Part I-Preliminary

1. These Regulations may be cited as the Exchange Control (Forex and Bureaux and Foreign Exchange Fixing Sessions) Regulations, 1994, and shall be deemed to have come into operation on 4th February, 1994.

2. (1) In these Regulations, unless the context otherwise requires-- "authorized dealer" has the meaning ascribed thereto in the Exchange Control Regulations, and "authorized dealer bank" shall be construed accordingly; "the Bank" means the Reserve Bank of Malawi established under the Reserve Bank of Malawi Act; "bank" has the meaning ascribed thereto in the Banking Act; "convertible currency" means any of the currencies specified in the First Schedule and such other currency as the Bank may prescribe in its Guidelines; "Fixing Committee" means the committee established under regulation 37; "Fixing Secretariat" means the unit in the Bank established pursuant to regulation 38; "fixing session" means the process conducted under regulation 35 to fix the exchange rate of the Malawi Kwacha; "foreign currency" is used interchangeably with the expression "foreign exchange"; 'forex" is used as the short form of the expression "foreign exchange"; "forex bureau" means a business enterprise licensed under Part III to carry on the business of buying and selling foreign currency; "licence fee" means the fee for a forex bureau licence specified r in regulation 11 (4); "prescribed" means prescribed in these Regulations or in f guidelines issued by the Bank under these Regulations; "Steering Committee" means the committee established under 1 regulation 35 (2) (a); "Policy Formulation Committee" means the committee established under regulation 35 (2) (b); "these Regulations" includes any guidelines issued by the Bank under these Regulations. (2) In these Regulations, a reference to any amount in United States dollars shall, unless the context otherwise requires, be construed as including a reference to an equivalent amount in any of the convertible currencies or any combination of them.

Part II-Foreign Exchange Accrued to Residents of Malawi

3. Foreign exchange accrued abroad to residents of Malawi shall be repatriated to Malawi and disposed of in accordance with these Regulations in furtherance of the objective to liberalize the financial and payment systems.

4. (1) Except with the permission of the Minister, no person resident in Malawi shall hold abroad for more than three working days, and in any form whatsoever, any foreign exchange after receipt thereof, in return for export of goods or services of Malawi (2) Subject to subregulation (3), every exporter shall- (a) cause the foreign exchange referred to in subregulation (1) to be transferred to the account of an authorized dealer bank in Malawi; or (b) maintain a foreign currency denominated account with an authorized dealer bank in Malawi, to which the foreign exchange shall be credited. (3) In the case of exporters of tobacco, tea and sugar ninety per cent of the foreign exchange received shall be credited to their foreign currency accounts with authorized dealer banks in Malawi and the banks shall surrender the balance to the Bank for the ultimate disbursement thereof to those exporters in Malawi Kwacha.

5.- (1) In order to obtain the Malawi Kwacha equivalent, all exporters holding foreign currency accounts may sell the foreign currency they have in their foreign currency accounts to any authorized dealer bank or to a fixing session. (2) An exporter may, subject to these Regulations, utilize the foreign currency held in an account with an authorized dealer bank under this regulation to pay for his own imports of goods or services through the bank.

6.- (1) Residents of Malawi wishing to obtain foreign exchange for purpose of making payments abroad in respect of imports of goods or services may purchase foreign exchange from-- (a) a fixing session; (b) an authorized dealer bank; (c) any forex bureau. Provided that any such remittance shall be arranged through an authorized dealer bank, except where alternative transfer mechanisms have been provided for under these Regulations. (2) In the buying and selling of foreign exchange under these Regulations- (a) residents of Malawi wishing to buy or sell foreign currency shall be at liberty to do so at the exchange rates which in their opinion favourable for their purpose; and (b) transactions may take place at the exchange rates as quoted by an authorized dealer bank or a forex bureau, or at the exchange rate which the purchaser or seller has offered or asked for at a fixing session, or has offered to, or asked from, an authorized dealer bank or a forex bureau.

7. The Bank- (a) shall, in accordance with these Regulations, issue guidelines for the establishment and operation of forex bureaux and fixing for sessions; (b) may, in order to facilitate the development of the foreign exchange market, issue guidelines for the establishment and operation of foreign exchange brokers in Malawi.

Part III-Licensing of Forex Bureaux

8. A forex bureau may carry on the business of buying and selling foreign currency subject to the provisions of the Act, these Regulations and any other subsidiary legislation made under the Act.

9.- (1) A person who satisfies the requirements of these Regulations and wishes to carry on the business of a forex bureau may apply to the Bank for a licence to carry on such business. (2) An applicant for a licence for a forex bureau shall have at the time of application- (a) been registered in accordance with the Companies Act as a limited liability company whose sole object shall be to carry on the business of a forex bureau, and included in its registered name the words "Forex Bureau" or "Bureau de Change"; (b) an identifiable place of business which is accessible to the public and is, in the opinion of the Bank, suitable in all respects for the business of a forex bureau.

10. An application for a licence shall be in the form set out in the Second Schedule addressed to the Bank and shall— (a) state the name of the forex bureau as registered under the Companies Act; (b) state the name and address of the applicant's bankers; (c) specify the proposed place of business of the forex bureau; and (d) be accompanied with the specimen signature of each director or, as the case may be, each proprietor, of the bureau.

11.- (1) The Bank shall, within twenty one days of an application for a licence, consider the application and approve it if the Bank is satisfied that the applicant has complied with the requirements of these Regulations or refuse to grant the licence if not so satisfied. (2) The Bank shall, before granting a licence under this regulation, cause to be made an inspection of the proposed place of business of the proposed forex bureau by an authorized officer of the Bank for the purpose of ascertaining whether or not the premises comply with the requirements of these Regulations. (3) The Bank shall, within fourteen days after the expiration of the period prescribed by subregulation (1), inform the applicant of its decision, giving reasons where the Bank refuses to grant a licence. (4) Where the Bank approves an application for a forex bureau, it shall issue to the applicant a forex bureau licence in the prescribed form upon payment by the applicant to the Bank of a licence fee of 500 United States dollars payable in that currency or in Malawi Kwacha.

12. A person issued with a forex bureau licence shall— (a) prominently display and at a times keep so displayed a copy of the licence of his business premises; (b) have identifiable employees of his forex bureau, by providing to the Bank their names, residential addresses, specimen signatures, and passport-size photographs; (c) immediately inform the Bank of any change with regard to the composition of the employees; (d) not permit any other person, other than those employees who have been registered with the Bank, to transact any business on behalf of the forex bureau; (e) immediately on the commencement of the business of the forex bureau, open a foreign currency account, solely for the day-to-day operations of the forex bureau, with an authorized dealer bank and report that fact in writing to the Bank within fourteen days from the commencement of business; and (f) maintain on the account opened pursuant to paragraph (e) a minimum balance of 2.000 United States dollars or such higher amount as the Bank may, from time to time, prescribe in its guidelines.

13. (1) Each forex bureau shall be treated as an autonomous for the purposes of registration and operations. (2) A forex bureau licence shall neither be transferable nor assignable and no forex bureau shall operate as an agent of another forex bureau.

14. (1) A forex bureau licence shall be valid for a period of twelve months from date of issue and may be renewed for similar periods upon payment of the licence fee. (2) An application for renewal of a forex bureau licence, supported by a tax clearance certificate and other documents prescribed by the Bank in its guidelines, shall be submitted to the Bank at least two months before the expiry date of the forex bureau licence. (3) At the expiration of its licence, a forex. bureau shall forthwith cease operations, unless the licence has been renewed by the Bank" (4) The renewal of a forex bureau licence shall be at the sole discretion of the Bank and shall be subject to the satisfactory conduct of the business of the forex bureau as determined by the Bank.

15.-(1) A forex bureau licence shall not be revoked except as provided in this regulation and regulation 17. (4) If- (a) the Bank is not satisfied with the cause shown under subregulation (2) or (3); or (b) in the opinion of the Bank, the conduct of a forex bureau is detrimental to the success of the whole or any aspect of the forex bureau scheme under these Regulations, the Bank may revoke the licence issued in respect of the forex bureau.

Part IV-Forex Bureau Operations

16.- (1) A forex bureau licence shall authorize the holder to engage in spot transactions only. (2) A forex bureau may deal only in convertible currencies and, subject thereto and to the restrictions specified in subregulation (4), may engage in- (a) buying and selling foreign currency in cash; (b) buying travellers' cheques of foreign currency; (c) selling travellers' cheques of foreign currency on agency basis on behalf of authorized dealer banks. (3) Where a forex bureau sells travellers' cheques on agency basis as provided in subregulation (2) (c) it shall, for every sale of such travellers' cheques, issue to the buyer a receipt in the prescribed form. (4) A forex bureau, whether owned by a bank or not, shall not operate or be regarded as a bank and shall not perform any of the following functions- (a) open foreign exchange or Malawi Kwacha accounts for any customer; (b) establish a letter of credit; or (c) perform any other banking business.

17- (1) No person shall- (a) deposit, or accept a deposit of, Malawi Kwacha with a forex bureau with the intention of obtaining or supplying foreign exchange equivalent thereof wholly or in part at a future date; (b) deposit, or accept a deposit of, foreign currency with a forex bureau with the intention of obtaining or supplying the Malawi Kwacha equivalent thereof either wholly or in part at a future date; (c) at a forex bureau, refuse to sell foreign currency to any customer if such foreign currency is available at the forex bureau; (d) fail to issue an accurate official receipt to cover purchase and sale of foreign currency at a forex bureau; (e) issue an official forex bureau receipt for any purpose other than to cover the purchase and sale of foreign currency by the issuing forex bureau. (2) A person who contravenes subregulation (1) shall be guilty of an offence and, on conviction of such person, in addition to any other penalty imposed, the licence issued in respect of the forex bureau shall, be deemed revoked forthwith.

18.- (1) Every forex bureau shall quote its foreign exchange buying and selling rates, which rates shall be prominently displayed in the premises of the forex bureau. (2) A forex bureau shall prominently display at all times in its premises a notice informing its customers that they are entitled to be issued with an official receipt in the prescribed form for any purchase or sale of foreign currency made by them. (3) A forex bureau shall report its buying and selling rates to the Bank as the Bank may require in its guidelines.

19.- (1) All transactions conducted by a forex bureau shall be done and maintained in the strictest confidence as between the forex bureau and the other parties to the transactions and the forex bureau shall not make any disclosure thereof except as required by law. (2) No information or document other than the information or document required for the completion of the foreign exchange purchase or sale receipts shall be demanded by any forex bureau. (3) A forex bureau shall not be entitled to demand or seek an explanation from a customer as to the source of the funds involved in any transaction with it.

