Customs Transit in the UAE: Guarantees, Shortages and Smuggling Risk

Under the GCC Common Customs Law, which the UAE applies, goods can move through the country in transit or be stored in customs warehouses without paying duty. The suspension holds only while the goods stay under customs control. If they do not exit, leave the route, or are missing when customs checks the stock, the duty falls due, and customs collects it from the party it holds responsible.

The law answers the first question directly. The carrier is responsible for goods in transit and for shortages found after the goods leave the customs office. The entity in charge of a warehouse is responsible for shortage or switching of goods it received in apparently proper condition. In both cases, the transit or warehouse guarantee secures the duty, so customs can call it before anyone has proved who took the goods.

• Transit depends on a guarantee. Under Article 67, goods move in transit against a bail or bank guarantee equal to the customs duties.
• The carrier answers for shortage in transit. Under Article 143(8), a shortage or change in packages found after the goods leave the customs office is deemed smuggling, and the carrier is held responsible.
• The warehouse operator answers for shortage in store. Under Article 54(3), the entity in charge of the warehouse is responsible for shortage or switching of goods received in apparently proper packages.
• Removal without clearance is smuggling. Under Article 143(10), taking goods out of a free zone or customs warehouse without completing the customs procedures is deemed smuggling.
• Force majeure is a defence. Under Article 154(a), a party is exonerated where it proves it was the victim of force majeure.
• The duty is only the start. Fines, confiscation and a claim against the guarantee can follow, and the party that pays has to recover from the party that caused the loss.

Who this applies to

This applies to freight forwarders, customs brokers and road hauliers that move goods in transit through the UAE, and to operators of bonded and free zone warehouses. It concerns re-exporters and traders in Jebel Ali, Dubai South and other free zones whose goods move between zones or across GCC borders, and banks that issue transit and warehouse guarantees. It is relevant across the maritime and logistics sector.

Our dispute resolution lawyers in the UAE act for forwarders, warehouse operators and cargo owners in customs demands, guarantee calls and recovery claims against carriers and subcontractors. This article covers duty liability for missing transit and bonded goods. Our article on re-export rules for UAE free zone companies covers the wider re-export framework.

The legal framework

• The GCC Common Customs Law. The Common Customs Law has applied since January 2002. Articles 67 to 73 govern transit, Articles 74 to 76 customs warehouses, Articles 77 to 88 free zones and Articles 89 to 93 temporary admission. Articles 142 to 154 govern smuggling, penalties and civil liability.
• Dubai Customs policies and notices. Dubai Customs applies the law through its own policies on goods in transit. According to published reports, Customs Notice No. 5 of 2026 extended the maximum period for transit declarations from 30 to 90 days.
• The TIR Convention. The TIR system allows goods to cross borders under a TIR Carnet backed by an international guarantee chain. In the UAE it operates through the Automobile and Touring Club for the UAE as the national association.

The administering bodies:

• The local customs departments. Dubai Customs, Abu Dhabi Customs and the customs departments of the other emirates accept transit declarations, hold the guarantees, supervise warehouses and raise duty demands.
• The free zone authorities. Under Article 87, a free zone administration is responsible for offences committed by its officers and for goods taken out of the zone illegally.

The supervising courts:

• The courts with customs jurisdiction and the civil courts. They hear appeals against customs demands and penalties, and claims between cargo owners, forwarders, carriers and warehouse operators.

How the transit regime works

Transit lets goods cross the UAE, or move between customs points inside it, without paying duty on the way. The exemption depends on three things: the declaration, the guarantee and the evidence that the goods left.

The declaration and the guarantee

The declarant files a transit declaration and provides a guarantee. Under Article 67, the guarantee is a bail or bank guarantee equal to the customs duties on the goods. Under Article 68, it is released against a discharge certificate once the goods have exited or reached the destination office.

The route and the period

Under Article 70, transit operations can be completed only at authorised customs offices. Under Article 71, the goods move under the carrier’s responsibility and on the routes set by the customs authority. The declaration must be closed within the permitted period. Dubai Customs extended the maximum transit period to 90 days in 2026, according to published reports of its notice.

The discharge

The guarantee is released only when customs records that the goods exited. A missing exit record, even where the goods left, leaves the guarantee open and exposes the declarant to a duty demand. The forwarder should keep the exit documents and check that each declaration is closed on the system.

TIR transit

Under the TIR system, the national association in the guarantee chain provides the guarantee in place of a bank. The holder of the TIR Carnet remains responsible to the guarantee chain, and the association recovers from the holder what it pays to customs. The TIR guarantee covers duties and taxes but does not cover penalties.

How bonded and customs warehouses work

Customs warehouses allow goods to be stored without paying duty until they are released for import, re-exported or transferred. Under Article 2, a warehouse is a place where goods are deposited under the supervision of customs free of duties.

Control of the goods

Under Article 53(c), goods in customs warehouses may not be removed without customs approval. Under Article 76, customs may supervise warehouses managed by other entities. The operator must keep records that match each receipt and release to a customs declaration.

The warehousing period

Under Article 14, duties fall due on the expiry of the warehousing period. Goods left in the warehouse beyond the permitted period become liable to duty even if they never enter the local market. The owner and the operator should track the period for each lot.

Free zones

Under Article 78, foreign goods may be brought into free zones without duty and without a time limit. Goods taken out of a free zone into the local market without completing the customs procedures are deemed smuggled under Article 143(10). Transfers between free zones and out to other GCC states must therefore be declared and closed in the same way as transit.

When missing cargo becomes a customs case

A shortage is first a duty question. It can also become a smuggling case, which changes the stakes.

