General UAE Legal Questions LawMinisterial Resolution No. (33) of 1981 Concerning the Issue of the Executive Regulation of the Federal Law Concerning Imposing Federal Customs Tax on the Imports of Tobacco and its Derivatives

Article (1) Upon application of the provisions of this Law, the following terms and expressions shall have the following meanings, unless the context requires otherwise: Goods : Any imports of tobacco and its derivatives including cigarettes, cigars, snuffs, tobacco, etc., whether manufactured or semi manufactured from raw materials. Tax : The federal customs duty imposed pursuant to Federal Law No. (11) of 1981, referred to above, and as amended by Federal Law No. (12) of 1994. Customs Department : Any seaport, airport or land center that may contain a customs department, which is the authority where the customs procedures are taken, whether on the seashores, the land borders or at the airports inside the State or on its borders.

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Ministerial Resolution of 1981 Concerning the Executive Regulations of Federal Law of 1981 Imposing Federal Custom Tax on Imports of Tobacco and its Derivatives 2 Chapter One Customs Departments

Article (3) The Customs Departments are: In the Emirate of Abu Dhabi, Zayed Port – Abu Dhabi International Airport – Commodities Center – Al Ruwais – Al Dhana Mountain – Das Island – the Post – Al Ain International Airport. In the Emirate of Dubai: Port Rashid – Dubai International Airport – Jebel Ali Port – Al Hamriyah Port – Al Shandaga Port. In the Emirate of Sharjah: Khalid Port – Sharjah International Airport – Khorfakkan Port. In the Emirate of Ras Al Khaimah: Saqr Port – Ras Al Khaimah Airport. In the Emirate of Ajman: Ajman Port. In the Emirate of Umm Al Quwain: Umm Al Quwain Port. In the Emirate of Fujairah: Fujairah Port – Fujairah Airport. The Minister of Finance and Industry may add any other Customs Departments.

Article (6) Goods to be entered by land shall be taken to the nearest Customs Department on the borders. Familiar routes shall be used without deviation until the Goods reach the first Customs Department to complete the customs procedures. If such Customs Department is not authorized to complete the customs procedures, a statement of inventory of the Goods shall be prepared and the person in charge of the transport mean shall sign such statement, and the Goods shall be taken under guard to the nearest Customs Department to complete the customs procedures. If the Goods cannot be sent under guard, such Customs Department shall notify the nearest Customs Department of the statement of such Goods. Chapter Two Applicable Rules for the Calculation of Tax

Article (9) As for the Goods which their owners find that they are not compliant with the agreed specifications, contain defects or are of less quality products or for any other reason which result in exchanging communications between the importer and the exporter abroad and the exporter agrees to deduct a particular percentage of the value of such consignments, the customs shall inspect all the relevant communications, telex messages and documents with the assistance of a customs assessor. If such assessor is satisfied by such deduction, the Tax on the Goods shall be assessed on the basis of the value following such deduction. This provision shall apply to such Goods that may suffer damage en route.

Article (10) The customs accountant calculates the tax and fixes it in the form designated for that purpose, and the tax rate is (50%) fifty percent of the import price of the good calculated on the basis of its delivery at the port of arrival in the United Arab Emirates if it is imported from abroad (CIF value). In the event the commodity is manufactured, or its manufacturing was completed, within the country, the tax is calculated on the basis of (50%) fifty percent of the value of its production cost, taking into account the deduction of the tax that may have been imposed and paid on the materials involved in manufacturing. The exports of such goods are exempted from tax.

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Ministerial Resolution of 1981 Concerning the Executive Regulations of Federal Law of 1981 Imposing Federal Custom Tax on Imports of Tobacco and its Derivatives 5 Chapter Three Customs Procedures

Article (14) The importer or the agent shall, at the time of clearance of the Goods, provide to the customs all the documents confirming the value of the Goods plus the freight and insurance costs and other expenses, together with an Arabic translation thereof. Such documents shall in particular include the following: a. The original invoices attested by the UAE Embassy in the exporting country. If there is no such UAE embassy in the exporting country, such invoices shall be attested by an Arab embassy, by the chamber of commerce or the chamber of industry in the exporting country. b. The certificate of origin attested in accordance with the provision of clause (a). c. The insurance policy attested in accordance with the provision of clause (a). d. The bill of lading. e. The packing list per package. f. The price list, if any. g. A copy of a documentary credit form or the documents for the remittance by the bank.

Article (22) If the importer or the agent declines to provide the customs manifest or fails to provide it in due time or fails to appear to collect the Goods within 4 months from the date of discharge of the Goods at the Customs Department, the customs shall be entitled to sell the Goods at the public auction. It shall be deducted from the sale proceeds the Tax and the other payable taxes and local customs duties and the expenses in the following order: a. The sale expenses including the publication expenses. b. The Tax calculated on the basis of the sale price. c. Taxes and local customs duties calculated on the basis of the sale price. d. Revenues, charges and flooring fees and any other dues payable to the customs. After that, any balance shall be held in the customs fund as trust on demand to any person that may be entitled thereto.

