The procedure for obtaining a Certificate of Conformity are as follows:

·     The exporter submits a written request to the appropriate SASO Country office for inspection and testing of the products requiring a Certificate of Conformity, together with full details of the consignment.

·     The Country Office completes the necessary steps appropriate to the product in order to meet SASO requirements.  These steps will depend upon existing product certifications and whether the product is covered by a valid registration, as well as the frequency with which the product is exported.  If the products are registered, the Country Office will set up an inspection plan, which may or may not require products to be sampled for testing.

·     If the products are not registered, they will be sampled and tested according to SASO requirements. Assuming the testing and/or inspection produces satisfactory compliance results, a Certificate of Conformity is issued.  The Certificate should accompany the shipping documents.

·     If the products do not meet the SASO requirements, the exporter will be given a complete explanation of the deficiency.  If acceptable corrective action is not taken, no Certificate will be issued and the Ministry of Commerce, SASO representatives and the importer will be advised accordingly.

·     When the shipment arrives at the port of entry in the Kingdom, the Ministry of Commerce and SASO will request the accompanying Certificate of Conformity.  Each certificate will be checked for authenticity and matching details.  After satisfactory checks, SASO will issue a letter of release.

A list of products regulated under ICCP and additional information can be accessed through the Internet at www.iccp.com or www.saso.org.sa

Food Standards:

With effect from December 1, 2001, new standards for the labeling of genetically modified food have been implemented.  The Saudi Food Safety Committee set a one percent threshold maximum for defining a genetically modified food. Most suppliers choose to declare their products free of genetically modified items. The Ministry of Commerce and Industry is expected to conduct random tests of products for the use of genetically modified products.  Saudi Ministry of Agriculture issued new regulations in February 2003 in respect of labeling for genetically modified food.  Salient features of the regulations are as follows:

·     Compulsory labeling on genetically modified items for the following products: fresh fruits, vegetables and dates; cereals used as fodder for animals such as barley, durra, millet, soybean, chaff, straw and the harvest of all its types; planting seed; and agricultural transplants and decorated plants

·     A triangle must be there on the label with the text "Contains Genetically Modified Product (s) and the statement must be clearly written in Arabic and English and printed prominently with an ink color different from that of the main product tag.

·     Genetically modified products or genetically engineered products exported to Saudi Arabia must be approved for consumption in their country of origin. Each shipment must be accompanied by a health certificate issued by the concerned government agency clearly stating that the genetically modified ingredient (s) used in the foodstuff is approved in the country of origin for human or animal consumption.

·     Import of genetically modified animals, birds, and their by-products is prohibited.

·    The regulations shall apply to all genetically modified imported and locally produced agricultural products beginning one year from the date they were issued (February 5, 2003). Products that do not meet the requirements of the regulations will not be allowed to enter the Kingdom after this grace period.

·     The Animal and Plant Quarantine Department of the Ministry of Agriculture will be responsible for implementing the regulations.

     Some food additives and antioxidants used in foodstuffs have additional labeling requirements. For more information on these requirements, the following may be contacted:

COMMERCIAL DOCUMENTS

       The documents required for all commercial shipments to the Kingdom of Saudi Arabia are:

·        Commercial invoice

·        Certificate of origin

·        Bill of lading (or airway bill)

·        Steamship (or airline) company certificate

·        Insurance certificate (if goods are insured by the exporter)

·        Packing list

  Additional documents may be required, depending on the type of goods being shipped, on certain requires from the Saudi importer or in the L/C or according to a contract.

FOOD PRODUCTS DOCUMENTS

     Exports of these products should comply (among other SASO standards) with Mandatory Standards SSA 1/1984 whether for sample demonstration or for commercial shipments, and must provide the following certificates:

·          Food manufacturers’ ingredients certificate

·          Health certificate

·          Price list

SEEDS AND GRAINS REQUIREMENTS

     In addition to the general shipping documents, the exporter of seeds or grains must provide the following authenticated certificates:

·        Certificate of Inspection

·        Phytosanitary

·        Seed analysis Certificate

·        Certificate of Weight

VEGETABLE AND FRUIT

     A vegetable and fruit health certificate must accompany all shipments of vegetables and fruits to the Kingdom certifying that such exports are free from pests, insects, and other agricultural diseases.  In addition to the general shipping documents, the shipment must include:

