Free Zone / Rules & Regulations

 
FREE ZONE EXPLOITATION REGULATIONS
Applied in the Management & Exploitation of Beirut Port
 
 
 
Section One: General Provisions
Chapter oneDefinitions
Chapter twoBringing goods into free zone 
Chapter threeRemoving goods from free zone 
 
 
 
Section Two: Public Warehouses
Chapter oneManagement obligations
Chapter twoPort charges and mode of payments
Chapter threeBeneficiary’s obligations
 
 
 
Section Three: Private Warehouses
Chapter oneOperating permission
Chapter twoGuarantees
Chapter threeInstallations and equipment
Chapter fourOperator’s obligations and responsibilities
Chapter five
Chapter six
Chapter seven
 
 
  Section Four: Shared Provisions  
  ATTACHMENTS
Decree number 12844 dated 8/10/98 amendment of articles 218,221,225and 228 of the Customs Law
Decision of council of Minister number 45 dated 26/8/98. 
Official Gazette number 42 dated 17/9/98
 
 

 

SECTION ONE: General provisions
Chapter one: Definitions

 
  Article 1:Definitions of the terms used in this guide:  
 
  • Public warehouses: covered/open warehouses or yards in the Free Zone allocated for the storage and deposit of goods. Public warehouses are managed and run directly by Beirut Port Management.
 
 
  • Private warehouses: covered/open warehouses: Their operation of the Free Zone is licensed to one operator.
 
 
  • Management: Beirut Port Management.
 
 
  • Customs: Lebanese Customs Authority.
 
 
  • Owner of goods representative: A captain, maritime agent, transport company, transporter, licensed clearing agent or any other person holding legal proxy issued by the owner of the goods.
 
 
  • Beneficiary: The actual or designated person who stores or deposits goods in the public warehouses in the Beirut Port Free Zone.
 
 
  • Operator: The actual or designated person who regularly operates a private warehouse in the Beirut Free Zone and who is engaged in commercial, industrial or service industry ventures.

 

 

Chapter two: BRINGING GOODS INTO THE FREE ZONE  
 

Article 2:

  • Goods of any kind and origin may be brought into the Free Zone, except for prohibited goods, especially those covered by the provisions of Article 219 of Customs law.
 
 
  • Drugs, weapons , ammunition and explosives as well as goods covered by the Israel Boycott Law are absolutely within the Free Zone.
 
 
  • Materials such as explosives or other dangerous materials may be imported, manufactured or stored in Lebanon only upon obtaining the necessary special dispensation to do so.
 
 
  • Materials such as explosives or other dangerous materials may be imported, manufactured or stored in Lebanon only upon obtaining the necessary special dispensation to do so.
 
 
  • The following goods may not be brought into the Free Zone except under conditions specified by Management which meet general security, health and safety requirements: highly odorous, combustible, inflammable. Poisonous, radioactive or environmentally prohibited goods.
 
     
  Article 3:Only goods originally destined for the Free Zone may be imported and then the following documents is required:  
 
  • For goods arriving by Sea: An original copy of the manifest or summary of goods destined for the Free Zone which has been stamped by Customs.
 
 
  • For goods arriving overland: Shipping manifests, waybills, land transport manifests or Customs declarations are acceptable.
 
 
  • For national goods or goods which acquire national status: A declaration to be presented to the Management which includes all necessary Customs formalities.
 
 
  • Management must send copies of all registered Declarations to Customs for their information.
 
 
  Chapter Three: REMOVING GOODS FROM FREE ZONE  
  Article 5:Whilst observing existing regulations, the removal of goods for the Free Zone is subject to the following:  
 
  • By Sea: goods may be removed by virtue of a Removal Permit (issued by Management according to Customs regulations). The permit lists the following: kind and origin of goods, it's gross and net weight, value and number of packages and their identification numbers.
 
 
  • By Road to other countries, Customs offices or Free Zones: goods may be removed in accordance with normal international transit formalities. A Removal Permit (issued by Management according to Customs regulations) is issued in this case.
 
 
  • In the direction of the Customs Zone for local consumption or other Customs requirement: goods may be removed by order of a Customs declaration and under the conditions specified under Article 224 of Customs law.
 
 
  • Management must send copies of all registered permits to Customs for information. Declarations are the responsibility of the presenter.
 
     
  Article 6:The declarations and forms relating to goods which have been subject to transfer, ally manufacturing or any other act must include all evidence relating to these operations before and after they are carried out. It is mandatory, in respect of mixed or manufactured goods which must enter the Customs area, to mention in the declaration and forms the various kind of goods used, evidence thereof and origin.  
 
