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An importer or exporter, engaged in import or export business in Ethiopia needs to know what type of import export payments in Ethiopia are possible while doing import or export trade in Ethiopia or with Ethiopian businesses. Moreover, it should be known that which type of payment is preferable and under what conditions. This article contains, methods of payment practised in international import export business and especially what is practised or allowed in Ethiopia and it specifically deals with Letter of Credit (LC), Cash against Document (CAD), Telegraphic Transfer (TT) and Advance Payment. It also contains documents to be included in a letter of credit and specifically in an LC opened through Ethiopian banks.

Methods of Payment

Letter of credit

Cash Against Document

Telegraphic Transfer

Advance Payment

Types of L/C

Irrevocable Vs Revocable

Confirmed Vs Unconfirmed

Straight Vs Negotiable

Sight Vs Usance

Documents to be included in L/C

Transaction Steps of L/C

Letter of credit (L/C)

• It is a written commitment to pay, by a buyer's or importer's bank to the seller's or exporter's bank. LC guarantees payment.
• A supplier or exporter that has sold to an Ethiopian Importer on LC basis should present to the bank these four sets of documents: Original sets of CLEAN Bill of lading, Shipping Document (Airway Bill, Truck way bill or Railway Manifest), Commercial Invoice that’s verified by the chamber of commerce of the supplier’s country, Packing List and Certificate of Origin that’s verified by the chamber of commerce of the supplier’s country. If the goods are imported from China, a CIQ certificate (pre shipment inspection certificate carried out by China AQSIQ) should be presented along with the other four documents. If the goods have complulsory Ethiopian Standard, a third party pre-shipment inspection certificate attesting the standard/grade of goods is required.
• The two most basic types of L/C are Revocable-credit L/C and Irrevocable-credit L/C, which comes in two versions: Confirmed irrevocable letter of credit and Non-confirmed irrevocable L/C.

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Cash Against Documents (CAD)

• A transaction in which the buyer assumes the title for the goods being purchased upon paying the sale price in cash. It’s quicker than LC, but not as safe; Ethiopian exporters are advised to use CAD if they have a very good relationship with the buyer and know that the credentials of the buyer make it trustworthy.
• A supplier or exporter that has sold to an Ethiopian Importer on CAD basis should present to the bank these four sets of documents: Original sets of CLEAN Bill of lading, Shipping Document (Airway Bill, Truck way bill or Railway Manifest), Commercial Invoice that’s verified by the chamber of commerce of the supplier’s country, Packing List and Certificate of Origin that’s verified by the chamber of commerce of the supplier’s country. If the goods are imported from China, a CIQ certificate (pre shipment inspection certificate carried out by China AQSIQ) should be presented along with the other four documents.

Telegraphic Transfer (TT)

• It’s a method of payment in which funds are transferred via telegraph or cable. It’s most common in business conducted in developing countries, where other types of infrastructure, such as computerized payments, may not be available; however, in Ethiopia all imports, of which value is more than USD 2000, are required to be done via LC or CAD. But in there are instances where banks allow up to USD 5000 for TT transfer.

Advance Payment

• An advance payment, or simply an advance, is the part of a contractually due sum that is paid in advance for goods or services, while the balance included in the invoice will only follow the delivery. It is called a prepaid expense in accrual accounting. In Ethiopia an advance payment of up to USD 5000 may be allowable and can be done through Telegraphic Transfer. However, the receiver's bank should provide guarantee for it.

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Types of L/C

1. Revocable L/C Vs Irrevocable L/C

Irrevocable L/C

If this type of L/C is once opened, it can not be changed or cancelled or amended without the consent of all parties (including the beneficiary or the seller).

Revocable L/C

A revocable L/C may be amended or cancelled by the Issuing Bank at any moment and without prior notice to the Beneficiary. The cancellation is usually made at the request and on the instructions of the applicant.

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2. Confirmed L/C Vs Advised (Unconfirmed L/C)

Confirmed L/C

It is a type of L/C in which the Confirming Bank promises to pay.When an exporter exports to a country with economical or political instability or if the exporter is unfamiliar with the Issuing Bank, the exporter should require that the L/C be confirmed by a first-class bank. If L/C is confirmed, the confirming bank is liable for the payment. The payment is assured even if the importer or the issuing bank defaults. However, under normal circumstances, an unconfirmed LC may be preferred to avoid the charges that would be paid by both the buyer and seller for confirmation.

