• Before acting as a Warehouse Keeper, an individual must first register with the FTA.
• To do so, they must submit an application that includes personal details and information about the intended operations.
• Additionally, a Designated Zone application must be submitted for each zone to be supervised, with a fee required for each 12-month registration period.
• The FTA will evaluate a Warehouse Keeper’s eligibility based on various criteria and conditions, as outlined below.
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It is necessary for the Warehouse Keeper to identify the types of excise goods that are currently stored or will be stored in the Designated Zone.

1. 1. When applying to register a Designated Zone, the Warehouse Keeper must inform the FTA about the expected average month-end stock of relevant excise goods for a 12-month period. This is determined differently depending on:
   • whether the applicant is already in business and the applicant has a warehouse, the average month-end stock is based on the actual data of the 12 months before the application.
   • If the applicant is new to the business, they must forecast the expected month-end stock for each of the 12 months.

    

   Once the registration or renewal application is approved, the Warehouse Keeper must monitor the average month-end stock for the following six months and inform the FTA if it increases by more than 20% of the originally reported quantity at the time of registration or renewal as the case may be.

    

   For example, a Designated Zone was registered effective from April 2023. At the time of registration, the average month-end holding stock of excise goods was 50,000 units. The month-end stock for the following 6 months in 2023 was:

   Month	April	May	June	July	August	September
   Units	60,000	74,000	80,000	95,000	93,000	78,000

    

   According to the information provided, the average month-end stock of excise goods has increased to 80,000 units, which is 60% higher than the previously declared quantity of 50,000 units. Since this increase exceeds the 20% threshold, the Warehouse Keeper must inform the FTA via the EmaraTax portal.

   Once notified, the FTA will increase the financial guarantee for that Designated Zone accordingly.

The FTA places great importance on physical security when determining whether to approve a Warehouse Keeper’s request to supervise a Designated Zone. During the review of the registration or renewal application, the FTA may inspect the Designated Zone site to confirm that strict and sufficient security measures have been implemented to manage, monitor, and protect excise goods that have not yet been subject to Excise Tax.

The applicant is responsible for providing enough evidence to demonstrate that they meet the following physical security standards:

• The Designated Zone must have adequate physical space to store at least the average amount of goods that will be held at the end of each month as indicated in the registration form.
• The Designated Zone has the capability to accommodate excise goods stored in distinct, recognizable areas that are conspicuously labeled.
• The FTA requires that the entrances and external doors of the Designated Zone premises be made of solid materials and equipped with suitable locking systems like electronic locks or keypad code locks. In cases where separate freight doors are installed, all access through these doors must be monitored by CCTV cameras and/or security personnel.
• The windows are equipped with barriers to prevent or limit access and removal of the excise goods.
• The anti-theft or anti-intrusion systems are set up to detect any unauthorized access outside of the normal business hours. These systems are linked to a security monitoring point such as a security office located on the site.
• The suitability of the warehouse for conducting operations can be demonstrated by presenting relevant documentation such as a health and safety certificate issued by a competent authority like the UAE Civil Defense.
• The Designated Zone site is enclosed with a perimeter fence that prevents unauthorized access. The height of the fencing is adequate to prevent illegal entry through, over, or under it, and the fence is well-maintained.
• The entry and exit points of the premises are monitored and unauthorized access is prevented. Gates have security locks and barriers to limit access.
• Trained security personnel are responsible for guarding the premises. The Warehouse Keeper keeps records of the security guards present on the site, including their work schedules, responsibilities, and the contact information of their supervisor who oversees the overall security of the premises. Security personnel stationed at the gates conduct inspections on anyone leaving the premises.
• The Warehouse Keeper keeps records of who enters the premises, including both authorized employees and visitors.
• Security lights are placed outside and inside the building to provide light for entry and exit points, storage areas, parking and holding areas. There is enough light to see everything clearly on the CCTV system.
• A strong CCTV system covers all the entry and exit points, as well as the storage areas of the premises. It is suggested that the surveillance system should have the ability to record in real-time, automatically store recordings, have night vision cameras and high-quality video recordings that can save up to 60 days of recording.

FTA’s approval for registration does not demand meeting all criteria. The officer assesses evidence and physical inspection to determine if minimum physical security requirements are met. If not, applicant is given 20 business days to implement necessary measures, else FTA may reject the application for registration or renewal.

If the FTA finds during an inspection that any of the physical security measures are missing in the registered Designated Zone, the Warehouse Keeper will be informed to make improvements within 20 business days. Failure to do so will result in the registration status being suspended for 20 business days, and the imposition of administrative penalties.

The Warehouse Keeper needs to have a stock and record management system that keeps track of all excise goods entering and leaving the Designated Zone. An accounting and inventory management system is recommended to provide a clear audit trail. The system must be able to identify:

1. the stock levels at any given time,
2. the quantity and value of excise goods coming in and going out of the zone,
3. those transferred to another Designated Zone or for export and
4. those produced within the zone.

If the stock and record management system doesn’t meet the requirements, the FTA may reject the registration request. The FTA may ask the applicant to implement the necessary measures within 20 days, and failure to do so may lead to rejection. If the FTA finds an insufficient system during an inspection, the Warehouse Keeper will be notified to take action within 20 days, and failure to do so may result in suspension of the registration status, penalties, and restrictions.

Warehouse Keepers are permitted to register a Designated Zone for a 12-month period, and the registration must be renewed every 12 months. To renew the registration, the Warehouse Keeper can complete and submit the renewal form available on the EmaraTax portal at least 20 business days before the expiry date.

If the renewal application is not submitted within this period, the Designated Zone’s registration will be suspended for 20 business days and the consequences outlined above will apply. If the renewal application is still not submitted within the suspension period, the Designated Zone will expire. If the Warehouse Keeper wishes to continue operating the expired Designated Zone, they must submit a new application to register the DZ that expired due to late renewal.

After the FTA approves an application for registration or renewal of a Designated Zone, they will notify the applicant of the amount of financial guarantee required for each area. The applicant must provide this guarantee within 40 business days, and it needs to be renewed every 12 months. If they fail to do so, their application will be rejected.

The required financial guarantee may be adjusted after registration, and the updated guarantee must be submitted within 40 business days to maintain the registration status. If the updated guarantee is not submitted within this time limit, the registration status will become “suspended” for 20 business days. If no updated guarantee is submitted by the end of the suspension period, the registration will expire, and all excise goods will be considered released for consumption, and Excise Tax should be paid for these goods.