News | Letter of Credit for exports to Egypt become mandatory from 13.02.2022 - New Legislation in place!

The Central Bank of Egypt has stopped the usage of documentary collection for all imports into the country with immediate effect from 12 February 2022 leaving letters of credit as the only acceptable method for payment.

As one of the governance procedures to regulate the importation process of goods into Egypt, the decision was made to stop all import transactions through collection of documents and use bank to bank transactions instead.

This came with a few exceptions which included branches of foreign companies and their affiliated companies. Documentary collection will only be accepted for goods shipped to Egypt before the date of this decree (12 Feb 2022). This decree came as Egypt is making the usage of the ACI system mandatory as of 1st of March 2022

Decision to make LoC as the only approved way of importing goods to Egypt, was followed by announcements of exemptions of sectors to the above regulation. The Central Bank of Egypt (CBE) excluded imports of medicines, serums, relevant chemical substances, and some food commodities from the recent decision.

The food items that were excluded include: tea, meat, chicken, fish, wheat, table oil, baby formula, powder milk, bean, lentils, butter, and maize.
The exclusion decision also applies to express mail shipments and shipments that are worth up to $5,000 or an equivalent amount in other currencies.

The CBE has also directed all banks to reduce their commission for opening documentary credits to be equal to the commission paid for collection documents, as not to add financial burdens to the trader.

Please contact us at info@theebcc.com if your business is affected by these changes or if you need any further information/clarification.

Please see FAQ regarding this legislation here