Advised L/C (Unconfirmed L/C)

Is opened by an issuing bank in which the advising bank does not add its confirmation to the credit. The promise to pay comes from the issuing bank only.

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3. Straight L/C Vs Negotiation L/C

Straight L/C

It can only be paid in the country of the Paying Bank.

Negotiation L/C

It can be presented and paid to any bank.

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4. Sight L/C Vs Usance L/C

Sight L/C

The Beneficiary is paid as soon as the Paying Bank has determined that all necessary documents are in order.

Usance L/C

Usance time can be between 30 and 180 days after the bill of lading date. This is a form of delayed payment, and should be avoided.

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Documents to be Included in L/C

Documents that are to be included in the L/C are always based on negotiation of the parties. It is preferable not to include documents that must be signed or authorized by the buyer's representative or a document that may never be produced (say, a certificate, which should be issued by a foreign agency) and to keep the list of the documents as short as possible.

It is not necessary to mention all documents required by the contract in the L/C. Most likely, it is required to present a commercial invoice, a transport document (Original sets of Bill of lading, Airway Bill, Truck way bill or Railway Manifest), Country of origin invoice and others. What is required in Ethiopia is mentioned above.

The list of additional documents depends up on the agreement made between the seller and the buyer. The list may include:

• Certificate of origin
• Certificate of quality
• Weight certificate
• Pre-shipment inspection certificate
• Packing declaration
• Packing list
• Fumigation certificate, and so on.

It is also necessary to specify how many original documents and how many copies are to be presented. The description of goods stipulated in the L/C must correspond with the description given in the invoice.

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Transaction Steps of L/C

The following are a Typical Letter of Credit Transaction steps of a confirmed irrevocable letter of credit.

• After the exporter and buyer agree on the terms of a sale, the buyer arranges for its bank to open a letter of credit that specifies the documents needed for payment. The buyer determines which documents will be required.
• The Buyer's Bank issues, or opens, its irrevocable letter of credit includes all instructions to the seller relating to the shipment.
• The Buyer's Bank sends its irrevocable letter of credit to a Exporter’s Bank and requests confirmation. The Exporter may request that a particular local bank be the Confirming Bank, or the Foreign Bank may select a correspondent bank in the Exporter’s country.
• The Confirming Bank prepares a letter of confirmation to forward to the Exporter along with the irrevocable letter of credit.
• The Exporter reviews carefully all conditions in the letter of credit. The Exporter's freight forwarder is contacted to make sure that the shipping date can be met. If the exporter cannot comply with one or more of the conditions, the customer is alerted at once.
• The Exporter arranges with the Freight Forwarder to deliver the goods to the appropriate port or airport.
• When the goods are loaded, the Freight Forwarder completes the necessary documentation.
• The Exporter (or the Freight Forwarder) presents the documents, evidencing full compliance with the letter of credit terms, to the Confirming Bank.
• The Confirming Bank reviews the documents. If they are in order, the documents are sent to the Buyer's Bank for review and then transmitted to the Buyer.
• The Buyer (or the Buyer's Agent) uses the documents to claim the goods.
• A draft, which accompanies the letter of credit, is paid by the Buyer's Bank at the time specified or, if a time draft, may be discounted to the Confirming Bank at an earlier date.

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This page presents information about Ethiopian import and export procedures in Ethiopia.

1. Import Procedures in Ethiopia 
2. Export Procedures in Ethiopia 

1. Import Procedures in Ethiopia 

An importer with an import license/investment permit has to follow certain procedures for importing goods. (See the article Import and Export Regulations in Ethiopia to learn about the procedures for obtaining import and export licenses)

Pre-Shipment Inspection

Goods imported are not required to be inspected prior to shipment EXCEPT when:

• they are imported from China (but goods that will be used as inputs for manufacturing will be exempt from this requirement). The certificate obtained for pre shipment inspections of goods from China is called CIQ certificate.
• the goods imported have compulsory Ethiopian standard. In this case, the goods have to be inspected by an internationally recognised inpsection company prior to shipment and certficate issued.
• the importer and the supplier have an agreement for pre-shipment inspections.

