Contractor Notice 2005

Date: Oct. 26, 2005

Contractor Notice Ni 07-05

Subject: Importation, Customs Clearance and Disposition of Personally Owned Vehicles (POVs).

Ref: Contractor Notice Numbers 01-03 and 02-03


The purpose of this notice is to consolidate mandated rules and regulations which are governing the import, customs clearance and disposition of privately owned vehicles in the above mentioned two notices. Also this notice will supersede Contractor Notice Numbers 01-03 and 02-03 respectively.

1/9


TABLE of CONTENTS

Section I: Outlines all laws, rules and regulations that are governing the Importation,
Customs Clearance of Privately Owned Vehicle.

1.1. Purpose: How to import a POV

1.2. Eligibility: Who is eligible to import a POV

1.3. Limitations: How many POV’s you can import

1.4. Restrictions: Imposed restriction on the imported POVs

1.5. Customs Clearance: Required document to process customs clearance
formalities
1.6. Contractor/Grantee’s Liability: Contractor/Grantee’s responsibility towards USAID
1.7 Disposition: When and how to dispose of your POV

1.8 Important Recommendations and Remarks

Section II: Summarizes U.S. Embassy-mandated policies and procedures governing the sale or disposition of personal property, including vehicles.

2.1. Purpose: Mandated policies and procedures related to the sale / disposition of personal property (including POV)

2.2. Applicability: Applicability of mandate policies

2.3. Authority: Laws and Rules governing the disposition process

2.4. Summary: How to start the procedure to dispose of your POV

2.5. Approval Procedures for Personal Property: How to obtain approval to dispose of personal property

2.6. Approval Procedures for Vehicles: How to obtain approval to dispose of a POV

2.7. Conversion of Proceeds: How to convert the proceeds to US dollars

2.8. Attachments: Tables and formats


2/9

Section I: Outlines all laws, rules and regulations that are governing the Importation, Customs Clearance of Privately Owned Vehicle.

1.0 Purpose:

1.1. This notice sets forth the revised terms and regulations governing the importation, customs clearance, and disposition of Personally Owned Vehicles (POVs) of U.S. citizens, U.S. permanent residents and third-country nationals (TCNs) who are employees of USAID-funded contractors and grantees transferred from abroad to Egypt at contract or grant expense. These provisions do not apply to Egyptian employees or to locally hired employees of any nationality.

2.0 Eligibility

2.1 In order to import a POV, a contractor or grantee employee must be assigned to Egypt for at least two years with a USAID-funded contractor or grantee.

3.0 Limitations

3.1 Only one POV is allowed to be imported during the employee’s tour in Egypt .

3.2 Pursuant to Ministerial Decree 80/1998 (copy attached) dated April 29, 1998 all motor vehicles imported after October 28, 1998 or locally manufactured after April 28, 1999 must be equipped with a catalytic converter.

4.0 Restrictions

These restrictions apply to all vehicles, including project vehicles and contractor or grantee-owned vehicles.

4.1 Right-hand drive vehicles may not be imported into Egypt .

4.2 The vehicle must be imported solely for personal/project/result package use. This effectively excludes luxury vehicles, which the Customs Administration generally considers to be vehicles with a value of about $40,000 and above. Exemptions are not granted for luxury vehicles.
3/9

4.3 Currently, the Customs Administration applies age restrictions on the POVs of TCN employees. POVs of TCNs must be imported within their year of manufacture.

5.0 Customs Clearance

The Customs Administration, Exemption Circular Number 6/93 (copy attached) outlines the rules and conditions related to the release of imported POVs on a permanent release status “with restriction on disposition” as follows:

5.1 POVs should be consigned on the bill of lading to the employee importing the vehicle and reference made to the USAID project/result package name, contract or grant number, and to the GOE counterpart ministry.

5.2 In addition to the routine shipping documents, the contractor or grantee employee must provide the Customs Administration with:

• A letter from the USAID Management Office certifying that the employee is eligible to import a POV.

• A letter from the Egyptian counterpart ministry requesting the release of the employee’s vehicle on a permanent release status as per Exemption Circular No. 6/93.

Although the POV will be released on a permanent release status, there will be a continuing liability for customs duties until the Customs Administration has granted prior approval for the POV’s sale or other disposal.

6.0 Contractor/Grantee’s Liability

When the POV is released from the customs and registered at the Egyptian Traffic Department Contractor/Grantee will be responsible of providing USAID/EXO/GSO with the following documentation:

6.1 Proof that the POV price is paid by the employee (copy of a bank statement, bank transfer, bank loan or the title)
6.2 Copy of the Customs Certificate of the vehicle.
6.3 Copy of the vehicle traffic registration.

4/9

7. Disposition

7.1 The Customs Administration Exemption Circular Number 3/94 (copy attached) outlines the rules and conditions related to the disposition of POVs. You are strongly recommended to read it carefully before you start the disposition process. U.S. citizens, U.S. permanent residents and other non-Egyptian employees of USAID-funded contractors/grantees who were hired overseas are entitled to dispose of their POVs as per the following conditions:

• When the employee and his/her vehicle have been physically present in Egypt for three years, or

• Upon the contractor/grantee employee’s permanent transfer from Egypt, if the employee and the vehicle have been physically present in Egypt for at least two years.

