Amendments To Seychelles' Financial Sector Laws Receive National Assembly Approval

by Amanda Banks, Tax-news.com, London

28 May 2001

The Seychelles National Assembly has approved a series of amendments to existing legislation that will strengthen the authorities' power to regulate and monitor the activities of the banking sector and foreign exchange operations.

The amendments, presented to the Assembly by Vice-President James Michel, who is also Minister for Finance, will be made to the Foreign Earnings Act, Exchange Control Act, Central Bank of Seychelles Act, Trades Tax Act and Licences Act.

According to the Seychelles Nation news, changes to the Acts will include the addition of provisions stipulating that exports of goods and services from Seychelles 'will have to be invoiced in foreign exchange which in turn should be brought into licensed financial institutions in Seychelles ... [and] goods brought into Seychelles are reasonably priced and that the price customers is charged on the market is within price control regulations.'

The amendments are an attempt by the government to curb the increasing activity of the black market, which is severely damaging the economy.

Under the new amended laws, foreign exchange earners will be obliged to use the country's banking system. Vice-President Michel claimed that in excess of 1.4 billion rupees was created by goods and services per year in the tourism industry alone but less than half that amount was actually circulating within the country's banking system and making money for the economy. According to the Seychelles Nation, the term 'foreign exchange earner' is expected to include non-residents (as well as residents) who engage in a trade, business or activity with another such person for or on behalf of or for the benefit or purpose of any person not resident in Seychelles.'

It is expected that amendments to the Trades Tax Act will strengthen price controls and enable the authorities to put a 'true' value on imported goods. And amendments to the Exchange Control Act will require individuals who possess any foreign currency to show evidence that it is obtained from a registered dealer and it will also include a prohibition against buying and selling foreign currency by authorised dealers at rates above the maximum rate or below the minimum rate determined by the Central Bank as well as prohibiting the export and import of Seychelles currency notes and coins in excess of R2,000.

The amendments will be enacted by the President as early as possible but the date as yet is undecided.

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