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AN EYE FOR DETAILS
Egypt’s economy has seen a boom in trade. With more goods flowing in both directions, a highly efficient system is needed to ensure these products meet their minimum specifications. Mohamed El-Banna, chairman of the General Organization for Export & Import Control, keeps a close watch on just about everything that enters and leaves the country.
BY RÉHAB EL-BAKRY
Mohamed El-Banna doesn’t care that the container full of plastic Chinese trinkets arriving at Alexandria Port is pure kitsch, or that the shipment of cotton dresses being sent to Europe’s demanding markets is last year’s fashion. To him, it’s all about the specifications. Does the product meet international standards? If so, he lets it enter or leave the country. If not, he either ships it back to the supplier or has the cargo destroyed.
As chairman of the General Organization for Export & Import Control (GOEIC), he is the nation’s chief quality control inspector, and responsible for assuring that the $37.8 billion of imports and $22 billion of exports meet design specifications and minimum quality standards. It is an immense task with little room for error. Mistakes can cost lives; delays can cost money.
El-Banna has brought engineering precision and military efficiency to the table. Having graduated in aviation engineering from the Egyptian Military Academy in 1970, he spent 10 years as an Air Force engineer working with constantly evolving technologies. “This gave me a lot of experience in the management of entities using technology and in the modernization of management and information accessibility using technological advances,” he says.
During this time, he also joined the Administrative Control Authority (ACA), the state’s corruption watchdog. He earned a reputation during his 25 years at the ACA for his attention to detail and advocacy of new technologies. He was serving as the ACA’s vice chairman for international trade and justice in 2001 when then minister of economy Youssef Boutros-Ghali, impressed by these qualities, headhunted him for a position in his ministry. “He had heard about my work with the ACA, but we had never met,” he recalls. “He fought for almost seven months until the ACA finally approved to let me join GOEIC. The first thing he told me was that we needed to implement sweeping changes in this organization.” El-Banna assured the minister he was up to the task.
Adhering to standards
The General Organization for Export & Import Control was created in 1975 as the primary agency for inspecting imported and exported goods to ensure these products meet obligatory Egyptian standards. Where no explicit standards exist, the importer has the right to select which set of international standards the product will comply with. “We don’t invent our own standards or specifications,” El-Banna explains. “Any specification has origins in international standards.”
Egyptian standards are set by the Egyptian Organization for Standardization & Quality Control, and it would be a mistake to think they are lenient. A conscious decision was made a few years back to align Egyptian standard specifications with international ones to protect the health and safety of consumers. Even in cases where products are designed to be manufactured cheaply for economy-minded consumers, standards ensure that they present no health or safety hazard and that the product is in accordance with its specifications.
Through its standards committee, the Egyptian Organization for Standardization & Quality Control works closely with various government bodies to set standards. Its also seeks input from importers, exporters and manufacturers. “This ensures that those who take part in setting specifications are those affected by them,” El-Banna explains. “There was a certain time in our history when those involved in this process were members of the public sector and importers who were not aware of the minimum standards set around the world. During that time, we had a lot of problems with standards. There were [too many] companies working with poor standards. But now, we include people on this committee who are aware and are interested in importing and producing good quality products.”
GOEIC comprises 26 branches, including offices at all ports and airports. The organization collects samples of all imported manufactured goods for testing. It also inspects imported agricultural products, as well as crops purchased by the government from local farmers, to ensure that they are in full compliance with the agreed upon specifications of their individual sale contracts. Export shipments are tested only upon the request of the exporter, though some agricultural products require obligatory testing.
Upon completing the specification tests, GOEIC issues certificates of origin for products that are exported from Egypt. The organization also verifies certificates of origin for products imported. “We conduct investigations. So [a similar body] from another country might receive a certificate of origin from Egypt and send us a request to verify that the information in it is true when it comes to origin and the components, etc. We also do the opposite,” explains El-Banna.
Given this level of involvement, GOEIC is perfectly positioned to gather statistics about imports and exports. “We are at every entry and exit point of trade in this country, and so we’re the most capable of gathering this data,” he says. Upon taking the helm of the agency seven years ago, El-Banna spearheaded the creation of an enormous data warehouse to consolidate the data of every consignment entering or exiting the country. The goal was to gather trade data that could be broken down by sector, product, country of origin and destination for analysis. The data can also be compared from one quarter to another, or one year to another.
The data warehouse has been up and running since 2004. GOEIC shares its trade data with other government agencies, such as the Customs Authority, the Ministry of Trade & Industry and the Central Authority for Public Mobilization & Statistics (CAPMAS). The numbers are also made available to private companies and agencies upon their request.
Watchful eye
El-Banna’s signature is everywhere at GOEIC. The technology-savvy chief has equipped his agency with robust IT infrastructure, including a central control unit at the agency’s Cairo headquarters where a special team monitors images from dozens of CCTV cameras at each of the agency’s 26 offices. A broadband network relays data and images to headquarters, and allows managers in one office to follow the progress of agents working in another. The system tracks consignments, clearance committee meetings and agent performance.
