Establishing the Customs Union on January 1st 2003 was a quality shift in the joint economic action as the customs union is basically based on a common external tariff, elimination of trade barriers, uniform import/export procedures and treatment of the geographical territory of the six member States as a single customs territory. Though the creation of the GCC customs union was a little bit late, yet it is deemed as an advanced union in legal terms as Article (1) of the GCC Economic Agreement, signed at Muscat Summit in December 2001, outlines the following three basic principles of the GCC Customs Union:

a) A Common External Tariff
b) Unified Customs regulations and procedures ( A Common Customs Law has been effective since 2002)
c) Uniform customs procedures
d) Single entry point where common duties are levied
e) Intra-GCC movement of goods without tariff or non-tariff barriers
f) National treatment of GCC goods

As outlined above, the main objective of the customs union is the liberalization of Intra-GCC trade. Therefore private sector in all GCC States is directly influenced by the establishment of such customs union which allows Intra-GCC flow of goods without tariff or non-tariff barriers. However, Intra-GCC movement of goods is subject to certain GCC laws and resolutions that address issues such as the veterinary and agricultural quarantine and control of the imported foodstuffs.