7.2 Under the same circumstances as in 7.1 above, the Government of Egypt has exempted U.S. citizen employees’ POVs from the Egyptian Sales Tax, whether paid by the seller or the purchaser (supporting documents attached). Currently, the purchasers of non-U.S. citizen employees’ POVs are required to pay the assessed sales tax.

7.3 Disposition of the POV must be in compliance with the U.S. Embassy-mandated policy related to the disposition of personal property, as described in Contractor Notice No. 00-05 and provisions referenced therein. These provisions are intended to ensure that contractor/grantee employees do not personally profit from the sale or disposition of personal property in Egypt, and that items imported pursuant to duty-free and tax free privileges are imported solely and exclusively for personal use.

7.4 The procedures contained herein require that USAID Mission approval be obtained prior to the disposition of the vehicle; that the vehicle not be sold for more that its acquisition cost; and that the employee submit evidence of the original cost and the source of funds used for acquisition before the disposition will be approved.


5/9


7.5 Chiefs of Party must make sure that their expatriate employees have finalized and permanently closed all customs files related to either the disposition or the export of their personal effects (including POV) before their departure from Egypt.

8.0 Important Recommendations and Remarks

8.1 The USAID/Executive Office has a data base which contains details of all imported and locally procured POVs. This data base is updated on a continuing basis.
8.2 USAID recommends that contractor/grantee employees not to buy used vehicles that are available locally except on certain conditions such as permanent release status.

8.3 To avoid temporary release status and/or delay in the customs clearance process, contractor/grantee employees must obtain work permits and resident visas before importing a POV or purchasing it from the duty-free zones. We recommend that you use “Alexandria” Port as a port of discharge of your imported POV since Customs officials there are familiar with and well aware of USAID exemption procedures.

Section II: Summarizes U.S. Embassy-mandated policies and procedures governing the sale or disposition of personal property, including vehicles.

1.0 Purpose
The purpose of this notice is to advise all USAID-financed Contractors and grantees, and their employees of the U.S. Embassy-mandated policies and procedures governing the sale or disposition of personal property, including vehicles. With respect to disposition of vehicles, contractor and grantee employees must comply with additional GOE requirements as stated in Contractor Notice Number 02-03.

6/9

2.0 Applicability

This notice applies to all personal property of USAID-financed contractor and grantee employees that has been imported exempt from Egyptian taxes or duties pursuant to provisions of the USAID Bilateral Agreement and/or Project, Result Package (RP), or Strategic Objective (SO) grant agreements between USAID and the Government of Egypt.

3.0 Authorities

U.S. Bilateral Agreement with the Government of Egypt dated August 16, 1978, and supplemental protocol letters (Bilateral Agreement); applicable Project, RP or SO grant agreements; 22 Code of Federal Regulations Part 136, Personal Property Disposition at Posts Abroad.

4.0 Summary

4.1 The Office Director/EXO (OD/EXO) shall approve all sales and dispositions of personal property, including vehicles, that are subject to this notice.

4.2 EXO must give prior approval for the sale or advertisement for sale of personal property items, including motor vehicles, motor cycles or other motorized means of transportation, imported into Egypt with an exemption referred to in section 2.0 above, and valued at U.S.$ 305 or more.

4.3 Applications for approval by OD/EXO to sell or dispose of such personal property or vehicles are available for download from the USAID contractor web site [http://www.usaid-egypt.org/contractors] or may be reproduced from the samples attached to this notice. Applications, consisting of a cover memorandum, Schedule A1 (Personal Property) and Schedule A2 (Vehicles), with all required information and documentation, must be submitted for approval prior to the sale or advertisement for sale of personal property or vehicles.

4.4 Prior approval is intended to ensure that all contractor and grantee employees comply with the policy of the U.S. Embassy, the Bilateral Agreement, Project, RP and SO Agreements, and with Federal regulations


7/9

cited in the authority section of this Notice. Institutional contractor and grantee representatives are also required to sign the forms, to ensure compliance by their employees.

5.0 Approval Procedures for Personal Property

5.1 Fill out Schedule A1 (Personal Property). Do not fill out columns 5 to 7 until the sale is concluded.

5.2 Submit schedule A1, with required documentation attached, to EXO for disposal approval.

5.3 After approval of the Schedule A1, items may be advertised for sale and sold without additional approval.

5.4 Report the actual proceeds of the sale by filling in columns 5 to 7 of Schedule A1 and send the completed Schedule A1 to EXO.

5.5 When the disposition is finalized EXO will certify the final Schedule A1, retains a copy in its permanent records and returns the original to the employee.

