Dear All,
"on 26th July 2009 an amendment on its financial legislation (Loi de Finances Complementair 2009 (LFC) came into force in Algeria."
Accordingly :
1. All imports into Algeria should mandatorily be settled through LCs.
2. Import of second hand machines,parts and primary raw material is prohibited
As the Algerian govt sites are all in French I am unable to get/give more details.
Request all to share on :
- anything you know related to the above legislation (facts like cut off dates for implementation etc )
- and your views on the impact on exporters to Algeria and exporting banks ( for instance export collections to Algeria will not be allowed /paid by the importers in Algeria presumably after a certain cut off, Financing on exports to Algeria might be impacted and so on)
I think that would help us all in understanding the implications better.
Cheers
Algeria: change in legislation on imports
-
ajoy
- Posts: 107
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- Last Name: Ghildiyal
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-
ajoy
- Posts: 107
- Joined: Wed Jul 01, 2009 9:49 am
- First Name: Ajoy
- Last Name: Ghildiyal
- Organization: ABN AMRO
- Filter: Two Plus Two =: 4
narisa
I dont think that is likely to be a problem:
1) Usually there should be a cut off date . This is unlikely to be 26th July as the the importers will already have ongoing contracts to with exporters for payment through collection. algerian Govt has to give time to the importers to arrange facility for Import LCs with banks and renegotiate ongoing contracts with their exporters.
Moreover under some of such outstanding contracts the goods might already be ready for shipment and or already shipped - such contracts will need to be honoured.
So I suppose the cut off date will need to take these situations into acount and therefore should still be away.
2) Even if this cut off date were 26th July in collections banks role is to merely send the docs as per instructions from teh exporter. We pay the seller only when we recive the money from the Issuing bank. If such collection is not taken up by the buyer then we simply need to inform the seller and ask for instructions. We have no liability to pay .
Assuming you have financed under the collections then also you would have done so with recourse to the seller.
The only risk I see as of now is cut off date is 26th July and you have financed exports under collections to ALgeria , donot get paid, and are then unable to enforce recourse on seller also.
So I suggest you check up details of the legislation with the export arm of your govt and inform the seller regarding the situation. Informing the seller is not absolutely necessary but I think is good service. You can even advise them to check with teh buyer or thier agents in Algeria regarding the legislation , cut of dates and any implications therefrom.
If you can read French then you can research the change on the net on from Algerian govt websites.
PS : Of course if you are heavily into algeria then you might want to check your current exposure and be careful with further financing as we might see some issues beacuse all importers in Algeria who were using collections as the preferred product will try to get LC limits. Some such buyers and even sellers may have cash flow problems.
Cheers
Ajoy
1) Usually there should be a cut off date . This is unlikely to be 26th July as the the importers will already have ongoing contracts to with exporters for payment through collection. algerian Govt has to give time to the importers to arrange facility for Import LCs with banks and renegotiate ongoing contracts with their exporters.
Moreover under some of such outstanding contracts the goods might already be ready for shipment and or already shipped - such contracts will need to be honoured.
So I suppose the cut off date will need to take these situations into acount and therefore should still be away.
2) Even if this cut off date were 26th July in collections banks role is to merely send the docs as per instructions from teh exporter. We pay the seller only when we recive the money from the Issuing bank. If such collection is not taken up by the buyer then we simply need to inform the seller and ask for instructions. We have no liability to pay .
Assuming you have financed under the collections then also you would have done so with recourse to the seller.
The only risk I see as of now is cut off date is 26th July and you have financed exports under collections to ALgeria , donot get paid, and are then unable to enforce recourse on seller also.
So I suggest you check up details of the legislation with the export arm of your govt and inform the seller regarding the situation. Informing the seller is not absolutely necessary but I think is good service. You can even advise them to check with teh buyer or thier agents in Algeria regarding the legislation , cut of dates and any implications therefrom.
If you can read French then you can research the change on the net on from Algerian govt websites.
PS : Of course if you are heavily into algeria then you might want to check your current exposure and be careful with further financing as we might see some issues beacuse all importers in Algeria who were using collections as the preferred product will try to get LC limits. Some such buyers and even sellers may have cash flow problems.
Cheers
Ajoy