The House of Representatives on Wednesday passed through second reading, a bill which seeks to establish a foreign exchange market and to provide for the regulation, monitoring and supervision of the transactions conducted in the market and for related matters, otherwise known as Foreign Exchange Act, 2017.
The bill sponsored by Jones Onyereri, chairman, House Committee on Banking and Currency, also seeks to repeal the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, Cap. P34, Laws of the Federation of Nigeria, 2004.
According to Onyereri (PDP-Imo), the bill seeks to “promote the effective regulation of the Nigerian financial industry with a view to promoting financial system stability under the CBN Act, 2007, and entrenching the deepening of financial markets, which requires the necessary legal framework to ensure that the goals of stability and growth are achieved..
“The cultural nature of the economy has exposed the financial system to risks associated with the vagaries of movements in the foreign exchange rate and the nation’s reserves that may quickly results in systematic failure. This has made a review of this area of law imperative in light of the dynamic nature of the foreign exchange system.”
Section 5 of the billseeks to amend the CBN Act to provide for “authorized dealers to render returns to the apex bank which must include information as to the sources of fund above $10,000.”
Section 6 seeks to “expand the sources of foreign currency in the market such that non-oil export proceeds has been amended to read all export proceeds to bring in oil inflows expressly within the forex market.”
Section 22 also seeks to “restrict outward cashflow in a manner that no person shall export foreign currency cash in excess of $50,000 or its equivalent from Nigeria.”
Meanwhile, section 25(2) makes provision for extension of time within which authorized dealers shall issue certificates of capital importation and make returns to CBN from 48 hours to 78 hours to reflect current realities.
Under the provision for ofdences and penalties as contained in section 38 of the bill, “any person who either with the intent to defraud, forges, mutilated, utters or defaces any foreign currency, or other instrument of exchange in the market on conviction shall be liable to 5 years imprisonment or a fine of five times the amount of foreign currency involved.
In case of corporate organization, to a fine of 10 times the amount of the foreign currency involved, while the officials of the corporate body shall be liable to 5 years imprisonment of a fine of five times that foreign currency involved.
Section 38(3) also provides that “where the person convicted under this section is an authorized dealer of authorized buyer, the bank shall revoke the licence granted to such authorized dealer or authorized buyer.”
In addition to any other penalty imposed under this section, the foreign curency involved shall be forfeited to the Federal Government, according to Section 38(4) of the bill.
Section 34 provides that authorized dealer notify the bank of any transfer to and from foreign country of a sum greater than $10,000 or its equivalent, for the purpose of determine and monitoring the flow of foreign curencies into Nigeria.
Section 35(1 & 2) of the bill, also provides a “person whether resident in or out of Nigeria and non citizen to deal invest, acquire or dispose of, create or transfer any interest in securities and other money market instruments whether denominated in foreign currencies in Nigeria or not. A person may invest in securities traded on Nigerian capital market, commodity market or by private placements in Nigeria.”
The bill was referred to the House Committee on Banking and Currency for further legislative action.- Business Day