(AFP Photo)
By Mohamed Aboul Fotouh
The state approved December a 10% reduction in the current customs value according to the European partnership agreement signed by Egypt with the European Union (EU) in 2008 and applied in 2009. The agreement provided for a reduction in the customs value on products of European origin, deducted from the actual customs value for that year.
Automobile sector workers were surprised at the beginning of 2015 to find new calculations applied under the name “pilot price”. It implies the rejection of prices offered by the company importing automobiles, whether agents, dealers, or even personal importers. The only prices accepted are those defined by customs, which has led to confusion within the sector, and many vehicles remain in the customs hangar.
This decision, made by the customs authority, is due to the large number of incorrect bills for the values of cars received. These bills’ values were less than the real value announced by parent companies by nearly 50%, proving that importers have manipulated the selling price presented to customs. The authority took this step to limit the manipulation, said Magdy Abdel Aziz, chairman of the Egyptian Customs Authority, at the Business News conference in December.
Abdel Aziz said the authority learned that a significant number of bills submitted by companies, agents and dealers for the same type of automobile listed varying prices. He added that this is considered a crime and makes it difficult for the Authority to set a unified customs value for a specific type of imported cars.
As part of the Authority’s interest in protecting protect public money, the group has addressed all embassies and trade consulates in several countries, demanding that reference prices be presented in order to limit manipulation. Based on the prices received from consulates, a real customs value for all types of imported cars in Egypt has been set.
Abdel Aziz noted that this step is considered crucial by the Egyptian Customs Authority to both determine all forms of manipulation during previous periods, and limit invalid bills. He added that this is what pushed them to take the step, which some considered to be an escalation and a challenge to companies. Abdel Aziz denied this, asserting that the authority is transparent with all importers and exporter and does not take decisions without conducting precise discussions before implementation.
He explained that if mistakes are found, coordination with the importing company takes place to facilitate the application of regulations and laws. This has already occurred with some companies that complained about reference prices. Follow-up committees were formed, with members being both employees of the company and the Authority, charged with discussing the issue and reaching a solution that would satisfy all parties.
On the other hand, the reference prices applied by the authority at the beginning of this year have halted the automobile import process for many companies in the sector. Companies have faced significant trouble processing cars through customs, especially since they have bills and certificates from parent companies with the prices at which they imported the cars. Companies have complained and demanded that agents that have been working in Egypt for long years get more respect, asserting that they have all necessary bills to validate their prices.
Agents, especially for European brands, said the authority sent their complaints to trade representation offices in several countries, but offered the same initial prices. They found these prices unsatisfactory and decided to obtain reference prices through the internet. These are individual selling prices in Europe rather than commercial ones and were less than the prices offered by the authority by nearly 30%, since agents must have a range of prices similar to global prices. Agents have special commercial prices and receive discounts from companies during the importing process, a fact that was overlooked by the Authority while applying the new prices, according to agents.
The authority’s decision also caused delays which led to higher costs. For this reason, agents have demanded a quick intervention from the chairman of the authority to reel in the excessive prices. They say that they hope the mistakes be redressed in order to avoid launching an official complaint against the Egyptian Customs Authority.
