IMPORT TRED IN ETHOPIYA

Anybody who wants to import to Ethiopia should know the import procedures in relation to the pre-shipment inspection on goods imported and applications submitted to commercial banks in Ethiopia to obtain Import Permit; in addition, an importer in the country should know the modes of payment allowed for import, documentation requirements to effect payment and document checking and verification. An importer who wishes to import goods to Ethiopia should pay through the commercial banks. All payments above USD2000 should be done through Letter of Credit or Cash against Document. Pre shipment inspections apply for all imports. The procedures needed to start an Import Trade and the frequently asked questions to start business in Ethiopia are found in the Business Start-up page; procedures and requirements regarding payment through banks and pre shipment inspection on goods imported to Ethiopia are found below.

Pre-shipment inspection
Goods imported are not required to be inspected prior to shipment except when they are imported from India or if the importer and the supplier have agreed to do that

Import payment
Foreign exchange can be availed by banks to any importer provided they can present one of these 1. Import License issued by Ministry of Trade and Industry (MOTI) 2. Industry License issue by MOTI (If applicable) 3. Investment License issued by Investment Agency

Source-http://www.2merkato.com/2008043023/import-procedures-in-ethiopia

Applications submitted for import should be accompanied by the Performa Invoice / contracts from suppliers stating

1. The type of commodity 2. Quantity of the commodity 3. Price per unit 4. FOB amount 5. Freight if any 6. Other charges 7. No insurance payment is allowed for payment in Foreign Exchange, so the importer should make insurance arrangement locally.

Mode of payment allowed for import

1. Letter of Credit 2. Cash against document 3. Advance payment up to USD5000

Documentation requirements to effect payment

It is important that the required sets of documents that should be presented by the supplier to demand payment should be mentioned in the LC or Purchase order. The following are mandatory for payment and always mentioned in the LC or Purchase order: 1. A final invoice (commercial invoice) 2. Original sets of Bill of lading, Airway Bill, Truck way bill, Railway Manifest 3. Country of origin 4. Packing list 5. Certificate of quality

Importers who wish it import using CAD

1. Should first get approvals of the their Bank on the purchase order they wish to pass to the supplier 2. The purchase order should clearly sate document requirements and certificate to be attached. 3. Shipping documents normally required for import payments 4. Payment can only be released on CAD provided the importers get the prior approval from its bank.

On Document checking and verification

1. Banks shall have the responsibility to check documents and insure that goods shipped are in accordance with the L/C term or the purchase order issued (in case of CAD) which should clearly sate the list of documents that should presented . 2. If the documents presented are in compliance with the letter of credit terms pr the purchase order approved (in case of CAD) then the documents shall be accepted and the payment will be released. If not, it will be kept in suspense pending receipt of clarification and amendments

Export treed in Ethiopia

According to Regulations No. 84/2003 or 84/1995 EC and its amendment 146/2008 or 146/2000 EC export trade of raw coffee, chat, oil seeds, pulses, hides and skins bought from the market and live sheep, goats and cattle not raised or fattened by the investor is exclusively reserved for domestic investors. Foreign investors cannot be involved in export trade of these items from Ethiopia. Businesses that wish to export from Ethiopia should know the export procedures needed to obtain export permit by commercial banks; should prepare Application for Quality Testing and Certification to obtain Export Authorization Certificate from the Quality and Standards Authority of Ethiopia; should fill the Customs declaration. We have included all these export procedures in Ethiopia and also the VAT registration for exporters from Ethiopia and VAT rate applied on goods exported from Ethiopia

Export permit by commercial bank (Documents required for Export Permit Approval)

Duly signed contract by seller & buyer Undertaking letter of our customer that consignment will be settled within a maximum of 90 days from date of the Foreign Exchange Permit for Cash Against Document (CAD) mode of payment and Authenticated message of L/C opened for Letter Credit mode of Payment. Seller's invoice

Export License Valid for the year Tax registration certificate (TIN certificate) Export permit application form duly filled, signed & stamped (as appropriate) by the customer

NBE (National Bank of Ethiopia) issues delinquent list of exporters periodically. Customers name should not appear in the delinquent exporters list of NBE for the period. If the name appears, there should be subsequent list indicating the given customer has cleared all outstanding item as NBE

Source- http://www.2merkato.com/2008043025/export-procedures-and-regulations-in-ethiopia

In regards to payment, the exporters should

Know thoroughly the foreign counterparts (buyers) financial soundness, reliability, integrity, full address, etc.

