The Ministry of Industry Extends Ti

On 15 February 2018, the Ministry of Trade and Industry issued decision No. 104 of 2018[1] extending the timeframe for companies and individual importers to comply with requirements set forth in Importers' Registry Law No. 121 of 1982 (the "Law").[2] This is since entities that wish to participate in the importing industry must fulfil certain capital requirement conditions. It is worth noting that the Law that came out in 1982 had not been amended until March 2017, when significant changes were introduced to importers' registration requirements and penalties imposed on violators to cope with the change of the economy since the 1980s.

Background

The Importers’ Registry Law outlines a framework for the registration of importer activities and it prohibits importation for commercial resale purposes without registration. As stipulated by the Executive Regulations[3] of the Law, the Importers' Registry is maintained by the General Authority for Export and Import Control. In March 2017, the first amendment to the Importers’ Registry Law in almost 35 years was issued in the Official Gazette. It included amendments to registration requirements, mandating that only importers who have an annual capital of at least two million Egyptian pounds in the year preceding their registration application pursuant to the tax return forms submitted to the Tax Authority apply for registration. Moreover, said amendment increased the minimum capital requirement for the registration of individual importers from EGP 10K to EGP 500K, and for limited liability companies from EGP 15K to EGP 2M. The minimum capital requirement for the registration of joint-stock companies is EGP 5M. More importantly, the 2017 amendment changed the requirement for Egyptian shareholders, managers and board members of companies applying for registration, stipulating that only 51% of share capital must be held by Egyptians, and that only the manager overseeing importation must be Egyptian. The Law had previously stipulated that individual importers must be Egyptian, and that the shares of partners/shareholders and the shareholding companies must all be owned by Egyptians (who have acquired their citizenship not less than ten years prior).

 Decision No. 104 of 2018 and the Grace Period

The amendments introduced to the Law in 2017 provided for a grace period of six months within which registered importers are to comply with the above requirements. Decision No. 104 of 2018 is issued pursuant to Law No. 9 of 2018,[4] which stipulated that a Ministerial Decree may allow "individuals and companies who have not fulfilled the requirements set by the Importer's Registry Law No. 121 of 1982 regarding the importers' register to do so during an extended time period of six months from the date of the Decree's enforcement".

Conclusion

On issuing this Decision, the Minister of Trade and Industry stated that his decision aims to grant importers sufficient time to adjust their activities in accordance with the Law’s amendments with the aim of ensuring the quality of imported products and imposing an efficient system of regulation. The Minister also stressed that holders of import cards should adjust their situation accordingly within the new timeframe so that the General Authority for Export and Import Control can complete registration procedures.   [1] Minister of Trade and Industry Decision No. 104/2018 extending the timeframe for companies and individual importers to comply with requirements regarding the importers' register, Official Gazette, Issue No. 38, 15 February 2018. [2] Importers’ Registry Law No. 121/1982, Official Gazette, Issue No. 31, 5 August 1982. [3] Minister of Economy and External Trade Decision No. 343/1982 enacting the Executive Regulations of the Importers’ Registry Law No. 121/1982, Egyptian Gazette Issue 275 (cont.), 4 December 1982. [4] Law No. 9/2018 amending certain provisions of the Importers’ Registry Law No. 121/1982, Official Gazette, Issue No. 5 (bis) (c), 7 February 2018.