20.- (1) Every forex bureau shall maintain- (a) a register of purchases of foreign currency in cash; (b) a register of purchases of travellers cheques; and (c) a register of sales of travellers cheques. (2) Every forex bureau shall maintain adequate accounting records to enable it to prepare its final accounts. (3) All registers and other records of a forex bureau shall be made available for inspection by authorized officials of the Bank.

21. The Bank shall, at least once in each licence year of a forex bureau, examine the operations of a forex bureau and may do so at any time as the Bank considers necessary.

Part V-Foreign Currency for Travel or Imports

22. A person who wishes to travel outside Malawi may purchase from a forex bureau for each trip up to 3,000 United States dollars and shall, if so required at the exit point furnish the foreign currency sale allowance receipt in respect of the foreign currency purchased.

23. Subject to the provisions of this Part, a person, firm or other organization may purchase any amount of foreign currency from a forex bureau for the purpose of importing goods into Malawi, but remittance of the foreign currency so purchased shall be made only through an authorized dealer bank.

24. Where the goods to be imported with foreign currency obtained from a forex bureau under these Regulations are valued at 5,000 United States dollars or more, the goods shall be subject to pre-shipment inspection in accordance with the law on pre-shipment inspection for the time being in force or in accordance with the guidelines of the Bank.

25. (1) An importer who wishes to import goods through a letter of credit shall submit the following documents to authorized dealer bank he is dealing with in respect of those goods- (a) a proforma invoice; (b) an import licence (where applicable) the face value of which does not exceed the value of the goods as stated in the proforma invoice; and (c) the relevant form prescribed for imports. (2) Where the authorized dealer bank is satisfied that the documents submitted by the importer are in order and that the importer has sufficient funds to pay for the imports, the bank shall establish a letter of credit on behalf of that importer in relation to the goods to which the import licence relates. (3) The authorized dealer bank shall, immediately after establishing the letter of credit under subregulation (2), submit the import documents to the Bank.

26 (1) An importer may transfer outside Malawi foreign currency obtained from a forex bureau to cover imports of goods on open account. (2) A person who wishes to transfer foreign currency under this regulation shall provide to his authorized dealer bank, the appropriate documentation which shall include any or all of the following, as applicable- (a) the customs and excise transit entry forms of the country of transit; (b) the Malawi customs and excise import bill of entry; (c) the supplier's final invoice; (d) the ex-warehouse home consumption entry form; (e) the Malawi Customs and Excise Department receipts for all taxes; (I) the Malawi customs and excise warehousing entry form; (g) the pre-inspection clean report of findings; (h) a bill of lading, air waybill or road and railway consignment note; (i) the relevant form prescribed for imports; (j) a copy of the import licence; and (k) the Malawi customs and excise verification certificate. (3) The authorized dealer bank shall submit to the Bank for recording the documents provided to it under subregulation (2).

Part VI-Service Payments

27. (1) A person resident in Malawi may, subject to the provisions of this regulation, transfer out of Malawi, without exchange control approval, foreign currency obtained from a forex bureau to cover costs of medical services incurred outside Malawi. (2) A person who wishes to make a transfer under this regulation may purchase up to 4,000 United States dollars per trip upon the production to an authorized dealer bank of a referral letter from a medical practitioner. (3) For any medical expenses in excess of the amount specified in subregulation (2), foreign currency shall be sold to the Individual concerned only upon production of medical bills showing the excess amount. (4) Every authorized dealer bank shall submit to the Bank documents produced to it under this regulation.

28. (1) A person resident in Malawi may, subject to the provisions of this regulation, transfer out of Malawi, without exchange control approval, foreign currency obtained from a forex bureau to cover educational expenses for a person who is a dependant of a person resident in Malawi. (2) A person who wishes to make a transfer under this regulation shall provide to an authorized dealer bank the following- (a) documentary evidence that the student is a citizen of Malawi or a dependant of a resident of Malawi; (b) documentary evidence that the beneficiary has a bona fide admission letter from a recognized institution of learning and evidence that the student has been enrolled for the period claimed; (c) in the case of a continuing student, evidence that the student is still enrolled and attending the institution; (d) the relative bills or statements of account from the educational institution showing the amount required for- (i) tuition fees; (ii) incidental expenses, including textbooks and stationery; and (iii) boarding and lodging expenses where the student is living in a hall of residence. (3) The expenses under this regulation shall be paid directly to the educational institution concerned. (4) The authorized dealer bank shall submit to the Bank for recording the documents provided to it under subregulation (2).

29. (1) A person resident in Malawi may, subject to this regulation, transfer out of Malawi, without exchange control approval, foreign currency obtained from a forex bureau to cover such other expenses than those specified in regulations 27 and 28 as may be specified by the Bank in its guidelines. (2) A person who wishes to transfer foreign currency under this regulation shall present to the authorized dealer bank handling the transfer supporting documentary evidence in the prescribed form. (3) The authorized dealer bank through which any transfer was made under this regulation shall, as soon as practicable, submit to the Bank for recording the documents relating to the transfer.

30. (1) A person resident in Malawi may, with the permission of the Bank, transfer out of Malawi foreign currency obtained from a fixing session for such expenses as the Bank may from time to time specify in its guidelines. (2) A person who wishes to make a transfer under this regulation shall submit to the Bank, through an authorized dealer bank, relevant forms and other documentary evidence prescribed by the Bank.

Part VII-Remittances

31. A person outside Malawi may make remittances in foreign currency to a beneficiary in Malawi directly or through an authorized dealer bank.

32. An international organization, a diplomatic mission, or the employees thereof with diplomatic or similar accreditation may sell foreign currency to a forex bureau but shall not be allowed to buy foreign currency from any forex bureau.