SECTION TWO: Public warehouses
Chapter one: MANAGEMENT OBLIGATIONS
Article 7: Whilst observing the provisions of Articles 2 and 3, Management receives goods in their public warehouses, unless the owner requests they be transferred directly to a private warehouse.

Article 8:Goods are removed from public warehouses upon the request of the owner or representative. Management workers undertake the delivery of paid goods after completing all necessary formalities.

 
 

Article 9:

  • Management takes all necessary precautions relating to the goods without prior notification of the owner and at the owner's expense. Management undertakes any action necessary to preserve goods in current condition or to restore goods or containers to their former conditions.
 
 
  • The Management must positively remove, after customs approval, outside the free zone or the country, at the goods owner's expense and responsibility, all goods whose entry there is forbidden. This does not prevent the application of penalties of any kind in respect of those responsible for the entry of these goods to the free zone.
 
 
  • The beneficiary may by virtue of "regular request to do works" undertake all works stipulated in article 21 8 of the Customs Law on his goods in public warehouses under the management supervision and within the facilities available in these warehouses.
 
 
  • The management gives the beneficiary at his request, certificates of entry of goods; these certificates are not considered ownership documents for the goods in question and may not be endorsed.
 
 
Article 10: Management arranges all ordinary and extraordinary porterage in the Free Zone, except for such activities occurring within private warehouses. Normal porterage includes:
 
  Normal porterage includes:  
 
  • Receiving and delivering goods at public warehouse doors in the Free Zone.
 
 
  • Counting and storing goods in public warehouses. Presenting goods for Customs inspection, opening, closing, and weighing them when needed
 
 
  • Receiving and delivering containers and the goods contained therein.
 
 
  • Extraordinary porterage is all porterage, transportation, loading not stated above.

Article 11
:The Management may, when necessary and after payment of Customs duties:
 
 
  • Dispose of rubbish accumulated in public warehouses which cannot be attributed to a particular shipment.
 
 
  • Dispose of containers and covers not removed by their owners.
 
 
  • Deliver rubbish shipped with goods to their owners upon removal of these goods. The Management may, in case rubbish is not removed, dispose of it after notifying its owners by registered letter, Owners have a period not exceeding 8 days from date of notification to do so themselves.
    Management undertakes the above operations at the beneficiaries own expense.

 
  Chapter two: PORT CHARGES AND MODE OF PAYMENTS  
  Article 12:Port charges are payable on all goods deposited in public warehouses as per management tariffs. Storage charges are double on goods occupying more space than is necessary, either because of improper storage or at the owner's behest.

Article 13
:All port charges due are paid as follows:
 
 
  • Charges due are paid on goods upon their final removal from public warehouses. In light of Customs status to which goods are subject when removed and without constraint of the value of the goods, final removal takes place when the last package is removed.
 
 
  • The Management may request advance payment of extraordinary porterage charges or ask for a deposit in their respect. The account is to be settled upon completion of work.
 
 
  • The beneficiary must, in the event that goods remain 3 months and one day in public warehouses, not pay port charges immediately if this period expires. For every three month period Free Zone Transit Tariffs are applicable for the duration of stay.
 
 
  • The Management may request the payment of port charges before the 3 month period elapses in respect of perishable goods.
 
 
  • The Management may ask for payment of charges on all goods, even if part is damaged and the owner wishes to remove only the part that is undamaged.
 
 
  • The porterage charge is due in full on work undertaken at the behest of the beneficiary or representative. Even if this is the result of an error in communication, torage, porterage, for transportation and other charges will be payable if goods are later returned to the warehouse.
 
 
  • If the beneficiary falls behind in paying charges, the Management will extend an 8-day period of grace. If the beneficiary still fails to make good on outstanding charges, the Management may ask the President of the Execution Department to recover costs by way of a public auction.
 

 


Chapter three
: BENEFICIARY'S OBLIGATIONS

 
  Article 14:The beneficiary must:  
 
  • Comply without reservation with all instructions, regulations governing the Free Zone and other arrangements decided by Management having read and understood these regulations
 
 
  • Pay port charges due before removing goods for any purpose.
 
 
  • Produce proper documentation approving the removal of goods. Article 15: The beneficiary is considered responsible for damages to Management installations and employees or other operators goods caused by the beneficiary's goods.
 
 
SECTION THREE: Private warehouses
 
  Chapter one: OPERATING PERMISSION
Article 16: Permission may be given to use special areas in the Free Zone to all persons, actual or de facto, residing in Lebanon or having a representative here. Permission depends on proposed usage and feasibility of proposal.

