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DE RUEHEG #2237/01 3371331
ZNR UUUUU ZZH
R 031331Z DEC 09
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 4371
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC

UNCLAS CAIRO 002237 
 
SIPDIS 
 
STATE FOR EB/TPP/BTA AND NEA/ELA 
DEPT PLEASE PASS TO USTR/GBLUE 
 
E.O. 12958:  N/A 
TAGS: ECON EINV EFIN ETRD ENRG PGOV EG
SUBJECT: EGYPT 2010 NATIONAL TRADE ESTIMATE 
 
REF: STATE 105978 
 
¶1. (U) Per reftel, below is the text of Embassy Cairo's 2010 
National Trade Estimate for Egypt, also emailed as requested to USTR 
in a Microsoft Word document. 
 
¶2. (U) Begin text: 
 
EGYPT 
 
TRADE SUMMARY 
 
The U.S. goods trade surplus with Egypt was $3.6 billion in 2008, an 
increase of $690 million from 2007.  U.S. goods exports in 2008 were 
$6.0 billion, up 12.8 percent from the previous year.  Corresponding 
U.S. imports from Egypt were $2.4 billion, down 0.3 percent.  Egypt 
is currently the 36th largest export market for U.S. goods. 
 
The stock of U.S. foreign direct investment (FDI) in Egypt was $8.8 
billion in 2008 (latest data available), up from $7.5 billion in 
¶2007.  U.S. FDI in Egypt is concentrated largely in the energy 
sector. 
 
IMPORT POLICIES 
 
In recent years, the Egyptian government has gradually liberalized 
its trade regime and economic policies, although the reform process 
has been somewhat halting.  Under the leadership of Prime Minister 
Ahmed Nazif and a ministerial economic team in place since 2004, the 
government has adopted a wide range of significant reform measures. 
However, the government needs to continue to reduce corruption, 
reform the cumbersome bureaucracy, and eliminate non-science based 
health and safety standards. 
 
Tariffs 
 
In 2004, the Egyptian government reduced the number of ad valorem 
tariff bands from 27 to 6, and later down to 5.  The government also 
dismantled tariff inconsistencies, rationalized national 
sub-headings above the six-digit level of the Harmonized System 
(HS), and eliminated services fees and import surcharges ranging 
from 1 percent to 4 percent.  The government reduced its 13,000 line 
tariff structure to less than 6,000 tariff lines.  These and other 
changes have significantly reduced requests for customs arbitration 
over the past five years. 
 
Over the past three years, Egypt has significantly reduced overall 
tariff rates. In February 2007, a presidential decree reduced import 
tariffs on 1,114 items, including foodstuffs, cloth, raw materials, 
and intermediate and final goods.  The government also adopted the 
World Customs Organization (WCO) HS-2007 for classifying 
commodities. 
 
In April 2008, Presidential Decree 103 further reduced customs 
tariffs on several items including processed foods, agricultural 
goods, paper products, and some durable household goods, and 
eliminated completely tariffs on steel rebar, cement (portland, 
aluminous, hydraulic, and white), toilet paper, and similar paper 
items. 
 
As part of the government's stimulus package in February 2009, 
Presidential Decree 51/2009 amended the customs tariff schedule for 
250 items, lowering import duties on many items and removing 
entirely duties on some raw materials and capital and intermediate 
goods such as inputs for spinning and weaving products.  While 
Decree 51 generally lowered tariffs, it increased tariff rates on 
some basic chemicals, rubber and bamboo manufacturing products, some 
basic machinery, and medical equipment.  The changes in the tariff 
schedule in Decree 51 have been described by the Egyptian government 
as temporary stimulus measures, and may be reversed in the future. 
 
 
The reforms of the past three years reduced overall weighted tariff 
average from 14.6 percent to 5.5 percent.  Tariffs on the vast 
majority of goods entering Egypt are below 15 percent. Vehicles, 
alcohol, and tobacco are the only items on which tariffs are still 
40 percent or greater.  Passenger cars with engines under 1,600 cc 
are taxed at 40 percent; cars with engines over 1,600 cc at 135 
percent.  In addition, cars with engines over 2,000 cc are subject 
to an escalating sales tax of up to 45 percent.  Clothing also faces 
relatively high tariffs, although the 2007 decree reduced the rate 
from 40 percent to 30 percent. 
 