33. A forex bureau shall maintain a foreign currency account with an authorized dealer bank for the following purposes- (a) to receive inward foreign currency transfers on its own account; and (b) for the settlement of its local foreign currency transactions.

34. A forex bureau shall not use its foreign currency account maintained under regulation 33 to transfer money outside Malawi, except in accordance with these Regulations.

Part VIII-Foreign Exchange Fixing Sessions

35. (1) The Bank shall conduct foreign exchange fixing sessions once every week at its premises during which the exchange rate of the Malawi Kwacha shall be freely established on the basis of supply of, and demand for, foreign currencies by authorized participants. (2) For the purposes of subregulation (1), there is hereby established- (a) a body to be known as the Foreign Exchange Steering Committee (in these Regulations otherwise referred to as the "steering Committee") which shall be the body to determine all issues relating to, and generally to oversee, the foreign exchange market in Malawi and which shall consist of- (i) the Governor of the Bank who shall be Chairman thereof; (ii) the Minister of Finance; (iii) the Minister of Trade and Industry; and (iv) the Secretary to the President and Cabinet; (b) another body, as a committee of the Steering Committee, to be known as the Foreign Exchange Policy Formulation Committee (in these Regulations otherwise referred to as the "Policy Formulation Committee") to advise the Steering Committee on all aspects of foreign exchange policies and to implement the decisions of the Steering Committee, and which shall consist of- (i) an officer of the Bank appointed by the Governor of the Bank and who shall be chairman thereof; (ii) the Secretary to the Treasury; (iii) the Secretary for Trade and Industry; and (iv) the Secretary for Economic Planning and Development.

36. For the purpose of participation at a fixing session, the following categories of participants shall be recognized as authorized participants- (a) the Bank; (b) authorized dealer banks; (c) forex bureaux; (d) licensed brokers in foreign exchange transactions; (e) companies incorporated under the Companies Act and other enterprises, which companies and enterprises, in the opinion of the Bank, meet the operational requirements of the fixing session.

37. (1) There shall be established a committee to be known as the Foreign Exchange Fixing Committee (in these Regulations otherwise referred to as the "Fixing Committee") which shall consist of- (a) three officers of the Bank, appointed by the Governor of the Bank who shall designate one of them as chairman of the Fixing Committee; (b) one member representing the Associated Chamber of Commerce and Industry, appointed by that body; (c) a public officer representing the Secretary to the Treasury; (d) a public officer representing the Secretary for Trade and Industry; (e) a public officer representing the Secretary for Economic Planning and Development; (I) one member representing authorized dealer banks; (g) one member representing forex bureaux; (h) one member representing licensed brokers in foreign exchange transactions. (2) The functions of the Fixing Committee shall be- (a) to supervise the conduct of fixing sessions; (b) to make recommendations to the Policy Formulation Committee regarding issues necessary for the proper conduct and development of the fixing. (3) At all fixing sessions, the chairman of the Fixing Committee shall- (a) open boxes containing fixing orders; (b) declare the rate that clears the buying and selling orders and announce the fixing statistics; and (c) sign the prescribed document to confirm the official exchange rate up to the next fixing session.

38. (1) For the purpose of facilitating the operations of fixing sessions, the Bank shall establish, within its establishment, a unit to be known as the Foreign Exchange Fixing Secretariat (in these Regulations otherwise referred to as the "Fixing Secretariat"). (2) The functions of the Fixing Secretariat shall be- (a) to carry out administrative instructions of the Fixing Committee; (b) to ensure the safe arrival of the buying and selling orders into the fixing room; (c) to open all envelopes containing orders and vet the orders in accordance with the published guidelines for the fixing; (d) to process all orders in order to establish the cumulative demand for and supply of foreign currency of participants; (e) to print a fixing report giving details of all orders in such manner as to enable the Fixing Committee to determine the clearing rate at the particular fixing; (f) to print other reports as may be required by the Fixing Committee and the Bank; (g) to ensure that there is a press release on the results of the fixing; and (h) to ensure that all buying and selling orders are processed quickly for settlement and accounting purposes.

Part IX-Miscellaneous

39. (1) Every forex bureau submit to the Bank, in the prescribed in form, the following returns-- (a) a weekly return of its foreign exchange position, which return shall be submitted not later than 4.00 p.m. of every working Monday of the week; and (b) a monthly return of total purchases and sales of foreign currency, which return shall be submitted not later than five working days after the end of the month for which the return is being made. (2) Every authorized dealer bank shall submit to the Bank, in the prescribed form, a monthly return of all transfers made by it under Parts V and VI.

40. (1) The Bank may, at any time, cause an inspection to be made by an officer of the Bank of any forex bureau and of its books of account of accounts. (2) It shall be the duty of every employee of a forex bureau, within a reasonable time, to produce to the officer making an inspection under subregulation (1) all such books, accounts and other documents in the power or custody of the forex bureau and to furnish that officer with such statements or information relating to the affairs of the forex bureau as he may require.

