Jordan's Import and Export Law: Licenses, Restrictions and Challenges
What costs traders in Jordan the most is neither import fees nor shipping costs, but a consignment held up at the border or a license canceled after the contract has been signed, turning the profit on a deal into a loss within days. The framework under which these situations are decided is the Import and Export Law of 2001, which replaced Import and Export Law No. 14 of 1992 and kept the related regulations, instructions and decisions in force until they are replaced, to the extent they do not conflict with its provisions. This law built a system that looks simple on the surface, since it made freedom the general rule; but the exceptions to that rule are spread across prohibition, restriction to specific entities and licensing, and the status of goods within them is set by administrative decisions that can be challenged before the administrative judiciary. Because an error in assessing the legal status of goods, or in dealing with an adverse administrative decision, translates directly into financial loss, contracting for a foreign trade deal is a matter to be put to a specialist lawyer before it is signed, not after it runs into trouble.
1. Scope of the Law
The law sets the general framework governing the entry of goods into the Kingdom and their exit from it, and this covers all kinds of goods and materials, whether plant, animal, industrial or mineral products. Under the law, "goods" means every commodity or material that falls within these categories, while "competent authority" means any official body that its own legislation has empowered to approve the import or export of particular goods.
The result is that the law's provisions are not limited to one type of commodity but extend to every kind of goods, subject to the special provisions that may apply to some of them by reason of their nature. This breadth of scope is the source of a recurring practical problem: a trader may deal in a commodity they consider ordinary, while under its legal classification it falls under another competent authority whose approval is required. Identifying the competent authority for a particular commodity, and whether its approval is needed at all, is itself a legal point that merits consultation before a letter of credit is opened or a contract is concluded.
2. Freedom to Import and Export Is the General Rule
In Article 3 of the law, the legislature established that the general rule is to allow goods to be imported into the Kingdom without restriction, provided the importer's card is produced when the goods are cleared, or the fines imposed under the regulations issued for this purpose are paid. It likewise allowed goods to be exported from the Kingdom or re-exported without restriction, provided the exporter's card is produced.
The importer's card is the document that the Ministry of Industry and Trade issues to an importer registered in the register of importers kept for this purpose, and the exporter's card is the document the Ministry issues to an exporter registered in the register of exporters. The law exempted certain cases from the importer's card requirement, among them a farmer who imports the agricultural supplies needed for their farm, and a person who imports goods for personal use. It exempted certain categories from the exporter's card requirement, among them exporters of vegetables and fruit unless the Council of Ministers decides otherwise, goods exported for personal use, and agricultural products that the Minister decides to exempt.
This rule may be understood as a simplification of matters, but in reality it carries a different kind of risk: relying on "the general rule" without checking the status of the specific goods is what lands many traders in trouble at clearance, because the exceptions are neither few nor fixed, and they change through successive administrative decisions.
3. The Four Statuses of Goods
Although the general rule is to allow, the law excepted categories of goods from that rule. As a result, any goods under the Jordanian legal system fall into one of four statuses, each with an entirely different effect on the deal:
| Status of the goods | What it means | Practical effect on the deal |
|---|---|---|
| Free goods | Fall under the general rule in Article 3 | The transaction proceeds on production of the importer's or exporter's card, with no further restriction |
| Prohibited goods | A decision has been issued prohibiting their import or export | There is no room to contract for them at all, and any contractual obligation concerning them faces a problem with its subject matter |
| Goods restricted to a specific entity | Their import or export has been wholly or partly restricted to a specific entity | The trader cannot complete the transaction alone except within the limits the decision leaves open |
| Goods subject to a license | The law or legislation requires a license for their import or export | The deal depends on an administrative decision that may be granted or refused, and a refusal must state its reasons |
Knowing the legal status of the goods being traded first requires checking whether they are free, prohibited, restricted, or goods that need a prior license. This check is not a formality, because a mistake in it is not easily corrected later: goods that reach the border with a status other than the one the contract was built on become the subject of a dispute with the administration and with the foreign party at the same time. This area also intersects with more serious criminal characterizations that we have dealt with in our article on customs smuggling in Jordanian law, an intersection the lawyer studies carefully when the status of the goods is in dispute with the customs authority.
