RESTRICTED
WORLD TRADE WT/ACC/SAU/4
13May1996
ORGANIZATION(96-1856)
Original: English
ACCESSION OFTHE KINGDOM OFSAUDI ARABIA
Memorandum ontheForeign Trade Regime
ThePermanent Mission oftheKingdom ofSaudi Arabia hastransmitted thefollowing revised
Memorandum ontheForeign Trade Regime withtherequest thatitbetransmitted tomembers ofthe
Working Party.
_______________
TABLE OFCONTENTS
page
I.INTRODUCTION 4
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE 5
1.Economy 5
(a) General description 5
(b) Current economic situation 5
2.Economic Policies 6
(a) Main directions 6
(b) Monetary andfiscal policies 7
(c) Foreign exchange andpayments system 8
(d) Foreign anddomestic investment policies 8
(e) Competition policies 8
3.Foreign Trade inGoods andServices 8
4.Domestic Trade inServices/Foreign Direct Investment 9
5.Information onFinancial Movements Related toPrivate Transfers 9
6.Information onGrowth inTrade inGoods andServices 9
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES
AFFECTING TRADE 9WT/ACC/SAU/4
Page2
1.Powers ofExecutive, Legislative andJudicial Branches ofGovernment 9
2.Government Entities Responsible forForeign Trade 10
3.Division ofAuthority 11
4.Laws andLegal Acts 11
5.Description ofJudicial, Arbitral orAdministrative Tribunals
orProcedures 12
IV. POLICIES AFFECTING TRADE INGOODS 12
1.Import regulations 12
(a) Registration requirements forengaging inimporting 12
(b) Characteristics ofnational tariff 12
(c) Tariff quotas, tariff exemptions 13
(d) Other duties andcharges 14
(e) Quantitative import restrictions 14
(f) Import licensing procedures 14
(g) Other border measures 15
(h) Customs valuation 15
(i) Other customs formalities 15
(j) Quality control inspection 15
(k) Application ofinternal taxes onimports 16
(l) Rules oforigin 16
(m) Anti-dumping regime 16
(n) Countervailing dutyregime 16
(o) Safeguard regime 16
2.Export Regulation 16
(a) Registration requirements forengaging inexporting 16
(b) Customs tariff nomenclature, types ofduties, dutyrates,
weighted averages ofrates 16
(c) Quantitative export restrictions 16
(d) Export licensing procedures 17
(e) Other measures 17
(f) Export financing, subsidy andpromotion policies 17
(g) Export performance requirements 18
(h) Import dutydrawback 18
3.Internal Policies Affecting Foreign Trade inGoods 18
(a) Industrial Policies 18
(b) Technical Regulations andStandards 19
(c) Sanitary andPhytosanitary Measures 19
(d) Trade-related investment measures 20
(d) State-trading practices 20
(f) Freezones 20
(g) Freeeconomic zones 21WT/ACC/SAU/4
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(h) Trade-related environmental policies 21
(i) Government procurement 21
(j) Regulation oftrade intransit 21
4.Policies Affecting Foreign Trade inAgricultural Products 22
(a) Imports 22
(b) Export subsidies 22
(c) Export prohibitions andrestrictions 22
(d) Export credits, export credit guarantees orinsurance programs 22
(e) Internal policies 22
5.Policies Affecting Foreign Trade inOther Sectors 22
(a) Textiles Regime 22
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 23
VI. TRADE-RELATED SERVICES REGIME 23
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC
RELATIONS WITH THIRD COUNTRIES 23
1.Bilateral orPlurilateral Agreements Relating toForeign Trade 23
2.Customs Union/Free-Trade Area Agreements 23
3.Labor Markets Integration Agreements 23
4.Multilateral Economic Cooperation, Membership inMultilateral 24
Economic Organizations
Annex 1Statistics andPublications 25
Annex 2ListofLaws andLegal Acts 32
Annex 3Information onImport Licensing Procedures 34
Annex 4Information onImplementation andAdministration oftheCustoms
Valuation Agreement 37
Annex 5Information onTechnical Barriers toTrade 40
Annex 6Information onState Trading 41
Annex 7Economic, Technical Cooperation andTrade Agreements 43WT/ACC/SAU/4
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Chapter I.Introduction
1. Over thelasttwenty fiveyears, theKingdom ofSaudi Arabia hasexerted aserious effort to
develop itseconomy. Islamic values havebeenstressed, asreflected intheGovernment ’spreference
forafreemarket economy andthesupport fortheprivate sector ’sparticipation inthedevelopment
process. However, theeconomic development oftheKingdom haslargely depended ontheutilization
ofitslarge oilandgasreserves. Saudi Arabia iscurrently thelargest producer ofoilintheworld and
oneoftheworld 'slargest producers ofnatural gas.Theavailability ofthese resources hasgiven rise
toaneconomy typical ofoil-rich developing countries. Itischaracterized byamajor concentration
ofexports onasingle product andahighpropensity toimport. Moreover, theKingdom isaware that
dependency onadepleting resource canbeunhealthy andhasmade astrong effort toprepare forthe
future byencouraging diversification andexpansion ofitseconomic base.
2. Since 1970, Saudi Arabia hasadopted consecutive plans foreconomic andsocial development,
based onIslamic values andprinciples, toserve asguidelines fordevelopment inacoordinated and
balanced direction. Tothisend,sixfive-year plans wereissued. Thefirstandsecond plans stressed
theconstruction ofamodern infrastructure, theimprovement ofgovernment services, andthe
development ofhuman resources. Thethird, fourth andfifthplans emphasized thediversification and
expansion oftheeconomic baseandimprovement inhealth, education, training andothersocial services.
Thecurrent plan, fortheperiod 1995-2000, concentrates onincreasing employment opportunities for
Saudimanpower,raisingthelevelofeconomicefficiencyinthepublicandprivatesectors,andenhancing
theprivate sector ’sroleinthenational economy.
3. Theresults oftheimplementation oftheseplans canbesummarized asfollows: Non-oil GDP
hasincreased five-fold since 1971 andprivate investment hasincreased seven-fold. Infant mortality
rateshavedropped byover75percent andtheratioofphysicians perperson hasimproved bymore
than90percent. School enrolment hasrisen from alittleover500,000 tomore than3million.
4. Saudi Arabia hasalsomade great strides initstrade withother nations oftheworld. Among
thedeveloping countries, itranked tenth intheworld inthevalue oftraded goods in1994, although
alargeproportion isaccounted forbypetroleum exports. Ofthetopfortytrading countries intheworld,
Saudi Arabia ranks thirteenth inthegrowth oftrade overtheperiod 1971-1994.
5. TheKingdom maintains oneoftheleastrestrictive exchange andtrade systems intheworld.
Itmaintains noexchange restrictions anddoesnotimpose trade restrictions forbalance ofpayments
reasons. Ingeneral, trade restrictions arelimited toreligious, health, andsecurity reasons.
6. Inlightoftheincreasing importance ofSaudi Arabia intheinternational trading system and
theexpected large impact thatWorld Trade Organization (WTO) rules andregulations would have
oninternational trade, theKingdom hasdecided torequest accession totheWTO inaccordance with
Article XIIoftheMarrakesh Agreement Establishing theWorld Trade Organization (WTO Agreement).
Itintends toassume allobligations andrights under theWorld Trade Organization asadeveloping
country member.WT/ACC/SAU/4
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Chapter II.Economy, Economic Policies AndForeign Trade
1.Economy
(a)General Description
7. TheKingdom ofSaudi Arabia islocated ontheArabian Peninsula inSouthwest Asia. Itis
bordered onthenorth byKuwait, IraqandJordan, onthewestbytheRedSea,onthesouth byYemen
andOman, andontheeastbyQatar, theUnited Arab Emirates andtheArab Gulf. Itisconnected
toBahrain byacauseway.
8. TheKingdom hasalarge landarea, mostly desert, witharelatively small population. Ona
landareaof2.15million square kilometres livesapopulation ofsome 18million, giving itadensity
of9people persquare kilometre. Thenumber ofSaudi nationals isroughly 13million, withforeign
nationals making uptherest.Approximately 75percent ofthecountry 'spopulation livesinurban areas.
9. Thecountry istheworld 'slargest producer andexporter ofoil.Production ofcrude oilin
Saudi Arabia hasaveraged about eight million barrels perdayoverthepastfewyears, compared to
aworldtotalof65-70millionbarrelsperday.TheKingdomholdsover250billionbarrelsofrecoverable
reserves ofoil,roughly onequarter oftheworld total.
10. Saudi Arabia isheavily dependent onoilexports foritseconomic well-being. Thus, itissimilar
tomany other developing countries whose economies depend primarily onchanges inexport markets,
particularly intheindustrialized countries. Saudi Arabia hasattempted topromote growth initsnon-oil
manufacturing sector but,atanestimated 4.6percent ofGDP in1994, itstillremains asmall part
oftheeconomy.
(b)Current Economic Situation
11. Saudi Arabia 'sgross domestic product isestimated tohaverisenby1.2percent during 1994
toatotalofabout $120 billion. GDP percapita wasroughly U.S.$6,750. Theoilsector declined by
2.2percent while thenon-oil sector registered anincrease of3.4percent. Within thenon-oil sector,
theprivate sector roseby3.8percent andtheGovernment sector by2.8percent.
12. Thenon-oil sector oftheeconomy contributed almost 64.9percent oftotaleconomic output
in1994, atcurrent prices excluding import duties. Byeconomic activity, construction accounted for
9.8percent ofGDP, tradefor7.6percent, andagriculture, forestry andfishing for7.2percent. Over
thepasttenyears, theagriculture sector hasseenthegreatest growth ofanyeconomic sector inSaudi
Arabia.
13. At29percent, government social services ineducation, health, etc.accounted forthesingle
largest shareofthenon-oil (totalGDPexcluding oilandgasproduction andpetroleum refining) economy
in1994. TheGovernment sector asawhole produced 26percent ofGDP.
14. Theoilsector continues toplayacentral roleinSaudi Arabia 'seconomy. Incurrent prices,
itaccounted for35percent ofthecountry 'seconomic output in1994. Furthermore, overtheperiod
1984-1993, thevalue ofcrude oilandpetroleum product exports accounted foranaverage 75percent
and16percent ofthetotalvalue ofexports, respectively.
15. Oiloutput hasremained atroughly eightmillion barrels perdayoverthepastfewyears. And
withweak oilprices, realeconomic growth overthethree yearperiod 1992-1994 averaged justone
percent perannum, asopposed totheprevious three yearperiod (1989-1991) during which oiloutputWT/ACC/SAU/4
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jumped fromanaverage fivemillion barrels perdaytoeightmillion barrels perdayandrealeconomic
output averaged over6percent perannum.
16. Thecostofliving index forallconsumers recorded anincrease ofjust0.6percent in1994
following a0.8percent increase in1993. Duetoaone-time increase inutility charges, theperannum
increase intheindex should behigher when finalfigures for1995arereleased. However, theunderlying
trend stillindicates little, ifany,sustained inflation intheKingdom.
2.Economic Policies
(a)Main Directions
17. Since 1970, theKingdom ofSaudi Arabia hasadopted aseries offiveyearplans asguidelines
fortheeconomic andsocial development ofthecountry. These plans integrate thedevelopment actions
oftheGovernment withthedynamism oftheprivate sector, inafreemarket economy, under the
umbrella ofIslamic values. Eachplanhasbeendesigned inaccordance withtherespective capabilities
oftheGovernment andoftheprivate sector, andtheevolving maturity oftheeconomy.
18. Inaddition totheunderlying objectives ofthepreservation ofIslamic values andtheprovision
ofnational security, thereareanumber ofother broad goals thatthefive-year plans aspire toachieve.
These include diversification andexpansion oftheeconomy, improvement ofliving standards, regional
development within theKingdom, strengthening oftheroleoftheprivate sector, broadening thelinkages
between theKingdom andother nations, development andsustenance ofthephysical infrastructure,
anddevelopment ofhuman resources.
