Countries adopt revised 2022 Customs Tariffs in the GCC
Customs Tariffs update
On 1 January 2022, the World Customs Organization (WCO), which is the primary custodian for the development and administration of Customs tools, published an updated version of the Harmonized System Convention (HS 2022).
The Harmonized System (HS) tool is globally accepted by over 180 Customs authorities to determine the classification of goods and applicable Customs duties. Conventionally, the WCO reviews the HS once every five years in order to cater for technological and environmental trade changes. The HS 2022 is the seventh version of the HS.
Countries located in the Gulf Cooperation Council (GCC) are members of the WCO and as such, observe the Customs protocols including adoption of the HS. The GCC Unified Customs Tariff (GCC Tariff) embodies the WCO HS, which guides the application of HS as outlined by the WCO.
Recently, various GCC Customs authorities have announced the adoption of HS 2022 by updating the GCC Tariff and revoking the 2017 version. These include: Oman, The Kingdom of Saudi Arabia (KSA), and the UAE Customs authorities.
What is the impact on GCC businesses?
HS 2022 came into effect on 1 January 2022 as outlined by the WCO. However, it is likely to be rolled out globally during the first half of 2022. GCC countries such as Oman, UAE, and KSA have already announced their adoption of HS 2022.
Consequently, GCC businesses should embark on a holistic review of their Customs classification procedures to determine compliance with the updated 2022 GCC Tariff. This should include an evaluation of key changes to the GCC Tariff such as:
- Changes in Tariff classification of goods,
- Introduction of new Tariff codes,
- Amendments to description of goods, and
- Deletion of Tariffs
Non-compliance with the updated GCC Tariff may lead to incorrect Customs declarations, delayed Customs clearance of goods, and exposure to fines or penalties. We have outlined the key changes in the tables below:
Table 1.0 – HS 2022 Change highlights
Impacted Economic Sectors |
Tariff amendments
|
|
1 |
Agriculture |
77 |
2 |
Manufacturing and Machinery |
63 |
3 |
Chemicals |
58 |
4 |
Woods |
31 |
5 |
Metals |
27 |
6 |
Transportation |
22 |
7 |
Textile | 21 |
8 |
Others - Amendments apply to a variety of other sectors, comprising a total of 1,228 headings identified by a 4-digit code, and 5,612 subheadings identified by a 6-digit code |
52 |
Total |
351 |
Table 2.0 – HS 2022 Impact summary
| # | Sector impacted |
Key changes |
1 |
Environment |
New heading included for e-waste subheadings for certain critical categories to promote greater visibility and facilitate member countries’ control of cross-border activity in hazardous wastes and its disposal. |
2 |
Security |
New heading included for certain dual-purpose goods like radioactive materials, bio safety cabinets etc.; that could be potentially used for mass disturbance of international peace. |
3 |
Technology |
New subheading included for smartphones (Chapter note), drones and Unmanned Aerial Vehicles (UAVs) etc. |
4 |
Tobacco |
New subheading for new tobacco products and nicotine-based products - in terms of simplification of the classification. |
5 |
Prohibited/ |
New subheading incorporated to distinctively cover controlled or prohibited hazardous chemicals, organic pollutants etc. |
6 |
Healthcare |
New provisions included for cell culture and therapy placebos. Classification is simplified for rapid diagnostic and clinical trial kits under new subheading to facilitate clearance across borders. |
