Egypt Central Bank Circular on Import Export Companies
Type
Legislative Insight
Date
10 Nov 2022
Jurisdiction
Egypt
Taxonomy
Banks, General Company Law & Business Entities, Exports
Legal reference
Egypt Central Bank Circular No. 49/2022
On February 12, 2022, the Central Bank of Egypt issued a circular to all Egyptian banks instructing them to stop dealing through collection documents/documentary collection for import export companies. Branches of foreign companies and subsidiaries of foreign companies are the only exception. It seems that these aggressive instructions have been issued to control moving foreign currency abroad as a consequence of devaluation and growing inflation. The outcomes is that import export companies are found between a rock and a hard place on how to move forward and maintain their business. The question arises whether import export companies could have a legal exit to survive this situation.
Analysis
Central Bank’s instructions on documentary collection
On February 12, 2022, the Egyptian Central Bank has issued Circular No. 49 to all Egyptian banks instructing them to stop documentary collection for import export companies, with the exception of foreign companies’ branches and subsidiaries. This circular caused confusion in the import export market. On June 2022, the CBE issued another circular answering some of banks’ enquiries on how to implement the said instruction and remove confusion among import export companies. The circular included the following facts: