WCO settles dispute between ECA, German agents in Egypt

The source also pointed out that one of the German companies imports cars at €33,000 and sells them in the Egyptian market at over EGP 1.250m, while the cars' real price should be about €64,000.

By Mohamed Abul Fotouh, Ahmed Farahat and Ahmed Amer
The World Customs Organization (WCO) settled the ongoing dispute between the customs authority and the German automotive agencies, whereby the WCO supported the Egyptian Customs Authority's (ECA) stance regarding indicative prices of cars.
An official source at the customs authority told Daily News Egypt that the ECA used the WCO as a neutral entity to settle the dispute between the authority and the German agents regarding indicative prices.
He also explained that the WCO supported the ECA's decision regarding the non-eligibility of car companies to benefit from the discount granted by the parent company and deduct it from the price of the car. This discount is the difference between the international prices of the car and prices according to the invoices submitted to the customs authority. This support indicates the validity of the indicative prices of cars set by the customs authority.
He said that the WCO's decision has permanently closed the German companies' files. The other brands are currently under examination to determine their final status. The source added that Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour was informed of the WCO's decision before the president's last visit to Germany.
The source also pointed out that one of the German companies imports cars at €33,000 and sells them in the Egyptian market at over EGP 1.250m, while the cars' real price should be about €64,000.
He pointed out that imported cars come in one of two forms; either basic models, or luxurious cars with extra features. Supposedly, each of these car features has a certain price, so when combined, the price of the basic with that of the extra features give the car's final price.
He added that the study conducted by the customs authority assumes that if a German company brought a car and it was sold in a German exhibit at €100,000, then the price of the car is considered the price set by the parent company, in addition to 16% of value-added tax, 16% merchant profit, and 1% administrative costs. So, when put together, the sale price of the car includes the price of the car from the parent company in addition to 33% taxes, profits and administrative costs.
The source said that the recently conducted study on cars would be beneficial in the case of cars arriving from abroad.
The German companies held a meeting with the Ministries of Finance, and Trade and Industry to discuss the repercussions of the crisis in the past weeks. They promised to send documents that support the validity of their given prices before President Al-Sisi came to Germany. The WCO decision, however, ended the conflict between the two parties.
An official at the German company told Daily News Egypt that the company is still negotiating with the Ministry of Finance to resolve the crisis and prove the validity of the documents. He added that the indicative prices have become an issue to all the companies, and not just one.
The German-Arab Chamber of Industry and Commerce sent a letter to the Ministry of Finance expressing concern regarding the ECA's decision to increase indicative prices on imported cars with a rate of up to 30%.
The chamber believes that this decision will lead to a price increase on consumers, and that this decision will force investors to exit the Egyptian market.