Arab Republic of Egypt Ministry of Investment and Foreign Trade General Organization for Export and Import Control

Within the framework of the State’s direction towards tightening the control over the import system and achieving greater discipline in the foreign trade movement, House of Representatives ratified Articles of the Draft Law submitted by the government to amend some provisions of Law No. 121 of 1982 with respect to the Importers’ Register, and postponed the final approval to another session after being approved by the Senate, and a number of substantive amendments were made by the Joint Committee of the Economic and Constitutional and Legislative Affairs Committees.

The Draft Law aims at addressing the practical issues revealed by the years of applying the current law, and developing mechanisms for registration and re-registration in the importers' register, in order to achieve a balance between encouraging investment and controlling the market. It also contributes to reducing the deficit in the trade balance, protecting the national industry, and regulating the movement of imports in light of economic changes.

Philosophy of the Law is based on providing greater flexibility to the investors, while maintaining control and discipline tools, whereas amendments aim at facilitating registration procedures, addressing obstacles related to payment of the capital and the insurance, regulating the status of heirs, and establishing a legal mechanism for reconciliation in some crimes related to violating the provisions of the law, thereby enhancing the legal stability and encouraging voluntary compliance.

The Draft Law achieves the possibility of paying the capital of the company that requests registration in the importers’ register or the paid up capital as set forth in the commercial registry in free convertible foreign currencies. Article No. (2), as stated in current Law, stipulates payment of these amounts in Egyptian pound, in order to provide an opportunity for many companies which capital is in foreign currencies to be registered in the importers’ register.

The amendments also face a difficulty in obtaining the insurance amount required to register in the importers' register in case of submitting a bank letter of guarantee with the insurance amount then the validity of this letter expires. Therefore, the cash payment of the insurance amount deemed only sufficient to avoid these difficulties. These amendments also allow companies to update their data in the importers' register if they change their legal status, with no need to be struck off from the register. Furthermore, the Draft Law grants the heirs the right to retain their deceased registration in the importers' register.

The amendments granted the competent entity in the Ministry of Investment and Foreign Trade the right to reconcile with the accused person in the crimes stipulated in Articles (8, 10, 11) of the current law, through assigning a separate article that includes the possible forms of reconciliation according to the case, even after the judgment is final and cannot be challenged. 

The Draft Law includes a number of key amendments, most notably:

• Permission to pay the amounts stipulated in Article (2) in their equivalent in free foreign currencies accepted by the Central Bank of Egypt, instead of the Egyptian pound only, in line with the nature of the capital of some companies operating in the field of importation
• Adding Article (4 bis) that permits the re-registration of previously registered companies in case of changing their legal status or registration number, provided that such change shall be deemed an amendment to the data with no need to write off and repeat the registration procedures again.
• Regulating the status of heirs by allowing re-registration if the heirs of the natural person, or some of them, establish a company to practice the same activity as their predecessor, while granting them a grace period of one year and half from the date of death, and obliging them to notify the competent entity.
• Amending the deadline of notifying the competent entity of any changes in the register data to become (90) days instead of (60) days, to keep the consistency between the provisions and to give the importers sufficient time before imposing the fine.
• Introduction of Article (12 bis) that grants the competent authority the right to reconcile with the accused person in the crimes stipulated in Articles (8) and (10), whether before or after filing the criminal case and even after the judgment has become final and decisive, against paying specific amounts of money according to the stage of dispute, with a legal effect of abatement of the case and the suspension of executing the penalty in case of reconciliation.

The committee confirmed, in its report, that the Draft Law is an important step towards updating the legislative framework regulating the Import Sector, addressing practical gaps, and achieving a degree of flexibility and discipline at the same time, thereby supporting the investment climate and contributing to achieving the objectives of sustainable economic development.