CargoX in Egypt: Air cargo postponed to January 2023
Egypt

CargoX in Egypt: Air cargo postponed to January 2023

Update: From January 1, 2023, the “Advanced Cargo Information” (ACI) system will also be mandatory for air cargo. More about latest developments.

Egypt introduced its Advanced Cargo Information (ACI) system in 2021 with the goal of digitizing its customs processes and introducing blockchain security. It began with ocean freight, but the intention from the outset was to eventually extend it to all imports. And so, following a trial period underway since May 2022, air freight shipments were supposed to be declared through ACI starting October 1. However, this start date was postponed to January 1, 2023 by the Egyptian Cabinet on September 20.

Such transitions do not always unfold smoothly. This was already evident at Egyptian ports in 2021 and has been discussed in professional forums like the AEB Community.

How does ACI work? 

All ocean freight entering Egypt has been cleared through ACI since October 2021 per Customs Law No. 207 of November 11, 2020. Cargo data must be submitted in advance (under Decrees 38/2021 and 222/2021), a move designed to streamline customs over the long term and reduce risk.

The ACI system consists of two interlinked platforms: Nafeza for Egyptian importers and CargoX for foreign exporters.

Once the (Egyptian) importer has registered with Nafeza and provided details of its (foreign) exporters, these exporters must then register with the CargoX platform so that the export and import data can be linked.

The importer must then declare shipments by submitting the necessary data in advance to Nafeza. Once the shipment has been checked and approved, the 19-digit ACID number is issued and sent to both importer and exporter as a provisional authorization. If the shipment is rejected, the importer can file an appeal.

The exporter then uploads its documents to CargoX. Ocean freight documents such as the commercial invoice, waybill, packing list, and EUR.1 / certificate of origin must be available at least 48 hours prior to the vessel’s arrival in Egypt. According to the Austrian Economic Chambers, air freight documentation must be submitted through CargoX at least two hours before the aircraft takes off. The importer then submits the invoice electronically. The shipping data can still be changed before the shipment and after the ACID number has been issued, but the data of the two parties (exporter and importer) cannot be changed.

Note on ACID number

The ACID number generated for each declared shipment must be listed on all shipping documents, including the bill of lading and the carrier manifest. On the certificate of origin, this can be done using boxes 5 (remarks) or 1 or 2 (additional information).

If the ACID number is not included on the freight documents, the goods will not be cleared in Egypt and instead returned at the carrier’s or agent’s expense.

Lessons learned from ocean freight

The registration requirements for Egyptian importers (Nafeza) and their foreign business partners (CargoX) for ocean freight imports to Egypt came into force in October 2021. Registration was a major headache for many companies, however, with some forced to repeat the process several times before their application was accepted.

Exporters uploading freight documents to CargoX face additional hurdles, especially since the ACID number must be included on all shipping documents. The following is an example of the information required on a commercial invoice in PDF format:

  • ACID: 100270468202109xxxx
  • Egyptian Importer Tax ID: 10027xxxx
  • Foreign Exporter Registration Type: VAT Number
  • Foreign Exporter ID: DE25784xxxx

Note on costs

CargoX registration is free, though there is a small one-time verification fee of USD 15. Each shipment under an ACID number incurs an additional administrative fee of USD 150, however. Another USD 3 is charged for each document uploaded, though this fee is capped at USD 15. That means that an ACI envelope generally incurs total fees of USD 165. These fees raise the price of imported goods on the Egyptian market. For this reason, be sure to clarify ahead of time whether and how you will pass along these costs.

Tips for air freight

The good news for anyone who has already had experience with ocean freight is that the existing ACI account can be used for air freight as well. This makes an ACID number even more important for anyone trading with Egypt, since shipments without one will be returned at the exporter’s expense.

Airlines will also be required to check the importer/exporter IDs and VAT numbers and submit the manifest through the messaging system so that it can be transmitted electronically to customs. Manifests will have to be uploaded upon departure or within two hours for long flights, after which Nafeza will issue the import permit.

Express shipments (up to 50 kg in weight and USD 2,000 in value) are excluded from the ACI procedure. ACID numbers can still be issued immediately upon request for time-sensitive shipments such as perishable goods. Note that in addition to the requirements of CargoX, imports may be subject to other requirements such as legalization.

Note on validity of ACID number

The validity of the ACID number has since been extended from three to six months. If this period elapses, a new number must be requested, so it is best to avoid these costs.

Outlook: Letters of credit

In addition to the rollout of the ACI system, another change complicating trade with Egypt is the requirement for a letter of credit, introduced unexpectedly on February 22, 2022. However, since May 10, 2022, the Central Bank of Egypt began to issue and extend exemptions. In a press release dated October 27, 2022, it was then stated that “the Central Bank of Egypt (CBE) will begin the process of gradually repealing Letter No. 49 of February 13, 2022 that mandated the use of Letters of Credit for import finance, and the CBE will ensure the completion of removal by December 2022. This will serve as a catalyst for the rejuvenation of economic activity in the medium term”. In a circular of the same day (only available in Arabic), the letter of credit requirement for imports into Egypt of up to USD 500,000 was lifted.

The plan is to eventually integrate the banks into the ACI system, eliminating the need to transmit the document originals. All processes and permits should then be electronic.

FAQ - your questions answered

The US International Trade Administration website offers a summary of the Import Requirements & Documentation for Egypt. The ACI page of the German-Arab Chamber of Commerce features FAQs in English

What you need to do

  • Sign up to Cargo X to be able to import goods to Egypt
  • Upload customs and shipping documents to Cargo X
  • Make sure that ocean freight documents such as commercial invoices, waybills, packing lists and EUR.1/certificate of origin are uploaded at least 48 hours prior to the vessel’s arrival in Egypt
  • Make sure that air freight documentation is submitted through Cargo X at least 2 hours prior to the aircraft's take-off
  • Make sure the ACID number is listed on all shipping documents, including the bill of landing and the carrier manifest
  • You will no longer require a letter of credit for imports with a worth of up to USD 500,00