The 2007 decree also reduced tariffs on several agricultural 
commodities and food products.  Among the reductions were those for 
most varieties of fresh fruit, which dropped from 40 percent to 20 
percent.  Fruit represents less than 1 percent of U.S. agricultural 
exports to Egypt.  In the 2007 tariff reduction, Egypt lowered four 
tariff lines to make them consistent with Egypt's WTO bound tariff 
rates.  In 2008, Egypt lowered and eliminated most duties on various 
dairy products, rice, and soybean oil. Most key U.S. agricultural 
product exports to Egypt now enter at duties of 5 percent or lower; 
however, a number of processed food products face tariff rates 
ranging from 20 to 30 percent.  The value of total U.S. agricultural 
product exports to Egypt in 2008 was $2.1 billion. 
 
Significant barriers to trade for U.S. agricultural products remain, 
particularly for those of animal origin.  In addition, the 
government continues to make abrupt import regime changes without 
notification or opportunity for comment.  In 2006, the tariff rate 
on poultry was reduced from 32 percent to zero, but in 2007, the 
government re-imposed a 30 percent tariff, which remains in place 
today.  There is a 300 percent duty on alcoholic beverages for use 
in the tourism sector, including hotels, plus a 40 percent sales 
tax.  The general tariff for alcoholic beverages ranges from 1200 
percent on beer to 1800 percent on wine to 3000 percent on sparkling 
wine and spirits. 
 
Foreign movies are subject to duties and import taxes amounting to 
46 percent, and are subject to sales taxes and box offices taxes 
higher than those for domestic films. 
 
Customs Procedures 
 
The Ministry of Finance has committed to a comprehensive reform of 
Egypt's customs administration, reorganizing the Customs Authority 
to meet international standards.  Modern customs centers are being 
established at major ports to test new procedures, such as risk 
management, and new information technology systems are being 
implemented to facilitate communications among ports and airports. 
These systems were supposed to become fully operational in 2009, but 
were delayed and are now estimated to be completed by April 2010. 
The Ministry of Finance in August 2008 finalized the draft of a new 
customs law to streamline procedures and facilitate trade, but the 
proposed legislation has yet to be submitted to parliament for 
consideration, and it is unlikely that the legislation will be 
introduced in the near future. 
 
Egypt joined the International Convention on the Simplification and 
Harmonization of Customs Procedures (Kyoto Convention), completing 
its accession in 2007, upon ratification by the Egyptian parliament. 
 Joining the convention requires participating governments to 
harmonize all customs procedures with those of the WCO standard to 
reduce barriers to trade and commerce.  In complying with the 
convention, the Egyptian Customs Authority is adopting measures and 
procedures and re-organizing portions of the organization. 
 
Import Bans and Barriers 
 
Passenger vehicles may only be imported into Egypt by their original 
owners, and the owner must have purchased the car within the first 
12 months of its production for it to be eligible for importation. 
 
The Egyptian Ministry of Health and Population (MOHP) prohibits the 
importation of natural products, vitamins, and food supplements. 
These items can only be marketed in Egypt by local companies that 
manufacture them under license, or prepare and pack imported 
ingredients and pre-mixes according to MOHP specifications.  Only 
local factories are allowed to produce food supplements and to 
import raw materials used in the manufacturing process. 
 
The Nutrition Institute and the Drug Planning and Policy Center of 
the MOHP register and approve all nutritional supplements and 
dietary foods.  The government attempts to complete the approval 
process in 6 to 8 weeks, but some products face waiting periods of 4 
to 12 months for approval.  Importers must apply for a license for 
dietary products, and annual renewal of the license costs 
approximately $1,000.  However, if a similar local dietary product 
is available in the local market, registration for an imported 
product will not be approved. 
 
