The Federal Government of Nigeria has reportedly announced the commencement of the Foreign Currency Voluntary Disclosure, Depositing, Repatriation, and Investment Scheme, known as the Disclosure Scheme.
The monetary measure is pursuant to the Executive Order No. 15 of 2023 titled ‘Disclosure, Depositing, Repatriation, and Investment of Eligible Foreign Exchange Assets and Related Matters Order, 2023’ and the ‘Foreign Currency Disclosure, Deposit , Repatriation, and Investment Scheme Guidelines, 2024’, issued by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on October 25th, 2024.
The Disclosure Scheme is an initiative designed to enhance transparency in the financial sector and boost Nigeria’s economic resilience, growth and development.
By facilitating the voluntary disclosure, depositing, repatriation, and investment of internationally tradable foreign currency held by Nigerians, both within and outside the country, the scheme aims to integrate these legitimate foreign currency assets into the formal economy.
Specifically, the key objectives of the scheme include, enhancing financial transparency in the financial sector by formalising legitimate foreign currency assets held outside the Nigerian banking system by Nigerians within or outside the country, and targeting weaknesses in the existing framework by promoting cashless and legitimate transactions within the formal financial system; and by so doing strengthening regulatory enforcement while also encouraging financial practices that reduce the likelihood of illicit cash transactions.
Speaking during the launch of the scheme on Friday in his office in Abuja, the Minister said: “The Disclosure Scheme is a bold initiative aimed at integrating foreign currency outside the formal financial system into the formal economy. It strengthens transparency and economic resilience, setting us on a path to rapid economic growth.
“The scheme offers a secure, confidential channel for people to reintegrate their legitimate foreign currency funds, promoting stability and growth for our nation. Guided by President Tinubu’s leadership and supported by the Central Bank of Nigeria (CBN) and Ministry of Justice, we are building a transparent and inclusive economy, aligned with best practice in anti-money laundering and countering the financing of terrorism”, he added.
According to the scheme’s implementation guidelines, which are as published by the Central Bank of Nigeria (CBN), to participate in the scheme, the participants must be Nigerians holding legitimately earned internationally tradable foreign currency.
The key features of the Disclosure Scheme are that it is based on voluntary disclosure by eligible participants, participants are required to maintain a domiciliary account with participating financial institutions, with deposited or repatriated funds held in a sub-account specifically designated for depositing foreign currency disclosed under the Scheme
On the scheme’s forbearances and assurances, the government assured that participants will not be subjected to any tax audit, investigation, or liability regarding the disclosed amount of foreign currency, and that the participants’ assets as disclosed, deposited, repatriated, and invested foreign currency under the scheme shall not be liable to any form of expropriation, seizure, or forfeiture.
In addition, participants can freely repatriate their foreign currency and any proceeds or accretions at the prevailing exchange rate, subject to the scheme’s guidelines, just as any information provided by participants will be treated with utmost confidentiality in accordance with relevant laws.
The guidelines further clarified deposit money banks (DMBs) regulated by the CBN will act as participating financial institutions, responsible for processing applications, maintaining designated accounts, and ensuring compliance with the scheme’s guidelines.
On the AML/CFT Measures, the government also makes it mandatory that in implementing the Scheme, participating financial Institutions must fully comply with existing Anti-Money Laundering (AML)/ Countering the Financing of Terrorism (CFT)/ Counter-Proliferation Financing (CPF) requirements. For avoidance of doubt, the effective application of AML/CFT/CPF preventative measures is key to ensuring that the Scheme is not used for money laundering or terrorism financing.
One of the benefits of the scheme is that any interest earned on balances in the designated domiciliary sub-account will not be subject to any form of tax.
This is even as the guidelines reflected that the Disclosure Scheme will be open for participation for a period not exceeding nine (9) months from the date of commencement.
To participate in the scheme, an applicant shall maintain or open a domiciliary account with a participating financial institution, complete the application form prescribed by the CBN through the participating financial institution, providing the required details and undertakings; and deposit or repatriate the disclosed foreign currency into the designated domiciliary sub-account.
