Customs Notice Number 17/2020: Procedures for Clearance of Goods Consumed within Free zones
Dubai Customs issued a Customs Notice on the 22nd of October, 2020 which aims to facilitate customs procedures. It aims to regulate the free zone business activities in regards to goods that are consumed or used therein. Further, it also ensures ease of clearance, reduction in the risk of doing business in the event of an audit, consequently, attracting more investment in these free zones.
The Notice draws a difference between goods that are subject to customs duty and the exempt ones. Article 1 lays down the goods not subject to customs duty as follows; Building equipment and materials used for construction, Packaging materials, machinery, equipment and spare parts used for maintenance, Petrol, oil, lubricants and materials used in production, Office equipment and supplies, and laboratory devices and materials used for scientific research, worn and damaged materials not fit for sale, use or recycling, Any other such goods that may be specified by the competent department.
Thereafter, Article 2 enumerates goods that are subject to duty; goods sold to the local market that are subject to customs duty consistent with the GCC Custom Tariff, that includes but are not limited to; goods sold by local markets by licensed shops such as, electronics, foodstuff, perfumes, glass etc., damaged or worn materials not fit for sale, use or recycling such as, oil residue from vessels and factories etc.
The Notice further also lays down the process of declaration of goods consumed or used as per the requirements. All businesses described in the Notice are subject to follow customs procedures enumerated under Article 3 of the Notice which requires; the submission of a request for approval to the customs office, the business is then required to undergo customs examination and inspection to ensure that the risk management standards are being adhered to, obtaining approvals in case the business deals in restricted goods and submitting reports of destruction of goods.
The new procedure involves a mandatory submission of ‘consumption goods declaration’ to the Dubai Customs which includes consumption and use of both goods that are included and excluded from custom duty. This declaration is required to be submitted every quarter and must be accompanied by the documents enumerated under Article 4 of the said Notice.
These compliance requirements apply to all entities that are conducting business activities in the Dubai free zones.