Govt underscores importance of ensuring equality between Kuwaiti-Gulf origin products

In a recent directive addressed to all government agencies, the Council of Ministers underscored the importance of ensuring equality between Kuwaiti-origin (local) and Gulf-origin (national) products when considering them for any type of tender allocation.

The directive, a copy of which was acquired by Al-Qabas, emphasized the necessity of adhering to the legal opinion provided by the Fatwa and Legislation Department. According to the department’s conclusion, there should be no preferential treatment given to local products over national ones beyond a 20% margin, as specified by tender laws concerning local versus imported goods, reports Al-Qabas daily.

A disagreement has arisen recently among government bodies and regulatory authorities regarding the interpretation of Article 62 of Law No. 74 of 2019, which amends certain provisions of Law No. 49 of 2016 concerning public tenders.

This article states that priority in public procurement should be given as follows:

• In supply tenders, the Council or relevant authority must award the bid to the local product if it meets specifications, conditions, and its prices do not exceed those of similar imported products by more than 20%.
• The products referred to in the previous clause must adhere to Kuwaiti specifications and standards. If these are unavailable, Gulf standards should be used, and failing that, international standards.

Despite the Audit Bureau advocating for a 20% price preference for local products while distinguishing between local and national producers, government agencies interpreted equality between producers differently, citing international agreements between Kuwait and Gulf Cooperation Council countries.

This discrepancy prompted the intervention of oversight agencies to resolve the matter, leading to a decision by the fatwa and legislation department that resulted in equal treatment of all producers.

Local industrialists have previously emphasized the necessity of supporting Kuwaiti national products akin to practices in Gulf countries. They pointed to court rulings favoring Kuwaiti products in various tenders and stressed the importance of supporting local industries to diversify the economy.

They argued that prioritizing local products in government tenders and projects would encourage young entrepreneurs to establish industrial ventures, create jobs, and stimulate small and medium enterprises, thus adding value to the economy.

One perspective is grounded in the Gulf Agreement signed in December 2001, which supplements the Gulf Free Trade Area agreement ratified by the National Assembly in November 1981. This agreement mandates equal treatment of citizens across member states without discrimination in economic fields and gives precedence to its provisions over local laws and regulations.

National product: Any product originating from Gulf Cooperation Council countries in accordance with the provisions of various laws including Law No. (58) of 1982, Law No. (5) of 2003, and Law No. (81) of 1995.