CBE Circular on the Export and Impo

As part of completing the reform procedures pertaining to foreign currency in Egypt, the Central Bank of Egypt (“CBE”) issued on 7 August 2019 new instructions regarding the standards for exporting and importing the residue foreign currency in Egypt,[1] giving banks a period of six months from the date of issuing its circular to comply with the new standards, i.e., before 7 February 2020. In particular, the circular regulates the export business, detailing its conditions and procedures. It is to be noted that what is referred to is the actual exportation of foreign currency (banknotes) and not merely their transfer abroad. According to the new circular, banks wishing to undertake the export of foreign currency must obtain a license to do so from CBE. An application for licensing must be submitted but only during the month of January of every year, and several conditions must be met, the most important of which are:

• The bank must have in place policies and procedures regarding the export process and its supervision as well as systems for anti-money laundering and terrorism financing. Such policies and procedures must have been approved by the bank’s board of directors.

• The contracts that will be used in this respect must be reviewed by the legal department, the risk management department, and the compliance department of the bank.

• Bank personnel working in this field must receive special training.

• CBE’s approval must be obtained in case the export will take place through a money export company.

• Banks could be authorized to contract with foreign entities to export banknotes provided that such entities satisfy special conditions that are stated in this new circular.

• A maximum of USD 100 million, or its equivalent, may be exported at any given time.

• The bank must submit a statement showing that it has sufficient balance for operational needs (excluding the amounts to be exported) and that the foreign currency to be exported is set aside in full amount in the bank’s treasury.

• The bank is required to announce the amounts that it intends to export on the Reuters screen for a full day before submitting an export request to CBE.

• A request has to be submitted to CBE one full day prior to the export.

• The foreign banknotes that are requested to be exported must be insured by one of the insurance companies.

The circular further provides that CBE may withdraw the export license at any time without cause. Finally, with respect to foreign currency import, the circular only states that banks wishing to import foreign currency must submit a request to CBE clarifying the reasons to do so.   [1] CBE Circular dated 7 August 2019 issuing the standards for exporting and importing the residue foreign currency, available through this link (in Arabic).