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Translations
Economic Agreement between
the Kingdom of Saudi Arabia and
the State of Kuwait
[Unofficial Translation
by
Howard L. Stovall]
WHEREAS, the Kingdom of Saudi Arabia and the government of the State of Kuwait are impelled by the firm desire to develop, broaden and consolidate the economic ties between them, on firm foundations for the good of the two fraternal peoples.
And WHEREAS, because the two fraternal countries constitute a solid economic union, they have agreed on the following:
Article 1
Each of the two contractual parties hereby undertakes to grant to citizens of the other party -- equally and without any distinction or discrimination -- the following:
- The right of residency, employment and work.
- Practicing economic activities within the framework of the attached "Protocol".
- Facilitating procedures for passage by subjects between the two countries.
Article 2
The two contractual parties shall encourage the establishment of joint economic development projects between the two countries and their respective subjects. Capital invested by one of the contractual parties or its subjects in the other country, or joint projects, shall enjoy all benefits and preferences given to national capital.
Article 3
- The Kingdom of Saudi Arabia shall permit the importation of agricultural, animal and industrial products and natural resources of Kuwaiti origin which are exported directly to Saudi Arabia. Kuwait shall permit the exportation of these products indicated in the appended schedules.
- The State of Kuwait shall permit the importation of agricultural, animal and industrial products and natural resources of Saudi origin which are imported directly to Kuwait. The Kingdom of Saudi Arabia shall permit the exportation of these products indicated in the appended schedules.
- Saudi and Kuwaiti agricultural, animal and industrial products and natural resources indicated in the appended schedules shall be exempt from custom duties and other taxes.
- The schedules referred to in the three previous paragraphs shall be agreed upon by the authorities designated by each country.
- Agricultural, animal and industrial products and natural resources of either Saudi or Kuwaiti origin and directly exported to either of the two contractual parties shall not be subject to export fees.
- For purposes of this agreement, any industrial product shall be deemed of Saudi or Kuwaiti origin if the raw materials of local origin, and local labor, and the other local cost of production, shall be no less the 40%.
- All goods exempt pursuant to this agreement shall be accompanied by a certificate of origin ratified by the Ministry of Commerce and Industry in the State of Kuwait for Kuwaiti goods and by the Ministry of Commerce and Industry in the Kingdom of Saudi Arabia for Saudi goods.
Article 4
The two parties have agreed on the importance of regulating the exchange of know-how, information, and industrial studies for the purpose of effecting industrial coordination and technical cooperation between the two countries and arranging a protocol for that effect.
Article 5
The two parties shall work to coordinate customs affairs between them, by observing the following:
- Work to standardize customs procedures forms, charts and bills of lading, and other procedures required for customs operations.
- Exchange of detailed information about the goods shipped between the two countries and the means of transporting them to the other country, whether such goods are of local origin of one of the two countries, or imported from another country.
- Permitting the customs authorities of both countries to conduct direct contacts between them, to exchange information and coordinate work procedures.
- Forming a permanent custom coordinating committee between the two countries, which shall meet three times a year to work to realize the purposes mentioned in this Article.
Article 6
- The two contractual parties undertake to exempt, from all restrictions, fees and taxes, regardless of what kind or the collecting authority, all Saudi or Kuwaiti freight trucks, unloaded or loaded; [such exemption also applies to] their loads, their drivers and their assistants who are crossing in transit over the land of either of the two countries to another.
- Saudi or Kuwaiti freight trucks driven by Saudis or Kuwaitis and destined from the country of either party to the country of the other party:
[i] shall be exempt from all restrictions, fees and taxes, regardless of what kind or the collecting authority;
[ii] shall [have the right to] reach loading or unloading docks, whether loaded or unloaded; and
[iii] shall [have the right] to reach their destinations with their loads without any restrictions or obstructions.
- Saudi and Kuwaiti private cars and public passenger cars destined for one of the two contracting parties shall be exempt from all restrictions, fees and taxes regardless of what kind or the collecting authority.
- Transportation between the Kingdom of Saudi Arabia and Kuwait shall be confined to vehicles belonging to them alone.
- The competent border authorities shall issue residence permits valid for a period of one month for trucks destined for one of the two countries.
- The provisions of this agreement shall not impinge on the provisions of the Agreement Organizing the Entrance and Departure of Automobiles, signed between the government of the Kingdom of Saudi Arabia and the government of the State of Kuwait, which has been in effect as of the first of Safar 1391H.
Article 7
Ships, boats, vessels and their cargoes -- belonging to either of the contracting parties -- in the harbors of the other contracting party, shall be granted the same privileges and preferences granted to national vessels in each of the countries, including exemption from loading, harboring, piloting, and lighthouse fees, and any other fees as long as in transporting between Kuwait and the Kingdom of Saudi Arabia.
Article 8
- Goods which are banned from entering the territory of either of the contracting parties, according to their regulations in force, shall be forbidden from passing in transit. The customs authorities in the two contracting countries shall exchange lists of such goods.
- Each of the contracting parties shall provide the necessary facilities for the use of free zones in either of the two countries.
- Goods imported to one of the contracting parties across the territory of the other party shall be exempt from transit fees regardless of what kind or the authority collecting them.
Article 9
In order to assure the proper implementation of this agreement and guarantee the realization and development of mutual benefits included herein, a joint committee of the representatives of the contracting parties shall be formed. [The committee] will meet once every 6 months or according to the wish of one of the contracting parties. Its functions will be:
- Resolving any difficulties and problems that might arise from the application of this agreement.
- Submit proposals which aim at improving and developing economic and trade relations between the two countries.
- Examining requests for amending the schedules attached to this agreement.
- Amendments, proposals and recommendations submitted by the joint committee shall be effective after ratification by the governments of the contracting parties and exchange of memoranda between the customs authorities of the countries.
Article 10
Ratification of this agreement and attached schedules -- which constitute part of [this agreement] -- shall be completed by the contracting parties according to observed principles. It will become effective after fifteen days from the date of the exchange of ratification documents, and will remain in force for a period of three years from the date of its execution. It shall be renewed automatically for the same period unless one of the two parties notifies the other party in writing no later than twelve months before the expiry of the first period or any of the subsequent periods of its wish not to renew. The provisions of this agreement shall apply to investments which were started while the agreement was in effect until the rights arising therefrom have been adjudicated, provided that they not exceed fifteen years from the expiration date of the agreement.
Written in Riyadh
29/2/1395 corresponding to
12/3/1975
The Government of the |
The Government of the |
State of Kuwait |
Kingdom of Saudi Arabia |
(s) |
(s) |
Abdullah Aziz Al-Khoweiteir |
Abdel Rahman Salim Al-Otaiki |
In the Name of God, the Most Compassionate and Most Merciful
Protocol Appended to Article 1
The economic activity mentioned in [paragraph 2 of Article 1] shall be defined as:
- Public and private industrial projects
- Public and private agricultural projects
- Public and private contracting projects
- Purchases and sales of stocks, after approval of the Ministry of Commerce in both countries
- Private practice of professions.
The Government of the |
The Government of the |
State of Kuwait |
Kingdom of Saudi Arabia |
(s) |
(s) |
Abdullah Aziz Al-Khoweiteir |
Abdel Rahman Salim Al-Otaiki |
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