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Ministerial Resolution of 1981 Concerning the Executive Regulations of Federal Law of 1981 Imposing Federal Custom Tax on Imports of Tobacco and its Derivatives 9

Article (25) It shall be temporarily exempted from Tax such Goods imported for the purpose of re-exporting thereof outside the State in their original condition or upon manufacturing or completing the manufacture of such Goods. It is conditional for such exemption that the importer pays to the Ministry of Finance and Industry a cash deposit or provides a bank guarantee of the amount of the applicable Tax and to re-export the Goods within one year from the date of import. In the event of failure to re-export such Goods within one year, the Tax shall become payable. The foregoing condition may not be applied if the re-export is scheduled to be made within 15 days from the date of arrival of the Goods to the port of discharge in the State. Such exclusion shall be granted under a resolution by the Minister of Finance and Industry.

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Ministerial Resolution of 1981 Concerning the Executive Regulations of Federal Law of 1981 Imposing Federal Custom Tax on Imports of Tobacco and its Derivatives 10 The one-year condition may be excluded if the importer or the agent provides such statements confirming that the re-exporting is impossible within one year due to force majeure events. Such exclusion shall be granted under a resolution by the Minister of Finance and Industry.

Article (30) Goods shall be deemed smuggled in any of the following events: a. Goods removed from the means of transport prior to the arrival to the first Customs Department without any compulsory circumstance, for the purpose of smuggling.

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Ministerial Resolution of 1981 Concerning the Executive Regulations of Federal Law of 1981 Imposing Federal Custom Tax on Imports of Tobacco and its Derivatives 11 b. Goods found upon inspection to be hidden or have been hidden by any way or it is suspected in the circumstances to be hidden, such as by putting the Goods in the overhead pockets or any similar pockets in the means of transport or in any unusual places or among the luggage of the passengers or in their own clothing bags carried by them or in disguised packages, all without declaration of such Goods. c. Goods found upon inspection to be different in number, type, quantity, measurement or weight than as stated in the invoice or the number on the label is untrue or for which invoices or documents feigned or imaginary or forged marks to avoid payment of all or any of the Tax. d. If the land, air, or sea means of transport coming from a foreign country deviates from the familiar route to locations free of custom departments and unloads the Goods without any compulsory reasons.

Article (32) Upon seizure of the smuggled Goods inside or outside the Customs Department, the customs officers shall issue the required minutes without any delay for the violating persons in the nearest customs office. The minutes shall state the date, time, and closure thereof and the place of such seizure and its date and time and the names, surnames, nationalities, profession and places of residences of the violating persons. If such persons reject to give any such information, such rejection shall be entered in the minutes. All the facts and explanations that may facilitate the search for and arrest of the violating persons shall also be entered in the minutes. If any of such violating persons is employed on board a vessel or any other means of transport, the name and type of such vessel or

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Ministerial Resolution of 1981 Concerning the Executive Regulations of Federal Law of 1981 Imposing Federal Custom Tax on Imports of Tobacco and its Derivatives 12 means of transport, the name of the master or driver and the name of its agent company shall be stated. The names of the seizing officers, a summary of the incident, the reason for seizure and its circumstances and an accurate description of the Goods and their assessed value shall be stated in the minutes. Such assessment shall be the basis of the penalty to be imposed on the violating person. The minutes shall be prepared in the presence of the violating persons, and they shall be required to sing the minutes and give their statements. If any of them rejects to sing the minutes, it shall be entered in the minutes. A copy of the seizure minutes shall be dispatched, together with all the relevant documents, within 24 hours to the to the head office of the Ministry of Finance and Industry in Abu Dhabi in case of the Abu Dhabi Customs Department or to the head office of the Ministry of Finance and Industry in Dubai in case of the Customs Departments in the Northern Emirates, together with the notes by the local Customs Department. Another copy shall be dispatched to the Federal Public Prosecution to take the required action.

Article (33) Investigations shall be conducted by a committee in every Customs Department, to be formed under a resolution by the Head of the Customs Department. The representative of the Ministry of Finance and Industry in the Customs Department shall be a member of such committee. If such committee is actually formed in the Customs Department for such purpose, a representative of the Ministry of Finance and Industry shall be a member of such committee for the purpose of investigations in connection with this Tax only.

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Ministerial Resolution of 1981 Concerning the Executive Regulations of Federal Law of 1981 Imposing Federal Custom Tax on Imports of Tobacco and its Derivatives 13