Arrangement and Mode of Payment

An importer has to fulfill two major requirements to settle payment. The first is that the importer must apply for an approval of foreign currency to a commercial bank which is authorized by the National Bank of Ethiopia. As part of the request, the importer must present his/her valid business and import license or investment permit, and a pro-forma invoice from the supplier. The pro-forma invoice should describe the imported goods, state the unit price, quantity and total price, as well as list additional charges that may be applied on the transaction.

(See the article Foreign Exchange Regulation and Directives in Ethiopia for further information)

After an approval of foreign currency, the importer must obtain a bank permit in order to arrange the mode of payment. The bank permit is obtained from the NBE. However, an importation of exceptional goods is allowed on a franco-vaulta basis. Importation of goods on the basis of franco-valuta means the importer is allowed to use his/her own hard currency for the payment of the goods instead of applying for it and getting it from the government. The goods which may be imported on a franco-vaulta basis include:

• imported good by diplomatic personnel for diplomatic purposes; 
• specific personal goods;
• goods imported for investment activities including capital goods and raw materials adequate to commissioning stage and for their personal use by investors having license from the appropriate government office.

(See article 2(9) of the Revised Regulations on the Importation of Goods on Franco-Valuta Basis Regulation No. 88/2003)

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As such, in most circumstances importers should arrange the payment of the imported goods through banks. After the bank permit has been issued by the NBE, the importer then chooses the mode of payment in accordance with his/her agreement with the seller. There are three methods of payment for imports (and also exports) in Ethiopia;

• Letter of Credit, in which the bank undertakes to pay the supplier a stated sum of money within a prescribed time limit and against the hand-over of the documents needed for the release of goods from customs. A letter of credit normally includes, a commercial invoice, manufacturer’s invoice, packing list, country of the goods origin, original sets of bill of lading, airway bill, truck way bill, railway Manifest (depending on the mode of transportation), and a certificate of quality. 
• Cash against Document, where the importer’s bank hands over to the importer the documents needed for the release of goods from customs against full payment.
• Advance Payment, i.e. the importer orders the bank to pay the seller via SWIFT transfer prior to shipping or rendering the service.

An application for the above mode of payments is usually accompanied with the following documents;

• Import license/investment permit
• Tax Identification Number (TIN)
• Other documents required for the foreign currency approval;
• The foreign currency approval;
• Insurance certificate,
• Regulatory permit (for products requiring pre-import permit), and ownership certificate from country of purchase (for used vehicles),
• An original price confirmation (for used commodities),
• A written waiver (in case of shipment by a foreign vessel),
• An undertaking letter for the entry of goods (in case of advance payment).

(An application form, used by the Ethiopian Commercial Bank, for a letter of credit is available HERE)

For all methods of payment, the importer is required to have an account with the bank, a TIN and he/she must not be listed on the National Bank of Ethiopia delinquent list which is a register that includes account holders whose cheques have been dishonored repeatedly; and whose accounts are closed by banks.

Once payment has been effected, the importer should be sure to collect his documents from the bank in case of letter of credit or cash against person and from the supplier in case of advance payment.

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Customs Proceedings for Imported Goods

(See the article Customs Procedures in Ethiopia for more information)

i. Customs Declaration

An importer should first prepare a customs declaration (goods declaration) and submit such declaration to the Customs Commission (the former ERCA). The custom declaration must include the contract of sale; goods description; tariff classification, valuation and payment of duties and taxes, and other supporting data (such as the name and address of the trade operator and, the mode of transportation to be used).

