Kuwait Ongoing matters of concern for business include Kuwait tax regulations, less than transparent regulations pertaining to industrial standards, highly bureaucratic application procedures, intellectual property rights protection, and less than transparent public contracting and procurement procedures 1 . Imports - Require ments Licensing Requirements for Commercial Activities - Joint Ventures & Agent Requirements Agent Requirements Commercial Law 36 of 1964, as amended by Commercial Law 68 of 1980, governs the establishing of a business or business relationship in the State of Kuwait. Under the above provisions, a foreign firm (including a partnership) may not establish a branch and may not perform any commercial activities in the country except through a Kuwaiti agent. Foreign and U.S. firms seeking a presence in the Kuwait market may do so utilizing commercial agents, distributors or service agents. Both agents and, if possible, their principals, should periodically visit existing and new customers since the importance of personal contact in Kuwait cannot be overemphasized. Foreign companies cannot sell directly to the Government nor participate in public tenders except through a local agent. In the oil sector, for instance, supplying companies should be approved by an internal committee and placed on a list of „pre-approved‟ companies. For major projects, international companies are usually invited to pre-qualify. Licensing Requirements for Comme rcial Activities – Joint Ventures In order to establish a business in Kuwait, the Kuwaiti firm or joint venture needs to apply for a business license issued by the Ministry of Commerce and Industry. Application documentation must be in Arabic. For special commercial activities such as telecommunications, health services, pharmaceuticals etc. the relevant ministry, department or regulatory agency may require other certificates or licenses. Given that all government procurement must be conducted with Kuwaiti citizens or firms and given that only Kuwaiti companies may be licensed in Kuwait, the 1 US Country Co mmercial Gu ide fo r Kuwait joint venture model is a good vehicle in order to enter and maintain a long-term presence in Kuwait. Import Regulations The residents of non Kuwaiti origin and companies having 100% foreign capital participation do not have authorization to import for purposes of marketing / selling in that country. Non Kuwaiti inhabitants and 100% foreign capital companies are not allowed to import for commercial purposes. Import Licenses Importers must obtain an annual import license from the Ministry of Commerce and Industry and must be registered with the Ministry of Commerce and Industry and the Kuwait Chamber of Commerce and Industry. Licenses are valid for one year and allow for multiple shipments. Kuwait requires a special import license for firearms. Import licenses for industrial machinery and spares are also required. Licenses are issued by the Industrial Development Commission of the Ministry of Commerce and Industry. Specific licenses are also issued from various ministries and agencies for products including firearms, explosives, drugs/pharmaceuticals, and wild/exotic animals. Though not a trade barrier, the State of Kuwait prohibits products including pork, pork products, alcoholic beverages, products containing alcoho lic beverages, gambling machines, and pornographic materials. Recorder appliances may be imported subject to a special license from the Ministry of Information. Wireless appliances telephones, fax switch boards, radios, computers, fax machines, modems, mobile telephones and specific corded telephones require a special licence from the Ministry of Communication. Children toys containing components similar to foodstuffs, drinking water and fruit juices produced in Saudi Arabia or Bahrain, chocolate from Lebanon, food products including honey, tomato pasta and biscuits from Saudi Arabia, and herbal essences from Bahrain may be imported subject to special licences issued by the Kuwait Municipality. Import of diluted isopropyl and methyl alcohol as well as appliances which emanate electromagnetic X-ray require an approval from the Ministry of Health. All kinds of manufactured cigarettes and its components, pure tobacco and derivatives need a special licence from the Environment Protection Department. The Public Authority for Agricultural Affairs and Sea Resources has responsibility for issuing special licences for veterinary drugs and vaccinations, all kinds of provender used for poultry, stallions and cows for breeding, and animal products such as leather, hair, wool and bowels imported from outside the GCC, live sea species, horses, cats and dogs food. The Public Authority for Agricultural Affairs and Sea Resources is also responsible for authorizing imports of fruits and vegetables, wood, seeds and transplants Psychotropic and controlled substances for medical use, and medical equipment require