The MOHP must approve the importation of new, used, and refurbished 
medical equipment and supplies to Egypt.  This requirement does not 
differentiate between the most complex computer-based imaging 
equipment and basic supplies.  The MOHP approval process entails a 
number of demanding steps.  Importers must submit a form requesting 
the MOHP's approval to import, provide a safety certificate issued 
by health authorities in the country of origin, and submit a 
certificate of approval from the U.S. Food and Drug Administration 
or the European Bureau of Standards.  The importer must also present 
an original certificate from the manufacturer indicating the 
production year of the equipment and certifying that new equipment 
is indeed new.  All medical equipment must be tested in the country 
of origin and proven safe.  The importer must prove it has a service 
center to provide after-sales support for the imported medical 
equipment, including spare parts and technical maintenance. 
 
The Egyptian government supports the production of agricultural 
biotechnology. However, regulations exist for the review and 
approval of biotechnology seed. In 2008, insect resistant (Bt) corn 
was approved for cultivation, but in spring 2009, the permission to 
import additional seed for planting was denied by the Ministry of 
Agriculture due to political interference by a foreign country. The 
Egyptian government maintains a general policy that allows 
agricultural commodities, such as corn and soybeans, produced 
through biotechnology to be imported, as long as the product 
imported is also consumed in the country of origin. 
 
STANDARDS, TESTING, LABELING, AND CERTIFICATION 
 
The Egyptian Organization for Standards and Quality (EOS), which is 
affiliated with the Ministry of Trade and Industry, issues standards 
and technical regulations through a consultative process with other 
ministries and the private sector.  Verification of compliance with 
standards and technical regulations for imported goods is the 
responsibility of agencies including the EOS, the Ministry of Health 
and Population, the Ministry of Agriculture and the General 
Organization for Export and Import Control (GOEIC) in the Ministry 
of Trade and Industry. 
 
Of Egypt's 8,500 standards, compliance with 543 is mandatory.  EOS 
reports that it has harmonized such "mandatory standards" with 
international standards and that about 80 percent of its mandatory 
standards are based on standards issued by "international 
institutions" such as the Geneva-based International Organization 
for Standardization (ISO).  In the absence of a mandatory Egyptian 
standard, Ministerial Decree Number 180/1996 allows importers to 
choose a relevant standard from seven "international systems" 
including ISO, European, American, Japanese, British, German, and 
for food, Codex.  However, importers report that products that meet 
international standards and display international marks are often 
still subjected to standards testing upon arrival at the port of 
entry. Product testing procedures are not uniform or transparent, 
and inadequately staffed and poorly equipped laboratories often 
yield faulty test results and cause lengthy delays.  Procedures are 
particularly cumbersome for products under the purview of the 
Ministry of Health and Population. 
 
The EOS also issues quality and conformity marks.  The conformity 
marks are mandatory for certain goods that may affect health and 
safety.  The quality mark is issued by the EOS upon request by a 
producer and is valid for two years.  However, goods carrying the 
mark are still subject to random testing. 
 
Import and export regulations put in place in 2005 increased 
transparency and liberalized procedures to facilitate trade. These 
regulations allowed importers to use certifications of conformity 
from any internationally accredited laboratory inside or outside of 
Egypt.  However, all imported goods are subject to inspection by 
GOEIC, which can be a lengthy process since samples are taken from 
each container. The regulations also introduced a mechanism for 
enforcing intellectual property rights at the border and extended 
the preferential inspection treatment given to inputs for 
manufacturing to include inputs for the service industry.  While 
these measures have improved Egypt's inspection regime, some 
exporters to Egypt report that the regulations are not applied 
consistently or uniformly.  Garment exporters also report that 
decrees such as 515 and 770, which require garments to include the 
stitched name of the exporter, result in increased costs and 
delivery delays. 
 