·         Certificate of Free Sale

·          Product Registration Certificate

·          Certificate of Analysis

·          Product Safety Data Sheet

MEAT

      In addition to the general shipping documents, the following certificates must accompany all meat shipments:

·          Certificate of ‘halal’ meat

·          Official Health Certificate

MEDICINES AND PHARMACEUTICALS

      Saudi importers of pharmaceuticals and medicinal products are required to have a Certificate of Free Sale, which confirms that the product is legally sold in the exporting country and that the company operates with good manufacturing practices.  No medicine or pharmaceutical products are admitted into the Kingdom unless a prior registration is made with the Ministry of Health.  The Ministry scrutinizes the applications and analyses the samples to ensure that they conform to the specifications before granting a license.  For further information, contact: Director General, General Directorate of Medical and Pharmaceutical Licenses, Ministry of Health, Riyadh Tel: 966-1-4640811 Fax: 966-1-4645536.

COMMERCIAL SAMPLES

    Legal documents include:

·          Power of Attorney

·          Agency Agreements

·          Sole Distributorship

·          Trademarks Registration

·          Certificate of Free Sale

·          Bid or Tender documents

·          Registration of partnerships, corporations or joint ventures

Saudi Market:

      The Saudi market represents both challenge and opportunity for foreign businesses.  It lies at the heart of a larger GCC market, with consumers having a high disposable income.  The large percentage of young Saudi population will likely substantially increase the demand for a wide range of consumer goods and products.  According to UN, more than 45 per cent of the Saudi population is under the age of 15.

      The exchange rate of the dollar has been fixed at 3.75 riyals to the dollar since 1986 and products are usually imported on a CIF basis and no standard formula exists for determining on mark up rates on products.  The Saudi prefers bargaining and financing has become a leading consideration in purchasing, especially for investment goods and repeat orders.  Due to the very competitive nature of the market, where US, European, and Far East products compete against the other, above average sales, service and customer support are important factors in winning and maintaining new clients.

      The Kingdom’s commercial regions are divided into three primary markets of Western Region, with Jeddah as the main commercial center, the Central Region with the capital city of Riyadh, and the Eastern Province where a high concentration of oil and gas industry business occurs.  Many companies import goods for their own use, or for direct sales making the location and the number of retail outlets and important factor.  Although there is no requirement for exclusive distributorship, the Saudi ministry of Commerce prefers that all such arrangements be exclusive with respect to either geographic region or product line as many Saudi companies are active in numerous product lines.

Advertising:

      Advertising is a rapidly expanding business in the Kingdom, which spent $380 million in 2000.  Most companies now choose to advertise in a wide range of media, including TV, newspapers, trade magazines, billboards, and trade promotion events, national festivals, and sweepstakes drawings in malls and shopping centers.

            Print advertising is also important.  In recent years, many new magazines have appeared on the Saudi market, the popular among them are Al Majallah, Al Yamamah, and Sayidati.

       Newspaper advertising is carried out in local English and Arabic papers.  The local dailies published in English have circulations of between 20,000 and 50, 000 copies: Arab News (Jeddah); Saudi Gazette (Jeddah); and the Riyadh Daily (Riyadh).  The leading Arabic newspapers have nationwide distribution and circulation of between 70,000 and 100,000: Al Sharq Al Awsat, Okaz, Al hayat, Al Jazira and Al Riyadh.  Um Al Qura is the official government newspaper.  Other newspapers have lower circulation and at times only regional distribution: Al Bilad, Al Madina, Al Nadwa, and Al Youm.  Another publication, the Al Iqtisadiah economic daily, focuses on business issues.

Business Laws in Saudi Arabia
               

Once a company has decided on the type of business presence in Saudi Arabia, it must also be aware of a variety of laws that regulate that business, including labour law, tax law, and intellectual property law. These laws are all currently in the process of being revised, as part of the government’s efforts to attract foreign investment and pursue its economic development goals.