a special licence from the Ministry of Public Health. The Ministry of Public Health also issues special import licences for all kind of brushes. Goods which bear some advertisement for propaganda in the originating country, special stickers showing the validity of food products, and empty bags used for food products require a special licence from the Ministry of Commerce. Colour photocopying machines need a special import licence. Documentation Requirements Additional licenses or certificates may be required for various products. In Kuwait, the import clearing process has historically been time-consuming, requiring numerous transfers, large quantities of paperwork and numerous redundancies. However, the Customs Department is currently undergoing a major privatization effort, contracting with a private company to provide customs support services. Bill of Lading Requirements Given Kuwait‟s import license regime, the importer license holder‟s name must appear on the bill of lading. The importer must be a Kuwaiti national. Special Documents Required Certificate of Free Sale: Cosmetics, pharmaceuticals, and foodstuffs may require a certificate of free sale stating that the commodities in question are in free circulation in the country of export. Applicants should submit the label and complete formula of the pharmaceutical to be exported. Import Restrictions & Prohibitions Kuwait's economy is liberal. As per the regulation of imports, it is to be known that alcohol drinks, pork meat, gambling machines, subversive and pornographic periodicals and movies as well as goods relating to the Arab boycott towards Israel are prohibited. Used medical equipment and automobiles over five years old cannot be imported. Kuwait Import Prohibitions Bearer Documents Corrosives Furs Gold (18k or Below) Ice, Dry Ice, Wet Liquor, Non-Haz Metals, Precious Micro Film Poisons (Toxics) Pornographic (Media) Powder Radioactives Silver Items offensive to Muslim culture. Items offensive to Kuwait Royal family, Kuwait politics, habits or traditions. Any media displaying the female anatomy. Jewelry, gold, precious metal, stones and silver (watches and articles of apparel or clothing containing these metals or stones) are prohibited inbound/outbound if valued over $1000 USD. Mobile and specific cordless telephones, black-cumin oil and products thereof, drain pipes and welded black steel pipes which measure from 6 to 48 inches except those from member countries of the GCC may not be imported. The following products are prohibited for human health protection reasons: chewing tobacco, insecticides, food products containing cyclamate substance in its ingredients, drinking water coolers which have cooling pipes inside the water tanks, asbestos products, magnetic equipment used for medical treatment and which is not based on a scientific source, anaesthetic substances, medical products containing oxpenistine and phenformin hydrochloride, pharmaceutical goods for vaginal uses, medical and industrial oxygen except that produced in member states of the GCC. Live chicken except one-day old may not be imported. Ring-necked parakeet or rose-ringed parakeet, all kinds of birds from Africa, monkeys and wild animals may not be imported for wildlife protection reasons. All kinds of gas cylinders, and regulators except those imported by Kuwait Oil Tanker Company (KOTC) are prohibited. The importation of small buggies is prohibited as well as motor vehicles older than five years. Components for fireworks, arms and ammunition, uniforms similar to military uniforms, related medals and all kinds of ready- made garments resembling police uniforms are prohibited. As a member of the League of Arab States, Kuwait applies the different degrees of the embargo decreed by this institution in 1954 as amended with regard to products originating in Israel. Candy shaped as cigarettes and kept in boxes similar to those of cigarettes may not be imported. Chemical tearful components with awful smells which are sold in markets for fun articles are prohibited. Various items may not be imported for religious reasons. These include alcoholic beverages, non-alcoholic beverages similar to beer, and alcoholic vanilla solution. General Import Restrictions The following items are not acceptable for carriage to any international destinations unless otherwise indicated. (Additional restrictions may apply depending on destination. Various regulatory clearances in addition to customs clearance may be required for certain commodities, thereby extending the transit time.) APO/FPO addresses. C.O.D. shipments. Human corpses, human organs or body parts, human and animal embryos, or cremated or disinterred human remains. Explosives (Class 1.4 explosives are acceptable for carriage to Canada, Germany, Japan, United Arab Emirates and United Kingdom. Note: United Arab Emirates only allows Class 1.4 explosives to be shipped hold- for- pick- up to the FedEx Express facility in