The Central Bank is seeking to amend the Exchange Control Act to address unauthorised foreign exchange transactions and advertising.
During a sitting of a Joint Select Committee on Finance and Legal Affairs on Friday, the Central Bank noted the culture of informal foreign exchange trading in Trinidad and Tobago that may not align with current legislation.
According to Section 6.1 of the Exchange Control Act, only authorised dealers are legally allowed to buy or sell foreign exchange.
Inspector of Financial Institutions at the Central Bank, Patrick Solomon, noted: “We have seen the ads and we have sought legal opinion, in terms of whether it is legal or not, and based on the opinions that we got, it is saying that if somebody purchase or sell foreign exchange, they are committing an anticipatory offence of conspiracy, aiding, abetting, attempting, counselling, or procuring the sale of foreign exchange contrary to our Section 6.1.”
To address this, the Central Bank is proposing amendments to the Exchange Control Act. These changes would create clear offences for activities such as advertising foreign exchange transactions, and include mechanisms for risk-based monitoring.
Mr. Solomon said the Bank is also exploring the introduction of cash thresholds, similar to international practices to ensure transactions exceeding a certain amount are automatically flagged.
“In some jurisdictions, they have a cash threshold so for example, if you deal with cash over a certain amount, it must be reported in other cases so as part of our analysis and the implementation of the Act, we look at the various scenarios and come up with what we consider to be high, medium, or low and what are the consequences. So yes, we are going to look at it to see how best we could administer the Act in terms of its implementation.”
The Central Banks notes any amendments to the Act must go before the Parliament and will require a Special Majority.