Tightening control over export earnings for some products

Cairo on 28 April 2013

Mr. / Chairman of the Board of Directors

Bank of Egypt, greetings,

In light of the Central Bank of Egypt's commitment to encouraging banks operating in the Egyptian banking sector to continue supporting and encouraging export activities in various economic sectors, and its belief in its primary role in preserving the country's foreign exchange reserves and attempting to develop them, especially during the current period due to the positive impact on the national economy.

In this context, it was noted that some exporters conducting export activities outside the banking system and directing their private export proceeds (in agreement with their clients abroad) to accounts outside the Arab Republic of Egypt, which negatively affects the state's foreign exchange reserves.

We refer in this regard to the decision of the Minister of Industry and Foreign Trade No. 235 for the year 2013 issued on 18 April 2013 (attached image), which requires the execution of the export transaction for the exporters of the products mentioned in the decision through one of the banks operating in the Arab Republic of Egypt and proving this through providing a banking certificate to the relevant customs authority before shipment.

In light of the above, banks must adhere to the following procedures to tighten supervision on the inflow of proceeds from export transactions related to the products mentioned in the aforementioned ministerial decision:

• The Bank must issue the aforementioned certificate in exchange for obtaining a written undertaking from the client that includes the maximum expected period for the arrival of export proceeds, and must monitor the arrival of proceeds during the specified period.

• The Bank issuing the certificate must obtain a copy of the instructions addressed by the exporter to the importer, including instructions to direct the proceeds of the export transaction to the bank itself.

• In the event that the proceeds of the export transaction do not arrive within a maximum period of 180 days from the date of shipment, or if the exporter proves the date and period of arrival of proceeds contrary to the above with a maximum period of one year from the date of shipment - and after the bank's follow-up with the client in this regard without success, the Bank must notify the Central Bank of Egypt of the client's name and group under the concept of the single client and the parties associated with it issued by the Central Bank, so that the Central Bank in turn communicates with the banking apparatus to include the client in the list of defaulting clients, and thus no similar operations will be executed for the client and group in the future.

• The Bank must also notify the Ministry of Industry and Foreign Trade (Foreign Trade Sector) and the Customs Authority to take the necessary measures on their part as well.

Please accept the highest respect,

Hisham Ramy Abdel Hafiz

Arab Republic of Egypt
Ministry of Industry and Foreign Trade

Minister of Industry and Foreign Trade No. 235 for the year 2013

Minister of Industry and Foreign Trade

After reviewing Law No. 118 for the year 1975 concerning Import and Export, And Law No. 88 for the year 2003 issuing the Central Bank of Egypt Law, the Banking System and Currency Law, And Ministerial Decision No. 770 for the year 2000 concerning issuing the executive regulations for the provisions of Law No. 118 for the year 1975 concerning Import and Export and procedures for inspection and control of exported and imported goods, And based on a memorandum from the advisor to the Minister of Trade regarding the coordination of the work of the committee formed to study the request of the Central Bank of Egypt to convert the value of some Egyptian commodities through banks.

(Article One)

It is required for the export of the goods listed in the attached list to pay their full value denominated in convertible foreign currencies through one of the banks operating within the Arab Republic of Egypt and approved by the Central Bank of Egypt, either by opening a letter of credit covering the full value or full cash transfer or bank transfer before shipment, or one of the accepted methods in shipment, in which the exporter must provide a banking certificate to the relevant customs authority before shipment.

The Ministry of Industry and Foreign Trade (Foreign Trade Sector) and Customs must notify the Ministry of Industry and Foreign Trade (Foreign Trade Sector) and the Central Bank of Egypt with a weekly statement of shipments exported that comply with these rules.

(Article Two)

This decision shall be published in the Egyptian Gazette and shall be effective from the date of its publication.

Minister of Industry and Foreign Trade

The goods for which it is required upon export to pay their full value in convertible foreign currencies through one of the banks operating within the Arab Republic of Egypt:

The Goods	Mark
Gold and its manufactures	V
Urea	V
Copper bars	V
Products of iron or steel	V
Rods of iron or steel	V
Carbon steel	V
Iron beams	V
Cotton	V
Natural calcium phosphates	V
Aluminum in its raw form	V
Cane sugar or beet sugar	V
Fertilizers	V
Marble and granite in raw or roughly shaped form or cut only by sawing or otherwise	V