Other U.S. agricultural products, particularly those of animal 
origin, face barriers.  The government of Egypt requires that 
officials from the Ministry of Agriculture be present to observe 
proper halal slaughter, even though the poultry industry in the 
United States contracts with Egypt-approved Islamic Centers in the 
United States to perform that service.  This makes these products 
more expensive and complicates poultry importation.  The government 
bans the import of poultry parts, such as leg quarters, to protect 
the local industry. Also, the requirement of inserting a label, 
which includes all product information, inside the vacuum bags 
complicates the importation of meat products. 
 
Imports may have to comply with labeling and packaging requirements 
that some importers find burdensome.  Arabic labeling is required on 
all imported products.  The Arabic language label must include the 
contact information of the importer and exporter, date of production 
and shelf life or expiration date, ingredients of the product, gross 
and net weight. The label may be applied in either the country of 
origin or in Egypt, but the product cannot be inspected and cleared 
for release until the Arabic label is applied. 
 
Although there is a list of permissible additives and colorants, 
inconsistency at the ports of entry sometimes makes importation of 
processed products risky. 
 
SANITARY AND PHYTOSANITARY MEASURES 
 
In recent years the Egyptian government has made great strides in 
reducing the bureaucratic hurdles and time required for customs 
clearance of agricultural products by taking a more scientific 
approach to sanitary and phytosanitary (SPS) measures, which are 
designed to keep the food supply safe.  Despite these improvements, 
importers of U.S. agricultural commodities continue to face 
non-transparent and arbitrary treatment of imports in a number of 
cases.  For example, U.S. beef products are still subject to strict 
import requirements that are not consistent with the World 
Organization for Animal Health (OIE) guidelines for trading with a 
"controlled" risk country.  Eligible products only include boneless 
beef, including livers, hearts and kidneys from cattle less than 30 
months of age that originated in Mexico, Canada, or the United 
States. In addition, meat products can only be imported directly 
from the country of origin. 
 
Pet food imports from the United States must be certified as being 
free of ruminant material.  This makes it difficult for importers to 
supply a full range of U.S. product to the market. 
 
Other food imports are sometimes subject to standards that appear to 
lack technical and scientific justification. 
 
The Ministry of Trade and Industry is working with the Ministries of 
Agriculture and Health and Population, among others, to review SPS 
standards and food product inspection procedures to ensure WTO 
compliance and prevent duplicative inspection.  Egypt is in the 
process of strengthening the Technical Barriers to Trade (TBT) and 
SPS enquiry points under the EOS and Ministry of Agriculture.  A new 
law establishing a food safety authority responsible for all food 
safety issues including standards and inspections was drafted with 
technical input from USAID in 2008 and approved by the Cabinet of 
Ministers.  The law was submitted to Parliament for review in 2008, 
but has not yet been discussed.  The law is on the agenda for the 
parliamentary session that began in November 2009, but it is unclear 
if it will be enacted. 
 
Imports of U.S cotton must be from boll weevil-free areas. 
Therefore, Egypt allows only U.S. cotton from Arizona and California 
to be imported. In addition, cotton must be fumigated by methyl 
bromide for 36 hours under vacuum. 
 
Egypt remains one of the last large importers of seed potatoes in 
the world to which the U.S. does not have market access.  Egypt 
requires that seed potato imports be free from brown rot despite its 
existence in Egypt.  Several U.S. states producing seed potato are 
free of brown rot, and USDA and industry are working with Egyptian 
authorities to open the market. 
 
Recently, several shipments of imported grain and oilseeds from a 
variety of countries have been temporarily detained by port 
quarantine officials due to alleged excess amounts of weed seeds and 
dead insects.  Cargos are usually permitted to enter after cleaning. 
 Sampling and inspection procedures at the ports appear to be 
inconsistent. 
 
GOVERNMENT PROCUREMENT 
 
Egypt is not a signatory to the WTO Agreement on Government 
Procurement (GPA). 
 
A 1998 law regulating government procurement requires that technical 
factors, not just price, be considered in awarding contracts.  A 
preference is granted to parastatal companies where their bid is 
within 15 percent of the price in other bids.  In the 2004 Small and 
Medium-Sized Enterprises (SMEs) Development Law, SMEs were given the 
right to supply 10 percent of the goods and services in every 
government procurement.  Egyptian law grants suppliers certain 
rights, such as speedy return of their bid bonds and an explanation 
of why a competing supplier was awarded a contract.  However, 
concerns about transparency remain.  For example, the Prime Minister 
retains the authority to determine the terms, conditions, and rules 
for procurement by specific entities. 
 
