20. Selling commission: means the commission paid to the seller’s agent who is connected with, subject to, or acts for or on behalf of the manufacturer or the seller.
21. Packing costs: means the cost of all containers (other than freight containers), coverings of whatever kind, and packing, whether for labour or materials, used to place the goods in packing fit for shipment to the Council States.
22. Unit price at the greatest aggregate quantity: means the unit price at which particular goods are sold to unrelated persons at the first commercial level after importation, in the condition as imported, or after further processing or manufacture if the importer so requests.
23. Related persons means the following:
Legally recognised partners in business.
Officers or directors of one another’s businesses.
An employer and his employees.
Any person who directly or indirectly owns, controls or holds 5% of the voting stock or shares, or both.
If one of them controls or dominates the other.
Or both of them are directly or indirectly controlled by a third person.
Or together they directly or indirectly control a third person.
Or they are members of the same family.
24. Valuation Agreement: means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994.
25. Origin of goods: the country of their production, whether they are natural resources, agricultural or animal produce, or industrial products.
26. Prohibited goods: goods whose importation or exportation is prohibited by the State on the basis of the provisions of this Regulation (Law) or another regulation (law).
27. Restricted goods: goods whose importation or exportation is restricted under the provisions of this Regulation (Law) or any other regulation (law).
28. Country of exportation: the country from which the goods were imported.
29. Importer: the natural or legal person who imports the goods.
30. Exporter: the natural or legal person who exports the goods.
31. Cargo manifest: the document containing a comprehensive description of the goods loaded on the various means of transport.
32. Free zone: a part of the territory of the State in which commercial or industrial activities are carried on under the regulations specific to it; any goods entering it shall be deemed to be outside the customs territory, and such goods shall not be subject to the usual customs procedures.
33. Free market: the licensed building or place in which goods are deposited under suspension of customs duties (taxes) for the purposes of display and sale.
34. Customs declaration: the statement of goods or the declaration submitted by their owner or the person acting on his behalf, specifying the distinguishing elements of the declared goods and their quantities in detail in accordance with the provisions of this Regulation (Law).
35. Store: the place or building designated for the temporary storage of goods pending their withdrawal under one of the customs regimes, whether operated directly by the Administration or by public official institutions or operating bodies.
36. Bonded warehouse: the place or building in which goods are deposited under the supervision of the Administration under suspension of customs taxes (duties) in accordance with the provisions of this Regulation (Law).
37. Carrier: the owner of the means of transport or the person acting on his behalf (under an official authorisation).
38. Designated routes: the routes determined by decision of the Minister or the competent authority for the movement of goods entering, leaving or passing through the State.
39. Treasury: the Public Treasury.
40. Customs clearance: the documentation of customs declarations for incoming, outgoing and transit goods in accordance with the customs procedures provided for in this Regulation (Law).
41. Customs broker: any natural or legal person licensed to carry on customs clearance business on behalf of third parties.
42. Customs broker’s representative: any natural person licensed to follow up customs procedures.

Article 3

The provisions of this Regulation (Law) shall apply to the territory subject to the sovereignty of the State and to its territorial waters, and free zones to which the customs provisions do not apply, in whole or in part, may be established in such territory.

Article 4

All goods crossing the customs line on entry or exit shall be subject to the provisions of this Regulation (Law).

Article 5

The Administration shall exercise its functions in the customs office and in the customs zone, and it may also exercise its powers throughout the territory of the State and its territorial waters, within the conditions specified in this Regulation (Law).

Article 6

Customs offices shall be established and abolished by decision of the Minister or the competent authority.

Article 7

The competences of customs offices and their working hours shall be determined by decision of the Minister or the competent authority.

Article 8

Subject to the provisions of the articles relating to the examination of goods, customs procedures may not be carried out except in the competent customs offices in accordance with Article (7) of this Regulation (Law).

Part Two – Provisions on the Application of the Customs Tariff

Article 9

Goods entering the State shall be subject to customs taxes (duties) under the Unified Customs Tariff and to the prescribed fees, except as exempted under the provisions of this Regulation (Law), the Unified Economic Agreement between the States of the Cooperation Council for the Arab States of the Gulf, or any other international agreement within the framework of the Council.

Article 10

The rate of the customs tariff tax shall be either ad valorem (a percentage of the value of the goods) or specific (an amount per unit of the goods), and such tax may be both ad valorem and specific for the same kind of goods.

Article 11

Customs taxes (duties) shall be imposed, amended and abolished by the legal instrument in force in each Member State, taking into account the decisions issued by the Council States in this regard and the provisions of the international agreements in force.

Article 12

Decisions amending the rate of customs tax (duties) shall specify the date on which they begin to apply.

Article 13

Imported goods shall be subject to the customs tax (duties) in force on the date of registration of the customs declaration at the customs offices, unless otherwise provided in the body of the decisions amending the customs tariff.

Article 14

Where customs tax (duties) is to be assessed ex officio on goods deposited in the bonded warehouse due to the expiry of the deposit period, the tariff provisions in force on the date of registration of the customs declaration shall apply to them.

Article 15

Goods leaving the free zones and free markets for the local markets shall be subject to the customs tariff in force on the date of their exit.

Article 16

Smuggled goods, or goods deemed smuggled, shall be subject to the customs tariff in force on the date of discovery of the smuggling or on the date of its commission, if it can be determined, whichever is higher.

Article 17

The customs tariff in force on the day of sale shall apply to goods sold by the customs office in accordance with the provisions of this Regulation (Law).

Article 18

The customs tariff in force shall apply to goods that have suffered damage according to their value in the condition they are in at the time of registration of the customs declaration.

Part Three – Prohibitions and Restrictions

Article 19

A customs declaration shall be submitted for all goods entering or leaving the State, and the goods shall be presented to the customs authorities at the nearest customs office.

Article 20

Maritime means of transport entering the State, whatever their capacity tonnage, are prohibited from anchoring at ports other than those designated to receive them, except in a maritime emergency or due to force majeure; in such case, the master shall notify the nearest customs office or security post thereof without delay.

Article 21

Vessels whose capacity tonnage is less than two hundred marine tons are prohibited from entering or moving within the maritime customs zone while laden with goods that are restricted, prohibited from importation, or subject to high rates of duty in the customs tariff, except in circumstances arising from maritime emergencies or due to force majeure; in such case, the master shall notify the nearest customs office or security post thereof without delay. Goods carried between the ports of the State whose customs procedures have been completed are excepted from this.

Article 22

Aircraft departing from or arriving in the State are prohibited from taking off or landing at airports where there are no customs offices, except in cases of force majeure; in such case, the aircraft commander shall notify the nearest customs office or security post thereof without delay and shall submit to the customs office a report endorsed by the customs office that was notified, unless otherwise provided in any other regulation (law) or decision.

Article 23

Land means of transport are prohibited from entering or leaving the State in areas where there are no customs offices.

Article 24

The Administration shall prevent the entry, transit or exit of goods that are prohibited or in contravention under the provisions of this Regulation (Law) or any other regulation (law) or decision, and shall likewise prevent the entry, transit or exit of restricted goods except under an approval issued by the competent authorities in the State.

Part Four – Distinguishing Elements of Goods (Origin – Value – Type)

Article 25

Imported goods shall be subject to proof of origin in accordance with the rules of origin in force agreed within the framework of the international and regional economic organisations.

Article 26

The value for customs purposes shall be calculated in accordance with the provisions and bases set out in the Executive Regulations.

