Instruction No. 251 on the Scope of Use, Procedures for Foreign Currency Circulation, and Rules for Issuance and Revocation of Licenses for Foreign Exchange Operations in the Republic of Tajikistan

1 "Registered" by the Ministry of Justice of the Republic of Tajikistan, Resolution No. 1168 dated June 13, 2022 "Approved" by the Board of the National Bank of Tajikistan, Resolution No. 23 dated February 22, 2022

Instruction No. 251 on the scope of use, procedures for circulation of foreign currency, and procedures and rules for issuance and revocation of licenses for activities related to conducting foreign exchange operations in the Republic of Tajikistan

1. GENERAL PROVISIONS

2. Instruction No. 251 on the scope of use, procedures for circulation of foreign currency, and procedures and rules for issuance and revocation of licenses for activities related to conducting foreign exchange operations in the Republic of Tajikistan (hereinafter referred to as the "Instruction") is developed in accordance with part 2 of Article 3, part 4 of Article 4, and Article 5 of the Law of the Republic of Tajikistan "On Currency Regulation and Currency Control." It establishes the scope of use and procedures for circulation of foreign currency for residents and non-residents, as well as the procedures and rules for issuing licenses for activities related to conducting foreign currency operations and grounds for refusal or revocation thereof (excluding credit financial organizations) within the territory of the Republic of Tajikistan.

3. The following basic concepts are used in this Instruction:

1. foreign currency - national currency of foreign countries;
2. authorized banks - credit financial organizations conducting operations with foreign currency based on a license from the National Bank of Tajikistan;
3. authorized representative - an individual authorized by a legal entity to conduct operations (via bank account);
4. exchange operations with cash and non-cash foreign currency (hereinafter - exchange operations) include operations for the purchase and sale of foreign currency for national currency, as well as the exchange of one foreign currency for another foreign currency;
5. special services include:

• performing works and providing services for maintenance, parking, repair, inspection, and preparation of aircraft of foreign airlines;
• providing consular services to non-residents of the Republic of Tajikistan in international airports and railway stations (customs border);
• intermediary services in the purchase and sale of goods, performance of works, and provision of services during their export and import;
• services for international freight transportation, including forwarding, insurance, and other services provided for by the legislation of the Republic of Tajikistan;
• providing services to passengers on international transport vehicles;
• sale of goods in duty-free shops;
• providing services in international airport lounges.

6. documents confirming the official source of origin of cash foreign currency:

• license of the National Bank of Tajikistan issued to resident legal entities for conducting activities related to operations with foreign currency;
• customs declaration on the import of cash foreign currency into the territory of the Republic of Tajikistan;
• document confirming the conduct of operations with the bank account of a legal and physical person in an authorized bank and the National Bank of Tajikistan;
• documents confirming the receipt of cash foreign currency from the operational cash desks of authorized banks and their structural subdivisions during the conduct of exchange and transfer operations without opening a bank account;
• confirming and оформленный document on the receipt and withdrawal of cash foreign currency in (from) the cash desk (cash desks) of a legal entity.

2. SCOPE OF USE OF FOREIGN CURRENCY
3. Foreign currency can be used as a means of circulation and payment within the territory of the Republic of Tajikistan in the following spheres:

1. activities related to conducting operations with foreign currency, which are carried out based on a license issued by the National Bank of Tajikistan, including:

• foreign exchange operations conducted by credit financial organizations;
• provision of special services;
• intermediation in the international currency market;

2. intermediary activities related to the sale of imported goods received from a non-resident based on a consignment or commission contract (agreement) for the export of goods produced by residents for export. In this case, the intermediary transfers the cost of the imported goods in foreign currency to the non-resident (seller) and keeps the commission fee for intermediation in their account in the payment currency. Upon the sale of the exported goods, the intermediary sells the goods to the non-resident (buyer) in foreign currency and pays the cost of the goods to the domestic producer in foreign currency, receiving a commission in national currency for this. The payment is made to the intermediary's currency account only in non-cash form. The amount of the commission reward is considered a currency asset of the intermediary and is not included in the price of the goods. All these conditions must be stipulated in the contract (agreement) concluded between residents (buyer, intermediary) and non-residents (seller), as well as between residents (producer, intermediary, seller) and non-residents (buyer);
3. when conducting operations via bank accounts opened in foreign currency by legal and physical persons in domestic and foreign authorized banks;
4. when conducting currency operations between residents provided for in Article 8 of the Law of the Republic of Tajikistan "On Currency Regulation and Currency Control."

