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Country Commercial Guides for
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CHAPTER VI. TRADE REGULATIONS, CUSTOMS, AND STANDARDSTRADE BARRIERS(INCLUDING TARIFFS AND NON-TARIFF BARRIERS) AND TARIFF RATES
Egypt's current customs regulations came into effect in 1986. Since 1991, under its economic reform program developed in conjunction with the IMF and the World Bank, the Government has reduced its tariff rates to a maximum rate of 40%, with a few exceptions such as cars with engines larger than 1300CC, alcoholic beverages, and certain luxury items.
In February 1994, Egypt implemented the Harmonized System (HS), which replaced the previously used CCCN (Customs Commodity Classification Nomenclature), formerly called BTN (Brussels Tariff Nomenclature). In 1996, Presidential Decree No. 304/1996 amended the Customs Tariff Harmonized as follows:
The Rates Mentioned in the The Amended Rates Customs Tariff as Promulgated by P.D. No. 38/1994
160% 135% 70% 55% 60% 45% 50% 40% 40% 30%In 1997, Presidential Decree No. 229 has been issued amending the Customs Tariff Harmonized as follows:55% 50% 45% 40% 40% 35%Above reduced rates do not apply on any kind of transportation.Another Presidential Decree No. 293 was also issued in 1997 amending tariff rates on various food items ranging between 3% and 80%.
In January 1998, Presidential Decree No. 1 was issued, increasing the tariff rate on textiles from 40% to 54%. (The increase was due to an earlier lifting of the ban on textile imports into Egypt.)
In September 1998, Presidential Decree No. 243 for 1998 was issued, amending the Customs Tariffs as follows:
50% 40% 45% 40% 40% 30% 35% 30%The Egyptian Government does not abide by tariff rates outlined in the WTO, having received a waiver of its obligation to provide these lower rates.IMPORT TAXES
To counterbalance the reduction in tariffs, the government levies a service fee on the value of imported shipments in return for inspection, listing, classification and reexamination of shipments. In February 1994, this surcharge was raised to 3% or 6%, depending on the customs duty of the imported item: 3% for commodities subject to customs duties between 5 and 30%, and 6% for those subject to custom duties over 30%. The surcharge was reduced twice to reach 2% for commodities subject to customs duties between 5 and 30%, and 4% for those subject to customs duties over 30%.
In addition to the customs tariff, a sales tax ranging between 5% and 25% is added to the final customs value of the imported item. Law 87 of 1986 canceled a series of taxes and fees which were formerly levied on imports: statistical duty, subsidy tax, marine duty, and the municipal tax. Law 2 of 1998 was issued to cancel the stamp tax.
REPRESENTATIVE (Alphabetical) LISTING OF COMMERCIAL LEGISLATION IN EGYPT (Not complete)
- ARBITRATION:
Law 9/1997 Amending Certain Provisions of Arbitration Law in Civil and Mercantile Matters, as Promulgated by Law 27/1994.- BANKS AND CREDIT:
Law 96/1996 Amending Certain Provisions of the Banks and Credit Law as Promulgated by Law 163/1957 and Law 120/1975 Concerning the Central Bank of Egypt and the Banking Machinery.- CAPITAL MARKETS:
Law 95/1992 Promulgating the Law on the Capital Market. Decree 135/1993 the Executive Regulations of the Law on Capital Market.- Commercial Law:
Law 17 of 1999 promulgating trade.- COMMERCIAL REGISTER:
Law No. 98/1996 Amending Certain Provisions of Law 34/1976, Concerning the Commercial Register.- COMPANIES LAW:
Law 3/1998 Companies Law. Ministerial Decree 496/1997 Amending the Executive Regulations of Companies Law.- CUSTOMS LAW:
Law 158/1997 Amending Certain Provisions of Customs Law as Promulgated by Law 66/1963.- CUSTOMS TARIFFS:
The Customs Tariff (Harmonized) modified up to November 1998.- ENVIRONMENT:
Law 4/1994 Promulgating a Law Concerning the Environment.- IMPORT AND EXPORT REGULATIONS:
Law 118 of the Year 1975 on Import and Export Regulations, amended up to March 1999.- INSURANCE AND REINSURANCE:
Law 156/1998 Concerning Certain Provisions on Insurance and Reinsurance Companies Which Are Considered as Public Sector Companies, and Amending Certain Provisions of the Law on Insurance Supervision and Control in Egypt.- INVESTMENT INCENTIVES:
Law 8/1997: Investment Incentives and Guarantees Law.- LEASING:
Leasing Law 95/1995.- SALES TAX:
General Sales Tax Law 11/1991 Amended up to March 1997.- STANDARDS AND SPECIFICATIONS:
Ministerial Decrees Nos. 179-180/1996, Enforcing the Obligation to Produce According to Egyptian Standard Specifications, Ministerial Decree 181/1996 Enforcing the Obligation to Produce According to Egyptian Technical Specifications.- TENDERS:
Tenders Law 89/1998 Promulgating the Law on Organizing Tenders and Bids.CUSTOMS REGULATIONS
Egyptian customs procedures are complicated and rigid in areas such as duty rates. They are designed to eliminate trading loopholes. Authorities do not have to explain or justify their decisions and there is no formal appeal process for customs officers' decisions. Customs procedures are subjective when it comes to identifying whether a commodity fits in one tariff category or another. Under-invoicing is prevalent in Egypt as a means of tax-avoidance by local businesses. The Customs Authority has a tough policy regarding commercial invoices. Tariff valuation is based on either the worldwide price list received annually from foreign producers/distributors, or if that is not available, they take the highest price available in the local market. In cases where customs officials suspect under-invoicing, they usually add from 10 to 30% to the invoice value of imports for customs valuation purposes.
