Stages of customs clearance

It is well known that every country in the world has entry points for goods, whether by air, sea, or land. Goods entering these countries are inspected at these points and subjected to duties known as customs duties, which apply to all goods and shipments. The owner of the goods, or their agent, must complete the customs clearance process, which involves submitting the documents required to facilitate export and import. The owner or agent remains responsible for the goods throughout inspection and valuation, for paying the applicable duties, and for taking delivery once the process is complete. Section VI of the GCC Common Customs Law is devoted entirely to the stages of customs clearance, which are as follows:

First: Customs Declarations

Articles 47 through 51 of the Law require that a customs declaration, accompanied by the documents specified by the Director General, be submitted to the customs office whenever goods are cleared. The Law also addresses who is entitled to access customs declarations and supporting documents. A detailed customs declaration, prepared on the approved forms, must be submitted to the customs office at the time of clearance, even where the goods are exempt from customs duties. The declaration must contain all information needed to apply customs rules, collect the duties owed, and support statistical purposes.

The Director General has the authority to determine which documents must accompany a customs declaration and what information those documents must contain. Where a required document cannot be produced, the Director General may still permit clearance to proceed against a cash guarantee, a bank guarantee, or a written undertaking to submit the document later, subject to conditions set by the Director General.

Once a customs declaration has been registered, its contents may not be amended. The party who submitted the declaration may, however, apply in writing to the Director for a correction, provided the application is made before the declaration is referred for inspection.

Only the owners of the goods, or those representing them, are entitled to examine the goods before submitting the customs declaration and to take samples where necessary, subject to the Director's approval and under the supervision of the customs office. Any samples taken remain subject to the applicable customs duties. No one other than the owner of the goods, or their representative, may access customs declarations and supporting documents, except for the competent judicial or official authorities.

Second: Inspection of Goods

Articles 52 and 53 set out how the inspection of goods is to be carried out, including the transport of goods to the inspection site and who is authorized to conduct the inspection. Once a customs declaration has been registered, the competent officer inspects the goods in whole or in part, following the instructions issued by the Director.

Inspection generally takes place at the customs office, although it may in certain cases be conducted elsewhere, according to rules set by the Director General. The owner of the goods bears the cost, and the responsibility, for transporting the goods to the inspection site, opening and repacking parcels, and any other work the inspection requires, until the goods reach the inspection site. Goods held in customs warehouses or at designated inspection sites may not be moved without the customs office's approval, and no one may enter the warehouses, bonded stores, yards, sheds, or storage and inspection areas without that approval.

Article 54 addresses responsibility where a shortage appears in the contents of a parcel. Inspection is carried out only in the presence of the owner of the goods or their representative. Where a shortage is found, responsibility is determined as follows. If the goods entered the customs warehouses or bonded stores in parcels that appeared intact, and it can be confirmed that the shortage occurred at the country of origin before shipment, the matter is not pursued further. If the goods entered in parcels that did not appear intact, the party responsible for the warehouse or bonded store must record this condition jointly with the carrier in a receipt report, verifying the weight, contents, and count, and must take the necessary steps to preserve the goods; in this case, responsibility falls on the carrier, unless a reservation was noted on the manifest by the customs authority at the country of origin, in which case the matter is likewise not pursued. If the goods entered in parcels that appeared intact but later became suspect after entering the customs warehouses or bonded stores, responsibility for any shortage or substitution falls on the party responsible for those warehouses or stores.

Article 55 gives the customs office the authority to open parcels for inspection where prohibited goods are suspected, or where the contents do not match the customs documents, even in the absence of the owner of the goods or their representative, if the owner fails to attend the inspection at the appointed time despite being notified. Where necessary, the customs office may proceed with the inspection before notifying the owner or their representative, through a committee formed for this purpose by decision of the Director General, and a report must be prepared recording the outcome of the inspection.

Article 56 authorizes the customs office to have goods analyzed by the competent authorities to verify their type, specifications, or conformity with applicable laws and regulations. Where release of the goods depends on specific conditions or specifications being met, the goods remain subject to analysis and inspection, though the Director may release them against the necessary guarantees, which ensure that the goods are not disposed of before the analysis results are known.

The Director General may order the destruction of goods that inspection or analysis proves to be harmful or non-conforming, at the owner's expense and in the owner's presence or that of their representative. The goods may instead be re-exported to their country of origin where appropriate, and a report must be prepared accordingly.

Where the customs office cannot verify the contents of a customs declaration through inspection of the goods or the documents submitted, it may suspend the inspection and request the documents needed to establish the facts.

Third: Payment of Customs Duties

Articles 57 and 58 establish that customs duties are calculated on the basis of the contents of the customs declaration. Where inspection reveals a discrepancy between the declaration and the actual goods, duties are calculated based on the inspection findings, without prejudice to the customs authority's right to collect any fines due under the Law. Where the customs office cannot verify the declaration through inspection of the goods or the submitted documents, it may suspend the inspection and request supporting documents, and it retains the right to re-inspect the goods under Articles 52 through 56.

A valuation committee, composed of officers from the customs administration, is formed by decision of the Director General to resolve disputes between the customs office and the parties concerned over the value of imported goods. The committee may seek the assistance of experts as needed.

Under Article 61, the importer has the right, without prejudice to their right to pursue the matter through the courts, to appeal a decision increasing the declared value before the valuation committee, within fifteen days of the date the customs declaration was registered, or of the date the importer was notified of the value assessed by the administration, by registered letter with acknowledgment of receipt. The committee's decisions are taken by majority vote and take effect only once approved by the Director General. The importer must be notified in writing of the committee's decision on their appeal, and the decision must state its reasoning.

Article 62 sets out the procedure to follow where a dispute arises between the competent customs officer and the owner of the goods over their value, whether due to a disagreement over their type, origin, or some other reason. The matter is referred to the Director. If the Director upholds the officer's assessment and the owner does not accept it, the matter is referred to the Director General, either to resolve the dispute directly or to refer it to the valuation committee. The Director may release goods under dispute, provided they are not prohibited, once a financial guarantee equal to the value of the customs duties, as assessed by the customs office, has been provided. Samples of the goods may be retained temporarily where necessary for future reference, and are returned to the owner once no longer needed, unless consumed during inspection or analysis.

Fourth: Payment of Other Duties and Release of Goods

Articles 63 through 66 govern the release and delivery of goods to their owners. Goods remain subject to customs duties and may not be released until customs procedures have been completed and all applicable duties and other charges have been paid, in accordance with the Law. Goods are delivered to their owners, or to those they officially authorize, following the procedures set by the Director General. The officer responsible for collecting customs duties must issue an official payment receipt in the importer's name, using the form specified by the Minister or the competent authority.

Where a state of emergency is declared, measures may be taken to allow the withdrawal of goods against special guarantees and conditions, determined by decision of the Minister or the competent authority.

Subject to the conditions and rules set by the Director General, goods may also be released before payment of the customs duties owed, once customs procedures have been completed, against a bank, cash, or documentary guarantee.

In Summary

The GCC Common Customs Law, adopted by the Kingdom of Saudi Arabia, sets out the stages of customs clearance in detail, beginning with the requirement to submit a customs declaration accompanied by the documents specified by the Director General of Customs and the information those documents must contain, through the inspection of goods, the opening and repacking of parcels, the payment of customs duties, and finally the release of the goods. The Law presents these stages in a clear and structured manner, making them easier to follow for customs clearance professionals and goods owners alike.

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