Banks and other financial institutions licensed by the Central Bank of Nigeria (CBN) to deal in foreign exchange face up to N50 million fine if they fail to comply with the rules, regulations, guidelines or administrative directives of the apex bank.
This is part of the new provisions in the Foreign Exchange (Control and Monitoring) Bill, 2016 currently before the Senate, which also requires that authorised dealers notify the CBN of any cash transfer to and from a foreign country of over $10,000.
The bill, which seeks to repeal the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act 2004, and enact the Foreign Exchange (Control and Monitoring) Bill to establish a foreign exchange market in Nigeria, provides for the control, monitoring and supervision of transactions conducted in the foreign exchange market.
Also, the proposed legislation aims to contribute to the sound development of the national economy by striving to facilitate foreign transactions, maintain an equilibrium of balance of international payments and stabilise the value of currency by ensuring the liberalisation of foreign transactions and revitalising market functionality.
“Notwithstanding any of the provisions of this Act, the Bank may impose a penalty not exceeding N50 million or not exceeding 10 times the amount of the foreign currency involved in the infraction, for the authorised dealer’s or authorised buyer’s failure to comply with the provisions of this Act,” Section 43 (4b) of the bill sponsored by , John Enoh, chairman, Senate Committee on Finance, states.
Similarly, Section 42 mandates the CBN to confiscate foreign currency or other properties of offenders. Section 3 of the bill establishes the Foreign Exchange Market, even as Section 5 (2) lists the foreign exchange market instruments to include: foreign bank notes, foreign coins, travellers’ cheques, bank drafts, mail, electronic or telegraphic transfers.
The proposal empowers the CBN to issue guidelines to regulate procedures and transactions in the market from time to time. Authorised dealers seeking to import foreign currency notes shall obtain prior approval of the CBN to do so, even as their licence is valid for one year and subject to renewal.
“Where the Central Bank intends to suspend, revoke or vary a licence, the conditions or restrictions of the licence, the Bank shall give the licensee a 14-day notice prior to the suspension, revocation or imposition of conditions or restrictions, reasons for the intention of the Bank to suspend, revoke or vary a licence and an opportunity to make an oral or written representation to oppose the intended action of the Bank.”
In the same token, exporter of any goods, including petroleum products, are required to repatriate the proceeds into the Export Proceeds Domiciliary Account within a period and condition prescribed by the CBN.
Section 10 of the bill mandates the CBN to grant licences to applicants within 60 days after the receipt of the application if satisfied with the applicant.
According to the proposal, CBN may suspend or revoke a licence if a licensee fails to utilise the licence within 90 days after the issue of the licence; placed under liquidation, receivership, or adjudged bankrupt; provided false information, among others.
