Customs Auctions and Disposal of Goods in Egypt

Customs authorities have broad powers to sell and dispose of goods that remain under customs control.

Imported goods may remain in customs warehouses and storage facilities for various reasons, including confiscation, settlement agreements, the expiration of statutory storage periods, or the failure of their owners to complete customs procedures. In certain cases, goods may also be subject to judicial disputes or administrative measures that delay their release.

To address these situations, Egypt’s Customs Law No. 207 of 2020 and its Executive Regulations establish a comprehensive framework governing the sale and disposal of goods held by the Customs Authority. The legislation regulates the conditions under which goods may be sold, the procedures applicable to public auctions, the allocation of sale proceeds, and the circumstances in which ownership of neglected goods may ultimately pass to the State.

The legal framework also seeks to ensure the efficient management of customs warehouses and ports by preventing congestion and facilitating the disposal of goods that remain under customs control for prolonged periods. In addition, it provides mechanisms for transferring certain goods to governmental entities and public-benefit organizations, whether for consideration or free of charge, subject to the conditions prescribed by law.

Circumstances Giving Rise to the Sale of Goods

Article 66 of the Customs Law grants the Customs Authority the power to sell goods in a number of circumstances. These include goods that have become the property of the Customs Authority as a result of settlement agreements, confiscation, or voluntary waiver by their owners.

The Customs Authority may also proceed with the sale of goods deposited in customs warehouses where their owners fail to release them, re-export them, or transfer them to a free zone, a duty-free market, or a special economic zone upon the expiry of the storage period prescribed by the Executive Regulations. Similarly, goods stored in temporary customs warehouses or on port transit yards may be sold once the applicable statutory period has elapsed.

Different rules apply to goods that are susceptible to deterioration, leakage, or shortage. Given their nature, such goods may only remain in customs custody for the period permitted by their condition. If they are not withdrawn within that period, the competent customs office is required to document their condition and proceed with their sale.

The law further permits the sale of abandoned goods whose owners are unknown and have not claimed them within one month, as well as the assets of projects whose licences in free zones or special economic zones have been revoked, subject to the provisions of the Investment Law.

How the Customs Authority Sells and Disposes of Uncollected Goods

The Sale of Goods under the Executive Regulations

The Executive Regulations supplement the provisions of the Customs Law by establishing the procedures and timelines governing the sale of goods held under customs custody. Pursuant to Article 299 of the Executive Regulations, goods that have devolved to the Customs Authority as a result of settlement, confiscation, or waiver must be sold within one month from the date on which such measures take effect.

As regards goods deposited in customs warehouses and temporary storage facilities, the Customs Authority may proceed with their sale one month after the expiry of the period during which they are permitted to remain in storage. In such cases, interested parties must first be notified by registered mail with acknowledgment of receipt, publication through the competent administrative authority, or electronic mail.

Special rules apply to goods that are susceptible to deterioration or shortage. Owing to their nature, such goods may only remain in customs custody for the period permitted by their condition. Where they are not withdrawn within that period, the Customs Authority is empowered to sell them without prior notice, provided that a report recording their condition is prepared beforehand. If such goods are the subject of judicial proceedings or administrative disputes, the net proceeds of the sale are deposited in an escrow account until a final decision is rendered.

The Executive Regulations also establish specific rules for goods stored on port transit yards, limiting their stay to three weeks, which may be extended for an additional week upon the approval of the competent customs authority.

Sale Procedures and the Role of the General Authority for Government Services

Under Article 300 of the Executive Regulations, the Customs Authority may conduct the sale of neglected, confiscated, abandoned, and waived goods either directly or through third parties, in accordance with the Public Contracts Law and its Executive Regulations. The same rules apply to perishable goods, goods susceptible to leakage or shortage, and animals retained by the Customs Authority as a result of disputes or seizures. The expenses incurred in connection with the sale process are determined in accordance with the rules issued by the Minister of Finance.

To prevent congestion at ports and customs warehouses, Article 301 permits the Customs Authority to notify the General Authority for Government Services of goods and vehicles classified as neglected within fifteen days from the date of such classification. Upon receipt of the notification, the General Authority for Government Services is required to take the necessary steps to complete the sale within one month.

The determination of the sale price is governed by Article 302, which requires the Customs Authority and the General Authority for Government Services to establish the local market value of the goods and the basis upon which that value has been assessed. Where the market price exceeds the value determined by the Customs Authority, the market price becomes the starting price for the sale. Conversely, where the market price is lower, a joint committee formed by both authorities must attempt to agree on the appropriate price. In the absence of such agreement, the General Authority for Government Services is empowered to determine the starting price in light of prevailing market conditions and the condition of the goods at the time of sale.

Importantly, the Executive Regulations provide that, in the case of goods susceptible to deterioration, leakage, or shortage, the sale may proceed at the highest price obtained through the auction process without regard to the customs value assigned to the goods.

Completion of the Sale and Distribution of Proceeds

Article 303 provides that goods and vehicles sold through auction are released once the purchaser submits a certified copy of the sale contract evidencing full payment of the purchase price. Delivery is carried out by a committee formed by the Customs Authority, which includes the entity responsible for conducting the sale, within a maximum period of two weeks from the date on which the sale contract is approved. Where the purchaser fails to collect the goods within thirty days, the goods are offered for sale once again in accordance with the rules governing public contracts.

Participation in the auction process is subject to the payment of a security deposit to the Customs Authority. Pursuant to Article 304 of the Executive Regulations, the purchaser must pay the remaining balance of the purchase price within fifteen days from the date on which the auction is awarded. Failure to comply with this requirement triggers the procedures prescribed by the Executive Regulations of the Public Contracts Law No. 182 of 2019.

The Executive Regulations further require the General Authority for Government Services to provide the Customs Authority with a detailed report on the auction process, including the terms and conditions governing the sale, the contracts concluded, and the value of the goods sold. Such report must be submitted within fifteen days from the end of the auction session.

Once the purchaser has paid the full purchase price, the Customs Authority is required to distribute the proceeds of the sale in accordance with Article 69 of the Customs Law. The proceeds are allocated in the following order of priority: sale expenses and costs incurred by the Customs Authority, customs duties, taxes and other amounts due to the public treasury, storage fees, and freight charges.

Any remaining balance is deposited with the Customs Authority as a trust amount and may be claimed by the owner within five years from the date of sale. In the case of prohibited goods, however, the remaining proceeds accrue to the State treasury.

Recovery of Goods and Disposal of Unsold Property

The Customs Law and its Executive Regulations draw a clear distinction between the rights available to the owner before and after the completion of the sale process. Pursuant to Article 307 of the Executive Regulations, once the public auction has been concluded and the sale contract approved by the competent authority, the original owner may no longer request the withdrawal of the goods or their return.

Nevertheless, Article 308 preserves the owner’s right to recover the goods prior to the conclusion of the auction. In such cases, the Customs Authority must take the necessary measures to remove the goods from the sale process, provided that the owner or his representative bears all actual expenses incurred by the Customs Authority or the entity conducting the sale.

The Executive Regulations also establish a separate framework governing the disposal of neglected goods that remain unsold. Under Article 70 of the Customs Law and Article 309 of the Executive Regulations, the Customs Authority may dispose of such goods, with or without consideration, provided that they have been offered for public auction at least twice within a period of three months, that their owners have failed to recover them within the three months following the last auction, and that the interested parties have been duly notified and thirty days have elapsed since such notification.

Where these conditions are satisfied, the goods are deemed to have been abandoned in favour of the State. The Customs Authority may subsequently transfer them to governmental bodies, public legal persons, or public-benefit associations in accordance with the procedures prescribed by the Executive Regulations.

Disposal of Goods to Public Entities and Public-Benefit Associations

Articles 310 to 314 of the Executive Regulations govern the disposal of neglected goods that remain unsold after satisfying the conditions set out in Article 70 of the Customs Law. In such cases, the competent authority within the Customs Authority may offer those goods to governmental entities, public legal persons, and public-benefit associations, either for consideration or free of charge.

Where disposal takes place for consideration, the transfer must comply with the provisions of the Public Contracts Law. By contrast, disposal without consideration requires a formal request approved by the competent minister, governor, or supervisory authority, as the case may be, together with the approval of the President of the Customs Authority. The transfer of vehicles, however, remains subject to the approval of the Minister of Finance.

The Executive Regulations further identify specific categories of goods that may be transferred without consideration to designated entities. Weapons, ammunition, surveillance equipment, and aircraft may be transferred to the Ministry of Defence, the General Intelligence Service, or the Ministry of Interior, while medicines and medical devices may be allocated to the Ministry of Health, university hospitals, and higher education institutions. Textiles and leather products may be transferred to the Ministry of Social Solidarity and the Egyptian Red Crescent, whereas books, magazines, and audiovisual materials may be allocated to educational and cultural institutions.

The Regulations also permit the transfer of chemicals, pesticides, and fertilizers to specialized governmental entities, as well as furniture and vehicles to certain public authorities. In addition, the Tahya Misr Fund may receive a number of the categories specified by the Executive Regulations.

Pursuant to Article 313, goods disposed of in favour of governmental entities, public legal persons, and public-benefit associations benefit from exemptions from customs duties, value-added tax, and other taxes and charges payable to the public treasury. Such goods are likewise exempt from import restrictions imposed under the relevant legislation. Nevertheless, the recipient entity remains responsible for the actual expenses incurred by the Customs Authority in connection with the transfer and delivery of the goods.

Finally, Article 314 requires all applicable regulatory restrictions and approvals to be satisfied prior to the disposal of any goods under this framework.

Conclusion

The sale and disposal mechanisms established under Egypt’s Customs Law and its Executive Regulations reflect the legislature’s attempt to reconcile the protection of private property with the efficient management of customs warehouses and ports. Through a graduated framework, the law regulates the circumstances in which goods may be sold, the procedures governing public auctions, and the conditions under which ownership may ultimately pass to the State.

At the same time, the legislation affords interested parties several opportunities to recover their goods before the completion of the sale process, while ensuring that neglected goods may be redirected to governmental entities and public-benefit organizations where appropriate. The framework therefore serves not only as a mechanism for enforcing customs obligations, but also as an instrument for preventing congestion at ports and facilitating the effective administration of customs operations.

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