SAUDI ARABIA

Logistic and forwarding services in Saudi Arabia

Saudi-Arabien

Capital City
Riad

Population
30.8 Mio.

National languages
Arabisch

Currency
Saudi-Rial (SAR)

Gross national product (GNP)
USD 805.2 Mrd.

GNP per person
USD 25’778

Financial exports to Switzerland
CHF 4’586.5 Mio.

Financial imports from Switzerland
CHF 168 Mio.

Bilateral relations Switzerland–Saudi Arabia

Saudi Arabia is a priority partner for Switzerland because of its role in the world economy, in the Muslim world and in the Middle East. In recent years the two countries have significantly improved the framework conditions for trade between them.

Economic cooperation

Saudi Arabia has considerable economic potential for Switzerland, partly because of the size of its market (it mainly imports watches, machine tools and pharmaceutical products) and partly because of investment conditions. Saudi Arabia joined the WTO in 2005. Following radical internal reforms, investment conditions in Saudi Arabia are considered among the most favourable in the world by international institutions. Saudi Arabia is currently Switzerland’s second trading partner in the Middle East after the United Arab Emirates.
The two countries have been working to improve framework conditions for their exchanges. This led to the conclusion of bilateral agreements on the promotion and protection of investments (signed on 1.4. 2006 and in force since 9.8.2008) and air traffic agreement (signed 4.7.2009 and in the course of ratification). Negotiations for a double taxation agreement began in December 2010.
Furthermore Switzerland and Saudi Arabia together with other members of the European Free Trade Association and the Gulf Cooperation Council signed a free trade agreement on 22.6.2009 (ratified by Saudi Arabia; ratification by another Gulf state is needed for the agreement to enter into force).

 

Business language

Arabic, English.
Foreign companies and their subsidiaries in Saudi Arabia must use Arabic when corresponding with government agencies. There are doubts as to how long English will continue to be accepted. Sanctions should be assumed.

Dimensions and weights

Metric system.

Currency

National currency Saudi Riyal (S.RI.) = 100 halalah

Customs tariff

Harmonised system, customs clearance based on the transaction value (GCC basis).

Import control

Regulations are based on the following: 1) Goods for which there is a ban on import, 2) Goods for which there is a restriction on imports which may only be imported with an import licence and 3) Goods which can be freely imported. An import licence is required for some goods such as lie animals and various products of animal origin, weapons, munitions, chemicals, date palms and their seeds. There is a ban on the import of alcoholic drinks, live pigs and pork products, pornographic material and goods from Israel. Meat and poultry may only be imported if it has been slaughtered using the method set out in sharia law; the shipment must be accompanied by a halal certificate. However, this ritual is banned in accordance with the Animal Welfare Act, Further information: CIC (Chambers of Industry and Commerce) or the Association of Islamic Cultural Centres. There are special provisions for frozen meat and a wide range of other goods (ask CICs). Pharmaceutical products and medications must be registered.
There is a ban on the import of genetically modified foods and additives, with the exception of edible oil from soya beans, maize and rapeseed. A health certificate is also required stating that the remaining foods are not genetically modified.
Importers must be entered in the Saudi commercial register. Foreign companies that want to enter into a contractual relationship with Saudi state institutions (contractor companies) are obliged to appoint a Saudi Arabian representative, who must be properly entered in the register of commercial representatives. Contractor companies have to provide extensive additional documents and certifications (ask CICs or professional associations).
There are no difficulties with foreign currencies except transfers to and from Israel. Transfers by foreigners from SAR 100,000 are notified to SAMA, in practice however a maximum of SAR 60,000 SAR (or equivalent) may be imported. The SAR is pegged against the USD.
Harbour and Service Charges: 10% of the customs duty.
No VAT.

Pre-shipment inspection

Importers for the goods in question must provide a Certificate of Conformity (COC) for each country of origin of an export shipment, which is to be issued by an accredited body once a pre-shipment inspection has been carried out. Ask the companies commissioned to carry out the certification for details. One of the testing bodies approved by the SASO is Intertek.

Terms of payment and tenders

Deliveries against an irrevocable, confirmed letter of credit is the rule, only in exceptional cases is documents against payment (D/P) advisable. Tenders in USD, EUR, CIF prices. Specifying binding delivery deadlines is advisable.
In the future, state Saudi Arabian agencies should only conclude service or delivery contracts with foreign companies on the basis of the Saudi Riyal where possible. If it is necessary to accept payment in a foreign currency, it should be included in the contract with no indication of the parity to the Saudi Riyal.
State export guarantees are possible with no formal restrictions.

Designations of origin

In principle, all imported goods should have markings indicating the origin which cannot be removed. Labelling should be easily legible and permanently combined with the goods. This can be by printing, engraving or pressing and should in principle be placed on the goods themselves. Only in exceptional cases and where it is not possible to place the marking on the goods due to their size or nature, such as screws, small parts and foods, the marking can be placed on the packaging. In this case, the labelling should be on the smallest packing unit. The information on the goods must be identical to that on the import documents. Labels on textiles must be sewn in and show the indication of origin and instructions for care. Labelling on textiles can be in English and/or Arabic.

