On 1st September 2023, the Governor of the Bank of Tanzania issued the Foreign Exchange (Amendment) Regulations, 2023 (the “2023 Amendments”) through the Government Notice No. 622. These regulations amend the Foreign Exchange Regulations, 2022.
The 2023 Amendments include:
- Removal of specified penalties (accruable daily at a rate of Tanzania Shillings One Million a day) to local banks and borrowers who fail to register foreign loans with the Bank of Tanzania. Removal of 10% penalty to a bank and foreign financial institutions for failure to comply with the regulation. The penalties have however been replaced with reference to the main Act which provide for penalties not exceeding TZS.4million or imprisonment for a term not exceeding 14 years or both penalties.
- Deletion of regulation 26 and replacing it with regulations which stipulate that a foreign credit will not be accommodated if they contain unfavourable terms and conditions, unfavourable non-prevailing market interest rates and charges and unreasonable conditions precedent which may require opening of a foreign currency account outside of Tanzania.
The requirement to register foreign loans with the Bank of Tanzania in respect of loans which exceed 365 days remains.