Guide to Import

Non-tariff measures (NTMs) are defined as policy measures, other than ordinary customs tariffs, that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both. As a result, NTMs cover a broad range of policies including traditional trade policy instruments, such as quotas or price controls. However, they also comprise technical regulatory measures that pursue important non-trade objectives that relate to health and environmental protection, such as Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT).

Examples of NTMs:

• Sanitary and Phytosanitary Measures – that are applied to protect human or animal life from risks arising from additives, contaminants, toxins or disease-causing organisms in food
• Technical Barriers to Trade are measures referring to technical regulations, and procedures for assessment of conformity with technical regulations and standards (example labeling requirements – refrigerators need to carry a label indicating their size, weight, and electricity consumption level)
• Pre-shipment inspection and other formalities – live animals need to be cleared at a designated customs office for inspection – a requirement that goods must be shipped directly from the country of origin, without stopping at a third country

For more information on non-tariff measures, please visit the UNCTAD website and book on International Classification of Non-tariff Measures (Arabic, English and French language versions)

The phrase “Technical Barriers to Trade” – TBT refers to the use of the Yemeni regulatory process as a means of protecting domestic producers. The TBT Agreement» seeks to assure that:

• Mandatory product regulations
• Voluntary product standards
• Conformity assessment procedures (procedures designed to test a product’s conformity with mandatory regulations or voluntary standards)

The WTO Agreement on Technical Barriers to Trade (“TBT Agreement”), which entered into force in 1995, is the multilateral successor to the Standards Code, signed by 32 GATT contracting parties at the conclusion of the 1979 Tokyo Round of Trade Negotiations. The purposes of the TBT Agreement can be broadly described as:

• Assuring that technical regulations, standards, and conformity assessment procedures, do not create unnecessary obstacles to international trade, while
• Leaving Members adequate regulatory discretion to protect human, animal and plant life and health, national security, the environment, consumers, and other policy interests.

Yemeni Ministry of Industry and Trade now operates the TBT inquiry point is appointed as the trade inquiry point for questions from outside Yemen, and the client service departments would continue to respond to citizen’s inquiries.

According to the WTO Agreement on Sanitary and Phytosanitary Measures, countries must ensure the consumers are being supplied with food that is safe to eat — “safe” by the standards you consider appropriate? And at the same time, how can you ensure that strict health and safety regulations are not being used as an excuse for protecting Yemeni domestic producers?

The Agreement on the Application of Sanitary and Phytosanitary Measures sets out the basic rules for food safety and animal and plant health standards.

It allows countries to set their own standards. But it also says regulations must be based on science. They should be applied only to the extent necessary to protect human, animal, or plant life or health. And they should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail.

Member countries are encouraged to use international standards, guidelines, and recommendations where they exist. However, members may use measures that result in higher standards if there is scientific justification. They can also set higher standards based on appropriate assessment of risks so long as the approach is consistent, not arbitrary.

According to the Standardization, Metrology, and Quality Control Law No. 44/1999, the Yemen Standards and Metrological Organization (YSMO) are responsible for:

• The application of standards, technical regulations, and conformity assessment procedures
• Ensure the safety of imported food products and conformity with the applicable regulations

The YSMO source of information includes communications from the GCC rapid alert system (of which YSMO is a contact point, and which is also a paper-based system) as well as information from the EU RASFF system, other national authorities, and businesses. In addition, where a YSMO officer at one border office finds a food safety risk, he will send a notice to other border offices.

Circulars include detailed information including sources of the product and recommended control actions to be taken where the imported goods are declared for entry.

If the importer is not satisfied with the YSMO decision, it can request a second test if the first test results are positive and allow the test to be conducted at third party laboratories including laboratories located outside the country, notably in Jordan. The importer shall not be subject to this control if 3 successive shipments of the goods in question by the importer were found to comply with standards. Fees to issue assessment certificates are applied in accordance with YSMO Regulation “On Inspection Charges Levied on Imported Goods” (Decision of the Minister of Industry and Trade No. 2/2003 on the Regulations of Conformity Assessment of Goods and Enterprises to Accredited Standards) replacing the fees of one per thousand of the value of the consignment (minimum YRls 10,000 – maximum YRls 200,000).

Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem, the customs value is essential to determine the duty to be paid on an imported good.