In 2006, the executive regulations of the Tenders and Bids Law were 
amended to streamline procurement procedures.  The changes shorten 
the period required between announcing tenders and the submission of 
bids, reduce the cost for tender documents, require procuring 
entities to hold pre-bid meetings to clarify items in tenders and 
include model contract terms that set out the rights and obligations 
of contractors. The amendments allow SMEs to obtain tender documents 
at cost. 
 
Egyptian Law 89/1998 forbids the use of direct purchasing except for 
cases involving national security or national emergency, and a 2004 
Prime Ministerial decree stipulates that all ministries must adhere 
strictly to that law. 
 
INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION 
 
Although Egypt has improved its IPR regime, the United States still 
has significant concerns about IPR protection and enforcement in 
Egypt.  The Egyptian government has made progress in strengthening 
some IPR laws and enforcement procedures, and engagement between the 
United States and Egypt on IPR issues has remained strong. 
 
The Egyptian Patent Office reports that it has completed its 
technical examination of all applications filed in the "mailbox" for 
pharmaceutical patents; however, the United States is monitoring the 
situation to ensure the actual disposition of all applications filed 
in the mailbox and appropriate notifications to patent applicants. 
 
The United States was encouraged by the Egyptian government's 
introduction in 2008 of a new 120 day streamlined drug registration 
system for drugs carrying U.S. FDA or European approval, although 
the United States continues to monitor the full implementation of 
this system.  The United States continues to seek written 
clarification that Egypt's Ministry of Health and Population 
provides adequate and effective protection against reliance on test 
and other data submitted for marketing approval of pharmaceutical 
products, and will continue to raise this issue in discussions with 
Egyptian IPR officials. 
 
The U.S. copyright industry continues to report high levels of 
piracy of movies, sound recordings, printed material, and computer 
software in Egypt, but significant improvements have been made.  The 
Information Technology Industries Development Authority (ITIDA) 
under the Ministry of Telecommunications has improved protection of 
computer software and taken steps to ensure that civilian government 
departments and schools use legitimate software.  The Egyptian 
Center for Intellectual Property and Information Technology reports 
that Egyptian authorities are increasingly willing to enforce 
copyright protections related to information and communication 
technology.  The establishment in 2008 of special economic courts, 
which handle IPR cases with specially-trained judges, has also been 
a major reform.  Consequently, a Business Software Alliance-IDC 
Report found that Egypt reduced its software piracy rate from 69 
percent to 59 percent from 2003 to 2008, bringing its rate to just 
below the world average. 
 
SERVICES BARRIERS 
 
Egypt restricts foreign equity in construction and transport 
services to 49 percent.  In the computer services sector, larger 
contributions of foreign equity may be permitted, such as when the 
Ministry of Communication and Information Technology determines that 
such services are an integral part of a larger business model and 
will benefit the country.  Egypt limits the employment of 
non-nationals to 10 percent of an enterprise's general workforce and 
in computer-related industries requires that 60 percent of top-level 
management must be Egyptian within 3 years of the start-up date of 
the venture. 
 
Banking 
 
No foreign bank seeking to establish a new bank in Egypt has been 
able to obtain a license in the past 20 years, and in November 2009, 
the Central Bank Governor reaffirmed that no new banks would be 
given licenses. 
 
Since banking reform began in 2004, the government has divested 
itself from many joint venture banks, and privatized the fully 
government-owned Bank of Alexandria in 2006. However, efforts to 
restructure the remaining three state-owned banks have been mixed, 
and the Central Bank rejected privatization for the three banks in 
2009 on the grounds that market conditions were not right. The three 
remaining state-owned banks still control at least 40 percent of the 
banking sector's total assets. The banking reforms in the past five 
years have succeeded in significantly reducing the share of 
non-performing loans. 
 
