Advanced Cargo Information (ACI) and “Nafeza” Single Window System
Egypt’s Ministry of Finance issued Decree 38/2021 2021 on pre-shipment registration - Advanced Caro Information (ACI) - under a new single window system that seeks to modernize and automate customs administration, simplify procedures, and reduce clearance times. The decree, released on February 1, 2021, requires that consignment documentation for Egyptian agencies at ports of entry be submitted through this new single window system (called “Nafeza” – the Arabic word for window) 48 hours prior to shipment arrival. The single window system is administered by Misr Technology Services (MTS).
ACI uses an integrated information platform to coordinate all necessary shipping information between foreign exporters and Egyptian importers. This system requires importers to submit all necessary shipping documentation and transaction data (customs duties, import controls, port of entry, etc.) via an online “e-portal” to facilitate the release of the importers’ goods from ports in Egypt. According to the Egyptian Customs Authority, the platform will bring the Government of Egypt in line with international standards of trade-related procedures and customs requirements for the clearance of goods.
In the single window system, a risk-based inspection approach will be applied to all commodities. The risk-based system indicates different pathways according to the identified risk where a “green” pathway will not require sampling and inspection and shipments will receive expedited clearance. However, imports that are granted “green” pathway will be subject to random audits to maintain their risk categorization. Work is also being done to harmonize port charges and other fees between the various ports of entry.
The Egyptian Customs Authority launched the pilot phase of single window system at the Port of Alexandria on April 1, 2021. During the pilot phase, Egyptian importers will have the option to start utilizing the system for seeking clearance for their inbound shipments. Beginning on October 1, 2021, use of the system will become obligatory. The new system will be applied at seaports first, and airports and inland ports will follow. Glitches in the system are being addressed, but some challenges remain. Complaints of extensive delays in the clearance process, including document checks, sampling, inspection, and the final release of consignments, are being addressed by the Egyptian authorities.
The Egyptian importer of an inbound shipment must sign into the online e-portal (https://www.nafeza.gov.eg/ar) and submit the required shipping documents. Upon successful submission of the required documentation, the Egyptian importer will be issued a unique Advanced Cargo Information identification number (ACID). Either the Egyptian importer, or a customs broker acting on behalf of the importer, may access the online e-portal to request issuance of the ACID number for a particular shipment. According to officials, the proposed customs process will be as follows:
- Importer inputs the shipment data in the new ACI customs system.
- Customs authority issues shipment identification number (ACID) within 48 hours.
- Customs authority notifies importer and exporter of the ACID.
- Exporter electronically transmits shipment documentation and data, ensuring ACID is referred to on all documentation.
- Importer certifies and acknowledges the correctness of the data sent by the exporter.
- Vessel is loaded with the shipment and departs the exporting country.
- Importer pays import taxes and fees.
- Vessel arrives at Egyptian port and shipment is offloaded.
- Joint committee at Egyptian port inspects shipment.
- Egyptian customs clear the shipment.
Exporters, suppliers, and shipping companies can obtain information about the new ACI customs system at https://www.nafeza.gov.eg/en/site/aci-info. Exporters should work closely with their clients in Egypt to ensure their consignments comply with import requirements.
Letters of Credit (LCs)
On February 22, 2022, the Central Bank of Egypt (CBE) implemented a new requirement indicating that Egypt will only accept Letters of Credit (LCs) in the execution of import operations. An exception applies only to multinationals, branches, and subsidiaries of multinationals in Egypt. Documentary collection is, for the time being, no longer accepted.
The CBE has directed all Egyptian banks to:
- Reduce all commissions for Letters of Credit (LCs), in all banks to be close to the commissions for Inward Documentary Collections.
- Increase the existing credit limits for customers, and open new limits for new customers, proportionally to the import volume of each customer.
- Upon request, the required Letters of Credit (LCs) are provided to all clients.
- Banks must receive customer enquiries and concerns and promptly reply to them while removing any obstructions.
There are some products that are exempted from the decree, which are primarily foodstuffs and pharmaceuticals (wheat, medicines, vaccines and their raw ingredients, along with tea, meat, poultry, fish, oil, powdered milk, baby milk, fava beans, lentils, butter and corn imports). Additionally, parcel shipments and priority mail express shipments of up to $5,000 or its equivalent in other currencies are also exempt from the decree.
On May 10, 2022, it was announced by the Egyptian government that production inputs and raw materials are now exempt from a CBE rule requiring importers to use letters of credit (LCs) to cover imports. Manufacturers, wholesalers, and importers of production inputs will be exempt from LCs and will be permitted to use documentary collection in this case to speed up the payment for imported goods.
Documentation Requirements
For an imported shipment to be accepted by the Egyptian Customs, the shipment must have the following documents:
- Commercial Invoice: Two copies plus the original document are required. Legalization by the Egyptian consulate in the country of origin is required in most cases.
- Certificate of Origin: Two copies plus the original document are required. The Certificate of Origin must be authenticated by the Egyptian Consulate in the country of origin. Natural products are considered to originate in the country where the goods are extracted. The Certificate of Origin must bear a statement that the information given is true and correct to the best of the shipper’s knowledge.
- Packing List: A packing list may be required by the consignee and is recommended in most cases.
- Bill of Lading: A bill of lading must show the name of the shipper, the address, and the number of bills of lading issued. There are no regulations specifying the form or number of bills of lading required for shipment. The number of bills of lading required depends upon the carrier.
- Pro Forma Invoice: This is an invoice required by the importer for submission along with the import license. It must show the country where the goods were manufactured.
- Letter of Credit: The Central Bank of Egypt advises all banks operating in Egypt that L/Cs must be covered 100 percent in cash by the importer, except for some food items. This replaces the previous procedure whereby banks and their clients reached their own agreements and usually covered 10-20 percent of an L/C’s value. In general, the exporter may not ship the goods before the Egyptian bank has provided notification of the opening of a L/C. If the goods are shipped before the L/C is opened, the importer runs the risk of being fined up to a maximum value of the goods. If the importer does not bear the cost, then the exporter will have lost the value of such a shipment, and in the case of products with a limited shelf-life, the delay at Customs can mean that even if the exporter (e.g. a U.S. company) wanted to take back the shipment, it’s no longer of any use. According to new regulations, the U.S. exporter must submit the invoice as well as export documentation to his bank and the U.S. bank should inform the Egyptian bank about a request to open the L/C. Import transactions are based on document collections.
- Content Analysis of the Commodity: Required for those products that may be subject to standards testing.
- Inspection and quality control certificates from other authorities as required.
All certificates issued concerning the shipment of product, and the product description must be countersigned by the Chamber of Commerce and notarized by the Egyptian Embassy or Consulate in the country of origin.