Prior import deposit

A deposit required by a government of a specific sum, in domestic or foreign currency, usually corresponding to a certain percentage of the value of the imported products. Such deposits are characteristically held without interest, sometimes for many months -from the time an order is placed until after the import transaction is completed – and represent real costs to importers. The purpose of prior deposits is mainly to discourage imports, particularly for balance of payments reasons, and they are generally recognized as non-tariff barriers to trade.

Related entries