Sales/Purchase contract should exist between the two parties (importer and exporter).

(LC Mode of Payment) Go through text of L/C opened in their favor and make sure that compliance can be met without doubt. Otherwise, amendments need to be requested from opener as soon as L/C has been received or at the earliest - long before shipment of consignments.

(CAD Mode of Payment) Follow up the payment, as non payment or even delay of remittance above 90 days will put name of exporter in delinquent list freezing further exports until proceeds are received.

Application for Quality Testing and Certification:

When export products are ready, make arrangements for suitable packaging and apply to the Quality and Standards Authority of Ethiopia for quality testing, and acquire the Export Authorization Certificate.

Customs Declaration:
To avoid costly delays, the exporter declares all facts about the export consignment, and all supporting original documents should be forwarded to the Customs Clearing Agents to enable customs formalities and authorization of the dispatch of the export goods. Accordingly, the exporter must hand over the Export Permit, the copy of the Customs Declaration Annex form, the Ethiopian Customs Declaration form, the Certificate of Origin, and the special movement forms/certificates (the EURI Movement Certificate and the GSP form A) to the clearing agents

Exporters, VAT and VAT Registration

According to the Value Added Tax Proclamation (285/2002) and the Regulation by the Council of Ministers on VAT (Regulation 79/2002), all exports of goods and services are liable to VAT at the zero rates. This means that VAT is charged at 0% (or no VAT has to be charged). However, more importantly an exporter is entitled to reclaim the VAT on all the goods and services purchased to produce the exports. But since this still means an exporter is still making taxable supplies even at a zero rate, the law requires the exporter to register if the turnover exceeds the registration limit.

Tax (registration-assessment-and-payment-procedures-in-Ethiopia)
Every taxpayer in Ethiopia is required to have a Taxpayer's Identification No. (TIN). The procedures to register for TIN, Value Added Tax (VAT) in Ethiopia are included here. Moreover, this page also contains procedures related to value added tax (VAT) assessment, VAT payment, VAT filing, cancellation of VAT registration, VAT Records and VAT Invoices. VAT Procedures

VAT Registration Procedure Cancellation of VAT Registration VAT Invoices Filling of Tax Return and Payment of VAT VAT Records

Taxpayer Identification Number (TIN):

TIN is a well-designed numbering system, which consists of numbers generated randomly and it has a self check digit, that is a number calculated from the digits forming the basic part of the TIN.

Where to register (TIN)

The TIN registration is done in nine regional adminstrations, in Addis Ababa at 10 sub cities, in Dire Dawa adminstration and at the Federal Inland Revenue Authority's sites including Addis Ababa Main branch office, LargeTaxpayers' Office, Hawassa, Nazreth,Mekele, Bahirdar, Diredawa and Jimma branch offices.

General Provisions about Customs Procedures

Basic document is Entry

Entry in relation to goods means entry made in Bill of Entry, Shipping Bill or Bill of Export. In case of import by post, label or declaration accompanying goods is entry

Loading and unloading at specified places only Computerisation of customs procedures

Imported goods can be unloaded only at specified places. Goods can be exported only from specified places.

Customs procedures are largely computerised. Most of documents have to be e-filed.

Amendment to documents

Documents submitted to customs can be amended with permission In case of bill of entry, shipping bill or bill of export, it can be amended after clearance only on the basis of documentary evidence which was in existence at the time the goods were cleared, warehoused or exported, and not on basis of any subsequent document. [proviso to section 149].