Article 27

Acceptance of the value as a distinguishing element of the goods shall require the following:

1. Each customs declaration shall be accompanied by an original detailed invoice; the Director General or whomever he authorises may permit the completion of clearance procedures for the goods without production of the certified original invoices and the required documents against an undertaking to produce them within a period not exceeding (90) days from the date of the undertaking.

2. The value of the goods shall be proved by submitting all original invoices and documents showing their value in accordance with the bases set out in Article (26).

3. The customs office shall have the right to request the documents, contracts, correspondence and other papers relating to the goods, without being bound by what is stated therein or in the invoices themselves.

4. The Administration may request an Arabic translation of invoices issued in a foreign language showing the details of the goods in conformity with the customs tariff, as well as of other documents if necessary.

Article 28

The value of exported goods is their value at the time of registration of the customs declaration, plus all expenses until the goods arrive at the customs office.

Article 29

Goods not mentioned in the customs tariff schedule and its explanatory notes shall be classified in accordance with what is issued by the World Customs Organization in this regard; goods falling under local subheadings in the tariff schedule shall be classified within the framework of the Council States.

Part Five – Importation and Exportation

Chapter One – Importation

1 – Transport by Sea

Article 30

a- All goods arriving in the State by sea shall be entered in the cargo manifest.
b- A single manifest covering the entire cargo shall be drawn up and signed by the master of the vessel, containing the following information:
1. The name, nationality and registered tonnage of the vessel.
2. The kinds of goods, their gross weight and the weight of bulk goods, if any; if the goods are prohibited, they shall be stated by their true description.
3. The number of packages and pieces, and the description of their packing, marks and numbers.
4. The name of the shipper and the name of the consignee.
5. The ports from which the goods were loaded.
c- Upon the vessel’s entry into the customs zone, the master of the vessel shall produce the original cargo manifest to the competent authorities.
d- Upon the vessel’s entry into the port, the master of the vessel shall submit to the office:
1. The cargo manifest.
2. The cargo manifest of the ship’s stores, the crew’s baggage and the goods belonging to them.
3. The list of passengers’ names.
4. The list of goods to be unloaded at that port.
5. All documents and bills of lading that the customs office may require for the application of the customs regulations.
e- The declarations and documents shall be submitted within thirty-six hours of the vessel’s entry into the port, and official holidays shall not be counted within this period.

Article 31

If the cargo manifest belongs to a vessel that does not make regular voyages or has no shipping agent in the port, or is a sailing vessel, it shall be endorsed by the customs authorities at the port of loading.

Article 32

a- The cargo of vessels and of all other waterborne means of transport may not be unloaded except at the customs office in the port. No goods may be unloaded or transhipped from one vessel to another except under the supervision of the customs office.

b- Unloading and transhipment from one vessel to another shall take place in accordance with the conditions specified by the Director General.

Article 33

The master of the vessel, its agent or his representative shall be liable for any shortage in the number of pieces or packages or in their contents, or in the quantity of bulk goods, until the goods are received in the customs stores or in the bonded warehouses, or by their owners when they are permitted to do so, subject to the provisions of Article (54) of this Regulation (Law).

Article 34

If a shortage is established in the number of pieces or packages unloaded compared with what is entered in the cargo manifest, or in the quantity of bulk goods, the master of the vessel or his representative shall justify such shortage and support it with documents proving that it occurred outside the maritime customs zone; if such documents cannot be submitted immediately, a period not exceeding six months may be granted for their submission after taking security safeguarding the rights of the Administration.

2 – Transport by Land

Article 35

The customs procedures for goods arriving by land shall be completed at the first customs office, and they may be referred to one of the inland customs offices in cases deemed appropriate by the Director General.

Article 36

a- A cargo manifest covering the entire load of the land means of transport shall be drawn up and signed by the carrier or his representative, containing sufficient information about the means of transport and its load and all other particulars, in accordance with the conditions determined by the Director General.

b- Carriers of goods or their representatives shall submit the cargo manifest to the customs office immediately upon their arrival there.

3 – Transport by Air

Article 37

Subject to the provisions of Article (22) of this Regulation (Law), aircraft shall, when crossing the borders of the State, follow the air routes designated for them, and shall not land except at airports where there are customs offices.

Article 38

A cargo manifest covering the entire cargo of the aircraft shall be drawn up and signed by the aircraft commander in accordance with the conditions set out in paragraphs (a – b – c – d) of Article (30) of this Regulation (Law).

Article 39

The aircraft commander or his representative shall submit the cargo manifest and the lists referred to in Article (38) of this Regulation (Law) to the officials of the Administration, and shall deliver these documents to the customs office immediately upon the arrival of the aircraft.

Article 40

Goods may not be unloaded or dropped from aircraft during flight unless this is necessary for safety purposes, provided that the customs office is notified thereof, subject to the special provisions contained in other relevant laws.

Chapter Two – Exportation

Article 41

Owners of means of transport of goods or their agents, whether such means are laden or empty, shall, upon their departure from the State, submit to the customs office a cargo manifest conforming to the provisions of Chapter One of this Part, and obtain a departure permit; the Director may grant an exception from this requirement in certain cases.

Article 42

Exporters of goods shall take the goods intended for export to the competent customs office and declare them in detail, and carriers heading towards the land borders are prohibited from bypassing the customs offices.

Chapter Three – Postal Transport

Article 43

Goods shall be imported or exported by post in accordance with the provisions of this Regulation (Law), subject to the provisions of the international postal conventions and the other domestic laws and regulations in force.

Chapter Four – Common Provisions

Article 44

a- Several closed packages, consolidated in any manner whatsoever, may not be entered in the cargo manifest, or whatever serves in its place, as a single package. With regard to containers, pallets and trailers, the instructions issued by the Director General shall be observed.
b- A single consignment of goods may not be split; the Director General may, for justified reasons, permit splitting, provided that such splitting does not result in any loss to the Treasury.

Article 45

The provisions of Articles (32, 33, 34) of this Regulation (Law) relating to carriage by sea shall apply to carriage by land and by air with regard to the unloading of goods and their transfer from one means of transport to another. Drivers, aircraft commanders and transport companies shall be liable for shortages in the case of carriage by land and by air.

Article 46

The Administration shall have the right to use electronic data interchange in customs clearance.

Part Six – Stages of Customs Clearance

Chapter One – Customs Declarations

Article 47

Upon the clearance of any goods – even if exempt from customs taxes (duties) – a detailed customs declaration shall be submitted to the customs office in accordance with the forms adopted within the GCC States, containing all the information that enables the application of the customs regulations, the collection of the customs taxes (duties) due, and for statistical purposes.

Article 48

Subject to the provisions of paragraph 1 of Article (27) of this Regulation (Law), the Director General shall specify the documents to be attached to customs declarations and the information that such documents shall contain, and may permit the completion of clearance procedures where any of the required documents is not produced, against cash or bank guarantees or a written undertaking to produce such documents, in accordance with the conditions he specifies.

Article 49

Entries in customs declarations may not be amended after their registration; however, the declarant may submit a written request for correction to the Director before the customs declaration is referred for examination.

Article 50

Owners of goods or their representatives may inspect their goods before submitting the customs declaration and take samples thereof where necessary, after obtaining permission from the Director and under the supervision of the customs office; such samples shall be subject to the prescribed customs taxes (duties).

Article 51

No one other than the owners of goods or their representatives may inspect customs declarations and documents; the competent judicial or official authorities are excepted therefrom.