Purpose of Valuation – The purpose of a valuation is to monitor, control the implementation of the World Trade Organization Valuation Agreement and conduct valuation audits on import documents/contracts/agreements to evaluate whether the correct value has been declared or to determine values within the confines of the WTO Agreement.

Technical Information on Customs Valuation is available at the WTO Website (Annex II: Technical Committee on Customs Valuation. Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem, the customs value is essential to determine the duty to be paid on an imported good. Customs valuation shall, except in specified circumstances, be based on the actual price of the goods to be valued, which is generally shown on the invoice. This price, plus adjustments for certain elements, equals the transaction value, which constitutes the first and most important method of valuation. For cases in which there is no transaction value, or where the transaction value is not acceptable as the customs value because the price has been distorted as a result of certain conditions, five other methods of customs valuation, to be applied in the prescribed hierarchical order. Technical Information on Customs Valuation is available at the WTO Website. Customs valuation is a customs procedure applied to determine the customs value of imported goods. If the rate of duty is ad valorem, the customs value is essential to determine the duty to be paid on an imported good. Customs valuation shall, except in specified circumstances, be based on the actual price of the goods to be valued, which is generally shown on the invoice. This price, plus adjustments for certain elements, equals the transaction value, which constitutes the first and most important method of valuation. For cases in which there is no transaction value, or where the transaction value is not acceptable as the customs value because the price has been distorted as a result of certain conditions, five other methods of customs valuation, to be applied in the prescribed hierarchical order. Overall the following six methods are considered:

• Method 1 — Transaction value
• Method 2 — Transaction value of identical goods
• Method 3 — Transaction value of similar goods
• Method 4 — Deductive method
• Method 5 — Computed method
• Method 6 — Fall-back method  

Yemen Customs Authority Valuation

The legal ground for determining the customs value is defined in 1990 Customs Law No. 14 of and its amendments by Law No. 12 of 2010 of the Yemen Customs Authority Act.

Yemen Customs Authority complies with international regulations in the domain of Customs valuation, such as the WTO Agreement on Customs Valuation (WTO ACV) which establishes a set of guidelines and provisions for the determination of the Customs value. The ACV was primarily designed to foster trade globalization, facilitation, and security but does not include any guidance in the prevention of fraud.

YCA is facing increasing challenges in the execution of their mission to primarily secure revenue, prevent capital flight, and facilitate legitimate trade. They have to make swift and accurate decisions regarding the value of consignments, either prior to Customs clearance or at the post-clearance stage. However, the frequent lack of information impede YCA from making reliable decisions and consequently, from collecting the correct duties and taxes.

The problem is further complicated by frequent high levels of fraud in goods valuation and tariff classification, both having a significant impact on revenue collection and capital flight.

As many other customs administrations worldwide, YCA is facing problems to determine the real value of the imported goods, which is the basis in the process of calculating customs duties, taxes, and other revenues. Therefore, the General Department of Value is extracting the statistical reports of imported and customs-treated goods for the previous year and analyzed those values to reach the volume of commercial activity and the volume and quantity of imported goods and goods, as well as the customs value of those goods from the statistical reality and the automated system reports.

According to the WTO Technical Information on Rules of Origin Rules is used:

• to implement measures and instruments of commercial policy such as anti-dumping duties and safeguard measures;
• to determine whether imported products shall receive most-favored-nation (MFN) treatment or preferential treatment;
• for the purpose of trade statistics;
• for the application of labeling and marking requirements; and
• for government procurement

According to the WCO international recommendations, the following products shall be considered wholly obtained/originated in the country of export:

(a)   mineral products drawn out directly from their land or their sea bottom;

(b)   vegetal products picked up in that country;

(c)   life animals born and raised in that country – verification should be verified through veterinary documents on registration of borne animal;

(d)   products generated from life animals raised in that country;

(e)   products generated from hunting or fishing performed in that country;

(f)    products from sea fishing and other products taken out of the sea outside of territorial waters of that country with their vessels;

(g)   products made on their boats-plants exclusively for products listed under point  (f) of this article

(h)   collected used objects in that country, available only for recycling of raw materials;

(i)    waste material and remains from the manufacture operations performed in that country;

(j)    products are taken out from the sea bottom or the territory under it outside of the territorial waters, on the condition that the country in question possesses exclusive rights for exploitation of the sea bottom or the territory under it;

(k)   goods produced in that country only from the products listed under points (а) to (i) of this stand.

