Within the CEMAC zone, assignment refers to the prior transfer of foreign exchange or the sale of assets subject to the prior approval of the central bank, whilst retrocession constitutes the mandatory operation by which commercial banks are required to return a minimum of 70% of repatriated foreign currencies such as United States Dollars or Euros to the Bank of Central African States (BEAC) in exchange for CFA Francs (XAF).
1. Retrocession of Foreign Currencies
BEAC regulations require local credit institutions to retrocede foreign currency to the Central Bank.
The 70% Rule: Authorized intermediaries — including commercial banks — are required to retrocede a minimum of 70% of foreign currency received in connection with exports, loans, investments, and income to the Bank of Central African States (BEAC).
30% Retention Limit: The remaining 30% is reserved exclusively for the purpose of meeting the current operational needs of the credit institution, subject to authorization by the Central Bank.
Transaction Accounts: Retrocessions denominated in United States Dollars are directed to the BEAC account held at Citibank New York, whilst retrocessions in currencies other than the United States Dollar are remitted to the Banque de France.
Daily Reporting: Credit institutions are required to process daily SWIFT MT202 messages within a period of three business days from the value date (D+3).
2. Assignment of Foreign Exchange
Assignment operations concern the sale or transfer of assets, donations, or foreign currency proceeds to parties or destinations outside the CEMAC zone. This is in accordance with the Circular-letter-N°023-GVR-2019 applicable in Cameroon and CEMAC.
Amounts Under 20 Million XAF: Such operations are subject to a mandatory prior declaration to the Central Bank and the Ministry responsible for currency and credit matters.
Amounts Over 20 Million XAF: Such operations are subject to the requirement of formal prior authorization from the Bank of Central African States (BEAC) before they may be carried out.
Required Documentation: The applicant is required to provide an Assignment Agreement or related documentation justifying the basis of the assignment, evidence of tax compliance, and a List of Supporting Documents appropriate to the nature of the transaction, in accordance with the applicable regulatory requirements.
Foreign currencies held in a CEMAC Member State, regardless of their ownership, shall be transferred or, where applicable, deposited by the owner with a credit institution.
Residents shall transfer to their domiciliary credit institution all income or proceeds received in foreign currency abroad or paid by a non-resident in respect of their external transactions.
The currencies collected by credit institutions are retroceded to the Central Bank.
However, in order to cover the current foreign exchange needs of their customers, credit institutions may be authorised to keep a proportion of the currencies received.
An Instruction of the Central Bank specifies the conditions and modalities of foreign exchange retrocession by credit institutions.
The currencies referred to in Article 37 of the Regulations include export earnings from goods and services, borrowings, current account advances, income, donations, direct or portfolio investments and transfers without counterpart.
Unjustified foreign currency assets held by credit institutions in the accounts of correspondents shall be transferred to the Central Bank under the terms and conditions specified by the latter's Instruction.