Chapter Two – Examination of Goods

Article 52

The competent officer shall examine the goods, in whole or in part, after the registration of the customs declarations, in accordance with the instructions issued by the Director.

Article 53

a- The examination of goods shall be carried out at the customs office, and in certain cases it may be permitted to be carried out outside that office in accordance with the rules specified by the Director General.
b- The transport of goods to the place of examination, the opening and repacking of packages, and all other operations required by the examination shall be at the expense of the owner of the goods, who shall be responsible for them until they reach the place of examination.
c- Goods placed in customs stores or in the places designated for examination may not be moved without the approval of the customs office.
d- Persons engaged in transporting goods and presenting them for examination shall be approved by the customs office.
e- No person may enter customs stores and bonded warehouses, enclosures, sheds and yards designated for storing or depositing goods, or places designated for examination, without the approval of the customs office.

Article 54

Examination shall be carried out only in the presence of the owner of the goods or his representative, and where a shortage in the contents of packages appears, liability therefor shall be determined as follows:

1. If the goods entered the customs stores and bonded warehouses in packages in apparently sound condition, such that it is certain that the shortage in their contents occurred in the country of exportation before shipment, the pursuit of such shortage shall be dropped.

2. If the goods entering the customs stores or bonded warehouses were in packages in apparently unsound condition, the entity responsible for such stores or bonded warehouses shall, together with the carrier company, record such condition in the receipt report and verify their weight, contents and number. Such entity shall take the measures necessary for their safe keeping, and liability in this case shall lie with the carrier unless there is a reservation on the cargo manifest endorsed by the customs of the country of exportation, in which case the pursuit shall be dropped.

3. If the goods entered in packages in apparently sound condition and then became subject to suspicion after entering the customs stores and bonded warehouses, liability shall lie with the entity responsible for the bonded warehouses in the event of a shortage or substitution.

Article 55

The customs office shall have the right to open packages for examination, where prohibited goods, or goods not conforming to what is stated in the customs documents, are suspected, in the absence of the owner of the goods or his representative if he refuses to attend the examination at the specified time despite being notified; and where necessary, the customs office shall carry out the examination before notifying the owner of the goods or his representative, by a committee formed for this purpose by a decision of the Director General, and shall draw up a report of the result of the examination.

Article 56

a- The customs office shall have the right to have goods analysed by the competent authorities in order to verify the type of the goods, their specifications, or their conformity with what is permitted by the laws and regulations.

b- Goods whose release requires the fulfilment of special conditions and specifications shall be subject to analysis or examination, and the Director shall have the right to release them against the necessary guarantees ensuring that they are not disposed of until the result of the analysis appears.

c- The Director General may order the destruction of goods which are proven by examination or analysis to be harmful or not conforming to the approved specifications, at the expense of their owners and in their presence or that of their representatives, and they shall be re-exported to their source if the matter so requires; the necessary report shall be drawn up thereof.

Article 57

Customs tax (duties) shall be collected in accordance with the contents of the customs declaration, and if the result of the examination shows a difference between it and what is stated in the customs declaration, the customs tax (duties) shall be collected on the basis of that result, without prejudice to the right of Customs to collect the fines due, where necessary, in accordance with the provisions of this Regulation (Law).

Article 58

If the customs office is unable to ascertain the accuracy of the contents of the customs declaration by examining the goods or the documents submitted, it may decide to suspend the examination and request the documents that provide the necessary elements of proof.

Article 59

The customs office may re-examine the goods in accordance with the provisions of Articles (52-56) of this Regulation (Law).

Chapter Three – Special Provisions for Travellers

Article 60

Declaration and examination of what travellers carry with them or what belongs to them shall take place at the competent customs offices in accordance with the procedures and rules specified by the Director General.

Chapter Four – Valuation Disputes

Article 61

A Valuation Disputes Committee shall be formed from among the employees of the Administration by a decision of the Director General. Its function shall be to resolve disputes arising between the customs office and the persons concerned regarding the value of imported goods, and it may seek the assistance of such experts as it deems fit. Without prejudice to the importer’s right to resort to the courts, the importer may file a grievance against decisions increasing the value of the goods before the Valuation Committee, within fifteen days from the date of registration of the customs declaration or from the date of his notification, by registered letter with acknowledgement of receipt, of the value assessed by the Administration for the goods. The decisions of this Committee shall be taken by majority and shall be enforceable after their ratification by the Director General. The importer shall be notified in writing of the decision issued by the Committee on his grievance, and its decision shall be reasoned.

Article 62

a. If a dispute arises between the competent customs officer and the owner of the goods regarding the value of the goods because of a difference in their type or origin or for any other reason, the matter shall be referred to the Director; if he endorses the opinion of the customs officer and the owner of the goods does not accept it, the matter shall be referred to the Director General to settle the dispute or refer it to the Valuation Disputes Committee.
b. The Director shall have the right to release the goods in dispute which are not liable to prohibition, after obtaining a financial guarantee equal to the customs tax (duties) as assessed by the customs office; samples of the goods shall be retained temporarily, where necessary, for reference when needed, and such samples shall be returned to the owner of the goods once they are no longer required, unless they are consumed for the purposes of inspection and analysis.

Chapter Five – Payment of Customs Taxes (Duties) and Other Fees and Release of Goods

Article 63

a- Goods shall be held as security for customs taxes (duties), and may not be released until the customs procedures thereon have been completed and the customs taxes (duties) and any other fees thereon have been paid, in accordance with the provisions of this Regulation (Law).

b- Goods shall be delivered to their owners or to those officially authorised by them in accordance with the procedures specified by the Director General.

Article 64

The employees charged with collecting customs taxes (duties) shall issue an official receipt in the name of the importer in accordance with the form specified by the Minister or the competent authority.

Article 65

Upon the declaration of a state of emergency, measures may be taken for the withdrawal of goods against special guarantees and conditions specified by a decision of the Minister or the competent authority.

Article 66

Within the conditions and rules specified by the Director General, the release of goods may be permitted before the payment of the customs taxes (duties) thereon and after the completion of the customs procedures thereon, against bank, cash or documentary guarantees.

Part Seven – Duty-Suspension Regimes and Refund of Customs Taxes (Duties)

Chapter One – General Provisions

Article 67

Goods may be brought in and transported to any other place within the State without payment of customs taxes (duties), provided that a cash deposit or bank guarantee equal to the customs taxes (duties) chargeable thereon is submitted, in accordance with the instructions issued by the Director General.

Article 68

Cash deposits, bank guarantees and undertakings shall be released on the basis of discharge certificates in accordance with the conditions specified by the Director General.

Chapter Two – Goods in Transit

Article 69

Subject to Article (67) of this Regulation (Law) and the provisions of the Unified Economic Agreement of the GCC States, the transit of goods (transit) through the territories of the GCC States shall be permitted in accordance with the provisions of the regulations and international conventions in force.

Article 70

Transit (transit) operations shall be permitted only at the customs offices licensed for that purpose.

Article 71

Subject to the provisions of the regional and international conventions in force, goods in transit (transit) shall be transported on the designated routes, by the various means of transport, and under the responsibility of the carrier, in accordance with the instructions issued by the Director General; the roads and routes on which transport by way of transit (transit) may be carried out, and the conditions of such transport, shall be specified by a decision of the Minister or the competent authority.

Article 72

In the case of transport from one customs office to another, the persons concerned may be exempted from submitting a detailed declaration at the point of entry, and the transfer shall be made in accordance with the documents and conditions specified by the Director General.

