The Algerian government has apparently conceded that legislation enacted five years ago making it compulsory for importers to buy only on letter of credit (L/C) terms has made conditions too tough for the country's traders.

Since 1 January, Algerian importers have been able to choose between L/C or documentary collections, but only on certain imports.

Amendments

Algeria has amended legislation to make it somewhat easier for importers to bring goods into the country.

But the obligation to import on L/C terms has only been lifted for goods that are not raw materials.

Lack of clarity

This means that imports of goods destined to be resold unprocessed must be paid only on L/C or documentary collection terms.

Some documentary credit specialists however say that the precise definition of 'unprocessed' or 'raw materials' remains unclear.

Controversial

In 2009, the Algerian government enacted controversial amendments to the country's finance law so that it required importers to buy on L/C terms (DC World News, 12 August 2009).

Since then, some traders have struggled to obtain credit lines from banks, thus preventing them from opening L/Cs and importing goods.

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