The Bank of Ghana (BoG) has taken the enforcement of laws on repatriation of export proceeds to another dimension by involving the Criminal Investigations Department (CID) of the Ghana Police Service.
The move is to help the central bank to deal with exporters that flout section 15 of the Foreign Exchange Act, 2006, Act 723, which relates to export activities and repatriation.
Per the Act, exporters are expected to repatriate proceeds from merchandise exports in compliance with the Letter of Commitment (LOC) regime.
The Deputy Director in-charge of Foreign Banking Operations at BoG, Mr Eric Kweku Hammond, who made this known at the Greater Accra Regional Shipper Committee (GARSC) in Accra on June 16, urged exporters to strictly comply with the law in order not to be prosecuted.
“LOC is a document required to accompany every merchandise export leaving the country. And so, the LOC is a commitment on the side of the exporter to assure proceeds from goods shipped out will be repatriated in compliance with the law.
“So, the forum today is to address issues affecting operationalization of the LOC regime. This forum was therefore held to build the capacities of these exporters so that they will be able to understand issues relating to the LOC,” he said.
He explained that the LOC was a mandatory requirement for all exports moving out of the country.
According to him, exporters who fail to repatriate proceeds through an external bank are in breach of Act 723 and are liable on summary conviction to a fine of not more five thousand penalty units or to a term of imprisonment of not more than ten years or to both.
“The Letter of Commitment is a module on the UNIPASS portal, developed and deployed for the Bank of Ghana. All exports related activities are captured to ensure effective monitoring of export and repatriation of export proceeds.”
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Under the LOC regime, the Deputy Director maintained that recalcitrant shippers were often blocked from undertaking any export activity in the country.
“The backbone of the regime is the Foreign Exchange Act implemented by BoG and so because the system has been automated recalcitrant exporters are blocked periodically.
“Once an exporter is blocked it will be difficult for the person to engage in export activity in the country using the shipment procedures.
“A list of these exporters is then prepared every week and forwarded to the security agencies especially the CID for further investigation and prosecution,” he said.
Mr Hammond noted that the regime was designed to address the trade in balances, often caused by the country’s huge imports.
“We need the exporters to repatriate their proceeds so that there will be enough foreign exchange to pay for our huge imports.
“The local currency is not a trading, reserve, or a convertible currency and so, we export to generate the needed foreign exchange to support the local currency,” he said.
The Head of Shipper Services and Trade Facilitation at the Ghana Shippers’ Authority (GSA), Naa Densua Aryeetey, stated that the GARSC was one of the authority’s ten regional shipper committee which meet on quarterly basis to discuss shipping and logistics industry issues and find solutions.
She said members of the committee were educated on letters of credit and letters of commitment.
“This meeting was the 112th edition.”