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Demand for IDs to transact forex business-BoG directs

The Bank of Ghana (BoG) has directed all forex bureau operators in the country to demand for a valid national identification of customers before engaging in any forex transaction.

The valid identification to be provided are a voter’s ID, passport, a national identification card or a driver’s licence before a forex business is transacted at any bureau.

The move is intended to provide for an audit trail of the customers’ business history and secure the country against financial crimes.

A notice signed by the Secretary to the Bank, Mrs Frances Van-Hein Sackey also directs that all licensed Forex Bureaux to submit the required monthly returns electronically to the Bank of Ghana within five after the end of each month.

Renewal of questionnaire

The central bank also wants forex bureaux operators to complete and submit a licence renewal questionnaire two months before the expiration of their licences. The questionnaire is expected to be submitted together with a copy of tax clearance certificate.

A Copy of Insurance Certificate and extract of audited accounts, bank statements and proof of filing of annual returns at the Registrar General’s Department are also expected to be attached to the required documents.

A source at the central bank said the regulations are not new and that the regulator is only enforcing and existing regulations.

“It’s always been there and we are using this as a reminder. We believe that, as is the case in other jurisdictions, the foreign exchange market needs some discipline”, the source said.

“For data requirements and monitoring purposes, we need to know sources of foreign exchange, where it is coming from and where it is going”, the source stated.

Enforcing regulations

It emphasized that the measures are not to regulate the market but to monitor and enforce the regulations of the 2006 foreign exchange Act.

As part of measures to enforce compliance by all licensed Forex Bureaux with the Forex Bureau Regulations issued in accordance with the Foreign Exchange Act, 2006 (Act 723), and the provisions of the Anti-Money Laundering Act, 2008 (Act 749).

The central bank also directs all purchases and sales of forex to be captured electronically and receipted accordingly by licensed Forex Bureaux.

Data Protection

It also asked licensed Forex Bureaux to comply with the provisions of the Data Protection Act, 2012 (Act 843) and must register with the Data Protection Commission of the Ministry of Communication as a key requirement for annual licence renewal.

It warned that failure to comply with this notice shall attract penalties, including pecuniary sanctions, suspension and revocation of licence in accordance with the Foreign Exchange Act 2006, (Act 723).

“Any person found transacting business with an unlicensed Forex Bureau or illegal forex dealers shall be dealt with in accordance with the Laws of Ghana”, the central bank warns.

Lucrative business

Forex bureau business is lucrative in Ghana and other West African countries. It is a vibrant business in Nigeria and Ghana, as well as neighbouring countries like Togo and Benin. Bureau de Change as referred to in most of these countries also carries very high risk. But if well managed, the business is one of the most profitable in the region.