19. Thecurrent, orsixth, five-year planaimstomeettheKingdom ’sfuture developmental needs
through:maximizingtheprivatesector’scontributiontotheprovisionofjobs;diversifyingandexpanding
theeconomic basetolessen itsdependence onoilrevenues; building newphysical infrastructure to
meet theneeds ofthegrowing population; achieving agrowth ratethatiscommensurate withthe
expansion ofjobopportunities fortheSaudi labor force; improving social services, suchaseducation
andhealth; raising percapita incomes; andmaintaining abalanced budget overthePlanperiod. The
plan’smainobjectives are(1)todevelop andincrease theemployment opportunities ofSaudi manpower,
(2)toraisethelevels ofeconomic efficiency inboththegovernment andprivate sectors, and(3)to
enhance theprivate sector ’sroleinthenational economy.
20. Withregard tothefirstobjective, theintention istoprovide better jobopportunities forSaudi
nationals inthegovernment sector replacing non-Saudi manpower, while policies andincentives have
beendesigned toencourage theprivate sector toprovide more jobopportunities forSaudi citizens as
well. Akeyaspect ofthiseffort willbetheprovision ofappropriate training programs toimprove
theskills andcapabilities ofSaudis invarious occupations (seealsoparagraph 24below).
21.With regard tothesecond objective, there isspecial emphasis onimproving economic efficiency
byraising labor productivity through training, byusing thelatest technology andbyimplementing
programs andmanagement techniques forthefuller utilization ofexisting infrastructure capacity. These
stepswillhavetheadditional benefit ofenhancing theeconomic efficiency oftheprivate sector aswell.
22. With regard tothethirdobjective, theprivate sector isexpected toplayanincreasing rolein
financing, building andoperating keyfacilities inthefields ofbasicinfrastructure, economic andsocial
services, thereby reducing thefinancial burden ofthegovernment which hastraditionally supplied many
ofthese facilities andservices. Awide range ofprivatization methods maybeemployed, from the
selling ofstock inpublic companies sothatamajority ofownership becomes privately held,toavariety
ofconfigurations forbuild/operate/transfer schemes. Expanding domestic markets andtheemergenceWT/ACC/SAU/4
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ofprivatization opportunities areexpected toattract theprivate investment thatisneeded togenerate
growth inthenational economy andsecure thecountry ’sfuture development.
23. Inorder todeepen thedevelopment process, Saudi Arabia recognizes theneed tobuild a
technology base. While some advancement hasbeenmade inkeeping uptodatewithglobal scientific
andtechnological developments, thishaslargely beenthrough theimport ofsophisticated technology
owned byforeign partners. TheKingdom stillhasalongwaytogotoattain thelevelofindigenous
technological capability thatexists indeveloped countries. TheGovernment willassist inthiseffort
primarily through theexpansion andimprovement ofeducational courses andfacilities related toscience
andtechnology atalllevels, andbyencouraging private sector initiatives.
24. While Saudi Arabia intends toincrease thefocus ofeducation onscience andtechnology, it
willcontinue todevote substantial resources toother human resource areas aswell. TheGovernment
isaware oftheneedtoimpart toitscitizens theknowledge andskills thatwillenable themtoparticipate
effectively inallsocial, economic andcultural activities. Particular importance isattached tofurther
development ofvocational andtechnical education sothatthecountry 'sskilled manpower needs can
beincreasingly metbyindigenous, asopposed toexpatriate, laborinthesemajor employment-producing
areas.
25. Inaddition toeducation, policy emphasis willcontinue tobeplaced ontheprovision ofprimary
health services. Because ofthegrowing demand andrising costs forthese services, theGovernment
hopes toincrease private sector participation inthehealth field. However, thepublic sector willcontinue
toexpand itssupport fortheprimary carenetwork inallareas oftheKingdom.
26. Because ofitseffects onthequality oflifeandthegeneral well-being ofitspeople, theKingdom
ofSaudi Arabia accords considerable attention toenvironmental protection andconservation. The
Government 'sconcern fortheenvironment isexpressed intheworkings oftheMeteorology and
Environmental Protection Administration (MEPA), theEnvironmental Protection Coordination
Commission (EPCC) andtheNational Commission forWildlife Conservation andDevelopment
(NCWCD). Theincreasing worldwide cultural, economic andpolitical awareness ofnature, the
environment andthepressing needforitsprotection iscompatible withtheKingdom 'scultural and
religious heritage andthethrust ofitsdevelopment plans.
(b)Monetary andFiscal Policies
27. TheSaudi Arabian Monetary Authority (SAMA) ischarged withcarrying outtheKingdom ’s
monetary policy. Theobjectives ofmonetary policy are:(1)tomaintain stable prices asaprerequisite
forachieving sustainable economic growth; (2)tomaintain theexchange rateoftheSaudi Riyal at
aprudent level; (3)toensure thestability ofthebanking system andtoenhance itsefficiency; (4)to
encourage stability andorderly growth indomestic capital markets; and(5)tomaintain reasonable
liquidity intheeconomy.
28. Theprimary objectives offiscal policy aretoencourage economic growth andthereby increased
employment opportunities, tomaintain living standards, andtodirect government expenditures towards
theexpansion anddiversification oftheeconomic baseandimprovements ofpublic services.
29. Thenational budget for1996 projects revenues ofSR131.5 billion andexpenditures of
SR150billion, resulting inanestimated SR18.5billion deficit. Spending willremain atthesame
budgeted level asin1994. In1994 thebudget setspending atSR150billion andrevenues at
SR135billion, leaving adeficit ofSR15billion.WT/ACC/SAU/4
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(c)Foreign Exchange andPayments System
30. Thecurrency ofSaudi Arabia istheSaudi Arabian Riyal. Itsintervention currency isthe
U.S.dollar andtherateagainst theRiyal, currently Saudi Riyals 3.745 perUS$1, isdetermined by
theSaudi Arabian Monetary Agency. There arenotaxes orsubsidies onpurchases orsalesofforeign
exchange. TheKingdom formally accepts theobligations ofArticle VIII, Sections 2,3,and4ofthe
International Monetary Fund Agreement. Noexchange control requirements areimposed oncapital
receipts orpayments byresidents ornon-residents.
(d)Foreign andDomestic Investment Policies
31. TheGovernment ofSaudi Arabia encourages foreign capital toinvest intheKingdom inorder
tosupport theinflow oftechnology andexpertise. Foreign investment isgoverned byInvestment of
Foreign Capital Regulation andenjoys national treatment within thecontext ofthatlaw.There are
notrade-related requirements attached toforeign ordomestic investments. Domestic investment is
primarily mobilized through decisions byprivate investors inrelation totheperceived riskandreturn
relative toinvestment opportunities elsewhere.
(e)Competition Policies
32. Saudi Arabian domestic competition policies arebased onfree-market principles inaccordance
withIslamic law.Company formation andoperation aregoverned bytheCompanies Law. Noantitrust
legislation exists.
3.Foreign Trade inGoods andServices
33. Foreign tradeplays acentral roleintheSaudi Arabian economy. During theperiod 1980-1994,
exports ofgoods andservices averaged approximately 47percent ofnominal GDPandimports averaged
some 40percent ofGDP. Inaddition, receipts derived from oilexports represented over75percent
ofannual totalgovernment receipts during the1980-1994 period.
34. Merchandise exports largely consist ofcrude oilanditsderivatives. In1994, totalexports
amounted toroughly $43billion while oil(crude andproducts except forbunker) exports totalled some
$38billion. Ofthenon-oil exports, petrochemicals generally holdatwo-thirds share. Theotherone-hird
iscomposed ofbasemetals, agricultural products, andmiscellaneous products.
35. Industrialized nations arethemostimportant markets forSaudi Arabian exports. In1994, the
United States wasthelargest export market, purchasing over18percent ofSaudi Arabian exports,
while Japan wasthesecond largest, purchasing approximately 16percent oftheKingdom ’sexports.
Thenewly industrialized countries ofEastAsiaarebecoming anincreasingly important destination
forSaudi goods withKorea andSingapore being thethirdandsixthlargest importers ofSaudi goods,
respectively. TheEuropean Union, asawhole, imported 22percent oftheKingdom ’sexports. The
GulfCooperation Council states, asawhole, arethelargest importers ofSaudi non-oil exports.
36. Saudi Arabia imports awidevariety ofgoods. Thetwolargest categories ofimports in1994,
transportation equipment andmachinery andelectrical equipment, made up41percent ofallimports.
Other categories ofimports ofsignificance arebasemetals, textiles andtextile products, chemical
products andvegetable andvegetable products.
37. Thetotalvalue ofimports, afterhaving increased from $19billion in1989 to$30billion in
1992, fellto$21billion in1994. From 1992to1994, imports oftransportation equipment fellbyover
$3billion andimports ofmachinery andelectrical equipment byover$2billion. ThemostimportantWT/ACC/SAU/4
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sources ofimports aretheOECD countries withtheU.S., Japan, andtheUnited Kingdom comprising
thetopthree spots, respectively, in1994. TheOECD asawhole wasthesource ofover75percent
ofSaudi Arabian imports in1994.
38. TheKingdom hashadapositive merchandise trade balance foranumber ofyears. During
the1980's,thebalance fellfromover$82billion in1981to$3.1billion in1986. In1994, thebalance
wasroughly $19.3 billion, anincrease ofabout $5billion from 1993.
39. Offsetting thepositive trade balance hasbeenanegative services trade balance, although it
hasimproved inrecent years. Services exports increased fromUS$5.5 billion in1993toUS$6.3 billion
in1994 while services imports declined from US$15.8 billion toUS$14.2 billion. Asaresult, the
negative balance declined from US$10.3 billion toUS$7.8 billion.
40. TheCentral Department ofStatistics within theMinistry ofPlanning produces twoannual
publications containing foreign trade statistics. Thefirst, entitled Foreign Trade Statistics, contains
official Saudi Arabian merchandise import andexport statistics bycommodity andcountry. Thesecond,
entitled Statistical Yearbook, contains dataontrade aswellasavariety ofother subjects. Copies of
bothcanbepurchased foranominal feebywriting totheDirector General oftheCentral Department
ofStatistics, P.O.Box3735, Riyadh.
4.Domestic Trade inServices/Foreign Direct Investment
41. Thevalue added intheservices sector in1994wasoverUS$26 billion, accounting forroughly
one-third ofnon-oil gross domestic product. Themostimportant sub-sector arecommercial services
which include wholesale andretail trade, hotels andrestaurants. Value-added inthecommercial sector
in1994 totalled almost US$9 billion, or11percent ofnon-oil gross domestic product.
42. Thegovernment ofSaudi Arabia realizes thatachieving itseconomic objectives requires asteady
flowoftechnology andexpertise intotheKingdom. Therefore, itwelcomes theinflow offoreign. Tables
oneandtwoofAnnex 4toL/7645/Add.1 provide more detailed information.
5.Information onFinancial Movements Related toPrivate Transfers
43. Asaresult ofalackofspecialized manpower incertain economic sectors, Saudi Arabia has
traditionally hadalargenumber ofexpatriate workers. Remittances byforeign workers totalled almost
US$15 billion in1994, equivalent toroughly twelve andonehalfpercent ofgross domestic product.
Remittances in1993 were US$18.4 billion.
6.Information onGrowth inTrade inGoods andServices
44. During thecourse ofthe1990 through 1994 five-year period, exports ofgoods andservices
fluctuated inanarrow range, rising from US$49 billion in1990 toUS$55.5 billion in1992, before
dropping backtoUS$49 billion in1994. Imports ofgoods andservices jumped from US$41 billion
in1990toUS$49 billion in1991before declining toUS$37.5 billion in1994. Thesixthfive-year plan,
covering the1995-1999 period, forecasts exports growing faster thanimports.
III.Framework ForMaking AndEnforcing Policies Affecting Trade
1.Powers OfExecutive, Legislative AndJudicial Branches OfGovernment
45. Monarchy isthesystem ofruleoftheKingdom ofSaudi Arabia andallauthority isvested
withtheKing. There isaCouncil ofMinisters which, under Article 24oftheCouncil ofMinistersWT/ACC/SAU/4
Page10
Law, isgiven thepower tosupervise theimplementation ofthelaws, implementing regulations and
resolutions. Under Article 29oftheCouncil ofMinisters Law, theKingisgiven thepower toexercise
supervision overtheCouncil ofMinisters.
