Home | | Contact Us

Ministerial Decree Amending Rules f

Ministerial Decree Amending Rules for Registering Exporters into Egyptian Market
The Minister of Trade and Industry issued Decree No. 43 of 2016 to amend the rules for registering exporters of products into the Egyptian market. It is worth mentioning that the Minister has issued Decree No. 992 of 2015, around a month earlier, which stirred a wave of objections by importers. The latest amendment eliminates some of these objections. The 2015 Decree had obliged exporters to the Egyptian market to register in a special register at the General Organization for Export and Import Control. The objective was to curb random importation and guarantee that imports conform to the quality and environmental standards. The new Ministerial Decree slightly amended the preceding 2015 Decree. The first amendment was segregating exporters to the Egyptian market subject to registration in the General Organization for Export and Import Control register into: 1) plants; and 2) companies owning trademarks. The second amendment obliged companies owning trademarks and seeking registration in the mentioned register to provide the following:  Certificate of trademark registration and goods produced under such trademark.  Certificate from the company owning the trademark mentioning all distribution centers permitted to supply goods having that trademark.  Certificate confirming the manufacturer’s conformity with the quality supervision systems and fulfilment of environmental and International Labour Organization standards. This certificate has to be issued from an entity accredited by the International Laboratory Accreditation Cooperation (ILAC) or a governmental or foreign entity approved by the foreign trade competent minister.   The third amendment exempted entities that fall within the scope of the Decree from formally accepting environmental and work-safety inspections. Instead of this acknowledgement, the new Decree permits inspecting a company or a plant upon request and with the approval of the minister in charge of foreign trade. The inspection aims to confirm the validity of documents in case of doubts.
Commentary
Both the President and government took decisions that are aimed at curbing imports of non-basic goods with a view to reversing the drain on foreign reserves. As for the Ministerial Decree, it complies with the government’s policy to control importation. The Decree differentiated in treating applicants seeking registration of plants and companies owning trademarks. In addition, the Decree attempted to eliminate some of the importers’ objections and to lessen some bureaucratic procedures incurred upon applicants for registration. The Decree assumed bona fide in applicants. However, in case of doubts, the burden of confirming the validity of documents was upon the administrative authority after complying with another set of procedures. Such measures will not succeed alone in achieving the desired objectives of enhancing foreign currency availability, increasing customs revenues, and protecting local industries, unless accompanied by some other complementary and simultaneous measures, such as:  Developing and modernizing local products by means of enhancing their quality and competitiveness (stimulated through competition more than protection); or else, the local market will end up dumped with low-quality products with not enough motivation for development and competitiveness enhancements. This would negatively reflect on utility of end consumers.  Taking strict measures to face the most likely resulting black market, and to control customs ports in order to avoid evasions.  Issuing a “Unified Industry Law” that helps alleviate obstacles facing Egyptian producers (especially pertaining to industrial licensing and land acquisition).  Setting policies and taking quick measures to revive real economic sectors that are deemed most vital for a sustainable flow of foreign currency. In particular, tourism, foreign direct investments (through setting a clearly defined strategy for investment climate enhancement), and remittances.  
The Minister of Trade and Industry issued Decree No. 43 of 2016 to amend the rules for registering exporters of products into the Egyptian market. It is worth mentioning that the Minister has issued Decree No. 992 of 2015, around a month earlier, which stirred a wave of objections by importers. The latest amendment eliminates some of these objections. The 2015 Decree had obliged exporters to the Egyptian market to register in a special register at the General Organization for Export and Import Control. The objective was to curb random importation and guarantee that imports conform to the quality and environmental standards. The new Ministerial Decree slightly amended the preceding 2015 Decree. The first amendment was segregating exporters to the Egyptian market subject to registration in the General Organization for Export and Import Control register into: 1) plants; and 2) companies owning trademarks. The second amendment obliged companies owning trademarks and seeking registration in the mentioned register to provide the following:  Certificate of trademark registration and goods produced under such trademark.  Certificate from the company owning the trademark mentioning all distribution centers permitted to supply goods having that trademark.  Certificate confirming the manufacturer’s conformity with the quality supervision systems and fulfilment of environmental and International Labour Organization standards. This certificate has to be issued from an entity accredited by the International Laboratory Accreditation Cooperation (ILAC) or a governmental or foreign entity approved by the foreign trade competent minister.   The third amendment exempted entities that fall within the scope of the Decree from formally accepting environmental and work-safety inspections. Instead of this acknowledgement, the new Decree permits inspecting a company or a plant upon request and with the approval of the minister in charge of foreign trade. The inspection aims to confirm the validity of documents in case of doubts.
Commentary
Both the President and government took decisions that are aimed at curbing imports of non-basic goods with a view to reversing the drain on foreign reserves. As for the Ministerial Decree, it complies with the government’s policy to control importation. The Decree differentiated in treating applicants seeking registration of plants and companies owning trademarks. In addition, the Decree attempted to eliminate some of the importers’ objections and to lessen some bureaucratic procedures incurred upon applicants for registration. The Decree assumed bona fide in applicants. However, in case of doubts, the burden of confirming the validity of documents was upon the administrative authority after complying with another set of procedures. Such measures will not succeed alone in achieving the desired objectives of enhancing foreign currency availability, increasing customs revenues, and protecting local industries, unless accompanied by some other complementary and simultaneous measures, such as:  Developing and modernizing local products by means of enhancing their quality and competitiveness (stimulated through competition more than protection); or else, the local market will end up dumped with low-quality products with not enough motivation for development and competitiveness enhancements. This would negatively reflect on utility of end consumers.  Taking strict measures to face the most likely resulting black market, and to control customs ports in order to avoid evasions.  Issuing a “Unified Industry Law” that helps alleviate obstacles facing Egyptian producers (especially pertaining to industrial licensing and land acquisition).  Setting policies and taking quick measures to revive real economic sectors that are deemed most vital for a sustainable flow of foreign currency. In particular, tourism, foreign direct investments (through setting a clearly defined strategy for investment climate enhancement), and remittances.