Gulf Arab countries plan to resolve all outstanding issues about their customs union over the next three years in order to have it fully operational by 2015, a top United Arab Emirates official said on Saturday.

What we have agreed upon, that in the next three years, meaning 2011 to 2014, we should complete all the pending issues in regard to the customs union, UAE Minister of State for Financial Affairs Obaid Humaid al-Tayer told a news conference.

We hope...it becomes effective January 1, 2015, he said after a Gulf finance ministers' meeting in the United Arab Emirates' capital Abu Dhabi.

The introduction of the customs union in 2003 had been hailed by officials as a major achievement countering criticism that the Gulf Arab bloc would be unable to realize economic integration in the world's top oil exporting region.

But differences have delayed an agreement on how to introduce a permanent system to distribute customs receipts among six members of the Gulf Cooperation Council, which besides the UAE also includes Saudi Arabia, Kuwait, Qatar, Oman and Bahrain.

In March, a top GCC official said the pending issues need to be resolved to reach a final deal on the customs union in line with an agreed timetable this year.

Customs duties were unified in 2003 at five percent and a common market in the Gulf, which seeks to emulate European economic integration, requires customs barriers to be removed.

Last year, GCC officials said the UAE, the region's trade hub and the second-largest Arab economy, was unhappy with a quota of receipts proposed by the secretariat but some said that a bigger issue would be to scrap red tape at border crossings.

Trucks transporting goods had been held up for days mainly at the border between Saudi Arabia and the UAE last year, casting doubts about the efficiency of the customs union plan.

GCC officials see the current customs system as temporary as it is expensive to run. Tariffs are collected at the first entry point and the revenue is shared according to a final destination of the product.

(Reporting by Stanley Carvalho and Martina Fuchs; Writing by Martin Dokoupil; editing by Keiron Henderson)

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