41. Anv person who- (a) fails to maintain a foreign currency account contrary to regulation 12 (e); (b) transfers or assigns a forex bureau licence contrary to regulation 13; (c) deals in foreign currency contrary to regulation 16; (d) transfers foreign currency out of Malawi for medical expenses contrary to regulation 27; (e) transfers foreign currency out of Malawi for educational purposes contrary to regulation 28; (f) transfers foreign currency out of Malawi to cover any expenses contrary to regulation 29; (g) transfers foreign currency out of Malawi, contrary to regulation 30; (h) fails to credit the account of a forex bureau upon receiving remittances from outside Malawi on behalf of the forex bureau contrary to regulation 33 (2); or (i) fails to submit a weekly or monthly return contrary to regulation 39, shall be guilty of an offence and liable to a fine of K500,000 or twice the value of the transaction, whichever is the higher amount and to imprisonment for ten years; and, where applicable, the court convicting such person shall, in addition, order that the funds involved in the .transactions or otherwise connected therewith be forfeited to the Government.

42. Nothing in these Regulations shall be construed as prohibiting or in any way restricting— (a) the Bank from buying or selling foreign currency from or to any forex bureau or person; or (b) any bank authorized to operate as an authorized dealer under the Exchange Control Regulations from continuing to operate as such.

43. (1) The Bank may, from time to time, issue guidelines for the operation of these Regulations and may at any time revise the guidelines so issued. (2) The Bank may in the guidelines issued under subregulation (1) prescribe any particulars or matter, including forms, it deems necessary or expedient for the operation, or use in the operation, of these Regulations and any particulars or matter so prescribed shall be deemed to be particulars or matter required under these Regulations.

FIRST SCHEDULE reg.2 Authorized Currencies for Transactions by a Forex Bureau Canadian Dollar Duetschemark French Franc Japanese Yen Pound Sterling South African Rand UAPTA United States Dollars

SECOND SCHEDULE reg 10 Form of Application for a Forex Bureau Licence

GUIDELINES FOR LICENSING AND OPERATING FOREIGN EXCHANGE BUREAUX ISSUED UNDER THE EXCHANGE CONTROL (FOREX BUREAUX AND FOREIGN EXCHANGE FIXING SESSIONS) REGULATIONS 1994

These guidelines shall be subject to the provisions of the Exchange Control (Forex Bureaux and Foreign Exchange Fixing Sessions) Regulations 1994.

I CATEGORIES OF FOREIGN EXCHANGE DEALERS

• For purposes of dealing in foreign exchange transactions under the Exchange Control (Forex Bureaux and Foreign Exchange Fixing Sessions) Regulations 1994, three categories of dealers are recognized:
  (a) Authorized Dealer Banks (ADBs)
  (b) Foreign Exchange Bureaux (Forex Bureaux)
  (c) Foreign Exchange Brokers
• Authorized Dealer Banks are commercial banks and other financial institutions who are authorized to buy and sell foreign exchange in addition to their normal banking functions.
• Foreign Exchange Bureaux are business entities whose activities are limited to the sale and purchase of foreign currency, travellers cheques and other similar instruments for immediate delivery (spot transactions).
• Foreign exchange brokers are business entities whose activities are limited to seeking and matching, by amount and price, prospective buyers and sellers of foreign exchange.

II CONDITIONS GOVERNING THE ISSUE OF LICENSES AND COMMENCEMENT OF BUSINESS

• An applicant for licence to operate a forex bureau shall, at the time of application, satisfy the following conditions:
  (i) shall be registered in accordance with the Companies Act as a limited liability company whose sole objective is to conduct the business of a forex bureau; and
  (ii) shall have a minimum paid up capital of the equivalent of US$10,000.
• An application for a licence for a forex bureau must be made on Form FX A (Annex 1) accompanied by a certificate of registration and a non-refundable payment fee of US$1,000 or its equivalent in Malawi kwacha, calculated on the basis of the middle rate bewteen the US dollar and the Malawi kwacha as quoted by the Reserve Bank of Malawi.
• The Reserve Bank of Malawi shall, before granting an approval in principle, inspect the proposed premises of the forex bureau to determine its accessibility to the public and suitability in all respects for the business of a forex bureau.
• The Reserve Bank of Malawi shall, before granting the licence, inspect the place of business, agreed to under Section II (3) of these guidelines, to ensure that the premises are:-
  (a) satisfying the requirements of Annex 2 to these guidelines and also conforming and equipped with the following:
  • a customer's lounge,
  • total cashier counter space for two (2200mm by 1800mm),
  • supervisor's office (2800mm by 2200mm),
  • a protective barrier between the customers and the dealer;
  
  (b) provided with a telephone, secure safe, counterfeit detector, fax machine and computer equipment.
• Upon the application being approved by the Reserve Bank of Malawi, a foreign exchange bureau licence will be issued to the applicant (Annex 3).
• The establishment of forex bureau branch(es) may be authorized by the Reserve Bank of Malawi provided the applicant satisfies the following conditions:
  (a) the applicant must have operated a forex bureau for a period of at least one year and shall have its operating licence renewed by the Reserve Bank of Malawi in the year that the application is being made;
  (b) the application must be made on Form FX A2 (Annex 5) accompanied by a non-refundable payment fee of US$500 or its equivalent in Malawi kwacha calculated on the basis of the exchange rate as in (2) above;
  (c) a good track record that will take into account, among other things, the following:
  • compliance with Exchange Control Act Cap 45:01 (Forex Bureaux and Foreign Exchange Fixing Sessions) Regulations 1994 and the resultant Guidelines for Licensing and Operating Foreign Exchange Bureaux;
  • the available management capability and expertise to handle the added duties and responsibilities of a branch;
  • the current as well as projected volumes of purchases and sales of foreign currency handled by the bureau justifying the opening of the branch.
• Upon approval of the application, the applicant shall be issued with a licence.
• A person who holds a forex bureau licence issued under the Forex Bureau Regulations may carry on the business of a forex bureau subject to the following conditions:-
  • the forex bureau licence is not transferable or assignable and any forex bureau or person, shall not operate or manage a forex bureau on behalf of another forex bureau or person;
  • the forex bureau shall commence operations within a month of the date of issue of its licence, failing which, the licence shall be withdrawn by the Reserve Bank of Malawi; and
  • the forex bureau licence shall be valid for a period of twelve months from the date of issue and may be renewed for similar periods.
• The proprietor of a forex bureau shall, before commencement of business, provide the Reserve Bank of Malawi with the names, addresses, designations, specimen signatures and passport size photographs of the members of staff of the forex bureau.
• Notwithstanding the above conditions, the applicant shall not be an authorised dealer bank.

