During the British Chamber of Commerce ‘Lunch and Learn’ at IMATT, Regent, the Director of Finance in the Bank of Sierra Leone Mr I.K. Lamin disclosed to all present that every person, resident or non-resident are allowed to maintain foreign currency accounts with a commercial bank in Sierra Leone. The accounts may be credited with transfers in foreign currency from abroad or from other foreign currency accounts, or with deposits of foreign currency notes.
An FC account is to allow individuals and business houses to hold their proceeds in foreign currency accounts with licensed commercial banks in Sierra Leone for the purpose of making payments or transfers abroad supported by the underlying document of the payment.He said the letter issued by the Bank of Sierra Leone confirms the existing policy on the operation of foreign currency account.
I.K. Lamin explained that “From 1985 to 1989, under the liberalization process, foreign currency account was only limited to non-residents and exporters. Thereafter it was extended to both residents and non-residents to legally operate a foreign currency account. However, foreign currency account was to be fed from the proceeds of exports, services, unrequited transfers, and from external sources. Payments from foreign currency accounts were restricted for the purpose of making payments abroad in accordance with the regulations.”
In 1992, he said persons were allowed to operate a foreign currency account at a commercial bank and transfers were limited for the purposes of making payments abroad. In 1995, when Sierra Leone acceded to Article VIII of the IMF Articles of Agreement status, foreign currency accountswere allowed to be used to make payment for all current international account transactions by transfers abroad.
The Director of Finance pointed out thata foreign currency account is not a checking account and is to be used solely for making payments for goods and services abroad in a non cash mode using Swift, cheques or bank draft; Residents and Non-residents are allowed to maintain Foreign Currency Accounts with a commercial bank; the accounts may be credited with transfers in foreign currency from abroad or deposits of foreign currency notes; transfers between foreign currency accounts done within the banking system are permitted; Foreign currency accounts can be used to make payments to non residents for all current international account transactions; holders of foreign currency accounts are permitted to withdraw up to US$10,000 cash for the purposes of travelling; amounts above US$10,000 shall be done by transfers.
I.K. Lamin then turned his attention to payments for domestic goods and services in Sierra Leone. Section 27 (1) of the BSL Act 2012 clearly states that the Leone is the legal tender in Sierra Leone and in this regard all payments for goods and services in Sierra Leone shall be done in the domestic currency.
The Bank he said is aware that the current Exchange Control Act dates back to 1965 and does not reflect the series of liberalisation that have taken place over the years. In that regard, the Bank has reviewed the Act and drafted a new foreign exchange bill which will be presented to stakeholders, including the IMF for consultation.
Friday April 11, 2014