More moves from the central bank to ease in new import rules + Nafeza trials for air freight to start soon
CBE teams up with Credit Guarantee Company to help banks cover risk when issuing letters of credit to importers: The Central Bank of Egypt (CBE) is launching an initiative with the Credit Guarantee Company (CGC) to help “cover the risks associated with issuing letters of credit from banks,” the CBE wrote in a letter seen by Enterprise and circulating widely in the local press. The move comes to encourage banks to issue new letters of credit (L/Cs) for importers who had previously facilitated their purchases through documentary collection.
The details: CGC will waive fees to guarantee the L/Cs for banks for six months from the initiative’s launch. The company is set to brief banks on the parameters of the initiative.
What new import rules? Starting tomorrow, banks will only accept L/Cs to facilitate the purchase of imports, and will no longer accept documentary collection. The central bank has announced exemptions and other measures to facilitate the move, which has drawn criticism from trade and industry organizations, who said it would drive up the price of goods in the local market and hurt the competitiveness of Egyptian exports.
ALSO IN TRADE- A trial to extend the Advance Cargo Information (ACI) system to air freight will begin “soon,” according to a Finance Ministry statement. Once the trial period is complete, only shipments that are registered through the system will be allowed to enter the country through airports, according to the statement. A three-month trial of the system for air cargo had previously been tipped to begin in January for an April launch.
What’s ACI? It’s a key part of the Finance Ministry’s digital customs system known as Nafeza, which went live for maritime importers in October. For more on ACI and Nafeza, head to our latest in-depth look at the initiative here.