Egypt's new consumer protection law: A leap forward for consumer rights?

Ghada Raafat , Friday 16 Nov 2018

Ghada Raafat listens to experts outlining expectations of Egypt’s new consumer protection law at a recent seminar in Cairo

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President Abdel-Fattah Al-Sisi ratified Egypt’s new consumer protection law some months ago, but the law can only go into effect once its executive regulations are published, a process which can take three months from ratification.

In the meantime, a seminar organised by the Egyptian Centre for Economic Studies (ECES), an NGO, brought together experts to voice their opinions on what the executive regulations should look for.

According to a paper prepared by the ECES, what distinguishes the new law is the higher penalties for those violating its stipulations. These can run from LE50,000 to LE2 million in fines, or twice the value of the consumer product concerned, whichever is the larger.

The new law regulates the relationship between buyers of real estate and real-estate developers, among other things. It says that developers should not advertise units until legal requirements are met and that they do not have the right to collect commissions or fees from the resale of units, as is currently the case.

The new law also requires suppliers to provide maintenance for imported products, setting a minimum of two years’ guarantee for durable goods. It also reinforces the right of consumers to return products within 14 days of purchase without having to provide a reason.

The law also introduces new regulations on e-commerce that are designed to protect consumers.

According to Hisham Ragab, a member of the Higher Committee for Legislative Reform speaking at the ECES seminar, explained that the Consumer Protection Authority (CPA) is under the supervision of the cabinet and it is the cabinet that will issue the executive charter.

According to the ECES, in order to fulfill its supervisory role the authority should be independent of any executive body.

Ragab said the state should assist the authority in performing its role and should focus on training its inspectors to help them resolve different kinds of complaints. However, at present the authority only has 150 employees.

However, he praised the raising of fines and the regulation of real-estate transactions under the new law.“The developer is not a partner in any loss when the value of the property goes down, so why should he take a part of any profit,” he asked.

The ECES also lamented the fact that the new law does not specifically cover imported cars, since Egypt has become a major importer of Chinese cars, and these should be regulated to ensure they meet consumer safety and environmental standards.

Although the new law tackles the real-estate sector, it does not address the issue of the timely delivery of units, participants at the seminar said.

Hamdi Abdel-Aziz, former member of the board of directors of the CPA, said there should be greater technical expertise available to the authority to deal with complaints from consumers.

He supported the idea that the authority should be under the supervision of the Ministry of Trade and Industry rather than the Ministry of Supply.

Other drawbacks, according to the seminar participants, include the fact that the authority received 25 per cent of fines handed down in cases of violation, possibly causing conflicts of interest.

Ahmed Eid, an executive at Promomedia, a media and advertising company, said there was a need to deal with misleading advertising without affecting advertising revenues, adding that in the case of TV advertising this should be discussed with the Supreme Media Council.

He stressed the need to set up an “observatory” in cooperation with various regulatory bodies to deal with consumer problems in the service sectors and said there was a need to cooperate more with civil society associations, thus easing the need to recruit additional human resources.

Abla Abdel-Latif, research director at the ECES, backed the idea of the CPA cooperating more with civil society. The authority’s responsibilities were greater than its current size, she said, and it would need to cooperate with civil society and other state agencies to carry out its job.

She called for a review of the executive regulations of the new law after they have been issued in order to ensure that they conform to international best practices and implementation on the ground.

Abdel-Latif said that while the new law represented a major leap forward for consumer protection in Egypt, one of the challenges facing its implementation was the ability of the CPA to implement the law.

“The government needs to support the CPA and provide it with the necessary means to do its job and implement the new law,” she said, adding that the main risk to consumer protection at present came from the informal sector, which represents a large proportion of the Egyptian economy.

* A version of this article appears in print in the 15 November, 2018 edition of Al-Ahram Weekly under the headline:  Reinventing consumer rights?

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