Andersen

24/8/2021

Products of national origin promote the development of local content as they go with Vision 2030

The decision also contributes to the development of the national economy and enhances the use of government purchasing power and its orientation towards local products and services, which will open up a wide range of opportunities for the private sector to enhance and develop its local production capacity.

Products of national origin enjoy preferential customs treatment among GCC countries

The aim of acquiring the status of national origin is for local products acquired to that status to enjoy preferential  tariffs between the GCC countries and therefore require that the value added (local components, whether materials or services)be not less than 40%, and that the local enterprise adhere to a settlement rate for national  employment at least 25%,noting that the decision was flexible in this regard, making the relationship between the realization of these two conditions reversible, for example, if the added value achieved is 30%, it is The establishment may compensate for this 10% shortage of the local component by increasing the rate of settlement to national employment to 35%  or vice versa if the settlement rate for national employment is 15%, the establishment may compensate for the shortfall of  10% by increasing the value added ratio to 50% instead of 40% and there is no doubt that this flexibility in applying the conditions gives the national establishment sufficient space to achieve the conditions stipulated in the system without effort or hardship in accordance with its financial and economic conditions.

The requirements for the product to acquire the national origin give the national enterprise sufficient space to acquire the status of national origin in accordance with its financial and economic conditions.

The most important conditions for acquiring national origin are value added as the difference between the final value of locally produced goods up to the end of manufacturing, less the value of imported materials (of external origin) involved in the production process, and the final value of the goods produced is calculated on the basis of the price of the product delivering the plant door, less customs duties or local production fees that have been imposed on their production inputs.

Insufficient processes to give the product to the national origin label

There are processes that are considered insufficient to give national origin status such as: keeping products in good condition during transport, cleaning, dust removal, arrangement, and classification, peeling grains and bleaching, packaging, packaging, pasting marks and brands, assembly, and dismantling, etc….

 If the commodity acquires national origin in more than one Gulf state, it has the status of national origin of the state when the added value achieved in that country is greater than the added value achieved by the other state.

There is no doubt that the decision with the above features will contribute to stimulating the investment environment in the Kingdom in various industries and directly influencing employment in the economic sector.