BUKHATIR GROUP

Strength through Diversity

Group Policy and Procedure

Group Supply Chain (GSC)

Import, Customs & Logistics

Incoterms, Customs Clearance & Freight Management

Document No: P-POL-025

Copyright © 2026 Bukhatir Group

Revision Control

This document is issued under the authority of Bukhatir Group and applies when carrying out the activities described. Revisions may be issued as necessary under the authority of the Group Head of Procurement. Revision history is recorded below with every revised policy.

Revision History

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Distribution List

1. Purpose & Objective

This policy manages international procurement logistics, customs clearance, freight and documentation. It optimizes Incoterms selection, ensures UAE customs compliance and minimizes import delays and costs.

2. Scope

Applies to all cross-border procurements involving import into the UAE, whether to mainland or free zones.

3. Incoterms 2020 Policy & Preferred Terms

Bukhatir Group standardizes on Incoterms 2020 (International Commercial Terms) to clearly allocate risk, cost and responsibility. The following terms are preferred based on transport mode:

Deviations from preferred terms (e.g., CIF, CIP) require BU Procurement and GSC joint approval. The decision matrix below guides selection:

4. Freight Management

Consolidation & Carrier Selection

• Small shipments (< 1 CBM) are consolidated with other BU orders for the same region to reduce per-unit freight cost.
• GSC maintains preferred freight carriers (sea, air, land) based on cost, reliability and insurance ratings.
• Ocean freight: preferred carriers are 3–4 major lines (via forwarder agreements).
• Air freight: negotiated rates with major carriers; used only for emergency or high-value express shipments.

Rate Benchmarking

• Freight rates are benchmarked quarterly against market rates for comparable lanes.
• Savings or cost overruns vs. benchmark are tracked and discussed in carrier performance reviews.

5. Customs Clearance & HS Code Classification

All imports are processed through UAE Federal Customs Authority (FCA). Key steps:

1. HS Code Classification: Supplier provides accurate 8-digit Harmonized System (HS) code on commercial invoice and packing list.
2. Duty Calculation: Customs duty is calculated as: Dutiable Value × Duty Rate (varies by commodity, 0–100%).
3. Clearance Documentation: Customs entry filed by licensed customs broker; commercial invoice, packing list, certificate of origin required.
4. Inspection: FCA may inspect shipment; GSC or BU coordinates physical inspection if required.
5. Duty Payment: Duty is paid by Group (FOB/FCA terms) or supplier (DDP terms); payment timing reflects Incoterm.

6. Import Documentation

The following documentation is mandatory for customs clearance and must be provided by supplier:

7. Restricted & Prohibited Items

Certain items are restricted or prohibited by UAE Federal Customs Authority. Procurement teams must verify:

• Prohibited goods: Narcotics, counterfeit items, weapons, certain chemicals (per UAE CITES and hazmat regulations).
• Restricted goods: Alcohol, certain electronics (sanction-related), used vehicles (age restrictions), food/animal products (health certifications required).
• Hazardous materials: Subject to special permits, IATA/IMDG documentation (per UAE Civil Aviation Authority and Maritime Authority).

Procurement teams must declare restricted items before import; failure to do so results in seizure and legal consequences. GSC maintains a Prohibited Goods List updated quarterly.

8. Free Zone vs. Mainland Import Procedures

Bukhatir Group operates from multiple locations (mainland, JAFZA, DAFZA free zones). Different procedures apply:

Goods imported to free zones for Group use must be re-imported to mainland with duty payment. Cost-benefit analysis is required when selecting import location.

9. Duty Exemption Certificates & Incentive Programs

UAE government offers duty exemption and incentive programs in select sectors:

• National Preference Program (>50% GCC content): 0% duty if commodity meets GCC origin threshold.
• Industrial Development Exemptions: Certain manufacturing equipment eligible for 0% duty (filed by procurement/finance).
• Government Tenders: Goods for certain government projects may be duty-exempt if agreement includes this benefit.

BU Procurement and Finance jointly determine eligibility; approved exemption certificates are obtained and filed with customs entry.

10. Logistics Provider Selection & Management

Freight forwarders and logistics providers are selected and managed as follows:

• Approved Logistics Partners: GSC maintains a list of 3–5 preferred customs brokers and freight forwarders.
• Performance KPIs: Customs clearance time, damage rate, cost accuracy (invoiced vs. estimate).
• Annual Review: Logistics partners are evaluated annually; poor performers are replaced.

11. Import Logistics KPIs

The following KPIs measure import efficiency, tracked monthly:

12. Reference Forms

• Form F-IMP-01 — Import Customs Entry Checklist
• Form F-IMP-02 — Hazardous Material Declaration
• Form F-IMP-03 — Duty Exemption Certificate Application

13. Definitions & Acronyms