Tariffs
Kuwait does not implement any customs duties on food, agricultural
items, or essential consumer goods, or on imports of some machinery,
most spare parts, and all raw materials. The General Administration of
Customs collects a 5 percent general tariff on most imports, which
includes the cost, insurance, and freight value of the goods. The
Ministry of Commerce and Industry may impose higher protective
tariffs, up to around 25 percent, on imports that compete with goods
manufactured in smaller local industries.
Standards
Kuwait maintains high restrictive standards, which hinder the marketing
of U.S. exports. For example, shelf life requirements for processed
foods are far lower than necessary to preserve freshness in Kuwait than
they are abroad. Therefore, local merchants tend to prefer products
from suppliers closer to Kuwait, as these products are susceptible to
longer shelf life requirements. This impedes the competitiveness of U.S.
products.
Export Subsidies Policies
Kuwait does not directly subsidize any of its exports, which consist
almost exclusively of crude oil, petroleum products, and fertilizer.
Kuwait imports almost 98 percent of the country's food products.
Some local vegetables are grown by farmers, and are subsidized by the
government; some of these vegetables are sold to nearby countries.
However, the amounts grown and sold are not significant enough to
have any real impact on local or foreign agricultural markets.
Customs Evaluation
For perishable items arriving via air, land, or sea, customs clearance is
prompt and takes about three hours. To complete clearance, the
importer presents its import license and quality test certificate (see
below). Customs' evaluation of duty on the imported goods is usually
based on the value on the commercial invoice. However, if the customs
officials believe the declared value is not realistic, they may make their
own assessment.
Import Licenses
Importers must obtain an annual import license from the Ministry of
Commerce and Industry. The license authorizes the import of any
amount of goods from any country on a multi-entry basis, during its
one-year term. To obtain this license, an importing company must fulfill
the following requirements:
- It must be registered in the Commercial Register at the Ministry of
Commerce and Industry, and with the Kuwait Chamber of Commerce
and Industry.
- The Kuwait share holding in the capital of the company must be at
least 51%.
A special import license is required to import certain kinds of goods,
such as firearms, explosives, drugs, and wild animals.
Export Controls
Only a few items being exported from Kuwait require export licenses,
and generally there are no export restrictions on Kuwaiti products. No
duties are levied on goods exported from Kuwait. Foreign contractors,
however, need a letter of clearance from the Director of Income Taxes,
Ministry of Finance, to be able to export equipment from Kuwait for
use outside Kuwait.
Import/Export Documentation
Imports to Kuwait from the U.S. require three certified and legalized
copies of the commercial invoice, three copies of the bill of lading (air
waybill), and a certificate of origin. The certificate of origin should:
- be duly certified by a U.S. Chamber of Commerce or the National
U.S.-Arab Chamber of Commerce. Legalization is done by the Kuwait
Consulate in New York City, or by the Kuwait Embassy in
Washington, D.C.
- contain the full name of the manufacturing plant or producer as well as
the full name of the freight forwarder.
- show the means of transportation.
- indicate the country of origin.
Invoices and documents should be available to the importer before the
arrival of goods in Kuwait, as goods cannot be cleared through
customs without these documents.
Labeling and Marking Requirements
All goods imported into Kuwait must be clearly marked with the
country of origin. All foodstuffs should carry an Arabic language label
stating the name of the manufacturer, the brand name of the food
product, the name of the food product, its composition (ingredients and
additives), net and gross weight in metric units, country of origin, and its
production and expiration dates. All fats and oils used as ingredients
must be specifically identified on the label.
Prohibited Imports
Kuwait prohibits the importation of pork, pork products, alcoholic
beverages, products containing alcoholic beverages, gambling
machines, and pornographic materials.
Additional Information
For information on types of imports and exports from Kuwait, and
other statistical information, please visit the Economy section in the
Country Profile, or visit theExternal Trade section in Statistics.