Practical note: The status of goods is not a fixed given, as the Council of Ministers may issue decisions of prohibition or restriction on the recommendation of the competent authority and with regard to the relevant international agreements, and the status may change after the contract is signed and before it is performed. In that case the lawyer reviews the effect of the decision on existing obligations, and whether goods contracted for before it was issued fall within the regard the law requires to be given to such goods. Do not sign an import contract or documentary credit before this point is settled.
4. The Two Types of License and the Considerations Behind Them
The law distinguished between two types of license. An automatic license is an import or export license that the Ministry or the competent authority issues whenever the conditions and requirements for granting it are met, and the Minister determines which goods are subject to it for import or export. A non-automatic license is one that the Ministry or the competent authority may issue when the prescribed legal conditions and requirements are met.
The difference between the two is fundamental from the standpoint of the trader's legal position: under the first, the administration's power is closer to being bound once the conditions are met, while under the second it has a wider margin of discretion. Certain goods may be made subject to non-automatic licensing when considerations of public safety, public health, public order, protection of the environment and natural resources, or national security call for it; they may also be made subject to it if they are subject to quantitative restrictions under the legislation in force or the relevant international agreements.
Determining whether particular goods are subject to automatic or non-automatic licensing, and the wider or narrower administrative power that follows from that, is among the matters on which the lawyer builds a position when facing an adverse decision, because the limits of judicial review of the decision differ according to the nature of the power the administration exercised.
5. The Duration of the License and Its Personal Nature
The law set the validity of an import or export license at one year. Licenses relating to goods subject to quantitative restrictions expire once the quantity specified in the license has been imported in full, provided their validity does not exceed one year in any case. Expiry in the case of quantitative restrictions is therefore tied to two things together: completion of the licensed quantity, and the maximum time limit set by the law.
The legislature also established that import and export licenses are personal: they may not be transferred or assigned to a third party except with the approval of the competent authority and provided the necessary legal requirements are met. This rule reflects the regulatory nature of the license, as it is granted to a specific person after verifying that certain conditions are met in that person, so it may not be treated as a right that can be freely traded. This point in particular is a recurring source of error in commercial practice, as partners sometimes agree to use another person's license or to dispose of it as part of arrangements between them, without realizing that this runs up against the license's personal nature and its consequences.
6. Safeguards Against an Adverse Administrative Decision
This is the most important part of the law for an affected trader, because the legislature did not leave the administration's decisions in this area unchecked.
First, it required the Ministry or the competent authority to notify the license applicant of its decision if it does not approve the application, and it did not stop there: it required that a refusal decision state its reasons. The aim of this provision is to ensure transparency in administrative decisions on import and export, to let the interested party know the reasons the administration relied on, and to enable them to exercise their right of challenge under the law. In practice, the statement of reasons is the material the lawyer later works with, since the decision is measured against the reasons the administration itself gave.
Second, the law allowed the body that issued the license to cancel it in specified cases. The most notable are a Council of Ministers decision prohibiting the import or export of the goods or restricting it to a specific entity, with regard for goods contracted for before the decision was issued; a decision by the competent authority not to allow the import or export because trading in the goods is banned under the legislation in force; or the license holder ceasing to meet one of the conditions for granting it. The legislature attached a financial consequence to cancellation, requiring the competent authority to refund the fees it collected for issuing the canceled licenses, except where the license holder has ceased to meet one of the conditions for granting it.
Third, and most important, the legislature did not place the decision to cancel a license beyond judicial review. It provided expressly that a decision to cancel import or export licenses may be challenged before the High Court of Justice under the legal provisions governing the jurisdiction of the administrative judiciary. This is a real safeguard, but benefiting from it depends on the conditions for a challenge and the interest in bringing it, and on conducting the case before an administrative judiciary that has its own rules. The distance between having a right of challenge and actually benefiting from it is exactly the distance a specialist lawyer covers.
