The registration in the Register of Experts for Asset Revaluation

The registration in the Register of Experts for Asset Revaluation, as regulated under Egyptian financial and accounting frameworks, represents a critical mechanism for ensuring that individuals entrusted with revaluation assignments possess the required technical qualifications and professional integrity.

Given the significant role that asset revaluation plays in presenting a fair and accurate reflection of financial positions, the establishment of a structured and regulated register has become imperative.

This article examines the legal and procedural requirements for registration, as well as the implications of such registration on the transparency and reliability of financial disclosures within the Egyptian context.

• An appraiser is a professional who specializes in estimating the actual market value of a specific property or asset, based on detailed studies and market analysis. Their work is typically used in the context of sales, purchases, financing, or mortgage processes. Appraisers rely on recognized methods such as comparative market analysis, replacement cost estimation, or income-based valuation to provide a precise and fair value that reflects current market conditions.
• On the other hand, an evaluator is responsible for conducting a broader assessment for a specific purpose. This may include evaluating assets, projects, institutional performance, or even strategic decisions. Evaluations are not always financial in nature and may involve both qualitative and quantitative elements, depending on the nature and objective of the assessment, such as tax evaluations, administrative reviews, or analytical reports.

Requirements for Preparation and Registration with Expert Houses

Pursuant to the provisions of Executive Regulations No. 101 of 2004 issued under Law No. 88 of 2003 on the Central Bank, the Banking Sector, and Monetary System — noting that Law No. 88 of 2003 has been repealed, yet the Executive Regulations remain in effect — Articles 22, 23, 24, and 25 of the aforementioned Regulations govern the rules for the preparation and registration of Expert Houses, as follows:

1- A register shall be maintained at the Central Bank of Egypt “CBE”for the registration of Expert Houses qualified to participate in the valuation of collateral submitted to banks. The register shall include the following:

• The name, legal form, and address of the Expert House.
• Its Commercial Register number and date, or the professional syndicate registration.
• Areas of specialization.
• Date of commencement of activity.
• Names and qualifications of the persons responsible for management and those authorized to approve valuation reports.
• Number and specializations of experts.
• Previous experience and completed projects.

2- Registration with CBE is based on an application submitted using the form prepared by the CBE, accompanied by the following documents:

• An official extract from the commercial register showing that the company’s activities include valuation, or a certificate of registration from the relevant professional syndicate (for individuals).
• Copies of the tax card.
• The company must have been established for at least five (5) years and must have relevant valuation experience not appraisal with at least five (5) years, (with at least two valuations per year) for financially solvent governmental entities.
• A copy of the national ID of the owner, partners, or board members, as applicable.
• Curriculum vitae of those responsible for the management of the Expert House and those authorized to approve valuation reports.
• A list of both full-time and part-time experts, including their qualifications and track record.
• A copy of the company’s contract or articles of association (for entities established as companies).
• A written undertaking by the management to refrain from conducting valuation work for collateral presented to a bank if any conflict of interest exists between the Expert House and the bank.
• A record of valuation assignments completed in the past five years.
• Disclosure of any affiliations with foreign or international Expert Houses or institutions.

3- The application and attached documents shall be submitted to the Board of Directors of CBE for review and decision within Thirty (30) days of submission. The company shall be notified of the decision by registered letter with acknowledgment of receipt within Fifteen (15) days from the date of issuance.

4- The same Regulations also outline the conditions to be met by the persons responsible for managing the Expert House and those authorized to sign valuation reports:

• Possession of a higher academic qualification.
• A minimum of Ten (10) years of specialized experience in valuation, with at least Two valuations per year, for financially sound governmental bodies. Specialization must be in electrical or mechanical engineering.
• Good reputation, with no final convictions in crimes involving honor, integrity, or any offense stipulated in the law or the Anti-Money Laundering Law. The individual must not have been declared bankrupt by final judgment.
• Must not be a board member of any bank operating in Egypt.
• Must not be registered as a valuation expert with the Real Estate Finance Authority, in the case of real estate collateral.

5- The Regulations prohibit the Expert House, as well as its management, shareholders, partners, or engaged experts, from valuing any collateral in which they or their related parties have a direct or indirect interest. They are also prohibited from purchasing any collateral after valuing it.

Registration in the Register of Asset Revaluation Experts

Following the registration of the company with the Central Bank’s register of Expert Houses, it may then apply for registration in the Register of Asset Revaluation Experts maintained by the Financial Regulatory Authority “FRA” in accordance with FRA Decision No. 131 of 2023.

Registration is conditional upon passing the exams prescribed by the FRA, based on the intended purpose of registration.

It is therefore clear that the regulation of registration in the Register of Experts for Asset Revaluation is essential for reinforcing confidence in financial reporting and aligning with the principles of accountability and good governance as stipulated under Egyptian law.

Ensuring that registered experts meet continuous professional development standards and are subject to oversight by competent authorities will enhance the credibility of asset revaluation processes.

In light of Egypt’s evolving economic landscape, the modernization and strict enforcement of registration requirements will serve to promote transparency, fairness, and trust in financial practices.