After the submission, the Customs Commission will examine the declaration by verifying the correctness of data information, tariff classification, valuation and payment of duties and taxes registered and supporting documents attached to declaration. The verification process may also include the fulfillment of legislative requirements administered by other regulatory agencies, such as veterinary, health and/or phytosanitary issues.

ii. Payment of Customs Duty and Taxes

The importer is required to pay duties and taxes on the imported goods which include customs duty at 0-35% based on the type of good imported, VAT at 15%, withholding tax at 3% on the CIF (Cost+Insurance+Freight), Surtax at 10% and excise tax for few selected goods at 10%-100%.

iii. Inspection

There is also a physical examination that will be conducted on the goods in order to ensure that the imported goods are not harmful to the public. Further, the imported goods will be examined so that their origin, country of export, nature, condition, quality, quantity, tariff classification and value of the goods are in accordance with the information furnished in the goods declaration.

iv. Clearance and Goods Release

In addition to the Customs Commission’s (ERCA’s) clearance activities (based on the physical examination conducted above), other regulatory bodies will also be involved in the clearance of certain imported goods. This applies to all goods for which pre-import permits are issued, as well as the ones for which an import permit is issued only at the time of clearance. The importer or his/her agent is responsible for obtaining the necessary permits from the regulatory agencies at the time of clearance. For instance, a person importing medicine is required to obtain a pre-license, before the starting of the import procedure and an import permit at the time of entry in order to obtain clearance.

After the physical examination and obtaining the necessary license, the importer will obtain a goods release charges upon the payment of services charges. The goods will then be released and the importer takes possession of them. In addition, the Customs Commission (ERCA) will issue a final declaration for the importer as a certificate of completing the import procedures and importation of goods.

Any importer who obtained a foreign currency permit should present the final import customs declaration to the NBE. This is a requirement for importing (or exporting) goods in the future.

Note that an importer should keep all records and documents related to the import for five years from the date of Customs Commission (ERCA’s) acceptance of the goods declaration. During this period, Customs Commission (ERCA) may perform a post clearance audit of the import. The purpose of such audits, which may cover traders’ commercial data, business systems, records and books, is to verify the accuracy and authenticity of declarations and information provided by the importer.

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2. Export Procedures in Ethiopia

Application to the NBE/Authorized Commercial Bank

An application must be submitted to the NBE that is accompanied with the export contract, seller’s invoice, export license of seller, TIN, export permit application, letter of seller stating that consignment will be settled within 90 days maximum and any other relevant document.

Note that the exporter must notify the Ministry of Trade that a contract deal has been made with a buyer within 15 days of the conclusion of the contract for export. 

Further, the buyer must, first, open an irrevocable L/C/documentary credit in favour of the seller. The exporter should go through the text of the L/C opened in their favour and make sure that compliance can be met without doubt.

Customs Proceedings 

(Also see the article Customs Procedures in Ethiopia)

i. Customs Declaration 

The Custom declaration should include the type of export regime, detailed information about the exported goods, and also tariff classification and customs valuation, which is relevant to determine the correct export duties and taxes. The exporter, then, submits the customs declaration to the Customs Commission which may accept or reject the declaration.

Upon acceptance of the customs declaration, the exporter pays the due export duties and taxes which is almost at 0%. The customs duty on exported goods is 0% except for selected hides, skins and leathers. VAT is also calculated at 0% for exported goods. But there is an excise tax imposed on the exportation of selected goods.

ii. Obtain Certificates

After the customs declaration the exporter then must obtain the necessary certificates. When export product is ready, the exporter must obtain certification from the Inspection Centre that the commodity is prepared in accordance with the characteristics of the agro-ecology of its production area and meets the required grade.

The exporter also must obtain a certificate of origin from Chambers of Commerce and special movement forms or certificates issued by the Customs Authority.

iii. Obtain export customs clearance and ship goods

The customs commission (ERCA) should physically examine the export goods in particular whether they confirm to the customs declaration and depending on the risk assessment. Further exported goods are subjected to pre-shipment mandatory inspections. For instance coffee, must be examined by the Ethiopian Coffee and Tea Development (which is under the Ministry of Agriculture, and Natural Resources), while live animals and meat products, oilseeds and pulses are inspected by the Ministry of Livestock and Fisheries.

The exporter may also inspect and insures the export cargo.

After the examination, the exporter is granted a release note upon the payment of warehouse fees and any other service charge.

iv. Arrange Payment Issue

An arrangement for payment may be through the franco-valuta basis or bank permit. A bank permit allows for three types of payment modalities; letters of credit, cash against payment, and advance payment. To obtain a permit for any of these, the exporter is required to present a completed bank permit form, which is available from the banks, along with the following documents to his/ her bank.

