UPDATES ON FOREIGN EXCHANGE REGULATION IN CAMEROON
CEMAC member states, through the BEAC, have approved new foreign exchange regulations that will restrict payments in foreign exchange by both individuals and businesses.
Effective 1 March 2019, the COBAC Regulation N°02/18/CEMAC/UMC/CM has raised a number of concerns. The new regulation is targeted at various types of economic actors, including individuals, banking and financial institutions, as well as extractive industries.
In fact, the New Regulation highlights the objectives of strengthening monetary policy in the CEMAC zone, driven by the governing bodies. In a nutshell, it reinforces the obligation for credit institutions to proceed, with diligence, with the retrocession of currency in their possession; it significantly restricts access to loans by non-residents; it increases the threshold amount that individuals must declare when crossing the border, recognising that border crossing and giving customs officials the power to confiscate; it prohibits the export of coins when the amount exceeds five thousand (5,000); it submits credit institutions to a periodic obligation to communicate statements of correspondent accounts; it reinforces the prerogatives of the monetary authorities in controlling the exercise of foreign exchange activity and it establishes a strict system of sanctions for breaches of foreign exchange regulations.
Forex Regulation Sanctions and Controls
Concerning extractive industries, the new regulation will be applicable to them starting from 1 January 2022, unlike other economic operators, who have been strictly adhering to the terms of the new foreign exchange regulations since 1 March 2019.
Oil and mining companies will be subject to more flexible regulations. For instance, they will have the right to hold foreign currency accounts both in the CEMAC zone and abroad, which will be governed by specific provisions enabling extractive companies to continue their activities while allowing the central bank to carry out the controls required by the regulations in force.
Article by CHUO ANGABUA JUNIOR
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