As per the Saudi Ministerial Decision No. 3852 on the local rules of origin, which sets out the national rules of origin for the eligibility of preferential duty treatment when importing Gulf Cooperation Council (GCC) goods into Saudi Arabia, all products manufactured or semi manufactured in GCC States must be accompanied by a “GCC National Origin Certificate” to be cleared through Saudi customs. Penalties may apply where goods are declared to originate from the GCC but do not meet the requirements under the Decision that took effect on 2 July 2021.
By the above discussion, all products manufactured or semi-manufactured in any of the GCC States to benefit from national product exemptions have to meet the following:
- The goods must obtain a valid certificate of origin from the relevant GCC States,
- The goods must be shipped directly from the GCC State of origin to Saudi Arabia,
- The licensed manufacturer must generally meet a standard requirement of 25% national workforce. Where it does not meet the standard requirement, it must meet a minimum of 10% national workforce, and the local value-added requirement will be increased by the percentage of the national workforce deficit.
- The local added value from production of the goods in any GCC State must equate to at least at least 40%.
Businesses should review how the Decision affects their supply chain and the manufacturing, movement and invoicing of goods between GCC countries. Especially that, certain processes (i.e. packing, assembly and mixing of products) will not satisfy the GCC origin requirements. Manufacturing, transporting, invoicing or shipping from a GCC free zone is also unlikely to satisfy the GCC origin requirements.