Ethiopian Customs Guide - The iGuides

1 CUSTOMSMANAGEMENTSYSTEMCARGO SCANNINGTAX SYSTEMSINGLE WINDOWVALUATION SYSTEM CARGO TRACKINGE thiopian Customs GuideEthiopian Revenues andCustoms AuthorityM a r ch 2017 Ethiopian Customs GuideEthiopian Revenues and Customs Authority March 2017 AcknowledgementsThe Customs Guide is developed as part of the World Bank Group s (WBG) Ethiopia Investment Climate Mihretu, Program Manager of Ethiopia Investment Climate Program, coordinated the overall work. Ankur Huria, Senior Trade Logistics Specialist, WBG and Tekleweyni Tadesse, Trade Logistics Project coordinator, WBG provided invaluable guidance and support. Abebe Abebayehu, Deputy Commissioner of Ethiopian Investment Commission, guided the work at its initial stage. This Customs Guide is developed as a result of a study conducted by BKP Development Research and Consulting GmbH.

2 Fasil Tadesse, Derk Bienen, Sisay Asres and Yalew Teshome contributed different sections of the Customs WBG would like to thank the Ethiopian Revenues and Customs Authority(ERCA) team for the comments while preparing this Customs extended core team was led by Moges Balcha, Deputy Director General of Customs Program Development and Support Division at team members include Fekadu Bekele, Director of Customs Valuation and Tariff Classification Directorate; Gaim Yibrah, Director of Customs Procedure Program Development Directorate ; Debele Kabeta, Director of Customs Branch Offices Support and Follow-up Directorate; Nigussie Seid, Project Manager of Ethiopia Electronic Single Window Project Office; Ahmed Yasin, Deputy Director of Customs Valuation and Tariff Classification Directorate; Gebre Eysus Gebre Hiwot, Head of Customs Affairs complaint Verification office; Haile Gebre Egziabher, Team Coordinator of Transit Procedure Program Development; Kebede Lidetu, Team Coordinator of Customs Risk Analysis and Profile Development; Wegayehu Adamu, Team Coordinator of Customs Clearance Procedure Program Development; Gebregziabher Gebretsadik, Team Coordinator of AEO Compliance Audit.

3 Wondwosen Degefa, Team Coordinator of Post Clearance Audit, Amsale Marcos, Business Expert in Electronic Single Window Project Office, Wondwosen Getachew, Senior Officer of Customs Affair Electronic Information Service, Dessie Menber, Senior Customs Guide - MARCH 2017ivWe gratefully acknowledge the financial contributions made by Department of Foreign Affairs, Trade and Development (DFATD) of Canada, Sweden International Development Agency (SIDA), Department for International Development (DFID) and the Italian organizations (that is, IBRD, IFC, and MIGA), using their best efforts in the time available, have endeavoured to provide high-quality services hereunder and have relied on information provided to them by a wide range of other the information presented in this Customs Guide has been carefully prepared, it is not a legally binding document; it merely constitutes the Ethiopian Revenues and Customs Authority s view on the law.

4 Therefore, the user of this Guide required to refer to the Customs Proclamation and other Customs related laws and regulations for obtaining legally binding information. About the World Bank Group s Trade and Competitiveness Global Practice (T&C GP)The Trade and Competitiveness Global Practice (T&C GP) provides policy advice and lending support to help client countries increase trade and investment, improve productivity and competitiveness at the national and industry levels, and create an inclusive, competitive private sector. The T&C GP works with governments to identify policies that promote growth, while helping identify and remove impediments to the smooth functioning of markets (such as gaps in coordination, under supply of public goods, non-competitive market structures, and regulatory constraints).

5 The Ethiopia Investment Climate Program, managed by the World Bank Group s Trade and Competitiveness Global Practice aims at streamlining and simplifying high priority regulatory practices and processes burdensome to the private sector and address investment climate issues that are holding back investment and productivity growth in Ethiopia. TABLE OF CONTENTSLIST OF ACRONYMS xiPART I: INTRODUCTION1 ABOUT THIS Guide Structure of the Guide Additional Sources of Information Other Regulatory Bodies for Import and Export Know Your Rights and Obligations 82 Customs OPERATIONS IN ETHIOPIA A BRIEF OVERVIEW Overview of Customs Functions Principles of Customs Operations in Ethiopia Prohibited or restricted imports and exports Legal Basis for Customs Operations 12 PART II: HOW TO IMPORT AND EXPORT GOODS IN ETHIOPIA3 HOW TO IMPORT GOODS INTO ETHIOPIA STEP BY STEP 154 HOW TO EXPORT GOODS FROM ETHIOPIA STEP BY STEP 29 PART III.