Customs officials suspect under-invoicing when legitimate sellers low-ball introductory prices of samples, then send larger quantities at higher prices; offer one price for a few items, and a quantity discount for subsequent shipments; or introduce a new product at a basic cost much cheaper than similar products previously imported from other sources.
The ability to fulfill local content requirements is no longer required to obtain an approval to set up an assembly project. However, assembly industries must meet a minimum local content requirement of 40% in order to benefit from customs tariff reductions on imported industrial inputs.
Prior to issuance of Ministerial Decree 99 of 1994, free-of-charge compensatory shipments, meant to make up for losses caused by a drop in the international price of an imported good between the contract date and the time of shipment, were considered illegal imports. The importer had to pay a fine equal to the value of the additional quantities before customs would release them. Now, compensatory shipments are released from Customs and the importer does not pay extra custom duties for the additional quantities, since custom fees are computed based on the value, not quantity, of the original shipment.Ministerial Decree 99 of 1994 also allows for the release of imports that replace previously imported defective or damaged goods without assessing custom duties. Egyptian importers now fill out Customs Form 126 declaring that the imported items are defective or damaged and are to be replaced. However, the Egyptian exporter of a previously imported good that was damaged or rejected must post a deposit (acceptable to the Customs Authority) guaranteeing importation of a replacement item within two years (renewable) from the date of export. This is a major improvement over the former situation where replacement products having a different serial number from the re-exported item were subject to full customs duties when re-entering the country. In case an item is exported to be refitted and then re-imported, custom duties are paid on the value-added only. If the item is replaced by another used machine, having a different serial number from the exported one, then the re-imported item is subject to full custom fees.
Recently, a decree on computerized customs procedures has been issued for imported goods. The Customs Authority has begun applying a Computerized Customs Declaration Form (Bill of Entry) which intends to facilitate and simplify importers' dealings with the Customs Authority and to avert problems or differences in customs evaluation.
IMPORT LICENSE REQUIREMENTS
Egypt no longer requires import licenses.
TEMPORARY GOODS ENTRY REQUIREMENTS
Imports may be admitted into the country under the temporary admission system. On May 10, 1998, the Head of the Customs Authority issued decree 48 of 1998 dictating that temporary import should be covered by 100% of the imports value in addition to customs fees and sales tax. Exporters raised the issue to the Minister of Finance who, as a result, amended Decree 48 of 1998 by decree 55 of 1998, reducing the guarantee from 100% to 5%.
Imports may be released from Customs under the drawback program. This is different from the temporary admission system in that full customs duties are paid on the imported material and the manufacturer does not fill out a special form with Customs. However, there is a one-year time requirement to re-export these imports as part of a final product in order to have the right to reclaim the full amount of the duties paid as well as other taxes such as the sales tax. This is a cumbersome procedure and refunding may take up to six months for processing. The agencies administering the program are tasked with the responsibilities of determining then repaying the drawback amount. The Industrial Surveillance Authority carries out the first task; the Customs Authority carries out the second. A delegate from Customs has to be present during the manufacturing process. To refund the amount paid, several administrative requirements must be satisfied:
- Details, such as quantities and materials used in manufacturing a unit of the exported products, must be provided to enable Customs to calculate the drawback rate.
- Proof of duties paid on the imported quantities must be furnished.
- In order to collect an allowance in the drawback rate for wastage and scrap, quantities of such must be verified.
In addition, the following documents must be provided: customs import release certificate, certificate of export of product, an export permit, a registered deed of sale from the original importer, and a customs clearance certificate.
To speed up the reimbursement process, the GOE introduced in October 1999 a new "tax rebate" system, by means of which exporters could be reimbursed according to pre-specified rates for each industry. The tax rebate system currently covers more than half of the major exported commodities.