Article 17
:The following provisions are observed in the granting of permission:
 
 
  • The party concerned presents the application for use to the Management. In this, all activities, goods Art to be imported and manufacturing activities are to be specified.
 
 
  • Management reserves the right to deny requests without further explanation.
 
 
  • Management assents in the form of a written contract between Management and the presenter of the request. This permit may be considered active once the delivery order has been signed by both parties.
 
 
Article 18
:Before commencing operations, the operator undertakes to abide by the following:
 
 
  • To accept without reservation the site allocated, to refrain from demanding compensation from the Management for direct or indirect damages caused by: changes of climate, storms, overloading, rough seas, floods or other unexpected events including those beyond the control of either party. This list is not exhaustive.
 
 
  • To comply without reservation with all the regulations of the Free Zone having read and understood them fully.

 
  Chapter two: GUARANTEES  
  Article 19: The operator must give the Management a cash or bank bond to guarantee compliance with all conditions of use. Bank bonds must be issued in the Management's name by a recognized bank.
The amount of the bond is set as follows:
1- In respect of open land and buildings erected by operator:
 
 
  • For the first 200 sq. meters or part thereof: 2 years rent.
 
 
  • For the second 200 sq. meters or part thereof: 1.5 years rent.
 
 
  • For each additional area: 1 year's rent, 
2- In respect of building erected by Management:
The bond is set at one year's rent.
3- In respect of adjustment of rent:
The amount of the bond is adjusted in line with rent adjustments. 
 
 
Article 20
:The bond is forfeited to Management in the two following cases:
1+ If the operator cedes his usage to someone other than Management as in Article 43.
2+ If the contract is breached by a contravention of Free Zone Regulations.

Article 21
:The amount of the bond referred to in Article 19 is returned to the operator without interest in the circumstances described in Paragraphs 1 3 of Article 41 Expenses fees and charges will be deducted from this amount according to the provisions of these regulations.

 
  Chapter three: INSTALLATIONS AND EQUIPMENT  
  Article 22:Without Management's prior approval, the operator may not;  
 
  • Erect buildings in the Free Zone.
 
 
  • Erect and operate industrial machinery.
 
 
  • Transform or manufacture goods.
 
 
Article 23
:The operator must:
 
 
  • Comply with building regulations drawn up by Management.
 
 
  • Draw up plans for all proposed constructions and submit them to Management for inspection and processing.
 
 
  • To attach to these plans approximate construction costs. Once accepted, this amount is used to determine rates of compensation as set out in Article 25.
 
 
Article 24
:The management has the right to oversee the erection of licensed buildings, Management incurs no responsibility for either the right of supervision or the license to build.

Article 25
:In the event the Free Zone is dismantled, relocated or its boundaries are changed, all operators who paid for construction have the right to be compensated.
Compensation once specified will be subject to yearly depreciation calculated at 1 0% of original costs agreed by Management. Compensation will not be increased for additional decorative construction undertaken after the value is set

 
  Chapter four: OPERATOR'S OBLIGATIONS AND RESPONSIBILITIES  
  Article 26: The operator must maintain registers of all goods passing through their warehouses to accord with those prepared by the Management according to customs guidelines. Customs for their part, will keep similar registers.

Article 27
: The operator must:
 
 
  • Observe protection and safety rules at work according to all current laws and regulations and instructions issued by the Management.
 
 
  • Maintain a special register listing all machinery and equipment licensed for use. Items to be identified by kind, quantity, power etc
 
 
  • Adopt a permanent residence, registered with the Management, for purposes of official notification. In the case of the operator's absence from this elected place of residence, a notice must be placed on the door as proof of absence.
 
 
Article 28
:In observation of Article Three, all goods entering a private warehouse by way of the docks, other forms of transportation or from other warehouses must be declared to the Management. The declaration is to include full details: kind, origin, gross and net weights, value, number of packages and their kinds, quantities and identification numbers.

Article 29
: Goods may be removed from private warehouses in accordance with procedures laid out in Section One of the regulations. 

Article 30
: Undertakings permitted under Article 218 of the Customs Law may be carried out in private warehouses by virtue of a "works request" that has been accepted by the Port Management.

Article 31
:Responsibility for arranging the deposit of goods in a private warehouse falls upon the operator. Arrangements must permit Management to inspect and supervise the operation.
 
     
  Article 32:The operator must:  
 
  • Prove ownership or guardianship over goods to be deposited in a private warehouse. Management has full authority to ask the operator to produce whatever documentation it sees fit to prove actual ownership of goods. Non compliance will result in the contract being terminated.
 