6 Customs OPERATIONS IN ETHIOPIA5 GOODS DECLARATIONS Introduction 35 Ethiopian Customs Guide - MARCH Declarant Goods to Be Declared Forms and Preparation of Goods Declaration Supporting Documents of Goods Declaration Acceptance or Rejection of Goods Declaration Amendment of Declaration Cancellation of Declaration 426 Customs TRANSIT Introduction Commencement of Customs Transit Procedures En Route Termination of Customs Transit Transshipment 51 7 Customs WAREHOUSING 53 Introduction Establishment of Customs Warehouses Entry and Storage of Goods in Customs Warehouses Release and Removal of Goods from Customs Warehouses Transfer of Goods to a Government Customs Warehouse Goods Taken for Sample Disposal of Abandoned Goods 638 Customs CLEARANCE Introduction Cargo Importation 65 Ethiopian Customs Guide - MARCH Examination of Goods Clearance of Goods Imported for Home Use 69 Temporary Importation Re-Importation Cargo Exportation Outright Exportation Temporary Exportation Re-exportation Travelers Unaccompanied Baggage Non-commercial Goods and Personal Effects Transit Travelers Postal parcels 79 9 SIMPLIFIED PROCEDURE 81 Introduction Types of Simplified Procedures 8110 INWARD AND OUTWARD PROCESSING Introduction Inward Processing Outward Processing 8311 Customs VALUATION Introduction Description of the Valuation Methods Transaction Value

7 Method (Method 1) 86 Ethiopian Customs Guide - MARCH Transaction Value of Identical Goods Method (Method 2) Transaction Value of Similar Goods Method (Method 3) 94 Deductive Value Method (Method 4) Computed Value Method (Method 5) Fallback Method (Method 6) Ethiopian Customs Valuation System and Database Exchange Rate Rights and Responsibilities of the Declarant Valuation of Special Goods 10312 TARIFF CLASSIFICATION Introduction Tariff Classification in Practice Binding Information Regarding Tariff Classification 10913 ORIGIN OF GOODS Int ro duc tion Non preferential rule of origin in Ethiopia Origin Marking Preferential Rules of Origin of Goods Calculation of Duties and Taxes 11614 PAYMENT OF Customs DUTIES.

8 TAXES AND SERVICE CHARGES Introduction Obligation and Liability to Pay Duties and Taxes 119 Ethiopian Customs Guide - MARCH Applicable Dates for Assessment and Payment of Duties and Taxes Assessment of Duties and Taxes on the Basis of Advance Information Correction of Errors Mode of Payment Refund of Duties and Taxes Service Charges 12115 POST CLEARANCE AUDIT AND DEFERRED PAYMENT Introduction Post-Clearance Audit Deferred Payment 12416 SECURITIES TO GUARANTEE PAYMENT OF DUTIES AND TAXES Furnishing of Security Reasons for Requiring Security Form of Security Amount of Security Duration of Security Role of Debtor and Guarantor 12917 Customs OFFENCES AND PENALTIES Introduction Customs Offences and Administrative Penalties Customs Criminal Offences and Penalties 138 Ethiopian Customs Guide - MARCH 2017x18 COMPLAINTS AND APPEALS Introduction Complaint Review Sections Complaint Handling Procedures Appeal Procedures 14619 MISCELLANEOUS ISSUES Tax Incentives Investment Tax Incentives Export Trade Tax Incentive Tax Reduction or Zero Rate Foreign Exchange Permit and Franco-Valuta Other Obligations Related to Customs Operations Obligation to Provide Information Retaining Information 154 GLOSSARY OF TERMS 155 ANNEX 1: SAMPLE DECLARATION IMPORT FORM IM4 158 ANNEX 2: PERSONAL EFFECTS EXEMPTED FROM DUTY PAYMENTS 159 ANNEX 3.

9 Ethiopian Customs TRANSIT ROUTES 161 ANNEX 4: ERCA VALUATION DETAIL DECLARATION 163 LIST OF ACRONYMS AEO Authorized Economic OperatorAGOA African Growth Opportunity ActASYCUDA Automation system for Customs dataCIF Cost, Insurance, FreightCOMESA Common Market for Eastern and Southern Africa ECAE Ethiopian Conformity Assessment Enterprise ECCSA Ethiopia Chamber of Commerce & Sectoral Associations ECVS Ethiopian Customs Valuation SystemEIC Ethiopian Investment CommissionERCA Ethiopian Revenue and Customs AuthorityERPA Ethiopian Radiation Protection AuthorityFMHCCA Food, Medicine and Health Care Administration and Control Authority FOB Free On BoardFTA Federal Transport AuthorityGIR General Interpretative RuleGSP Generalized System of PreferencesHS Harmonized SystemETHIOPIAN Customs Guide - MARCH 2017xiiINSA Information Network Security AgencyMCIT Ministry of Communication and Information TechnologyMOANR Ministry of Agriculture & Natural ResourcesMoFEC Ministry of Finance and Economic Cooperation1 MoI Ministry of IndustryMoMPNG Ministry of Mines.

10 petroleum & Natural GasMoT Ministry of TradeNBE National Bank of EthiopiaOIASC Oromia Islamic Affairs Supreme CouncilRCTG Regional Customs Transit GuideRKC Revised Kyoto ConventionVDD Valuation Detail DeclarationVDFACA Veterinary Drug and Feed Administration and Control Authority WCO World Customs OrganizationWTO World Trade Organization1 Also referred to in this Guide as the Ministry if there is no other I: INTRODUCTION 1. About this guideThe import and export of goods is an inherently complex undertaking, and is often made even more complex due to the multitude of rules in place. These complex rules in combination with traders and other stakeholders involved in international trade which are not well informed of the rules create uncertainty, risk, and contribute to limited compliance with rules.