From this definition, it can be concluded that the products may be considered as “wholly obtained products” if not a single material originating from a third country has been used. In this process, materials originating from the Republic of Yemen may be used, on the condition, these materials should not contain materials (components) originating from third countries.

Origin of goods for exportation form Yemen

According to the Yemen Customs Code, article 38, the value declared in export is the value of the goods at the time of registering the customs declaration to which are added all costs until the goods leave the frontiers. Such value does not include:

• Fees and taxes imposed on exports
• Internal fees and taxes and production taxes and others that are refunded upon export

Distinguishing Elements of Goods related to Origin – YCA Customs Code

 Article (32): The origin of goods is the country of their production, and the source of goods is the country from which these have been imported directly.

 Article (33): Imported goods are subject to establishing origin. A resolution of the minister concerned shall determine the conditions for establishing the origin and the cases of exemption from establishing such origin.

 Article (34): Goods imported from other than the country of origin after being placed for consumption in that country shall have applied to them the tariff of the country of origin or the country of source, whichever is higher.

If the goods have had manufacture added to it in other than the country of origin then it shall be subject to the tariff applied to the country of origin or the country of manufacture according to the degree of manufacture and in accordance with rules established by the resolution of the competent minister based on the proposal of the Chairman of the Authority.

Article (35):

(a) Resolutions on symmetry and itemization of goods for which there is no mention in the tariffs schedule shall be issued by the Chairman of the Authority in accordance with the rules appearing in such schedule, and these resolutions shall be published in the Official Gazette.

 (b) With due regard for the interpretive clarifications of tariffs issued by the League of Arab States additional clarifications of customs tariffs and their conditions of application shall be issued by the Chairman of the Authority by resolutions in which he shall determine commencement of implementation, and these shall be published in the Official Gazette.

 Article (36):The value that must be declared in imports for the condition of consumption and for conditions in abeyance for duties is the ordinary value of the goods, and this shall be determined according to the following fundamentals:-

1. For determination of this value, the time of recording the declaration at the customs center shall be taken into account.
2. It is presumed that the goods have been handed over to the purchaser at the place of its entry at the frontiers.
3. It is presumed that the seller has incorporated in the value all that has been expended on its sale and handing over at the place of entry at the frontiers.
4. Costs of transportation within the country and the fees and taxes required on the goods after their being entered do not fall within the concept of ordinary value.
5. It is presumed that the sale took place in a free competitive market between a purchaser and seller independent of each other, whereby:
6. The payment of the price by the purchaser is his sole real obligation to the seller.
7. The agreed-upon price is not influenced by commercial, financial, or other relations between the seller and/or his partner on the one hand and the purchaser and/or his partner on the other hand, save for relations arising out of the sale itself, be such relations contractual or otherwise.
8. Neither the seller nor his partner, be they natural persons or body corporates and whether in a direct or indirect manner shall have revert to them any part of the outcome of the sale of the goods subsequently or its relinquishment or use.

 Partners in the business are any two persons one of whom has an interest in the trade of the other or both have a common interest in some trade or a third person has an interest in the trade of each of them, whether these two persons are bodies corporate or incorporate.

• If the goods are manufactured in accordance with a patented invention or model or bearing a foreign trade or manufacture mark, then the ordinary value must include the value of the right to use such invention, design, model, manufacture mark or trademark of such goods.

The Customs Department shall have the right when required, to increase the declared value in a manner making it appropriate to the real value and in accordance with the provisions of this article.

 When the value of the goods is written in a foreign currency it must be exchanged into the local currency on the basis of the exchange rate set by the Central Bank and notified to the Customs Authority.

 Article (37): In principle, each declaration must be accompanied by an original invoice endorsed by the chamber of commerce or any other body accepted by the Customs Authority and which establishes the correctness of the prices and origin. Such lists must also be endorsed by the consular missions when present in the city from which they are issued: The Customs Department has the right to demand documents, contracts, correspondence, etc. related to the transaction without being limited by their contents or by the lists themselves and without there being any limitation of the powers of assessment granted to it. The Customs Authority has the right to accept two separate documents to establish origin and value.

 Article (38): The value declared in export is the value of the goods at the time of registering the customs declaration to which are added all costs until the goods leave the frontiers. Such value does not include:

• Fees and taxes imposed on exports.
• Internal fees and taxes and production taxes and others that are refunded upon export.