Article 73

The Minister or the competent authority shall issue the decisions necessary to regulate the suspension of customs taxes (duties) on all other types of transport by way of transit (transit).

Chapter Three – Bonded Warehouses

Article 74

Bonded warehouses shall be established inside or outside the customs office by a decision of the Minister or the competent authority, and the Director General shall lay down the rules and conditions governing them.

Article 75

Goods may be deposited in bonded warehouses inside or outside the customs office without payment of the customs taxes (duties) thereon, in accordance with the rules and conditions specified by the Director General.

Article 76

The Administration shall have the right of customs supervision and control over bonded warehouses managed by other bodies, in accordance with the provisions of this Regulation (Law) and the other regulations (laws) in force.

Chapter Four – Free Zones and Free Markets

Article 77

Free zones and free markets shall be established by the legal instrument of each State, and the customs rules, conditions and procedures relating thereto shall be specified by a decision of the Minister or the competent authority.

Article 78

a- Subject to the provisions of Articles (79 and 80) of this Regulation (Law), all foreign goods of whatever type and whatever their origin may be brought into free zones and free markets and taken out of them to outside the country or to other free zones and free markets without being subject to customs taxes and duties.

b- Foreign goods re-exported from within the country may be brought into free zones and free markets, provided that they are subject to the export restrictions and the customs procedures followed in the case of re-exportation.

c- Goods present in free zones and free markets shall not be subject to any restriction as to the duration of their stay therein.

Article 79

Goods entered in the cargo manifest as consigned for import may not be transferred or brought into free zones and free markets except with the approval of the Director General and within the conditions and controls he determines.

Article 80

The entry of the following goods into free zones and free markets is prohibited:
1. Flammable goods, except the fuel necessary for operation that is permitted by the entity supervising the free zones and free markets within the conditions specified by the competent authorities.
2. Radioactive materials.
3. Weapons of war, ammunition and explosives of whatever type, except under a licence from the competent authorities.
4. Goods that violate the regulations relating to the protection of commercial, industrial, literary and artistic property and in respect of which a decision to that effect has been issued by the competent authorities.
5. Narcotics of all kinds and their derivatives.
6. Goods originating in a country subject to a decision of economic boycott.
7. Goods prohibited from entering the country; each State shall specify a list of such goods.

Article 81

The customs office may carry out inspections in free zones and free markets for goods prohibited from entering them, and it may also audit documents and inspect goods upon suspicion of smuggling operations.

Article 82

The management of free zones and free markets shall submit to the Administration, upon request, a list of the goods entering the free zones and those leaving them.

Article 83

Goods present in free zones and free markets may not be transferred to other free zones or free markets, stores or bonded warehouses except in accordance with the securities, undertakings and procedures specified by the Director General.

Article 84

Goods shall be withdrawn from free zones and free markets into the country in accordance with the provisions of the regulations in force and pursuant to the instructions issued by the Director General.

Article 85

Goods leaving free zones for the customs office shall be treated as foreign goods, even if they contain local raw materials or items on which customs taxes (duties) were previously paid before they were brought into the free zones.

Article 86

National and foreign vessels shall be permitted to obtain from the free zones all the marine equipment they require.

Article 87

The management of free zones and free markets shall be liable for all violations committed by its employees and for the unlawful leakage of goods therefrom, and all regulations and instructions relating to security and public health and to the suppression of smuggling and fraud shall remain in force therein.

Article 88

Goods dispatched from free zones and free markets to inside or outside the State shall be treated as foreign goods.

Chapter Five – Temporary Admission

Article 89

Subject to the provisions set out in this Chapter, the Unified Economic Agreement of the GCC States, and the other international conventions in force, the entry of goods under temporary admission without collection of the customs taxes (duties) thereon shall be permitted in accordance with the conditions specified by the Executive Regulations.

Article 90

The Director General may grant temporary admission for the following:
1. Machinery and heavy equipment for the execution of projects or for conducting practical and scientific experiments pertaining to such projects.
2. Foreign goods imported for the purpose of completion of manufacture.
3. What is imported temporarily for stadiums, theatres, exhibitions and the like.
4. Machines, equipment and apparatus brought into the country for the purpose of repair.
5. Containers and packing imported to be filled.
6. Animals entering for the purpose of grazing.
7. Commercial samples for the purpose of display.
8. Other cases that so require.
The items provided for in this Article shall be re-exported or deposited in the free zone, the customs offices or the bonded warehouses within the period of temporary admission specified by the Executive Regulations.

Article 91

The provisions of the Unified Economic Agreement of the GCC States and the other international conventions in force relating to the temporary admission of motor vehicles shall be observed, in accordance with the instructions issued under the Executive Regulations.

Article 92

Materials and items released under temporary admission may not be used, allocated or disposed of for purposes and objectives other than those for which they were imported and which were declared in the declarations submitted.

Article 93

Every shortage appearing upon the removal of goods released under temporary admission shall be subject to the customs taxes (duties) due thereon at the time of their entry.

Article 94

The Executive Regulations shall specify the conditions for the practical application of the temporary admission regime and the guarantees to be submitted.

Chapter Six – Re-exportation

Article 95

Goods brought into the country on which customs taxes (duties) have not been collected may be re-exported abroad or to the free zone in accordance with the procedures and guarantees specified by the Executive Regulations.

Article 96

In certain cases, the transfer of goods from one vessel to another, or the withdrawal from the quays to vessels of goods that have not been brought into the bonded warehouses, may be licensed within the conditions specified by the Director General.

Chapter Seven – Refund of Customs Taxes (Duties)

Article 97

Customs taxes (duties) collected on foreign goods shall be refunded in whole or in part in the event of their re-exportation, in accordance with the rules and conditions specified by the Executive Regulations.

Part Eight – Exemptions

Chapter One – Goods Exempt from Customs Taxes (Duties)

Article 98

Goods agreed to be exempted in the Unified Customs Tariff of the GCC States shall be exempt from customs taxes (duties) under this Regulation (Law).

Chapter Two – Diplomatic Exemptions

Article 99

Subject to reciprocity, items received by diplomatic and consular missions, international organisations, and heads and members of the diplomatic and consular corps accredited to the State shall be exempt from customs taxes (duties), in accordance with the international agreements and the laws and resolutions in force.

Article 100

a- Goods exempted under Article (99) of this Regulation (Law) may not be disposed of in a manner inconsistent with the purpose for which they were exempted, nor assigned, except after notifying the Administration and paying the customs taxes (duties) due.

b- Customs taxes (duties) shall not be due if the beneficiary disposes of what was exempted pursuant to Article (99) of this Regulation (Law) after three years from the date of its release by the customs office, provided that there is reciprocity.

c- An exempted vehicle may not be disposed of before the lapse of three years from the date of its exemption, except in the following cases:

1. The end of the assignment in the country of the diplomatic or consular member benefiting from the exemption.

2. The vehicle, after its exemption, being involved in an accident that renders it unsuitable for the use requirements of the diplomatic or consular member, based on a joint recommendation of the Traffic Department and the Administration.

3. A sale by a diplomatic or consular member to another member, in which case it shall be a condition that the assignee enjoys the right to exemption.

Article 101

The right to exemption for persons benefiting from it under Article (99) of this Regulation (Law) shall begin from the date on which they assume their duties at their official places of work in the country.

Chapter Three – Military Exemptions

Article 102

Ammunition, weapons, equipment, military means of transport and their parts, and any other materials imported for the armed forces and the internal security forces in all their sectors shall be exempt from customs taxes (duties) by a resolution of the Council of Ministers or of the authority so empowered in each State.