 
  • Take out insurance policies acceptable to the management as proof that goods have been insured against fire and explosion.
 
 
  • Deposit a true copy of the original insurance policy as well as proof of payment with Management.
 
 
  • Renew said policy upon expiry to cover the period of occupancy, without need of prompting by Management. Management reserves the right to check, by whatever means it deems necessary, that the policy has been properly renewed.
 
 
Article 33
:The operator may not ask Management to reduce or waiver operation tariffs nor to be compensated for any damages caused by temporary actions on the part of Management. These actions include: equipping, organization, building projects and maintenance etc...

Article 34
: The contract is subject to cancellation in the following cases:
 
 
  • If the operator contravenes the conditions of operation specified in Free Zone regulations.
 
 
  • If the operator fails to operate as licensed for a period of six months unless causes are beyond the operators control.
 
 
  • If the operator does not complete the licensed building during the period stipulated in the license.
 
 
  • If the operator falls behind in complying with his obligations in spite of being warned.
 
 
  • If the operator vacates his place of residence without written notification of the new address in 3. Lebanon or without informing Management of the name of a designated, accredited representative
 
 
  • If the operator changes the use of a licensed private warehouse without Management's prior written approval.
 
 
  • If the operator is late in paying fees or rents.
 
 
Article 35
:The contract specifies the method of payment of rents and installments - as determined by Management - on condition that the advance installment is not less than six month's rent.
 
     
  Article 36:If the operator falls behind in paying the rent or fails to make good on payments within eight on days of being contacted by Management, the operator is obliged to pay interest on the amount owed for every month or part thereof the contractor does not pay. Interest will be determined according to the preferential rate decided each month by the Association of Banks. In addition, Management may terminate the contract and require the operator to vacate the premises.

Article 37
:The operator is responsible for:
 
 
  • All direct or indirect damage arising from actions, mistaken or negligent, that affect other operators, the Management, its employees, workers or properties.
 
 
  • The actions of all employees, their mistakes, negligence or lack of consideration for other operators, the Management, its employees, workers or properties.
 
 
  • Damages affecting other operators, the Management, its employees, workers or properties resulting from defective goods or concealed explosives or other prohibited goods inside or outside a private warehouse. 
    Any contravention of laws and regulations, especially those related to the Free Zone. 
    Any contravention of Customs laws and regulations.

Article 38
:Abiding by the conditions imposed by these regulations does not preclude the operator from assuming full responsibility for event arising out of the situations mentioned above.
 
  Chapter Five  
 
Article 39
:The operator is licensed to operate for a period of not less than one year and not more than five years for commercial storage and fifteen years for manufacturing.

Article 40:The management may:
Renew the license for a period shorter than or exceeding the original period of operation in observance with the provisions of the preceding article. Licenses may be renewed more than once.
Decline to renew the license if the operator does not properly fulfill obligations concerning the transit, storage or manufacture of goods noted in the contract. 

Article 41:Contracts will be terminated in the following cases:
 
 
  • Expiry of the contract.
 
 
  • Upon prior agreement of both parties concerned.
 
 
  • Upon termination of the Free Zone or alteration of its boundaries or location.
 
 
  • Upon the bankruptcy of the operator.
 
 
  • The decline in quality of a merchant or industrialist.
 
 
  • Upon breach of contract.
 
  Article 42:In case of termination or non-renewal of a contract as a result of the conditions laid out in Article 41 the operator is obliged to vacate the premises occupied, removing all goods therein. All properties are to be returned to the Management with no recourse to compensation. 
The operator must comply with these stipulations within a time period specified by the Management undertaking all procedural formalities and at the operator's own expense.
If the operator fails to comply with these obligations, the Management may: 
  •  Remove all remaining goods to their own warehouse at the operator's own expense. 
  • Demolish any buildings erected by the operator. Demolition and rubble clearance 
will be Conducted at the operator's own expense. 
The actions outlined above will be undertaken only after a full report prepared by the Management's representative has been verified by a public notary and has been adopted in settlement of outstanding accounts. Management must supply Customs with a copy of this report for their information.

 
  Chapter Six  
  Article 43:The owner may not transfer the operation to any person, actual or representative.

Chapter seven: PAYMENT OF PORT CHARGES
Article 44:Port charges on goods stored in private warehouses are payable when goods are removed from public warehouses, unloaded directly onto the docks or from other forms of transportation. Charges are determined in accordance with Free Zone Transit Tariffs Predetermined fees are payable on goods removed from private warehouses for the purposes of local wholesale or retail consumption in accordance with the provisions of Article 225 of the Customs Law.
Goods removed from private warehouses by the Management at the behest of the operator or the operator's representative are subject to full porterage fees. If, as a result of a mistake on the part of the operator, goods are then stored in a public warehouse, all storage, porterage and transportation fees are payable without discount or discharge.

