Dear Sir / Chairman of the Board

Greetings,

In the context of the interest the Central Bank of Egypt attaches to contributing to the enhancement of the national economy and working to encourage local products and strengthen their competitiveness against foreign products, and directing banking resources in a manner that achieves real development in society with a focus on goods and production supplies that will drive the economic wheel. And in light of current developments and the Central Bank of Egypt's support for local industry, the following has been decided:

1. Regarding import operations conducted on the strength of collection documents, the execution of such operations through collection documents received directly by banks via banks abroad is restricted. Collection documents received directly by customers are not accepted for a period of one month from the date of this circular to apply this.

2. Banks are required to obtain a cash security deposit of 100% instead of 50% as stated in Circular No. 86 dated June 28, 2010, and its subsequent circulars. This applies to documentary credits opened to finance the import of goods for commercial companies or for the account of government entities, as well as in the case of enhancing customs bonds for the account of those entities, or to meet any obligations on the bank, including issuing letters of guarantee regarding import operations for merchants and government entities. The exception mentioned in Circular No. 124 dated September 30, 2010, and its subsequent circulars, the latest of which was on May 13, 2015, is limited to import operations of pharmaceuticals, vaccines, their chemical materials, and infant milk only from the aforementioned cash security.

The above shall be applied to import operations commencing from January 1, 2016.

It is emphasized that the authorized credit limits granted to customers by banks shall not be used to settle the aforementioned cash security, including credit facilities secured by commercial or financial papers.

As for import operations for importing goods for non-trading purposes, such as what factories import of capital goods or production supplies and raw materials, etc., they are not subject to any restrictions other than the usual banking rules.

3. Not allowing the re-financing of import operations for trade purposes which are subject to a cash security of 100% as stated in the previous item through granting a temporary facility in foreign currency according to the letter of the Deputy Governor of the Central Bank of Egypt No. 9 issued on January 14, 2013. The permission to re-finance the following import operations continues:

a. Operations for non-trading purposes.

b. Basic food and supply goods (excluding the General Organization for Supply and Trade).

c. Pharmaceuticals, vaccines, their chemical materials, and infant milk.

Please be so kind as to alert regarding taking the necessary action to implement the aforementioned decision.

Accept the highest regards,
Tarek Amer