Chapter Four – Personal Effects and Household Articles

Article 103

a- Personal effects and used household articles brought by citizens residing abroad and by foreigners coming to reside in the country for the first time shall be exempt from customs taxes (duties), and this exemption shall be subject to the conditions and controls set by the Director General.
b- Personal effects and gifts in the possession of travellers shall be exempt from customs taxes (duties), provided that they are not of a commercial nature, and in accordance with the conditions and controls set by the Executive Regulations.

Chapter Five – Supplies of Charitable Societies

Article 104

The requirements of charitable societies shall be exempt from customs taxes (duties) in accordance with the controls and conditions set by the Executive Regulations.

Chapter Six – Returned Goods

Article 105

The following shall be exempt from customs taxes (duties):
1. Returned goods of national origin that were previously exported.
2. Foreign goods returned to the country that are proven to have been previously re-exported abroad, if they are returned within one year from the date of their re-exportation.
3. Goods temporarily exported for completion of their manufacture or for repair, in which case customs taxes (duties) shall be collected on the increase resulting from the completion of their manufacture or their repair, in accordance with a resolution issued by the Director General.
The Minister or the competent authority shall, by resolution, determine the conditions to be met in order to benefit from the provisions of this Article.

Chapter Six – Common Provisions

Article 106

a- The provisions on exemptions set out in this Part shall apply to goods covered by the exemption, whether imported directly or indirectly or purchased from bonded warehouses or free zones, provided that the conditions laid down by the Administration are observed.
b- If a dispute arises as to whether the goods provided for in this Part are subject to or exempt from customs taxes (duties), the Director General shall decide on such dispute.

Part Nine – Service Fees

Article 107

a- Goods placed in the yards and warehouses of the customs office shall be subject to fees for storage, handling, insurance and other services required for the storage and examination of goods, at the prescribed rates, and the storage fee may not in any case exceed half of the estimated value of the goods. Where the warehouses are managed by other entities, those entities shall collect these fees in accordance with the provisions and rates prescribed in this regard.

b- Goods may be made subject to fees for lead sealing, stamping, analysis and all services provided to them.

c- The services and fees set out in this Article and the conditions for their collection shall be determined by a resolution issued by the Minister or the competent authority.

Part Ten – Customs Brokers

Article 108

A customs broker shall be any natural or legal person who engages in preparing, signing and submitting customs declarations to the customs office and completing the customs procedures for the clearance of goods on behalf of third parties.

Article 109

Citizens of the GCC States (natural and legal persons) shall have the right to practise the profession of customs clearance after obtaining a licence from the Administration.

Article 110

The declaration of goods to the customs office and the completion of customs procedures thereon, whether for import, export or transit, shall be accepted from:

1. The owners of the goods or their representatives authorised by them who meet the conditions set by the Director General, including the conditions of authorisation.

2. Licensed customs brokers.

Article 111

The endorsement of the delivery order in the name of the customs broker or of the representatives of the owners of the goods shall be deemed an authorisation to complete the customs procedures thereon, without the Administration bearing any liability arising from the delivery of the goods to the person in whose favour the delivery order was endorsed.

Article 112

The customs broker shall be liable for his acts and the acts of his subordinates towards importers and exporters and towards the Administration in accordance with the provisions of this Regulation (Law).

Article 113

The Director General may issue the instructions necessary for the following:
1. The conditions required for granting licences to practise the profession of customs clearance.
2. The conditions required for granting licences to practise the profession of customs broker’s representative.
3. The procedures for issuing customs licences to the broker and the customs representative.
4. The obligations of the customs broker and the customs broker’s representative.
5. The conditions required for opening customs clearance offices.
6. The number of customs brokers and representatives permitted to work in customs offices.
7. The customs office or customs offices in which brokers are permitted to work.
8. The procedures for dispensing with customs brokers and their representatives.
9. The procedures for the transfer of customs brokers’ representatives between customs clearance offices.
10. The procedures for withdrawing the licences of customs brokers and their representatives.
11. The cases of striking off the entry in the register of the Administration.

Article 114

Taking into account the provision of Article (141) of this Regulation (Law), and without prejudice to any civil or criminal liability established by this Regulation (Law) or any other regulations (laws), the Director General may, after the necessary investigation has been conducted with him by the competent body within the Administration, and in proportion to the extent of his violation of the obligations imposed on him, impose on the broker and the customs broker’s representative the following penalties:
1. Warning.
2. A fine not exceeding 5000 Saudi riyals or its equivalent in the other currencies of the GCC States.
3. Suspension from work for a period not exceeding two years.
4. Cancellation of the licence and a permanent ban from practising the profession.
A grievance against the application of these penalties may be filed with the Minister or the competent authority within thirty days from the date of his notification thereof, and the decision of the Minister or the competent authority shall be final.

Article 115

The customs broker shall keep a register for five years in which he records a summary of the customs transactions he has completed on behalf of third parties, within the conditions set by the Administration. This register shall include the amount of fees paid to the customs office, the charges paid to the broker and any other expenses incurred on the transactions. The Director or whomever he authorises shall have absolute authority to inspect these registers at any time without any objection from the customs broker.

Part Eleven – Rights and Duties of the Administration’s Employees

Article 116

a- Employees of the Administration, while performing their duties, shall be deemed judicial police officers within the limits of their competences.

b- Employees of the Administration shall, upon their appointment, be given a card proving the nature of their work, and they shall produce it upon request.

c- Employees of the Administration shall wear the official uniform designated for them while performing their work if the nature of their work so requires.

Article 117

The civil and military authorities and the internal security forces shall provide the employees of the Administration with all assistance to carry out their work as soon as they request it, and the Administration shall cooperate with the other official entities.

Article 118

Customs employees whose nature of work so requires shall be permitted to carry arms, and such employees shall be determined by a resolution of the Minister or the competent authority.

Article 119

Every employee of the Administration whose service ends for any reason whatsoever shall return to the Administration whatever is in his custody.

Article 120

The incentives and allowances granted to customs employees according to the nature of their work shall be determined by a resolution of the Minister or the competent authority based on a proposal by the Director General, and they shall be applied after their approval by the competent authorities.

Part Twelve – Customs Zone

Article 121

Prohibited goods, restricted goods, goods subject to high customs taxes (duties), and other goods designated by the Director General by his resolution shall be subject to the provisions of the customs zone, and the Executive Regulations shall determine the conditions of transport within this zone and the documents and procedures required therefor.

Part Thirteen – Customs Cases

Chapter One – Investigation of Smuggling

Article 122

a- Employees of the Administration shall combat smuggling, and to that end they may examine goods and means of transport and search persons in accordance with the provisions of this Regulation (Law) and the other regulations (laws) in force.

b- Women may not be bodily searched except by female customs inspectors.

c- Employees of the Administration may, where there is sufficient evidence of the presence of smuggled goods, and after obtaining permission from the competent authority, search any house, store or any premises in accordance with the regulations (laws) in force.

d- Employees of the Administration shall not bear liability for damage arising from their performance of their official duties in the required manner.

Article 123

Authorised employees of the Administration shall have the right to board all vessels present in, entering or leaving the local ports and to remain on board until their cargo is unloaded, and they may search all parts of the vessel.

