Given the current economic and pricing fluctuations, it is crucial to be aware of the recent legislative changes that have significantly impacted strategic goods trading in Egypt. Cabinet decree no. 5000 of 2023 (the “Strategic Products Decree”) and Ministry of Supply and Internal Trade (the “Ministry”) decree no. 200 of 2023 (the “Trading in Strategic Products Decree”) have introduced stringent measures to regulate the production, importation, manufacturing, packaging, and distribution of specific strategic products.
The Strategic Products Decree identifies 7 (seven) products as strategic: blended oil, fava beans, rice, milk, sugar, pasta, and white cheese. The Strategic Products Decree imposes restrictions on the sale of said strategic products, prohibiting their withholding, concealing, or refusing to sell the same in any manner. Additionally, entities in possession of such products are required to promptly notify relevant Directorates of Supply and Internal Trade regarding the type and quantities stored.
Violating the requirements stipulated under the Strategic Products Decree may result in severe penalties, including imprisonment, fines ranging from EGP 100,000 (one hundred thousand Egyptian pounds) to EGP 2,000,000 (two million Egyptian pounds), or the equivalent value of the products involved. Furthermore, violations may be subject to military court proceedings under Law No. 3 of 2024 regarding the Security and Protection of Public Facilities and Vital State Facilities.
The Trading in Strategic Products Decree was subsequently issued to set additional requirements on entities importing, producing, and packaging strategic products. Below are the key takeaways of said decree:
Entities trading in strategic products shall issue tax sales invoices detailing product specifics. Starting 1 March 2024, entities must include a clear, permanent, and non-erasable inscription of the product’s maximum final consumer selling price in Arabic.
Entities subject to the Trading in Strategic Products Decree must submit detailed monthly reports to the Ministrycovering various aspects of their products, including, inter alia, product description, production date, maximum final consumer selling price, and production quantity. In case of changes to the maximum final consumer selling price, immediate notification to the Ministry is also required.
Failure to comply may result in penalties akin to those outlined in the Strategic Products Decree and the Consumer Protection Law No. 181 of 2018, which encompass imprisonment, fines, and the confiscation of products subject to violation.
Further, a recent Ministerial Instruction has been issued requiring specific timeframes for storing strategic products. These include sugar, milk, cheese, and pasta for no longer than 3 (three) months; oils for no longer than 6 (six) months; beans, lentils, and rice for no longer than 2 (two) months.
The practical implementation of said decrees and the Ministerial Instruction remains to be seen.
If you require any further clarification or assistance on strategic products decrees, please do not hesitate to our retail, e-commerce and logistics team, Mennatullah Sultan, Senior Associate, Associates, Nourhan Hatem and Karim Manadelo, and Heba Aboslima, Junior Associate.
