New measures stipulating the use of letters of credit and import certificates for import payments have been introduced recently. Article 69 of the LFC 2009 (loi de finances complémentaire 2009), states that letters of credit must be secured for payment of import. Besides, a note to Algerian banks by the Central Bank of Algeria (16/DGC/2009, 16 February 2009) stipulates that, letters of credit must be supported by import certificates (of origin, of quality and phytosanitary). The costs involved by the use of letters of credit and the related requirement to provide certificates might drive import companies out of business and will negatively affect EU exports.

These new provisions form part of a broader policy package to address the deterioration of Algeria's balance of payments in 2009 after the fall in oil prices. The July 2009 loi de finances complémentaire (supplementary budget law) aims to promote the interests of local businesses at the expense of their international counterparts and help lower the rapidly expanding import bill, which has contributed to a fall in the trade surplus to € 1,4 billion during the first nine months of the year (compared with € 22 billion in the same period of 2008).
It includes the imposition of a ban on consumer credit, new rules for importing goods and services from abroad and restrictions on foreign direct investment (see related fiche). The new import procedures are meant to regulate market prices and track payments to help restrict the development of the informal economy. Part of the motivation for the measures is also likely to be to reduce the import bill.
 

Reports from industry point to difficulties with the import certificates to be provided with letters of credit. Algerian authorities have apparently refused some certificates presented by exporters and are requesting phytosanitary certificates from wines and spirits, even if these processed products should be exempted from this requirement .

COM discussed this issue with Algeria during a high-level mission in Algiers in February 2010.