Ministry of Trade and Industry Amen

The Ministry of Trade and Industry recently issued an amendment (the “Amendment”) to the Implementing Rules of the Imports and Exports Law.[1] The new rules provide for more systematic communication between different administrative authorities in order to limit the number of parties that an importer must deal with. The Amendments also reduced the threshold that triggers a requirement for importers to make necessary payments through banks operating in Egypt. The new rules come into effect as of 31 May 2017, but they allow for a grace period of three to six months (depending on the specific requirement).

Recent Modifications

The latest Amendment stipulates that payments for imports exceeding US $ 2,000 shall be made through banks operating in Egypt, specifying that the bank electronically informs the Customs Authority of the transfer and relevant information related to it. The Amendment clarifies that the information required to be submitted to the Customs Authority will differ from one import to the other. Prior to the Amendment, only imports exceeding $ 5,000 had to be made through banks. In addition to reducing the amount, the new Amendment also provides that the imported goods may not be released until after the notification from the bank to the Customs Authority has been received. If there is a discrepancy in the valuation of the imported good, the Customs Authority is obliged to immediately inform the bank and the authorities dealing with international trade. The new Amendment retained the original text with respect to the permission to settle a value of an import through other exports and services. As with the original text of the Implementing Rules, the Amendment reaffirmed the banks' obligation to collect administrative fees, determined by the competent minister, and transfer them to the Ministry of Trade and Industry. The Amendment added a new task for the banks, namely, the need to notify the Customs Authority electronically of the administrative expenses transferred. The Amendment also confirmed that the imported commodity will not be released from customs unless administrative expenses have already been paid. Furthermore, in an effort to create a more effective electronic system among different administrative authorities working on import and export, the Amendments required the General Organization for Export and Import Control to provide the Customs Authority electronically with all those who have been listed in the register of importers and the specific commodities they are allowed to import. This is an attempt to facilitate procedures for the release of imported goods, which require that importers be registered. This and other changes introduced by the Amendment indicate a desire to create a more effective system that relies on communication between different administrative bodies, in an attempt to reduce the amount of approval and bureaucratic procedures that an importer has to obtain from different bodies. Another example of the same effort can be seen in the Amendment’s approach to imports related to “production and operations” (i.e. commodities that are imported for the purpose of use as inputs or for alteration, in contrast to retail commodities that are sold as is). These commodities generally do not require registration in the importers' register. However, while the original wording of the rules required an importer to submit a number of documents and approvals to the relevant customs authority, the new Amendment places an obligation on the Industrial Development Authority to electronically submit required information to the relevant customs authority. The Amendment also requires "other supervising entities" to "electronically submit to the Customs Authority the projects that are licensed to practice production or service activities ". The Amendment points out, however, that if this is not possible, the importer must submit the required documents him/herself. As in imports, so in exports, the Amendment removed some of the required procedures and replaced them with direct communication between the various administrative bodies. For example, while exporters had to previously complete a number of documents for each export and submit them to the General Organization for Export and Import Control, the Amendment stipulates that the customs authorities should provide the Organization with required data directly, but for exceptional cases. In addition to the previous changes, the Amendment make introduces modifications to the rules related to imports and exports connected to projects operating in free zones and special economic zones. It also made some changes related to the process of inspection and control of imported and exported goods.

Conclusion

The recent Amendment is a welcome development insofar as it seeks to facilitate communication between different administrative bodies in order to reduce the procedures for importers and exporters. It remains to be seen whether the relevant authorities will be able to transition over the six-month period, particularly as some changes may require significant operational and technological changes.   [1] Ministry of Trade and Industry Decision No. 835/2017 amending certain provision of the Regulations concerning imports, exports and supervision of relevant goods, Egyptian Gazette, Issue No. 124 (cont.), 30 May 2017.