Foreign Exchange Act 2009 Implementation Guidelines

Foreign Exchange Act Foreign Exchange Act 2009 (FEA) 2009 (FEA)

Implications of FEA Implications of FEA „ The Law removes all controls for residents and non The Law removes all controls for residents and non

residents to freely hold foreign currencies in Seychelles residents to freely hold foreign currencies in Seychelles and Seychelles Rupees overseas. However, this is subject and Seychelles Rupees overseas. However, this is subject to Anti to Anti -Money Laundering Act. Money Laundering Act. „ Payments for services provided in Seychelles may be Payments for services provided in Seychelles may be made in EITHER Seychelles Rupees OR foreign currency, made in EITHER Seychelles Rupees OR foreign currency, but RUPEES CANNOT BE REFUSED. but RUPEES CANNOT BE REFUSED. „ Buying and selling of foreign exchange as a business, is Buying and selling of foreign exchange as a business, is restricted to Banks or Bureau de Change ( restricted to Banks or Bureau de Change (Authorised Authorised dealers). dealers). „ In cases whereby businesses have to exchange foreign In cases whereby businesses have to exchange foreign currency with residents or non currency with residents or non -residents, this is only legal residents, this is only legal to the extent that the exchange is not carried out as a to the extent that the exchange is not carried out as a business (that is, it should be on a one business (that is, it should be on a one -off basis, not in a off basis, not in a continuous manner and not for a profit). continuous manner and not for a profit).

„ Only Banks and Bureau de Change set exchange rates. Only Banks and Bureau de Change set exchange rates. All other operators HAVE to use the exchange rates All other operators HAVE to use the exchange rates determined by the market. ( determined by the market. (This provision should be This provision should be applied with Immediate Effect applied with Immediate Effect). „ Central Bank publishes average traded rates of the 3 main Central Bank publishes average traded rates of the 3 main currencies. currencies. „ For all other currencies, liaise with an For all other currencies, liaise with an authorised authorised dealer. dealer. Implications of FEA (Cont) Implications of FEA (Cont)

„ Businesses whose nature of operations require them to Businesses whose nature of operations require them to continuously continuously have to exchange foreign currency for have to exchange foreign currency for Seychelles Rupees, need to obtain a Bureau de Change Seychelles Rupees, need to obtain a Bureau de Change licence. licence. A direct payment for goods and services in foreign currency A direct payment for goods and services in foreign currency does not require a Bureau de Change licence. does not require a Bureau de Change licence. „ Two types of Bureau de Change licence exist: Two types of Bureau de Change licence exist: „ Class B= Annual fee SR5,000 : restricted to buying and selling Class B= Annual fee SR5,000 : restricted to buying and selling foreign currency only in the form of notes, coins and foreign currency only in the form of notes, coins and travelers travelers cheques. cheques. „ Class A= Annual fee SR10,000 : Class A= Annual fee SR10,000 : licenced licenced to buy and sell foreign to buy and sell foreign currency without the limitation that applies to currency without the limitation that applies to “Class B Class B” Bureau de Change. For example, it can engage in money transmission de Change. For example, it can engage in money transmission services. services. „ For more information contact Central Bank. For more information contact Central Bank. Implications of FEA (Cont) Implications of FEA (Cont)

„ With a Bureau de Change licence businesses can set With a Bureau de Change licence businesses can set their buying and selling rates, and buy and sell to their buying and selling rates, and buy and sell to anyone. anyone. „ However, there has to be a clear separation between the However, there has to be a clear separation between the operations of a Bureau de Chan operations of a Bureau de Change and their normal business ge and their normal business (Hotel, Car hire, etc.). (Hotel, Car hire, etc.). „ Where change/refund needs to be given it may be done Where change/refund needs to be given it may be done in Rupees. in Rupees. This is standard practice worldwide. This is standard practice worldwide. Implications of FEA (Cont) Implications of FEA (Cont)

„ All operators shall use the published Central Bank: All operators shall use the published Central Bank: „ BUYING rates for conversion from foreign currency to Seychelles BUYING rates for conversion from foreign currency to Seychelles Rupees AND „ the SELLING rates for conversion from Seychelles Rupees to the SELLING rates for conversion from Seychelles Rupees to foreign currency. foreign currency. „ Operators may wish to charge a small commission on Operators may wish to charge a small commission on exchange to further minimize exchange loss. exchange to further minimize exchange loss. „ The Central Bank cannot determine The Central Bank cannot determine the level of this commission. the level of this commission. However, this should remain minimal since operators already However, this should remain minimal since operators already charge a service charge. Moreover charge a service charge. Moreover, operators will not always los , operators will not always lose because banks because banks’ rates are at times more rates are at times more favorable than previous favorable than previous days. Payments for goods and services Payments for goods and services

Advertisement of goods and Advertisement of goods and services services „ All goods and services being advertised in Seychelles All goods and services being advertised in Seychelles HAVE TO BE ADVERTISED IN SEYCHELLES RUPEES. This HAVE TO BE ADVERTISED IN SEYCHELLES RUPEES. This applies for hotels, restaurants, duty free shops etc applies for hotels, restaurants, duty free shops etc … The only exception is where it is stated otherwise by a The only exception is where it is stated otherwise by a different law or other legal instruments (SI etc.). different law or other legal instruments (SI etc.). „ For those advertising outside Seychelles, especially For those advertising outside Seychelles, especially hotels advertising over the internet or in brochures hotels advertising over the internet or in brochures targeted for overseas clients, prices can be set in foreign targeted for overseas clients, prices can be set in foreign currency or Seychelles Rupees. currency or Seychelles Rupees.

Any questions? Any questions?

For more details For more details „ A copy of the FEA can be obtained at A copy of the FEA can be obtained at http:// http://www.cbs.sc/fxlegislation.html www.cbs.sc/fxlegislation.html „ An explanatory note and frequently asked An explanatory note and frequently asked question document for the FEA can be obtained question document for the FEA can be obtained at http:// http://www.cbs.sc/fxlegislationother.html www.cbs.sc/fxlegislationother.html „ For any other enquiries you can contact the CBS For any other enquiries you can contact the CBS within working hours (i.e. Monday to Friday 8am within working hours (i.e. Monday to Friday 8am -4 pm) on 525 630 or 525 710 4 pm) on 525 630 or 525 710

Thank you. Thank you.

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