Barriers To Entry Saudi Arabia

SAUDI ARABIA
TRADE SUMMARY
The U.S. goods trade deficit with Saudi Arabia was $19.8 billion in 2010, up $8.6 billion from 2009. U.S.
goods exports in 2010 were $11.6 billion, up 7.4 percent from the previous year. Corresponding U.S.
imports from Saudi Arabia were $31.4 billion, up 42.5 percent. Saudi Arabia is currently the 22nd largest
export market for U.S. goods.
U.S. exports ofprivate commercial services (i.e., excluding military and government) to Saudi Arabia
were $4.0 billion in 2009 (latest data available), and U.S. imports were $503 million. Sales of services in
Saudi Arabia by majority U.S.-owned affiliates were not available in 2008 ($1.5 billion in 2007, latest
data available), while sales of services in the United States by majority Saudi Arabia-owned firmswere
$5.3 billion.
The stock of U.S. foreign direct investment (FDI) in Saudi Arabia was $8.1 billion in 2009 (latest data
available), up from $5.2 billion in 2008. U.S. FDI in Saudi Arabia is concentrated mostly in the nonbank
holding companies sector.
IMPORT POLICIES
Tariffs
As a member of the Gulf Cooperation Council (GCC), Saudi Arabia applies the GCC common external
tariff offive percent for most products, with a limited number of GCC-approved country specific
exceptions. Saudi Arabia‘s exceptions include 666 products that may be imported duty-free, including
aircraft and most livestock. Saudi Arabia applies a 12 percent tariff on 294 products, in some cases to
protect local industries. Certain textile imports are among the products to which the 12 percentrate
applies.
The vast majority of food products are subject to a five percent import duty. However, selected processed
food products are assessed higher import duties. Saudi Arabia ties import duties to the level of local
production of similar products. As a general rule, a maximum import tariff rate of 40 percent is applied
when local production of a food or agricultural productexceeds a self-sufficiency level. Currently, a 40
percent import duty rate applies to fresh, dried, and processed dates. Imports of rice, baby milk, and
animal feed are subsidized while coffee, tea, and fresh red meat enter the country duty free.
Confectionary products with cocoa and other bulk cocoa products are subject to a 15 percent tariff. Nine
types of fresh or chilled vegetables(tomatoes, onions, carrots, cucumbers, marrow, okra, watermelons,
melons, and potatoes) are subject to a 25 percent tariff on a seasonal basis. Saudi Arabia also imposes a
100 percent tariff on cigarette and other tobacco imports. According to the WTO, Saudi Arabia‘s simple
average applied tariff is 5.9 percent for agricultural goods and 4.7 percent for non-agricultural goods.
ImportProhibitions and Licensing
In Saudi Arabia, the importation of certain articles is either prohibited or requires special approval from
the appropriate authorities. The importation of alcohol, firearms, pork products, and used clothing is
prohibited. Imports of certain products, including agriculture seeds, live animals, books, periodicals,
audio or visual media, religious materials that donot adhere to the state-sanctioned version of Islam or
that relate to a religion other than Islam, chemicals and harmful materials, pharmaceutical products, wireless equipment, horses, radio-controlled model airplanes, products containing alcohol, natural
asphalt, and archaeological artifacts require special approval. Importation of some media products is
subject to censorship.Documentation Requirements
Some products, most notably agricultural biotechnology products, require a certificate authenticated by
the local chamber of commerce in the country of origin attesting to the product‘s fitness for human
consumption and to its sale in the country of origin.
GOVERNMENT PROCUREMENT
Several royal decrees apply to Saudi Arabia‘s government procurement. Under a 1983 decree,...