Packaging

The packaging should be resistant and adapted to the climate conditions. Hay and straw are permissible but are subject to phytosanitary control. The declaration of origin must also be indicated on the packaging. Plant protection certificates are required when importing wooden packaging. The packages must be labelled with information about the manufacturer and the recipient, the goods, the country of origin and the destination. All information in the markings must correspond to the information on the documents, particularly the certificates of origin. Breakable goods or those which need to be treated in a special manner should also have instructions on the treatment of the goods, ideally in Arabic. The transport of certain goods in containers is prohibited (ask CICs).

Product samples

Commercial samples which cannot be sold as commercial goods and are of a low value are duty free. Sample products, the value of which does not exceed a customs value of S.RI 10,000 are subject to simplified customs clearance regulations. Other sample products can temporarily be imported duty free on payment of a security totalling the duties. Certificates of origin are required.
The shipment of samples which are subject to duty as “product samples” is not permissible.

Shipping and accompanying documents

Please note: ban on the submission of boycott measures.

a) Commercial invoices, at least 2 copies in English with all standard information such as a precisely specified description of the product (very strict), gross and net weight, sales value, country of origin (“Swiss”) and the name of the ship and its date of departure.

Customs authorities sometimes request: the original freight invoice from the carrier/shipper and the original invoice from the insurer. CIF prices on the basis of CIF at Jeddah or CIF at Dammam with the freight or insurance indicated separately. If the commercial invoice has 2 or more pages, the final total of the invoice must be shown or repeated on the final page.

In the case of motor vehicles, technical data is also required (information can be provided by CICs).

Legally binding signature of the exporter.

Where appropriate the importer may request an additional declaration from the manufacturer (at the end of the invoice): “The goods are manufactured by … (Name and full address)” and where applicable additional certification by CICs (submit 2 copies) which has then been granted consular legalisation. (The number of invoices which need to be legalised by the consulate depends on the importer’s instructions.) Declarations linked to the boycott of Israel by the Arab League will not be certified by the CICs.

b) Certificates of origin, 2 copies for all goods. Always fill in field 4 of the certificates of origin. Country of origin: “Swiss”. Note: for UE origin simply “European Union” is not recognised.

Declaration of origin (reverse of certificate of origin): “We hereby declare that the mentioned merchandise is being exported on our own account. The goods are of pure Swiss origin.” Potentially with the addition of: “We certify that the goods are manufactured by …”. If the goods come from another country or several countries, these must be indicated accordingly in the clause (instead of “pure Swiss”). If “Swiss” is not indicated in FIELD 3 (country of origin) or another country is also indicated, the exporter must make a manufacturer’s declaration (name and address of the manufacturer) on the reverse of the certificates of origin. Special rules for food.

Submit to CICs for approval, then to the consulate for legalisation. Certificates of origin must always contain information about the carriage (field 4).

c) Bills of lading uncertified; order bills of lading possible on indication of a notify address.

d) Manufacturer’s declaration indicating who manufactured the goods must be submitted on headed company paper and make reference to the commercial invoices. For the formulation see a)/b). Certification by CICs (1 copy remains with the CICs), or a notary can certify the signature. If the importer also requests consular legalisation, when choosing the notary certification of the signature there must be an authentication by the District Court President.

e) Confirmation from the shipping company/appended declarations (only in some cases) 1. Appended Declaration to Bill of Lading if the importer requests consular legalisation of the bill of lading. 2. Appended Declaration to Insurance Company if the importer requests an insurance policy legalised by the general consulate. 3. Appended Declaration to Certificate of Origin if two or more countries of origin are indicated in the chamber of commerce certificate of origin. The CICs will have templates of the certificate. They can be duplicated at will. Certificates require notarial certification. If the letter of credit also requires consular certification, the certificate must also be certified by the consulate.

f) A health certificate (“free from dioxin certificate) is required for foods, live animals and animal products. The certificate from the health authorities must be submitted to the CICs (2 copies) for authentication. It must then be submitted for legalisation (1 copy).

g) Submission of the documents

Applications for the legalisation of documents directly (straight from the exporter, no intermediary or representative permitted) to the Arabic Association of Commerce and Industry, to be submitted via post or email. The preliminary certification and forwarding will be carried out on the day of submission, legalisation by the consular department on the following day and subsequent sending to the

applicant. Note: enclose a stamped addressed envelope and only submit original documents. Copies will not be certified.

f) Postal packages up to 31.5 kg: 1 foreign dispatch note, 3 customs declarations in English/French, 3 commercial invoices in English with all standard information including country of origin, gross and net weight, precise description of the goods, 2 certificates of origin with the same declaration as on the commercial invoices, each certified by the CICs and the embassy.

i) Air freight packages up to 10 kg: 1 foreign dispatch note, “air mail” note, otherwise as for packages.

j) Note: there is a legal provision that all goods must be “imported directly”. Indicating the precise shipping route from the exporter’s location to the destination is therefore advisable, particularly if the shipment is from Dutch or Belgian ports.