Algeria’s Association of Banks and Financial Institutions (ABEF) has provided some clarification regarding the new import trade regulation, which is expected to come in force starting from January 1, 2020.
According to the document, importers in Algeria should prioritize operations on the FOB basis over the CFR and give preference to the local shipping companies, while previously it was stated that those are mandatory. Therefore, the importers are encouraged to use national flags, to give priority to the national carriers and to contact the national ship owners before the execution of any import operations in order to verify the existence of the maritime links with the supplying country, SteelOrbis understands.
As for the incoterm usage, the importers are advised to adopt the FOB basis for the operations whenever possible. In case of the CFR incoterm usage, the invoice must contain the breakdown in three parts: the goods, the freight and insurance, the ABEF notification states.
The key point of clarification is that the usage of FOB instead of the CFR seems to be no longer mandatory, but being imposed as a recommendation. ABEF notification is the reaction to the local business community warnings regarding the possible negative impact on the local industry and economy overall. Moreover, some producers, not being able to place orders for raw material and other inputs, were forced to temporarily halt operations.
Still, the new import regulation is not completely clear for the market players. In particular, there are still some uncertainty regarding the customs procedures and the process of justification of the cooperation with the non-national shippers, SteelOrbis understands.