Directive No.

FXD/28/2006
Flower Export and Foreign Exchange Repatriations
Whereas the Floricultural development and growth in the country is a promising business activity that
is attracting many investors to undertake the business and is anticipated to be an important source of
foreign exchange to the economy in the future;

Whereas the export of flower requires a special attention, follow-up and support in processing the

export formalities by banks, recording the transactions and shipments.

Whereas the price of flower fetched at various international markets vary due to various factors,

which requires regularly monitoring, and follow-up of the trading price development and proceed

repatriation using the appropriate mechanisms put in place.

Now, therefore, in accordance with the Monetary and Banking Proclamation No. 83/1994 article 39

(1) and (2), this Directive is issued to monitor the export of flower, proceed repatriations and trading price.

I. Short Title

This Directive may be cited as Flower Export and Foreign Exchange Repatriations Directive No.

FXD/28/2006"

2. Definitions

In this Directive, unless the context provides otherwise, the following terms shall have the

meanings ascribed below:-

(a) "NBE" shall mean the National Bank of Ethiopia

(b) "Banks" shall mean Commercial Banks that process export permits
 And collect proceeds from buyers and report to NBE.

(c) "Direct Sales Contract" - flower export sales arrangements made on contractual

or consignment basis.

(d) "Flower Auction Market" - a specialized market where flowers of different

species, grade and quality are traded on the basis of bid price offered.

(e) "Auction Processing Agent" - an organization/individual officially

Representing exporters at flower auction centers, processing the sales at the centers,

collecting payments and transferring the proceeds to exporters.

(f) "Auction Sales Outcome Report" - A report that is provided by the

auction center to the exporter after the flower is sold on auction and handing over the

items to the winners.

(g) "Specialized Report On Flower" - A report prepared by the auction

center and released to market participants, by country and geographical locations.

(h) "Place of Auction" - Generally refers to flower auction centers in many

countries and specific to the ones in Netherlands.

3. Flower Export Arrangements and Mode of Payments

1 Sales arrangements shall be carried out in the following two forms:-

(a) Direct sales

I. Contract base sales

iii negotiated sales

(b) Sales at the Auction Market

2 The Mode of payments applicable for flower exports

(a) Consignment sales (Open Accounts);

(b) Letter of Credit (sight, acceptance upto 60 days);

(c) Cash Against Document (sight, acceptance upto 60 days); and

(d) Advance payment (transferred through banking system).

4. Flower Export Permit Processing by Banks

The following shall apply for processing flower export permits

1 All requirements indicated under FXD/26/2004 issued for processing

Export permits, monitoring the Fx repatriation and documentation

Requirements shall be applicable for the export of flower as well.

2 In addition to article 4.1 of the above,

(a) Exporters are required to indicate on the export application the

Market where the flower is intended to be sold. (Auction Market/Direct

Market), including the name of the agent delegated To process on behalf of the exporter.
 (b) Exporters are also required to submit copies of the following documents along with the

application

(I) Registration certificate or acceptance letter to participate At the auction center

named.

(ii) Copy of the agreement signed with the intermediary agent

Authorized for handling the sales of the flower at the Auction center. The

agreement should explicitly indicate charges and fees payable. The total charges deducted should

not be more than 25% of the sales proceed expected from a particular export.

(iii) Purchase contracts or requisition for supply of flower from The buyer. (not

applicable for auction sales)

(c) If exporters are using a specific bank and branch to process their export permits, items

required under b(i) and (ii) can be placed in apermanent file and may not be necessary to attach

with every export application. However, if changes are made the exporter is responsible to update

the file and duly inform the bank.

3 On the export application to be presented, the quantity and variety of roses

(summer/cuttings) of flower to be exported shall be expressed in Number of stems

including the total estimated value in foreign currency and the estimated price per stem.

Partial shipments scheduled should aggregate and tally to the quantity and value expressed in

the original application.

auction. Accordingly, the application form presented by the exporter should reflect the

prevailing price per stem for the flowers to be sold.

5 Any partial shipment effected should bear the original permit number issued by its bank

and partial shipment reference to which the quantity shipped is supposed to be

consistent to the balance remaining under the permit. Exporters should therefore

carefully check the balance and process the export provided sufficient balance in terms of

quantity is available under the export permit.

5. Repatriation of Export Proceed

1 Exporters shall have the responsibility to repatriate fully the net amount earned from the

market in compliance with Article 4.2-b (ii) within 90 days from date of permit issuance.

2 Transfer of payments by the Auction agents or the direct buyers shall Clearly identify the

bank permit or partial shipment ref and the appropriate references from the exporter. This requirement

shall also be included on each invoice issued by the exporter in order to draw the awareness of buyers

or the processing agents.

3 Any deductions retained out of the export proceeds for the purposes of covering agents fees

and processing costs should clearly be stated in thetransfer documents by providing

others.

6. Reporting Requirements

The following organizations and entities shall submit reports to NBE on regular basis.

1 Commercial Banks

a) Banks shall report the status and position of flower exporters by providing details of

the export permit issued, partial shipments made, proceeds received against

the permits issued and deductions made as well.

b) All reports submitted to NBE shall be supported with documents

and relevant information confirming fulfillment of the export processes in line

with the existing directives and procedures.

2 Flower Growers & Exporters' Association

a) The flower growers/exporters Association shall forward flower auction prices fixed at

the auction market specially the prices offered for flowers from Ethiopia,

Tanzania, Uganda and Kenya on weekly intervals to NBE.

of exporters systematically picked shall be Forwarded by the Association to

NBE on weekly basis.

c) Flower exporters shall arrange for proper information flow through

Their Auction Processing Agents who are expected to provide reports on the

outcome of auction results and details of the Exported transferred including deductions

made from each consignment delivered at the auction center to their respective banks

who issued the export permits.

3 Ethiopian Customs Authority

The Ethiopian Customs Authority shall send to NBE monthly reports of flower

exports processed through their office classifying the details by exporters name,

type of flower, number of stems, and the estimated values in Foreign Exchange,

Bank permit number or partial shipment reference if any.

4 Flower Exporters

The flower exporters to their bank who issued the export permits shall submit
the following reports. If any rejections, damages or spoilage of flowers, partially
or wholly encountered after shipments are effected, the situation Should
immediately be reported by the exporter to its bank with supporting documents
attached.

7. Ex-post Price Verifications and Monitoring

price verifications and checks the proper compliance to the regulation in place.

2 Corrective actions and measures shall be taken based on the findings of the ex-post price

verifications and inspection reports presented.

8. Effective date

This Directive shall enter into force as of 28th day of August, 2006

Teklewold Atnafu

Governor

National Bank of Ethiopia