46. There isalsoa60member strong Majlis Al-Shoura (Consultative Council) nominated toassist
thegovernment inthedischarge ofitsresponsibilities, study government plans andpropose legislation
inaccordance withthepowers reposed init.According totheby-laws which govern theCouncil, it
shallexpress anopinion about anyinternal andexternal strategy ofSaudi Arabia which istransferred
toitbytheKing foritsopinion.
47. Under Article 46oftheBasic RuleofLaw, thejudiciary isgranted independent authority.
Under Article 47,therightoflitigation isassured fortheadministration ofequal justice tothenationals
of,andthenon-nationals in,theKingdom ofSaudi Arabia.
2.Government Entities Responsible ForForeign Trade
48. TheCouncil ofMinisters isofficially responsible foranychange inthetariff rate.
49. TheMinistry ofFinance andNational Economy isconcerned withthedomestic economy as
wellasinternational economic issues. TheCustoms Authority, which isunder thesupervision ofthe
MinisterofFinanceandNationalEconomyischargedwithimplementingtheCustomsLawandCustoms
Tariff Schedule anddrafting customs regulations.
50. TheMinistry ofCommerce, theprincipal Government agency concerned withthedevelopment,
support andencouragement ofcommercial activities within theKingdom, implements theCommercial
Agency Regulations. Italsorepresents Saudi Arabia ininternational panels andconferences dealing
withcommercial activities andstudies ways andmeans forenhancing andencouraging commercial
exchanges between Saudi Arabia andother countries. Itisalsoresponsible forinsuring thatimported
anddomestically produced goods meetSaudi Arabian standards anddonotviolate trademark, patent,
andcopyright laws.
51. TheMinistry ofIndustry andElectricity formulates policies andprocedures thatpromote
industrial development within theKingdom. Among itsmany duties, isthesupervision oflicensing
offoreign investment inSaudi Arabia. Itisalso, responsible forthedevelopment oftheelectrical
sector.
52. TheMinistry ofPetroleum andMineral Resources formulates theoilpolicies oftheKingdom
andsupervises concessions intheoilandmining sectors. Italsoapproves jointventures intheoil
industries when agovernment enterprise isinvolved.
53. TheMinistry ofAgriculture andWater istheprincipal government body responsible forthe
development andencouragement oftheagricultural sector inSaudi Arabia. Oneofitsresponsibilities
isensuring thatnecessary sanitary andphytosanitary standards forfertilizer, agricultural andlivestock
imports aremaintained.
54. TheMinistry ofHealth isprimarily responsible formaintaining andsupervising thehealth
industry within theKingdom. Atrade-related responsibility relates totheimport andsaleofmedicaments
andmedical supplies.
55. TheSaudi Arabian Standards Organization (SASO) establishes andapproves national standard
specifications foravariety ofgoods andproducts soldwithin theKingdom. Itisalsoinvolved inthe
sampling, inspection andtesting ofcertain imports, toensure thattheymeetthecountry 'sstandards.WT/ACC/SAU/4
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SASO participates ininternational standardization activities tokeepabreast ofallcritical developments
inthisarea.
56. Thevarious Chambers ofCommerce inSaudi Arabia, organized under theCouncil ofChambers
ofCommerce, assist theMinistry ofCommerce inawidevariety ofareas. Please refertoreply 268
onpage96ofL/7645/Add.1 foradditional information.
57. TheSaudi Arabian Monetary Agency ischarged withacting asthecentral bank. Assuch, it
isresponsible formanaging theGovernment 'sfinancial andmonetary affairs. Among itsmostimportant
responsibilities aretheminting ofcurrency, stabilization ofitsvalue, andthesupervision ofbanks
andmoney changers. Italsomaintains accounts fortheGovernment andaccepts deposits from
government organizations andinvests them.
58. TheGeneralOrganizationforPetroleumandMinerals(Petromin)isresponsibleforthepromotion
ofprojects inpetroleum andmineral sectors intheKingdom. Itisrunbyaboard ofdirectors Chaired
bytheMinister ofPetroleum andMineral Resources withmembership from different government
organizations andtheprivate sector. Itinitiates andenters intojointventure projects inpetroleum and
mineral sectors aswellasservices tosuchsectors likedrilling andseismic services.
3.Division OfAuthority
59. Thefinalauthority forallmatters related tothenational economy andforeign traderestswith
theCentral Government.
4.Laws AndLegal Acts
60. TheCustoms LawandtheCustoms Tariff Schedule arethetwoprimary documents covering
theimport andexport ofgoods. TheCustoms Lawincludes, among otherthings, provisions concerning
non-tariff regulation ofimports, exports, trade intransit, andrules oforigin.
61. There areseveral lawsandlegalmeasures thathavethepotential toaffect trade inservices,
most significantly thefollowing: Investment ofForeign Capital Regulation; Banks Control Law;
Ministerial Decisions bytheMinistry ofCommunications Concerning Applications forLicenses by
Maritime Companies andFirm forCarrying onMaritime Carriage; Ministerial Resolution
4104/20/M (1408) Concerning theImplementing Regulations tothePrivate Medical Establishments
Law;ImplementingRegulationstoRegulationofTechnicalInstitutesandNationalOccupationalCenters;
Resolution fromHisRoyal Highness theMinister ofDefense andAviation Concerning theRegulation
ofTourism andTravel Agencies andCompanies Engaged inAirTransport; Ministerial Order
No.264(1402) Concerning Organization ofthePractice oftheProfession ofEngineering Consultancy;
LawofCertified Accountants andMinisterial Order No.595(1395) Enacting theImplementing
Regulations oftheAccountants Law; Ministerial Order No.1190 (1402) Pertaining totheRegulation
ofCarrying ontheProfession ofLegal Consultancy; andLawConcerning theCarrying onofthe
Profession ofPharmacy andTrading inMedicaments andMedical Preparations.
62. Thefollowing areother lawsandlegalmeasures dealing witheconomic issues thatmight affect
trade: LawfortheProtection andEncouragement ofNational Industry; Trade Marks Law; Patents
ofInventions Law; Copyright Law; LawofCommercial Agencies andImplementing Regulations; and
theGovernment Purchases Law.WT/ACC/SAU/4
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5.Description OfJudicial, Arbitral OrAdministrative Tribunals OrProcedures
63. Saudi Arabia provides forawiderange ofjudicial, arbitral andadministrative procedures with
respect totrade matters. Forexample, withregard tomatters under thejurisdiction oftheCustoms
Directorate, suchasclassification andvaluation, thereisanadministrative system forappealing rulings.
Similar dispute settlement systems havebeenestablished withregard tosanitary andphytosanitary
requirements, standards, andintellectual property rights, information onwhich isspelled outbelow.
Inaddition,governmentrulingsaregenerallyappealabletotheBoardofGrievancesundertheMinisterial
Order No.190of16.11.1409 (H)Concerning Rules andProcedures tobeFollowed bytheBoard of
Grievances. Commercial disputes aregenerally covered bytheLawofArbitration andtheImplementing
Regulations totheLawofArbitration.
IV.Policies Affecting Trade InGoods
1.Import Regulations:
(a)Registration Requirements ForEngaging InImporting
64. TheGovernment ofSaudi Arabia doesnotimpose separate registration requirements forentities
engaged inimporting. Business enterprises which areofficially licensed andregistered tooperate in
theKingdom mayimport goods andservices.
(b)Characteristics OfNational Tariff
65. There arefivedifferent ratesofcustoms tariff forgoods imported intotheKingdom ofSaudi
Arabia: 0percent, 7percent, 12percent, 20percent, and50percent. Thedistribution ofthe6924
tariff linesfalling within eachtariff rateisasfollows:
Tariff Rate Tariff Lines
0percent
7percent
12percent
20percent
50percent189
32
6252
431
20
There aretwo tariff lines forwhich aspecific duty isassessed. Imports ofGypsum
(HC25201010) andAnhydrite (HC25201020) areassessed aduty ofSR21permetric ton.
Mixed duties cover about onepercent ofthetariff lines.
66. Items subject tozero tariff largely consist ofbasic foodstuff, medicaments, printed
materials, andmedical equipment. Those attracting adutyof7percent consist ofmedical instruments
andmedical equipment. There are6,252 items subject toadutyof12percent which could berevised
depending onfiscal conditions. The431items subject toadutyof20percent areitems thatcompete
withdomestically produced goods andaresubjected therefore tocustoms duties ofatradenature. The
highest tariff of50percent on20items isapplicable totobacco andtobacco products whose useis
discouraged bytheGovernment onhealth grounds. Thus, currently only451items outofatotal6,926,
orabout 6percent oftheitems, attract duties ofmore than12percent.WT/ACC/SAU/4
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67. Theshare of1994 imports, byvalue, foreachofthefivetariff categories wasasfollows:
Subject tonoduty 18.4%
Subject to7%duty 0.5%
Subject to12%duty 74.8%
Subject to20%duty 5.8%
Subject to50%duty 0.5%
68. Theaverage weighted (1994, byvalue) tariffs foreachofthetwenty onemain customs tariff
groupings follows below. Theaverage effective ratewas9.5percent in1994.
Animal andAnimal Products 6.9%
Vegetable andVegetable Products 4.8%
FatsandOils 12.0%
Prepared Foods andTobacco 14.6%
Mineral Products 12.6%
Chemical Products 8.4%
Plastics andRubber 12.8%
Leather Products 12.0%
Wood Products 12.2%
Paper Products 12.3%
Textile andTextile Products 12.1%
Clothing Accessories 12.9%
Stone andGlass Products 12.2%
Precious Metals, Jewellery 0.8%
BaseMetals 13.7%
Machinery andElectrical Equipment 12.0%
Transportation Equipment 8.5%
Miscellaneous Instruments 10.1%
Arms andAmmunition 2.8%
Miscellaneous Manufactures 15.8%
Art,NEC 12.0%
69. TheKingdom ofSaudi Arabia hasbeenusing theHarmonized Commodity Description and
Coding System since1January 1991toclassify imports andexports. The6,926 items inthetariffcode
areeachdesignated withaneight digitnumber. Thefirstsixdigits correspond tointernationally
recognized categories while thelasttwodigits arespecific toSaudi Arabia 'sowncategorization of
items.
70. Saudi Arabia signed aneconomic agreement withother GulfCooperation Council (GCC)
Countries -Bahrain, Oman, Kuwait, Qatar andtheUnited Arab Emirates -in1981withtheobjective
ofintegrating theireconomies. Infurtherance ofthisobjective, theGCC members formed afreetrade
areain1983. Thefreetrade areaagreement covers alltrade inindustrial andagricultural products.
Itallows products ofGCC origin toenterduty-free intoanyoftheother fivemember states. Products
areconsidered tobeofGCC origin iftheycontain aminimum 40percent GCC value added. AGCC
technical committee entrusted withthetaskofclassifying goods andcommodities iscurrently working
toward theunification ofthecustoms regimes intheindividual GCC member states.
(c)Tariff Quotas, Tariff Exemptions
71. Saudi Arabia doesnotapply tariff quotas. TheLawfortheProtection andEncouragement of
National Industry allows certain goods which areimported forqualified industries tobeexempt fromWT/ACC/SAU/4
Page14
customs duties. Please refer toreplies 156and157onpage58ofL/7645/Add.1 foradditional
information.
(d)Other Duties AndCharges
72. TheGovernment ofSaudi Arabia imposes charges forloading, unloading andstorage services
rendered byport/airport authorities within themeaning ofArticle VIII.1(a) oftheGATT 1994. These
charges depend onthetimeandlabor involved forloading andunloading, ontheweight andvolume
ofimports andonthelength ofstorage period. They arenotlevied onthebasis ofvalue oronaflat
advalorem rate.Revenues collected fortheseservices donotexceed thecostofproviding theservices.
Specific ratescharged canbefound intheImplementing Regulations totheCustoms Law. Acomplete
listofallcharges willbesupplied totheWorking Party.
(e)Quantitative Import Restrictions
73. Alargemajority ofgoods canbeimported intoSaudi Arabia freeofanyrestrictions andwithout
anyauthorization orimport license. With theexception oftwolineitems (seeparagraph 76below),
quantitative import restrictions havenotbeenputintoeffect foreconomic reasons.
74. TheKingdom prohibits theproduction, consumption andimport ofproducts suchasalcohol
andmeatandproducts ofpigsandporkforreligious reasons. Import ofpornographic literature and
material isalsoprohibited duetomoral andreligious values.
