Bridging the Two Nations Through Trade and Shipping – UAE & Israel

Bridging the Two nations through Trade and Shipping - UAE & Israel

Trade Relationship

As per global perspectives and research, it estimated that the bilateral trade and investment between Israel and UAE as a result of the Abraham Accord would be more than $500m. Both nations are working to develop economic and diplomatic ties. However, advanced technological exchange and security partnership have caught the UAE’s attention. Israel may also share its expertise in water desalination and its recycling along with the technologies related to agriculture and manufacturing.

United Arab Emirates Advantage

The industry and market services in the free zones in the United Arab Emirates guarantee that both new businesses and start-up organizations expand their competition in the Middle East. Utilize the United Arab Emirates as their local centre and a passage to further GCC, Middle East and Africa.

Similarly, foreign companies are also offered 100% ownership in the mainland territory for organizations in some specific fields of the economy according to the new FDI law update. This list incorporates economic events across different areas including

  • Farming
  • Assembling

Along with

  • Medical care
  • Hospitality
  • Development
  • Training, among others.

The objective of this gesture is to fortify UAE’s vow to become the best option for foreign investment spots in the entire region.

Interesting Facts:

  • Dubai has the most significant concentration of regional headquarters for almost 70% of Fortune 500 organizations.
  • Dubai’s strategic position gives it an extraordinary favour with 2.4 Billion consumer direct access from the Middle East, Indian Sub and African markets.
  • Its strategic position also provides it with the ability to connect with 2/3 of the total population from Dubai in less than eight hours of flight distance.

Israel Advantage

Israel has an entrepreneurial spirit and a creative, highly educated, skilled, and diverse workforce. It is the leader in innovation in a variety of sectors, and many Israeli start-ups have American companies as their partners. Israel’s massive investments in education and research have led its people to spend in new businesses which have earned it the name of

Start-Up Nation

The workforce of Israel has some of the dynamic and diverse qualities including

Facts to know:

  • Israel nation that spends a massive amount of its budget in research and development at almost 4.8% of its GDP.
  • Israel has an exceptionally skilled workforce, especially in engineering and high technology.
  • The unemployment rate in Israel is very low as 4%
  • Reliable and stable private utilization was almost 55% of GDP as per reports from 2017
  • The high rate of rising in wages
  • The offshore natural gas discovery in 2013 has led the nation to lessen its energy reliance and make use of new improvement chances.

Which industry will it benefit & Who?

With the Abraham accord in action, people and organizations from the two nations will enable them to work together and do business together. They will permit them to make financial, business or some other kind of contracts and trade all kinds of items and goods.

The UAE’s ambassador to the US has named this arrangement as a success for diplomacy, which will prompt development and progress in the area. This change isn’t far. There will be bilateral deals between the two nations in the coming months especially in the following fields

  • Culture
  • Environment
  • Investment
  • Tourism
  • Telecommunications
  • Technology
  • Energy
  • Healthcare

Top Industries in UAE

UAE is hoping to expand investment in the production area from 11% to 25% of the overall GDP by 2025. Oil, gas is taken as the basis of the industrial sector of the Emirates, which contribute almost 33% of GDP. As of now, the United Arab Emirates is the third biggest producer of “dark gold” in the Gulf territory.

Almost 2.2 million barrels of oil for every day created in the nation. The total reserves of valuable fuel are around 200 billion barrels. At the same time, the storage of natural gas is about 5.6 billion cubic meters—most of the oil created in the Emirates of Abu Dhabi, Dubai and Sharjah.

Along with the other industrial sectors, a significant role in the economy of the UAE is played by the 

  • Energy sector 
  • Production of development materials and manufactured metals 
  • Water refining  
  • Textile industry 
  • Food handling industry

What set off the development of all these industries was the construction boom in UAE led by the construction of

  • Hotels 
  • Shopping malls  
  • Skyscrapers  

That needed a massive number of plastic pipes, vast loads of concrete, electrical hardware and different products. Similarly, another job was to facilitate the continually developing population with consumer items and food.

