Mona El-Fiqi reports on the progress of the executive charter that sets out to streamline customs procedures Last week Minister of Finance Youssef Boutros-Ghali announced that executive charter no 861 for the customs law was nearing completion. The text of the charter has already been presented to business associations and trade and industry federations and is due to be enforced starting 1 December. Boutros-Ghali added that ongoing consultations with concerned parties were intended to iron out any possible problems before the charter comes into force. The charter, which overhauls the 1963 customs law by simplifying customs procedures for importers and exporters, aims at lifting obstacles to international trade and in so doing attract more direct investments flows to Egypt. In compiling the charter Boutros- Ghali said particular attention had been paid to clarity in order to avoid confusion and ensure that its provisions are uniformly applied at all customs outlets. "One perennial complaint of businessmen is that custom regulations are applied arbitrarily, according to employees' understanding of the decree," notes one economist, who sees the new charter as a positive development that will unify procedures and streamline the whole customs regime. Galal Abul-Fotouh, chairman of the Customs Authority, has announced that the charter will for the first time allow governmental organisations to import for themselves without any mediators. It also permits customs officers to apply agreed duty exemption on specified items, including vehicles designed for the handicapped. Currently, the granting of exemptions is a prerogative of the minister of finance. The new charter raises the exemption on vehicles for the handicapped from LE12,000 to LE20,000 and increases the capacity of eligible cars from 1500cc to 1600cc. In a bow to inflation, the charter also increases the value of goods exempted from customs, for both Egyptians and non- Egyptians, from LE100 to LE1,500. The charter, which comprises more than 5,000 articles, irons out distortions and overlap in customs exemptions between the tax rebate and draw back systems under which importers can reclaim duties paid on imported inputs when exporting the final product. This, according to the finance minister, was necessary in order to combat the corruption that had dogged the earlier, unclear regulations. Hamdi Abdel-Azim, former chairman of Al-Sadat Academy for Administrative Sciences, believes the customs overhaul alone will be insufficient to attract foreign direct investments. It should, he argues, be coupled with other decrees regulating arbitration and commercial disputes and guaranteeing the application of verdicts. The real problem, says Abdel-Azim, is not in laws or charters but in the way they are applied. "Customs employees use obstacles and bureaucratic procedures to avoid responsibility." The new charter is part of a radical shake-up of customs regulations that began a year ago when the customs duties were slashed and tariff categories streamlined. The Customs Authority has also set up a department to receive and follow up on complaints. Concerned parties can register complaints with a newly formed committee which will then adjudicate. If the committee's decision fails to satisfy the complainant, then there is an option to go on to the arbitration procedures governed by customs law 57. Key to streamlining import procedures is the centre dedicated to the speedy processing of the paperwork of Egypt's 200 biggest importers inaugurated a few weeks ago. The annual customs duties paid by these importers amounts to LE7 billion, 70 per cent of total customs revenues. The centre aims at allowing the release of imported goods within 24 hours rather than the 27 days it currently takes, providing an accountant for each importer to advise on completing customs procedures. The system, currently in operation in Alexandria, Port Said, Damietta and Cairo should, believes Abdel-Azim, be expanded to include smaller businesses.
