2025 – Regulation No. 06/2024/CM/UEMOA on Foreign Exchange – Highlights
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On 20 December 2024, a new forex regulation was adopted in the West African Economic and Monetary Union ("WAEMU") – i.e., regulation No. 06/2024/CM/UEMOA (the "New Forex Regulation"). The New Forex Regulation repeals the former WAEMU forex regulation – i.e., regulation No. 09/2010/CM/UEMOA dated 1 October 2010 (the "Former Forex Regulation").
1. Preliminary observations
- The New Forex Regulation applies directly in all WAEMU member states (i.e., Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo).
- The official version of the New Forex Regulation is not yet publicly available, and we have no visibility into when it will become so. But there is an unofficial version of the New Forex Regulation, which we understand will be similar to the official version of the New Forex Regulation. This article is based on our review of the unofficial version of the New Forex Regulation.
- The points set out in section 2 below are not meant to be exhaustive. They just highlight a few examples of changes brought by the New Forex Regulation (when compared with the Former Forex Regulation).
2. Few examples of changes brought by the New Forex Regulation
- Introduction of new definitions/concepts. The New Forex Regulation introduces new definitions/concepts that were not referred to in the Former Forex Regulation (e.g., electronic money, payment establishment).
- Updated definitions. Just to give an example, the definition of "non-resident" set out in the New Forex Regulation is slightly different from the definition of "non-resident" set out in the Former Forex Regulation. Non-resident is now defined as follows, and we quote:
- "individuals that have their predominant centre of economic interest abroad and foreign civil servants that hold office in a member state of the WAEMU;
- legal entities that have their predominant centre of economic interest abroad;
- foreign diplomatic representations and assimilated entities as well as foreign military bases and other extra territorial enclaves installed in a member state of the WAEMU".
- Current operations. Current operations between residents of the WAEMU and non-residents of the WAEMU (e.g., payment of services provided by a non-resident of the WAEMU to a resident of the WAEMU) still need to transit via an approved intermediary (i.e., local banks), the post office, or the Central Bank of West African States (the "Central Bank") (together, the "Authorised Intermediaries") with the documents justifying the money transfers (e.g., copy of the invoice being paid) submitted to the Authorised Intermediaries. But some current operations which amount does not exceed a threshold set by the Central Bank do not need any documents justifying the money transfers. We understand that this threshold will be set out in a regulation of the Central Bank (probably an instruction), which will be issued in due course.
- Loans. When a resident of the WAEMU borrows money from a non-resident of the WAEMU, the loan proceeds need to be domiciled at a locally approved intermediary (i.e., local bank). This is not new. What is new, however, is the fact that the loan proceeds in foreign currency then need to be transferred to the Central Bank in accordance with the modalities set by it (we are not aware of any modalities that have been set by the Central Bank, but these would probably be published in due course). It would be interesting to see how this actually works in practice.
- Sale of foreign securities to residents of the WAEMU. Residents of the WAEMU that purchase foreign securities, which issuance and sale in WAEMU member states have been authorised by the Autorité des Marchés Financiers de l’Union Monétaire Ouest Africaine - (or AMF-UMOA, which is a regulatory agency responsible for the regional financial market), must finance that purchase (at a level of at least 75%) with foreign loan(s) or any other form of mobilisation of foreign resources.
- Key role played by approved intermediaries highlighted. The New Forex Regulation expressly states that individuals, legal entities, e-money companies and payment establishments executing money transfers under the responsibility of approved intermediaries (i.e., local banks), have to receive all foreign currencies from abroad or from non-residents, at an approved intermediary (i.e., a local bank).