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BusinessCustoms bans vehicle imports for returning citizens

Customs bans vehicle imports for returning citizens

Only diplomatic rights holders are permitted to import fuel cars

A new rule by the Ethiopian Customs Commission has put an end to the privilege Ethiopians permanently moving back to their homeland from abroad enjoying to import their vehicles.

The Commission’s decision to tighten importation of automobiles indirectly poses stronger risks on vehicle dealers in Ethiopia.

The move comes after the government’s decision last October to ban allocation of foreign currency for the importation of 38 items, which included fuel-based automobiles.

Despite the restrictions, a significant number of automobiles continued to be imported through various exemptions. The exemptions were granted to returnee Ethiopians, international organizations, diplomats, and individuals with letters of credit (LC) approved before the ban.

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However, in a letter signed by Commissioner Debele Kabeta, dated August 17, 2023, and addressed to the branch customs offices, the Ethiopian Customs Commission eliminated these privileges, with the exception of diplomatic rights holders.

The Commission has intensified its ban on automobile imports in response to the discovery of “operational faults,” including a concerning number of vehicles being imported under the guise of returnees.

Some importers managed to extend their letters of credit (LCs) obtained prior to the October ban, but including those with extended LCs will now be prohibited from importing vehicles.

“The strict prohibition applies to automobiles imported in the name of returnees or importers with extended or new LC approvals,” states the letter issued by the Commission.

The letter also emphasized that the existing restrictions on automobile imports through the Franco Valuta system would continue to be enforced.

The Commission warns in the letter that any violation of this restriction, such as attempting to import or facilitate the importation of vehicles for which foreign currency allocation is prohibited, will result in legal action.

Insiders familiar with the matter revealed that the previous loopholes resulted in legal disputes and put vehicle buyers at a disadvantage. “The consequences were significant from a legal perspective,” explained one market insider, shedding light on the Commission’s decision to eliminate these privileges.

A customs transit operator, accredited by the Commission, confirmed being informed of the decision this week during a visit to a branch office. “A significant number of vehicles were being imported using the returnee rights, as importers faced limitations on fuel-powered automobiles,” the operator stated.

According to the transit operator, the Commission’s decision is the right move, as they have observed a massive trade volume of automobiles that raised suspicions.

Despite multiple attempts, officials from the Commission could not be reached for comment.

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