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Cablegate: Egypt's New Import-Export Regulations

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 CAIRO 009546

SIPDIS

PLEASE PASS USTR FOR SAUMS
COMMERCE PASS TO ITA/MAC/AMESA/TSAMS/MTALAAT

E.O. 12958: N/A
TAGS: ETRD ECON EG WTRO
SUBJECT: EGYPT'S NEW IMPORT-EXPORT REGULATIONS

1. (U) The Egyptian Ministry of Foreign Trade and Industry
(MOFTI) recently implemented new, more transparent and
liberalized import/export regulations to facilitate trade and
further integrate Egypt into the global economy. These
regulations were developed with the private sector to give
industry and consumers quicker and easier access to traded
goods, while simplifying the process of exporting Egyptian
goods.

--------------------------
Changes in the Regulations
--------------------------

2. (U) Key reforms in the new regulations include:

-- Reduction in the number of imported goods subject to
inspection by the General Organization for Export and Import
Control (GOEIC);

-- Acceptance of importer-provided certificates of conformity
from any internationally accredited laboratory inside or
outside of Egypt for those goods still subject to inspection
by the GOEIC;

-- Exclusion from inspection of imported goods manufactured
in accordance with internationally recognized quality marks;

-- Elimination of the requirement in the import-export
regulations that perishable products have at least one-half
of their shelf life remaining at the time of import;
(Comment: For this change to take effect, a particular shelf
life standard must also be amended by the Egyptian Office of
Standards. This standard is being amended and the process is
expected to be complete in the near future. End comment.);

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-- Elimination of the registration requirement for garment
imports;

-- Introduction of a mechanism for enforcing intellectual
property rights at the border as a way to increase Egypt's
compliance with WTO TRIPS requirements;

-- Extension of the preferential inspection treatment given
to inputs for manufacturing to inputs in the service industry.

3. (U) Additional reforms include:

-- The transfer of responsibility for issuing and reviewing
certificates of origin from GOEIC to the Egyptian Customs
Administration;

-- Clarifying previously vague rules for registering as an
exporter, which were often abused by companies wanting to
take advantage of the incentives provide to exporters without
actually engaging in export activity. Under the new rules, a
potential exporter has to obtain an export license and is
required to provide proof of its export activity;

-- Requiring bar codes for all imports;

-- Increasing the value of goods that can be imported as
samples;

-- Explicitly listing chemicals that cannot be imported into
Egypt, thus clarifying a previously ambiguous procedure.

------------------------
Further Efforts Required
------------------------

4. (U) Having issued the new regulations, the MOFTI is now
seeking to further improve Egypt's trade and business
environment through a three-pronged process:

-- First, the Ministry is taking additional measures to
ensure that the new regulations are implemented effectively.
This will include issuing a number of implementing decrees,
particularly in the areas of IPR border control, recognition
of international conformity assessment reports and quality
marks, and traceability of food and agricultural products.
MOFTI will also be providing training to its staff and a
public awareness campaign on the new provisions;

-- Second, the Ministry is seeking to address concerns that
have been expressed by the private sector over unnecessary
restraints on business activity. A particular focus will be
to improve government quality control systems, and to make
registering, financing, and operating small businesses much
easier;

-- Third, the Ministry will also be working with other
ministries and organizations to address remaining trade and
industrial policy concerns. This is particularly important
for sanitary and phytosanitary standards and inspection of
food products to ensure WTO-compliance and prevent duplicate
inspection, especially with the Ministries of Health and
Agriculture.

-------
Comment
-------

5. (U) According to the "Trading Across Borders" section of
the World Bank's 2005 Doing Business Report, Egypt fares
slightly better than its regional peers with regard to export
and import transactions, but still falls considerably below
others in OECD performance ratings. Although faced with the
challenges of certain entrenched bureaucratic interests that
do not welcome further liberalization, Minister of Foreign
Trade and Industry Rachid continues to profess his intention
to move ahead. Rachid says he will continue working to
create opportunities for competition in the Egyptian economy
through the lowering of barriers.

JONES

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