75. Some goods areprohibited frombeing imported forhealth andsecurity reasons. Forexample,
import ofnarcotics isnotallowed. Alsoarms ofalltypes andtheirparts andammunition cannot be
imported except bycertain government agencies. Please refertoReply 85onpage32ofL/7645/Add.1
formore detailed information.
76. Theimport oftwoagricultural items iscurrently restricted forreasons ofhealth andprotection.
These are:datesandlong-validity pasteurized liquid milkimported incontainers ofmore thanonelitre.
Please refertoreplies 86,87and88onpage34ofL/7645/Add.1 foradditional information.
(f)Import Licensing Procedures
77. Imports thatrequire authorization orimport licensing andtheirapproval processes are:
Horses :approval from theChivalry Club isrequired.
Livestock :tobepresented totherepresentative ofquarantine toensure theyarefreeofdiseases.
Sowings :tobetested bythequality control labtoensure thattheyarefreeofepidemics.
Foodstuffs :tobetested byquality control labtoensure theyarefreeofepidemics.
Chemicals :aprior approval from theMinistry ofIndustry andElectricity isrequired.
Pharmaceutical Products :aprior approval from theMinistry ofHealth isrequired.
Perfumery :tobeexamined bytherepresentative oftheMinistry ofCommerce.
Films :tobeexamined bytherepresentative oftheMinistry ofInformation prior torelease.
Books andPeriodicals :tobeexamined bytherepresentative oftheMinistry ofInformation.
Wireless (radio) equipment :aprior approval from theMinistry ofInterior isrequired.
Antiques :aprior approval from theMinistry ofEducation isrequired.
Additional information onimport licensing procedures canbefound inAnnex 16toL/7645/Add.1.WT/ACC/SAU/4
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(g)Other Border Measures
78. Saudi Arabia doesnotapply anyborder measures thathaveborder effects similar tothose of
themeasures referred toin(e)above, other thanthose measures themselves.
(h)Customs valuation
79. Saudi Arabian customs valuation isbased ontheprice actually paidoragreed tobepaidfor
imported goods packed andready forshipment attheportofexport plusexpenses incurred untilthe
goods reach theKingdom. Suchexpenses principally include transport andfreight charges andinsurance
incurred untiltheportofdischarge. Formailed orairtransported goods, thefreight costofgoods is
setforcustoms valuation at0.5Saudi Riyals perkilogram. Intheevent theCustoms authorities cannot
obtain thefreight charges actually paid, thenthecustoms authorities willcalculate thefreight charges
asapercentage ofthef.o.b. value. Additional information canbefound inreplies 93and94onpages 35
and35ofL/7645/Add.1.
80. Thevalue iscalculated inSaudi Riyals. Theexchange rateusedtodetermine theSaudi Riyal
value ofagoods isdetermined according totheexchange ratepublished bytheSaudi Arabian Monetary
Agency (SAMA) onthedayofcustoms declaration. SAMA exchange ratesarerevised daily andare
determined bytheactual market value oftheRiyal withrespect toother currencies.
81. Iftheimporter disputes thevalue ofimported goods assessed byaCustoms official, hemay
apply toCustoms forafurther ruling. TheCustoms Department willreferthematter toaninternal
adhoccommittee, composed ofavaluation expert, tariff expert andlegaladvisor, forsettlement of
thedispute. Iftheimporter continues todisagree withthedecision, hemayfileacasewiththeBoard
ofGrievances under theRules andProcedures tobefollowed bytheBoard ofGrievances.
(i)Other Customs Formalities
82. Customs formalities arerelatively simple andstraightforward. Importers cangettheirgoods
cleared expeditiously onpresentation oftherequired shipping documents, invoices, certificates oforigin
andconformity andonpayment ofduties, ifany.
83. Intheevent there isadispute about classification, thefollowing steps willbeobserved:
Anamicable settlement willbeattempted, thatis,toconvince theimporter ofCustoms opinion. Ifsuch
asettlement isnotreached, then
Thedispute willbereferred totheTariff Committee oftheCustoms Department Headquarters composed
oftariff experts andalegaladvisor. Iftheimporter isstillnotconvinced, then
TheCustoms Department willrequest atechnical opinion fromtheNomenclature andClassifications
Directorate attheCustoms Cooperation Council inBrussels, Belgium.
Under certain circumstances, administrative actions canbeappealed totheBoard ofGrievances under
theRules andProcedures tobefollowed bytheBoard ofGrievances. Please refertoreply 106onpage40
ofL/7645/Add.1 foradditional information.
(j)Quality Control Inspection
84. TheSaudi Arabian Ministry ofCommerce andtheSaudi Arabian Standards Organization are
intheprocessofimplementingaqualitycontrolsystemtoinsurethatproductsimportedintotheKingdomWT/ACC/SAU/4
Page16
areinfullconformity toSaudi Arabian standards. Such asystem provides fortheinspection and
certification ofapplicable products tofacilitate theirimportation intotheKingdom.
(k)Application OfInternal Taxes OnImports
85. Saudi Arabia doesnothaveinternal taxes orcharges upon products which treatdomestically
produced products differently from imported products.
(l)Rules OfOrigin
86. Saudi Arabia usesrulesoforigin forimports fromitstrade partners. Products areconsidered
tobeofGCC origin iftheycontain aminimum 40percent GCC value added. TheArab League
agreements provide forthesame value added. Since theKingdom extends MFN toallimports that
donotfallunder thescope oftheGCC orArab League trade agreements, there arenospecific rules
oforigin regulations forMFN trade. Theimporter must, however, provide toCustoms acertificate
ofthenationality ofthegoods.
(m)Anti-Dumping Regime
87. Saudi Arabia doesnotatpresent haveanylegislation/regulations specifically referring tothe
imposition ofanti-dumping duties.
(n)Countervailing Duty Regime
88. Saudi Arabia doesnotatpresent haveanylegislation/regulations specifically referring tothe
imposition ofcountervailing duties.
(o)Safeguard Regime
89. Under Article 7oftheLawfortheProtection andEncouragement ofNational Industry, the
Council ofMinisters isempowered totakesuchmeasures deemed appropriate fortheprotection of
localproduction, inaccordance withthestipulations oftheLawandofother valid laws.
2.Export Regulation:
(a)Registration Requirements ForEngaging InExporting
90. TheGovernment ofSaudi Arabia doesnotimpose separate registration requirements forentities
engaged inexporting. Business enterprises which areofficially licensed andregistered tooperate in
theKingdom mayexport goods andservices.
(b)Customs Tariff Nomenclature, Types OfDuties, Duty Rates, Weighted Averages OfRates
91. Saudi Arabia usestheHarmonized System forclassification ofexports, asforimports. Except
foroneitem, there arenoexport duties. Theonlyitemsubject toexport tariff is:untanned hides and
skins. TherateofdutyisSaudi Riyals 2,000 permetric ton.Theequivalent advalorem export tariff
onuntanned hides andskins in1994 was22.6percent.
(c)Quantitative Export Restrictions
92. TheSaudi Arabian government exercises some restrictions onexports. These controls prevent
goods thatarebenefiting from domestic subsidies from leaving theKingdom, thereby protecting theWT/ACC/SAU/4
Page17
national treasury andprecluding anti-dumping actions byforeign countries. Examples ofprohibited
exports arefemale livestock, babyformula, medicines, andanimal fodder. Inaddition, export ofcertain
items isrestricted topreserve theculture andwildlife oftheKingdom ofSaudi Arabia.
93. Export ofsubsidized goods byindividuals isconsidered smuggling andpunishable under the
laweither byimprisonment orfinesorboth. Under theImplementing Regulations oftheCustoms Law,
theCustoms Department isvested withtherighttosearch every person, motor carorpassenger vehicle,
lorry oranything elsewhich passes through itsgateorfrom theCustoms jurisdiction orcrosses the
Customs line.Customs isalsovested withpower todothesame atseaoncommercial ships, barges,
boats andother seaworthy vessels within theKingdom 'sjurisdiction. Withdrawal ofgoods ofwhatever
kindwhich cross theCustoms lineortheCustoms jurisdiction mustholdalegalauthorization tothat
effect. After being completed bytheinterested party, theapplication forlegalauthorization shallbe
presented totheDirector ofCustoms forapproval oftheexport. Items which areconcealed witha
viewtoavoid therestrictions imposed onexports ofsubsidized goods areliable toconfiscation.
(d)Export Licensing Procedures
94. Someexportitemsaresubjecttospecialexportpermits.Exportsofpetroleumderivatives,except
lubricating oilsandcertain types ofasphalt, have tobeapproved bytheMinistry ofPetroleum.
Agricultural toolsandequipment financed bytheSaudi Agricultural Bank canonlybere-exported with
itspermission. Exports ofallnon-farm animals andbirds mustbeapproved bytheWildlife Protection
Commission. Also, archaeological artifacts andcertain antiquities canonlybeexported afterreceiving
permission from theDepartment ofAntiquities attheMinistry ofEducation.
(e)Other Measures
95. There arenoother measures, suchasminimum export prices, voluntary export restrictions,
ororderly marketing arrangements, toregulate exports.
(f)Export Financing, Subsidy AndPromotion Policies
96. TheKingdom ofSaudi Arabia takes different export promotion measures suchasparticipation
intradefairs,exchange oftradedelegations, andproviding tradeinformation toexporters andproducers.
Saudi Arabia doesnotuseexport subsidies. While theKingdom hasnonational export credit agency,
itdoesparticipateinthree,self-supportingregionalexportcreditprogramswhichareintendedtominimize
theriskofnon-payment toexporters. Thefollowing arebriefdescription oftheprograms offered by
theIslamicDevelopmentBank,theInter-ArabInvestmentGuaranteeCorporation,andtheArabMonetary
Fund.
97. TheIslamic Development Bank, amultilateral financial institution composed of47Organization
ofIslamic Conference members, offers threedifferent tradecredit programs. Oneisalong-term facility,
withamaturity of18to60months, intended tocover 30-40 percent offoreign trade deals. Another
isaprogram runbytheIDBbutusing funds fromIslamic banks toextend credits tointra-Islamic business
transactions. Finally, animport credit program based ontheIslamic profit system (murabaha) covers
upto100percent ofatransaction involving strategic products suchascement, fertilizers, industrial
input building materials andfeedstocks. Please refertoreply 138onpage49andreply 140onpage50
ofL/7645/Add.1 foradditional information.
98. TheInter-Arab Investment Guarantee Corporation 's"Export Credit Guarantee Scheme" was
introduced in1986 toencourage increased inter-Arab trade. Thecommercial risks covered include
purchaser 'sbankruptcy, insolvency, orliquidation; failure topayforgoods received; orrefusal totake
upgoods upon arrival. Thenon-commercial risks covered aretheremoval ofpermission forgoodsWT/ACC/SAU/4
Page18
toenter acountry forwhatever reason; theseizure ofgoods byacountry oftransit; theprevention
ofpayment byanimporter duetogovernment intervention; therefusal byapurchaser 'snational bank
toallow financial settlement, ortocause substantial delays insuchsettlement; andlocaldisturbances
andmilitary action which result intheinability ofthepurchaser topay.
99. TheArab Monetary Fund, established in1976 andheadquartered inAbuDhabi, created the
"Inter-Arab Trade Finance Program" topromote thedevelopment oftrade among Arab countries. It
provides credit tonational agencies toenable them topurchase financial instruments issued bythose
agencies, ortorediscount trade billswhich havepreviously beenpurchased ordiscounted bythem.
Theauthorized capital oftheprogram hasbeensetat$500 million. Further information canbefound
inreply 140onpage50ofL/7645/Add.1.
100. Saudi Arabia doesnotuseanyexport subsidies.
(g)Export Performance Requirements
101. Saudi Arabia doesnothaveanyexport performance requirements.
(h)Import Duty Drawback
102. Saudi Arabian lawdoesnotcurrently provide forimport dutydrawback.
3.Internal Policies Affecting Foreign Trade inGoods
(a)Industrial Policy
103. TheKingdom 'sindustrial policy focuses onencouraging andexpanding themanufacturing and
natural resource-based industries. Within thiscontext, theSixth Development Plan(1995-2000) is
pursuing thefollowing objectives under theleadership oftheMinistry ofIndustry andElectricity:
Increase theindustrial sector ’scontribution tothegross domestic product andthediversification of
thenational economy;
Expand industrialization anddiversify theindustrial structure through more intensive development of
upstream anddownstream industries, through developing economically feasible import substitution
industries.