III OPERATIONS AND DEALINGS OF A FOREX BUREAU

• The Business Registration Certificate and the licence issued by the Reserve Bank of Malawi shall be displayed prominently in the place of business at all times.
• (a) A forex bureau shall open and maintain a foreign currency account with an authorized dealer bank for the following purposes: (i) to receive inward foreign currency transfers on its own account; and (ii) the settlement of its local foreign currency transactions.
  (b) A forex bureau shall not use its foreign currency account to transfer money outside Malawi, except in accordance with Exchange Control rules and regulations.
  (c) A forex bureau shall ensure that:
  • there is maintained, at all times, in the foreign currency account a minimum balance of the equivalent of US$2,000 (all currencies considered); and
  • in addition to the above, it has foreign exchange solely for its day-to-day operations.
    
  
  (d) An authorized dealer bank with which a foreign currency account of a forex bureau is maintained shall ensure that the account is at all times maintained at a minimum balance of US$2,000.
• (a) Where a change occurs in the names of directors, members of staff, or bankers of the forex bureau, the proprietor shall inform the Reserve Bank of Malawi of the change in writing (in the case of names of directors and forex bureau, supported by an approval from the Registrar of Companies).
  (b) A forex bureau shall, prior to re-location, apply to the Reserve Bank of Malawi for approval of the change.
• Each forex bureau shall be free to quote its own buying and selling rates to be applied exclusively in spot transactions. All bureaux shall prominently display their rates on a board in a conspicuous place on their premises in the following manner:-
  • show the current buying and selling rates for each currency with equal prominence;
  • if different rates apply to travellers cheques and bank drafts, show these rates separately and clearly.
  • If there are charges on exchange transactions, whether prescribed as commission or otherwise, these charges should be built in the exchange rate.
• Relations with the Public
  (a) Forex bureaux shall not refuse to sell foreign exchange to any member of the public if such foreign exchange is available;
  (b) Forex bureaux shall issue accurate official purchases and sales receipts in all transactions with the public, banks and other bureaux (Annexes 6,7,8 and 9);
  (c) A forex bureau is not a bank and, therefore, shall not perform any of the following:
  • taking of any deposits;
  • opening of any account for a customer;
  • establishment of Letters of Credit facilities;
  • participate directly on the interbank market; and
  • any other banking business.
  (d) Forex bureaux shall not accept advance payment of kwacha or hold money in any currency with a view to concluding a sale or purchase for transaction at a later time.
  (e) Forex bureaux may purchase foreign exchange from other foreign currency denominated account (FCDA) holders only for the sole purpose of:-
  • payment for imports; and
  • procurement of travellers cheques.
• Records of transactions
  (a) Each forex bureau shall maintain separate registers for each of the following transactions:-
  • purchase of foreign currency notes (Annex 11);
  • purchase of travellers cheques (Annex 12);
  • sale of foreign currency notes (Annex 13);
  • sale of travellers cheques on agency basis (Annex 14).
  (b) In addition to the registers, each forex bureau shall maintain a stock control register (Annex 15).
• Inspection
  (a) The Reserve Bank of Malawi may, at any time, cause an inspection to be made, by an authorized officer of the Bank, of any forex bureau and its books of accounts on the premises of that forex bureau;
  (b) The forex bureau shall, within reasonable time, produce to the officer making an inspection under sub-section (a) of this section, all such books, accounts and all other documents in the forex bureau's custody and to furnish that officer with such statements or information relating to the affairs of the forex bureau.
• Confidentiality
  All transactions conducted by a forex bureau shall be done and maintained in the strictest confidence, unless otherwise required by the applicable Regulations.
• Use of Temporary Premises
  Any forex bureau wishing to undertake transactions outside its registered place of business on a temporary basis shall first seek and obtain approval from the Reserve Bank of Malawi.
• Returns
  All forex bureaux shall submit in the prescribed format the following:
  (a) on a daily basis, not later than 9.00 a.m., buying and selling rates;
  (b)
  • on a weekly basis, details of purchases and sales volumes (Part A: Annex 10), supported with copies of receipts;
  • purchases from, and sales to Reserve Bank of Malawi, commercial banks and other forex bureaux shall be reported separately (Part B: Annex 10).
  (c) on a weekly basis, details of purchases and disposal of FCDA balances together with relevant receipts and photocopies of import documents (Annex 16).
• Renewal of Forex Bureau Licence
  (a) At the expiration of its licence, a forex bureau shall automatically cease operations until otherwise determined or its licence is renewed by the Reserve Bank of Malawi.
  (b) Application for renewal supported by a tax clearance certificate (or documentary evidence of provisional tax payment) and other relevant documents as specified on renewal form (FX A1) shall be submitted to the Reserve Bank of Malawi at least 2 months before the expiry date of the forex bureaux licence.
  (c) Upon receipt of application for renewal on Form FX A1 (Annex 4), the Reserve Bank of Malawi shall renew a foreign exchange bureau licence:-
  • if satisfied that the forex bureau operated in accordance with these guidelines; and
  • on payment of a renewal fee of US$500 or the equivalent in Malawi kwacha (based on the official middle rate between the US dollar and Malawi kwacha).
• Revocation of Forex Bureau Licence
  The Reserve Bank of Malawi reserves the right to revoke the licence of any forex bureau, at any time, if in the Reserve Bank of Malawi's opinion the conduct of that forex bureau is contrary to these guidelines and/or detrimental to the success of the forex bureau market.
• Amendment to the Guidelines
  The Reserve Bank of Malawi reserves the right to make amendments to the rules and regulations governing the operations of the forex bureau market at any time.

