As part of a national project to modernise Egypt’s customs administration, the Ministry of Finance has introduced a new system to expedite the release of imported goods as soon as they arrive at port. To enjoy the benefits of the new system, importers must first register with the new pre-arrival customs facilitation system, which will become mandatory by October.
The executive regulations of the new customs law lay out procedures for authorised economic operators that grant them benefits consistent with the provisions of the Trade Facilitation Agreement (TFA), Minister of Finance Mohammed Maait said.
The new system will allow importers to pay only 30 per cent of estimated customs duties in advance, after submission and approval of the necessary documentation, termed “advance cargo information” (ACI). The remainder will be paid upon the arrival of the cargo, after port authorities have reviewed it and calculated final fees.
Maait said the system’s online ACI portal was fully secured to protect the privacy of registered users and that its purpose was to collect all necessary information in one place and make it available exclusively to authorised customs officials.
Importers or customs brokers acting on behalf of importers have responded enthusiastically to the new ACI system. According to the minister, 15,000 companies have already registered with the portal, reflecting the business community’s eagerness to benefit from the advantages of the new system.
In addition to speedier customs clearance, which makes it possible for goods to reach their destinations more quickly, the ACI system reduces shipment costs because the rapid release of goods spares importers storage costs at port facilities.
The streamlined process will also increase Egypt’s international competitiveness, facilitate the movement of trade, and attract investment.
“Around 2,200 companies have registered about 18,000 successful customs transactions on the system since it first went into operation on a trial basis in April,” Maait said. The trial period ends at the end of September.
“We are keen to provide all possible facilities to importers and their agents and to overcome any obstacles they may face in order to encourage them to join the ACI system,” Maait said, adding that agents from the firm EgyTrust have been stationed at logistics centres in Cairo and Alexandria to help with registering inbound shipments.
“NAFEZA,” as the National Single Window for Foreign Trade Facilitation system is called, will extend to Safaga, Nuweiba, Ismailia, and Aswan before the end of 2021, “thus establishing an electronic network between all Egypt’s ports, which will strengthen governance, protect national security, and prevent the entry of any harmful goods,” the minister said.
He added that by that time new x-ray systems will also have been introduced at 85 per cent of Egyptian ports.
Shahat Ghatouri, director of the Customs Authority, urged importers and customs brokers to register on the new ACI system as soon as possible, at www.nafez.gov.eg, in order to benefit from incentives still on offer during the remaining period of the trial phase.
Those who open an account before the end of August will be entitled to a 50 per cent reduction on subscription fees. The reduction declines to 30 per cent for registration before mid-September and to 20 per cent for registration before the end of September.
Early account openers will also be entitled to priority customs clearance during the remainder of the trial period if they use the system. This entails entering the information of an expected shipment in the system and uploading the required documentation in order to receive a shipment identification number, or ACID, from the Customs Authority within 48 hours.
The Customs Authority has created a joint committee with the Federation of Egyptian Industries to enhance communication and ensure positive interaction with the business community in order to facilitate early registration and use of the new system, Ghatouri added.
According to Mohammed Al-Bahi, chair of the Federation’s Tax and Customs Committee, the Ministry of Finance has put measures in place to facilitate and encourage business people to open NAFEZA accounts and help them make immediate use of the new system.
“This positive move on the part of the ministry has instilled a spirit of optimism and assurance among investors,” Al-Bahi said, adding a call to importers to register with the ACI system before it becomes mandatory in October in order to simplify and speed up the release of foreign shipments upon their arrival in Egyptian ports.
However, while everyone agrees on the importance of digital procedures, there have been reservations among importers regarding the period specified for registration. Matta Beshay, a member of the Exporters Division of the Federation of Chambers of Commerce and head of the Egyptian Company for Trade and Agencies, hopes there will be a further postponement of applications because any failure to register would mean importers that have not done so would be unable to carry out import transactions.
The system was originally scheduled to begin in July, but registration was extended until October. Beshay said companies needed longer to familiarise themselves with the requirements for registration, especially since some importers were having difficulties dealing with the new technology. He said the new system had multiple benefits, the most important being the release of goods within three rather than seven or 10 days.
The new customs law and its bylaws, according to Al-Bahi, has been thoroughly discussed in the Federation of Egyptian Industries and all its observations have been taken into account in the drafting of the executive regulations.
Apart from the promise of speedier procedures, investors have welcomed the new system’s measures to prevent smuggling, minimise waiting fines and fees, and reduce corruption because it will no longer depend on cash transactions.
Al-Bahi added that the new customs law would contribute to the development of the customs system and strengthen the government’s regulatory role, especially given the stiffer penalties that could be imposed on violators.
*A version of this article appears in print in the 26 August, 2021 edition of Al-Ahram Weekly