Dubai Tries to Build a Modern Customs Agency

Two years ago, Dr. Obaid Saqer Busit became the youngest Director-General of the Dubai Department of Ports and Customs. At the age of thirty-four, he was suddenly responsible for tracking the flow of millions of imports and exports each year. He soon discovered, however, that Dubai had no effective law for controlling trade, including exports to Iran.

In an exclusive interview, Dr. Busit tells the Risk Report: “Two years ago we weren’t a true Customs agency. You could call us anything you want, but you couldn’t call us Customs.” Today, Dr. Busit is struggling to draft new rules that will take effect this year, but it is an uphill battle. “Change is very hard for everyone,” he says, “many people still feel they are living in the 60’s and 70’s” a time when there were virtually no regulations. “I am under a lot of pressure, and sometimes I feel that I am working alone, but I’m stubborn,” he says.

It is nearly impossible for Dubai Customs to control the trade now flowing between the U.A.E. and Iran, says Dr. Busit, because “there are no specific rules on what should or should not go.” Moreover, controlling exports to Iran, Dubai’s number one trading partner, is not a priority, notwithstanding pressure from Washington to help enforce the current U.S. embargo. “Most people in Dubai are confused by the embargo, and many Customs officials are not sure what in fact is prohibited,” Dr. Busit warns.

Even if the rules were clear, enforcing them would be an additional challenge. Most of Dubai’s trade is made up of re-exports goods in transit through the United Arab Emirates to other countries such as Iran. Because there is little documentation for most of the ships traveling to and from Iranian ports, Dr. Busit says it is difficult to classify the types of products that may be reaching Iran. “Traditional ships can berth anywhere in Iran, so it’s difficult to account for the trade,” he explains.

U.A.E. officials have now started to focus their attention on smuggling. Dr. Busit says that illicit traders change their operations quickly to avoid the law. When Dubai started to watch its port more closely, the traders moved to Al-Khasab, a fishing village at the head of the Strait of Hormuz, only a few hours by boat from Iran’s Bandar Abbas. At Al-Khasab, says Dr. Busit, “you can now see hundreds of speedboats, filled with foodstuffs and electronics it sometimes looks like a boat race.” Most of the speedboat owners are Iranian, he adds, and they can shuttle radios, TVs, VCRs and U.S.-made appliances to Iran in a few hours. “They work like bats,” he says, “and are difficult to catch.”

In 1994, the U.A.E. Ministry of Interior issued an order to stop speedboats from transporting goods without official permission. Speedboats were limited to stays of 72 hours and are not supposed to sail from port to port without proper documentation.

Traditional ships, or dhows, can anchor in U.A.E. ports for up to 21 days, but even they are now supposed to register, obtain travel papers and document their cargo and crews. Though no penalties are mentioned in the Ministry of Interior’s 1994 directive, Dr. Busit says that Customs is willing to confiscate boats and cargo. Dr. Busit hopes computerization will help catch smugglers and facilitate legal trade. By the end of the year, he expects all Customs transactions to be processed electronically, and for the Port Rashid and the Jebel Ali Free Zone to be linked by computer. Other U.A.E. Customs and Port Authorities will be added to the communications network later. According to Dr. Busit, Dubai Customs has come a long way in a short time. “I am one of the new people to change and modernize it,” he says.

This month, trade officials from the region will gather in Dubai to hold the first Middle East conference on Electronic Data Interchange a U.S.-origin system that computerizes banking, customs clearance and cargo movement and handling. “We want to establish a club for communication on customs using EDI,” says Dr. Busit, “we are the first Middle East country to try to adopt this new system.” He says implementing new regulations “helps the Europeans trust what we are doing, and we want to keep that trust.” And looking to the future, he adds that “we want to have a model law and to follow the rules.”