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Monday, 14 March 2022

Fresh exemptions from filing L/Cs for some imports + central bank exempts some foodstuffs from cash cover for another year

No L/Cs required for operational imports: Some goods imported by companies and organizations for their own use — as opposed to for resale or as raw materials for manufacturing, for example — will be exempted from filing certain customs forms with banks, including letters of credit (L/Cs), the Central Bank of Egypt announced in a circular (pdf) last week. As of the beginning of March, banks have stopped documentary collection as part of the import cycle after the CBE instructed them to only accept L/Cs

The imports that don’t require L/Cs: The paperwork isn’t necessary for own-use imports worth up to USD 25k made once every six months. Machinery and equipment for projects implemented by Egyptian companies abroad is also newly exempt — such as construction equipment bought by a local firm to complete a project in a foreign country, which the firm then ships back home once the project is completed. Imports by embassies, consulates, commercial service bureaus, and international and regional organizations also get a pass on the forms.

The list of imports exempted from L/Cs is growing. It now includes: transactions between freezones and overseas companies; some types of cross-border trade; temporary imports and imports for re-export; imports by foreign companies; those made via express shipment; imports of goods worth up to USD 5k; and a raft of commodity and pharma imports.

ALSO IN TRADE- CBE extends cash cover for foodstuffs: The central bank is extending (pdf) the exclusion period for rice, lentils, and fava beans from their 100% cash cover for another year, ending 15 March, 2023. The CBE has extended the exemption period annually (here and here) since it was first introduced to facilitate imports of essential commodities in 2019.

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