Under the U.S.-Bahrain FTA, bilateral trade in industrial and consumer products, with the exception of some agricultural items, may be conducted duty free. Goods manufactured outside the FTA region may be imported according to Bahrain’s tariff schedule listed below. Bahrain is party to the GCC Unified Customs Union agreement. The agreement eliminated tariffs for GCC member states on 426 items (primarily food and medical products) and applies five percent import duties on most commodities imported from countries outside the GCC, except alcohol and tobacco which are assessed duties at 125 and 100 percent, respectively. The Customs authorities of the GCC countries finalized the Unified GCC Customs Tariff of 2017, which entered into force on January 1, 2017. In February 2017, the GCC states, including Bahrain, ratified the Unified Selective Tax Agreement for the GCC States. It imposes a tax on goods harmful to human health and the environment, as well as luxury goods. Tax rates are determined by the Committee for Financial and Economic Cooperation of the GCC States.
Customs rates for trade under the FTA and within the GCC customs union are as follows:
| Duty Exempt | Includes most goods traded under the FTA, as well as 426 listed commodities (mostly food and medical products) for intra-GCC trade. |
| 5 percent import duty | All other commodities, except tobacco and alcoholic beverages |
| 100 percent import duty | Tobacco products (not exempt under the FTA) |
| 125 percent import duty | Alcoholic beverages (not exempt under the FTA) |
To incentivize FDI, the Bahraini government does not levy duties on imports of raw materials or of semi-manufactured goods, provided that the final products assembled using these inputs will be exported out of Bahrain. The Bahraini government also allows items imported for development projects (excluding spare parts), and transshipments to be imported duty free.
Foreign products entering or already in the GCC are treated as follows:
- Goods imported to the GCC region are granted duty-free entry if the importer presents certificates issued by the first single-entry point as a proof that customs duties have been paid after the establishment of the customs union.
- Goods imported to the GCC for which the importer fails to prove payment of customs duties shall have their customs duty collected by the customs authority of the country that is the final destination.
- The customs declaration for statistical purposes shall be prepared manually by the owner of the goods or the person who acts on his behalf, or by computer, and shall be approved at the customs entry point and have the local invoices attached to it. Invoices are required to detail the correct value and origin of the goods.
- The importer must ensure that the customs authority has made the necessary endorsements that justify the entry and exit of the goods on the basis of the statistical declaration.