Establishment of Customs

Since old times, Bahrain has given special attention to the customs sector and collection of customs duties,  by virtue of its strategic location and dominance of trade in the Arabian Gulf region. Hence the importance of regulating and energizing the process of revenue collection emerged since the Al-Khalifa assumed power in Bahrain.  The ruler himself assumed supervision of the Customs Department until the first customs organization was set up in 1860. In 1888, the ruler decided to conclude a deal with a senior Indian merchant to collect taxes and customs duties subject to payment of a certain amount to the ruler. A company was formed for this purpose and a retired merchant was appointed as Director of Customs and a representative of the ruler was appointed to the same company. Application of this commitment system continued for about 35 years.

 Development of the Directorate General of Customs  

The first customs office was established in 1917 at Manama Port. As part of the reformation plans of Shaikh Hamad bin Isa Al-Khalifa, Bahrain Deputy Ruler (1923-1932), the commitment system was abolished and a modern customs department was formed. In 1923, Shaikh Hamad ordered that another premises be constructed at a cost of five thousand Rupees. In 1924, Mr. Claude de Grenier, a British customs officer, was appointed as Director. He organized the department along the lines of the Indian customs systems and introduced the bill of lading as a part of customs processes.  The customs premises was then demolished and replaced with a new building in the centre of the business district, and was known as Bab Al Bahrain Building.

In 1937, a new customs building was constructed on the site of a Manama Port jetty. To accommodate booming commercial activities and the desire to expand the customs building, a new building was constructed near Mina Salman and was opened in 1975. The close geographical proximity of the new building to Mina Salman helped accelerate the finalization of customs formalities. In the 1980's an upper floor was added for the use of senior officials.

Currently, the Directorate General of Customs is planning to move during the 1st half of 2007 to Hidd to be close to the new Mina Khalifa bin Salman, which is being constructed.

Evolution of Bahrain Ports

Manama Port was established in the beginning of the 20th Century. With the great increase in commercial traffic, there was need for another port. Construction of the new Mina Salman started in Jufair in 1957 and was officially inaugurated in 1962 to become the principal port in Bahrain, allowing giant ships to berth, for the first time in Bahrain, alongside the port jetties. In the mid 1970's, Mina Salman was extended with more berths.

Bahrain is now looking forward to inaugurating the new Mina Khalifa bin Salman at Hidd, which will meet the economic requirements of the new century.

Development of Customs Management

In the 1940's, the core function of the customs was to receive, handle and distribute duty-paid imports and exports. It was also to handle customs accounts, statistics, Government reports, registration of ships, issue of pearl diving licences and examination of pearls. In the 1950's, the organizational structure of the customs included a director, an assistant director, a warehousing superintendent, a head clerk, a chief assessor, a port head clerk and a number of employees.

At the beginning of the last century, the customs director was responsible for the customs offices and for the port and warehouses. The position title was then changed to Customs Director & Head of Port. This was due to the developments that took place in Manama Port. Upon the opening of Mina Salman in 1962, the Port Department was separated from the Directorate of Customs, with each having an independent director. However, in view of the close relationship between the two departments, it was decided in 1966 to merge the two divisions into one organization under the name of the Directorate of Customs & Ports. In 1970, the Directorate of Customs & Ports came under the Department of Finance and was renamed to the Directorate General of Customs. In 1976, the Foreign Trade Statistics Section was attached to the Central Statistics Bureau, and in 1997 the organizational structure of the Directorate General of Customs was further reorganized to be at par with regional and international changes. This has resulted in creating new directorates.

Evolution of Customs Duties in the Kingdom of Bahrain

At the beginning of the Al-Khalifa Dynasty, no customs duties or taxes were imposed upon imported goods. The rationale behind this policy was to encourage and attract more trade activities. In the 1920's, a general 5% customs duty was imposed on imports without differentiation, although certain commodities were subject to customs duties by "classification", as a custom duty of 15 Rupees was charged for each intact bundle.

In 1933, as a result of the world's major economic downturn, the customs duty was adjusted to 5% for essential commodities, 10% for luxury goods and 15% for merchandises of a special nature. Over the years, the customs duties continued to change upward and downward to reach the current levels which are as follows:
- Exempted commodities (essential commodities)
- 5% on other commodities
- 100% on tobaccos
- 120% on alcoholic beverages

HEADS OF CUSTOMS & PORTS

Shaikh Khalid Bin Mohammed Al-Khalifa	Shaikh Duaij Bin Khalifa Al-Khalifa	Eid Abdulla Yousif	Shaikh Daij Bin Salman Al-Khalifa	Basim Yacob Al Hamer
1966 – 1970	1970 – 1995	1995 – 2005	2006 – 2008	2008 – To-Date

DIRECTORS-GENERAL OF CUSTOMS

Claude de Grenier 1924 – 1943	G.W.R. Smith 1943 – 1957	G.H. Reid 1957 – 1959	K.L. Arvin 1961 - 1965

Mohammed Ahmed Al-Sa'ei	Abdul Rahman M. Taqi	Khalil Al-Mutawa	Jassem M. Jamsheer
1966	1968 – 1976	1976 – 1992	1993 – 2002
	Ali Ebrahim Al-Mahmeed	Mohamed Ali Taleb
	2002 – 2005	2007 – to-date