1. Legal framework
1.1. What laws and regulations govern exchange control regime in your jurisdiction?
The laws and regulations governing exchange control regime in Benin are:
- Regulation 06/2024/CM/UEMOA on financial relations of the Member States of the West African Economic and Monetary Union (UEMOA) of 20 December 2024 ACT No. 2016-11 OF 8 JULY 2016 providing uniform rules for the litigation of infringements of the rules governing the external financial relations of the Member States of the Economic Union and West African Monetary Union (WAEMU);
- Act No. 86-005 of 26 February 1986 on the litigation of foreign exchange control offenses;
- Act No. 2018-17 of 25 July 2018 on combating money-laundering and the financing of terrorism in the Republic of Benin, as amended by Act No. 2020- 25 of 20 September 2020;
1.2. Which bilateral and multilateral exchange control instruments have an effect in your jurisdiction? How is regulatory cooperation and consolidated supervision ensured?
The Community provisions on exchange control regime within the UEMOA shall apply to Benin; in this case, it is Regulation 06/2024/CM/UEMOA on the financial relations of the Member States of the West African Economic and Monetary Union (UEMOA) of 20 December 2024, which repealed and replaced Regulation No 09/2010/CM/UEMOA/of 10/10/2010 on the external financial relations of the Member States of UEMOA and its implementing texts, which had hitherto been applicable.
1.3. What are the current priorities of regulators and how do they work with the banking industry?
Current priorities of regulators In Benin, foreign exchange regulators, such as the Central Bank of West African States (BCEAO) and the Ministry of Economy and Finance, are focusing their efforts on several key priorities:
- Combating money laundering and terrorist financing (AML/CFT)
- Strengthening foreign exchange control regime and supervision
- Improving transparency and regulatory compliance
- Ensure compliance with the rules on the external financial relations of WAEMU member States
These priorities aim at ensuring the stability of the financial system, preventing illegal activities and fostering an environment conducive to trade and investment.
Modalities for working with the banking industry
In Benin, collaboration between foreign exchange regulators and the banking sector is crucial to ensuring financial stability and compliance with regional and international standards.
2. Exchange control regime
2.1. Can a subsidiary or affiliate repatriate money to a non-resident parent company?
Yes.
2.2. Is there limitation of transfer of foreign currency to procure goods or payment for services to non-resident person?
Yes.
2.3. Can a subsidiary easily make payments for intra-group transactions?
Yes
2.4. Are there rules against intercompany netting off?
No
2.5. Are permits required to transfer money to a third party or non-resident entity for procurement of goods or services?
Yes, authorization to exchange currency.
2.6. What requirements or documentation must be in place before banks authorize requests for international transfers?
- The invoice for the good or service;
- The foreign exchange authorization issued by the Directorate for Monetary and Financial Affairs.
2.7. Have there been recent directives issued by your Central Bank on Exchange Control?
No.
3. Exchange control contraventions
3.1. Which entities are responsible for enforcing the relevant laws and regulations? What powers do they have?
Law enforcement agencies
In Benin, several agencies are responsible for enforcing exchange laws and regulations:
- The Central Bank of West African States (BCEAO);
- The Ministry of Economy and Finance; and
- Authorized Intermediaries.
In summary, the BCEAO is the main body responsible for regulating and controlling foreign exchange in Benin, in collaboration with the Ministry of Economy and Finance and authorised intermediaries.
Sanctions
3.2 What sanctions are applicable in the event of a violation of the exchange control regime?
In Benin, the sanctions applicable to violations of the exchange rate regime are defined by Act No. 2016-11 of 8 July 2016 and the regulations of the Central Bank of West African States (BCEAO). These sanctions are aimed at ensuring compliance with the rules on external financial relations (EFR) within the West African Economic and Monetary Union (WAEMU). These are mainly fines and prison sanctions.
4. Trends and forecasts
4.1 How would you describe the current exchange control regime and trends in your jurisdiction? Are there any plans for further developments in the next 12 months, including proposals for legislative reforms?
The current exchange control regime in Benin is rather strict and does not offer any possibility of deviance. We are not aware of any new developments planned in the next 12 months.
4.2 Does your jurisdiction regulate cryptocurrencies? Are there any legislative developments with regard to cryptocurrencies or financial technologies in general?
In Benin, the regulation of cryptocurrencies is an evolving subject. There are no specific rules for cryptocurrencies.
