Last fall, Egypt implemented its Single Window platform into its operations and was very successful in obtaining the required advance data.
On March 1, 2022, Egypt will require all importing to be processed under a Bank Letter of Credit. This process change will need to be coordinated and set up between the supplier and the importer.
The Central Bank of Egypt decided to stop dealing with collection documents in the implementation of all import operations and to work with a letter of credits/LG only, as of March 1, 2022.
The Central Bank’s decision excluded branches of foreign companies and their subsidiaries and allowed banks to accept collection documents received for goods that had already been shipped before the issuance of this decision.
The Central Bank stressed that these measures come within the framework of the governance of import operations and the activation of the system of pre-registration of shipments, which will be applied compulsorily as of the beginning of March.
From discussions with banks, this change has already been implemented and the main impact now is that banks will hold the LC amount in full even if there is a credit payment term between the supplier and importer and other impacts will be shown later. We suggest that the supplier and importer discuss this with their local bank to streamline the process. This way, the local bank can offer guidance or recommendations for the type of account or facility needed.
It’s important to remember that the true impact is on the bank documents (between supplier and importer). Once the documents have been processed through the bank, they should be sent directly for clearance.
If you have any questions about this updated regulation, please do not hesitate to contact Emad Tawfik, Country Manager - BDP Egypt.