For valuable guides and resources concerning foreign investments, or to
order complete business guides for Kuwait, visit the links section in the
business directory or review the following guides:
E-mail info@nrec.com.kw to order the ultimate foreign investors guide
-The Kuwait Free Trade Zone Investors Guide- not only will it give
you an overview of business in Kuwait, but it will also provide details
on how to obtain a license in the Kuwait Free Zone, investment costs,
administrative costs, incentives for investment, frequently asked
questions and much more. You may even order this handbook by
writing to: P.O. Box 64585, Shuwaikh/B, 70456, Kuwait, Tel.
965-802-808 Fax. 965-482-2067
This single chapter is excerpted from the FY 2004 Country Commercial Guide for Kuwait, describing trade regulations in the country. The full text of the report is also available on this website.
Chapter 6. TRADE REGULATIONS, CUSTOMS AND STANDARDS
Import Duty
On April 1, 2003, the National Assembly approved adoption of the GCC Unified Customs Law (UCL). The UCL imposes a five percent ad valorem duty on all food products imported from non-GCC countries. The law will be implemented effective with publication in the Kuwait government's Official Gazette, expected to occur before year's end. Until then no customs duty is imposed on food or beverage products. Tobacco products are assessed a 100 percent customs duty.
All other imports are subject to a five percent general tariff. This flat rate is applied to the cost, insurance, and freight (c.i.f.) value of imported goods. In cases where imports compete with goods that are locally manufactured by "infant industries," the Ministry of Commerce and Industry may impose protective tariffs of up to 15 percent. In such cases, tariff reviews and determinations are conducted on a case‑by‑case basis. Effective July 1, 1997, the Council of Ministers increased the customs duty on cigarettes and tobacco from 70 percent to 100. An Amiri Decree (2/2002) was issued recently to set taxes on all imported cigarettes and tobacco products by 100 percent, or to impose US $26 customs on every 1000 cigarettes. A Ministerial order was issued on June 11, 2002 and directed to the Director General of customs to implement this law. Gulf Cooperation Council (GCC) countries are pondering another increase of cigarette and tobacco tariff.
For perishable imports arriving via air, land, or sea, customs clearance is prompt, taking about three hours. To complete clearance, the importer presents the import license and quality test certificate. Recurring perishable imports can be cleared and taken to the importer's premises after evidence that a sample has been submitted to the Municipality for quality testing. The testing period may take as long as three weeks. Efforts are underway to authorize private testing facilities at the Kuwait Institute for Scientific Research (KISR) to alleviate this problem. The Government is aware of this chronic and irritating problem but nothing has been done to resolve it.
American exporters of perishable goods are advised to appoint their own quality surveyors in Kuwait to protect their rights. Local importers have their own connections with the local officials and may obtain certificates in their favor, e.g., stating that competitors' imports are wasted, damaged, or not fit for human consumption.
It should also be noted that incoming shipments (sea freight) to Kuwait currently require a long time to unload because of the long waiting period at ports. Priority is given to ships carrying shipments to Iraq and to the Coalition forces. Assessment of duty on imported goods is usually based on the commercial invoice. However, if customs officials believe the declared value is not realistic, they are authorized to make their own assessment.
Late in 2001, all docking fees were cancelled at Kuwait ports so as to attract foreign investments.
New Income Tax Guidelines
The Department of Income Tax recently issued certain intradepartmental circulars setting out guidelines for determining the taxability of income, deductibility of costs, recognition of revenue, as well as procedures to be adopted to increase tax assessments. The new guidelines are effective for fiscal years beginning on or after January 1, 2002. For details regarding these guidelines, please contact a local tax professional.
Export Controls
There are few restrictions on exports from Kuwait, though government-subsidized commodities are not authorized for export. Only a few items require export licenses and no duties are levied on exported goods. Foreign contractors, however, must have a letter of clearance from the Director of Income Taxes at the Ministry of Finance in order to export equipment from Kuwait for use on a project outside of Kuwait.
Import/Export Documentation
Imports to Kuwait require three certified and legalized copies of the commercial invoice, three copies of the Bill of Lading (airway bill), and a Certificate of Origin.