The law also required the Ministry or the competent authority to publish in the Official Gazette the instructions and regulatory decisions issued to implement its provisions or the provisions of the regulations issued under it, specifying the effective date of each, to ensure that those addressed by them are aware of them and that the rules governing import and export operations are stable. This point carries direct defensive value when a decision is invoked against a trader, as the lawyer reviews the fact of publication and the effective date before anything else.
7. The Law's Place Among Other Legislation
The Import and Export Law of 2001 repealed Import and Export Law No. 14 of 1992, while keeping the related regulations, instructions and decisions in force at the time it was issued until they are replaced by others, to the extent that their content does not conflict with the provisions of the new law. It also provided that any provision in other legislation that conflicts with its provisions is not to be applied, and it entrusted the Council of Ministers, on the Minister's recommendation, with issuing the regulations needed to implement it.
This structure has a practical consequence that many of those dealing in trade overlook: the rule that applies to a particular deal may not be in the text of the law at all, but in an earlier regulation, set of instructions or decision that has remained in force, or in an international agreement. Ranking these sources and determining which one governs the facts is purely legal work, and it becomes more complex when the dispute involves a foreign party and an arbitration clause in the contract, whose foundations we have dealt with in our article on arbitration in Jordanian law.
Frequently Asked Questions
Are import and export restricted or free in Jordan?
Freedom is the general rule. Article 3 of the Import and Export Law of 2001 allows goods to be imported without restriction provided the importer's card is produced at clearance or the fines imposed under the regulations are paid, and it allows export and re-export without restriction provided the exporter's card is produced. Restrictions are an exception to this rule.
What is the difference between an automatic license and a non-automatic license?
An automatic license is issued by the Ministry or the competent authority whenever the conditions and requirements for granting it are met, and the Minister determines which goods are subject to it. A non-automatic license may be issued by the authority when the conditions are met, and goods may be made subject to it for considerations of public safety, public health, public order, protection of the environment and natural resources, or national security, or if they are subject to quantitative restrictions.
How long is an import or export license valid?
One year. Licenses for goods subject to quantitative restrictions expire once the quantity specified in them has been imported in full, provided the period does not exceed one year in any case.
Can a license be assigned to another person?
The license is personal: it may not be transferred or assigned to a third party except with the approval of the competent authority and provided the necessary legal requirements are met.
Must a refusal of a license application state its reasons?
Yes. The law requires the Ministry or the competent authority to notify the license applicant of its decision when it does not approve, and it requires the refusal decision to state its reasons, enabling the interested party to know the reasons for the refusal and to exercise their right of challenge.
Can a decision to cancel a license be challenged?
Yes. The law provides expressly that a decision to cancel import or export licenses may be challenged before the High Court of Justice under the provisions governing the jurisdiction of the administrative judiciary, where the conditions for a challenge and the interest in bringing it are met.
Are fees refunded when a license is canceled?
The law requires the competent authority to refund the fees collected for issuing the canceled licenses, except where the license holder has ceased to meet one of the conditions for granting it.
What happens to deals contracted before a prohibition decision is issued?
The law provides for regard to be had to goods contracted for before a prohibition or restriction decision was issued when a license is canceled for that reason. Whether a particular deal falls within that regard depends on the date of contracting, its documents and the nature of the obligation, a matter the lawyer settles after reviewing the contract. Related to it are questions of the business's commercial form, which we have dealt with in our article on a corporate lawyer in Jordan.
Legal Consultation
Import and export disputes are among the most costly commercial disputes, because they bring together a foreign party whose relationship is not governed by a single law, an administrative body with the power to prohibit, restrict and cancel, and goods held up while storage costs pile up day after day. Dealing with an adverse administrative decision through correspondence and follow-up visits alone, without looking early at the conditions and time limits for a challenge before the High Court of Justice, often ends with the loss of the very safeguard the law provides, because the right of challenge exists but is governed by rules that do not tolerate delay. That is why putting the contract, the deal documents and the administrative decision before a practice that handles this type of dispute is the first step. This is what our firm's team provides through its advisory and representation services in commercial law and company cases, including reviewing the legal status of goods before contracting and preparing challenges to administrative decisions on licenses. You can contact Alabwini Law Firm to arrange a specialist legal consultation.
