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FOB Directive for Deciding Import Goods and Importers Obliged or Not to Import on FOB (Directive No. 858/2021)

Ministry of Transport and Logistics858/2021

Summary

This directive aims to determine which import goods and importers are obligated to use the Free On Board (FOB) purchasing system and which are not. It also aims to manage and monitor the waiver system, service levels, and service fees for carriers transporting goods under the FOB term.

Who's affected

Importers, carriers, government agencies, private enterprises, and commercial banks involved in international trade.

Action required

Importers and carriers should review the directive to understand their obligations and restrictions regarding FOB purchasing and related transportation services.

Key points

7
  • Defines what constitutes FOB term and related terms like INCO terms, Multimodal Transport, etc.
  • Lists specific import goods and importers that are obligated and not obligated to use the FOB term.
  • Outlines the responsibilities and prohibitions for carriers.
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    • Establishes a waiver system for exceptions to the FOB term under specific conditions.
    • Details procedures for suspension and cancellation of carrier licenses.
    • Specifies the powers and duties of the Ministry, the Authority, and the National Bank of Ethiopia.
    • Provides a mechanism for handling complaints against administrative decisions.

Requirements

7
  • Carriers must collect shipping and port service charges locally, with exceptions for payments made in foreign currency by the importer or when the importer selects a carrier under different INCO terms with authority permission.
  • Carriers unable to transport goods must provide proof to the importer.
  • Carriers must report to the Authority as requested.
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    • Carriers must conduct business transparently and avoid distorting competition.
    • Importers obliged to use FOB terms must adhere to the directive's classifications.
    • Importers seeking a waiver must complete an application form and provide evidence of inability to obtain service from a carrier.
    • Commercial banks must implement the directive and report relevant data to the Authority.

Rights and permissions

4
  • The Authority may decide to treat certain goods with unique characteristics (like fuel) under the waiver system.
  • The Ministry may amend the list of goods and importers obliged or not obliged to use FOB terms.
  • The Authority may grant waivers for one-time or limited periods/shipments under specific conditions.
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    • Carriers and importers have the right to lodge complaints against administrative decisions.

Restrictions

6
  • Carriers are prohibited from transferring designated service areas or shipment types to other carriers.
  • Carriers are prohibited from loading outside designated areas or types of cargo without proper authorization.
  • Carriers are prohibited from discontinuing services without three months' prior written notice.
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    • Carriers are prohibited from accepting bookings they cannot fulfill within three months after notifying of service termination.
    • Carriers are prohibited from misusing foreign currency allocated for transportation services.
    • Carriers are prohibited from disclosing customer secrets and documents without legal authorization.

Penalties

5
  • Carriers found in violation of the directive may be suspended or cancelled.
  • Suspension periods shall not exceed six months.
  • Cancellation may occur for repeated violations, fraud, or failure to rectify deficiencies.
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    • The Authority may levy financial penalties and take administrative measures against importers who ship goods without prior waiver permission.
    • Administrative measures may be taken against commercial banks not complying with the directive.

Objectives

5
  • To determine import goods and importers obliged to use the FOB purchasing system.
  • To determine import goods and importers not obliged to use the FOB purchasing system.
  • To manage and monitor the waiver system for goods transported under FOB terms.
    • Show 2 more
    • To set service levels and fees for carriers transporting goods under FOB terms.
    • To ensure transparent and competitive practices in the transportation of FOB-term imports.

Organizations

5
  • Ministry of Transport and Logistics
  • Ethiopian Maritime Authority
  • Council of Ministers
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    • National Bank of Ethiopia
    • Commercial Banks

Legal references

4
  • Proclamation No. 549/2007 (Article 18(b))
  • Multimodal Transport Proclamation No. 548/1999
  • Multimodal Transport Commercial Licensing & Competency Certification Directive No. 802/2021
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    • Investment Proclamation No. 1180/2020 (Article 2, Sub-Article 6)
Original sourcehttps://justice.gov.et/en/directives/fob-directive-for-deciding-import-goods-and-importers-obliged-or-not-to-import-on-fob-directive-no-858-2021/
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