Egypt: Procedures for import transactions to change: New decision affecting Dutch exports to Egypt
Are you exporting to Egypt? The way your trading partners will process payments will change.
Last week Sunday, Egypt's central bank decided last to stop accepting “documentary collection” when processing import operations. Rather, “Letters of Credit” (L/Cs or documentary credits) will be used to finance the import of goods.
Egypt's central bank governor said new rules, requiring importers to use letters of credit, will be implemented starting in March. Importers fear that these measures could inflate the costs of products.
To prepare for implementation as of 22nd of February 2022, any new bill of lading will need to go through the new procedures.
The decision exempted the following:
• International companies that have branches in Egypt and import from their own company
• Shipments received by express mail
• Shipments up to the amount of 5 thousand US dollars or its equivalent in other currencies.
• Medicines, serums and related chemicals
• The following food commodities: tea, meat, poultry, fish, wheat, oil, milk powder, baby milk, beans, lentils, butter, corn.
Enterprise Press, reports that there is concern among the importers that this decision will cause supply issues, put pressure on production costs and local prices, and freeze SMEs out of the industry because it would be harder for them to obtain L/Cs. At the same time, analysists suggest that while the procedure is more complex this will provide more surety to exporters. For more analysis, check article in Enterprise Press.
The agricultural team of the embassy will follow up on developments and stand ready to provide updates when needed: KAI-LNV@minbuza.nl