SPECIAL IMPORT/EXPORT REQUIREMENTS AND CERTIFICATIONS
Investment Law 8 of 1997 (which replaced Investment Law 230 of 1989, except for the requirement for annual distributions to employees of not less than 10% of profits) made one authority responsible for investor incentives and guarantees--the General Authority for Free Zones and Investment (GAFI). It also grouped some 20 exemptions and incentives under one law, and specified activities that would automatically benefit from them. Law 8 allows 100% foreign ownership of ventures and guarantees the right to remit income earned in Egypt and to repatriate capital.
Companies Law 3 of 1998 (which amended Companies Law 159 of 1981) streamlined the procedures for establishing a new company. It continues to cover investors in any sector not covered by Law 8 of 1997, including shareholder, joint stock, and limited liability companies and representative and branch offices. Law 3 allows for automatic registration of a company upon presentation of the application to the Companies Department at the Ministry of Economy and for acquisition of legal status 15 days after appearance in the Commercial Register, with some exceptions. These exceptions include noncompliance with procedures or violation of other laws; or lack of qualifications requisite to operating a business. Founders of joint stock and limited liability companies must submit a bank certificate showing a 10% deposit of the issue capital to the Companies Department. The amendment also provides for the right of petition for denial of incorporation, removes the restriction that 49% of shareholders be Egyptian, allows 100% foreign representation on the board of directors, and strengthens accounting standards. Importers should possess the following documents:
1. An Import Card which is issued by the General Authority for Import/Export Quality Control at the Ministry of Trade and Supply.
2. Taxation Card, which is obtained from the Taxation Authority or any of its offices.
3. Three forms of Annex (11) of the import/export executive regulations issued by Ministerial Decree 275/91. Annex (11), the application to finance imports with convertible currencies, includes information on the type, quantity, price and country of origin of the imported commodities. The importer retains one copy which he/she submits to Customs to release the shipment, the second copy is submitted to the Foreign Trade Department at the Ministry of Trade and Supply and the third copy is kept with the bank to follow-up on payment. The pro-forma invoice or final invoice should be stamped by the bank.The following documents should be presented to Customs to release imports:
1. Bill of lading.
2. Original invoice.
3. Packing lists.
4. Certificate of origin (authenticated and legalized).
5. Form (EX), which is a bank form, applicable in cases where the bank finances the importation transaction. This form is not required if the importer self-finances the transaction.
6. Content analysis of the commodity, if required.
7. Delivery order from the carrier in return for the bill of lading.
8. Custom procedural certificate, which is a customs form that lists information and data including source and country of origin of imports, name of importer, type of product, port of delivery, value, and quantity of the shipment.Exporters should possess the following documents:
1. An Export Card which is issued by the General Authority for Import/Export Quality Control at the Ministry of Trade and Supply.
2. Taxation Card, which is obtained from the Taxation Authority or any of its offices.
3. Original invoice.
4. Custom procedural certificate, which is a customs form that lists information and data on the exported goods.Decree 619 of 1998:
Ministerial decrees over the past year have begun to have an impact on U.S. trade with Egypt. The following provides information as to the thrust of the decrees, principally Decree 619, and the various clarifications subsequently offered by the Egyptian government. Some of Egypt's major trading partners have raised questions about the WTO compatibility of Decree 619. The translations are unofficial and are intended as general guidelines only.
On November 21, 1998, the Minister of Supply and Trade, Dr. Ahmed Goweili, issued Decree No. 619 of 1998, concerning the import of consumer and non-consumer goods from the country of origin. The decree amended Law 118 of 1975. Text of the decree (unofficial translation):
Having considered Law No. 118 of 1975 on Import and Export, and Ministerial Decree 275 of 1991, promulgating the executive statues of the provisions of referenced Law 118 of 1975 and its amendments, decreed:
Article 1: A new article is to be added to the above-mentioned executive statutes of the provisions of Import and Export Law 118 of 1975, promulgated by pertinent Ministerial Decree, reading as follows:
Article 32 (bis): Imported durable and non-durable consumer goods must be shipped from the country of origin. In order for imported goods to be released, they must have a certificate of origin authenticated by the competent authorities. The certificate must conform to the specific import control rules.
Article 2: This decree is to be published in the official Egyptian Gazette and be in effect day its publication. Signed, Dr. Ahmed Goweili, Minister of Trade and Supply.