6.0 Approval Procedures for Vehicles

6.1 Fill out columns 1-4 of Schedule A2 (Sale of Personal Vehicle) and submit to EXO for approval with copies of the following documents:
• Bill of Sale, Certificate of Origin, or Registration showing from whom the vehicle was purchased.
• Evidence of payment for the vehicle such as loan agreement, bank records of automobile loan payments, or a financial institution statement showing a transfer of funds when the vehicle was purchased for cash. (Information not relevant to the purchase of a vehicle may be excised from the above material.)

6.2 If EXO grants approval, it will request the Customs Administration to provide the permission required for sale or disposition of the vehicle. When the employee receives this permission from Customs, the vehicle may be advertised and sold.

8/9

6.3 Be sure to have the sales contract notarized by the Embassy Consular Section or Egyptian Public Notary.

6.4 When payment is received, report the actual proceeds of the sale by filling out columns 5 to 7 in Schedule A2 and then submit the completed Schedule A2 to EXO for final review with copy of the notarized sales contract attached.

7.0 Conversion of Proceeds

7.1 If the sale is made in any currency other than U.S. dollars and you want USAID to convert the proceeds to dollars, fill out Schedule B - Disposition of Sales Proceeds and Request for Reverse Accommodation Exchange. Schedule B is available for download from the USAID contractor web site [http://www.usaid-egypt.org/contractors] or reproduced from the samples attached to this notice.

7.2 Submit Schedule B to OD/EXO for approval.

7.3 Submit the approved Schedule B to the USAID Financial Management Office, which will arrange conversion to U.S. Dollars.

John May
Director
Procurement Office


Attachments:

1- Memorandum
2- USAID Schedules A1, A2 & B
Attachment (1)
USE your company letter head to submit this Memo to USAID


Memorandum

T USAID Executive Office


From: [Name of the Contractor or Grantee Employee] employed by [Name of Employing Institutional Contractor or Grantee]

Subject: Approval to Dispose of Personal Property

Refs: (a) Administrative Policy Announcement
of 1/2/1996
(b) Administrative Procedure Bulletin
(c) 4FAM 368
(d) 22CFR 16


Projected Departure Date: ___________________

I certify that the sale of these items, which were imported under tax and duty privileges conferred by the USAID Bilateral Agreement and/or applicable project, Results Package, or Strategic Objective grant agreements, for my bona fide personal use only, will be disposed of in accordance with the existing rules and regulations of the USAID and related policy for the sale and disposal of personal property (including vehicles).

I certify that I understand the Federal Regulations regarding the retention of profits from the sale of personal property (including vehicles) to non-privileged buyers. If I make a profit from the sale of personal property, I will donate that profit to an approved charity within 90 days of receipt by contribution or gift and provide the USAID/EXO with a receipt for that donation.

I understand that violation of these regulations may be grounds for civil and criminal liability and penalties.


___________________________________
Signature of Employee

__________________________________
Signature and Name of Employing
Institutional Contractor or Grantee


1/2


Approval is requested to sell and convert the proceeds from my personal property sales including vehicle, which were carried out in conformance with local law, U.S. law, State Department, USAID and Post regulations. The attached Schedules A (A1 for personal property and A2 for vehicles) and B are submitted as official documents to record financial transactions resulting from the sale and necessary approval confirming that all requirements are met.

This form records the sales in local currency units (LCU). When sales are in both dollars and local currency, separate forms are used, with one form to show dollars. The dollar entries from all Schedule B Lines 5B & 7 are combined where a dollar check is due for the same payee.

The following definitions are used in submitting this form:

COST BASIS: Initial price paid (or market value if acquired by gift or inheritance), cost of inland/overseas transportation (if not USG reimbursed), shipping insurance, taxes, duties, customs fees, or other such charges, and capital improvements, but not for the insurance on items in use or for storage, maintenance, repair or related costs, or financing charges. I WILL PROVIDE EVIDENCE OF THESE COSTS IF REQUESTED BY THE APPROVING OFFICER.

MINIMAL VALUE: Acquisition cost in U.S. dollars (or retail value if by gift) is within the limit set by the Administrator of General Services for "minimal value" of foreign gifts under 5 U.S.C. 7342, currently $240.

UNRETAINABLE GAIN: The profit amount is the sale price (Column 5) less than cost basis (Column 6). Whether an employee may retain profit is determined by the buyer’s exemption status, State Department and USAID guidelines and Post regulations. If a sale of any items was to an exempt person or entity, or profit is otherwise retained, the amount is entered in Column 6, and the buyer's name and exempt status are shown in Column. 7.

PROFIT VERIFICATION & REVERSE ACCOMMODATION EXCHANGE APPROVAL


(Schedule A & B)

The amounts and recipients of non retainable profit and retainable proceeds have been verified and accepted, except for the following:___________________________________________ _____________________________________________________

LCU amounts in Schedule B (Lines 5B & 7) are approved for reverse accommodation exchange payable as shown:

OR

Conversion of LCU and/or payment in dollars is limited by post regulations to the following allowed maximums:

LCU converted: ____________ Dollar payment ________

Other instructions to certifying officer: ______________________________

Other comments for the audit file: _______________

Authorizing officer & Date: ______________________

2/2
This document was last updated on Wednesday, December 14, 2005