3. PROCEDURES FOR CIRCULATION OF FOREIGN CURRENCY FOR LEGAL ENTITIES
4. Legal entities may use foreign currency in the spheres specified in paragraph 2 of this Instruction.
5. Legal entities may use foreign currency to conduct activities related to operations with foreign currency based on a license from the National Bank of Tajikistan, subject to sub-item 1) of paragraph 3 of this Instruction and fulfillment of the following conditions:

• setting price tags for goods and tariffs for special services in foreign currency and in equivalent in national currency;
• ensuring conditions and technical means necessary for the acceptance, storage, and determination of the authenticity of cash foreign currency, and having employees with knowledge and skills in working with foreign currency;
• having a bank account in foreign currency. Legal entities conducting operations with foreign currency based on a license from the National Bank of Tajikistan are obliged to unconditionally accept, along with cash foreign currency, national currency in case customers offer national currency for payment for goods and provision of special services. In such a case, the cost of goods and provision of special services, expressed in foreign currency, is expressed in national currency at a rate not exceeding the currency sale rate of the servicing bank.

6. Cash foreign currency from legal entities - residents and non-residents (their authorized representative) may:

• be credited to any currency accounts on one operational day up to 1750 calculation indicators for settlements without amount limits and without providing documents confirming their official procedure, and for amounts exceeding 1750 calculation indicators for settlements upon provision of documents confirming their official procedure;
• be imported (exported) into (from) the republic (from the republic) or transferred by an authorized representative of a legal entity in accordance with the requirements established by Instruction No. 234 "On the procedure for import into the Republic of Tajikistan and export from the Republic of Tajikistan of currency values," approved by the Resolution of the Board of the National Bank of Tajikistan dated May 23, 2019, No. 55, and passed state registration in the Ministry of Justice of the Republic of Tajikistan dated February 21, 2020, No. 153 "b."

7. Legal entities may use cash foreign currency for business trips, for payment of education and internships, treatment of employees abroad (based on confirming documents of their appointment).

8. Legal entities may transfer foreign currency without restriction from one of their bank accounts to another of their bank accounts in any authorized bank.

9. From the side of legal entities - residents and non-residents, operations with foreign currency are carried out in compliance with the requirements of the Law of the Republic of Tajikistan "On Countering the Legalization (Money Laundering) of Income Obtained by Criminal Means, Financing of Terrorism, and Financing of Proliferation of Weapons of Mass Destruction."

10. For legal entities, the conduct of exchange operations in authorized banks in cash form is prohibited.

11. PROCEDURES FOR CIRCULATION OF FOREIGN CURRENCY FOR PHYSICAL PERSONS

12. Cash foreign currency may be held by physical persons - residents and non-residents:

• as a personal asset;
• invested (withdrawn) as a deposit and savings in (from) an authorized bank (banks) in accordance with a bank account agreement;
• received as a loan and used for repayment of the loan and its interest;
• purchased or sold in authorized banks and their structural subdivisions in compliance with the requirements of the Law of the Republic of Tajikistan "On Countering the Legalization (Money Laundering) of Income Obtained by Criminal Means, Financing of Terrorism, and Financing of Proliferation of Weapons of Mass Destruction" and according to the procedure established by Instruction No. 211 "On the procedure for conducting exchange operations with foreign currency," approved by the Resolution of the Board of the National Bank of Tajikistan dated July 30, 2020, No. 95, and passed state registration in the Ministry of Justice of the Republic of Tajikistan dated August 25, 2020, No. 139 "e";
• conduct import (export) or transfer into (from) the republic (and).

12. Physical persons - residents and non-residents may, in their own name, credit cash foreign currency to their bank accounts opened by them in authorized banks or to bank accounts of third parties, in compliance with the requirements of the legislation of the Republic of Tajikistan in the field of countering the legalization (money laundering) of income obtained by criminal means, financing of terrorism, and financing of proliferation of weapons of mass destruction, without amount limits and without presenting a document confirming the official source of origin of cash foreign currency.

13. Physical persons may withdraw cash foreign currency from their currency accounts without restriction and upon first request. Authorized banks are not entitled to charge a commission for the issuance from currency (deposit) accounts of physical persons of cash foreign currency that has been credited to these currency accounts in cash form.

