The Bank of Ghana (BoG) is taking the enforcement of laws on repatriation of export proceeds to another dimension with an enhanced education.
It is part of an intensified effort to help deal with exporters who flout section 15 of the Foreign Exchange Act, 2006, Act 723, which relates to export activities and repatriation.
Per the act, exporters are expected to repatriate proceeds from merchandise exports in compliance with the Letter of Commitment (LOC) regime.
It was for this reason that the Ghana Shippers’ Authority (GSA) in collaboration with the BoG held the seminar to sensitise exporters in the Bono, Bono East and Ahafo regions.
The seminar, which took place in Sunyani on Tuesday, August 9, focused on Letter of Commitment requirements for the repatriation of export proceeds.
It was the first in a series to be held across the country this year. The seminar followed engagements between the GSA and the BoG after several complaints from exporters and some custom house agents regarding the implementation of the LOC since its introduction in 2016.
Taking participants through the legal framework of the LOC, the Head of Foreign Operations at the BoG, Mr Eric Hammond, urged exporters to strictly comply with the law in order not to be prosecuted.
“The LOC is a document required to accompany every merchandise export leaving the country. And so, the LOC is a commitment on the side of the exporter to assure proceeds from goods shipped out will be repatriated in compliance with the law.
“So, the forum today is to address issues affecting operationalisation of the LOC regime. This forum was ,therefore, held to build the capacities of these exporters so that they will be able to understand issues relating to the LOC,” he said.
He explained that the LOC was a mandatory requirement for all exports moving out of the country.
According to him, exporters who fail to repatriate proceeds through an external bank are in breach of Act 723 and are liable on summary conviction to a fine of not more than five thousand penalty units or to a term of imprisonment of not more than ten years or to both.
Under the LoC regime, the head maintained that recalcitrant shippers were often blocked from undertaking any export activity in the country.
“The backbone of the regime is the Foreign Exchange Act implemented by BoG and so because the system has been automated, recalcitrant exporters are blocked periodically.
“Once an exporter is blocked, it will be difficult for the person to engage in export activity in the country using the shipment procedures.
“A list of these exporters is then prepared every week and forwarded to the security agencies, especially the CID for further investigation and prosecution,” he said.
The Chief Executive Officer (CEO) of the GSA, Benonita Bismarck, in her opening remarks, observed that the challenges with the implementation of the LOC included inadequate time allocated for the repatriation of export proceeds and blocking of subsequent export transactions for non-repatriation of proceeds beyond 60 days.
“The others were delays in accessing repatriated proceeds from commercial banks, low exchange rates offered by the banks, high commissions charged by commercial banks, and the unsuitability of the current form of the LOC for small-scale cross border trade.”
She noted that most of the problems faced by exporters stemmed from non-compliance and inadequate knowledge of the procedures involved, hence the collaboration between the two organisations to remove these bottlenecks.
On his part, the Kumasi Branch Manager of the GSA, Isaac Tersiah Ackwerh, noted that Non-Traditional Export (NTE) earnings for 2021 amounted to about USS$3.3 billion, which was an increase of 17 per cent over the 2020 figure of US$2.846 billion.
He said this clearly indicated the importance of the repatriation of export proceeds to the country, and therefore, the need to comply with Section 15 of the Foreign Exchange Act, 2006 (Act 723).