Article 124

Authorised employees of the Administration shall have the right to board vessels within the customs zone to search them or to demand the submission of the cargo manifest and other documents required under the provisions of this Regulation (Law), and they shall have the right, in the event of refusal to submit the documents or their absence, and of suspicion of the presence of smuggled or prohibited goods, to take all measures necessary to seize such goods, and then to escort the vessel to the nearest customs office.

Article 125

The Administration may take appropriate measures to investigate smuggling inside and outside the customs office in accordance with the rules determined by the Minister or the competent authority.

Article 126

Investigation of smuggling, seizure of goods and investigation of customs violations concerning all goods may be carried out throughout the territory of the State in the following cases:

1. In the land and maritime customs zones.

2. In customs offices, ports and airports, and in all places subject to customs control.

3. Outside the land and maritime customs zones, when smuggled goods are followed and pursued in continuous pursuit by those responsible therefor, after having been sighted within the zone in a situation indicating the intent to smuggle them.

Article 127

Employees of the Administration shall have the right to inspect papers, documents, records, correspondence, commercial contracts and instruments of whatever kind relating directly or indirectly to customs operations, and to seize them where there is a violation, at shipping and transport establishments and all natural and legal persons connected with customs operations. Such establishments and persons shall keep all the aforementioned papers for a period of five years from the date of completion of the customs operations.

Article 128

Employees of the Administration may detain any person if they suspect that he has committed or attempted to commit, or was connected with the commission of, any of the following crimes:

1- Smuggling.

2- Transporting or possessing smuggled goods.

Chapter Two – Seizure Report

Article 129

A seizure report shall be drawn up for customs smuggling violations and crimes in accordance with the rules set out in this Regulation (Law).

Article 130

The seizure report shall be drawn up by at least two customs employees upon discovery of the violation or the smuggling crime, and the seizure report may, where necessary, be drawn up by one employee.

Article 131

The seizure report shall state the following:

1. The place, date and hour at which it is drawn up, in words and figures.

2. The names of the officers who detected the act and of those who drew up the seizure report, their signatures and the nature of their work.

3. The names of the violators or of those responsible for the smuggling, their nationalities, capacities, occupations and detailed addresses.

4. The seized goods, their types, quantities, value and tariff heading.

5. A detailed account of the facts, the statements of the violators or of those responsible for the smuggling, and the statements of witnesses, if any.

6. A statement in the seizure report that it was read to the violators or those responsible for the smuggling who were present, and that they confirmed it with their signatures or refused to do so.

7. All other useful documents, and the presence of the violators or those responsible for the smuggling at the inventory of the goods, or their refusal to do so.

8. The referral of samples of the seized smuggled substance to the competent authorities to verify that it is a prohibited substance.

9. Identification of the entity to which the smuggled goods were handed over, and that entity’s signature acknowledging receipt.

10. Identification of the security authority with which the smuggler or smugglers were placed, and the hour and date of the handover.

Article 132

a- A seizure report drawn up in accordance with Articles 130 – 131 of this Regulation (Law) shall be conclusive evidence as to the material facts that those who drew it up observed in person, unless the contrary is proven.

b- A formal deficiency in the seizure report shall not be deemed a ground for its nullity, and it may not be returned to those who drew it up unless the deficiency relates to the material facts.

Article 133

The customs office may seize the goods that are the subject of the violation or the smuggling offence, the items used to conceal them, and the means of transport of any kind, such as boats, cars and animals, except for ships, aircraft and public buses intended for the carriage of passengers, unless they were specially prepared for the purpose of smuggling.

Article 134

Smuggled substances, or substances whose smuggling was attempted, of the type of narcotics and the like shall be disposed of in accordance with the regulations and laws in force in the State.

Chapter Three – Precautionary Measures

Section One – Precautionary Attachment

Article 135

a- Those who draw up the seizure report may seize the goods that are the subject of the violation or the smuggling, the items used to conceal them and the means of transport, and may seize and take possession of all documents, in order to establish the violations or smuggling crimes and as security for fees, taxes and fines.

b- The Director General may, where necessary, obtain an order from the competent authorities to impose a precautionary attachment on the property of the violators and of those responsible for the smuggling held by third parties, as security for the collection of customs taxes and fees and of fines, in execution of the final decisions or final judgments ordering their payment.

Article 136

The Director General may, where necessary and to safeguard the rights of the Public Treasury, by decision impose a customs security on the property of the persons liable or their partners.

Article 137

Arrest shall not be permitted except in the following cases:
1. Smuggling offences caught in the act (in flagrante delicto).
2. Resistance to customs officers or security officers that obstructs the detection or investigation of customs violations or smuggling offences or the apprehension of the accused therein.
The arrest decision shall be issued by customs employees vested with the capacity of judicial police officers or by the security authorities. The arrested person shall be brought before the competent court within 24 hours from the time of his arrest.

Section Two – Travel Ban on Violators and Persons Accused of Smuggling

Article 138

The Director General or whomever he authorises may request the competent authorities to prevent violators or persons accused of smuggling from leaving the country where the value of the seized goods is insufficient to cover the taxes, fees and fines.
The travel ban decision shall be revoked if the violator or the person accused of smuggling provides security equal to the amounts that may be claimed from him, or if it later becomes evident that the value of the seized goods is sufficient to cover the amounts claimed.

Chapter Four – Customs Violations and Their Penalties

Article 139

Customs fines collected and confiscations provided for in this Regulation (Law) shall be deemed civil compensation to the Administration and shall not be covered by the provisions of general amnesty.

Article 140

Where violations are multiple, a fine shall be due for each violation separately, and the most severe fine alone shall suffice if the violations are so interconnected as to be indivisible.

Article 141

Except for the cases deemed smuggling provided for in Article (143) of this Regulation (Law), and without conflicting with the provisions of the international agreements in force, a fine shall be imposed, in accordance with the rules set by the Executive Regulations of this Regulation (Law), on the following violations:
1- Import and export violations.
2- Customs declaration violations.
3- Violations relating to goods in transit (transit).
4- Bonded warehouse violations.
5- Violations in areas supervised by customs.
6- Temporary admission violations.
7- Re-exportation violations.
8- Any other customs violations.

Chapter Five – Smuggling and Its Penalties

Section One – Smuggling

Article 142

Smuggling is the introduction or attempted introduction of goods into the country, or their removal or attempted removal from it, in a manner contrary to the legislation in force, without payment of the customs taxes (duties) in whole or in part, or contrary to the provisions on prohibition or restriction contained in this Regulation (Law) and the other regulations and laws.

Article 143

The following in particular shall be deemed smuggling:
1. Failure to proceed with the goods, upon introduction, to the first customs office.
2. Failure to follow the designated routes in the introduction and removal of goods.
3. Unloading goods from, or loading them onto, vessels in a manner contrary to the regulations at the customs office, or unloading or loading them in the maritime customs zone.
4. Unloading goods from, or loading them onto, aircraft unlawfully outside the official airports, or dropping goods during air transport, subject to the provisions of Article (40) of this Regulation (Law).
5. Failure to declare at the customs office incoming or outgoing goods not covered by a cargo manifest, including goods of a commercial nature accompanying travellers.
6. Goods bypassing the customs office upon introduction or removal without being declared.
7. The discovery at any customs office of undeclared goods placed in hiding places with the intent of concealing them, or in cavities or spaces not normally intended to contain such goods.
8. An excess, shortage or substitution in the number of packages or in their declared contents under a duty-suspension regime provided for in Part Seven of this Regulation (Law), discovered after the goods have left the customs office; this provision shall include goods that have passed through the country by smuggling or without completion of their customs procedures, and the carrier shall bear liability therefor.
9. Failure to submit the proofs determined by the Administration for the discharge of declarations under duty-suspension regimes provided for in Part Seven of this Regulation (Law).
10. Removal of goods from free zones and free markets, customs stores, bonded warehouses or customs areas without completion of their customs procedures.
11. Submission of false, forged or fabricated documents or invoices, or the affixing of false marks, with the intent of evading payment of customs taxes (duties) in whole or in part, or with the intent of circumventing the provisions on prohibition or restriction.
12. Transport or possession of prohibited or restricted goods without submitting proofs supporting their lawful importation.
13. Transport or possession of goods subject to customs control within the customs zone without a proper document.
14. Failure to re-import goods whose export is prohibited and which were temporarily exported for any purpose whatsoever.

