AG Usham: Revisions to FX laws will effect positive changes to economy within a month

Attorney General Ahmed Usham says he believes the recent amendments to the Foreign Currency Act will effect positive changes to the Maldivian economy within the coming month.

The amendments, which took effect on September 1, raises the mandatory US dollar exchange requirement for Category A establishments - resorts, integrated tourist resorts and private islands – from 20 percent to 40 percent of gross monthly revenue.

Speaking at a press briefing on Monday afternoon regarding the crackdown on illegal USD exchange, Usham said he believes the 40 percent exchange requirement will effect positive changes to the Maldivian economy within the next one-month period.

“I believe the amendment mandating foreign revenue generators to exchange 40 percent will effect positive changes within the next month. According to the law, it took effect on September 1. Therefore, they will need to exchange it starting October 1,” he told reporters gathered at the President’s Office.

The recent amendments to the Foreign Currency Act also prohibit the advertisement or promotion of foreign exchange at rates exceeding the official rates set by the central bank. The disclosure, publication, or dissemination of black-market exchange rates through digital platforms or any other medium is now punishable with fines of up to MVR 500,000 for individual offenders and up to MVR 5 million for legal entities or registered businesses.

Usham warned the authorities will continue to take action against violators.

Under the new amendments, the threshold for mandatory foreign exchange by non-tourism sector businesses earning dollar revenue has been raised from USD 15 million to USD 25 million per annum. Such businesses are required to exchange 40 percent of the monthly revenue in general, but seven percent if its 100 percent Maldivian-owned.

Meanwhile, Category B establishments - guesthouses, hotels, liveaboards - are required to exchange 20 percent of gross monthly revenue or USD 25 per tourist.

The government says the amendments were designed to retain US dollar revenue generated by the country within the local economy