Government considers obligating Egyptian shipping agencies to use local currency

The Egyptian government is considering obligating local shipping agencies operating in Egyptian ports to accept the payment of local container handling fees in the Egyptian pound and to stop dealing in foreign currencies.

This came after the Federation of the Egyptian Chambers of Commerce (FEDCOC) submitted an urgent memo to Finance Minister Mohamed Maait.

Maait confirmed in an official memo to respond to the FEDCOC’s request that the CEO of the General Authority for Investment and Free Zones, Mohamed Abdel-Wahab, was addressed to study the feasibility of making shipping agencies in Egypt deal in Egypt pound in collecting all required fees instead of using foreign currencies.

The memo also emphasized extending the working hours of visa, collection and exchange employees in the Chinese arena until seven in the evening, according to the dates of the joint examination committees, and to reduce the time of customs release.

The FEDCOC also demanded in a letter to Finance Minister to stop dealing in US dollar for transactions that take place on Egyptian lands in order to reduce the burden and demand for foreign currency.

The union indicated that companies bear additional burdens resulting from demurrage charges that are paid in US dollar to shipping lines, as foreign shipping agencies and container handling companies oblige importers to pay the required fees in US dollar instead of the Egyptian pound.

Maait stressed that obligating importers to pay trading fees in US dollars and not in Egyptian pounds is unacceptable as long as shipping agencies in Egypt provide their services on Egyptian territory.

The Advisor to Finance Minister for Customs Affairs Magdy Abdel-Aziz, said that the aim of the measure is to reduce pressures on importing companies, especially with the high fines for delays required in case of delayed release of containers, which may reach US$160 per container per day.

Any transaction inside Egypt’s territories must be in the local currency, he explained, calling on the Transport Ministry to intervene in this matter and oblige all companies to accept dealing in the Egypt pound, especially as it is the authority responsible for issuing licenses and permits for shipping lines and agencies in Egyptian ports.

The issuance of such a decision will certainly reduce pressure on foreign currency, he said.

And the Secretary of the Transport and Logistics Division in FEDCOC, Amr al-Samdouni, said that shipping lines collect in US dollars for most of their expenses, while the country suffers from a severe shortage of its dollar resources as a result of the decline in the performance of its main sources – which are exports, tourism and foreign investment, in addition to the currently high price of the US dollar.

He added that the shipping agencies in Egypt gave themselves the right to collect the proceeds of unloading in US dollars on the pretext that they deal with foreign container stations, and these stations get them pay in dollars as well.

Samdouni said that importers are suffering in order to manage hard currency to pay the value of the imported goods, in light of the banks reluctance to provide it to them, and paying fees in dollars increases the burden on importers and raises the price of the imported commodity on the consumer.

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