* Clause 12: The Constitutional Court ruled it unconstitutional insofar as it provides that the transport or possession of prohibited or restricted goods without the carrier or holder submitting proofs supporting their lawful importation is deemed smuggling (Case No. 2 of 2005 (Constitutional), session of 22 June 2005).

Section Two – Criminal Liability

Article 144

Criminal liability for the offence of smuggling requires criminal intent, and the criminal provisions in force shall be observed in determining such liability. The following, in particular, shall be deemed criminally liable:

1. The principal perpetrators.

2. Accomplices in the offence.

3. Accessories and instigators.

4. Holders of smuggled goods.

5. The owners of the means of transport used in smuggling, and their drivers and assistants whose connection with the smuggled goods is established.

6. The owners or lessees of the premises and places in which the smuggled goods were deposited, or the users thereof, whose knowledge of the presence of the smuggled goods in their premises and places is established.

Section Three – Penalties

Article 145

Without prejudice to any more severe penalty prescribed by other provisions in force in the State, smuggling and deemed smuggling, and any attempt at either, shall be punishable as follows:
1. If the subject of the smuggling is goods subject to high customs taxes (duties), the penalty shall be a fine of not less than twice the customs tax (duties) due and not more than twice the value of the goods, and imprisonment for not less than one month and not more than one year, or either of these two penalties.
2. As for other goods, the penalty shall be a fine of not less than twice the customs tax (duties) due and not more than the value of the goods, and imprisonment for not less than one month and not more than one year, or either of these two penalties.
3. If the goods subject of the smuggling are goods not subject to customs taxes (duties) (exempt), the penalty shall be a fine of not less than ten percent of the value of the goods and not more than their value, and imprisonment for not less than one month and not more than one year, or either of these two penalties.
4. If the goods subject of the smuggling are prohibited goods, the penalty shall be a fine of not less than the value of the goods and not more than three times their value, and imprisonment for not less than six months and not more than three years, or either of these two penalties.
5. Confiscation of the goods subject of the smuggling, or a judgment for the equivalent of their value if they have not been seized.
6. Confiscation of the means of transport, tools and materials used in the smuggling, with the exception of public means of transport such as ships, aircraft, trains and public vehicles, unless they were prepared or hired for that purpose, or a judgment for the equivalent of their value if they have not been seized.
7. In the event of recidivism, a judgment of twice the penalty may be imposed.

Article 146

The Director General may retain the seized goods and means of transport where the smugglers have fled or cannot be traced, and may sell them in accordance with the provisions of Part Fourteen of this Regulation (Law). The sale proceeds shall revert to the State if one year has elapsed from the date of sale without the smugglers being apprehended. If they are apprehended or brought to trial within that period and a judgment is rendered confiscating the goods, the confiscation judgment shall apply to the amount of the sale proceeds.

Chapter Six – Prosecutions

Section One – Administrative Prosecutions

Article 147

a- The Director General may issue the decisions necessary for the collection of customs taxes (duties), other fees and established customs fines which the person liable has failed to pay.

b- An objection to collection decisions may be lodged with the Administration within fifteen days from the date of notification; however, this shall not stay enforcement unless security has been provided for the amounts claimed by means of a bank guarantee or a cash deposit.

Article 148

a- The fines provided for in Chapter Four of this Part shall be imposed by a decision of the Director General or whomever he authorises to do so.

b- The violator or his representative shall be notified of the fine imposed on him by written notice through the competent authority, and the violator shall pay the fines within fifteen days from the date of his notification thereof.

Article 149

A grievance against the fine decisions referred to in the preceding Article may be lodged with the Minister or the competent authority within the same time limit, and the Minister or the competent authority may uphold, amend or revoke the fine decision.

Section Two – Judicial Prosecution of Smuggling Offences

Article 150

No action may be instituted in smuggling offences except upon a written request from the Director General.

Section Three – Settlement

Article 151

a- The Director General or whomever he authorises may, upon a written request from the person concerned, conclude a settlement in smuggling cases, whether before the action is filed or while it is being heard and before the judgment of first instance is rendered, in substitution for the customs penalties and fines provided for in Article (145) of this Regulation (Law).

b- The Settlements Guide shall be issued by a decision of the Minister or the competent authority.

Article 152

Subject to the provisions of Article (151), the settlement shall be as follows:

1. If the subject of the smuggling is goods subject to high customs taxes (duties), the penalty shall be a fine of not less than twice the customs tax (duties) due and not more than twice the value of the goods.

2. As for other goods, the penalty shall be a fine of not less than the amount of the customs tax (duties) due and not more than fifty percent of the value of the goods.

3. If the goods subject of the smuggling are not subject to customs taxes (duties) (exempt), the penalty shall be a fine of not less than ten percent of the value of the goods and not more than fifty percent of their value.

4. If the goods subject of the smuggling are prohibited goods, the penalty shall be a fine of not less than the value of the goods and not more than three times their value.

5. Confiscation of the goods subject of the smuggling, or their release or re-exportation, in whole or in part.

6. Confiscation of the means of transport, tools and materials used in the smuggling, with the exception of public means of transport such as ships, aircraft and public vehicles, unless they were prepared or hired for that purpose.

Article 153

The action shall lapse upon completion of the settlement procedures in respect thereof.

Chapter Seven – Liability and Joint Liability

Article 154

a- The violation is constituted, and civil liability arises in smuggling offences, upon the presence of their material elements, and good faith or ignorance may not be pleaded; however, a person who proves that he was the victim of force majeure shall be exempt from liability, as shall a person who proves that he did not commit any of the acts that constituted the violation or the smuggling offence, nor caused it to occur or led to its commission.

b- In addition to the perpetrators of the violation and smuggling offences, civil liability shall extend to partners, financiers, guarantors, beneficiaries, intermediaries, principals, donors, carriers, holders and consignors of the goods.

Article 155

Operators of private premises and places in which the goods that are the subject of the violation or the smuggling offence are deposited shall be deemed liable therefor; as for operators of public premises and places and their employees, as well as the owners of public passenger means of transport and their drivers and assistants, they shall be liable unless they prove their lack of knowledge of the presence of the goods that are the subject of the violation or smuggling and the absence of any direct or indirect interest of theirs therein.

Article 156

Guarantors shall be liable, within the limits of their guarantees, for the payment of customs taxes (duties), fines and other amounts due to the Administration or due from the principal obligors.

Article 157

Customs brokers shall be fully liable for the violations and smuggling offences they commit in customs declarations and for the violations and smuggling offences committed by their employees authorised by them; as for undertakings submitted in customs declarations, they shall not be held liable for them unless they gave such undertakings themselves or stood as guarantors for those who gave them.

