Financial Crime World

Compliance Requirements for Banks in Chad: A Guide to Doing Business

Chad’s banking system may be limited, but compliance requirements for banks are no less stringent. As the country’s economy remains largely cash-based, foreign exchange controls play a crucial role in regulating transactions.

Overview of the Banking Sector

According to the Commission de Banque de l’Afrique Centrale (COBAC), the regional banking agency that regulates Chad’s banking sector, there are currently ten commercial banks operating in the country. These institutions offer a range of financial instruments, including:

  • Letters of credit
  • Short-term and long-term loans
  • Foreign exchange operations
  • Savings instruments

Compliance Requirements for Banks

Compliance requirements for banks in Chad are strict, particularly when it comes to foreign exchange transactions. The Central Bank has implemented measures to regulate capital outflows, requiring individuals transferring more than $1,000 out of the country to provide documentation on the source and purpose of the transfer.

  • Transactions exceeding $10,000 for individuals and $50,000 for companies are automatically notified to COBAC.
  • Companies transferring more than $800,000 out of the country require additional approvals.
  • The Central Bank has temporarily restricted capital outflows during periods of low oil prices, when demand for USD and foreign currency is high.

International Cooperation

Despite these regulations, Chad’s banking sector remains open to international cooperation. Several local banks have correspondent banks in the US and Europe, facilitating international transfers through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.

  • Some notable local banks with SWIFT identification codes and arrangements with correspondent banks include:
    • Société Générale des Banques
    • Banque Commerciale du Chari
    • Ecobank Tchad
    • Orabank
    • Commercial Bank Tchad
    • Banque Agricole et Commerciale
    • Banque Sahelo Saharienne pour L’investissement et le Commerce (Tchad) S.A.

New Legislation and Risks

New legislation aimed at further restricting foreign exchange holdings and cash outflows was delayed in 2020. However, holding large sums of foreign currency in Chad still poses risks of government appropriation through legal procedures.

Guidance for US Banks

For US banks looking to do business with Chadian banks, it’s essential to understand these compliance requirements and regulations. A guide to trade finance options is available at www.Export.gov/TradeFinanceGuide.