In a significant development, the Foreign Exchange Regulations, initially published in May 2022, have undergone crucial amendments through the Foreign Exchange (Amendment) Regulations, 2023, published on 1 September 2023 via Government Notice No. 622 (Amendment Regulations).
The amendments introduced by the Amendment Regulations are aimed at fostering greater access to foreign currency while reinforcing compliance under the Tanzanian foreign exchange regime and include:
- Exporters now have the green light to execute foreign currency sales through banks or financial institutions without the need to maintain an account with the said bank or financial institution.
- Banks and financial institutions are now authorised to purchase foreign currency from exporters, even if there is no existing account relationship in place.
- Previously, failure to submit documents to the Bank of Tanzania (BOT) to register a facility in respect to a foreign credit accommodation incurred a fine of TZS 1 million for each day the facility remained unregistered. However, under the Amendment Regulations, the penalty has been substantially revised to a fine of not more than TZS 4 million or imprisonment for a maximum term of 14 years, or both.
- The BOT will not register a facility in respect to a foreign credit accommodation that fails to reflect the prevailing market conditions, including interest rates and other associated charges, for the relevant currency of borrowing.
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Read the original publication at Bowmans.