Telecommunications 
 
Despite the passage of a February 2003 law to allow for new 
telecommunications companies in accords with Egypt's WTO 
commitments, Telecom Egypt continues to hold a de facto monopoly 
since additional fixed-line licenses have not been issued by the 
National Telecommunications Regulatory Authority (NTRA).  The NTRA 
postponed a plan to issue a second license in mid-2008, citing a 
lack of interest in the international markets for fixed-line 
service. However, in October 2009, the NTRA began accepting local 
and international bids for licenses to establish so-called "triple 
play" services of data, voice, and video in private residences, for 
which greater international market interest exists.  The licenses 
for "triple-play" services are slated to be issued in 2010. 
Compared to fixed-line service, mobile phone service in Egypt is a 
more competitive sector, and three major private companies - 
Etisalat, Mobinil, and Vodafone - dominate the market. 
Transportation 
 
The government is liberalizing maritime and air transportation 
services.  The government's monopoly on maritime transport ended 
with the passage of Law 1 of 1998, and the private sector now 
conducts most maritime activities including loading, supplying, ship 
repair, and, increasingly, container handling.  The Port of 
Alexandria now handles about 60 to 65 percent of Egypt's trade. 
Renovations underway at the Port of Alexandria, thus far at a cost 
of about LE 750 million ($138 million) have increased handling 
capacity to 44 million tons per year, up from 32 million tons per 
year in 2004.  The renovations included construction of deeper quays 
to receive larger vessels; re-design of storage areas, warehouses, 
and associated infrastructure; installation of new fiber optic 
cables for data transmission; installation of a more automated cargo 
management system; and renovation of the passenger cruise ship 
terminal.  These renovations have resulted in a smoother flow of 
goods and services and have, combined with reforms in the Customs 
Authority, produced a sharp decrease in customs clearance times from 
three to four weeks in 2004 to about 3-5 days at present for the 
Port of Alexandria, and just 1 day at the Port of Ain Sukhna. 
However, when shipments are required to be approved by the General 
Organization for Import and Export Control (GOIEC), customs 
clearance may take between 2 to 20 days, depending on cargo type. 
Egypt and the United States concluded an Air Transport Agreement in 
1964, and the countries have modified the agreement only twice since 
then, adding a security article in 1991, and in 1997 adding an 
amended route schedule, a limited agreement on cooperative marketing 
arrangements, and a safety article.  The agreement remains very 
restrictive and has no provisions on charter services.  In the past, 
private and foreign air carriers have not been able to operate 
charter flights to and from Cairo without the approval of the 
national carrier, Egypt Air.  The United States remains interested 
in replacing the restrictive 1964 agreement with an Open Skies air 
services agreement. In June 2008, Delta Air Lines resumed operation 
of non-stop service between Cairo International Airport and New 
York's John F. Kennedy Airport.  Egypt Air joined the Star Alliance 
in July of 2008 and has entered into a code share agreement with 
United Airlines. 
Egypt is working with the U.S. on transportation security issues at 
seaports and airports, and a bilateral memorandum of understanding 
on the Container Security Initiative is expected soon. 
Courier and Express Delivery Services 
Private courier and express delivery service suppliers seeking to 
operate in Egypt must receive special authorization from the 
Egyptian National Postal Organization (ENPO).  In addition, although 
express delivery services constitute a separate for-profit, premium 
delivery market, private express operators are required to pay ENPO 
a "postal agency fee" of 10 percent of annual revenue from shipments 
under 20 kilos.  In 2009, the government of Egypt proposed a new 
contract for private courier and express delivery companies, which 
would  grant ENPO even more extensive regulatory oversight over the 
private express delivery sector by increasing considerably the fees 
paid to ENPO and requiring private express delivery companies to 
receive prior ENPO authorization for their prices and other polices. 
 Given that ENPO is not an independent regulator, there are strong 
concerns that this new proposed contract will negatively impact 
competition in the express delivery sector. 
 
