According to a binding decision by the Egyptian cabinet, Egypt will only accept letters of credit (LCs) for several goods when conducting import transactions. This decision is aimed at increasing the quality of goods imported from abroad, as well as ensuring the management of the foreign trade system and the protection of local industry.
Now the Egyptian side has clarified that all payment terms are affected by the new regulation. Advance payment, cash payment, cash against documents and open payment terms are no longer permitted.
The only exceptions are for multinational companies based in Egypt and for branches and subsidiaries of multinational companies in Egypt*.
The following types of deliveries are exempt from these requirements:
– Parcel shipments and courier/express mail shipments up to a value of USD 5,000 or the equivalent in other currencies.
– Supplies of medicines, vaccines and their ingredients.
– Supplies of certain food products: Wheat, tea, meat, poultry, fish, edible oil, milk powder, baby milk, beans, lentils, butter, maize.
– Supplies to multinational companies with their headquarters in Egypt and to branches and subsidiaries of multinational companies in Egypt.
*The German Chamber of Commerce Abroad (AHK) Egypt has set up an FAQ website about L/C requirements (German language only).
Source: Chamber of Commerce (IHK) München und Oberbayern