Ethiopia: ERCA to Seize Chinese Telecom Huawei’s U.S.$13 Million Worth of Equipment

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The Ethiopian Revenues & Customs Authority (ERCA) is to confiscate 13 million dollars worth of equipment imported in late 2012 by the Chinese telecom company, Huawei Technologies. The equipment was allegedly imported in the name of ethio telecom without the latter’s knowledge.

The measure came following successive investigations by the Ethiopian Shipping & Logistics Service Enterprise (ESLSE), Ethiopian Cargo (ET Cargo) and the House of People’s Representatives (HPR). The investigations finally pointed out that the company had imported the equipment on behalf of ethio telecom. The latter signed an 800 million dollar telecommunication expansion deal three months ago with Huawei.

Huawei imported a total of 235 items, which included energy storage units and various types of batteries through the ESLSE, on November 19 and 20, 2012. These were described on the commercial invoice as for ‘ethio telecom network expansion projects’.

On the other hand, other equipment, including microwave telecommunication products, with a gross weight of 11,334kg, were brought into the country through ET Cargo by the company on behalf of ethio-telecom, on December 8, 2012.

The equipment has been stuck at ET Cargo and the Modjo Dry Port since late November 2012. This is about nine months before the company signed the deal with ethio telecom.

The disclosure came as the ESLSE lost patience with ethio telecom for leaving what it believed was its property for over two months at the dry port, leading to congestion.

The Enterprise filed an appeal with the Transport Standing Committee at the HPR, which then appealed at the Science, Communication & Technology Affairs Standing Committee. The latter contacted ethio telecom at the end of the last fiscal year to request an explanation.

When asked by the House, however, ethio telecom claimed that it has no property at the dry port. In a letter ethio telecom wrote to the ERCA last week, it stated that the properties do not belong to them, nor did they allow Huawei to import the equipment.

The state-owned telecom service provider signed a 1.6 billion dollar telecom service expansion project with Huawei and its Chinese rival, ZTE, on July 25 and August 18, 2013, respectively. Their specific assignments, however, are yet to be determined.

Following ethio telecom’s letter, a second letter was dispatched, this time from the ERCA’s head office, directed to the Customs Clearance Procedure Department of the branch office found inside ET Cargo. The Department, which is responsible for handling goods imported through the airline, was told to take the appropriate measure ‘per the law’.

“Discussion was held among officials here and the goods will be confiscated,” an official at the Customer Service Directorate at the ERCA told Fortune, on condition of anonymity.

A similar measure is to be taken at the dry port as well, Fortune has confirmed.

The law says goods left at the port for more than two months should be confiscated.

“They [Huawei] have been using our weakness and tolerance inappropriately,” said Desalegn Tefera, port & operation service deputy CEO at ESL.

Celia Huang, Huawei’s public relations officer, declined to comment on the issue.

BY BEWKET ABEBA, Addis Fortune