ICD and CFS

Imported and export goods are usually handled in containers. These can be stored in Inland Container Depot (ICD) or Container Freight Station (CFS). They function like dry port for handling and temporary storage of imported/export goods and empty containers. Boat Notes are used for transferring small cargo from ship to shore, or from shore to ship, without berthing the ship. Goods can be transshipped from one conveyance to other after following required procedure. Such transhipment may be to any major port or airport in India. The goods can be transshipped to any other customs station in India if Customs Officer is satisfied that the goods are bona fide intended for transhipment to any customs station. The facility is available at all customs ports and Inland Container Depots (ICDs). Procedures have been prescribed for coastal goods, even if there is neither import nor export.

Boat Notes Transshipment of goods

Coastal goods

Import Procedures e-filing of documents Goods should arrive at customs port/airport only. Most of customs procedures are computerised. E-filing of documents is required. Person in charge of conveyance is required to submit Import Manifest or Import Report. Goods can be unloaded only after grant of Entry Inwards. Self Assessment on basis of Risk Management System (RMS) has been introduced in respect of specified goods and importers.

Import manifest or Import Report

Entry Inwards Risk Management System

Bill of Entry for home Importer has to submit Bill of Entry giving details of goods consumption on being imported, along with required documents. Electronic payment of customs submission of documents is done in major ports. duty White Bill of Entry is for home consumption. Imported goods are cleared on payment of customs duty.

Bill of Entry for warehousing

Yellow Bill of Entry is for warehousing. It is also termed as into bond Bill of Entry as bond is executed. Duty is not paid and imported goods are transferred to warehouse where these are stored. Green Bill of Entry is for clearance from warehouse on payment of customs duty. It is for exbond clearance.

Noting, examination and assessment Bond

Out of customs charge order

Demurrage if clearance from port delayed

Bill of Entry is noted, Goods are assessed to duty, examined and pre-audit is carried out. Customs duty is paid after assessment. Bond is executed if required if assessment is provisional (PD bond) or concessional rate of customs duty is subject to certain post import conditions. Goods can be cleared outside port after Out of Customs Charge order is issued by customs officer. After that, port dues, demurrage and other charges are paid and goods are cleared. Demurrage is payable if goods are not cleared from port/airport within three days. Goods can be disposed of if not cleared from port within 30 days.

Export Procedures

Entry Outward

Loading in conveyance can start after Entry Outward is given by customs officer.

Export Person in charge of conveyance is required to submit manifest/Export report Export Manifest or Export Report.

Registration with DGFT and EPC

Exporter has to be obtain IEC number from DGFT is advance. He should be registered with Export Promotion Council if he intends to claim export benefits.

Third party exports

Export can be by manufacturer himself or third party (i.e. by exporter on behalf of another). Merchant exporter means a person engaged in trading activity and exporting or intending to export goods [para 9.40 of FTP]

Registration of documents under Export Promotion Scheme Shipping Mill

Advance authorisation, DEPB etc. should be registered if exports are under Export Promotion Scheme.

FEMA formalities Noting, assessment, examination Certification of documents for export incentives Let export order

Export is required to submit Shipping Bill with required documents for obtaining permission to export. There are five forms : (a) Shipping Bill for export of goods under claim for duty drawback - these should be in Green colour (b) Shipping Bill for export of dutiable goods - this should be yellow colour (c) Shipping bill for export of duty free goods - it should be white colour (d) shipping bill for export of duty free goods ex-bond - i.e. from bonded store room it should be pink colour (e) Shipping Bill for export under DEPB scheme - Blue colour. GR/SDF/Softex form (under FEMA) is required to be submitted. The shipping bill is noted, goods are assessed and examined. Export duty is paid, if applicable. If export is under export incentives, relevant documents are checked and certified. Then proof of export is obtained on ARE-1. Conveyance can leave only after Let Export order is issued.