Other Services Barriers 
 
Egypt maintains several other barriers to the provision of certain 
services by U.S. and other foreign firms.  Foreign motion pictures 
are subject to a screen quota, and distributors may import only five 
prints of any foreign film.  According to the Egyptian labor law, 
foreigners cannot be employed as export and import customs clearance 
officers, or as tourist guides. 
 
INVESTMENT BARRIERS 
 
Under the 1986 United States-Egypt Bilateral Investment Treaty 
(BIT), Egypt committed to maintaining an open investment regime. 
The BIT requires Egypt to accord national and Most-Favored Nation 
(MFN) treatment (with certain exceptions) to U.S. investors, to 
allow investors to make financial transfers freely and promptly, and 
to adhere to international standards for expropriation and 
compensation.  The BIT also provides for binding international 
arbitration of certain disputes. 
 
Based on a review of Egypt's investment policies, the OECD has 
invited Egypt to adhere to the OECD Declaration on International 
Investment and Multinational Enterprises.  Egypt signed the 
 
Declaration in 2007, becoming the first Arab and first African 
country to join.  During this process, Egypt agreed to review the 
restrictions on investors identified in the OECD's 2007 Investment 
Policy Review of Egypt, such as certain limits in the tourism sector 
as well as the discriminatory treatment of foreign investors in 
courier services. 
ANTICOMPETITIVE PRACTICES 
 
Under Egyptian competition law, a company holding 25 percent or more 
market share of a given sector may be subject to investigation if 
suspected of certain illegal or unfair market practices.  The law is 
implemented by the Egyptian Competition Authority, which reports to 
the Minister of Trade and Industry.  However, the law does not apply 
to utilities and infrastructure projects, which are regulated by 
other governmental entities. 
 
In June 2008, Law 3/2005 on Protection of Competition and 
Prohibition of Monopolistic Practices was amended and passed by the 
People's Assembly under Law 190/2008. The amendment sets the minimum 
fine for monopolistic business practices at LE 100,000 (US$18,380) 
and the maximum at LE 300 million (US$55.15 million). It also 
provides for doubling the penalty in cases where violations are 
repeated.   The first trial under both new laws involved a cement 
cartel, which was convicted in 2008 and given a fine of LE200 
million ($36.76 million), which was upheld on appeal. 
 
ELECTRONIC COMMERCE 
 
Egypt's Electronic Signature Law 15 of 2004 established the 
Information Technology Industry Development Agency (ITIDA) to act as 
the e-signature regulatory authority and to further develop the 
information technology sector in Egypt.  The Ministry of State for 
Administrative Development (MSAD) is implementing an e-government 
initiative to increase government efficiency, reduce services 
provision time, establish new service delivery models, reduce 
government expenses, and encourage e-procurement.  For example, the 
e-tender portal, established in August 2007, allows all government 
tenders to be published online.  In September 2009, the government 
implemented the e-signature service, allowing public and private 
companies to offer e-signature authentication. New legislative 
proposals on information security, cyber crimes, and the right to 
information have been in the drafting process for over a year, and 
it is unclear if they will be implemented. 
 
OTHER BARRIERS 
 
Pharmaceutical Price Controls 
 
The Egyptian government controls prices in the pharmaceutical sector 
to ensure that drugs are affordable to the public. The government 
does not have a transparent mechanism for pharmaceutical pricing. 
The Pharmaceutical Committee in the Ministry of Health and 
Population reviews prices of various pharmaceutical products and 
negotiates with companies to adjust prices based on a cost-plus 
formula. This method, however, does not allow price increases to 
compensate for inflation and the pricing policy has failed to keep 
pace with the rising cost of raw materials. In 2007, the government 
granted price increases for selected pharmaceutical products, but 
the approved increases were minimal. 
 
About 85 percent of active pharmaceutical ingredients in Egypt are 
imported. In 2004, the government reduced customs duties on most 
imports of pharmaceutical inputs and products from 10 percent to 2 
percent.  In that same year, the MOHP lifted restrictions on 
exporting pharmaceuticals to encourage pharmaceutical investment and 
exports. 
 
End Text. 
 
TUELLER