The duty demand

Where transit goods do not exit, or a warehouse count comes up short, customs assesses the duty on the missing goods and claims it from the guarantee or from the responsible party. Under Article 93, a shortage in goods under temporary admission is charged at the rate in force on the date of admission. The party that receives the demand should check the quantities, the valuation and the rate applied before it pays.

Deemed smuggling

Article 143 treats several transit and warehouse failures as smuggling. They include failing to proceed to the first customs office of entry and leaving the specified routes. They also include a shortage or change in packages found after the goods leave the customs office, and removing goods from a free zone or warehouse without clearance. A smuggling finding brings fines calculated on the duty or the value of the goods, and possible confiscation.

Penalties for transit and warehouse offences

Under Article 141, fines for offences relating to goods in transit, warehouses and temporary admission are set by the implementing rules. These fines apply in addition to the duty. A forwarder that closes declarations late, or a warehouse that fails to reconcile its stock, can face fines even where no goods are lost.

Force majeure

Under Article 154(a), a party is exonerated where it proves it was the victim of force majeure. A truck destroyed in an accident or goods lost in a fire may qualify, subject to evidence such as police and civil defence reports. Theft without proof that it could not have been prevented is harder to bring within the defence.

Responding to a demand or a guarantee call

The first weeks after a demand decide whether the loss can be reduced and passed on.

Check the facts

Compare the customs record with the transport and warehouse documents: the declaration, the seal numbers, the gate-out and exit records, the delivery notes and the warehouse ledger. A demand for goods that left the country but were never recorded as exiting can be answered with evidence of the exit. That evidence includes the border customs record or the receiving country’s import declaration.

Challenge the assessment

Where goods are missing, the party should check the quantity, the classification, the value and the rate on which customs calculated the duty. A demand that applies the wrong rate or values the goods above their invoice price can be reduced. Our guide to Dubai Customs appeals covers the grievance and appeal route and its deadlines.

Handle the guarantee call

Where customs calls a bank guarantee, the bank pays on demand under the guarantee terms, and the applicant reimburses the bank. The applicant cannot stop the call by disputing liability with customs. It should pursue the customs challenge in parallel and prepare its recovery claim.

Recovering the loss from the party at fault

The party that pays customs is seldom the party that took the goods. Recovery depends on the contracts in the chain.

Against the haulier or subcontractor

A forwarder that subcontracted the trucking can claim against the haulier for the duty and fines it paid, where the loss occurred in the haulier’s custody. The claim depends on the subcontract, the haulier’s limitation of liability and evidence of when and where the goods went missing. Our article on freight forwarder liability and carrier status covers how liability passes along the chain.

Against the warehouse operator

A cargo owner whose goods disappeared from a bonded warehouse can claim against the operator under the storage contract and the rules on deposit. The operator may rely on its liability cap, but a cap that limits liability for the goods may not cover customs duties and fines unless the contract says so. Our article on warehouse liability for damaged or lost goods covers the depositary’s duty of care.

Under the customer contract

A forwarder’s standard terms should allocate customs duties and fines arising from shortage or failure to exit. Terms that allow the forwarder to pass on duties only where the customer caused the loss leave the forwarder carrying the risk of its own subcontractors.

Common mistakes with transit and bonded goods

Leaving declarations open. A transit declaration that is not closed on the system leaves the guarantee exposed, even where the goods exited.

Accepting damaged seals or packages without reservation. Under Article 54(2), a carrier is responsible for packages not in apparently proper condition unless a reservation is endorsed.

Losing track of the warehousing period. Goods left in a warehouse beyond the permitted period become liable to duty.

Moving goods out of a free zone without declaring them. Removal without completing the customs procedures is deemed smuggling under Article 143(10).

Paying without checking the assessment. A demand based on the wrong value or rate can be reduced, but only if the party challenges it in time.

Relying on a liability cap for duties. A cap that covers the goods may not cover customs duties and fines unless the contract extends it.

What forwarders and warehouse operators should do next

• Reconcile declarations weekly. Match every transit declaration to an exit or discharge record and close it on the system.
• Record seals and condition. Note seal numbers and package condition at every handover, and endorse reservations where packages are damaged.
• Track warehousing periods. Keep a register of each lot and its permitted period, and act before it expires.
• Align the contract chain. Make subcontracts with hauliers and warehouse operators cover customs duties and fines arising in their custody.
• Insure the exposure. Check that liability insurance covers customs duties and penalties as well as physical loss of goods.
• Respond to demands quickly. Collect the evidence, challenge the assessment within the deadline and notify the parties you will claim against.

Who is liable for customs duty on missing transit and bonded goods in the UAE?

Under the GCC Common Customs Law, goods in transit and in customs warehouses enter without paying duty. The duty is secured by a guarantee and falls due when the goods fail to exit or go missing. The carrier answers for shortages in transit, the entity in charge of the warehouse answers for shortages in store, and removing goods from a free zone or warehouse without clearance is deemed smuggling.

The main risk is that customs collects from the guarantee or the responsible operator first, and the loss stays there unless that party can prove force majeure or recover from whoever caused it.

The commercial consequence is that records and contracts decide who finally pays. A forwarder or warehouse operator that closes every declaration, records seals and condition, and passes customs liability down its contract chain can limit the loss to the party at fault. One that does not may pay duty and fines on goods it never touched.

For forwarders, warehouse operators and cargo owners, our dispute resolution team advises on customs demands and guarantee calls, shortage and smuggling cases, and recovery claims against carriers and subcontractors.

‍