14. Transfer of foreign currency by physical persons within the republic without opening a bank account is carried out without restriction in accordance with the requirement of the Law of the Republic of Tajikistan "On Currency Regulation and Currency Control."

15. Crediting of cash and non-cash foreign currency by physical persons to accounts of charitable foundations is carried out in compliance with the requirements of the legislation of the Republic of Tajikistan in the field of countering the legalization (money laundering) of income obtained by criminal means, financing of terrorism, and financing of proliferation of weapons of mass destruction, without amount limits and without presenting a document confirming the official source of origin of cash foreign currency.

16. PROCEDURES FOR CIRCULATION OF FOREIGN CURRENCY FOR AUTHORIZED BANKS

17. Authorized banks may conduct purchase and sale of foreign currency within the territory of the Republic of Tajikistan on the internal currency market (through currency exchanges, interbank market, intra-bank market, and cash market of foreign currency), without amount limits and for their own account for themselves and for clients.

18. Authorized banks independently establish the rate of exchange operations based on the situation on the internal currency market, supply and demand for foreign currency, and official requests from clients.

19. Authorized banks are obliged within the timeframes established by agreements on servicing currency accounts and other normative legal acts, as well as intra-bank documents, to officially accept requests or instructions from their clients for the exchange of foreign currency and fulfill them. In the absence of a sufficient amount of national or foreign currency, authorized banks must refer to the interbank market to fulfill the request and instructions of clients.

20. PROCEDURES AND RULES FOR ISSUANCE OF LICENSES FOR ACTIVITIES RELATED TO CONDUCTING OPERATIONS WITH FOREIGN CURRENCY, GROUNDS FOR REFUSAL OR REVOCATION OF LICENSES

21. Activities related to conducting operations with foreign currency in the spheres provided for in sub-item 1) of paragraph 3 of this Instruction are carried out based on a license of the National Bank of Tajikistan (hereinafter - license). Activities related to conducting operations with foreign currency cannot be the main activity of residents.

22. The license is named and cannot be transferred to a third party; the validity period of the license is at least three years from the date of issuance. A license issued to a legal entity is a document providing its owner the right to engage only in the activity specified in the license.

23. Residents, to obtain a license for activities related to conducting operations with foreign currency, submit an application to the National Bank of Tajikistan in accordance with Appendix No. 1, providing the following documents and information:

• constituent documents and documents confirming state registration (original or copy, certified in accordance with the requirements of the legislation of the Republic of Tajikistan);
• information on financial results of economic activity as of the last reporting date (in the case of a newly created legal entity - submission of financial statements after one year of activity);
• information on the conditions, place, and method of conducting activities related to the conduct of operations with foreign currency, the procedure for acceptance and storage of currency funds, forms of mutual settlements related thereto;
• information on responsible employees ensuring activities related to the conduct of operations with foreign currency;
• details of the bank account and servicing authorized bank;
• documents confirming payment of the fee for consideration of the application and issuance of the license (in accordance with Article 6 of the Law of the Republic of Tajikistan "On Currency Regulation and Currency Control") (receipt or copy of payment order). The National Bank of Tajikistan, within 30 calendar days from the date of receipt of the application from a resident - legal entity for obtaining a license, makes a decision on its satisfaction or refusal.

22. The National Bank of Tajikistan, when considering an application for the issuance of a license, in order to determine the readiness of the resident to conduct activities related to operations with foreign currency, conducts a check that covers the following issues:

• familiarization with the normative, organizational, material-technical base, ensuring the resident has the necessary conditions (presence of a safe, surveillance cameras, counting machine) for organizing activities related to the conduct of operations with foreign currency;
• assessment of the internal system of accounting, storage of funds, and interaction with the authorized credit financial organization servicing the resident's activity for the conduct of operations with foreign currency;
• general assessment of the qualification level of responsible employees ensuring the conduct of operations with foreign currency, including in the field of countering the legalization (money laundering) of income obtained by criminal means, financing of terrorism, and financing of proliferation of weapons of mass destruction.