Expand theeconomic linkages between theindustrial sector andother producing sectors, particularly
agriculture andmineral resources;
Increase theindustrial sector ’scontribution towards meeting thelocaldemand forconsumer andcapital
goods;
Increase theindustrial sector ’scontribution tothediversification ofexports; and
Create newjobopportunities forSaudi citizens.
Further information canbefound inreplies 145through 148onpages 54and55ofL/7645/Add.1.
104. TheLawfortheProtection andEncouragement ofNational Industry provides foranumber
ofincentives topromote theindustrial sector intheKingdom. Under theLaw, theState ischarged
withfurnishing licensed establishments, atanominal rental fee,landneeded fortheconstruction ofWT/ACC/SAU/4
Page19
factories anddwelling places fortheworkers andemployees. TheMinistry ofIndustry andElectricity
hasestablished eightindustrial cities throughout theKingdom where suchanarrangement canbemade.
Further information canbefound inreplies 150through 155onpages 56and57ofL/7645/Add.1.
105. TheSaudi Industrial Development Fund (SIDF), established in1974, plays acentral rolein
thesupport ofindustrial development intheKingdom. Thissupport comes through theprovision of
softloans toindustrial establishments, bothwholly domestic andjointventures, toassist them in
establishing orexpanding industrial projects andalsoproviding themwithadvisory services invarious
areas. From itsinception through theendof1992, theSIDF hasapproved loans worth
21.7billion Saudi Riyals for1216industrial projects, ofwhich jointventures accounted forloans worth
8.7billion Saudi Riyals for388projects. Further information canbefound inreplies 170through 173
onpages 61and62ofL/7645/Add.1.
106. TheRoyal Commission forJubail andYanbu hasalsoplayed asignificant roleinenhancing
industrial development within Saudi Arabia. Established byaRoyal decree in1975, theRoyal
Commission wascreated asanengine forindustrial development intheeastandwestoftheKingdom.
Itsduties andobjectives include, butarenotlimited to,theconstruction ofinfrastructure, andprotection
oftheenvironment. Further information canbefound inreplies 174through 176onpages 62through
64ofL/7645/Add.1.
(b)Technical Regulations AndStandards
107. Goods imported intoandproduced inSaudi Arabia must meettheKingdom 'sstandards and
measures. Theprimary bodyresponsible forthesestandards istheSaudi Arabian Standards Organization
(SASO). SASO wasestablished withtheobjective offormulating, adopting, publishing anddistributing
national standards forallcommodities, products, symbols andsampling andtestprocedures within
theKingdom. Itisamember oftheInternational Standards Organization. Further information canbe
found inreplies 108through 116onpages 41through 43ofL/7645/Add.1.
108. Thepurpose ofstandards andmeasures applied intheKingdom istoprovide safety andprotect
thehealth andwelfare ofconsumers. Saudi standards andmeasures takeintoaccount theharsh
environment intheKingdom andthecountry 'spublic morals andvalues. Bytheendof1995, SASO
hadprepared over1,000 standards andmeasures, copies ofwhich canbeobtained fromSASO orthe
mainChambers ofCommerce intheKingdom. Electrical equipment, automobiles, cigarettes, andbaby
formula aresomeofthemostimportant goods covered bySASO standards andmeasures. SASO ensures
international participation intheprocess ofsetting standards bycirculating draftstandards totheworld
market forcomments priortofinalization ofthestandards. Further information canbefound inreply 117
onpages 43and44ofL/7645/Add.1.
109. Medicines andmedical equipment areregulated bytheMinistry ofHealth. Under these
regulations, acertificate orendorsement oftheMinistry ofHealth mustbeobtained inorder toclear
thegoods forsalewithin theKingdom. Thecertificate orendorsement states thatthegoods conform
tothecountry 'shealth standards andmust berenewed every twoyears.
(c)Sanitary AndPhytosanitary Measures
110. TheMinistries ofAgriculture andCommerce maintain sanitary andphytosanitary standards
toensure thesafety andhealth ofallimported foods, plants andanimals. Theuseofsanitary and
phytosanitary measures toregulate imports offoods, plants andanimals isjustified onthebasisofthe
needtoprotect thesafety oftheagricultural, livestock andpoultry industries aswellasnative plants
andanimals.WT/ACC/SAU/4
Page20
111. AlloftheKingdom ’ssanitary andphytosanitary standards arescientifically based. Saudi Arabia
isamember oftheCodex Alimentarius Commission andtheInternational Office ofEpizootics. Itworks
withthese twobodies, aswellaswiththeFood andAgriculture Organization andtheWorld Health
Organization inestablishing andapplying sanitary andphytosanitary measures.
112. Consignments ofanimals suchaslivestock, poultry, andhatching eggsaswellasunprocessed
hides, hair,fursandwoolaresubject toMinistry ofAgriculture andWater inspection andquarantine.
Veterinary medicines areallowed toentertheKingdom afterreceiving permission fromtheMinistries
ofHealth andAgriculture. Agricultural consignments offreshfruits, vegetables, seeds, grains, materials
usedasanimal fodder suchasbarley, sorghum andhay,organic fertilizers andagricultural pesticides
areallsubject toinspection andquarantine.
113. Importers ofgoods thatdonotsatisfy sanitary andphytosanitary requirements havetheoption
ofre-exporting theirgoods outoftheportarea.Ifthegoods arenotremoved, theyaredestroyed. Further
information canbefound inreply 126onpage46ofL/7645/Add.1.
(d)Trade-related Investment Measures
114. There arenotrade-related requirements attached toforeign ordomestic investment.
(e)State-Trading Practices
115. Saudi Arabian OilCompany (Saudi Aramco) andtheGrain SilosandFlour Mills Organization
(GSFMO) make purchases andsalessolely inaccordance withcommercial considerations andactin
amannerconsistentwiththegeneralprinciplesofnon-discriminatorytreatmentenshrinedinArticleXVII.
Further information canbefound inreplies 213through 216onpages 76and77ofL/7645/Add.1.
116. Saudi Arabian OilCompany (Saudi Aramco) isestablished byaroyal decree in1987. Itis
responsible formost oftheproduction andexports ofcrude oilandnatural gas,intheKingdom. It
isalsoresponsible fortherefining andmarketing ofproducts within Saudi Arabia andenters intojoint
venture refineries withothers. Andalthough owned bythegovernment, itisrunlikeaprivate company
withaboard ofdirectors, chaired bytheMinister ofPetroleum andMineral Resources. Theboard
consists ofmembers fromthecompany ’sexecutive management, government officials, private sector
andinternationalcompanies.ThegeneralpolicyoftheCorporationisdeterminedbytheSupremeCouncil
oftheCorporation which ispresided overbythePresident oftheCouncil ofMinisters orhisdesignated
representative and,withtenmembers from theprivate sector andgovernment officials appointed by
royal order.
117. TheGrain Silos andFlour Mills Organization (GSFMO) wasestablished byaRoyal Decree
in1973 inorder tosupport thedevelopment ofthedomestic agricultural sector, particularly wheat
production fornational security reasons. GSFMO wascharged withforming agrain storage, flour
production andanimal feedprocessing conglomerate aswellaswithcreating astable market forgrains
inorder tosafeguard farmers from price fluctuations. Itistheonlyorganization allowed toimport
grains, flour, andanimal feed. Further information canbefound inreplies 219and220onpages 77
and78ofL/7645/Add.1.
(f)FreeZones
118. There arenofreetrade zones inSaudi Arabia.WT/ACC/SAU/4
Page21
(g)FreeEconomic Zones
119. There isnothing which isknown asa"free economic zone" inSaudi Arabia.
(h)Trade-related Environmental Policies
120. Trade-related environmental policies areofthreetypes. First, theimport andexport ofwildlife
islicensed bytheNational Commission forWildlife Conservation andDevelopment. Second, theSaudi
Meteorology andEnvironmental Protection Administration hasusedsome general standards toprovide
appropriate bases fortheevaluation andregulation ofindustrial andurban activities thatcurrently exist
intheKingdom inorder to,among other things, helpprotect theKingdom ’senvironment. Asaresult
ofthesestandards,importsofhighlypollutingcapitalequipmentareimplicitlydiscouragedwhileimports
ofmore benign equipment areencouraged. Third, theSaudi Arabian Standards Organization considers
environmental issues when formulating standards which maysubsequently beenforced attheborder.
Further information canbefound inreply 40onpage19ofL/7645/Add.1.
(i)Government Procurement
121. Government procurement practices aregoverned primarily bytheProcurement ofGovernment
Purchases Lawsupplemented byinterpretations orrulings onindividual cases issued bytheMinistry
ofFinance andNational Economy. Under theGovernment Purchases Law, qualified Saudi nationals
andwholly Saudi owned firms aregiven priority forcontracts, followed bymixed Saudi-foreign
establishments, andfinally, wholly foreign-owned firms. Inaddition, products produced within the
Kingdom aregiven limited preference overforeign goods insupply contracts. Please refertoreplies 203
through 205onpages 73and74ofL/7645/Add.1 foradditional information.
122. Council ofMinister Resolution 124oftheyear1403 (H)concerns theallocation ofwork to
Saudi nationals under public works contracts. Theresolution stipulates thatforeign contractors aswell
asjointventure firms carrying outpublic works contracts must giveatleast30percent ofthework
toSaudi individuals orcompanies which areregistered inSaudi Arabia andarewholly owned bySaudi
nationals.
123. TheStandard Rules forGiving Priority inGovernment Purchases toNational Products and
Products ofNational Origin oftheGulfCooperation Council States (known hereafter as"Standard
Rules forGovernment Purchases") specify theconditions forgiving priority toproducts produced in
theGulfCooperation Council. Differentiation ismade between "National Products" and"Products
ofNational Origin." Theformer areproducts produced inoneofthemember states oftheGulf
Cooperation Council andaregiven atenpercent price orquality preference when purchased bythe
Government where theproduct isproduced. Thelatter areproducts whose value added intheCouncil
States isnotlessthan40percent. Products ofNational Origin aregiven afivepercent pricepreference
inallCouncil States unless aNational Product isnotavailable inwhich casetheformer aregiven a
tenpercent price orquality preference overforeign products.
(j)Regulation ofTrade InTransit
124. Goodsintransitreceiveduty-freetreatmentunderArticle53oftheCustomsLaw.TheKingdom's
policy regarding goods intransit istoallow them tobetransported through theKingdom without any
discrimination onthekindofgoods ornational origin, except iftherearereligious ornational security
concerns. Thecustoms authorities havetherighttoinspect anygoods intransit toprevent trafficking
ofprohibited goods suchasnarcotics. Saudi Arabia isaparty toanagreement signed byArab League
countries tofacilitate transit trade. Please refertoreply 142onpage52ofL/7645/Add.1 foradditional
information.WT/ACC/SAU/4
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4.Policies Affecting Foreign Trade InAgricultural Products
(a)Imports
125. Theduties applied bySaudi Arabia onagricultural products imported intotheKingdom are
relatively low,andanumber ofbasic foodstuffs areimported dutyfree.In1994, theaverage weighted
tariffofagricultural products was7.5percent. There aretwoproducts forwhich quantitative restrictions
areapplied. These are:dates andlong-validity pasteurized liquid milkimported incontainers ofmore
thanonelitre. Please refer toreplies 86,87and88onpage34ofL/7645/Add.1 foradditional
information.
(b)Export Subsidies
126. Saudi Arabia doesnotsubsidize agricultural exports. Please refer toreply 131onpages 47
and48andreply 137onpage49ofL/7645/Add.1 foradditional information.
(c)Export Prohibitions AndRestrictions
127. Asmentioned above, theSaudi Arabian government exercises some restrictions onexports.
These controls prevent goods thatarebenefiting fromdomestic subsidies fromleaving theKingdom.
Examples ofprohibited exports arefemale livestock andanimal fodder. Agricultural toolsandequipment
financed bytheSaudi Agricultural Bank canonlybere-exported withitspermission.