The Customs Procedures with Economic Impact are:

• The horizontal provisions applicable to all special procedures
• The special procedure Storage: customs warehousing and free zone
• The special procedure-specific Use: temporary admission and end-use
• The special procedure Processing: inward processing and outward processing

Except for free zone, goods placed under a special procedure must be covered by a guarantee.

Placing and discharging goods under a special procedure involves the following stages:

Storage Procedures

Customs Warehouse

Customs Warehouse is a way to delay the payment of import duty, tax, and excise on imported goods for a certain period, covered by the guarantee management system. In many countries, the practice is to allow importer and exporter to store the goods under customs supervision in authorized Public/Private Customs Warehouses. The goods can be stored in the Customs Warehouse until they are released to free circulation, re-exported, or entered to another customs procedure like procedures with economic impact – inward processing (explained later in this page) with a specific timeframe for the traders to keep the goods in the Customs Warehouse.

There are numerous advantages to allow traders to store the good under YCA supervision – Customs Warehouse;

• No duty payment required, Customs Warehouse is the secure location where the goods are stored without the trader  having to pay duty;
• The storage time can be up to one year (for a certain type of goods) and extended upon request of the trader to extend the storage time (one year);
• The high-risk goods (example with excise duty – tobacco products, alcoholic beverages, etc.)  are under the customs surveillance;
• 100 % coverage of the customs duties, Tax, and excise with bank guarantee, issued by the trader or by the public/private Customs Warehouse.

Yemen Legal Basis for Customs Warehouse

According to the Article 102 – 105 (A- General Provisions) of the Yemen Customs Law No 14/1990, goods may be deposited in warehouses without the payment of duties and taxes in accordance with the provisions of this section.

Such warehouses shall be of three types:

1. Genuine (explained articles 106 – 114)
2. Special (explained articles 115 – 121)
3. Pseudo (explained articles 122 – 125)

Free zone

Free zones are special enclosed areas within the customs territory of Yemen. Goods placed within these areas are considered to be under the free zone procedure and are, therefore, free of import duties, VAT, and other import charges.

To take the goods out of the free zone you either have to follow:

• the (re-)export formalities when taking the goods out of the customs territory of Yemen, or
• the formalities regarding entering goods into the customs territory of Yemen when bringing the goods to another customs procedure

Specific use

Temporary Admission

Temporary Admission is a customs procedure under which certain goods can be brought into a Yemen conditionally relieved totally or partially from payment of import duties and taxes; such goods must be imported for a specific purpose and must be intended for re-exportation within a specified period and without having undergone any change except normal depreciation due to the use made of them.

YCA should approve the maximum limit for which goods can be placed under temporary admission, depending on the nature of the goods.

End-Use

End-use means use or process-specific non-Yemeni goods released for free circulation in a specific way within a specific period to grant a duty exemption or a lower duty for a specific end-use (e.g. processing of fish into food preparation). If these conditions are not met, the normal duty becomes payable.

Processing procedure

Inward processing

Inward processing means to import non-Union goods into the customs territory of the Union and to process these goods under duty and tax suspension with a view to:

• re-export the processed products (and thus avoid duty)
• release the processed products for free circulation (and thus pay lower duty)
• release the waste of the processed products (and thus pay lower duty)

Under this procedure, the non-Yemeni goods remain non-Yemeni goods. YCA specifies the period within which the inward processing is to be discharged.

Outward processing

Outward processing means to take Yemeni goods outside the customs territory of Yemen and to process these goods with a view to benefiting from a lower, or no duty when the goods are released for free circulation on re-importation into Yemen. These duties are calculated on the added value of the processed goods, that is, the processing costs and not the value of the processed product.

No duty is due on re-importation where the goods are repaired free of charge or defective goods are replaced. Under this procedure, the Yemeni goods keep proof of Yemeni status while being processed.

The YCA specifies the period within which the outward processing procedure is to be discharged.

There are three types of situations in which outward processing apply to repaired goods:

• Goods repaired free of charge
• Standard exchange system
• Prior import of replacement product

This section will provide access to a searchable Comprehensive Integrated Tariff System (CITS) showing import duties and taxes and applicable NTBs, TBT, and SPS measures, processing fees, and responsible authorities.

This section provides a facility for determining customs dues (duties and taxes) by using the HS Code and country of origin.