Top Import In UAE

Jewels and Precious Stones

Articles of JewelleryDiamond worked or not.Gold
5.54%4.6%11.8%

Motor Cars, Accessories and Aircrafts

Motor CarsVehicle PartsAircrafts
5.78%1.01%1.74%

Mineral fuels and Alloys

Petroleum from bituminous minerals other than crudePetroleum from bituminous minerals which are crudeCopper alloys
5.15%1.3%1.13%

Machinery, Computer Items

Telephone SetsAutomatic Data Processing MachinesTurbojets And Gas Turbines
7.95%2.32%1.5%
Top-Imports-in-UAE

Top Exports From UAE

Petroleum oils

Petroleum oils other than crude Petroleum oils which are crude 
25.2% 14.9% 

Electronics and Telephones

Telephones for cellular or wireless networks Automatic Data processing machines 
3.51% 0.83% 

Pearls, Jewels and Gold

Gold Articles of jewellery Diamonds whether or not worked 
6.3% 4.9% 4.11 
Top-Exports-from-UAE

Top Industries in Israel  

The top manufacturing export industries in Israel are 

  • Chemical substances and chemical products (CHM),  
  • Producing (OTM)  
  • Manufacturing computers  
  • Creating electronic items (CEQ).  

Compared to other Israeli enterprises, these industries have both high export ratio and import content of export. They are outlining of how exports and imports can go inseparably. Israel has a moderately high service content in its export as high as 62% despite a nearly little portion of direct investment spent in the service sector. 

Top Imports in Israel

Israel’s Top 5 Imports according to 2019 reports:

Top Imports in Israel
Percentage Worth Category Items 
7.75% $5.94 billion 2709 Petroleum oils and oils obtained from bituminous minerals, crude. 
6.62% $5.07 billion 8703 Motor cars and other motor vehicles principally designed for the transport of persons including station wagons and racing cars. 
6.14%  $4.7 billion 7102 Diamonds, whether or not worked, but not mounted or set.  
 
2.99% $2.29 billion 2710  petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils. 
2.73% $2.09 billion 8525 Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, 

Top Exports in Israel

Top Exports in Israel

Electronics and machines

Integrated circuits  Computers  Telephones  
7.8%  1.8%  2.9% 

Petroleum, jewellery and instruments

Refined petroleum Diamonds Measuring Instruments 
8.4% 6.8% 1.9% 

Chemicals and Drugs

Packaged medication Potassium fertilizer Mixed Minerals 
9.2% 1.9% 1.1% 

Trade & Shipping Brings Closer UAE and Israel

Sea Routes between UAE and Israel:

Following list indicates the major port links between the two nations.

Major Ports in Israel  Major Ports in UAE   
Port of Haifa in Haifa City   Jebel Ali in Dubai City  
Port of Ashdod in Ashdod City  Port Khalid in Sharjah City  
Port of Eilat in Eilat City  Khorfakkan Port in Sharjah City  
  Khalifa Port in Abu Dhabi City  
  Saqr Port in Ras Al Khaimah City 
  Ajman Port in Ajman City  
  Fujairah Port in Fujairah City  
  Umm Al Quwain Port in Umm Al Quwain City  

As the normalization deal set off, many organizations are looking for discovering direct Container routes from Dubai to Israel. The big businesses are teaming up to explore ocean shipping links between the two nations. Dubai’s DP World and Israel’s Dover Tower are making a direct shipping link from Dubai’s Jebel Ali to Eilat to promote worldwide exchange and encourage their clients to work together effectively and productively.

Airway Route for Cargo Flight between UAE & Israel

Air cargo is the fastest way to deliver items. Your shipment from UAE to Israel can be delivered by freighter planes in just a matter of a few hours. As indicated by research, Dubai is likely to benefit the most in the aviation field from this historic agreement. Dubai will encounter an expanding number of sightseers and travellers. This will empower the Gulf to bounce back from the Covid crisis that has decreased air traffic.