IV DEALINGS BY THE FOREX BUREAU

A forex bureau may sell foreign currency under this section to residents of Malawi i.e. Malawian passport holders and foreign passport holders with an official permit to reside in Malawi for over six consecutive months (for example, temporary resident permit, business resident permit e.t.c.).
• Travel
  (a)
  • A forex bureau may sell up to the indicative limit of US$3,000 (US$1,000 in cash and the balance in travellers cheques) or the equivalent thereof in any other foreign currency to an individual for each holiday trip outside Malawi and issue a sales receipt. The amount shall be endorsed in the passport/travel document of the traveller. Subsequent sales to the same individual shall be conditional upon proof of previous travel;
  • A forex bureau may sell foreign exchange beyond the indicative limit under this section provided the excess amount is sold in travellers cheques and provided the client furnishes the bureau with an itinerary clearly showing the duration of the trip.
  
  (b)
  • A forex bureau may sell up to the indicative limit of US$5,000 (US$1,000 in cash and the balance in travellers cheques) or the equivalent thereof in any other foreign currency to an individual going on a business trip outside Malawi, provided the application is supported by a letter on the company's headed paper (certifying that the trip is official). The bureau shall endorse this amount in the passport/travel document of the traveller and retain the letter. Subsequent sales to the same individual shall be conditional upon proof of previous travel;
  • A forex bureau may sell foreign exchange beyond the indicative limits, provided the excess is sold in travellers cheques and provided the client states the purpose of the trip (meeting, workshop, seminar etc.), confirmation by hosting country and furnish the bureau with an itinerary clearly showing the duration of the trip.
  
  (c) Every forex bureau shall submit separately, on a weekly basis:
  • documents submitted to it under this section to the Reserve Bank of Malawi for recording; and
  • documents submitted to it under this section establishing the bona fide nature of any request for excess allowances.
  (d) Under no circumstances shall a bureau allow any individual to obtain both holiday and business allowance at the same time.
• Medical and Education
  A person in Malawi may transfer abroad foreign currency obtained from a forex bureau to cover the costs of medical and education expenses as follows:-
  (a)
  • In the case of Medical Allowance, the bureau may sell up to the indicative limit of US$4,000 (US$1,000 in cash and the balance in travellers cheques) or the equivalent thereof in any other currency per trip upon production of a referral letter from a recognized medical doctor practising in Malawi.
  • The forex bureau may sell foreign exchange beyond these limits, provided the bona fide nature of the request can be established by the client and the excess is sold in travellers cheques or bank draft.
  • Every forex bureau shall submit, on a weekly basis, the documents submitted to it under this section to the Reserve Bank of Malawi for recording.
  (b) In the case of Educational Expenses, the forex bureau may sell up to the indicative limit of US$25,000 per student per year or the equivalent thereof in any other currency to residents of Malawi subject to the following documentation:
  • Evidence that the student is a citizen of Malawi, or a dependant of a resident of Malawi;
  • Proof that the beneficiary has a bona fide admission letter from an institution of learning, evidencing that the student has been enrolled for the period claimed;
  • In the case of a continuing student, evidence that the student is still enrolled and attending the institution;
  • the relative bills or statements of account from the educational institution showing the amount required for:
    - tuition fees;
    - incidental expenses, including text books and stationery;
    - boarding and lodging expenses where the student is living in a hall of residence; and
    - a letter from the school stating requirements for non-residents, where the student is not in a hall of residence.
  • The above educational expenses shall be paid directly to the educational establishment through an authorized dealer bank.
  • Every authorized dealer bank shall, immediately after receiving and processing the documents, submit them to Reserve Bank of Malawi for recording purposes.
• Merchandise Imports
  A forex bureau may sell foreign exchange for the purpose of paying for imports to any person or organization subject to submission and verification of the following documents:-
  (i) Where goods imported under modes of payment other than a Letter of Credit (L/C)
  • Final supplier's invoice evidencing the amount being applied for;
  • A preshipment inspection clean report of findings covering the goods specified on the invoice;
  • Form E (For Imports Only); and
  • Custom's Bill of Entry (Imports).
  (ii) In case where an L/C is to be opened at an Authorized Dealer Bank, provide his bankers with the following:
  • proforma invoice
  • Form E (imports only)
  • Payment to the Authorized Dealer Bank of amount so purchased from the forex bureau to provide cover for the L/C.
  When the above conditions have been satisfied, the authorized dealer bank shall open the L/C for the importer. Such an L/C should demand preshipment inspection. (iii) The forex bureau shall immediately after processing the documents, submit to the Reserve Bank of Malawi photocopies of documents submitted to it under Section IV (3) (i) and (ii)of these guidelines supported by the relative foreign exchange receipts and Annex 16 hereto.
• Other Transactions
  Forex bureaux may sell foreign exchange up to US$250 or the equivalent thereof in any currency for purposes of subscriptions and examination and membership fees provided this is supported by thr relevant documentary evidence, such as invoices.
  Every forex bureau shall submit, on a weekly basis, the documents submitted to it under this section to the Reserve Bank of Malawi for recording.
• Dealings Amongst Forex Bureaux
  All dealings amongst forex bureaux shall be conducted in accordance with these guidelines and shall be duly reported to the Reserve Bank of Malawi supported by the relevant annexture.
• Insider Dealings
  Directors, shareholders, employees and their relatives, respectively shall not be accorded special favours by a forex bureau. Where this is established, the forex bureaux will be liable to penalties as provided for in (10) below or any other forms of sanctions as may be determined by the Reserve Bank of Malawi.
• Non-residents
  Forex bureaux shall not sell foreign exchange to non-residents unless they produce evidence of having brought in foreign exchange and wish to convert their holdings of excess Malawi kwacha into foreign currency.
  For purposes of these guidelines, non-residents shall constitute persons normally living and working in Malawi but who are paid entirely from a source outside Malawi or persons living or working in Malawi for a period of less than six consecutive months in any twelve-month period.
• Remittances
  Forex bureaux shall always advise their customers that all outward remittances shall be made through an authorized dealer bank.
• Endorsements
  Forex bureaux shall endorse all documents presented to them by their customers under these guidelines.
• Penalties
  Any person guilty of an offence under these guidelines shall be liable to penalties as specified in section 41 of the Exchange Control (Forex Bureaux and Foreign Exchange Fixing Sessions) Regulations, 1994.

