VI. Trade Regulations and Standards Tariffs and Import Taxes Most imports into Jordan are subject to tariffs and import taxes, although industrial raw materials, as well as capital equipment imported by licensed industrial projects are exempt. Import tariffs range between 5-45 percent on most commodities. Tariffs on luxury items are higher, ranging between 60-120 percent. Automobiles tariffs are 130-300 percent. All imports into Jordan, except those exempted by law or regulation, are subject to the following import duties, fees and taxes: A. Import tariff; B. Sales tax (7 percent; Certain imports subject to excise Taxes pay more than 10 percent); And C. Import taxes and fees (21.06 percent): 5 percent import license fees 6 percent uniform additional duties 6 percent university and municipal duties 3 percent additional tax (imports which are exempted From import duties pay 5 percent additional tax) 1 percent commercial centers duty .02 percent per thousand overtime fees .04 percent per thousand customs service duty Importers who do not present an import license may be Subject to a ten percent fine. This includes the five percent import license fee plus a five percent penalty. Importers who do not present a Certificate of Origin and an invoice may be fined two percent for each document. Importers who present a faulty Certificate of Origin are liable to a one percent fine. Those presenting invoices that show an error in the quantity shipped, whether a shortage or an excess, may be accused of smuggling and assessed fines and penalties equal to three times the value of the import duties due. Goods in transit are subject to a .02 percent per thousand customs service duty and a .01 percent per thousand overtime fee. The aggregate rates of import duties, taxes, fees and fines are multiplied by the customs-determined value of the imported goods to determine the total amount of tariffs and duties payable to the customs department. Customs Valuation Generally, customs valuation officers do not accept the value of imported goods as stated on the invoice and may add an additional percentage point to raise it to a level deemed appropriate. This is permitted by law, under the assumption that importers do not report the true value of their imports. The added amount is considered a penalty valued by the customs officer in percentage terms and payable by the importer. The exporter is expected to include in his sales price all expenses related to the sale and delivery of goods until arrival at the point of entry. Local agents estimate that, in general, up to 85 percent of the goods imported into Jordan are overvalued by customs. According to Article 39 of the Customs Law, the price of imports includes the right of the importer to use the patents, designs, forms, manufacturing marks and trademarks related to the product if it is manufactured according to a registered design and form or has a foreign manufacturing mark or a trademark. The customs law stipulates that the value of the goods, if stated in foreign currency, should be converted to dinars at the rate set by the Central Bank as of the date of the customs declaration. The absence of required import documentation gives the customs valuation officer the right to determine the value of the imported goods as he sees appropriate. Invoice or export discounts are not accepted by the customs department. If the exporter agrees to give a discount, he should consult the local importer to determine whether it should be granted directly or indirectly. Although it is legal, an "agent's discount" may not be accepted by the customs department. Import Licenses According to Import/Export Regulation No. 74 of 1993, an import license is not required except in specific cases. However the Minister of Industry and Trade has not yet issued instructions mandating that licenses be waived on goods imported by local businessmen. These instructions will have to be passed to the Department of Customs through the Minister of Finance. Until such time, the Customs Department will continue to require an import license at the clearing point. Export Controls The Import/Export Law No. 14 of 1993 and the Import/Export Regulation No. 74 of 1993 govern general export control issues. Enforcement of regular export controls is the responsibility of the Ministry of Finance/Customs and the Ministry of Industry and Trade. Under Jordanian law, the Ministry of Finance/Customs exercises direct control on goods cleared to enter and leave the kingdom. According to the Import/Export Law and Regulation, no export license is required for Jordanian-made products, transit goods, free trade zone goods, re-exports or goods entered under temporary status. However, while the law was passed more than seven months ago, the Minister of Industry and Trade has not issued the necessary instructions to implement it. For this reason, the Customs Department continues to demand an export application for all exports and re-exports from Jordan. Paperwork required includes the export application, the export declaration statement and all other commercial documents, including a detailed customs declaration. Import/Export Documentation According to Article 40 of the Customs Law, every customs declaration must include an attested Certificate of Origin issued by the concerned authority in the area of the exporter. Generally, the invoice must have an attestation from the Jordanian diplomatic mission where the goods originated. If there is no Jordanian consulate near the exporter, the certification of the local Chamber of Commerce is sufficient, subject to the approval of the Customs Department director. The buying price and origin of the goods must be stated on invoices and all other documents, along with shipping costs and freight charges, insurance and all other expenses. The Customs Department may accept an invoice and Certificate of Origin in one document if the required information is present. The Customs Department may request other documents related to the shipment as needed. All invoices should describe the imported goods in Arabic. The local importer must obtain an import license before his clearing agent completes the customs declaration, which provides all details relating to the value and type of goods, country of origin, method of shipment, details about the exporter and shipper, and the local consignee's name and address. The importer, or his clearing agent, should present