AmendmentTrade

Transfer NBE’s Foreign Exchange Functions to Commercial Banks (Amendment) (Directive No. 69/2020)

National Bank Of Ethiopia69/2020

Summary

This directive amends Directive No. 50/2020 by modifying the requirements for import and export authorization, specifically concerning the value thresholds for requiring International Competitive Bid (ICB) documents and outlining exceptions. It also repeals Article 4 of Directive No. FXD/07/1998 and Directive No. FXD/13/2000.

Who's affected

Commercial banks authorized to handle foreign exchange transactions, importers, and exporters, particularly those involved in transactions exceeding USD 1,000,000.

Action required

Commercial banks must update their procedures to comply with the amended import and export authorization requirements, including checks for International Competitive Bid documents for imports above USD 1,000,000, while noting the specified exceptions.

Key points

5
  • Article 4 of Directive No. 50/2020 is amended.
  • Imports valued at USD 1,000,000 or more require ICB documentation.
  • Exceptions to ICB documentation apply to government/public enterprise imports and imports from own FX accounts.
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    • NBE Governor/Vice-Governor can grant special approvals.
    • Directive No. FXD/07/1998 and Directive No. FXD/13/2000 are repealed.

Requirements

5
  • Commercial banks are mandated to allow import and export of goods for any value, excluding coffee, against submission of required documents.
  • For imports valued at USD 1,000,000 and above, commercial banks must verify that the import application is supported by relevant International Competitive Bid (ICB) documents.
  • ICB document requirement is not applicable for imports by Government and public enterprises governed by government procurement proclamation or their respective procurement laws.
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    • ICB document requirement is not applicable for imports using own Foreign Currency Account.
    • NBE’s Governor or Vice-Governor of Monetary Stability Cluster may give special approval on a case-by-case basis if the case is deemed acceptable.

Rights and permissions

4
  • Commercial banks have the mandate to allow import and export of goods for any value (excluding coffee) upon submission of required documents.
  • NBE’s Governor or Vice-Governor of Monetary Stability Cluster has the right to grant special approval for imports.
  • Government and public enterprises have the right to be exempted from ICB requirements under specific conditions.
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    • Entities importing using their own Foreign Currency Account have the right to be exempted from ICB requirements.

Restrictions

3
  • Import and export of coffee are excluded from the general authorization mandate.
  • Imports of goods valued at USD 1,000,000 and above require verification of International Competitive Bid (ICB) documents by commercial banks, unless an exception applies.
  • Exceptions to the ICB requirement are limited to government imports, public enterprise imports, and imports using own foreign currency accounts.

Objectives

5
  • To amend the existing directive regarding the transfer of NBE's foreign exchange functions to commercial banks.
  • To modify the requirements for import and export authorization, including value thresholds for ICB documentation.
  • To specify exemptions from ICB requirements for certain government imports and imports using own foreign currency accounts.
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    • To grant NBE's Governor or Vice-Governor the authority to provide special approval in specific cases.
    • To repeal previous directives related to foreign exchange functions.

Organizations

3
  • National Bank of Ethiopia (NBE)
  • Commercial Banks
  • Government and public enterprises

Legal references

6
  • Article 20(2) and Article 27(2) of the National Bank of Ethiopia Establishment Proclamation No. 591/2008
  • Directive No. 50/2020
  • Directive No. FXD/07/1998
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    • Directive No. FXD/13/2000
    • Government procurement proclamation
    • Their respect procurement laws
Original sourcehttps://justice.gov.et/en/directives/transfer-nbes-foreign-exchange-functions-to-commercial-banks-amendment-directive-no-69-2020/
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