• An original sales contract agreement;
• The exporter’s business license;
• The exporter’s TIN certificate;
• For L/C: Advice and shipping documents (commercial invoice, packing list, bill of lading or air way bill, certificate of origin and regulatory permit, if required);
• For advance payments: original credit advice, and advance payment receipt advice (incoming telegraphic transfer) or customs declaration along with a bank advice for the sale of the cash notes to the bank.
• Commercial invoice including one copy duly certified by the Customs;
• Packing List;
• Foreign exchange declaration forms;
• Customs Declaration Annex form (CDAF) in duplicate;
• Certificate of Origin; and
• Insurance Policy in duplicate.

For all methods of payment, the exporter needs to have an account with the bank and must not be listed on the NBE delinquent list. Additionally, the exporter should collect his documents from the bank or the buyer when payment has been effected.

In case of a documentary credit, the commercial bank negotiates these documents to the importer’s bank in the manner as specified in the letter of credit. Before negotiating documents, the exporter’s bank scrutinizes them in order to ensure that all formalities have been complied with and all documents are in order. The bank then sends the bank certificate and attested copies commercial invoice of the exporter.

Next, the exporter can get immediate payment from his/her respective bank on the submission of documents by signing a Letter of Indemnity. By signing the Letter of Indemnity the exporter undertakes to indemnity the bank in the event of non receipt of payment from the importer along with accrued interests.

Further, where payment should be effected via a documentary credit (L/C) banks have the obligation to verify documents in a way that the documents strictly conform to the instruction contained in the credit (Article 965 of the commercial code). The bank is, however, not liable where the documents are on their face value in conformity with the instructions received (Article 966 of the commercial code). When the bank refuses the documents, it will notify the presenter with the error’s found for rectification (Article 965 of the Commercial Code).

(See also the article Foreign Exchange Regulation and Directives in Ethiopia on retention and utilization of foreign exchange by exporters)

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v. Pay service charges and receive final export customs declaration

This is the last stage of the export procedure. After fulfilling all obligations for customs clearance and the release of goods, ERCA will issue the final declaration to the exporter as a certificate that all customs procedures related to the export of the goods have been accomplished.

Any exporter who obtained an export bank permit is expected to present the final export customs declaration to the NBE. This is a requirement for importing or exporting goods in the future. As in the case of imports, an exporter must keep all records and documents related to the export for five years from the date of ERCA’s acceptance of the goods declaration. During this period, the Customs Commission (ERCA) may perform a post clearance audit of the export.

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The import export trade has been growing steadily in Ethiopia. This aritcles covers the following topics:

1. Who can import to Ethiopia and export goods out of Ethiopia? 
2. Prohibition and Restriction of Import-Export 
3. Foreign Currency in Import-Export Trade 

Under the current legal system the import and export trade is regulated in accordance with several laws, which include:

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The Ministry of Trade and Regional Integration (the former Ministry of Trade and Industry) is the major body of the government to regulate all import and export of goods and licensing. The other major organ is the National bank of Ethiopia (NBE) which regulates the foreign currency aspect of import-export. The responsibility of the NBE include registration of sales contract agreement; issues Export Bank Permit; issues Foreign currency Approval; and issues Bank import permit for Letter of Credit, Advance Payment, approves Purchase Order for Cash Against Document (CAD).

There are also other regulatory bodies which specifically issue import and export permit for specific goods. For example; the Ministry of Agriculture issues import permit for plants, seeds, plant products, pesticides and fertilizers, and export permit for animal feed, live animals and meat products; the Ministry of Mines and Petroleum issue permit for the exportation of mineral products; the Ethiopian Food and Drugs Authority (EFDA) (formerly Food, Medicine and Health Care Administration and Control Authority (FMHACA)) regulates the import and export of drugs, medical supplies or instruments, baby food, supplement food, and cosmetics; and the Information Network Security Agency (INSA) issue Import permit for communication and security equipments.

