Saudi Arabia

Saudi business and laws still favor Saudi citizens, and Saudi Arabia still has trade barriers, mainly regulatory and bureaucratic practices, which restrict the level of trade and investment.

For example, only Saudi nationals are permitted to engage in trading activities and only Saudis are permitted to register as commercial agents. All industrial enterprises are open to non-Saudis, and they can also trade in the products they manufacture.

Saudi non-tariff barriers include: preferences for national and GCC products in government procurement; a requirement that foreign contractors obtain their imported goods and services exclusively through Saudi agents; and the economic offset requirement mandating reinvestment of a portion of contract value in indigenous industries for certain high value government contracts, particularly in defense.

Licensing Requirements for Commercial Activities – Agent Requirements

Exporters to Saudi Arabiaare not required to appoint a local Saudi agent or distributor to sell to Saudi companies, but commercial regulations restrict importing for resale and direct commercial marketing within the Kingdom to Saudi nationals and wholly Saudi-owned companies.

Non-automatic licensing

Distillation equipment used for producing distilled water may be importedsubject to an import licence from the Ministry of Commerce.

Petroleum jellies and waxes require an import licence from the Ministry ofInterior.

Balloons, gliders, aircraft and spacecraft and parts thereof require a priorlicence from the competent Government Department.

According to international convention, imports of antiques are subject to alicence from the Ministry of Education.

Night binoculars may only be imported by a competent agency.

Chemicals imported by commercial importers require an import licence fromthe Ministry of Commerce. Chemicals imported by factories require anapproval and import licence from the Ministry of Industry and Electricity.

Pharmaceutical products, controlled substances for medical use, narcotics,psychotropics, chemicals under control which could lead to narcoticsmanufacturing, ethyl alcohol, certain biological products, and blood productsmay be imported subject to an approval from the Ministry of Health.

For human life and plant health protection reasons, the Ministry ofAgriculture and Water issues import licences for the following goods: seedsand fertilizers, pesticides, veterinary drugs and vaccines, feeds additives,biological materials, pigeons, land birds, rabbits, and animal semen.

For national security reasons, explosives and dangerous chemicals requirean approval from the Ministry of Interior.

The importation of radio and electronics equipment, TV-monitoring camerasand accessories and closed circuit television, burglar or fire alarms, highquality photocopiers, arms and ammunition requires an import licence fromthe Ministry of Interior to ensure national security.

The Ministry of PTT is the competent authority to issue import licences forwireless sets and radio communication apparatus to ensure nationalsecurity and rationalization of the use of frequencies.

Ethyl alcohol may be imported subject to an approval from differentauthorities: (1) the Ministry of Health; or (2) the Ministry of Industry; or (3)the Ministry of Health and the Ministry of Industry.

Horses of Arab breed may only be imported by air, by a direct flight from theexporting country. The Chivalry Club is responsible for issuing importlicenses to ensure that the Arab breed is maintained.

All subsidized agricultural machinery and equipment require an importlicence from the Ministry of Agriculture and Water.

Import Regulations

  1. Registration requirements
    Importers of commercial shipments are required to provide Saudi Customs with their importer code number that is listed on their trade license that they receive when they register with their local Chamber of Commerce.Veterinary drugs and products must be registered with the Ministry ofAgriculture & Water, Animal Resources Department, Division of Registrationand Control of Veterinary Drugs and Products.
  1. Documentation Requirements

Shipments with a value of $13,000 (USD) or more require a Certificate of Origin legalized by the Saudi Arabia Royal Embassy. Additional documents or permits may be required based on the type of commodity.

  1. Inspection
    The Saudi Arabian Standards Organization (SASO) has implemented a program known as the International Conformity Certification Program (ICCP) that applies to 76 regulated products. The purpose of the program is to protect the Saudi Arabian consumer.
  1. Temporary Import Bond Shipments

Temporary goods which are imported for promotional use, require aninvoice with the value of the goods endorsed by the local Chamber ofCommerce, and a certificate of origin. The invoice should clearly statethat the goods are being imported for exhibition purposes only and willbe re-exported.A refundable deposit of 5% or 20% must be paid to the SaudiCustoms

Technical Barriers to Trade (TBT's)

Saudi Arabia's pre-shipment inspection program known as the International Conformity Certification Program (ICCP) is controversial and is seen by many as a barrier to free trade. It adds various costs to imports and can cause delays. Shipments valued under $5000.00 (USD) do not require ICCP

Standards & other Technical Requirements

Standards

All imported goods should conform to approved Saudi standards. In theabsence of local standards, products should conform to InternationalStandards. Many Saudi standards are applicable in other Gulf countries.