Also, as Dubai viewed as the door into the Middle East and Africa, it will be a fascination and a preferred destination for various organizations from

Israel to export their items to various nations. Numerous aircraft, including Israir, has already taken consents to land in UAE, which has opened possibilities to new flight courses.

Major Airports in Israel   Major Airports in UAE   
TLV – Ben Gurion Airport  DXB – Dubai International Airport  
HFA – Haifa Airport  DWC- Dubai World Central Airport  
ETM – Ramon International (aka Eilat-Ramon Airport)  AUH – Abu Dhabi Airport  
 Abu Dhabi Midfield Airport  
 SHJ – Sharjah international Airport  

Customs Laws of Countries  

Customs and Import in UAE  

Procedure Of Calculating Custom Duties 

The customs office is liable for enabling global trade by approving and permitting the products to enter the nation. 

Customs Department is likewise liable for gathering charges and demands:  

  • Import declaration charges  
  • Petroleum development charges  
  • The foreign engine license fee 
  • Sugar charges  
  • Green crop development charges  
  • Revenue stamps 

There is certainly not a single norm for the use of application rates on imported items in UAE. The rates may cost from 0-100%. A few products might exclude from any sort of obligation; they may incorporate these:  

  • Products entering the Duty-Free storage zone at port Rashid in Dubai  
  • Products imported to the Free Zones 

While for some goods the duty is calculated at 5 % of the CIF value imported into the Mainland. The CIF value is the cost, insurance and Freight Value of the goods. This custom duty of 5% applies to all the dutiable goods other than the following products: 

Tobacco

Tobacco has a 100% duty rate applied to it, and the duty is gathered either according to the value or the quantity of those items whatever is higher.

Alcohol

70% duty rate applies to Alcohol.

Sample and Customs Duty Exemptions

Any parcel or items imported under Courier Category with worth less than 1000 AED and under 250 kgs won’t have tax or duties.

Likewise, Raw material imported under the Industrial license based in the mainland are permitted to get crude material at 0% tax but the approval from Ministry of Finance is mandatory

Import Documentation

Organizations and Individuals:

  • Receipt  
  • Packing lists  
  • Certificate of Origin  
  • Delivery request  
  • Bill of Lading/Airway bill  
    • License for restricted items for Mainland 

Forbidden and Restricted Goods

There are some products that are prohibited from the UAE for import. Usually, the products that are undermining or dangerous for society, the wellbeing of people, climate, wildlife or security of the state are included in the prohibition list. These restricted products are the ones that are banned under the Common Customs Law or the law of the state. The products are limited under the Common Customs Law or under any law of the state and can be permitted in the state only by the approval of the concerned authorities.

A list of banned and restricted items for Expo Dubai 2020 has declared that it has referred to the following things.

Banned items  

  • Drugs including mind-modifying hallucinogens 
  • Obscene materials
  • Fake things
  • Cultural artefacts and different objects of social significance, for example, real inscriptions, prints, and lithographs. But they should be approved endorsed by the applicable authorities to stop unlawful trade
  • Gambling-related things, for example, lottery tickets and machines
  • Three-layered fishing nets
  • Utilized, altered, or trimmed tires
  • Materials or substances that are exposed to radiation
  • Homemade food

Restricted 

The table below indicates some restricting authorities and respective goods categories: ​​​​​​​​

Controlling Authorities Goods Categories 
Ministry Of Climate Change & Environment Live animals, plants, fertilizers and insecticides 
Ministry Of Defence / Armed Forces / Ministry of Interior Ministry Of Defence / Armed Forces / Ministry of Interior Arms, ammunitions, explosives, and fireworks 
Ministry Of Health & Prevention Pharmaceutical products and Medical/ Surgical instruments and machines 
National Media Council Print materials, publications, and media products 
Federal Authority for Nuclear Regulation Nuclear energy-related products 
Emirates Authority for Standardization and Metrology New tires 
Telecommunications Regulatory Authority Transmitters and radio equipment 
Dubai Police Alcoholic beverages 
Dubai Municipality Foodstuffs, personal care, and cosmetic products 
UAE Kimberley Process office Rough Diamonds 

Live Animals:
Health declaration, alongside complete and legitimate immunizations, is required.

