UAE begins enforcing import document authentication

The UAE yesterday began enforcing a fee to authenticate import documents locally. The fee ranges from Dh100 to Dh2,000 — or a maximum of one per cent, which, when added to the four per cent import duty, brings the total import cost to five per cent. On instructions from the Ministry of Finance and Industry, banks have been asked by the Central Bank to release import documents to traders only after the collection of the authentication fees. The instructions are effective from yesterday. The revenues collected are to go towards maintaining UAE missions abroad.

Yesterday, a couple of firms were charged by banks even for goods which would not touch UAE ports, but for which the letters of credit (LC) were opened in Dubai. "We were informed of goods which were proceeding directly from the country of manufacture to Poland and Hamburg. But the local traders were charged by the banks as the LCs for these goods were opened in Dubai," said Ashok Sawlani, honorary secretary of the Textile Merchants Group (Texmas).

Bankers said the import authentication fee has existed for some time. Importers had to get imports authenticated by authorised diplomatic offices (mainly GCC embassies and consulates) abroad. However, this was not strictly enforced. Almost no trader paid the fee at missions abroad. "Now what has happened is that the banks will charge at source the authentication fee if they process any import document," said a consumer electronics importer.

The move to get the banks involved in this way was sudden, Sawlani said. "If we had been informed earlier, we would have made arrangements to see whether we should pay or our suppliers, or whether it is cheaper to pay here or abroad, or should the burden of these extra tariffs be part of our costing. This sudden imposition has taken us by surprise. We had not budgeted for these extra expenses in this year's planning, and with already thin margins, this will have an adverse impact," he said.