The Saudi Arabian Standards Organization (SASO) has adopted ISO 9000 as the official standards for the Kingdom. SASO acts as the official accreditation body through the Quality Assurance Department. While compliance is voluntary, many government procurements require this standard or its equivalent. Currently, there are more than 1,420 SASO and 976 Gulf Cooperation Council (GCC) standards.

Labeling and Marking Requirements

Labeling and marking requirements are compulsory for any products exported to Saudi Arabia.

Labeling is particularly important for companies marketing food products, personal care products, health care products, and pharmaceuticals.

SASO has specific requirements for identifying marks and labels for various imported items.

Labels must be in Arabic for any imported foodstuff item, which should basically reveal the same information on the container as in the foreign language, i.e. ingredients, country of origin, manufacturer, shelf life, instructions for use, etc.

Quality control laboratories at ports of entry may reject products that are in violation of existing laws. Products arriving at port having less than one-half of the time remaining between production and expiration date will be rejected and cannot be sold on the market. U.S. manufacturers are urged to discuss labeling requirements with their selected representative or distributor.

Labeling and expiration date requirements are stringent and present an export impediment for U.S. fresh eggs and bottled baby food products.

Arabic manuals must be included with any household electrical appliances exported to Saudi Arabia.

Mandatory labelling requirements for the presence of geneticallymodifiedingredients became effective on 1 December 2001.

Labelling requirements for all imported pre-packaged foodstuffs andadditives are satisfied through SASO's mandatory standard No. SSA/1995 which is identical to Gulf standard No. 9/1995 and is based on the CODEXguidelines.

Packaging Requirements

Packaging requirements for imports by sea are in conformity with decree

No. SPA-1740/82 of 4 May 1982.

Jute made packaging materials to be used for packing of food articles must

conform to the specifications for such products laid down by the country.

Conformity Assessment

The International Conformity Certification Programme (ICCP) is a combined

conformity assessment and pre-shipment inspection scheme. Under the

ICCP, 77 regulated consumer product lines are subject to quality and safety

control through the application of mandatory Saudi and international

standards on the following groups of commodities: (1) toys and playground

equipment, (2) electrical and electronic items, (3) automotive products, (4)

chemical products, and (5) others.

Preshipment Inspection Requirements

The International Conformity Certification Programme (ICCP) uses preshipment inspection as a tool of conformity assessment on shipmentsvalued at US$5000 and more. Pre-shipment inspection varies with thestatus of the particular product vis-à-vis the programme, ranging from fullpre-shipment inspection and pre-shipment testing for unknown/unregisteredproducts, to pre-shipment inspection plus occasional pre-shipment testingfor registered products, to occasional random pre-shipment inspection onlyfor type-approved products. On behalf of SASO, the Intertek TestingServices administer the ICCO on a global basis.

Import Licensing

In Saudi Arabia, the importation of certain articles is either prohibited or requires special approval fromcompetent authorities. Specifically, the importation of alcohol, firearms, pork products and used clothing isprohibited. Imports of agriculture seeds, live animals, fresh and frozen meat, books, periodicals, movies,tapes, religious books and materials, chemicals and harmful materials, pharmaceutical products, wirelessequipment, horses, radio-controlled model airplanes, products containing alcohol, natural asphalt andarchaeological artifacts require special approval.

Regulated products exported to the Kingdom are required to be registered by the manufacturer and must have a Certificate of Conformity issued by Intertech. Failure to provide this certification will result in the rejection of the import entry by Saudi Arabian Customs. The complete details on how this process works can be found at the ICCP website:

Special Import Provisions

Military uniforms or equipment of any kind require the consignee to hold a validimport permitletter from the Ministry of Interior.
Printed matter such as books, pictures, records, films, tapes, slides, movies, videos, compact discs, diskettes, etc are subject to censorship and confiscation.
Certain radio transmitter/communication equipment as well as telescopic equipment require that the consignee provide an import letter from the Ministry of Interior.

Import Prohibitions

  • Any item contrary to the Royal Family, Saudi Arabian or Muslim beliefs or morality
  • Goods either shipped from or manufactured in Israel are completely banned
  • Alcohol and alcohol related items
  • Items of human concealment such as: wigs, masks, artificial pearls, etc.
  • Items used for gambling or games of chance.
  • Stuffed animals and pokemon toys
  • Any items which depict or display the female anatomy (other than for strict medical purposes).
  • Watches which have cameras attached to them.
  • Pornography in any form.
  • Advertising materials for tobacco products may not be imported for health protection reasons
  • Imports of asbestos and materials or goods containing asbestos areprohibited.
  • The importation of genetically-modified food and food ingredientsmanufactured from animal products is not authorized.
  • Nutmeg, poppy, seeds of poppy and cannabis, black cannabis, opium, andmiscellaneous herbs are prohibited for importation.
  • Imports of parts for use solely or principally with radio communicationapparatus and television receivers are banned for security reasons.
  • Various items may not be imported for religious reasons. These include liveswine, meat of swine and other products of swine, frogs' legs, food productsmade from animal blood, alcoholic beverages, leather of beasts, threedimensionalpictures and any goods which offend Sharia and publicmorality, as well as tools and machinery designed for gambling excludingthose for innocent amusement.
  • Due to the intended illegal use of the products, imports of empty bagsbearing trademarks of the manufacturers and bottles with origin evidenceaffixed thereon are banned.

