The Common Customs Law of the GCC States was issued under Royal Decree No. (M/41) dated 03/11/1423 H, which unifies the customs procedures and laws in the GCC states in accordance with the provisions of the customs international conventions.The Law addresses an array of customs procedures, including public auction, as Article (170) of the Law sets out certain goods auctioned with authorization of the minister or the competent authority to prescribe the relevant rules and conditions.Accordingly, the Ministerial Resolution No. (1319) dated 07/06/1424 H., amended by the Ministerial Resolution No. (3326) dated 15/11/1438 H., was issued for specifying the rules of the public auction, when goods are classified as abandoned, and other rules governing the auction process. These Rules aim to ensure impartiality and transparency of the auction processes and procedures, supervise the auction, apply the terms and conditions that observe the interests of the goods owner, the purchaser and the public, and streamline the sale of the confiscated,abandoned, waived or seized goods.

The following words and expressions, wherever mentioned herein, shall have the meanings ascribed thereto hereunder unless the context indicates otherwise:

• ZATCA: Zakat, Tax and Customs Authority.

• Board: ZATCA’s Board of Directors.

• Governor: Governor of ZATCA.

• Common Customs Law: The Common Customs Law of the GCC States issued under Royal Decree No. (M/41) dated 03/11/1423 H.

• Implementing Regulations: The Implementing Regulations of the Common Customs Law issued under the Ministerial Resolution No. (2748) dated 25/11/1423 H.

• Rules: These Public Auction Rules

• Auction: A publicly held sale at which the confiscated, abandoned or waived goods or transport modes are sold to the highest bidder as per the auction principle in order to secure the most advantageous sale.

• Bidder: Any legal or natural person who desire to purchase the confiscated, abandoned or waived goods  or transport modes.

• Quorum: The number of bidders required to hold the auction, which is at least two bidders.

• Storehouse: Building or place intended for the temporary storage of goods pending their withdrawal under one of the customs procedures whether such place/building is directly administered by ZATCA or by the official public agencies or the investors.

• Goods: Any natural material or any animal, agricultural, industrial, or intellectual product.

• Goods of Special Nature: Goods that are affected by external factors, thereby adversely reducing their value more quickly than usual, or are hard to be maintained in the customs
  office, including, inter alia, medicines, living organisms, and agricultural products.

• Guarantee: A cash or bank guarantee issued by a bank licensed by the Central Bank in the name of ZATCA to guarantee payment of the sale full amount in accordance with the Rules and any further determinations by ZATCA.

• Goods List: A document including information about the confiscated, waived, abandoned or seized goods or transport modes.

Without prejudice to the relevant applicable laws and regulations, these Rules shall be applicable to the bidders, owners of goods and those in charge of inventory, valuation and sale.

ZATCA may auction off the following:

• 1. Seized goods susceptible to damage or leakage, or goods that are in a condition that could affect the safety of other goods and facilities.

• 2. Seized goods that are susceptible to a substantial drop in value.

• 3. Goods, materials and transport modes that have become the property of ZATCA as a result of being confiscated by a court order or by virtue of a reconciliation decision, or have been waived in writing.

• 4. Goods that have not been withdrawn from customs warehouses in accordance with Article (75) of the Common Customs Law.

• 5. Goods that have not been withdrawn from storehouses, yards and berths in customs offices, or goods whose owners have not been identified or have not been claimed within the timeframe specified in Article (4) hereof.

• 6. Goods and transport modes seized in smuggling attempts when the smugglers cannot be identified or apprehended.

1. Goods shall be considered abandoned upon the expiration of the following timeframes:

• A. Fifteen (15) days for goods of special nature.

• B. Thirty (30) days for other goods.

2. Subject to Article (3) hereof, the Governor may, under a Governor’s decision, amend the timeframes set out in this Article.

3. The timeframes set out in this Article shall start from the date of unloading the goods at the customs offices.

ZATCA shall conduct inventory and valuation for the goods to be auctioned in accordance with the following:

• 1. Physical inventory shall be conducted for the goods and transport modes and their status shall be determined.

• 2. The goods and transport modes shall be included, after being inspected and verified for safety, in the goods lists and their type and number shall be indicated.

• 3. A separate list shall be made for restricted goods and transport modes, and the type of auction in which they will be offered shall be determined, whether for imports or exports, according to the nature of each product and its current condition.

• 4. Each item shall be valued according to its current condition, taking into account the valuation bases stipulated in the Implementing Regulations.

• 5. ZATCA may, when needed, seek the assistance of experts and specialists in the valuation of goods.

• 6. A document detailing all inventory and valuation procedures shall be developed.

Before inclusion of goods and transport modes in the auction, ZATCA shall take the following into account:

• 1. Reviewing the document of the inventory and valuation of the goods and transport modes to be included in the auction.

• 2. Reviewing the documents for each item and matching them to the goods and transport modes to be included in the auction, and excluding the following:

  • A. Goods whose period of stay has not expired.

  • B. Goods and transport modes whose confiscation decision has not become final and enforceable, taking into account the provisions of Article (166) of the Common Customs Law.

  • C. Goods and transport modes that are still under the inventory and valuation process.

• 3. Determining the appropriate date to hold the auction.

• 4. Announcing the auction in accordance with Article (7) hereof.

• 5. Maintaining all documents related to the sales for at least five (5) years.