EGYPT: Letters of Credit No Longer Required for Imports of Inputs

Companies in Egypt importing production inputs and raw materials will soon return to the old cash-against-documents (CAD) system or the documentary collection process to finance purchases, following presidential decrees published by Egypt’s State Information Service on 10 May 2022. The move specifically eases requirements issued in February 2022 by the Central Bank of Egypt (CBE) ordering trade finance banks to shift to LCs and cease the use of CAD. The rules exclude branches of foreign firms and their subsidiaries, however, and trade in essential goods. 

The President has also ordered the creation of a working group monitoring the import system. The working group is authorised to add or remove procedures on a case-to-case basis to maintain production cycle continuity to meet the basic requirements of the population.