Customs Duty Evasion: Consequences and Suggestions: The GCC Countries Perspective

Abstract

Customs duty has existed in Gulf Countries for over a century. In 2002, it took its institutional form by implementing the Gulf Cooperation Council (GCC) Common Customs Law. Since then, customs duty evasion has been a problem for GCC governments and companies. Customs authorities continuously audit and eliminate such illegal activities by imposing penalties and taking necessary actions within the provisions of the law. This article highlights various customs offences, including false origin, incorrect tariff classification, under-declaration of customs valuation, and lack of inventory reconciliation leading toward smuggling. The article also highlights the consequences faced by businesses involved in such illegal activities. To combat and eliminate these offences during import/export procedures, the paper proposes some suggestions to companies, which will eventually help them avoid the administrative burden and financial and reputational loss resulting from such frauds. Customs duty evasion, Penalties, Smuggling, Origin, Valuation, Tariff Classification, Inventory reconciliation, Voluntary disclosure, GCC countries