Here are some major points on the Regulation of Import and Export License. (See also the article Import-Export Procedures in Ethiopia)

1. Who can import to Ethiopia and export goods out of Ethiopia? 

According to Investment Proclamation No. 1180/2020 the following import-export activities are reserved for domestic investors only:

1. import trade, excluding liquefied petroleum gas and bitumen; 

2. export trade of raw coffee, Khat, oilseeds, pulses, minerals, hides and skins, products of natural forest, chicken and livestock including pack animals bought on the market;

A business person who desires to engage in import-export trade, first, has to obtain a business license and import permit (note that export permit is only required for certain goods) from the Ministry of Trade and Industry (Article 43(2) of the commercial registration and business licensing proclamation no. 980/2016) or other government agencies which can issue business license and import-export permit. 

There is also a special import permit that such business person must acquire for the importation of certain goods. For instance a special permit is required for the importation of ‘genetically modified food’, infant and follow up formula or complementary food, and medicine for clinical trials or any other scientific investigation for conducting laboratory quality test for registration purpose. (See article 10(4) article 11 of Council of Ministers Regulation No. 299/2013 to provide for Food, Medicine and Health Care Administration and Control)

(See also the article Regulations of Commercial Registration and Business Licensing in Ethiopia)

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2. Prohibition and Restriction of Import-Export

According to article 43(1) of the commercial registration and business licensing proclamation no. 980/2016, the Ministry of Trade and Industry (now Ministry of Trade and Regional Integration) can ban importation into or exportation from Ethiopia of certain goods and services. The prohibition made by the Ministry may be complete prohibition or temporary prohibition. The complete prohibitions are permanently applicable for specific imports or exports. However, the Ministry may issue a temporary suspension of the prohibitions where it is found necessary. For instance, teff is permanently prohibited unless for persons of Israeli origin residing in Ethiopia (but not more than 4000 tons) and commercial farmers. However, the Ministry had reportedly issued a temporary suspension of the prohibition where there is an excess of products.

On the other hand, the Ministry may issue a temporary prohibition on import and export. Most of the temporary prohibitions are issued where there is food scarcity, drought or other serious circumstances in Ethiopia.

In relation to restriction of import-export goods, the various relevant government organs, discussed in the beginning of this article, have the power to restrict the importation or exportation of certain goods. The import of certain goods into Ethiopia is restricted for safety, security, environmental, health and other reasons, i.e. they must not be imported without permission.

A business person is required to obtain a pre-import permit and export permit to import and export restricted goods, respectively. For instance the importation of medical supplies, pharmaceuticals, food supplements, and baby food are restricted, thus an importer needs to obtain a pre-import permit. Further, an importer who obtained a pre-import permit should also have an entry permit that is issued at the port of entry. Similarly a person, who wants to export coffee, is required to obtain an export permit to from the Coffee and Tea Development Center which is under the Ministry of Agriculture and Natural Resource.

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3. Foreign Currency in Import-Export Trade

Foreign Exchange Allocation and Priorities

Sub Article 6.1 Imports of essential goods:

In the allocation of foreign currency a bank shall give priority for the categories as listed in First priority, Second priority and Third priority to the following import items and payments, among them, on first come first served basis.

1. First priority:
   1. Pharmaceuticals - Medicine, input for manufacturing of pharmaceuticals and laboratory reagents
   2. Input for manufacturing of Edible Oil
   3. liquefied petroleum gas (LPG)
2. Second Priority:
   1. Input for Agriculture: Fertilizer, Seed, Pesticide and Chemical
   2. Input for Manufacturing: Raw material and Chemical
3. Third Priority:
   1. motor oil and lubricants;
   2. agricultural inputs and machineries:
      • irrigation pumps,
      • animal feeds,
      • machineries and equipment,
      • tractors, harvesting machineries and their spare parts,
      • animal hybrids;
   3. pharmaceutical product:
      • laboratory equipment
      • medical equipment and appliances;
   4. manufacturing industries requests for procurement of machineries, equipment, spare parts, and accessories;
   5. import of nutritious food for babies;
   6. spare part for construction machineries for own use construction companies whose total values not exceeding USD 50,000;
   7. educational materials
      • exercise book, ball pen, pencil and
      • printing papers,
   8. profit and dividend transfer
   9. transfer of excess sales of foreign airlines;
   10. sales from share and liquidation of companies by FDI

