According to the central bank, branches of foreign companies and their subsidiaries, as well as shipments delivered via express post are exempt from the new policy
Discussion on the Central Bank of Egypt’s (CBE) new import regulations continues to dominate business feeds, with new details released by the bank.
According to the latest details, imports of goods worth up to $5,000 (or equivalent in other foreign currency) will be exempt from the new regulations requiring importers to obtain letters of credit (L/Cs) for their purchases, according to a Federation of Egyptian Banks (FEB).
Released earlier this week, the regulations, which will go into effect next Tuesday on February 22, notes that documentary collection from exporters are not to be accepted by banks to facilitate the import of goods into Egypt. The CBE also dictated that importers must present letters of credit for them to be able to buy goods.
A group of Egyptian importers, represented by the Federation of Egyptian Chamber of Commerce (FECC), the Federation of Egyptian Industries (FEI), and Egyptian Businessmen’s Association (EBA), sent Prime Minister Mostafa Madbouly a letter objecting the decision.
The letter argued that the new policy would have a negative impact on the the competitiveness of Egyptian exports, as well as worsen the effect of the global supply crisis and raise production costs, which would in turn increase prices of goods in the local market.
Madbouly announced the next day that the decision is irreversible.
According to the central bank, branches of foreign companies and their subsidiaries, as well as shipments delivered via express post are exempt from the new policy.
Imports of medicines, vaccines and active ingredients used for pharmaceuticals, as well as tea, meat and poultry products, fish, wheat, oil, milk powder, baby formula, fava beans, lentils, butter, and corn are also exempt.
Banks have been requested to lower its fees for issuing L/Cs to match those for the existing process of documentary collection, according to the FEB statement. Banks are also required to raise credit limits for existing customers and set new limits for new customers, depending on their import volumes. The FEB is also instructing banks to provide L/Cs to all customers who request them as quickly as possible.
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The new regulatory frameworks by the CBE are part of the cabinet’s directives to enhance governance measures related to import operations, and will entail a compulsory pre-registration system for shipments. Prior to this decision, importers had the option to pay for imports by documentary collection as well as Open Account.
