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Warehouse Receipt System (Directive No. 835/2014)

Ministry of Industry835/2021

Summary

This directive establishes the Warehouse Receipt System by outlining procedures for issuance, reporting, quality standards, and operational requirements for warehouse operators. It aims to facilitate trade, improve access to finance for farmers, and reduce post-harvest losses.

Who's affected

Warehouse operators, farmers, agricultural product certifiers, and businesses involved in the agricultural value chain.

Action required

Warehouse operators must comply with the new regulations, including obtaining competency certificates, adhering to operational standards, and fulfilling reporting obligations.

Key points

7
  • Establishes a Warehouse Receipt System in Ethiopia.
  • Regulates warehouse operators, including licensing and operational requirements.
  • Mandates insurance coverage and performance bonds for warehouse operators.
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    • Defines procedures for issuing, reporting, and managing warehouse receipts.
    • Sets quality standards for commodities covered by the system.
    • Includes provisions for inspection, complaints, and administrative measures.
    • Aims to enhance agricultural trade and farmer access to finance.

Requirements

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  • Warehouse operators must obtain a competency certificate.
  • Minimum capital of 1 million Birr for warehouse operators.
  • Insurance coverage for commodities.
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    • Submission of warehouse details including address, GPS, plans, and photographs.
    • Specification of commodities to be stored in each warehouse.
    • Performance bond posting.
    • Compliance with commercial terms and conditions, and standard operating procedures.
    • Validation of bailor identity.
    • Maintenance of standard operating procedures for receiving, storing, and releasing goods.
    • Cooperative societies must obtain competency certificates.
    • Warehouse operators must maintain up-to-date information and make it accessible.
    • Regular and surprise inspections of warehouse operators.
    • Compliance with quality standards for commodities.

Rights and permissions

7
  • Farmers can sell produce at fair prices and access finance.
  • Warehouse operators have the right to operate after obtaining a competency certificate.
  • Bailors have the right to receive warehouse receipts for deposited goods.
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    • Bailors can prove their legal rights to the commodity by presenting the warehouse receipt.
    • Warehouse operators can store their own proprietary stock under specific conditions.
    • Cooperative societies can participate as warehouse operators.
    • Public access to basic information about warehouse receipts, operators, and warehouses.

Restrictions

6
  • Warehouse operators must only accept commodities officially announced by the Ministry.
  • Warehouse operators are prohibited from issuing warehouse receipts for their own proprietary stock or related parties' stock.
  • Proprietary stock must be segregated and clearly labeled.
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    • Warehouse operators cannot use their own employees as agricultural product certifiers.
    • Information in the Central Registry is kept strictly confidential.
    • Strict confidentiality of personal and commercial information of warehouse operators and receipt holders.

Penalties

4
  • Warehouse operators failing to comply with reporting and submission duties are legally liable for damages.
  • Suspension or revocation of competency certificate for non-compliance.
  • Suspension of business license for failure to renew competency certificate.
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    • Administrative measures including public/private reprimands, suspension or revocation of competency certificates for violations.

Objectives

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  • To enable farmers to sell their produce at fair prices and gain appropriate benefits.
  • To improve farmers' access to finance, especially during the harvest season.
  • To reduce post-harvest losses and improve product quality through scientific and modern storage.
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    • To create shorter, efficient, modern, and cost-effective agricultural value chains.
    • To establish clear regulations for the warehouse receipt system.

Organizations

2
  • FDRE Ministry of Trade and Industry
  • Ethiopian Standards Agency

Legal references

2
  • Warehouse Receipt System Proclamation No. 372/2003
  • Commercial Registration and Licensing Proclamation No. 980/2016
Original sourcehttps://justice.gov.et/en/directives/warehouse-receipt-system-directive-no-835-2014/
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