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