The People’s Majlis (Maldives Parliament) passed the government’s amendments to the Foreign Currency Act on Wednesday. Members voted 47 in favor and 12 against. The vote covered the bill as the committee revised it.
Holhudhoo MP Abdul Sattar Mohamed introduced the bill on the government’s behalf. The government said it wanted to review the criteria that decide which businesses must bank their foreign currency earnings and which must exchange them. It also wanted firmer rules on how Category A establishments convert foreign currency.
The foreign currency law amendments require two groups to deposit foreign currency income into a bank account. The first covers businesses that sell goods or provide services in the tourism sector. The second covers any other business that earned at least USD 25 million in foreign currency during the previous calendar year. The current law sets that figure at USD 15 million.
Those businesses must hold the account at a bank licensed by the Maldives Monetary Authority (MMA). They must also give the authority the account details.
Category A tourism establishments face a new conversion rule. They must exchange 40 percent of their total monthly foreign currency income into Rufiyaa. The previous rule set two options: USD 500 for every tourist who arrived that month, or 20 percent of total income.
The committee’s changes criminalize dollar sales that breach the MMA’s rates. Traders must buy and sell foreign currency at or below the rates or bands the authority sets and publishes. Anyone who sells above that rate, or attempts to, faces a fine between MVR 25,000 to MVR 1 million. The court will set the amount according to the gravity of the offence.
The foreign currency law amendments also target advertising. Anyone who promotes above-rate currency deals through digital channels or any other means faces a fine between MVR 25,000 and MVR 500,000.
The foreign currency law amendments set a heavier penalty for companies. A legal person involved in such dealings faces a fine between MVR 100,000 and MVR 5 million.