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Egyptian banks will not open branches in Iraq or accept deposits as security on shipment, after the murder of Cairo’s top envoy at the hands of his alleged Al-Qaeda kidnappers.


The 51-year-old Ihab Al-Sherif was the first Arab ambassador designate since the ousting of former Iraqi President Saddam Hussein.


“Egyptian banks have decided not to open branches in Iraq or to secure and guarantee the Egyptian export shipments to Iraq,” says general-secretary of Egyptian Businessmen Association, Muhammad Yousef. “At least we will wait another year until the Iraqi government ensures stability and safety in the country and create a better environment for the Egyptian investment.”


Contractual agreements between Egyptian companies and the Iraqi government reached US$2bn in 2002, primarily exporting foodstuffs, pharmaceuticals and industrial materials, within the framework of the 10th stage of the oil-for-food program.


Iraq was the second largest importer of Egyptian goods, after Saudi Arabia.

Official figures estimate that some 65,000 Egyptians worked in Iraq before the war are still trying to activate US$4bn that were frozen in Iraqi banks and have been transferred to Egypt.