Back to the complete issue
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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.