The Re-export Zone at Dammam's King Abdul Aziz Port has started operations with the arrival of the first consignment of American cars imported by a local agent.

The Saudi government has permitted this new pattern of trading on the lines of Dubai and Singapore to exploit growing business opportunities with neighbouring countries, the Arab News reports. The project is located in the port but segregated from the normal cargo facility.

It is not governed by the normal port and customs regulations. If the goods are re-exported either by road, sea or railways within a specific period, no customs duty is paid on imports within the zone.

The project has been initiated by the Saudi Development and Re-export Services Company, a private sector venture formed by a group of local businessmen.

An important feature of the Re-export Zone's operation is that the customs authorities do not insist on re-exporting all the goods imported through the facility. Partial shipment is allowed. Company sources say that goods meant for local distribution could be stored within the zone for a specified period, subject to customs approval. The customs duty on goods stored within the zone is levied only when they are taken out of the zone for local distribution.