Import Licenses
All imported meats - beef and poultry products, require a health certificate issued by the country of export and a Halal slaughter certificate issued by an approved Islamic center in that country. Exporters should contact the U.S. Department of Agriculture, Animal and Plant Health Inspection Service (APHIS) for further information.
Certificate of Origin
‑‑ Must be certified by a U.S. Chamber of Commerce - affiliated Chamber of Commerce or the National U.S.‑Arab Chamber of Commerce. Legalization is performed by the Kuwait Consulate in New York City or by the Kuwait Embassy in Washington, D.C.
‑‑ Contain the full name of the manufacturing plant or producer as well as the full name of the freight forwarder.
‑‑ Show the means of transportation.
‑‑ Indicate country of origin.
Invoices and documents should be sent to the importer before the arrival of goods in Kuwait as goods cannot be cleared through customs without these documents. Shipments of live animals, animal products, plants, or plant products require sanitary and health certification and inspections from the country of origin.
Private Kuwaiti companies usually make payment by Letters of Credit through a Kuwaiti bank. Government agencies except the Ministry of Defense, pay letters of credit directly through the Central Bank of Kuwait.
In brief, export documentation should include:
‑‑ detailed description of the goods;
‑‑ unit as well as total prices;
‑‑ net and gross weight (metric);
‑‑ type of packing;
‑‑ full name and address of the manufacturers and the exporters;
‑‑ trademarks and numbers of the goods as shown in the manifest;
‑‑ means of transportation, the shipper's port and country of origin; and,
‑‑ certification of the invoices by the authorized organizations.
Temporary Entry
Products imported into Kuwait that do not comply with established standards and regulations may be allowed a three‑month temporary entry against storage fees. If the exporter fails to correct the fault, the goods will either be re‑exported at the exporter's expense, or will be auctioned.
Goods coming into Kuwait for transshipment may be allowed temporary entry. In addition, goods being imported for trade shows or exhibitions can be entered via a temporary import bond. However, temporary import bonds can be very expensive to secure and many exhibitors have found it less costly to simply pay the five percent tariff, even for goods that will be re-exported.
Labeling, Marking Requirements
All goods imported into Kuwait must be clearly marked with the country of origin.
Food labels must include product and brand names, production and expiry dates, country of origin, name and address of the manufacturer, net weight in metric units, and a list of ingredients in descending order of importance. All fats and oils used as ingredients must be specifically identified on the label. Labels must be in Arabic/English or Arabic only. Arabic stickers are accepted.
Shelf-life Standards
Kuwait enforces a shelf-life standard for 44 food products. The manufacturer's established shelf life is accepted for other food products. The manufacturer must print production and expiry dates on the original label or container. Dates cannot be added after the fact via a sticker. Products must arrive at destination with at least half the shelf-life duration remaining. The U.S. supplier should work closely with the importer to ensure compliance with local shelf-life requirements.
Food and pharmaceutical products should also bear the following labeling information:
‑‑ Batch or lot number
‑‑ Manufacturing date
‑‑ Expiry date or validity
‑‑ Description of contents
‑‑ Storage conditions
‑‑ Name of the pharmacopoeia (for a pharmacopoeia product)
Prohibited Imports
Kuwait prohibits the importation of pork, pork products, alcoholic beverages, products containing alcoholic beverages, gambling machines and materials that could be considered pornographic. Kuwait also prohibits imports from Israel and imports of Israeli-made products.
Standards
< SPAN>The Department of Standards and Meteorology at the Public Authority for Industry has developed some 300 Kuwaiti standards that are currently in force. These have been based on a combination of American, British, German and other national standards modified to suit Kuwait.
In addition, Kuwait has adopted a number of import regulations that conform to Gulf Cooperation Council (GCC) standards. Most importantly:
1.) Instruction manuals for imported durable goods must be translated into Arabic; and,
2.) Consumer durable goods including, but not restricted to, large appliances must be able to operate without a transformer on Kuwait's 240 volt, 50 hertz power transmission system.