Import Restrictions

The following items are not acceptable for carriage to any international destinations unless otherwise indicated. (Additional restrictions may apply depending on destination. Various regulatory clearances in addition to customs clearance may be required for certain commodities, thereby extending the transit time.)

  • APO/FPO addresses.
  • C.O.D. shipments.
  • Human corpses, human organs or body parts, human and animal embryos, orcremated or disinterred human remains.
  • Explosives (Class 1.4 explosives are acceptable for carriage to Canada, Germany, Japan, United Arab Emirates and United Kingdom.Note:United Arab Emirates only allows Class 1.4 explosives to be shipped hold- for- pick-up to the FedEx Express facility in Dubai.)
  • Firearms, weaponry, and their parts (acceptable between the U.S. and Puerto Rico).
  • Perishable foodstuffs and foods and beverages requiring refrigeration or other environmental control.
  • Live animals (including insects) except via our Live Animal Desk (1.800.405.9052).
  • Plants and plant material, including cut flowers (cut flowers are acceptable from the U.S. to selected points in Canada and from Colombia and Ecuador to the U.S.).
  • Lottery tickets and gambling devices where prohibited by local, state, provincial or national law.
  • Money (coins, cash, currency, paper money and negotiable instruments equivalent to cash such as endorsed stocks, bonds and cash letters).
  • Collectible coins and stamps.
  • Pornography.
  • Hazardous waste, including, but not limited to, used hypodermic needles or syringes or other medical waste.
  • Shipments that may cause damage to, or delay of, equipment, personnel or other shipments.
  • Shipments that require us to obtain any special license or permit for transportation, importation or exportation.
  • Shipments whose carriage, importation or exportation is prohibited by any law, statute or regulation.
  • Shipments with a declared value for customs in excess of that permitted for a specific destination.
  • Dangerous goods except as permitted under the Dangerous Goods section of these terms and conditions.
  • Dead animals (including insects) or animals that have been mounted.
  • Shipments being processed under:

Duty drawback claims unless advance arrangements are made.

Temporary Import Bonds - acceptable under the FedEx International Broker Select option, for initial import only.

U.S. State Department licenses.

Carnets.

U.S. Drug Enforcement Administration export permit.

  • Shipments destined to or being withdrawn from a Foreign Trade Zone.
  • Letters of Credit (however, shipments covered by a Letter of Credit calling for a "Courier Receipt" as defined by Article 29 of UCP 500 may move via FedEx International Priority).
  • Certificate of Registration shipments (CF4455).
  • Shipments moving into or out of Foreign Trade Zones or bonded warehouses.

Government Procurement

When Saudi Arabia acceded to the WTO in December 2005, it committed to initiating negotiations foraccession to the WTO Agreement on Government Procurement (GPA) and to complete its GPAnegotiations within one year of becoming a WTO Member.

However, Saudi Arabia has not begunnegotiations for GPA membership, nor has it become an observer in the WTO Committee on GovernmentProcurement.

Saudi Arabia is currently reviewing its government procurement procedures to bring them in line withWTO GPA requirements; however, it has not yet published revised procedures.

Several royal decrees that strongly favor GCC nationals apply to Saudi Arabia’s government procurement.

Under a 1983 decree, contractors must subcontract 30 percent of the value of any government contract,including support services, to firms majority-owned by Saudi nationals.An exemption is granted only where noSaudi-owned company can provide the goods and services necessary to fulfill the procurement requirement.

The tender regulations require that Saudi individuals and establishments be given preference over othersuppliers in government procurement. However, the regulations extend the preference to other suppliers inwhich Saudi nationals hold at least 51 percent of the supplier’s capital.

The tender regulations also give apreference to products of Saudi origin that satisfy the requirements of the procurement.

SaudiArabia gives priority in government purchasing programs to GCC products. These items receive up to a 10percent price preference over non-GCC products in all government procurements in which foreign suppliersparticipate.

Foreign suppliers that participate in government procurement are required to establish a training programfor Saudi nationals. Some government contracts also require a minimum level of subcontracting with Saudicompanies. In addition,

The Saudi government may favor joint venture companies with a Saudi partner overforeign firms, and will also support companies that use Saudi goods and services.

Foreign suppliers working only for the government, if not alreadyregistered to do business in Saudi Arabia, are required to obtain a temporary registration from the Ministryof Commerce and Industry within 30 days of contract signing.