Central African Economic and Monetary Community (CEMAC) Unveils New Regulations on Foreign Exchange

Introduction

In a bid to streamline foreign exchange transactions and curb irregularities, the Central African Economic and Monetary Community (CEMAC) has introduced new regulations governing the use of foreign currencies in its member states.

Key Provisions

• Foreign Currency Holding: According to Article 36, foreign currencies held in any CEMAC member state must be transferred or deposited with a credit institution. This applies regardless of ownership, emphasizing the importance of transparency and accountability in foreign exchange transactions.
• Income and Proceeds: Residents are required to transfer all income or proceeds received in foreign currency abroad or paid by non-residents to their domestic credit institutions (Article 37). The currencies collected by these institutions must then be retroceded to the Central Bank (Article 38).
• Credit Institutions: Credit institutions may be authorized to retain a proportion of the currencies received to meet the foreign exchange needs of their customers. The conditions and modalities for foreign exchange retrocession are specified in an Instruction issued by the Central Bank.

Resident and Non-Resident Accounts

• Resident Legal Entities: Resident legal entities may not open foreign currency accounts outside CEMAC, except with the authorization of the Central Bank (Article 41). However, the Central Bank may permit certain exceptions under specific conditions.
• Individuals Resident Abroad: Individuals resident abroad are required to report their accounts to the Central Bank (Article 42).
• Prohibition on Personal Use: Residents are prohibited from opening foreign currency accounts in CEMAC for personal use (Article 43).

Non-Resident Accounts

• Opening of Foreign Currency Accounts: Non-residents are free to open foreign currency accounts in CEMAC credit institutions subject to ex post information from the Central Bank (Article 46).
• Transactions: Transactions involving non-resident accounts are also subject to regulations and may not be credited with payments in CFA Franc or by debiting an account in CFA Franc.

Conclusion

The new regulations aim to promote transparency, accountability, and stability in foreign exchange transactions within the CEMAC region. These measures will help to streamline foreign exchange transactions, curb irregularities, and ensure that all transactions are conducted in a transparent and accountable manner.