Article 45:Supervision within the Free Zone is exercised by the Management’s employees charged with this duty and also by members of special units within the port, should Management deem this necessary.
This is in accordance with the provisions of article 221 of the Customs law and Article Four of these regulations as well as other current laws and regulations.
Special unified Customs offices will be placed at all entrances to the Free Zone and authorized to deal with full customs formalities for all goods passing through, including retail sales formalities as stipulated in Article 225 of the Customs Law.
Customs Employees are authorized to search all people entering or leaving the Free Zone by land. This search extends to all vehicles and machinery as well. The Management's employees may, by proper order and on a case by case basis, conduct inspections at any time within the Free Zone.
 
     
  Article 46:All persons wishing to access the Free Zone must be in possession of a valid Free Zone pass. Upon payment of a fee, Management will supply the operator, his representatives, employees and workers with the passes. Passes are valid for a maximum period of one year and are renewable. On-duty Port employees or other relevant officials who have notified Management of their intent, are exempt from this requirement. Clearing agents and their employees may enter the Free Zone on production of valid passes. Management may also grant passes for visitors wishing to enter the zone for one or more days. Cars and trucks may not remain in the Free Zone overnight without permission from the Management. 

Article 47:The Free Zone, including all public warehouses, will be open from 7AM to 6PM. Management may alter opening hours as it sees fit. The Free Zone will be oft-limits outside of these times and on public holidays. Management may authorize work within the Free Zone outside of normal working hours if the operator or beneficiary presents a special request and arranges, when necessary, to pay any fees or charges arising from this work.

Article 48:Management is responsible for controlling traffic, maintaining roads, street lighting and sewage systems at no charge to users. Fires may not be lit within the Free Zone.

Article 49:Management is not responsible for goods stored in public warehouses in accordance with current regulations. Management must inform Customs of any breach of regulations upon learning of them, regardless of whether breaches are committed in public or private warehouses.

Article 50:Management is not responsible for the following:
Damage or harm to goods resulting from the following: climatic conditions, changes in temperature or humidity, inadequate packaging, attack by vermin or pests, flaws within the goods themselves, explosions, collisions or Acts of God. 
Damages resulting from the actions or negligence on the part of the operator, the beneficiary or representative/employees of either party whether or not these actions are in contravention of protection and safety regulations. 
Direct or indirect damages resulting from the improper maintenance or usage of property belonging to the owner.

Article 51:Persons in breach of current Free Zone rules and regulations may be subject to any or all of the following:
The guilty party will be prohibited from using or benefiting from the Free Zone. Contracts with the guilty party will be terminated. Parties in contravention of the Penal Code or Customs Law will be prosecuted. Parties in contravention of protection and safety regulations will be prosecuted. Withdrawal on a temporary or a permanent basis of permission to enter the Free 

Article 52:Regulations come into force immediately upon publication of the official gazette.
Amendments to the Customs Law: Articles 218, 221, 225 and 228
Decree 12844
August 10,1998

Article 1: Article 218 of the Customs Law has been amended and now reads as follows: The following operations are permitted within the Free Zone: goods may be aired, cleaned, separated, mixed and classified, they may also be burnt, broken, rendered into powder or otherwise changed in form and goods may also be freely transported within the zone. The manufacturing or modification of goods may also be permitted as long as the nature of the work accords with current legislation related to the Free Zone or any future amendments.

Article 2: Article 221 of the Customs Law has been amended and now reads as follows: The role of Customs is not simply restricted to controlling access to the Free Zone and customs employees are entitled, whenever necessary, to full access to all areas of the Free Zone.

Article 3: Article 225 of the Customs Law has been amended and now reads as follows: It is strictly forbidden to reside within or to consume goods within the Free Zone but wholesale and retail sales may be conducted pursuant with the conditions and regulations laid out by the Customs Department.

Article 4: Article 228 of the Customs Law has been amended and now reads as follows: Goods may not be deposited in the Free Zone unless they are first registered in the Entry and Exit registers. Specimen registers approved by the Customs Department have been created by the committee responsible for the Zone and are available for inspection. Registers are to be kept by goods depositors or owners and must contain full details of the nature of goods kept within the Zone.The Customs Department will create their own Entry and Exit registers as well as monitor Control and Commercial statistics. The Department will make sure there are no discrepancies between the registers.