Download: Exchange Control Policy Guidelines, July 2018 Revision
The Foreign Exchange Control Act 2018 assigns the authority to the National Reserve Bank of Tonga over sending money and securities out of Tonga.
The exchange control documentary requirements guideline is issued by the Reserve Bank for use by banks and authorized restricted foreign exchange dealers under the Foreign Exchange Control Act.
These guidelines were introduced by the Reserve Bank to provide a level playing field in the foreign exchange market, improve the consistency of the exchange control process in the financial system, improve the accuracy of balance of payments statistics and assist with the protection of the country’s foreign reserves.
The exchange control documentary requirements list the type of supporting documents that banks and authorized restricted foreign exchange dealers are required to sight for all foreign exchange outward payments. Banks and authorized restricted foreign exchange dealers have been delegated to approve:
| 1. |
All payments of amounts up to T$100,000 per transaction except for gifts payments which are limited for amounts up to T$50,000 per applicant per beneficiary per annum, and the payments under the ‘Other EC Requirements’. |
| 2. |
Travel allowance payments are limited for amounts up to T$20,000 per application. |
| 3. |
The banks and authorized restricted foreign exchange dealers have been delegated to approve all payments of amounts up to T$5,000 per transaction per applicant without supporting documents, except for those under the ‘Other EC Requirements’. The Reserve Bank reserves the right to ask for any other information. |
| 4. |
All payments above the delegated limit require the prior approval of the Reserve Bank. |
For the purpose of ensuring compliance with the Exchange Control Policy Guideline, the Reserve Bank in accordance with Section 11(3) of the Foreign Exchange Control Act 2018, impose administrative penalties on an authorised person which may not exceed $10,000, and in the case of continuing contravention, an additional penalty which may not exceed $2,000 for every day during which such contravention continues.
Furthermore, in accordance with Section 29 of the Exchange Control Act 2018, a person who commits an offence against this Act shall be liable on conviction (i) in the case of an individual to a fine not exceeding $10,000 (or, if the offence is a continuing one, to a fine not exceeding $1,000 for every day during which the offence continues) or imprisonment for a term not exceeding 3 years or both (ii) in the case of a body corporate to a fine not exceeding $200,000 or if the offence is a continuing one, to a fine not exceeding $2,000 for every day during which the offence continues.
The Reserve Bank reserves the right to conduct due diligence checks on applicants, require further information, and may not approve any application that does not comply with its Anti-Money Laundering and Counter Terrorist Financing requirements.
It should also be noted that tax clearance requirements for payments are imposed and monitored by the Ministry of Revenue & Customs.
National Reserve Bank of Tonga
July 2018
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