Legal System in Saudi Arabia
               

As in other Islamic nations, the fundamental source of law in Saudi Arabia is the Islamic Law (the Sharia). The Sharia consists of the Holy Koran, the teachings of the Prophet Muhammad (the Sunnah), and the writings of legal scholars.

Several other sources of law elaborate on the Sharia and govern commercial relations. Royal Decrees are adopted by the Saudi Council of Ministers and provide broad rules for a particular area such as taxes or labour relations. Regulations, often issued by government agencies, elaborate on these rules and provide more specific requirements.

Labour Law

      Saudi labour law determines whom a company may hire and the terms of the employment. A company should proceed cautiously before terminating or restricting the rights of an employee, even if provided in terms of the individual contract agreements. A new labour law is currently under review by the Saudi Government. An employee can sue the employer before the Preliminary Committee for the Settlement of Labour Disputes. In 2001, the Ministerial Council approved a regulation allowing workers to form labour committees in companies that employ 100 or more workers.

Tax Law

     Saudi Arabia does not tax personal income.  Saudi citizens are subject to a religious tax, known as Zakat, 2.5 per cent on the net worth of their working assets (not income). Non-Saudi employees as well as companies are required to pay income tax based on the income and earnings of their businesses.

Intellectual Property Law

Trademarks:  The current trademark law has been in effect since 1984. Letters, names, drawings or other distinguishing symbols, including service marks, may be protected under the trademark law. In order to receive trademark protection, the applicant must be a Saudi citizen or legal entity (such as a limited liability company) or must reside in a country that offers the same protection to Saudi Arabians. If the trademark is registered in another country, the company may file a priority claim. Approved trademarks are protected for a ten-year renewable period. While the registration is pending, a foreign company may still obtain some protection for its trademark by entering into licensing arrangements with local merchants.

Copyrights:  Saudi Arabia passed an updated copyright law in June 2003. Consisting of 25 articles, the law protects intellectual property rights in the fields of literature, arts and science, computer programs, DVDs, and designer clothes. It details the rights of copyright owners and the means for transferring those rights. In addition, it outlines enforcement and penalties for copyright violations, and an arbitration process for disputes. The length of the copyright protection depends on the type of work; written works, movies and computer programs are protected for 50 years after the author’s death, while artistic works are protected for 25 years after they are first released. Exempted from the new law are judicial rules and daily items published in newspapers, magazines and at broadcast stations. Folklore is also exempt, as it is considered to be publicly owned. The new law is consistent with the provisions of the World Trade Organization’s agreement on trade-related aspects of intellectual property rights, and is an important step toward the Kingdom’s accession to the WTO.

Patents:  Saudi Arabia adopted its current patent law in 1989. An inventor may obtain a patent on new products or processes or on improvements to current ones. A patent applicant must have a local agent. Applications are submitted to the King Abdul Aziz City for Science and Technology (KACST). The inventor generally must exploit the patent on a full industrial scale within two years of the grant. Once issued, a patent is effective for fifteen years and may be renewed.

Institutions and Organizations Promoting Investment in Saudi Arabia

Government agencies:

·            Ministry of Commerce and Industry

·            Ministry of Finance

·            Ministry of Economy and Planning

·            Saudi Arabian General Investment Authority (SAGIA)             

·            Saudi Arabian Standards Organization (SASO)

·            Royal Commission for Jubail and Yanbu

Private agencies:

1)                Council of Saudi Chambers of Commerce and Industry (CSCCI)

     The Council is the apex body of all the chambers of commerce in the Kingdom.  There are 21 chambers of commerce and industry in the major cities of the Kingdom: Riyadh, Jeddah, Dammam, Makkah, Madinah, Qaseem, Yanbu, Taif, Abha, Al-Majma’a, Tabuk, Al-Ahsa, Hail, Al-Baha, Al-Jouf, Jizan, Arar, Hafer Al-Baten, Najran, Bishah, and Al-Qurayat. Most of the chambers periodically publish a guide of the existing factories in their area. The chambers promote industrial development, assist Saudi contractors, provide information and technical services to agricultural investors, and provide statistics and information on Saudi Arabia.

2)                Saudi Export Development Center (SEDC)
3)                Saudi Industrial Exports Company (SIEC)