Technology is the key to higher efficiency, El-Banna proclaims. “We created a computerized system that allows me to monitor [the inspection process] from the moment the client presents the consignment papers at the [agent’s] window until the shipment is released. This allows me to see where the hold-ups are and to address them on the spot.”
GOEIC’s labs, located at every international port and airport, were “primitive” when El-Banna took the helm in 2001. One of his first orders was a complete overhaul of the labs, which are now fully ISO certified. “If we are going to be testing standards, then it was important for our labs to also meet standards,” he explains. “And just like all our branches, they’re now electronic and there is a network that connects them to the branches and to us.”
Technology has reduced the time it takes to test samples, but El-Banna has also implemented a new scheduling system to shorten the time it takes to collect samples. “We have schedules accessible to all parties involved that allow for the representatives of all the different agencies that need samples of the shipment – including GOEIC, security, the ministries of health and agriculture, and the representative of the importer – to be present to take their samples at the same time,” he says.
In the case of industrial goods, the importer is allowed a conditional release of the shipment to the company’s warehouse once the samples are taken – a concession designed to save the importer time and money. “This way, they don’t have to wait until all the tests are completed to transport their products from the point of arrival to their warehouses, while paying storage fees,” El-Banna explains. “Once the tests are completed, we then give them the release documents to begin distribution.”
To make the system even more efficient, El-Banna has created white lists, which include the names of products and importers permitted to clear their products without inspection, though still subject to periodic spot checks. “There are some importers who have been importing the same products from the same manufacturer for years and their records indicate that they have never had a violation. These are the people who end up on the white lists,” he says.
On average, industrial products clear the standard testing process within a couple of days of arrival. Testing for food items, however, can take longer as the process is more complex. Government regulations require that food shipments undergo health and safety testing by GOEIC, the Customs Authority, and the ministries of health and agriculture. On average, food products take around five days to be released, though some tests may take up to 10 days to complete.
Testing patience
Despite GOEIC’s new facilities and procedures, El-Banna complains that government agencies have been unwilling to adopt a mindset of efficiency. “For example, we spent all this time and effort to upgrade our labs so that they are up to international standards, but there are many agencies that simply refuse to use them and insist on using their own labs. It doesn’t matter that this is time wasted in transporting the samples, or that this creates opportunity for contaminating the sample, or that we have offered that they bring in their own teams to conduct the tests in the lab. To them this is about [ownership] and money generation.”
He explains that labs generally get paid for the number of tests they conduct, and employees bonuses are usually tied to this revenue. Hence labs tend to put their profit ahead of efficiency. “Labs shouldn’t be thinking of profits. They should be trying to ensure that their results are accurate and that the process is efficient. Until today, this is a challenge that we have been unable to solve.”
Testing for products being exported from Egypt is generally voluntary, except in the case of five specific agricultural products that are considered strategic by the government: onions, garlic, peanuts, potatoes and oranges. “Other than these products, if someone wants to have their products tested before export, I’m more than glad to do it,” he says. Exporters may find it prudent to take him up on the offer as many countries require certified testing results before accepting agricultural shipments.
Unfortunately, El-Banna sighs, when an imported product doesn’t live up to expectation people usually assume GOEIC has somehow let standards slip. That’s simply not the case, he insists. The problem is that local importers tend to order the cheapest product. “These products meet the minimum standards required. So they’re cheap quality, but as long as they meet the minimum requirements for the specs we have to release them. The problem is when they break a few days later, people blame me.”
The situation seems bound to improve with the recent arrival of the Consumer Protection Authority, which is educating consumers about their rights and putting pressure on importers to select products with better standards. In the meantime, however, GOEIC agents are being inundated with poor-quality goods and knock-offs that meet standards, but add no value to the market.
One challenge that has yet to be addressed is the issue of copyrighted goods. El-Banna explains that even if a GOEIC agent is fully aware that a shipment contains a product that violates a copyright, the agent has no authority to prevent it from entering or leaving the country provided it meets the minimum specifications set for that item. “[Even if] I can see that the product is fake and I am certain of that fact, my hands are tied and there is nothing I can do to stop it from entering the country because the law doesn’t give me the authority to do anything.”
He gives the example of Nike, which was facing problems with Egyptian importers bringing in shipments of knock-offs of its products. “We’d seized several consignments of [fake goods]. We took all the steps that we’re allowed to under the law and we had the [importer] pay 25 percent of the value of the consignment to customs to hold onto the products until further investigation could be completed. That was the most we could do.”
After that, he says, it was up to Nike to take action. It did, though things didn’t play out the way the company expected. “They filed a lawsuit, which they lost. The importer is now suing them for compensation because there’s a loophole in the law.”
El-Banna hopes legislation will be revised to close such loopholes. This is particularly important if Egypt is to integrate into the global economy. He says GOEIC is ready to adopt any change necessary to support the government’s economic policies. “We are all part of a process that will not be complete until we accept change,” he says.
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