Repatriation of Foreign Export Proceeds Will Be Mandated

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Mr. Elie Saleeby and Former Lands, Mines and Energy Minister Eugene Shannon

-House’s Joint Committee begins hearing for subsequent enactment, but exporters express fear over liquidation in local banks

The House’s Joint Committee on Judiciary and Banking and Currency have begun public hearings on a draft law intended to promote economic measures aimed at protecting the value of the country’s currency by ensuring profits from export transactions are returned to Liberia.

The draft law is called an “Act to Establish Export Proceeds Repatriation of Liberia 2018.”

The Act seeks to ensure exporters repatriate proceeds from sales of natural resources (iron ore, rubber, timber, gold, diamond, etc) into the country within 90 days.

When the law is passed, it will be the first law ever to mandate exporters to put proceeds from all goods and services, including natural resources exported to be repatriated into the local bank accounts of the exporting entity in Liberia.

In yesterday’s public hearings, some exporters, including Elie Saleeby, Chief Executive Officer (CEO) of the Premier Milling Company expressed fears over the liquidation of their proceeds if deposited into local banks and the repercussion of failing to invest their proceeds to offshore accounts as an assurance of repayment of their debts to foreign creditors.

Those who were in the hearings were also former Lands, Mines and Energy Minister Eugene Shannon; Don Darden and Raymond Gwenigale of Firestone Liberia and Richard B. Fallah of Bea Mountain.

An excuse from the President of the Liberia Banker’s Association (LBA), John Davies, who is presently out of the country on official duties, caused the rescheduling of the public hearings to a later date.

The excuse letter was under the signature of Doreen McIntosh, Executive Secretary/Head of LBA’s Secretariat.

The House’s Joint Public Hearing was chaired by Representative Ellen Attoh of the Judiciary Committee and co-chaired by Representative Dixon Seboe of the Banking and Currency Committee and also one of the sponsors of the bill.

Other lawmakers in attendance were Representatives Richard Koon, Francis Dopoh, Jimmy Smith and Joseph Kolleh.

Members of the Joint Committee on Judiciary and Banking and Currency in closed consultation.

The Act will mandate investment companies to repatriate funds, realized from export sales of Liberia’s natural resources,  into any local bank in Liberia in order increase money supply and circulation of US dollars.

The Act also seeks to encourage institutions such as Arcellor Mittal, Firestone, Sime Darby, Bea Mountain, and others to have more funds in their local accounts rather than in their offshore accounts.

It is stated that no exporting entity shall remit “all” funds from sales into their foreign bank accounts of their parent companies without first being locally repatriated into their local bank account in Liberia.

The bill says if an exporter fails to repatriate export proceeds within the time specified they shall be fined not less than 10% of the proceeds for every offense committed.

Also, the Central Bank of Liberia (CBL) will set the technical mechanics on the repatriation of proceeds to the international accounts of the parent companies of the exporting entities.

Meanwhile, as in other countries, like Nigeria, the Central Bank of Nigeria issues annual circulars to remind exporters of their obligation with respect to repatriation of export proceeds.

For instance,  export proceeds for oil and gas exports are expected to be repatriated within 90 days while that of non-oil and gas exports are to be repatriated within 180 days.

In a 2017 circular issued by the CBN to authorized dealers, concerning the repatriation of export proceeds into the domiciliary account of  their respective export customers.  The publication reiterates that failure to repatriate these export proceeds within the stipulated period constitutes a breach of the Foreign Exchange Regulations and as such, any exporter that defaults in the repatriation of such export proceeds will be barred from accessing all banking services, including access to the foreign exchange market.

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