Dubai.) Firearms, weaponry, and their parts (acceptable between the U.S. and Puerto Rico). Perishable foodstuffs and foods and beverages requiring refrigeration or other environmental control. Live animals (including insects) except via our Live Anima l Desk (1.800.405.9052). Plants and plant material, including cut flowers (cut flowers are acceptable from the U.S. to selected points in Canada and from Colombia and Ecuador to the U.S.). Lottery tickets and gambling devices where prohibited by local, state, provincial or national law. Money (coins, cash, currency, paper money and negotiable instruments equivalent to cash such as endorsed stocks, bonds and cash letters). Collectible coins and stamps. Pornography. Hazardous waste, including, but not limited to, used hypodermic needles or syringes or other medical waste. Shipments that may cause damage to, or delay of, equipment, personnel or other shipments. Shipments that require any special license or permit for transportation, importation or exportation. Shipments whose carriage, importation or exportation is prohibited by any law, statute or regulation. Shipments with a declared value for customs in excess of that permitted for a specific destination. Dangerous goods except as permitted under the Dangerous Goods section of these terms and conditions. Dead animals (including insects) or animals that have been mounted. Packages that are wet, leaking or emit an odor of any kind. Shipments moving into or out of Foreign Trade Zones or bonded warehouses Shipments destined to or being withdrawn from a Foreign Trade Zone. Shipments being processed under: Duty drawback claims unless advance arrangements are made. Temporary Import Bonds - acceptable under the FedEx International Broker Select option, for initial import only. U.S. State Department licenses. Carnets. U.S. Drug Enforcement Administration export permit. Letters of Credit (however, shipments covered by a Letter of Credit calling for a "Courier Receipt" as defined by Article 29 of UCP 500 may move via FedEx International Priority). Certificate of Registration shipments (CF4455). Standards & other Technical Requirements 1. Standards, Testing & Certification The Government of Kuwait, per its notification to the World Trade Organization‟s Committee on Technical Barriers to Trade, eliminated pre-shipment standards inspection under the International Conformity Certification Program (ICCP) and is currently working with the Gulf Cooperation Council Standards Organization (Riyadh) to develop a region wide standards regime to replace the ICCP. Standards in Kuwait are governed by the Standards and Metrology Department of the Public Authority for Industry. All products must comply with the Kuwaiti standards (Kuwaiti standard specification, KSS). If there are not specific standards to be applied, then, the Gulf countries' standards must be established. Standards in Kuwait are governed by the Standards and Metrology Department of the Public Authority for Industry. Approximately 300 standards are currently being applied, with standards being potentially derived from U.S., EU, ISO and GCC standards to meet the needs of Kuwait. Kuwait has adopted several Gulf Cooperation Council standards, including that major white and brown household appliances can operate without a transformer at 240 V/50 Hz and that instruction manuals for durable goods and appliances be translated in Arabic. Kuwait strictly enforces government- mandated shelf life standards on 44 of 75 food products listed in Gulf Standard 150/1993, but recognizes the shelf- life established by manufacturers on all other food products. Shelf- life requirements for processed foods are far shorter than necessary to preserve freshness and result in processed U.S. goods being non-competitive with products shipped from countries geographically closer to Kuwait. Standards for medical, telecommunications and computer equipment tend to lag behind technological developments, with the result that government tenders frequently specify the purchase of obsolete, often more costly items. 2. Conformity Assessment In March 2003, Kuwait implemented an International Conformity Certification Program (ICCP) requiring that covered products be tested and certified by a single private company before being exported to Kuwait. The program applied to imports of: (1) household appliances and electronics; (2) new and used cars and vehicles; (3) chemicals, including motor oil and paint; (4) building materials, including cement, gypsum and bricks; and (5) paper and plastic items. A certificate of origin is required for all imports. Certificates of origin shall be attested by the appropriate chamber of commerce. Food products require a health certificate. The standards used are based on the World Health Organization and the Food and Agriculture Organization (WHO/FAO) Codex Alimentarius recommendations. Kuwait has some very specific regulations which restrict the import of