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Monday, 22 April 2019

Customs payment dispute with Mercedes importer returns

DISPUTE WATCH- Customs dispute with Mercedes importer in Egypt is back from the dead: A dispute between the Customs Authority and an Egyptian importer of Mercedes-Benz cars that was settled earlier this year has apparently resurfaced and is now before the Investment Ministry’s dispute resolution committee to be sorted out, according ot a domestic press report citing an unnamed government official. The importer, unnamed in this report and in an earlier statement by the Finance Ministry, is pushing back on the Customs Authority’s imposition of indicative pricing on the cars. It argues that as an importer, it can sometimes get specific price breaks from Mercedes-Benz that the Customs Authority “does not acknowledge” in calculating the base price for customs. According to the sources, the ministry committee says it is “difficult” to grant the importer the customs rate it is seeking, bringing back the dispute over the EGP 700 mn payment back to square zero.

Could this put a damper on Mercedes’ return to assembling in Egypt? Mercedes-Benz production chain boss Markus Schaefer had told Prime Minister Moustafa Madbouly in January that the German manufacturer could resume the assembly of passenger cars in Egypt after a years-long hiatus. Schaefer’s announcement came just one day after the Cabinet’s investment dispute resolution committee settled the EGP 700 mn customs payment. The luxury car maker shut down its assembly line in mid-2015 amid FX shortages and as completely built-up cars (CBUs) were made cheaper in light of falling tariffs on EU-assembled cars, which hit zero at the start of this year.

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