The amended law was adopted during the House's 24th regular session on 9 June 2026, passed by majority vote with two abstentions, and is now in force as Proclamation No. 1425/2018.
Vehicle Confiscation Provisions
The proclamation mandates confiscation of vehicles used in smuggling activities, a measure lawmakers justified by citing a widening gap between the Customs Commission's enforcement capacity and the scale of illicit trade. The law states that any vehicle fitted with a compartment enabling concealment of goods, or found fully loaded with contraband, is subject to confiscation. Some lawmakers raised concerns during debate about asset seizure in cases where vehicle owners were not directly involved in the criminal act; the Ministry of Revenue's own account of the session notes that council members emphasized property should not be confiscated where the owner was not involved, and that owners who hand over vehicles to drivers are expected to hire trustworthy, law-abiding drivers and carry appropriate insurance against damage or illegal acts.
Financing Mechanism
Under Article 62(2)(b), revenue obtained from the sale of goods seized in contraband cases will be used for Customs Commission capacity-building activities, in accordance with a directive to be issued by the Ministry of Finance.
Rationale
Desalegn Wedaje, chairperson of the House's Planning, Budget and Finance Affairs Standing Committee, said the reform aims to curb contraband, align customs procedures with international standards, and resolve longstanding implementation gaps and importer complaints. He added that the revised law supports the country's growing manufacturing sector and encourages investment.
Other Administrative Changes
The proclamation extends storage periods for imported goods, from 15 to 45 days for sea and land transport and from 10 to 30 days for air cargo, citing operational realities. It also changes how foreign currency exchange rates are determined for customs valuation, requiring use of the National Bank of Ethiopia's indicative exchange rate on the day import declarations are submitted and accepted — a change expected to reduce revenue losses.
Importer-Facing Reforms
To improve access to justice, the law reduces the upfront payment required to file customs appeals, from full payment to 50% of the disputed duty, and introduces a partial release system allowing goods to be released in stages where importers face liquidity constraints. It also lets customs authorities reject declared transaction values where a buyer-seller relationship is deemed to have influenced pricing, unless importers provide sufficient proof otherwise, and establishes confidentiality protections for importer pricing information except where required for court proceedings.
Anti-Smuggling Scope
The proclamation introduces stricter penalties covering non-traditional smuggling channels, including penalties equal to 100% of the market value of animals found involved in contraband activity.
