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The Central Bank of Egypt (CBE) issued on August 7, 2019 a circular letter on the criteria governing the practice of exporting and importing excess foreign currency securities.
The text states that "as part of the constant efforts of the Central Bank of Egypt to maintain the good performance of the banking system and by referring to the circular books that set certain rules for export and export". importing notes in excess of foreign currency, the last being the circular book published on March 15, 2018, in order to set standards to regulate it. Activity On the Egyptian banking market, the Board of Directors of the Central Bank of Egypt (CBE) decided, at its meeting of August 5, 2019, to set standards for the practice of banking. export and import of currency excess notes.
Gamal Negm, Deputy Governor of the Central Bank of Egypt, in his speech distributed to banks, clarified the criteria for carrying out the export and import activity of excess currency banknotes, namely:
Banks wishing to export and import excess foreign currency banknotes address to the Department of Banking Affairs of the Central Bank of Egypt to obtain authorization to carry out this activity in January of each year, provided that the following conditions are met:
(A) The Bank shall obtain approval and documentation by the Board of Directors of its policies and procedures regarding all export and import transactions of banknotes (banknotes), as well as the anti-money laundering and terrorist financing systems and procedures.
B) Availability of effective internal control systems for operations related to the export and import activities of banks.
The Bank must approve the contracts of the Legal Department, Risk Management and Compliance before signing them with the parties related to the export and import of the ticket, provided that they contain all the details and responsibilities each party, as well as anti-money laundering and anti-terrorist financing regulations.
D- Employees involved in this activity must take courses on the handling of foreign currency notes such as counterfeit and other banknotes, as well as introductory courses on money laundering and anti-money laundering instructions. Terrorist financing, in particular with respect to operations related to the export and import of currency banknotes.
2. Banks are not allowed to outsource the foreign exchange surplus to a company to export funds to the Arab Republic of Egypt without the prior authorization of the Central Bank.
3 Banks are allowed to enter into contracts with financial institutions (banks / brokerage firms) abroad to carry out the process of currency export, conduct a thorough examination of the currency. ignorance and to a credit study of these institutions before entering into a contract with them to determine the feasibility of the contract and set a credit limit for each institution renewed each year, as well as an internal ceiling of the size of Single transaction. This aims to cover the risk of non-payment, focusing on the following minimum standards for these institutions:
The establishment must be subject to one of the supervisory bodies and obtain the approval of the supervisory authority to carry out this activity.
B) At least five years have pbaded since its creation and practice.
Not to have been subject to sanctions or fines by the supervisory authority of the country in which it operates, or sanctions related to money laundering operations by third parties.
(D) Approving and documenting by the Board of Directors the AML / CFT Procedures with respect to the shipping / exporting and importing activities of banknotes in foreign currency, as well as the systems necessary for their application.
Banks should expand the network of contractable financial institutions to ensure the continuity of export activities and not focus on a limited number of institutions.
4. Banks must continuously badess all customers regarding the export and import activities of the ticket (eg insurance, transport companies, etc.).
5. In the course of any transaction involving the export of excess banknotes, the banks shall apply the following procedures:
Confirmation that the export will be carried out by the authorized bank or by one of the authorized banks to carry out the export business of the excess currency banknotes by the Central Bank of Egypt.
B- The volume of exports at a time must not exceed 100 million US dollars and its equivalent for all currencies in circulation.
C) Submit a statement indicating that a sufficient balance is available for the operational need other than the amounts to be exported.
D) Submit a statement indicating that the foreign currency banknotes to be exported are set aside and entirely to the bank's treasury.
E- Publication of the currencies to be exported on the Reuters bank page, including the components of this excess of currency types – without quantities – throughout the day before the application is filed at the Central Bank for export approval, provided that a copy of it is attached to the export approval application.
(F) The Bank shall submit to the banking sector of the Central Bank an export request at least one day before the date of export for approval.
G- The issuing bank recognizes its commitment to the entire export process by committing to adding value to its accounts with its correspondents abroad on the scheduled date.
H- The bank must insure the ticket to be exported with one of the insurance companies.
I- The need to respect the instructions of the Central Bank of Egypt on the banking system security policies and procedures issued in May 2018, and in particular the seventh point, which includes securing the transfer of funds between banks and various payment centers when transferring tickets to the airport.
J- The bank will inform the General Directorate of Foreign Operations of the banking sector at the Central Bank of the export approval by indicating to the customs authorities concerned the quantity exported, as well as a copy of their documents attesting that the bank has received the actual value of the notes denominated in foreign currency in the books of correspondents previously exported. The exchange rate and the due date must not be later than ten days from the date of export.
6. The Central Bank of Egypt has the right to revoke the export license of currency banknotes at any time without giving any reason.
7. For foreign currency notes that are not part of the exchange rate of the Central Bank of Egypt, banks are permitted to use the relevant foreign companies in the field of foreign currency banknotes. shipment / export and import, provided that the volume of the transaction does not exceed the equivalent of 10 million US dollars and is not less than the equivalent. US $ 2 million, and each transaction is presented separately to the Central Bank – Banking Sector – for review and approval.
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