International Conformity Certification Program (ICCP)
In April 2003, the Government of Kuwait adopted an import standards program similar to the International Conformity Certificate Program (ICCP) in effect in Saudi Arabia since 1995. The certification program applies to nearly 40 categories of regulated products, including a wide range of common use goods, such as electronic, automotive, and chemical imports. Similar to Saudi Arabia, Kuwait selected Intertek Testing Services (ITS) to administer the ICCP globally on its behalf. ITS operates laboratories in nearly 50 countries around the world, including many labs in the United States. Exporters are not required to use ITS labs, as long as their products achieve certification from an acceptable certifying body.
Kuwait's ICCP has raised concerns from the US Trade Representative's office, which considers the program as an unfair and unnecessary barrier to trade. For more information on Kuwait's ICCP, contact the Public Authority for Industry (PAI) at Tel: (965) 431-8240, Fax: (965) 431-8721, e-mail: industry@pai.gov.kw, and Web Site: http://www.pai.gov.kw
Free Trade Zones (FTZ)/Warehouses
< SPAN>In July 1995, the National Assembly passed a law (Law No. 26 of 1995) authorizing the Ministry of Commerce and Industry to establish free trade zones in Kuwait. In June 1996 the Ministry received proposals from Kuwaiti private firms to operate, manage and market Kuwait's Free Zone at Shuwaikh port. The contract was awarded to the National Real Estate Company (NREC) in the fall of 1996. On May 17, 1998, the Cabinet approved awarding and signing the agreement which gives the government 80 percent of the profits if NREC utilizes the Port Authority's facilities and only 10 percent if it does not. The Kuwait Free Trade Zone at Shuwaikh Port opened in 1999 and covers 1.7 million square meters. The FTZ is divided into three main sections: trade, services and industry and includes warehouses, exhibition grounds, banks, cargo companies and insurance companies. A trade center will also be built inside the FTZ to house exhibit and display facilities.
Warehouses are available in Kuwait not only in Shuwaikh but also at Shuaiba and in large refrigerated warehouses in other locations. Several leading importers also have their own warehousing facilities.
For information about various Kuwaiti laws pertinent to customs, tariffs, import regulations, and export requirements to Kuwait, you may visit the Kuwait Chamber of Commerce and Industry's Web Site: www.kcci.org/kw
Government Procurement & Offset Policies
Kuwait government procurement policies specify local products, when available, and prescribe 10 percent price advantage for local firms in government tenders.
Offset Program
The Counter-Trade Offset Program was established in 1992 to compensate for supply contracts to the Kuwaiti government worth KD 1 million (US $3.05 million) or more. Contractors must invest 35 percent of the government contract in an approved offset business venture with a Kuwaiti partner in Kuwait or the rest of the Arab world. The program is intended to provide new investment opportunities in Kuwait; aid the transfer of technology to the private sector; create training opportunities for Kuwaitis; help market local products outside of the country; and provide foreign aid. Non-performance penalties equivalent to six percent of the value of the contract can be levied. Further details are available from the Commercial Service at the U.S. Embassy Kuwait or the Ministry of Finance's Counter-Trade Offset Program www.mof.gov.kw/offset.< BR>
Boycott of Israel
In June 1993, Kuwait announced that it would no longer apply the secondary boycott to firms that do business with Israel and the tertiary boycott to firms that do business with firms subject to the secondary boycott. However, Kuwait continues to apply the primary boycott to goods and services produced in Israel itself. Kuwait has also taken steps to revise its commercial documentation to eliminate all direct references to the boycott of Israel. U.S. firms may still occasionally receive requests for boycott‑related information from private Kuwait firms or uninformed Kuwaiti public officials. In such cases, U.S. firms should advise the Embassy of the request, report the request to the U.S. Department of Commerce, Office of Anti-Boycott compliance at (202) 482-2381 or visit their website at www.bis.doc.gov/antiboycottcompliance< /A> and take care to comply with all requirements of the U.S. anti‑boycott laws. Kuwait has received several one‑year waivers of "Brown Amendment" requirements through 1998. The "Brown Amendment" prohibits defense sales to those countries that have not eliminated all vestiges of the enforcement of the secondary and tertiary boycott of Israel.
