Friday, 09 September 2022 08:22

Legal Update on Limit on Foreign Currency Holding in the Territory of Ethiopia

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Introduction

The National Bank of Ethiopia (NBE) has introduced a Limit on Birr and Foreign Currency Holding in the Territory of Ethiopia Directive (“New Directive”) which repealed and replaced the previous directive regulating the matter, Directive No. FXD/49/2017, effective from September 5, 2022.  We have prepared this short legal update to give our clients an overview of the main change brought by the New Directive.

On Foreign Currency Holding and Timeline Limit for Incoming Individuals (through air transportation)

Resident person in Ethiopia entered into the territory of Ethiopia should convert all the foreign currency they hold at authorized forex bureau or deposit to their foreign currency account, if they have, within one month from the date of entry. If the amount exceeds US$ 4000, they have to present customs declaration.

Diasporas and Ethiopian who are non-resident and intended to stay in Ethiopia for more than three months should transfer all the foreign currency they hold to their non-resident foreign currency account or foreign exchange saving account within three months from the date of entry. If the amount exceeds US$ 10,000, however, they have to present custom declaration.

Foreigners who are not residing in Ethiopia can hold the amount of foreign currency they hold without restriction until the expiration of their visa.

On Foreign Currency Holding and Timeline Limit for Outgoing Individuals (through air transportation)

A person residing in Ethiopia can travel aboard with foreign currency purchased from the bank within one month from the date of a bank advice. Non-resident diaspora and Ethiopian nationals who are not residing in Ethiopia can travel aboard with foreign currency either purchased from the bank within one month from the date of a bank advice or if they enter the country and leave within three months. If the amount exceeds US$ 10,000, they have to present customs declaration.

Embassy and international institutions’ employees, trainers and workshop participants who enter the country can hold more than US$ 10,000 if they provide either bank advice or employer’s letter or supporting letter that justify the acquisition of the foreign currency is from a legal source.

On Foreign Currency Holding and Timeline Limit for Incoming Individuals (through inland transportation)

A person entering into the territory of Ethiopia through in land transportation should declare at the board if they hold other foreign currency which have equivalent or more than US$ 500. 

On Birr Holding Limit for Incoming and outgoing Individuals

Any person entering to and departing from Ethiopia can hold up to ETB 3000 per travel. However, travel from and to Djibouti can hold up to a maximum amount of ETB 10,000 per travel.

On Prohibited Transactions

Unless as provided in this New Directive or other laws, it is prohibited to hold foreign currency. It is also prohibited to undertake any transaction in foreign currency. Therefore, the New Directive prohibits to pay foreign currency in cash to a third party either to discharge a contractual or other obligations or by way of gift and/or donation unless as provided the New Directive, other laws or without prior authorization of the NBE. Any person who acquired foreign currency by means of donation and/or gift before the coming into effect of the New Directive should convert the currency s/he received to Ethiopian birr within one month therefore until October 05, 2022.

Disclaimer: This information is intended as a general overview and discussion of the subjects dealt with.  The information provided here was accurate as of the day it was posted; however, the law may have changed since that date.  This information is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation.  Mehrteab & Getu Advocates LLP is not responsible for any actions taken or not taken on the basis of this information.  Please refer to the full terms and conditions on our website. 

Copyright©2022 Mehrteab & Getu Advocates LLP.  All rights reserved.

Read 696 times Last modified on Tuesday, 13 September 2022 08:27

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