Custom Regulations

Until few years ago the Egyptain customs regulations, namely Article 37, 38,117 and 119 of Customs Law No.66/1963, provided that if the cargo discharged from a vessel was less than manifested quantity, it was assumed that the carrier allowed the short landed quantity into the country resulting in the inability of the customs to collect customs dues on the shortlanded quantity.

Therefore the carrier was held liable for the payment of the customs dues plus a penalty in the nature of a fine which was imposed on the carrier. This fine was normally asseessed at 100% of the customs dues.

Under the above-mentioned regulations, if the cargo discharged was in excess of the manifested quantity it was assumed that the carrier intended to smuggle the overlanded quantity into the country without payment of the customs dues.

Therefore a penalty in the nature of a fine was imposed against the carrier. This was normally 100% of the customs dues paid on the overloaded quantity.

The above – mentioned regualtions were considered by the High Constitutional Court of Egypt who ordered that the said regulations were against the constitution of Egypt, with the effect that the relevant articles were to be considered null and void. Treasury

As this had been one of the most important sources of revenue for the Egyptian Government, a Bill was passed at the end of 1998 which reinstated the right to impose fines and penalties and the level of penalties was furthermore increased.

The new legislation requires Masters/ship agents to ensure that the amount of cargo loaded, or the number of packages or their contents, conforms to the cargo manifest through to final delivery.The parties will be absolved from liability if they are able, within a maximum period of three months from the date of notification, to justify the reasons for the shortage / overlanding of cargo, was either contrary to the allegation and / or beyond their area of responsibility.

Some of the highlights of these amendments are as follows:

1. All shipping companies / agencies are to be aware that as soon as they are officially notified by the customs with the so called 50 KM customs form that they are to promptly adopt certain measures by providing the adequate documented evidence proving the contrary to the customs allegation in respect of shortage and overlanding of cargoes within the legal time limit of three months from the date of notification.
2. The amended articles in the law No. 175/98 have allowed the Master / Shipping Agency to settle the imposed fines / dues on the shortlanded/overlanded cargoes amicably based on evidence supported by documents proving the contrary to the customs allegation. Further the penalties to be imposed can be revalued to lesser amounts based on the Customs Certificates and Release Orders covering the bills of lading related to such shortages / overlanded cargoes.
3. If an amicable settlement is reached and the Customs have accepted whatever has been ratified, no legal actions will take place against either the Master and/or the shipping agency on the basis that such claims are concluded/null and void.
4. In respect of customs dues imposed within the customs forms mentioned in point (1) above, the Customs Authority is allowed to raise/institute their claims within the legal time limit based on the Civil Code (three years as from the date of notification) before the competent jurisdiction.
5. If the Master and/or shipping agency decide to adopt the amicable settlement of the customs fine imposed, they should act in the same manner in respect of the customs dues claim.
6. In respect of discrepancies which occur on the manifested cargoes, the customs are allowed to impose the maximum fine in respect of same, except for one condition which is exempted from imposition of such penalties which is the discrepancy / amendments in the consignee’s descriptions on the cargo manifest, subject that the Master / shipping agency are to notify the Customs with the above within a permissable acceptable time.
7. With regard to Customs smuggling claims, if the vessel’s Master/crew are found in possession of undeclared items outside the vessel’s bonded stores, beyond the legally permissible quantities during their stay in Egyptian ports (especially alchohol) a very substantial customs fine and dues reaching 3000% are to be imposed, the accused may face criminal prosecution and the confiscation of the undeclared items. In order to avoid such drastic action by the customs, the penalty imposed should be promptly settled amicably to prevent the imprisonment of the accused and the detention of the vessel by the Customs until payments are effected.