RAS AL KHAIMAH CUSTOMS: FACILITATING TRADE FIRST PRIORITY

C O N F I D E N T I A L DUBAI 000103 SIPDIS SIPDIS ABU DHABI: ALSO FOR USDAO E.O. 12958: DECL: 2/7/2017 TAGS: PGOV PREL ETRD ECON IR AE SUBJECT: RAS AL KHAIMAH CUSTOMS: FACILITATING TRADE FIRST PRIORITY CLASSIFIED BY: Paul R Sutphin, Consul General, Dubai, UAE. REASON: 1.4 (b) 1.(C) Summary: On January 30, PolEconoffs met with Mohammad Al Mehrizi, General Director of Customs and Port Department for the emirate of Ras al Khaimah. RAK Customs has approximately 100 officers -- with hopes to hire another 32 in the next year -- manning seven locations across the emirate. Customs' primary objective is collecting tariffs, although Mehrizi noted RAK Customs does offer incentives to reduce the tariff impact and attract business to its ports. RAK Customs officers train with Dubai Customs and some have traveled to Cairo for training. Mehrizi welcomed IPR training and hoped to be able to send officers to upcoming US Patent and Trademark Office training in Virginia. Ras al Khaimah no longer operates small ferries to Iran, but hopes to begin new service late this year. End Summary 2.(SBU) RAK Customs is located near RAK Port in a mixed-use commercial building. Mehrizi told PolEconoffs a dedicated headquarters is being built and will be ready next year. He said RAK Customs officers are posted to seven locations: Saqr Port, RAK Port (RAK Creek),the main Post Office, RAK Airport, two RAK Free Zone locations, and Hamra Port. RAK Customs currently has 100 officers and Mehrizi hopes to hire another 32 in the next year. There are four cargo terminals and six bulk cargo berths in RAK. Saqr Port, located on the Gulf, is RAK's commercial seaport and has a 12 meter draft. It will open a 70,000 TEU container handling facility in March. RAK Port, south of Saqr Port on the emirate's creek, handles only bulk cargo -- mainly through dhow traffic. Hamra Port, located south of RAK Port, is an industrial port where stone and aggregate are loaded onto barges for off-shore projects. Plans call for Hamra Port to be converted into a yacht club once a nearby residential development is completed. Customs is opening a new land-entry point to Oman in six months near Wadi Bih. Comment: Currently there is a military post there but no ability to process entry to or exit from the UAE. End Comment. 3.(C) RAK Customs uses container scanners and narcotics dogs to inspect shipments, but its primary role is collecting a federally mandated five percent tariff. Mehrizi candidly spoke about the practice of offering incentives -- such as reduced or waived berthing fees, processing fees, etc. -- to lower the impact of the tariff and attract business. Mehrizi noted that items that receive 20 percent or more added value in the Emirates must pay tariff on the entire value of the item. 4.(SBU) Similar to other northern emirate customs organizations, Mehrizi said RAK Customs officers train with Dubai Customs and some have traveled to Cairo for training. Mehrizi welcomed IPR training and hoped to be able to send some officers to upcoming US Patent and Trademark Office training in Virginia. He noted that most of his officers have at least a college or technical degree and a working knowledge of English. 5.(SBU) Mehrizi said RAK sold its small passenger ferries that used to operate service to Iran, sailing out of RAK Port. There is currently no ferry service between RAK and Iran. Next month Mehrizi is going to Norway to finalize an agreement for two new 330 passenger ferries with hopes to begin operations late this year. The new ferries, also sailing out of RAK Port, will operate a line to the Iranian ports of Kish, Qeshm and Bander Abbas and a regional line to Karachi and Bombay. 6.(C) Comment: RAK is a small emirate with big ambitions, and as such is seeking to increase its attractiveness as a business and shipping location; Customs there is more oriented toward generating revenue and facilitating business than law enforcement. RAK's de facto ruler, Crown Prince Sheikh Saud al Qassimi, is smart, western-oriented, and has ambitions to push his sparsely populated emirate (population: 197,571 according to the 2005 census) toward Dubai-like growth. He has had some successes, including attracting a 165 million USD float glass plant now nearing completion by the large, private held US company Guardian Glass. Other potential projects, such as the Sheikh Saud's ambition to host a commercial spaceport in RAK, are much more in the category of wishes rather than plans. SUTPHIN