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COMMERCIAL LAW MEMORANDUM ON EXCHANGE CONTROL

Martin George & Company > Laws of Trinidad and Tobago  > COMMERCIAL LAW MEMORANDUM ON EXCHANGE CONTROL

COMMERCIAL LAW MEMORANDUM ON EXCHANGE CONTROL

1. The Exchange Control Act Chap. 79:50 regulates all foreign currency transactions in Trinidad and Tobago and is designed to prevent the escape of currency and preserve the Country’s foreign exchange reserve. Prior to April 12, 1993 there existed under the Exchange Control Act and Regulations made thereunder a range of controls and restrictions in respect of dealings in gold, local and foreign currencies, securities and payments to non-residents designed strictly to control any leakage of foreign exchange. To be lawful any such dealings required the prior approval of the Central Bank of Trinidad and Tobago.

2. With the passage of the Central Bank (Amendment) Act, 1993 and the par value of the Trinidad and Tobago Dollar Order, 1993, the majority of the previously existing restrictions and controls were repealed.

3. The par value of the Trinidad and Tobago Dollar now floats as against the United States Dollar and consequently against every other foreign currency. The rate of exchange is now based on the prevailing market rates which are defined in the case of an authorised dealer as such rate as the authorised dealer may from time to time specify as its buying and selling rates for the United States Dollar and in the case of the Central Bank of Trinidad and Tobago such rate as the Bank shall determine as the average of the buying and selling rates for the United States Dollar specified by each authorised dealer.

4. Persons may now freely buy, borrow, sell or lend gold or foreign currency from each other outside Trinidad and Tobago and all persons within Trinidad and Tobago can now buy, borrow, sell and lend gold and foreign currency to/from authorised dealers only without the approval of the Central Bank. Neither the Central Bank nor any authorised dealer can any longer place a restriction as to the use to which any gold or foreign currency sold/borrowed from them must be put or the period for which such gold or foreign currency may be retained by the buyer/borrower.

5. There is no longer any obligation to sell gold/foreign currency to an authorised dealer and these items may now be retained without any interference by the Central Bank. Payments may now be made within or outside Trinidad and Tobago to or from or on behalf of anyone.

6. There is no longer a need in the case of investment from abroad to obtain Exchange Control approval in principle before the investment is made and loans may now be made to non-residents without the approval of the Central Bank.

7. With the liberalisation of the foreign currency regime the repatriation of capital is no longer subject to Exchange Control approval.

 

Extracted From: Trinidad and Tobago Law.com

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