Endangered Species and Any Items or Products
As illustrated by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES):
Permission from CITES is required.

Drug Including Painkillers:
Strict laws apply.

Cash and Currency:
All foreign or local monetary bills exceeding the value of AED40,000 in comparison should be shown and declared. Travellers under 18 years of age can’t import more than stated.

Customs and Import in Israel

The customs authorities of the two nations are responsible for assisting and encouraging firms from the two nations to advance financial and political ties.

Import Procedures

The Israel Customs Administration authorities are responsible for supervising and overseeing customs operations of Israel.

  • They control the conditions and terms of import and fare.  
  • They ensure that no business or movement that is illicit happens including  
  • Cheating or trickery 
  • Illegal movement 
  • Illegal tax avoidance  
  • Violation of any rights property or scholarly

They care for and facilitate all the import and export to and from Israel. Alongside that, they additionally control the business and commercial imports to the Palestinian Authority.

Import Documentation

Some documents are needed to bring items into Israel:  

  • The Ministry of Economy and Industry gave an import grant  
  • Authentication of the Standards Institution of Israel showing that the item agrees to Israeli norms. 

For specific items, an import certificate is required, which is issued by the authorities. For example, to import food-related items, the Kosher Certificate is required.

Examples of products under the Authority’s responsibility Competent Authority 
Communications products and wireless equipment Ministry of Communications 
Plants and seeds Ministry of Agriculture, Plant Protection Services 
Motor vehicles, car parts Ministry of Transport 
Food products and dietary supplements Ministry of Health – the Food Service 
Certified laboratories for standards testing, such as the Standards Institution of Israel  

For Companies and Individuals: 

  • Receipt  
  • Packing lists 
  • Port papers 
  • Import Declaration  
  • Certificate of Origin  
  • Delivery request 
  • Bill of Lading 
  • Airway bill  
  • Licenses; Standards; Permit from prohibition 

Importing Samples

To get instructions regarding the sample products, the ATA book can be consulted as it has all the details regarding the import, export and re-export.

Isreal_UAE_LCL_Export

Customs Duties and Taxes Upon Imports

Customs limit

If the imported items fulfil certain conditions, then they are absolved from the import duty. These include:

  • Items with a CIF value up to $1000 (US)  
  • Items with as much as 30 kilograms of weight  

Average duty on imports other than agricultural items:

Customs duties charge on some products brought into Israel. The amount charged as duty varies from one item to the other. These rates decided based on  

  • the items’ order as shown by the Harmonized Customs Tariff  
  • The place of origin as some nations have free trade agreements with Israel. 

Products Having a Higher Customs Tariff

In Israel, the customs taxes to import agricultural goods is a lot higher relative to the mechanical goods which is significantly less and, in some cases, absolutely none.

Import Taxes (Excluding Consumer Taxes)

Some imported things cost additional duties and charges which add to the customs taxes. That may include  

  • a purchase tax on the finished things and imported things like  
    • Vehicles  
    • Alcohol  
    • Tobacco  
    • Cosmetics  
  • Safeguard duties on certain things  
  • Antidumping duties for the products profiting by endowments  
  • Port obligation which addresses 1.1% of the CIF rate

Banned Items:

Like some other nation in the world, Israel doesn’t acknowledge everything into its borders. The banned items include 

  • Forged cash  
  • Cordless phones, extents of 900 MHz and 2.4 GHz  
  • Gambling equipment  
  • Any games played on possibilities  
  • Counterfeit records  
  • Drugs 
  • Explicit material 

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