Leveraging Free Trade Agreements: GAFTA, Singapore-GCC, and EFTA Benefits

The UAE participates in several Free Trade Agreements (FTAs) that provide preferential tariff rates for qualifying goods. Understanding and utilizing these agreements can significantly reduce import costs.

Greater Arab Free Trade Agreement (GAFTA)

GAFTA eliminates customs duties on goods traded between Arab League member states. Key provisions include:

Complete duty elimination on qualifying goods of Arab origin.

Simplified rules of origin based on substantial transformation or value-added thresholds.

Mutual recognition of certificates of origin issued by member state chambers of commerce.

Member states include Saudi Arabia, Egypt, Jordan, Morocco, Tunisia, and other Arab League countries. Trade in agricultural and industrial products benefits most significantly.

Singapore-GCC Free Trade Agreement

This agreement provides preferential access for goods traded between Singapore and GCC member states:

Reduced or eliminated tariffs on a wide range of industrial and consumer products.

Specific rules of origin determine qualifying Singaporean products.

Services and investment provisions complement the goods trade benefits.

Singapore serves as a major source for electronics, pharmaceuticals, and precision equipment, making this FTA particularly valuable for importers in these sectors.

EFTA-GCC Free Trade Agreement

Trade between GCC states and the European Free Trade Association (Switzerland, Norway, Iceland, Liechtenstein) benefits from:

Preferential tariffs on industrial goods meeting origin requirements.

Specific provisions for agricultural products and processed foods.

Investment and services commitments beyond traditional goods trade.

Swiss watches, Norwegian seafood, and precision instruments are among the products benefiting from this agreement.

How to Claim FTA Benefits

To receive preferential tariff treatment:

Obtain Certificate of Origin: The exporter must obtain a certificate from the authorized issuing body in the exporting country, confirming the product meets origin requirements.

Declare FTA Treatment: When submitting the customs declaration, indicate the applicable FTA and attach the certificate of origin.

Meet Documentary Requirements: Maintain records demonstrating compliance with origin rules, including production records, supplier declarations, and bill of materials.

Rules of Origin

Each FTA specifies how products qualify for preferential treatment:

Wholly Obtained: Products entirely produced in the FTA partner country (agricultural products, minerals, manufactured goods using only local inputs).

Substantial Transformation: Products sufficiently processed in the partner country to change tariff classification or meet value-added thresholds.

Cumulation: Some agreements allow combining originating materials from multiple partner countries to meet origin requirements.

Verification and Compliance

Customs authorities may verify origin claims through:

Documentary review of production and sourcing records.

Requests to partner country authorities for verification.

Post-clearance audits of importer and supplier records.

False origin claims can result in duty recovery, penalties, and potential criminal prosecution.