a bill of lading with the declaration. The bill of lading is used by customs to verify the ownership of the goods. For goods in transit through Jordan, the local importer, or his clearing agent, must present a customs declaration issued by a neighboring country. Importing many products, such as foodstuffs, agricultural and animal products, satellite dishes and telephone equipment, require a special permit before the customs department will give its clearance. The permit is issued by the responsible Jordanian ministry or agency. For example, the Telecommunications Corporation (TIC) issues permits for importing satellite dishes and telephone equipment, the Civil Defense Department is responsible for fire-fighting equipment, and the TIC and security agencies issues permits for alarm equipment equipped with radiowave components. For foodstuffs, a laboratory report is required. A committee at the Aqaba and Amman customs centers, called "The Sampling Committee", must authorize laboratory testing. The committee includes representatives from the Ministries of Health, Supply, Agriculture, and the Department of Standards and Measures and Customs. According to customs officers, only the Aqaba customs laboratory is capable of verifying the type and composition of an imported product so that a customs tariff number can be assigned, according to the international harmonized coding system. Certain imports, such as precious metals and regular metals, can only be tested at the Aqaba customs laboratory. Temporary Entry Instructions covering temporary entry requirements for manufacturing and export purposes were issued in May 1994, and state that: A. A written request must be submitted to the Customs Department for the temporary entry of raw materials and intermediate goods necessary to manufacture products destined for either the local market or for export; B. Local factories registered with the Ministry of Industry and Trade and the Amman Chamber of Industry may apply for temporary entry approval; C. The period of temporary entry is granted for one year, renewable for another year pending approval and evaluation by customs, and; D. The manufacturer must submit a bank guarantee equal to the value of all tariffs, duties and fees on the materials cleared for entry. Labeling, Marking Requirements Local businessmen may only import products which comply with the labeling and marking requirements issued by the Department of Standards and Measures and responsible government ministries. Different requirements govern the imports of foodstuffs, medicines, chemicals and other consumer products. Jordanian importers are responsible for informing exporters of any applicable labeling and marking requirements. Prohibited Imports The Ministry of Supply bans imports of the following goods into Jordan: Wheat semolina, table salt, vegetable oil/hydrated palm oil, eggs, olive oil and bottled olives, Arabic-style sweets, bread and ice cream. However, the Ministry may grant permission for the private sector to export these products. Standards (ISO 9000 Usage) The Jordanian Standards and Measures Department is responsible for verifying that imported goods comply with Jordanian-issued standards. Until the end of 1993, the department issued 960 standards broken down into the following categories: Foodstuffs, 278; Chemicals, 289; Construction materials, 103; Textiles and paper, 109; And engineering and meteorology, 181. The department will become an independent, autonomous government corporation before the end of 1994 and may move forward in implementing the ISO 9000 quality-mark standards. The Royal Scientific Society, a government agency, carries out laboratory testing and product analysis to verify compliance with local standards. Free Trade Zones / Warehouses Goods may be shipped to the Jordanian Free Trade Zones by shipping agents and representatives of land transport and clearing firms. All shipping documentation must be submitted to the free zones within 72 hours and before shipments are unloaded. Jordanian and foreign investors are permitted equally to invest in trade, services, or storage facilities in the free zones. Transit goods entering the kingdom may be stored in warehouses at the port of Aqaba for up to one month; Beyond that, they must be stored in a free zone. The free zones investment regulation no. 43 of 1987 permits the entering, depositing and exporting of any Type of foreign goods from any origin without an import or export license. However, Entry of the following goods is prohibited: A. Goods originating from countries with which trading is banned; B. Drugs, except what is required by the local pharmaceutical industry, as determined by the ministry of health; C. Arms, munitions and explosives, except what is used in hunting, as determined by the security departments; D. Rotten or flammable goods, as defined by the board of directors of the free zones corporation; and, E. Radioactive materials, except what is permissible by the minister of energy and mineral resources. Special Import Provisions The Ministry of Supply has a monopoly over the import of the following food products: Sugar, rice, lentils, wheat, cigarettes, frozen chickens, olive oil, wheat flour, halibuna milk and complete frozen lambs. The Ministry must grant permission for importing and exporting the following products: Light and dark brown sugar in containers of not more than 500 grams, sugar for pharmaceutical manufacturing, cookies, tea, macaroni, noodles, animal fodder (barley, broken wheat articles and yellow corn), barley wheat for bread, yeast, butter, animal ghee, halawa tahina, yellow cheese, vegetable oil, fresh or frozen lamb and veal, livestock imported for farming or slaughtering, canned meat, fish, mortadella (cold cuts) of all types, edible cereals (chick peas and bruised and crushed wheat), all cow and sheep products, all flour derivatives, canned powdered milk, canned aerated water, long-grain rice, and yogurt. According to the Arab boycott of Israel law, Jordanian importers and exporters are prohibited from trading with Israeli companies or with foreign companies doing business with Israel. The government of Jordan continues to adhere to the boycott law and related regulations. Membership in Free Trade Arrangements Jordan is not a member in any regional or international free trade arrangement. It recently applied for membership in the General Agreement of Tariffs and Trade (GATT).