Article 158

Owners of goods, employers and carriers of goods shall be liable for the acts of their employees and all those working on their behalf with respect to the fees and taxes collected by the customs office and the fines and confiscations provided for in this Regulation (Law) resulting from such acts.

Article 159

Heirs shall not be liable, out of each one’s share of the estate, for the payment of fines incurred by the deceased unless they were accomplices in the smuggling, and the action shall lapse upon the death of the violator.

Article 160

The taxes, fees and fines prescribed or adjudged shall be collected jointly and severally from the violators or those liable for the smuggling, in accordance with the procedures followed in the collection of State Treasury funds, and the goods and means of transport, where present or seized, shall serve as security for the recovery of the amounts due.

Chapter Eight – Rules of Procedure

Article 161

Customs courts of first instance may be established in the Administration and in the customs offices in accordance with the legal instrument in force in each State.

Article 162

The customs court of first instance shall have the following jurisdiction:

1. Hearing all smuggling offences and deemed smuggling.

2. Hearing all offences and violations committed against the provisions of this Regulation (Law) and its Executive Regulations.

3. Hearing objections to collection decisions pursuant to the provisions of Article (147) of this Regulation (Law).

4. Hearing objections submitted against fine decisions in accordance with the provisions of Article (148) of this Regulation (Law).

5. The court may require any person charged under this Regulation (Law) to provide a guarantor to secure his appearance before the court, or may order his detention until the case is concluded.

Article 163

a- Judgments of the customs court of first instance may be appealed before a special court of appeal established under the legal instrument in force in each State.

b- This court shall hear the cases brought before it and shall render its judgments by majority.

c- The appeal period shall be thirty days from the date of notification of the judgment of first instance if it was rendered in absentia, and from the date of its pronouncement if it was rendered in the presence of the parties.

Article 164

Judgments rendered by the court of appeal shall be final.

Article 165

Collection decisions, fine decisions and judgments rendered in customs cases shall, after becoming final, be enforced by all means of enforcement against the movable and immovable property of the persons liable, and the Minister or the competent authority may obtain an order to attach so much of such property as is sufficient to pay the amounts due.

Part Fourteen – Sale of Goods

Article 166

a- The Administration may sell seized goods that are perishable or liable to shortage or leakage, or that are in a condition likely to affect the safety of other goods and of the facilities in which they are located.

b- With the authorisation of the Director General or whomever he authorises, seized goods whose value is liable to diminish noticeably may be sold.
In implementation of this Article, the sale shall be effected on the basis of a report recording the condition of the goods and the reasons for their sale, without the need to await a judgment from the competent court, provided that the owner of the goods is notified thereof. If such judgment is subsequently rendered and orders the return of these goods to their owner, he shall be paid the price of the goods sold after deduction of any taxes or fees due thereon.

Article 167

After the expiry of the time limit set by the Minister or the competent authority, the Administration may sell goods stored in customs bonded warehouses, or located in yards and on quays, or abandoned in customs offices.

Article 168

The Administration shall sell the following:

1. Goods, materials and means of transport that have become the property of Customs as a result of a confiscation judgment, a settlement or a written waiver.

2. Goods not withdrawn from bonded warehouses within the statutory time limit set in accordance with Article (75) of this Regulation (Law).

3. Goods and materials whose owners are unknown and which no one has claimed within the storage period set by the Minister or the competent authority.

Article 169

The Administration shall bear no liability for any damage or harm to goods it sells under the provisions of this Regulation (Law) unless it is proven that it committed a manifest error in conducting the sale.

Article 170

a- The sales provided for in this Part shall be conducted by public auction in accordance with the terms and rules set by a decision of the Minister or the competent authority.

b- Goods, articles and means of transport shall be sold free of customs taxes (duties) and other fees and taxes, except for the brokerage commission borne by the buyer during the sale procedures.

Article 171

a- The sale proceeds shall be distributed in the following order:

1. Customs taxes (duties).

2. Expenses of the sale.

3. Expenses incurred by the Administration, of whatever kind.

4. Transport charges, where applicable.

5. Any other fees.

b- The remaining balance of the proceeds of sale of goods whose importation is permitted on the day of sale shall, after deduction of the amounts provided for in Paragraph (a) of this Article, be deposited in trust with the Administration. The persons concerned may claim its refund within one year from the date of sale; otherwise it shall become due to the Treasury.

c- In the case of prohibited goods or goods whose importation is not permitted, the remaining balance of their price shall become due to the Public Treasury.

d- In the case of prohibited or restricted goods, or goods whose importation is permitted, that are sold as a result of a settlement, a fine decision or a court judgment in connection with a smuggling operation, the remaining balance shall be distributed in accordance with the provisions of Article (172) of this Regulation (Law), after deduction of taxes, fees and expenses.

Article 172

The share accruing to the Treasury from the proceeds of customs fines and the value of confiscated or waived goods and means of transport shall be fixed at fifty percent, after deduction of customs taxes (duties) and expenses. The remaining percentage of the proceeds shall be deposited in the Customs Rewards Fund or any other account specific to Customs, and shall be disbursed to the persons who detected and seized the violations and those who assisted them. The rules for distributing such rewards shall be set by a decision of the Minister or the competent authority upon a proposal from the Director General.

Part Fifteen – Lien of the Customs Administration

Article 173

For the purpose of collecting customs taxes (duties) and the other fees and taxes it is charged with collecting, as well as fines, compensation, confiscations and recoveries, the Administration shall enjoy a general lien (privilege) over the movable and immovable property of the persons liable, even in the event of bankruptcy, and with priority over all debts except judicial costs.

Part Sixteen – Limitation

Article 174

No claim or action for the refund of customs taxes (duties) shall be accepted if more than three years have elapsed since their payment.

Article 175

The Administration may destroy the records, receipts, declarations and other customs documents relating to each year after five years have elapsed from the completion of their customs procedures, and after the expiry of that period it shall not be obliged to produce them to any party whatsoever or to provide any copy or photocopy thereof.

Article 176

Without prejudice to the other regulations and laws in force in the State, the limitation period with respect to the Customs Administration, where no prosecution has been undertaken in respect thereof, shall be as follows:
1. Fifteen years for the following two cases:
a- Acts of smuggling or deemed smuggling, starting from the date of commission of the offence.
b- Enforcement of judgments in smuggling and deemed smuggling cases, from the date the judgment is rendered.
2. Five years for the following cases, unless a claim has been made in respect thereof:
a- For the investigation of violations, starting from the date of their occurrence.
b- For the collection of fines and confiscations imposed for violations, starting from the issuance of the fine decision.
c- For the collection of customs taxes (duties) and other fees not collected owing to an error by the customs office, starting from the date of registration of the customs declaration.

Part Seventeen – Final Provisions

Article 177

a- The Director General may exempt ministries, government departments and public official institutions from certain procedures in order to facilitate their work.

b- The Director General may sell confiscated or waived goods and articles to the ministries, official departments and public institutions of the State at such price as he deems appropriate if they express their need for them, or may relinquish them without consideration by a decision of the Minister or the competent authority.

Article 178

The Financial and Economic Cooperation Committee of the GCC States shall approve the Executive Regulations of this Regulation (Law), and they shall be issued in accordance with the legal instrument of each State.

Article 179

Upon its entry into force, the Unified Customs Regulation (Law) of the GCC States shall replace the customs regulations and laws in force in the Member States, within the limits of, and without conflicting with, the constitutional rules and systems and the basic laws in force in each State.

Issued on 22 April 2003 and published in the Official Gazette Kuwait Al-Youm on 4 May 2003.