The Trade Minister noted at the time that the decree had been necessary in the face of massive imports of East Asian goods. The decree, however, was applicable across the board. Its publication caused many inquiries to be made to the Trade Ministry, and they issued a number of clarifications, over time, in the form of official Import Circulars, official letters, and press statements, addressing the implementation of Decree 619. Information on those clarifications follows:
Import Circular No. 82 of 1998: Prior Shipment Exempted
The provisions of Decree 619 were not applicable to products that had been shipped prior to the date the decree was put into effect; nor did they apply to consignments for which documentary credits had been opened before the effective date of the decree, provided the credits did not get extended or increased after that date.Import Circular No. 84 of 1998: List of Consumer Goods
Compliance with the list of durable and non-durable consumer goods when applying Decree 619 according to the classification in the statistical manual for the foreign trade items. First: durable goods; second: non-durable goods; third: other consumer goods not indicated under the two previous items, according to the classification of the Central Agency for Public Mobilization & Statistics (CAPMAS). The CAPMAS classification, shown before each item in the harmonized customs tariff, must be consulted (Import Circular No. 2 of 1999). (Note: This specific product listing will be the subject of a separate IMI report.)Import Circular No. 86 of 1998: Decree 619 Not Applicable to Free Zones
The Decree does not apply to goods imported into public or private free zone areas or the Port Said free zone. The application of the decree will be related to what is imported into the country and what is registered in the customs statement for final clearance.Import Circular No. 87 of 1998: Guarantee Requirements for Clearance of Consignments
An unconditional letter of guarantee should be presented for the value of the customs-cleared goods, as determined by the Customs Authority's evaluation, to the Ministry of Supply and Trade's account until a duly authenticated certificate of origin is obtained from the competent authorities, within one month from the clearance date of the consignment, in relation to the consignments which have not fulfilled the proviso that the certificate of origin be authenticated by competent authority.?Import Circular No. 92 of 1998: No New Release of Consumer Goods From Free Zones
Required that any customs clearance of consumer goods stored in free zones be stopped, even if a documentary credit had been opened before Decree 619 was issued December 13, 1998.Import Circular No. 94 of 1998: Consumer Goods in Free Zones
The application of the provisions of Ministerial Decree 675 of 1998, with all its terms and conditions related to the goods stored in the free zones:(1) Consumer goods stored before November 21, 1998, could be released without applying Decree 619, as follows:
(a) to authorize, within a period not to exceed March 3, 1998, imports for trading in relation to foodstuff and non-foodstuff consumer goods which have an expiry date;
(b) to authorize, within a period not to exceed July 15, 1998, imports related to passenger cars, according to the following terms and conditions: The application of Decree 269 of 1996 and the non-application of Decree 580 of 1998 (relating to the lifetime provision), on condition that the monthly quantity authorized to enter the country should not exceed 20 cars or one-fifth of the quantity stored for each storage project separately.
(2) Non-consumer goods stored before November 21, 1998 could be released from customs without having to authenticate the certificate of origin.
(3) For goods other than those under the first and second items, it is mandatory to comply with all provisions of Decree 619, in order to allow them into country for trading purposes.The Letter of the Head of the Foreign Trade Sector, Trade Ministry, dated January 17, 1999:
Authentication of the certificate of origin by any of the Arab Embassies in Taiwan for goods imported from Taiwan as well as from Bellarussia, will be accepted and taken into consideration.The Letter of the Head of the Foreign Trade Sector, Trade Ministry, dated January 23, 1999:
Decree 619 does not apply to imports of books, magazines and newspapers in compliance with Article 32 of the Import and Export Law. They are to be released from Customs directly upon payment of the administrative expenses.Import Circular No. 9 of 1999: Industrial Products in Free Zones
Industrial projects' products in free zones in Egypt acquire the origin of these zones. When imported into country, these products are considered as if imported from the country of origin, provided they are accompanied by a certificate of origin.Import Circular No. 15 of 1999, dated February 16, 1999: Certificates of Origin for products from Arab Countries:
Commercial goods of national origin from any of the Arab countries, members of the Trade Exchange Facilitation and Development Agreement, whether when imported or exported, should be accompanied by an original certificate of origin duly authenticated by the competent entities, as determined by each country. Authentication by diplomatic missions is not required.Import Circular No. 31 of 1999: Import Rules from European Union:
Consumer goods imported for sale from any of the European Union (EU) states shall be accompanied by a European Union certificate of origin, without fixation of the member state. The certificate shall be authenticated by any of the Egyptian Representation offices in the EU. Furthermore, it is permitted to ship from any of the states of the European Union. However, if the certificate of origin mentions a specific state, then it shall be authenticated by the Egyptian Representation in that state, and the shipment must be made from the same state. In relation to the rest of the product imported for trading, it is not required that the shipment be from the same state, but it must be accompanied by a certificate authenticated by the competent entity.The Letter of the Head of the Foreign Trade Sector, Trade Ministry, dated February 1, 1999:
Exempts imported pharmaceuticals, medical supplies and raw materials, diagnostic materials, and medical equipment from the certificate of origin requirement, provided they have the approval of the Ministry of Health. This exemption does not include cosmetics or domestic insecticides.The Letter of the Head of the Foreign Trade Sector, Trade Ministry, dated February 27, 1999:
Addressed to First Undersecretary of the Ministry of Finance, Head of the Customs Authority, the letter states that due to many inquiries related to Decree 619, the Minister of Trade agreed on February 23, 1999 to issue the following explanations:
(1) Concerning durable and non-durable consumer goods:
It is a precondition for entry into country that they be shipped from the country of origin, duly accompanied by a certificate of origin issued by the country of origin, notarized and authenticated by the Egyptian Representation (i.e., embassy or consulate) in that country. In case there is no Egyptian Representation there, it shall be duly authenticated by any of the Arab Representations.(2) Concerning all other goods:
It is a precondition to submit a certificate of origin from the country of origin duly notarized and authenticated. In the case of exporting from other than the country of origin, it is possible to accept the certificate of origin from the exporting country, duly notarized and authenticated by the country of export, subject to referring to the original certificate of origin, with a copy of it.(On April 4, 1999, the Trade Minister agreed to clear the consignments of non-consumer goods which had been shipped up until March 31, 999, which had been accompanied by a certificate of origin notarized and authenticated by the country of export, without referring to the original certificate of origin.)