(d)Export Credits, Export Credit Guarantees OrInsurance Programs
128. Saudi Arabia participates inthree self-supporting regional export credit programs which are
intended tominimize theriskofnon-payment toexporters. Please refertoparagraphs 96through 99
above foradditional information.
(e)Internal Policies
129. TheState supports thedevelopment oftheagricultural production basethrough encouraging
investment inlarge-scale projects which utilize modern irrigation equipment andmethods. Itcontinues
toencourage investments inagriculture, andsupports investment inprojects thatadopt newtechnologies.
TheGovernment supports theagricultural sector primarily through distribution ofland, technical
assistance, and,guaranteed purchase prices forwheat andbarley. Please refertoreplies 179through
186onpages 65through 67ofL/7645/Add.1 foradditional information.
130. TheSaudi Agricultural Bank, under theauspices oftheMinistry ofFinance andNational
Economy, istheprimary institution forextending loans totheprivate sector forinvestments in
agriculture. TheBank provides short-term loans tofinance seasonal production requirements,
medium-term loans topurchase machinery andequipment, andlong-term loans tobuy,reclaim, and
develop land.Please refertoreplies 188through 190onpages 68and69ofL/7645/Add.1 foradditional
information.
5.Policies Affecting Foreign Trade InOther Sectors
(a)Textiles Regime
131. Saudi Arabia isnotaparty totheMultifibre Arrangement andhasnospecial policy regarding
theimport and/or export oftextiles ortextile products.WT/ACC/SAU/4
Page23
V.Trade-Related Intellectual Property Regime
Thissection tobecovered inaforthcoming supplement.
VI.Trade-Related Services Regime
Thissection tobecovered inaforthcoming supplement.
VII.Institutional Base ForTrade AndEconomic Relations With Third Countries
1.Bilateral OrPlurilateral Agreements Relating ToForeign Trade
132. Saudi Arabia isoneofthemember states oftheArabLeague, anorganization which hasagreed
towork towards creating anArab Common Market. Withaviewtoachieving thisobjective, member
States haveconcluded trade andtariff conventions. TheKingdom hasplayed anactive partinthis
program, concluding trade andtariff conventions withother countries oftheArab League. These
conventions provide either forcomplete removal oftariffs between member states orforreduction of
tariffs ongoods exchanged among member countries oftheLeague. Thepurpose ofthese agreements
istofacilitate andpromote trade among members oftheArab League andnottocreate obstacles to
thetradeofothercountries. Please refertoreply 260onpages 92and93ofL/7645/Add.1 foradditional
information.
133. TheKingdom alsomaintains bilateral economic andtechnical agreements withanumber of
non-Arab countries. These agreements generally cover specialized aspects oftheeconomic relationship
anddonotoffer preferential treatment forimports orexports.
2.Customs Union/Free-Trade Area Agreements
134. Saudi Arabia isamember oftheGulfCooperation Council (GCC) freetrade area. TheGCC
wasformed in1981 bytheleaders ofSaudi Arabia, Kuwait, Qatar, Bahrain, Oman andtheUnited
Arab Emirates tocoordinate policies among thestates inallfields, including economic andfinancial
affairs, commerce, andcustoms. Accordingly, themembers havespent much timeontherationalization
andunification ofthevarious customs 'regimes, thedevelopment ofjointventures, andthecoordination
ofexternal tradepolicies. Please refertoreply 256onpages 91and92ofL/7645/Add.1 foradditional
information.
135. In1983, theGulfCooperation Council states established afreetrade area. Goods originating
inmember states areallowed duty-free entry, provided thatatleast40percent ofthevalue added in
eachcaseiseffected inamember state. Please refertoreplies 257and258onpage92ofL/7645/Add.1
foradditional information.
3.Labor Markets Integration Agreements
136. Article 8oftheUnified Economic Agreement oftheCooperation Council oftheArab States
oftheGulfincludes labormarket integration asoneoftheeconomic integration objectives. Inaccordance
withthis,theSaudi Arabian government hasissued rules andregulations which apply tonon-Saudi
GulfCooperation Council nationals whoengage ineconomic activity andpractice thefreeprofessions
andvocations intheKingdom.WT/ACC/SAU/4
Page24
4.Multilateral Economic Cooperation, Membership InMultilateral Economic Organizations.
137. Saudi Arabia isamember ofseveral multilateral economic organizations which, among other
things, promote increased trade among members through cooperation andreduction oftrade barriers.
These institutions include theArab Monetary Fund, theArab Fund forEconomic andSocial
Development,theIslamicDevelopmentBank,theInternationalBankforReconstructionandDevelopment
(World Bank), andtheInternational Monetary Fund.WT/ACC/SAU/4
Page25
Annex 1
Statistics AndPublications
1.Foreign Trade Statistics, Responsible Agencies
1. TheCentralDepartmentofStatisticswithintheMinistryofPlanningisresponsibleforcompiling
foreign trade statistics andstatistics related totrade inservices. Itreceives itsdatafromtheCustoms
Department andother sources.
2.Publications Related ToStatistics
2. TheCentral Department ofStatistics within theMinistry ofPlanning produces twoannual
publications containing foreign trade statistics. Thefirst, entitled Foreign Trade Statistics, contains
official Saudi Arabian import andexport statistics bycommodity andcountry. Thesecond, entitled
Statistical Yearbook, contains dataontrade aswellasavariety ofother subjects suchasgovernment
finances, agriculture, petroleum, prices, andprivate establishments. Copies canbepurchased fora
nominal feebywriting totheDirector General oftheCentral Department ofStatistics, P.O.Box3735,
Riyadh.
3. TheSaudiArabianMonetaryAgencyalsoproducestwoannualpublicationscontainingstatistics.
Thetworeports aretheAnnual Report oftheSaudi Arabian Monetary Agency andtheStatistical
Summary.BothreviewmajoreconomicdevelopmentsintheKingdomofSaudiArabiaduringtherelevant
fiscal year.
4. Statistical Data(seeaccompanying tables)
(i)Main Economic Indicators
1.Gross Domestic Product
2.Budget
3.CostofLiving Price Series
4.Current Account Balance
5.Foreign Exchange Rates
(ii)Foreign Trade Statistics
1.Merchandise Trade Balance
2.Exports byMain Categories
3.Imports byMain Categories
4.Average Effective Tariff Rates
5.Imports byMain SourcesWT/ACC/SAU/4
Page26
Annex 1
Table (a)1
GROSS DOMESTIC PRODUCT
Current Prices Constant (1970) Prices
YearAmount (million
Saudi Riyals) Growth RateAmount (million
Saudi Riyals) Growth Rate
1982 454,876 -18.6% 51,818 -9.2%
1983 370,205 -18.6% 48,175 -7.0%
1984 347,425 -6.2% 46,842 -2.8%
1985 310,031 -10.8% 44,936 -4.1%
1986 267,846 -13.6% 47,511 5.7%
1987 272,000 1.6% 46,829 -1.4%
1988 276,906 1.8% 49,922 6.6%
1989 304,080 9.8% 50,167 0.5%
1990 384,993 26.6% 54,854 9.3%
1991 435,037 13.0% 60,284 9.9%
1992 452,298 4.0% 61,917 2.7%
1993 434,565 -3.9% 61,511 -0.7%
1994 440,871 1.5% 61,483 0.0%
Note: Gross Domestic Product doesnotinclude import duties.WT/ACC/SAU/4
Page27
Annex 1
Table (a)2
GOVERNMENT BUDGET
(Amounts inBillion Saudi Riyals)
Year Revenues Expenditures
1987 103.80 173.50
1988 84.60 134.90
1989 114.60 149.50
1990-91 316.60 476.80
1992 151.00 181.00
1993 169.15 196.95
1994 160.00 160.00
1995 135.00 150.00
1996 131.50 150.00
Note: 1987-1991 areactual figures.
1992-1996 arebudgeted figures.
Table (a)3
COST OFLIVING PRICE SERIES
Year Index %Change
1982 108.8 1.0
1983 109.0 0.2
1984 107.3 -1.6
1985 104.0 -3.1
1986 100.7 -3.2
1987 99.1 -1.6
1988 100.0 0.9
1989 101.0 1.0
1990 103.1 2.1
1991 107.8 4.6
1992 107.4 -0.4
1993 108.3 0.8
1994 109.0 0.6WT/ACC/SAU/4
Page28
Annex 1
Table (a)4
CURRENT ACCOUNT BALANCE
(Million Saudi Riyals)
Year Trade Balance Non-trade Balance Current Account Balance
1981 277,174 (138,051) 139,123
1982 135,175 (109,220) 25,955
1983 42,983 (101,199) (58,216)
1984 31,248 (96,093) (64,845)
1985 25,462 (72,317) (46,855)
1986 11,333 (55,013) (43,680)
1987 18,184 (54,788) (36,604)
1988 16,895 (44,387) (27,492)
1989 33,953 (69,729) (35,776)
1990 85,096 (100,651) (15,555)
1991 81,257 (184,411) (103,154)
1992 74,556 (140,993) (66,437)
1993 61,875 (116,609) (54,734)
1994 79,720 (113,680) (33,960)
Table (a)5
FOREIGN EXCHANGE RATES
Year Dollar (average) SDR (average)
1981 3.383 3.975
1982 3.427 3.789
1983 3.455 3.659
1984 3.524 3.504
1985 3.623 4.004
1986 3.704 4.581
1987 3.745 5.313
1988 3.745 5.040
1989 3.745 4.922
1990 3.745 5.328
1991 3.745 5.357
1992 3.745 5.149
1993 3.745 5.144
1994 3.745 5.467
1995 3.745 5.567WT/ACC/SAU/4
Page29
Annex 1
Table (b)1
MERCHANDISE TRADE BALANCE
(Million Saudi Riyals)
Year Exports Imports (f.o.b.) Trade Balance
1981 378,274 101,100 277,174
1982 253,256 118,081 135,175
1983 157,743 114,760 42,983
1984 131,873 100,625 31,248
1985 99,224 73,762 25,462
1986 74,529 63,196 11,133
1987 86,650 68,466 18,184
1988 91,060 74,165 16,895
1989 105,970 72,017 33,953
1990 165,705 80,609 85,096
1991 178,520 97,263 81,257
1992 187,834 113,278 74,556
1993 158,770 96,895 61,875
1994 159,590 79,870 79,720
Table (b)2
EXPORTS BYMAIN CATEGORIES
(Million Saudi Riyals)
1992 1993 1994
Category Value Share Value Share Value Share
Mineral Products 174,219 92.7% 145,054 91.4% 143,174 89.7%
Chemicals 5,795 3.1% 5,873 3.7% 7,916 5.0%
Plastics andRubber 2,781 1.5% 2,578 1.6% 3,395 2.1%
BaseMetals 1,031 0.5% 992 0.6% 1,080 0.7%
Agricultural Products 931 0.5% 1,765 1.1% 1,541 1.0%
Other Goods 3,153 1.7% 2,508 1.6% 2,484 1.5%
TOTAL 187,834 100% 158,770 100% 159,590 100%WT/ACC/SAU/4
Page30
Annex 1
Table (b)3
IMPORTS BYMAIN CATEGORIES
(Million Saudi Riyals, c.i.f.)
