Two days after President Dr Irfaan Ali announced new policies for foreign exchange control in Guyana, the country’s Vice President Dr Bharrat Jagdeo has emphasised that these measures are meant to close loopholes that exist and prevent money from being siphoned off elsewhere.Additionally, Jagdeo told reporters that the new policies are not expected to burden locals and small business owners.“We’re not going to restrict Guyanese from purchasing foreign currency. We will make sure that we provide adequate amounts from the central bank to meet domestic demand but will close loopholes to prevent people from abusing the system,” Jagdeo said at his Thursday press conference.He added, “There will be significant exemptions for small businesses… it would be mainly for the larger users of foreign currency.”The new measures— nine in total— were announced during the President’s meeting with several stakeholders of the financial sector, including the Governor of the Bank of Guyana (BoG) Dr Gobin Ganga, the Commissioner-General of the Guyana Revenue Authority (GRA), Godfrey Statia, and representatives of the various commercial banks operating in Guyana.Extra verifications part of President’s foreign exchange control planSo what are the nine measures?1.) Any request for foreign exchange by any customer to commercial banks for the importation of goods to Guyana would require every customer to provide the commercial bank with a copy of the commercial invoice on the basis of which the commercial bank may release the foreign exchange to the said customer. The President said such a system already exists, but there are instances of over- and under-invoicing that must be dealt with.2.) Any customer that submits a request for foreign exchange, upon the arrival of the goods in Guyana, will have to submit a copy of the invoice and Bill of Lading to GRA. The documents must also be submitted to the commercial bank for verification. This allows the stakeholders to verify that the goods were purchased and that those goods were brought to Guyana and not taken to any other destination3.) If a customer fails to submit the certified copy of the invoice, the Bill of Lading, and a GRA compliance to the commercial bank, then the commercial bank shall not release the request for further foreign exchange4.) The commercial banks will submit copies of the Bill of Lading and the commercial invoice to the Bank of Guyana for further verification. The President said this new window will be set up at the central bank, and it will be one allowing robust monitoring and clearing, so that these new policies do not cause any delays in business transactions5.) Each commercial bank will have to ensure that personal credit cards are used strictly for personal transactions and not for the settling of business obligations, in light of a spike in credit card transactions6.) In cases where there are related party transactions and inflated invoicing for capital flights, the entities found responsible will be penalised. Capital flight, in economics, refers to the rapid outflow of a large amount of money or assets from a country or region due to several reasons. President Ali, however, said this is “unfair to the system.”7.) In cases where foreign exchange in the form of currency is being taken out of Guyana, the source of the currency will have to be declared. President Ali said this must be done whether the currency is purchased from the banks or “on the road”8.) Entities registered in Guyana under the local content laws that are providing services for the oil and gas sector must maintain a local bank account in which the foreign currency earnings shall be remitted into the said bank account. President Ali said local content legislation will be amended to reflect this9.) A single window post-clearing system will be established at the Central Bank, through which reconciliation and prior transactions between GRA, commercial banks, and the Central Bank will be completed before new requests are facilitatedPresident Ali said these measures would be implemented with immediate effect.The post Significant exemptions for small businesses as new foreign exchange rules target gaps – Jagdeo appeared first on News Room Guyana.