For more information, please contact:
Mr. As-Sayed Mohammed Aboul Qumsan, Chairman
Foreign Trade Sector
Ministry of Supply and Trade
99 Kasr El Aini St., Cairo
Tel: 20-2-355-0360, Fax: 20-2-354-4973LABELING REQUIREMENTS
On October 25, 1998, the Minister of Trade and Supply Dr. Ahmed Goweili issued Decree No. 553 of 1998, addressing the conditions under which imported goods may be stored outside of Customs Zones (the first point of entry of goods into a customs territory and a sort of "holding area" pending determination of origin of the goods and their classification, assessment, and liquidation of applicable duties). This decree amends Law 118 of 1975 and adds two provisions to Article 79 of Ministerial Decree No. 275 of 1991.
An unofficial translation of the decree follows:
Article One
The following two clauses are to be added to Article 79*, promulgating the executive regulations for Import and Export Law No. 118 of 1975:
It is permitted to store products outside customs zones, provided that the shipment is in accordance with all labeling conditions;
It is obligatory for the importer to re-export the shipment if the inspection shows products are not in accordance with labeling conditions.
*Article 79: The Minister of Economy and Foreign Trade or his delegate may permit the storage of the imported perishable consignments or that of special storage preparations, outside the customs zone, in accordance with the rules stipulated in the Customs Law and the decrees implementing it. In such case, the importer will be bound not to dispose of such consignment, up to issuance of a final decision by the concerned authorities regarding its inspection.
Article Two
The second clause of Article 79 of the executive regulations of the aforementioned Law is to be replaced with the following clause:
(In all cases, it is obligatory for the exporter or importer to pay for the services provided by the General Authority for Import and Export Control in accordance with the rules set by the Authority Chairman in agreement with the Foreign Trade Sector.)Article Three
Contents of Serial Nos. 39, 135, and 136 of Supplement No. 8 of reference Law are to be replaced with the following:
Serial No. 39:
Custom Item No.: 11 00 0335
Commodity: Gelatin
Custom Item No.: 19 00 0335
Commodity: Except items used to manufacture pharmaceuticals for which a license was obtained from the relevant authority in the Ministry of Health.
Inspection fee: LE 3 ($0.88) per ton of the consignment.Serial No. 135:
Chapter 28, Items Nos. 0128 to 4228, and Item No. 4728
Commodity: Non-organic chemicals, organic or non-organic compounds, except items used to manufacture pharmaceuticals for which a license was obtained from the relevant authority in the Ministry of Health.
Inspection fee: LE 3 ($0.88) per ton of the consignment.Serial No. 136:
Chapter 29, Items Nos.: 0129 to 3429Commodity: Organic chemicals, organic or non-organic compounds, except the items for use of manufacturing of pharmaceuticals for which a license was obtained from the relevant authority in the Ministry of Health.
Inspection fee: LE 3 ($0.88) per ton of the consignment.Circular No. 12/1998 issued on November 29, 1998 by the Chairman of the Board:
In implementing the provisions of Ministerial Decree No. 553 of 1998 on the precondition that the consignment is in accordance with all labeling conditions to allow storage outside the customs zone, and providing the importer agrees to re-export consignments if inspection proves non-conformability, the following have been decided:
First: Concerning Industrial Commodities
(1) The stipulations of the list of rules executing the provisions of Law No. 118/1975 promulgated by Ministerial Decree No. 275/1991 and its amendments are to be applied, necessitating that the details included in Article 74 BIS Clause 3 be written on every package in Arabic and in clear, indelible handwriting. Consequently, all customs branches must make sure that the following appears:
A. 1. The product's name or its trademark. Technical data according to stipulations in the applicable standard specifications.
