The Central Bank of Nigeria (CBN) has introduced new directives for Bureau de Change (BDC) operators, aimed at improving tracking, transparency, and anti-money laundering efforts in the foreign exchange market.
The new regulations require BDCs to maintain records of all transactions, including the Bank Verification Numbers (BVNs) of end-users and endorsement of dollar sales on international passports.
In a circular signed by W. J. Kanya, acting director of the Trade and Exchange Department, the CBN stated that BDCs are restricted to purchasing $25,000 per week from authorized dealers. Additionally, foreign exchange purchased by BDCs must be sold to end-users at a rate not exceeding a 1% margin above the buying rate. As the CBN noted, “Foreign exchange cash purchased by BDCs from Authorised Dealer Banks shall be sold to foreign exchange end-users at a rate not exceeding 1 percent margin above the buying rate.”
BDCs are also required to provide daily returns on their foreign exchange purchases and sales through the Financial Institutions Forex Reporting System (FIFX). Furthermore, funds purchased by BDCs are restricted to specific eligible transactions, including Business Travel Allowance (BTA), Personal Travel Allowance (PTA), overseas school fees, and overseas medical fees, with a maximum disbursement of $5,000 per quarter.
The CBN emphasized the importance of compliance with Anti-Money Laundering Laws and Know-Your-Customer (KYC) principles, stating, “It is to be noted that Authorised Dealer Banks and BDC operators shall ensure strict compliance with the provisions of Anti-Money Laundering Laws and observance of appropriate KYC principles in the handling of these transactions.”
The circular concludes with a warning that any Authorized Dealer or BDC that violates these guidelines or diverts funds will face sanctions, including the suspension of their dealership license. As the CBN noted, “Any Authorised Dealer and BDC that diverts funds or violates the provision of these guidelines shall attract appropriate sanction.”