1992 1993 1994
Category Value Share Value Share Value Share
Animals/Animal Products 3,771 3.0% 3,720 3.5% 3,334 3.8%
Vegetable Products 6,484 5.2% 5,511 5.2% 5,441 6.2%
Fatsandoils 551 0.4% 400 0.4% 462 0.5%
Prepared Foods/Tobacco 2,420 1.9% 1,819 1.7% 2,079 2.4%
Mineral Products 916 0.7% 1,781 1.7% 1,313 1.5%
Chemical Products 8,398 6.7% 7,605 7.2% 6,242 7.1%
Plastics andRubber 3,971 3.2% 3,989 3.8% 3,456 4.0%
Leather Products 438 0.4% 418 0.4% 334 0.4%
Wood Products 2,040 1.6% 2,007 1.9% 1,616 1.9%
Paper Products 1,940 1.6% 2,086 2.0% 2,018 2.3%
Textiles/Textile Products 9,842 7.9% 8,272 7.8% 6,404 7.3%
Clothing accessories 1,048 0.8% 996 0.9% 822 0.9%
Stone andglass products 2,314 1.9% 2,053 1.9% 1,697 1.9%
Precious Metals &
Jewellery5,911 4.7% 3,251 3.1% 2,954 3.4%
Basemetals 11,182 9.0% 10,650 10.1% 8,108 9.3%
Machinery/Electric
Equipment26,322 21.1% 22,469 21.3% 18,139 20.8%
Transportation Equipment 29,911 24.0% 21,964 20.8% 18,058 20.7%
Miscellaneous
Instruments3,435 2.8% 3,339 3.2% 2,575 3.0%
Arms andAmmunition 454 0.4% 507 0.5% 90 0.1%
Miscellaneous
Manufactures2,924 2.4% 2,456 2.3% 1,947 2.2%
Art,N.E.C. 333 0.3% 324 0.3% 332 0.4%
TOTAL 124,606 100% 105,616 100% 87,422 100%
Note: Numbers maynotaddupduetorounding.WT/ACC/SAU/4
Page31
Annex 1
Table (b)4
AVERAGE EFFECTIVE TARIFF RATES
YearCustoms revenues
(million Saudi Riyals) Imports (c.i.f.)Average effective
tariff rate
1985 3,910 85,564 4.6%
1986 3,245 70,780 4.6%
1987 3,453 75,313 4.6%
1988 7,757 81,607 9.5%
1989 6,843 79,278 8.6%
1990 6,809 90,282 7.5%
1991 8,561 109,387 7.8%
1992 9,937 124,606 8.0%
1993 9,390 105,616 8.9%
1994 8,289 87,422 9.5%
Table (b)5
IMPORTS BYMAIN SOURCES, 1994
(Million Saudi Riyals)
Country/region Value Share
European Community 28,220 32.3%
United Kingdom 7,400 8.5%
Germany 7,246 8.3%
Italy 4,116 4.7%
France 3,806 4.4%
Belgium 1,678 1.9%
Netherlands 1,521 1.7%
Spain 1,323 1.5%
United States 18,697 21.4%
Japan 10,270 11.7%
Switzerland 3,634 4.2%
South Korea 2,477 2.8%
China 1,886 2.2%
Turkey 1,726 2.0%
India 1,578 1.8%
Taiwan 1,402 1.6%
Sweden 1,273 1.5%
Others 16,259 18.6%
TOTAL 87,422 100%WT/ACC/SAU/4
Page32
Annex 2
ListOfLaws AndLegal Acts
Laws AndLegal ActsRegulating TheActivity OfTheCustoms Authority; Responsible Agencies
1. Thefollowing measures regulate theactivity ofthecustoms authority:
a.Customs Law.
b.Customs Tariff Schedule.
2. Theresponsible agency forimplementing theabove measures istheCustoms Department in
theMinistry ofFinance andNational Economy.
3. TheCouncil ofMinisters isofficially responsible foranychange inthetariff rate,including
theadoption ofprotective tariffs fortheprotection ofnational products upon therecommendation of
acommittee composed ofrepresentatives from theMinistry ofFinance, Ministry ofIndustry and
Electricity andMinistry ofCommerce. TheMinister ofFinance andNational Economy hasthepower
toissue decisions related totheapplication ofthetariff.
Laws AndLegal ActsRelating ToNon-Tariff Regulation OfImports, Exports, Trade InTransit, And
Rules OfOrigin; Responsible Agencies
4. Thefollowing measure covers non-tariff regulation ofimports, exports, trade intransit, and
rules oforigin:
a.Customs Law.
5. Theresponsible agency forimplementing theabove measure istheCustoms Department in
theMinistry ofFinance andNational Economy.
Laws AndLegal ActsRelating ToForeign Investment; Responsible Agencies
6. Thefollowing measure covers foreign investment:
a.Foreign Capital Investment Code
7. Theresponsible agency forimplementing theabove measure istheMinistry ofIndustry and
Electricity.
Other Laws AndLegal ActsDealing WithEconomic Issues ThatAffect Trade; Responsible Agencies
8. Thefollowing areother lawsandlegalmeasures dealing witheconomic issues thataffect trade:
a.LawfortheProtection andEncouragement ofNational Industry.
b.Trademark Law
c.Patents ofInventions Law.
d.Copyright Law.WT/ACC/SAU/4
Page33
e.Commercial Agencies Regulations
9. Theresponsible agencies forimplementing theabove measures aretheMinistry ofIndustry
andElectricity andtheMinistry ofCommerce.
Trade InServices
(i)Existing Laws AndRegulations
10. InternationalparticipationinthevariousservicesectorsisgovernedbytheInvestmentofForeign
Capital Regulation. Rules concerning temporary residence inSaudi Arabia byforeigners isgoverned
bytheLawofStay. Inaddition, theLabor andWorkers Regulations govern theemployment of
expatriates. Also, there arethefollowing sector specific lawsandregulations:
BANKING SERVICES: TheBanks Control Law;
MARITIME SERVICES: Order No.53Dated 24.3.1403 (AH);
HEALTH SERVICES: Ministerial Order Number 4104/20M of1408 Concerning theImplementing
Regulations tothePrivate Medical Establishment Law;
EDUCATIONAL SERVICES: Implementing Regulations totheRegulation ofTechnical Institutes and
National Occupational Centers;
TOURISMSERVICES:MinisterialOrderNo.1/1/4/8/10of29.6.1400RegardingRegulationofTourism
andTravel Agencies andCompanies Engaged inAirTransport;
ENGINEERING SERVICES: Ministerial Order No.264of16.9.1402 Concerning Organization of
thePractice oftheProfession ofEngineering Consultancy;
ACCOUNTING SERVICES: LawofCertified Accountants, andtheImplementing Regulations ofthe
Accountants Law;
LEGAL SERVICES: Ministerial Order Number 1190of1402Pertaining totheRegulation ofCarrying
ontheProfession ofLegal Consultancy; and
PHARMACEUTICAL SERVICES: LawConcerning theCarrying onoftheProfession ofPharmacy
andTrading inMedicaments andMedical Preparations.
(ii)Publications OrSources OfInformation
11. Information onmeasures ofgeneral application ofrelevance totradeinservices canbeobtained
fromawidevariety ofsources which arepublicly available. TheUmal-Qura istheofficial publication
forthenotification oflaws, regulations anddecrees. Inaddition, information canbeobtained from
theMinistry responsible foroverseeing theservice sector inquestion, appropriate employees ofSaudi
Arabian embassies andconsulates abroad, theSaudi Arabian Chamber ofCommerce, oranyoneof
anumber ofprivate sources.
(iii)Publications OrSources OfInformation
12. Theinquiry point asforeseen inArticle IIIoftheGeneral Agreement onTrade inServices
istheMinistry ofCommerce.WT/ACC/SAU/4
Page34
Annex 3
Information OnImport Licensing Procedures
1. Rules oflicensing system fortheitems mentioned below arethefollowing:
I.Cutting/Seedlings andSeeds (Chapter 6):
1. Prior license must beobtained from theMinistry ofAgriculture andWater forimportation
ofthese itemfrom anycountry.
2. Thequantity, typeandsource ofimportation shallbespecified bytheimporter forthepurpose
ofobtaining thelicense.
3. Thereasons thatledtothisprocedure, were thefollowing:
I.Toensure direct supervision bytheMinistry onthequality andtoprevent entryofdegraded
qualities.
II.Regarding theseeds, thequantity must beproportionate tothequantity required for
cultivation.
III.Protection ofthelocalseedmanufactures.
4. Therules governing importation licenses areendorsed byanyofthefollowing:
A.Royal Decree,
B.Decree issued bytheCouncil ofMinisters, or
C.Ministerial Decree
5. Obtaining animport license isalegalmatter. Animport license contrary tothelawcannot
beissued, aswellastheimportation without animport license isnotpossible.
6. Therules andregulations inSaudi Arabia arepublished asperfollowing:
I.Published intheofficial Gazette.
II.Announced through themass media i.e.thejournals andbroadcasting.
III.Distributed totheSaudi Arabian embassies andconsulates abroad, Saudi Chambers of
Commerce, andtheGovernment departments concerned.
IV.Distributed toanyother agencies thatmaybeconcerned withsuchrulesandregulations
i.e.Saudi Chamber ofCommerce.
7. Theimport license isobtained within averyshort period. Theimportation canbemade
immediately aftertheimport license isobtained. There arenorestrictions ontheforeign exchange.
Thelicense period isdetermined byseasonal periods ortimelimits ranging from sixmonths toone
year. Incaseofnotusing thelicense, itcanberenewed.
8. Anyperson, company orcorporation canobtain animport license. There isnosystem forthe
importers registration aswellasthere arenolistings ofauthorized importers.
9. Theinformation required from theimporter areusual personal datai.e.name, address etc.
There isnoparticular formforthispurpose. Nothing more thanIDSCardorCommercial Registration
isrequired.WT/ACC/SAU/4
Page35
10. Atthetimeofgoods importation, theimport license isrequired andissubmitted along with
other documents tothecustoms
11. Nofeesagainst issuance oftheimport license oranydeposit amount etc.exist.
12. There isnopenalty incaseofnotusing theimporting license. Theimport license canonly
beusedbythefirstlicensee.
13. There arenorequirements orformalities other thanwhatismentioned here.
14. Relevant legal reference: Decree no.77dated 28/1/1395 AH,andno.50dated 17/3/1410,
issued bytheCouncil ofMinisters.
II.Medicaments, Medical andAlcoholic Preparations (Chapter 30):
1. Import license from theMinistry ofHealth must beobtained.
2. Relevant legalreference: Royal Decree no.M/18 dated 18/3/1398 AH.
III.Alcoholic Preparations forNon-Medical Purposes (2207 &2208):
1. Import license must beobtained from theMinistry ofIndustry.
2. Relevant legalreference: Royal Decree M/18 dated 18/3/1398 AH.
IV.Radioactive Chemicals (Chapters 28&29):
1. Import license must beobtained from theMinistry ofInterior.
2. Relevant legalreference: Letter oftheMinister ofInterior no.26/S/3098 dated 10/12/1395 AH.
V.Explosives (Chapter 36):
1. Import license must beobtained from theMinister ofInterior.
2. Relevant legalreference: Letter oftheMinister ofInterior no.26/S/3098 dated 10/12/1395 AH.
VI.Petroleum andnatural Asphalt (2714 &2713 20):
1. Import license must beobtained from theGeneral Corporation ofPetroleum &Minerals.
2. Relevant legalreference: General Corporation ofPetroleum &Minerals letterno.6611/404/410
dated 11/10/1404 AH.
VII. Agricultural Pesticides (3808):
1. Import license must beobtained from theMinistry ofAgriculture andWater Resources.
2. Relevant legalreference: Decree no.19dated 10/1/1396 AHissued bytheCouncil ofMinisters
VIII. Agricultural Equipment andMachinery (8432 &8433):
1. Import license must beobtained from theMinistry ofAgriculture.
2. Relevant legal reference: Decree issued bytheCouncil ofMinisters under no.77dated
28/1/1395 AH.
IX.Distilling Plant (8419):
1. Import license must beobtained from theMinistry ofIndustry, Ministry ofCommerce or
Ministry ofHealth asperthecompetence.
2. Relevant legalreference: Royal Decree no.9588/3/M dated 25/5/1390 AH.
X.Radio-Communication Apparatus (8525):
1. Import license must beobtained from theMinistry ofInterior.
2. Relevant legal reference: Decree issued bytheCouncil ofMinisters under no.673dated
15/6/1390 AHandno.730dated 20/7/1392 AH.WT/ACC/SAU/4
Page36
XI.Computer Screening Equipment forFake Dollars (9022):
1. Import license must beobtained from theGeneral Directorate ofPublic Security.
2. Relevant legalreference: Letter ofMinistry ofFinance under no.3030/404 dated
19/6/1404 AH.
XII. Allkinds ofArms &Ammunition (Chapter 93):
1. Import license must beobtained from Ministry ofInterior.
2. Relevant legalreference: Decree issued bytheMinister ofInterior under no.45/S/3382 dated
1/8/1407 AHbased ontheArticle 37oftheArms &Ammunition Act.