International data or marks according to the nature of the commodity.
The country of origin.
The production and expiration dates.All these details have to be printed or sealed with indelible ink on the packages directly or on the original card of the producing entity.
B. As for apparatuses, machines and equipment, details written on each have to be the same as those written on the package. The same applies to the country of origin. A catalogue written in Arabic containing what is stipulated in Clause 3 of Article 74 must be attached thereto.
It is not a precondition that the details on the apparatuses, machines and equipment be written in Arabic. Writing such details in the foreign language would be enough, provided that they are carved or printed or sealed with indelible ink directly on the units or on the original card of the producing entity.
(2) Temporary Release Under Custody: Temporary release under custody is to be effected by the approval of the Customs Authority's board chairman in the following cases:
Waiting for the laboratory test results.
Withdrawal of the consignment's samples or need for special preparation not available in ports.Until an international inspection and review certificate is to be brought for the goods that inspection and testing thereof is not possible inside or outside the Customs Authority's laboratories.
In all cases, it is a precondition that all details are to be in conformity with what is mentioned above.
Second: Concerning Agricultural Commodities
1. Temporary release under custody is confined to waiting for results of analysis, provided that all the details are in conformity with what is mentioned above.
2. Concerning the commodities which arrive in bulk form, temporary release under custody can be effected until the analysis results appear.
Third: Acceptance or Refusal (Industrial or Foodstuff)
In case of apparent conformability, the samples are to be withdrawn and procedures are to be continued.
In case of apparent non-conformability, the customs certificate is to be annotated with the following phrase:
"The items...are to be removed from the content of this certificate as it is proved from the apparent inspection that "the importer has to re-export them."Fourth: Contradicting Instructions
Any contradictory instruction is to be superseded. This circular is to be applied starting from December 12, 1998.
On December 8, 1998, a joint circular was issued by Chairman of General Authority for Import and Export Control, and Chairman of Foreign Trade Sector stipulating the following:
With regard to implementation of the provisions of Ministerial Decree No. 553 of 1998, and in light of the outcome of actual implementation, the following should be taken into consideration:
First: Instructions included in Circular No. 12 do not apply to the following cases:
Commodities shipped before November 2, 1998.
Commodities, the credit for which was opened before November 2, 1998, on the condition that no elevation or extension were made after that date.
Commodities that arrived at the Egyptian ports before December 3, 1998.Second: Sustaining exemption for commodities imported for Duty Free Shops from the condition of labeling in Arabic, and instead, permitting the use of a foreign language (English or French), in addition to enclosure of a user's manual in a foreign language (English or French) for electric appliances imported for these companies, as per the Minister's approval.
Third: All previous instructions contrary to the above are to be cancelled.In summary, the decree stipulates that all imported materials should have an Arabic label. The decree allows imports to free zones of products not having an Arabic label. Imports shipped before November 2, 1998 and imports with credit guarantees opened before that date are not subject to the decree.
Food Import Requirements:
There are certain food import requirements that must be observed including the following:
a. Labeling Requirements
b. Multiple Product Samples
c. Restrictions on the Use of Artificial Colors
d. Shelf-life Standards and Product Specifications
e. Shipping Documentsa. Labeling Requirements
Food products should be packed in appropriate packages which should be clean, intact, and odorless so as to preserve the product and not affect its characteristics. Production and expiration dates must be shown on the product's packaging. Information on the label cannot be erased, scratched or altered in any way. With the exception of the production and expiration dates, information in English only is not allowed. The word "production" and "expiration" dates must be in Arabic, but the date is accepted in English. Arabic language is mandatory in labels.
Labeling must include the following:
- Name and address of manufacturer
- Brand or trade mark, if appropriate
- Country of origin
- Type of product and grade
- Name and address of importer
- Production and expiration dates
- Product use instructions (optional)
- Product ingredients
- Storage instructions or storage temperature - Net weight
Gross weight and total number of the packages per case or carton If the product contains preservatives, the percentage of each preservative must be indicated
If the product is meat or poultry, the following statement must appear: "slaughtered according to Islamic ritual" or "Halal slaughtered."
On November 1997, the Ministry of Trade and Supply issued Decree No. 465 adding new labeling requirements to the importation of meat and poultry products. The decree requires that all products must be packaged in sealed bags.