food products based on the expiry date and age of the products relative to its production date. Medical and industrial oxygen imported from member states of the GCC require a certificate of quality from the Gulf Specification Authority or an approved international certificate of origin. Animals imported into Kuwait require a veterinary health certificate. Plants and plant products imported from non- member countries of the GCC require a health certificate under art. 2 of the decree No. 9/1985. Imported tyres require an examination certificate from the country of origin. Pork tissues or lard are not permitted in formulated products. Cigarettes and tobacco products must bear a warning against the health damages of tobacco. Kuwait strictly enforces labeling requirements. All food products must carry a label in Arabic or English/Arabic stating the name of the manufacturer, the brand name and the name of the product, a list of ingredients and additives, net and gros weight in metric units, country of origin and its production and expiry dates. All fats and oils used as ingredients must be specifically identified on the label. All imported meat and poultry products require a health certificate from the country of origin and a halal slaughter certificate issued by an approved Islamic centre in the country of origin. Tinned meat and poultry must carry a label indicating that the goods have been produced in conformity with Islamic way of slaughtering animals. In conformity with the resolution No. 167 of 1989, pharmaceutical products must be registered with the Drug Control & Registration Administration. Veterinary medical products must be registered in accordance with the decree No. 146/1989. The United States and other WTO Members raised concerns about the ICCP bilaterally and during meetings of the WTO Technical Barriers to Trade Committee. In November 2004, the PAI (Public Authority for Industry) indicated that it would introduce changes to the ICCP and transition to a new Kuwait Conformity Assessment Scheme (KUCAS). The KUCAS does not appear to differ substantially from the ICCP. The United States is evaluating the impact of KUCAS in order to determine whether it has alleviated previous concerns. 3. Labeling and Marking Requirements A. Labeling Labels stating the country of origin must be shown on all imported goods in such a manner that it cannot be removed or altered. The information appearing on the label must conform to the information listed in the shipping documentation. If it were impossible to label a product i.e. a piece of fruit, a label affixed to the package, container or can would be sufficient. If the product contains components from more than one country, the percentage of each countries components to the overall finished product should be noted. B. Special Labels Pharmaceuticals: Pharmaceutical products must be labeled with the batch or lot number, production date, expiration date, content description, storage information, usage information, indications and contra indications for use, and reference to the pharmacopoeia standards used. Food Products: Labels must show the product and brand name; origin of any animal fats; batch number; ingredients in descending order of proportion; additives; net contents in metric units; date of production; date of expiration; name and address of manufacturer/packer; country of origin storage/preparation/handling instructions; and nutritional information where applicable (U.S. nutrition labels would be generally accepted). All meat and poultry products would need to be labeled that the product was slaughtered in accordance with Islamic Law. Information must be in Arabic, however multi- lingual labels are acceptable. C. Marking The outside marking on each package or container should identify the name of the shipper, the name and address of the consignee, the weight of the package, the number of the package if shipped as a part of a bulk shipment, and the country of origin. If products are of U.S. origin, “Made in the U.S.A.” should be clearly marked on the package. Government Procurement Kuwait is neither a signatory to nor an Observer at the WTO agreement on government procurement. There is a 10 percent price preference on public contracts in favor of Kuwaiti businesses. If a contracting officer or authority determines that a local company meets the technical specifications per the request for proposal, and though the bid price may be higher (within 10 percent), the local company may be awarded the public contract. In 2004, the Council of Ministers agreed to increase this price advantage to 15 percent. However, implementation of this increase will require amendment of the GCC countries‟ unified agreement, which has not yet occurred. Government Procurement Requirements Law Number 37 of 1964 (Articles 43 and 44) specifies the use of local products when available and prescribes a 15 percent price advantage for local firms in government tenders.