The Central Bank of Egypt (CBE) has decided that from March, Egyptian importers can only import goods using letters of credit and instructed banks to stop processing exporter collection documents. The Central Bank of Egypt instructed banks to stop processing exporter collection documents.
Now the payment methods of our well-known Egyptian customers are mainly D/P and L/C. Because in 2016, Egypt issued a regulation, “Bills of lading, invoices, certificates of origin and other documents must be sent to the bank of the destination country through the exporter’s bank. If the owner sends it directly to the Egyptian buyer or the buyer’s bank will be rejected” , that is, forcing our export enterprises to complete the trade through bank presentation, the process complexity and cost are much higher than the previous wire transfer.
The new regulations now restrict that Egyptian importers can only pay by letter of credit, which is to facilitate the Egyptian government to strengthen import supervision and reduce dependence on foreign exchange supply.
Therefore, importers who are unable to issue letters of credit in Egypt are not happy. After the announcement of the decision, the Federation of Egyptian Chambers of Commerce, Industry Federation and importers filed complaints one after another, believing that this move would lead to supply problems, increase production costs and local The price of goods will have a serious impact on small and medium-sized enterprises that are difficult to obtain letters of credit, and the government is called on to consider carefully and withdraw its decision.
But the governor of Egypt’s central bank said he would not reverse the decision and urged companies to comply with the new rules and “not to waste time on disputes that have nothing to do with the stability and good performance of Egypt’s foreign trade”.
The Central Bank of Egypt insists that it will not revise the new import regulations.
However, according to the latest news on February 17, the Central Bank of Egypt has relaxed some restrictions, excluding essential goods such as wheat, corn, beans, poultry, milk powder, chemicals and medicines from the list of imported goods to which the new payment rules apply. Egypt’s central bank excludes medicines, food from new import rules.
It is worth noting that, in addition to the latest “obstacle” announced by the Central Bank of Egypt on February 14, Egypt has been making frequent moves in import recently-on October 1, 2021, its important new import regulations “Advanced Cargo Information (Advanced Cargo Information ( ACI) declaration “predicted cargo data regulation came into effect, requiring all imported goods in Egypt, the consignee must first forecast cargo data in the local system to obtain the ACID number and provide it to the consignor; Chinese exporters need to complete the registration on the CargoX website , and cooperate with customers to upload necessary information. In order to continue to export to Egypt smoothly, how many Chinese companies have repeatedly operated on certification.
Soon after, Egypt adjusted tariffs, such as a 5% tariff on photovoltaic cells imported as a final product and a 10% tariff on imported mobile phones. Its purpose is to encourage national industry and deepen local production, enhancing the competitiveness of Egyptian products in the global market.