Labels must be inserted inside the package as well as on the outside carton. The information on the label may be in two or more languages, as long as one is Arabic. The label must include the following information:
- Country of origin
- Producer's name and logo (if any)
- Name of slaughterhouse
- Slaughter date
- Name and address of importer
- Name of entity which issued the "Islamic Slaughter" certification.Such entity must be approved by the Commercial Office of the Egyptian Embassy (or Consulate) in the country of origin.
b. Multiple Product Samples
As many as four ministries may draw samples depending on the product:
- The Radiation Department of the Ministry of Energy and Electricity
- The Ministry of Health
- The Ministry of Agriculture (Veterinary Office), as appropriate
- The Ministry of Supply (Import and Export Control), as appropriateAll product samples should be representative of the consignment and should be drawn during the unloading process. With the exception of frozen products, each agency draws its own samples and tests the consignment independently. Samples are drawn for each type of product mentioned on the invoice and for each product with different production and expiration dates, regardless of the size and weight of the products. In many cases, inspectors pulling samples at the port lack the technical experience in sampling the product. Sometimes they damage the sample, which is why different authorities require a complete sample such as a complete carton to assure a product's safety.
In May 1998, the U.S. Foreign Agricultural Service at American Embassy Cairo published the third version of a complete description of Egyptian import requirements for foodstuffs: A Practical Guide to Egyptian Food Import Requirements and Procedures. U.S. firms may request this guide through the Foreign Agricultural Service at the American Embassy in Cairo at fax: 20-2-356-3989.
c. Restrictions on the Use of Food Additives
- Artificial Colors
The Ministry of Health increased the number of artificial colors allowed in food products to 40 colors instead of 11. However, acceptable artificial colors are not necessarily allowed in all food products. The scientific name of the color ingredient and the percentage of concentration must be indicated on the Analysis Certificate. Importers and suppliers should refer to Ministerial Decree No. 411 of 1997 issued by the Ministry of Health.
- Natural Colors
There are some natural colors extracted from fruits and plants considered to be fit for human consumption and approved by the Egyptian authorities. Importers and suppliers should refer to Ministerial Decree No. 411 of 1997 issued by the Ministry of Health.
- Preservatives
All preservatives must be identified along with the allowed concentration as a percentage in parts per million calculated on the acid base. Importers and suppliers should refer to Ministerial Decree No. 478 of 1995 issued by the Ministry of Health which lists all acceptable preservatives and concentrations.
- Flavorings
The Ministry of Health does not have a positive list of approved flavorings. However, all flavorings which conform under CODEX or WHO are approved in Egypt.
d. Shelf-Life Standards and Product Specifications
The Ministry of Industry is responsible for establishing shelf-life standard for all food products. Any product that exceeds its established shelf-life is considered no longer fit for human consumption. Manufacturer/processor "use by" or "sell by" dating is not accepted. In 1994, the government decreed that all food products should have at least 50% of the established shelf-life remaining at the time of importation into Egypt, otherwise the product would be rejected. The shelf-life of a product is calculated from the date of production up until the date of completion of all customs procedures and import certification at the Egyptian port of entry.Failure to meet Egyptian product specifications constitutes one of the main reasons for product rejection. While the Egyptian Organization for Standardization and Quality Control in the Ministry of Industry sets all product standards, it is the responsibility of the Ministry of Health and the General Organization for Import and Export Control Authority (Ministry of Supply and Trade) to apply those standards.
On September 19, 1996, the Ministry of Industry issued Ministerial Decree No. 180/1996 whereby all manufacturers and importers are required to abide by Egyptian product standards. In cases where no mandatory standard exist, the following standards are acceptable:
- Egyptian Product Standards (voluntary)
- International Standards (ISO/IEC)
- European Standards (EN); in the absence of EN standards, British (BS), German (DIN), and French (NF) standards may be applied
- American Standards (ANS)
- Japanese Standards
- Codex StandardsIn the absence of an Egyptian or international standard, authorities often will refer to the Analysis Certificate accompanying the product.
e. Shipping Documents
Shipping documents must be authenticated at an Egyptian Embassy or Consulate, in the country of origin, or any other Arab consulate if there is no Egyptian Embassy in the country of origin.PROHIBITED IMPORTS
Although the Government of Egypt recently lifted a ban on textile imports into Egypt, there still remains an import ban on apparel. The ban is aimed at protecting the local apparel manufacturers. The import ban on textiles is permitted under the WTO's eight year transition period. It is expected to be lifted by the year 2002.
EXPORT CONTROLS
All Egyptian products can be exported without obtaining export approvals as long as they are not banned from export. Hides, scrap metal (except scrap of stainless steel), and alpaca fibers are the only items banned from export. Quality control of exports is voluntary.
