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Details of the terms and conditions for the application of import measures

17/01/2020

The purpose of these new measures is, on the one hand, to substitute the cash payment of imports, currently in use, for the nine-month deferred payment and, on the other hand, to make compulsory use of the FOB Incoterm and national shipping capacities, as a priority, whenever possible.
As a reminder, these measures concerned, in a first phase, imports of mobile phone products and household appliances (white and grey goods) in Complete Knock Down (CKD) / Semi Knock Down (SKD), and then, in a second phase, extended, by 31 December 2019 at the latest, to all imports. 

These new measures have given rise to many questions within the banking sector and by professionals active in the foreign trade sector. Foreign importers and suppliers have, for their part, contested these measures and stressed the impact they could have on Algerian industry, which might result in a total halt to national production.
 
In this context, ABEF then issued a new memo dated 25 December 2019, specifying the terms and conditions for the application of these import measures.
 
In this memo, ABEF confirms the adoption of the said import measures and reminds Algerian operators of the obligation to “prioritise the use of the national flag”, whenever possible, and to “prioritise” the use of the FOB Incoterm, with the aim of promoting the use of the national maritime fleet and reducing foreign currency expenditure.

While the use of the FOB Incoterm seemed to become mandatory for all imports, ABEF nevertheless clarified in its memo dated 25 December 2019 that, should it be impossible to use the FOB Incoterm, imports could be carried out using CFR, provided that the invoice is itemised in order to be able to determine the prices of the goods, the cost of transport and the cost of insurance. This measure would thus enable the commercial bank and the Bank of Algeria to control the cost of freight.
 
Taking into account the fact that under the CFR Incoterm, insurance remained the responsibility of the Algerian importer, ABEF, in addition to the memo of 25 December, stated in its memo of 26 December that, since the use of the CFR Incoterm did not require a reference to insurance in the supplier's invoice, it had to be paid for in Algerian Dinars by the Algerian importer.
 
With the publication of two new memos, ABEF clarifies the terms and conditions for the priority use of Algerian shipowners and changes its guidance concerning the compulsory use of the FOB Incoterm by adding the CFR Incoterm subject to detailing the cost.


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