NOTES

• 6.1.1: The total foreign currency allocated for imports listed under article 6.1 above by a bank shall not be less than 50% of the total foreign currency allocated for all import of goods and services at any time. The 50% allocated under 6.1 above shall be distributed 15% for first priority, 45% for 2nd and 40% for 3rd priority.
• 6.1.2: In case the allocation to the imports listed under article 6.1 above is less that 50% of the total foreign currency aaloaction for all import of goods and services at any time,the bank is obliged to surrender the difference to the National Bank every month within the first five working days of the next month.
• 6.1.3: In case the utilization of allocated foreign currency under 6.1.2 above is less than 50% of the total foreign currency allocated for all import of goods and services at any time, the bank shall surrender the difference to the National Bank every six months ie. on June 30 and December 31 within the first five working days of the next month.
• 6.1.4: The National Bank shall credit the payment and settlement account of the bank with equivalent amount in birr at the prevailing mid exchange rate.

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Sub Article 6.2: Special approval for import of spare parts

• In the case of interruption of production due to damage parts of machinery or equipment and small value critical inputs, CEO of the Bank is authorized to give special approval for import of spare parts requested by Manufacturing or Agricultural sector.

Sub Article 6.3: Special priority approval by vice governor

• The Governor or Vice Governor of the Monitory Cluster of the National Bank may give special priority approval for Financial Institutions, Federal Government, and Regional Government and City administrations requests in a case by case basis.

Sub Article 6.4: Foreign Exchange sales on demand

Items listed under this article are exempted from registration procedure required under sub-article 6.1 and shall be served on demand.

1. foreign currency requests from:
   1. Non-Resident Foreign currency and Non-Resident Transferable birr account,
   2. Foreign Currency accounts of Non-resident Ethiopian and Non-Resident Ethiopian Origin,
   3. Retention accounts,
2. forex request for all transaction set under the operation of forex Bureau Directives No. FXD/17/2001.
3. invisible payments i.e.,
   1. consultancy, commissioning, installation, erecting and royalty fees;
   2. payment of services and travel payment and other invisible transaction drawn from Non-Resident Non-transferable accounts;
   3. area Commissions for refueling jet oil by oil companies;
   4. communications and other service payments ie. Telecom service charge satellite service payment postal service charges;
   5. aviation service payments and associated costs;
   6. salary, allowances and administrative expenses of Ethiopian Diplomatic missions abroad and representatives of Ethiopian companies in Djibouti and other countries;
   7. naval personal, Djibouti Ethiopian customs authority, licensed transit and forwarding companies and other oil companies, Ethiopian Orthodox church transfer abroad;
   8. travel allowances for religious institutions;
   9. cargo handling, fright and other associated costs like container service, storage, port dues incurred on goods handled in transit by shipping and forwarding firms licensed to handle such services;
   10. payments on imports and export freight and transit services;
   11. payment for quality claim, loss in weight, commission, superintendency or survey fee, demurrage request by exporters;
4. payments authorized by the National Bank:
   1. external debt payment obligation ie principal interest and fees
   2. supplier’s credits,
5. salary transfer of foreign employees.

Sub Article 6.5 List Amendment

• National Bank may amend the above lists under sub-articles 6.1 and 6.4 as required.

Sub Article 6.6 First Come First Served Basis

• Notwithstanding sub-article 6.1 of this Article, a bank shall sale foreign currency to its all other customers on the basis of first come first served basis.

Sub Article 6.7 Foreign Exchange Receipt of an Exporter

• A bank shall allocate foreign exchange receipt of an exporter in line with the "Retention and Utilization of Export Earnings and Inward Remittance" Directive

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Retention and Utilization of Foreign Currency for Exporters

• An exporter has a right to retain their foreign exchange earnings but only through retention accounts. In plain word, an exporter can obtain the foreign currency which is paid to him by the buyer, provided that he/she has a retention account in one of the banks authorized by the NBE.
• An exporter or earner of foreign currency can keep 20% of its export earnings indefinitely in its retention account. The exporter may utilise the forex in his retention account for any import material provided he has the license to import the product.

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This page gives statistics on the import export trade to and from Ethiopia and is being developed.

• Most Imported Goods
• Most Exported Goods
• Country of Import
• Major Buyers of Ethiopian Products