XIII. Antiques (9706):
1. Import license must beobtained from theMinistry ofEducation.
2. Relevant legalreference: Cultural &Natural Heritage Protection Convention. Saudi Arabia
isamember ofthisConvention.
IX.LiveHorses (0101):
1. Import license must beobtained from theChivalry Club.
2. Relevant legalreference: Telegram fromtheDeputy Premier under 14354 dated 9/11/1399 AH.WT/ACC/SAU/4
Page37
Annex 4
Information OnImplementation AndAdministration Of
TheCustoms Valuation Agreement
1.Questions Concerning Article 1
(a)Sales Between Related Persons
Salesbetween related persons arenotsubject toanyspecial provisions. Anyperceived deficiency
inthedeclared value inthecaseofsales between related persons ishandled inthesame manner as
inthecaseofsalesbetween unrelated persons.
(b)Price OfLostOrDamaged Goods
With regard todamaged goods, under Article 147oftheSaudi Customs Regulations, the
appropriate Customs andPortAuthority officials shallexamine theshipment andestimate thedecrease
initsvalue withrespect toitscondition. Customs dutyonlostgoods isexempted.
2.Implementation ofArticle 4oftheCustoms Valuation Agreement
Notapplicable asthere isnoprovision intheexisting Saudi Arabian customs valuation law
corresponding toArticles 4,5,6oftheCustoms Valuation Agreement.
3.Implementation ofArticle 5.2oftheCustoms Valuation Agreement
Notapplicable asthere isnoprovision intheexisting Saudi Arabian customs valuation law
corresponding toArticle 5.2oftheCustoms Valuation Agreement.
4.Implementation ofArticle 6.2oftheCustoms Valuation Agreement
Notapplicable asthere isnoprovision intheexisting Saudi Arabian customs valuation law
corresponding toArticle 6.2oftheCustoms Valuation Agreement.
5.Questions Concerning Article 7
Notapplicable asthere isnoprovision intheexisting Saudi Arabian customs valuation law
corresponding toArticle 7oftheCustoms Valuation Agreement.
6.Handling OfOptions Found InArticle 8.2
Under Saudi Arabia ’sCustoms Regulations, thecustoms value includes international freight
andinsurance.
7.Publication OfRate OfExchange
Therateofexchange usedforthepurposes covered byArticle 9oftheCustoms Valuation
Agreement ispublished bytheSaudi Arabia Monetary Authority (SAMA).WT/ACC/SAU/4
Page38
8.Confidentiality
Under Saudi Arabian civilservice regulations, information which isbynature confidential or
whichisprovidedonaconfidentialbasisforthepurposeofcustomsvaluationcannotbedisclosedwithout
thespecific permission oftheperson orgovernment providing suchinformation, except totheextent
thatitmayberequired tobedisclosed inthecontext ofjudicial proceedings.
9.Questions Concerning Article 11
Iftheimporter disputes thevalue ofimported goods assessed byaCustoms official, hemany
apply toCustoms forafurther ruling. TheCustoms Department willreferthematter toaninternal
adhoccommittee, composed ofavaluation expert, tariff expert andlegaladvisor, forsettlement of
thedispute. Iftheimporter continues todisagree withthedecision, hemayfileacasewiththeBoard
ofGrievances under theRules andProcedures tobefollowed bytheBoard ofGrievances.
Importers areinformed oftheirrights ofappeal.
10.Information OnPublication AsRequired ByArticle 12
(a)Laws, Regulations, Judicial Decisions AndAdministrative Rulings
Current lawsandregulations concerning theapplication andimplementation ofthevaluation
ofproducts forcustoms purposes canbeobtained fromavariety ofsources including public sources,
suchastheCustoms Department attheMinistry ofFinance andNational Economy, andprivate sources.
TheUmal-Qura istheofficial publication forthenotification oflaws, regulations anddecrees.
With regard tojudicial decisions andadministrative rulings, preparations arebeing made to
comply withtheprovisions ofArticle 12when Saudi Arabia implements theprovisions ofCustoms
Valuation Agreement.
(b)Publication OfFurther Rules
Asmentioned above, preparations arebeing made toensure thatSaudi Arabia ’scustoms regime
complies withtheUruguay Round Customs Valuation Agreement. Anyadditional rulesorregulations
setdown asaresult ofthese preparations willbepublished intheUmAl-Qura.
11.Questions Concerning Article 13
Preparations arecurrently being made tocomply withtheprovisions ofArticle 13when Saudi
Arabia implements theprovisions ofCustoms Valuation Agreement.
12.Questions Concerning Article 16
National legislation doesnotcontain aprovision requiring customs authorities togivean
explanation inwriting astohowthecustoms value wasdetermined butasamatter ofpractice such
anexplanation isprovided upon written request.
13.Interpretive Notes
Notapplicable asSaudi Arabia isnotasignatory totheCustoms Valuation Agreement and
isnotimplementing itsprovisions.WT/ACC/SAU/4
Page39
14.Decision Of26April 1984
Notapplicable asSaudi Arabia isnotasignatory totheCustoms Valuation Agreement.
15.Paragraph 2OfTheDecision Of24September 1984
Notapplicable asSaudi Arabia isnotasignatory totheCustoms Valuation Agreement.WT/ACC/SAU/4
Page40
Annex 5
Information OnTechnical Barriers ToTrade
Relevant laws, regulations, administrative orders relating totechnical barriers totrade
1. Royal Decree M/10 of3.3.92 (AH) andCouncil ofMinisters Resolution No.172of25.2.1392
AHestablished theSaudi Arabia Standards Organization andprovided itwithitsregulatory powers.
With regard toimports, theImplementing Regulations oftheCustoms Lawprovide theCustoms
Directorate withtheauthority toexamine imports andtorestrict theimport ofgoods which donotmeet
Saudi standards. Information onparticular standards canbeobtained fromtheSaudi Arabian Standards
Organization.
Information regarding:
Names ofpublications
2. Government regulations governing standards andcertification procedures canbefound inthe
UmAl-Qura, theofficial government gazette. Inaddition, theSaudi Arabian Standards Organization
publishes, from timetotime, updates onthelistofstandards andthecertification procedures for
standards.
Name andaddress ofinquiry point
3. Thename andaddress oftheinquiry point foreseen inArticles 10.1and10.3oftheWTO
Agreement onTechnical Barriers toTrade istheSaudi Arabia Standards Organization, P.O.Box3437,
Riyadh, 11471.
Name andaddress ofagency dealing withconsultations
4. Thename andaddress oftheagency dealing withconsultations foreseen inArticle 14ofthe
WTO Agreement onTechnical Barriers toTrade istheMinistry ofCommerce, P.O.Box3437, Riyadh,
11471.
Measures AndArrangements Concerning NewTechnical Regulations
5. Thestandard practice ofSASO istodistribute draftstandards toallthestandard organizations
incountries which areinterested inreceiving suchdraftstandards. Recipients aregiven three months
torespond tothedraftstandards. Thisprocess isgenerally repeated untilSASO decides toissue the
standards intheirfinalform.WT/ACC/SAU/4
Page41
Annex 6
Information OnState Trading
I.ENUMERATION OFSTATE-TRADING ENTERPRISES
1. Saudi Arabian OilCompany (Saudi Aramco), a100percent government owned company, holds
thedominant position intheKingdom withregard toexports andimports ofgoods andservices related
totheoilindustry, bothupstream anddownstream. With theexception oftwosmall operations inthe
Divided Zone runbytheJapanese Arabian OilCompany andTexaco, Saudi Aramco produces and
markets allcrude oilproduced inSaudi Arabia. Inaddition, Saudi Aramco issoleowner andoperator
offourrefineries andjointventure partner inthree others. Withregard toexports, Saudi Aramco has
authority overthemarketing ofproducts produced atitsfacilities. Withregard toimports, Saudi Aramco
imports avariety ofgoods andservices asinputs intoitsoperations. Avariety ofcontractors hired
bySaudi Aramco, andoverwhom Saudi Aramco hassupervisory responsibility, alsoimport goods
andservices toassist intheiroperations.
2. TheGrain Silos andFlour Mills Organization (GSFMO) istheonlyorganization allowed to
import grains, flour, andanimal feed.
II.REASON AND PURPOSE FOR STATE-TRADING ENTERPRISES
3. With regard tocrude oilandoilproducts, Saudi Aramco holds aspecial position because of
thestrategic nature oftheoilindustry intheKingdom. Thepurpose oftheGSFMO istoencourage
domestic grain production byproviding silocapacity andoffering auniform guaranteed price to
producers. Toavoid abuse oftheguaranteed price, imports arecontrolled.
III. DESCRIPTION OFTHE FUNCTIONING OFSTATE TRADING ENTERPRISES
4. Saudi Aramco deals withbothexports andimports ofpetroleum. Thequantities ofexports is
dependent upon theanticipated difference between domestic production anddomestic demand. The
price Saudi Aramco charges forcrude aremarket related andtiedtothespotprice quotations ineach
regional market through aprice formula. Some ofthese prices aresubject tolong-term contracts and
some toshort-term contracts. Theprices ofexported refined products arealsotiedtothespotprices
inthedestined regional markets.
5. TheGSFMO deals withimports ofgrains, flour andanimal feed. Decisions onimports are
made based ondomestic supply anddemand considerations. Since theGrain Silos andFlour Mills
Organization purchases mostofthewheat produced within theKingdom, itmustexport wheat which
ispurchased inexcess ofexpected domestic salesofwheat andwheat flour, withsome leeway allowed
forchanges ininventory levels. Inaddition, theKingdom donates alarge amount ofwheat topoor
countries. Domestic wheat andbarley ispurchased atfixed prices which canvaryfrom yeartoyear,
depending onchanges inthegovernment purchase priceandthepriceforwheat ininternational markets.
IV. STATISTICAL INFORMATION
6. Withregardtoexports,themostrecentforeigntradestatisticsshowthefollowingdataonexports
ofoilandwheat.WT/ACC/SAU/4
Page42
OILEXPORTS
Year Value Volume
1991 SR163billion 358million MT
1992 SR174billion 373million MT
1993 SR144billion 359million MT
WHEAT EXPORTS
Year Value Volume
1992 SR528million 1,181 thousand MT
1993 SR674million 1,569 thousand MT
1994 SR451million 980thousand MT
7. Production ofwheat totalled 4.0million tonsin1991, 4.2million tonsin1992 and3.4
million tonsin1993.
8. Inthecaseofoil,Saudi Aramco isresponsible fortheproduction andexport ofover95percent
ofcrude oilbybothvalue andvolume. Over theperiod 1986-1991, Saudi Aramco wasresponsible
forabout 50percent oftheexports ofrefined products. Theremaining isexported bythejointventure
partners.WT/ACC/SAU/4
Page43
Annex 7
ECONOMIC, TECHNICAL COOPERATION AND TRADE AGREEMENTS
Country Date ofAgreement Duration Renewal
Algeria Nov. 1986 3Years Three Years
Argentina August 1981 3Years Annual
Australia Mar1980 3Years Annual
Austria Mar1988 3Years Annual
Bangladesh Dec.1978 3Years Annual
Belgium-Luxembourg May1978 3Years OnRequest
Brazil August 1981 3Years OnRequest
Canada Oct.1987 3Years Annual
Chinese Taipei May1976 5Years OnRequest
Finland May1976 5Years OnRequest
France July1975 Long-term Annual
Germany Jan1977 5Years Annual
Greece Sept. 1986 3Years Annual
Holland May1984 3Years Annual
India April 1981 3Years Annual
Indonesia May1981 3Years 3Year
Iraq Jan1984 2Years Annual
Ireland Oct.1983 3Years Annual
Italy Aug. 1974 open Annual
Japan March 1975 5Years OnRequest
Jordan Oct.1962 2Years Annual
Lebanon Nov. 1971 1Year Annual
Malaysia Jan1975 5Years 5Years
Morocco Sept. 1966 2Years 2Years
Pakistan Nov. 1951 open Annual
Republic ofKorea July1974 5Years Annual
South Yemen Mar1988 3Years 3Years
Spain April 1984 open OnRequest
Syria Apr.1972 1Year Annual
Tunisia Jan1965 2Years TwoYears
Turkey June1968 5Years Annual
United Kingdom Jan1943 5Years Annual
United States Feb.1975 5Years Annual