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Tanzanian Authorities Clamp Down on Foreign Currency Transfers: What You Need to Know
As part of efforts to combat money laundering and terrorism financing, Tanzanian authorities have introduced new regulations governing foreign currency transfers.
Requirements for International Monetary Transactions
Before making any international monetary transactions, customers are required to provide specific documents to the Bureau De Change. According to Regulation 32(1) of the Foreign Exchange Regulations, 2015, the Bureau De Change must report any anti-money laundering transactions or terrorism financing activities. To ensure compliance with this regulation, customers are advised to present relevant documentation prior to effecting any monetary transfers.
Required Documents
The following documents are required:
- Relevant invoice for importation
- Letter or invoice from educational or medical institutions for medical or education expenses
- Employment contract for expatriate proceeds
- Pension award letter and employment contract for retirement benefits
- Contractual documents, invoices, fee notes, and certification of settlement of tax obligations for consultancy management or royalty agreements
- Audited reports indicating declared dividends or profits to be repatriated and documents confirming payments of all relevant taxes for dividends and profits to foreign shareholders
Limit on Foreign Currency Issuance
The Bureau De Change has also introduced a limit on foreign currency issuance to residents traveling abroad. The new limit is USD 10,000, which is an increase from the previous limit of USD 50.
Anti-Money Laundering Measures
In addition, banks and financial institutions are required to conduct due diligence on their customers and report any suspicious transactions under the Anti-Money Laundering Act, 2006.
Transferability of Foreign Capital
Foreign investors are guaranteed unconditional transferability of foreign capital through authorized dealer banks. The Tanzania Investment Act, 1997 provides for the transfer of foreign currency involving net profits or dividends, loan servicing, royalties, fees, and charges, and remittance of proceeds from the sale or liquidation of a business enterprise.
Conclusion
The regulations governing foreign currency transfers in Tanzania aim to ensure transparency and prevent financial crimes such as money laundering and terrorism financing. Customers are advised to comply with these regulations by providing required documentation before making any international monetary transactions.
Important Notice: This article is for general guidance only and should not be relied upon as professional advice. If you require specific legal advice, please consult a qualified attorney.