<p>The UAE is a federacy of seven states. Each state has its own ruler and the  rulers together form the supreme counsel governing body of the UAE, with the  ruler of Abu Dhabi as the president of the country and supreme commander of the  army. Each Emirate is subject to its own local laws and regulations governing  internal affairs. Matters related to the UAE as a whole legal body, would  require a federal law or decree approved by the president of the UAE.<br /><br />The  UAE applies the &ldquo;Common Customs Law of the GCC States&rdquo; which is applicable in  all GCC states, in which any commodities crossing the customs line, at  importation or exportation, are subject to the provisions of this law. This law  is approved by federal decree No. 85 for the year 2007. The commodities imported  into the country are subject to the custom dues specified in the Customs Tariff  issued pursuant to the Common Customs Law. There is no local UAE law regarding  customs. Any laws or regulations issued in the UAE regarding customs are all  subject to the Common Customs Law.<br /><br />According to the Law no. 13 for the  year 2007 of the import and export control, a committee named the &ldquo;national  committee of commoditisers that are subject to control of import, export and  re-export&rdquo; should be established under presidency of the representative of the  ministry of economy.&nbsp; This committee should control the rules that regulate the  affairs of import and export as well as provide the required technical  consultation concerning the non-violation of the states interest or the  international conventions to which the state joined or  approved.<br /><br />Generally, most of the imported commodities are subject to 5 %  customs duty.&nbsp; Products such as tobacco and manufactures tobacco substitute&rsquo;s  are subject to 100% customs duty or on the minimum collectable rates basis,  whichever is higher, as outlined in a specific table. Alcohol is subject to 50%  duty of product value. There are 734 items exempt from the customs duty under  the customs tariff, for example, certain animals, vegetables, plants, chemicals,  and medicines, certain diamonds, silver, and gold, as well as carriages and  accessories for those who are disabled. Helicopters, cruise ships and excursion  boats are also exempt.<br /><br />As long as there is an agent registered in the  specified register maintained for this purpose by the UAE Ministry of Economy  and Commerce, parallel importing is prohibited in the UAE. The Customs  Departments, at the registered agent's request, detain any products imported by  any other person and deposit them in the port warehouses until the dispute is  determined. This is of course a headache for inexperienced traders, agents and  forwarders who allow cargo to be imported without first checking if the cargo  has an agent registered in the UAE.&nbsp; A high proportion of cargo imported into  the UAE perishes while waiting for disputes to be resolved concerning whether or  not the cargo can be imported without the prior approval of the registered  commercial agent. <br /><br />According to Law No. 13, it is illegal to import any  strategic commodity that forms danger against public safety, public health,  environment, natural resources, and national security or for reasons related to  the UAE foreign policy, taking into account any restrictions which may currently  be imposed on those commodities according to the applicable legislations in the  state. The UAE authorities are extremely strict and intolerant when it comes to  cargo they believe jeopardizes or threatens national security. The mere  discovery of an unannounced handgun with the master or crew member will lead to  vessel detention, imprisonment of the master and a criminal action against the  vessel and its owners. Finding smuggled and prohibited cargo on board a vessel  will most probably lead to the vessel being confiscated.<br /><br />Meanwhile, there  is a list of prohibited products of which the import and export of is  prohibited. In addition to drugs and radiation polluted substances, this list  includes printed matters, paintings and drawings which contradict with Islamic  teachings or decencies, used and inlaid tyres, children&rsquo;s toys in the form of a  dinosaur and goods which consist of led.<br /><br />One of the prohibited products  mentioned in the list concerns those which are imported or exported to or from  Israel. According to the federal law no. 15 for the year 1972 of the &ldquo;Israel  Boycott&rdquo;, the Israeli products shall not be imported or exported from or to  Israel.&nbsp; The decision by the Israel Boycott office prohibits goods from Israel,  bearing Israel marks or logos. However, some goods imported from different  countries and which have some small undetected Israeli made components would not  cause problems with customs.<br /><br />If a cargo was shipped from a Malaysian port  to Israel in transit through the UAE, the UAE authorities will not permit the  shipment to continue its course to Israel. However, cargoes indirectly destined&nbsp;  to Israel going through other ports should not be considered against the  law.<br /><br />The UAE applies the UN Security Council Resolution 1929 which  relates to various issues and sanctions over Iran.&nbsp; In particular, the  resolution requires implementation by the member States for certain financial  directives which include primarily exercising vigilance over transactions  involving Iranian banks in order to prevent such transactions contributing to  the proliferation of sensitive nuclear activities or the development of nuclear  weapons.&nbsp; <br /><br />The resolution further calls upon member states to implement  measures which prevent the provision for any financial services (such as  insurance; re-insurance; the transfer to or from such States&rsquo; territory; or to  or by nationals or entities organised under such State laws; or financial  institutions, other assets or resources) if such services, assets or resources  could potentially contribute to the sensitive nature of Iran&rsquo;s nuclear  activities or the development of nuclear weapons.The below prohibitions set out  by the UN Security Council restrict the flow of importing and exporting  commodities to and from Iran:</p>
<ul>
<li>Prevention of the supply or sale of vessels directly or indirectly, that may  be used for the benefit of Iran, as well as any additional items contributing to  enrichment-related, reprocessing or heavy water-related activities which may  develop nuclear weapon delivery systems;</li>
<li>Prohibit procurement from Iran, or using their flag vessels, whether or not  originating in the territory of Iran any of the items mentioned in a specific  list (with particular regard to Industrial Equipment, Test and Production  Equipment, Equipment, Assemblies and Components (where applicable), Heavy Water  Production Plant Related Equipment, and other &ldquo;Trigger List&rdquo;  activities).</li>
</ul>
<p>The UAE has undertaken several steps to implement the UN Sanctions against  Iran. The main step being the issuance of a circular by the UAE Central Bank  pertaining to Anti Money Laundering and the Combat of Terrorist financing. The  circular outlines the requirements of the UN Security Council Resolutions  including the freezing of suspicious accounts and recommending banks to conduct  the necessary due diligence in relation to their correspondent banks in Iran..  The UAE Central bank has informed all financial institutions in the country,  including banks, to freeze all accounts and stop bank transactions as per the  instructions of the UN Security Council based on its Resolution 1929 on Iran  connection. Furthermore, the Central Bank has issued a circular listing Iranian  entities with which UAE banks are not allowed to deal with under any  circumstance. The circular states: &ldquo;If you (banks) receive funds from a  natural/judicial persons mentioned in the enclosures or in their favour, you are  to freeze such funds &lsquo;immediately&rsquo;&rdquo; Currently there is no list issued by the UAE  authorities detailing the banned items however; the banned items are similar to  the circulars and directive issued by the UN in this regard. It should be noted  that on 20th June 2010, the Dubai Financial Services Authority warned companies  based in the free zones to conduct risk assessments when dealing with banks and  other clients domiciled in Iran. The Dubai Financial Services Authority said  that companies should "ensure that the due diligence processes for each  correspondent bank domiciled in Iran has been completed, consistent with the  enhanced due diligence procedures".&nbsp; It is however, no secret that the UAE, with  its free trade and open market policy is a destination to Iranian traders and  cargos. <br /><br />Accordingly, any goods not included within the UN sanctions will  find its way through the UAE ports</p>