MoU signed to ‘prevent’ the smuggling of oil derivatives

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KPC, Customs and KNPC collaborate

KUWAIT CITY, April 9: Kuwait Petroleum Corporation (KPC), Customs General Department and Kuwait National Petroleum Company (KNPC) signed a memorandum of understanding (MoU) recently to stop the smuggling of oil derivatives, reports Al-Qabas daily quoting sources.

This came after a remarkable increase in the prices of oil derivatives in neighboring countries compared to Kuwait; hence, the smuggling of oil derivatives has become rampant.

Sources clarified the MoU is an implementation of the mechanism for exporting oil derivates agreed previously as follows:

1. If KNPC did not produce the shipment for export, the director of Sales Arrangement Department at KPC shall sign the customs declaration and stamp it with ‘no objection; in addition to signing and sealing the report of the inspector regarding the validity of containers and figures in each container.

2. The customs inspector is authorized to cut off the stream in any container in case of suspicion or to check the quality of the product.

3. In case of suspicion in the shipment of diesel, a sample will be sent to KPC with an official letter. The sample should not be less than four liters and it will be analyzed in the laboratory of KNPC. A copy of the result should be forwarded to the Customs General Department.

4. KPC should be notified in case a shipment of diesel is confiscated. It will then address the Local Marketing Department at KNPC to withdraw the shipment.

5. The number of containers should be mentioned in the customs declaration under column 17 or column 19.

6. In case a customs declaration is referred to inspection companies accredited by KPC, the inspector shall write a report including the numbers and seals of the containers. A copy of the report should be forwarded to the Customs General Department, along with the customs declaration.

7. Before the KPC adopts the declaration, it is necessary to make sure that the document contains the seal of the Environment Public Authority (EPA) to know its opinion in this regard.

On the other hand, sources affirmed that the director of Customs General Department issued decision number 49 for the year 2018 regarding ministerial resolution number 529/2014 and terms of exporting products manufactured by using subsidized kerosene.

The director banned the export or re-export of commodities and products manufactured locally like dyes, detergents, organic solvents if the quantity of subsidized kerosene used in the production exceeds 10 percent of the contents — a percentage specified by KNPC.

Sources added Article Two of the director’s decision states that commercial institutions, companies and individuals are allowed to export these commodities provided they meet the following terms and conditions:

1. The customs declaration should be submitted for the goods to be exported, stating the percentage of kerosene used in the production and amount of subsidy given by the State.

2. Submission of a pledge to refund the subsidy immediately after approval of exportation and before the shipment.

3. Payment of subsidy difference to KPC. In accordance with Article Three of the decision, Penal Code number 16/1960, its amendments and Importation Law number 10/1979 on the supervision of trading in goods, services and crafts as well as determination of prices in the amended laws and law number 10/2003 — the Unified Customs Law in GCC and other Arab Gulf countries; all the necessary legal measures shall be taken against anyone proven to have violated the regulations.

Penalties include suspension of commercial license, temporary closure of the shop, and final cancellation if violations are repeated.

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