23. Upon compliance with the requirements of this Instruction and a positive conclusion from the responsible structural subdivisions of the National Bank of Tajikistan, the Board of the National Bank of Tajikistan makes a decision to issue a license to a resident legal entity in accordance with Appendix No. 2 of this Instruction.
24. The application of a resident legal entity for obtaining a license may be rejected on the following grounds:

• submission of incomplete, incorrect, unreliable documents and information or their non-submission;
• unsatisfactory results of the check conducted by the National Bank of Tajikistan;
• gross and/or systematic violation by the resident of the requirements of the legislation of the Republic of Tajikistan in the field of currency regulation and currency control, as well as the legislation of the Republic of Tajikistan in the field of countering the legalization (money laundering) of income obtained by criminal means, financing of terrorism, and financing of proliferation of weapons of mass destruction;
• the National Bank of Tajikistan considers it unnecessary for the resident to conduct activities related to operations with foreign currency, that is, if it becomes known that the resident is fully capable of conducting its activity in national currency and does not need to conduct operations with foreign currency.

25. In case of refusal of the application for the issuance of a license, the National Bank of Tajikistan sends a written response to the applicant with justification for the refusal of the application for the issuance of a license within the established timeframe.
26. The National Bank of Tajikistan has the right to revoke the license in case of non-compliance with the following requirements:

• non-submission of reports within the established timeframe and in the established order;
• conduct of currency operations outside the scope of activity specified in the license;
• non-compliance with the requirements of the legislation of the Republic of Tajikistan in the field of currency regulation and currency control, as well as the legislation of the Republic of Tajikistan in the field of countering the legalization (money laundering) of income obtained by criminal means, financing of terrorism, and financing of proliferation of weapons of mass destruction.

27. Residents must submit a certified copy of the license to the servicing authorized bank.

28. A copy of the license is sufficient grounds for the authorized bank to conduct payments and settlements related to activities related to the conduct of operations with foreign currency.

29. FINAL PROVISIONS

30. Within the territory of the Republic of Tajikistan, all price tags, tariffs, and units are indicated only in the national currency - somoni. Their expression and use in foreign currency or conditional units is prohibited, except for cases established by sub-item 1) of paragraph 3 of this Instruction.

31. Resident legal entities are obliged to submit the following information to the National Bank of Tajikistan regarding their activities related to the conduct of operations with foreign currency:

• quarterly report in accordance with Appendix No. 3 of this Instruction;
• certified copy of tariffs (price tags) for activities related to operations associated with foreign currency (once a year and upon changes in tariffs (price tags) during the year).

Appendix No. 1 to Instruction No. 251 on the scope of use, procedures for circulation of foreign currency, procedures and rules for issuance and revocation of licenses for conducting foreign exchange operations in the Republic of Tajikistan

Sample Application for License

To the Chairman of the National Bank of Tajikistan Respected _______________________________ On behalf of the company _________________________

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Application

The daily activity of the company ______________________________

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is associated with the following operations __________________________________

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____________________________________________________ and their conduct sometimes directly requires the conduct of operations with foreign currency. In this regard, we ask you to assist in obtaining a license for conducting activities related to the conduct of operations with foreign currency.

Sincerely, Head of the company ____________________________ (signature, Full Name) (place of seal)

Appendix No. 2 to Instruction No. 251 on the scope of use, procedures for circulation of foreign currency, procedures and rules for issuance and revocation of licenses for conducting foreign exchange operations in the Republic of Tajikistan

LICENSE No. ___ (name of legal entity) has the right to conduct activities ______________________________

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The validity period of this license is until “____“ ___________20___year.

CHAIRMAN National Bank of Tajikistan _____________ _______________ (signature) (Full Name) (place of seal)

Appendix No. 3 to Instruction No. 251 on the scope of use, procedures for circulation of foreign currency, procedures and rules for issuance and revocation of licenses for conducting foreign exchange operations in the Republic of Tajikistan

REPORT on activities related to conducting operations with foreign currency _____________________________________ in _________ month of 20___ g. (short name of resident)

Type of activity | Amount received from activities related to the conduct of operations with foreign currency |---|---|---|---|---|---|---|---|---| | | Total, in somoni* | in somoni | in US dollars | in Euros | in Russian rubles | | | | cash | non-cash | cash | non-cash | cash | non-cash | cash | non-cash | | | | | | | | | | | Total: *- at the official rate of somoni on the 1st day of the month following the reporting month ** - type of activity related to the conduct of operations with foreign currency

Head of the company: _________________________________ (signature, Full Name) Responsible person: ________________________________________ (signature, Full Name) Phone of the executor: ______________