An export duty is imposed on certain commodities produced locally in accordance with specified rates listed in Schedule (B) of the Custom Tariff promulgated by Law 351/86, and modified up to November 1998, as follows:
Tendons and sinews, parings and similar waste of raw hides and skins LE 0.60 per 1000 KG Molasses LE 0.60 per 100 KG Raw hides and skins (fresh or salted) and sheep or lamb skin LE 1.20 per 1000 KG Ferrous waste and iron or steel scrap LE 11.00 per 1000 KG Copper waste and scrap LE 11.00 per 1000 KG Nickel waste and scrap LE 11.00 per 1000 KG Aluminum waste and scrap LE 11.00 per 1000 KG Zinc waste and scrap LE 11.00 per 1000 KG Antiques over 100 years old 5%All other kinds of goods are exempt from export duty.STANDARDS
Domestic industries must comply with the specifications of Egyptian standard definitions. The Egyptian Organization for Standardization and Quality Control (EOS), under the Ministry of Industry, is responsible for issuing industrial quality control certificates for local industries and for approving quality certification bodies in Egypt. Adherence to ISO 9000 specifications is optional but increasingly of interest to Egyptian exporters.
Import and export in Egypt are regulated by Law 118 of 1995. Annex (8) of the import/export regulations lists commodities subject to quality control inspection prior to admittance into Egypt. The list consists of about 135 product categories including foodstuffs, spare parts, construction products, electronic devices, appliances, and many consumer goods. Although Egyptian authorities stress that standards applied to imports are identical to those applicable to domestically-produced goods, they are more strict in enforcing product standards on imported food products than on local food products. Moreover, importers face the problems of ill-defined or unwritten product standards, and backlogs result from authorities having limited staff or too few inspection machines to conduct their quality inspections.
In general, inspection fees range between 0.5 piasters (PT) ($.015) per kilogram to 10 Egyptian pounds (LE) ($2.90) per container, with an average inspection fee of PT 1 per kilogram. (Note: There are 100 piasters (PT) to a pound.) The inspection fee for goods imported for industrial purposes is lower than that applied to goods imported for retail purposes.
Ministerial Decree 99/94 exempts from quality control inspection of industrial inputs imported by factories. In contrast, the same products, if imported for resale, are subject to inspection. Imports for personal or private use are exempt from quality control inspection.
FREE TRADE ZONES/WAREHOUSES
The Sadat-era Law 43 of 1974 allowed the establishment of free zones in Egypt. The law was superseded by Investment Law 230. In May 1997, Law 230 of 1989 was canceled and replaced by the new investment law known as Law 8 of 1997 which regulates operations in the free trade zones of Egypt. It allows for storage, warehousing, mixing, repacking, assembly, and manufacturing for export; and provision of services to firms located in the free zones. There are eight free trade zones in Egypt: Cairo (Nasr City), Alexandria, Port Said, Suez, Ismailia, Damietta, Safaga, and Sohag. Goods exported from or imported into the free zones are not subject to normal import/export customs procedures, duties or other taxes and fees. Likewise all instruments, machinery, equipment, and transportation equipment necessary for establishments authorized within the free zones are exempt from customs and taxes. Provisions of the labor law do not apply to companies operating in free zones, nor are they subject to currency transaction controls. Commodities manufactured and/or stored in free zones are considered "imports" subject to full customs duties if they enter Egypt.
The Customs Authority supervises both public and private bonded warehouses. The Ministry of Finance authorizes establishment of the warehouses, specifying the site of the bonded area, conditions of storage, storage charges, administrative charges, expenditures, guarantees to be presented, and other conditions relating to warehousing under bond.
Imported and domestically produced commodities, which may be bonded in either public or private sector bonded warehouses, may not be withdrawn from bond unless the necessary taxes and fees are paid or a suitable bank guarantee is provided and accepted by Customs.
MEMBERSHIP IN FREE TRADE ARRANGEMENTS
Egypt is negotiating a free trade agreement with the European Union, as part of the EU's Mediterranean initiative. The transition periods are very long (up to 12 years), and the EU and Egypt have not yet come to terms on many attractive sectors (notably agriculture). The EU initiative carries a regional aspect, as it promises to lower barriers and harmonize procedures among regional parties, including Israel and Jordan. It also promises increased technical assistance to Egyptian industry.
Egypt is a strong supporter of regional integration and has ties through the Arab League to neighboring countries, as well as numerous bilateral agreements with Arabian Gulf and North African states. None of these currently meet the modern definition of a free trade arrangement, however, and many are being renegotiated in light of Egypt's WTO membership.
Egypt joined the Common Market for Eastern and Southern Africa (COMESA) in June 1998, reducing tariffs with COMESA partners by 90% in 1999 and committing to eliminate them entirely by 2000.
CUSTOMS CONTACT INFORMATION
Customs Authority
Mrs. Omnia Afifi, General Manager
4 El Tayaran St., Cairo
Tel: 20-2-403-5557
Fax: 20-2-261-2672General Authority For Export & Import Control
Mr. Fakhr Eldin Abul Ezz, President
Atlas Building, 1 Ramsis & Maarouf Streets
Tel: 20-2-578-5716
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[end of document] Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.
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