RIYADH, 14 October — Finance ministers of the Gulf countries yesterday set 2010 as a target date for monetary union and a single currency, and approved a five percent common customs duty on imports.

The six Gulf states also agreed to take further steps to comply with US-led global efforts to block the funding of groups and individuals suspected of having links to "terrorism".

Bahraini Finance Minister Abdullah Hassan Saif told reporters at the end of a two-day meeting here the ministers of the Gulf Cooperation Council (GCC) also decided to bring forward the complete implementation of a customs union to 2003 from 2005.

The meeting, held at GCC headquarters in Riyadh, also approved a "mechanism for collection and distribution of customs duties" and set the end of 2002 as the date to finalize the details for applying it.

The GCC meeting began on Friday, with governors of central banks from the six states also taking part on the first day.

The ministers also approved the modified form of the GCC unified economic agreement that calls for economic integration between members of the six-nation alliance.

The GCC also approved the US dollar as a yardstick for a single currency to be effective by 2010.

But the Kuwaiti dinar, pegged against a basket of currencies, was given "a margin of movement" against the US dollar until the single currency is achieved, according to Kuwait’s Finance Minister Yussef Al-Ibrahim.

The currencies of the other five GCC member countries are pegged to the US dollar.

The ministers overcame the most controversial difference that blocked an agreement earlier on a customs union by approving the Saudi customs duty of five percent as a common tariff on imports from foreign countries.

"It was agreed to start the implementation of the GCC unified customs law as of January 2002. It was also agreed to adjust the customs duty to five percent. Implementation would begin from 2002 and must be completed by 2003," Saif said.

Ibrahim said the ministers agreed to exempt 35 essential commodities from any customs duty.

Saif told reporters the six states had agreed to freeze assets of an expanded list of groups and individuals blacklisted by the US Treasury on Friday.

"The new lists will be distributed everywhere in the Gulf states," said.

On Friday, Washington ordered US financial institutions to freeze the assets of 39 individuals and organizations which it believes has ties to terrorism.

GCC states have already said they would clamp down on money linked to 27 other entities and individuals listed by Washington last month.

"There have been no assets yet of (dirty) money caught in Gulf banks," Saif said.

He said the GCC had agreed to apply a unified law against money laundering as part of a global crackdown on terrorism.

"We will have a unified law on money laundering by the end of the year...It will be applied by 2002," Saif said.

Individual GCC states have different customs tariffs and members which have relatively high duty had resisted a drastic cut. But the Saudi decision earlier this year to cut customs duty to five percent from 12 percent appeared to have facilitated the agreement.

The GCC states, which depend heavily on oil revenues, signed in 1981 the unified economic agreement which calls for full economic and financial integration between the member states.

Foreign economic blocs, especially the European Union, have urged the GCC states to establish a customs union before reaching a free trade agreement.