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BDC: CBN Mandates Sellers Above $10,000 To Declare Sources

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The Central Bank of Nigeria (CBN) has mandated foreign exchange sellers to Bureau De Change (BDC) of the equivalent of $10,000 and above to declare their forex sources. Haruna Mustapha, Director of the Financial Policy and Regulation Department of the CBN, said this in a revised regulatory framework to curtail excesses of BDCs and check uncertainty in the foreign exchange market.

Mustapha said that such sellers would also be required to comply with all Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) regulations. He said that the guidelines would significantly enhance the regulatory framework for the operations of BDCs as part of ongoing reforms of the Nigerian foreign exchange market. According to him, the guidelines revise the permissible activities, licensing requirements, corporate governance and AML/CFT provisions for BDCs.

“It also sets out new record-keeping and reporting requirements, among others,” he said. The News Agency of Nigeria (NAN) reports that the guidelines also specify that no person shall carry on the business of BDC in Nigeria except with the prior au- thorisation of the CBN. It described BDC as a company licensed by the CBN to carry on only retail foreign exchange business in Nigeria.

It banned commercial, merchant, non-interest and payment service banks and other Financial Institutions (OFIs), including holding companies and payment service providers from promoting BDCs. It also precluded serving staff of financial services regulatory and supervisory agencies, serving staff of regulated financial services providers, and governments at all levels, among others, from promoting BDCs.

The guidelines permitted BDCs to acquire foreign currency from authorised sources like tourists, returnees from the diaspora and expatriates with foreign exchange inflows from work, travel, investment or their domiciliary accounts. Other permissible sources are International Money Transfer Operators (IMTOs), embassies, hotels that are authorised buyers of foreign currencies, the Nigerian Foreign Exchange Market (NFEM) and any other source that the CBN may specify.

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