A new directive issued in March that revises pre-shipment inspection requirements on goods imported to Ethiopia has caused concern in some quarters of the country's business community.

Some businesses are saying that the new directive - which stipulates that a letter of credit (L/C) should specify and pre-shipment inspection services should be provided at port of loading or the country of origin for all goods destined to Ethiopia - is against international trade practices and jeopardises import activities.

Port of departure

Businesses are concerned that the directive requires documentation based on goods' country of origin or original port of loading. This they say is unworkable because goods that have already been exported from their country of origin are frequently re-exported to Ethiopia.

The businesses are therefore urging the authorities to amend the directive to specify that L/Cs and pre-shipment services should specify the country or port of departure from where goods are shipped to Ethiopia instead of their country of origin or original port of loading.

L/C abuse

The Ethiopian Customs Authority (ECA) has defended the spirit of the new directive which according to an ECA official quoted in the Addis Tribune has been issued in a bid to control the escalating abuse of L/C and pre-shipment fraud and under-invoicing.

The official is nevertheless reported as saying he understands some of the concerns expressed in the business community and that in his view the directive is a "complete trash."

Against trade practices

Officials from the ECA and Ministry of Revenue (MoR) have apparently met to discuss the matter and there are unofficial reports that the directive is likely to be revised very soon.

Head of the ECA's Operations Division, Fitihanegest Kinde, is reported in the Addis Tribune as saying a new directive would be issued. "There is a clear understanding among officials of both the ECA and MoR that the directive is against international trade practices," he says.

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