CEMAC Regulates Foreign Currency Transactions, Requires Transparency

The Central Bank of the Economic and Monetary Community of Central Africa (CEMAC) has introduced new regulations governing foreign currency transactions in an effort to promote transparency and prevent financial crimes.

Background

The regulations came into effect on [date] and require approved intermediaries to collect information on external transactions and report periodically to the Central Bank. This includes statements of correspondent accounts, global foreign exchange positions, and any other relevant documents that can verify inflows and outflows.

Key Provisions

• Reporting Requirements: Approved intermediaries must collect information on external transactions and report periodically to the Central Bank.
• Communication with the Central Bank: Credit institutions must communicate regularly with the Central Bank on their foreign currency transactions, disclosing information on correspondents’ accounts, global foreign exchange positions, and other relevant details.
• External Transactions: All payments must be made through correspondent banks in one of the currencies of both partners or in another currency accepted by both parties to the transaction. Transactions between two resident entities cannot be settled through bank accounts domiciled abroad.
• Transfer Fees: Transfers of funds to foreign countries may be subject to a transfer fee, which is determined by free competition. However, the Central Bank may set a maximum transfer fee rate if market conditions require it.
• Electronic Payment Instruments: The use of electronic payment instruments outside CEMAC is restricted to current transactions within the limits of thresholds provided for in the regulations.
• Foreign Currency Holding: Foreign currencies held in CEMAC Member States must be transferred or deposited with a credit institution.

Penalties

Failure to comply with the regulations may result in penalties, including:

• Fines
• Imprisonment

The new regulations aim to promote transparency and prevent financial crimes such as money laundering and terrorism financing. They also seek to ensure that foreign currency transactions are carried out in a secure and transparent manner, consistent with the principles of good governance and economic development.