LICENSING REQUIREMENTS FOR DEALING IN FOREIGN EXCHANGE BY TOURIST OPERATORS
Preamble

These Licensing Requirements (the Requirements) are issued under Part I (3) of the Exchange Control Regulations of the Exchange Control Act, 1989.

Application

The Requirements apply to tourist operators (hereinafter Licensee) who are members of the Malawi Tourism Association (MTA) and authorized to deal in foreign exchange by the Reserve Bank of Malawi in terms of the Regulations. In terms of Section 3 of the Exchange Control Act, unauthorized tourist operators are prohibited from dealing in foreign exchange.

Tourist operators mean hotels, motels, inns and any other tourist service provider who is a member of MTA.

I CONDITIONS GOVERNING ISSUANCE OF LICENCE AND COMMENCEMENT OF BUSINESS. (1) An application for a licence to deal in foreign exchange must be made on Form AD 1 (Annex 1) accompanied by a non-refundable payment fee determined by the Bank from time to time. (2) Reserve Bank of Malawi shall issue a licence (Annex 2) to the applicant and the licence shall remain valid until revoked by the Reserve Bank of Malawi or until the operator ceases to operate.

II OPERATIONS AND DEALINGS OF A LICENSEE

(1) Licensees may purchase foreign exchange from non-residents only. However, sales of forex by non-residents shall be voluntary and tourist operators shall not in so doing require non-residents to settle bills in foreign currencies.

(2) Licensees are prohibited from selling forex to any person other than authorized dealer banks and forex bureaux

.(3)

• Licensees shall open and maintain Foreign Currency Denominated Accounts (FCDAs) with authorized dealer banks for the sole purpose of depositing the foreign exchange so purchased.
• The FCDA shall be subject to the conversion and retention requirement ruling at any point in time and balances in the FCDA shall be used in accordance with Exchange Control rules and regulations.

(4) Licensees shall be free to quote buying exchange rates and shall prominently display these rates on a board in a conspicuous place on their premises in the following manner:-

• show the current buying rates for each currency with equal prominence;
• if different rates apply to travellers cheques and cash, show these rates separately and clearly; and
• the rate s so quoted shall be inclusive of all charges e.g. commissions etc.

(5) Licensees may purchase excess Malawi Kwacha from tourists upon proof of conversion at an authorized dealer bank, foreign exchange bureau or any other authorized dealer.

(6) Licensees shall issue accurate official purchases receipts (Annex 3) for all transactions.

(7) Records of transactions

• Each licensee shall maintain separate registers for each of the following transactions:-
  (i) purchases of foreign currency notes
  (ii) purchases of travellers cheques.
  (iii) purchases of forex through international credit cards.
  
• In addition to the above, each licensee shall maintain a register reconciling purchases and deposits and/or sells at authorized dealer banks, forex bureaux and sold to tourists in exchange for excess local currency (Annex 4).

(8) Inspection

• The Reserve Bank of Malawi may, at any time, carry out an inspection of the conduct, records and books of accounts of licensees.
• The licensees shall, within reasonable time, produce to the officer making an inspection all such books, accounts and all other documents in the authorized dealer's custody and to furnish that officer with such statements or information relating to the affairs of the licensee.

(9) Returns Licensees must submit, in the prescribed format (Annex 5), monthly returns of their transactions in foreign exchange by the 10th of the subsequent month.

(10) Revocation of Authorized Dealer Licence The Reserve Bank of Malawi reserves the right to revoke the licence at any time if in the Reserve Bank of Malawi's opinion the conduct of such business is contrary to these Requirements.

(11) Amendment to the Guidelines The Reserve Bank of Malawi reserves the right to make amendments to the Requirements.