Preliminary Provisions
Name of the Regulations and Commencement

1. These Regulations shall be called the “Regulations Governing Exchange Companies for the Year 2022” and shall come into force as of the date of their signing.

Repeal and Exception

2. The “Regulations Governing Exchange Companies for the Year 2011” are hereby repealed, provided that all decisions, circulars, and procedures issued thereunder shall remain in force until repealed or amended.

Interpretation

3. The terms and expressions used in these Regulations shall have the meanings assigned to them under the Banking Business Organization Act of 2004, the Central Bank of Sudan Act of 2002 (Amendment) of 2012, or any other laws replacing them.

Unless the context otherwise requires:

Bank: Means the Central Bank of Sudan.

Governor: Means the Governor of the Bank.

Exchange Company: Means any company or branch of a company licensed to conduct exchange business in accordance with the provisions of these Regulations.

Company Branch: Means any branch of a foreign company registered in Sudan in accordance with the Companies Act of 2015 or any other law replacing it.

Correspondent: Means a bank, exchange company, or licensed money transfer company operating outside Sudan that undertakes the necessary procedures and arrangements to execute transfers with the exchange company.

Foreign Currency: Means banknotes, foreign balances, checks, and bank transfers denominated in foreign currencies that are convertible and declared by the Bank from time to time as convertible.

Working Capital: Means current assets, including cash held in the treasury in local and convertible foreign currencies, balances held with banks and correspondents in local and convertible foreign currencies, less current liabilities, including obligations payable to third parties in local and convertible foreign currencies, if any.

Exchange Business: Means the activities specified in Article (11) of these Regulations.

Administrative and Financial Penalties Regulations: Means the regulations issued pursuant to Article 60(1), read together with Articles 38(2) and 58(6) of the Banking Business Organization Act of 2004, as amended.

Financial Year: Means the period beginning on the first day of January of the Gregorian calendar year and ending on the last day of December of the same Gregorian calendar year.

Licensing Authority

4. The Governor shall have the authority to grant licenses to companies to conduct exchange business after fulfilling the requirements set forth in Articles (5), (6), and (7) of these Regulations. The Governor may include in the license any conditions deemed appropriate and may also refuse to grant the license.

Licensing Requirements

5. The Governor shall grant a license to conduct exchange business in Sudan to persons wishing to establish a company, whether public or private, or to branches of foreign companies wishing to operate in the exchange business, provided that the following conditions are met:

a. The name of the company shall not include the word “bank,” “financial institution,” “investment company,” “commercial company,” “real estate company,” or any other term indicating activities other than exchange business.

b. Exchange business shall be the sole purpose for which the license is granted.

c. A license shall not be granted if any of the founders:

Has been convicted of an offense involving money laundering, terrorist financing, or any offense involving dishonesty or breach of trust.
Has been declared bankrupt or placed under legal incapacity.
Has an outstanding default with the banking system or is prohibited from conducting banking transactions.
Is a partner in a company that has been compulsorily liquidated or is still undergoing compulsory liquidation.
Licensing Stages and Requirements
Preliminary License

6. 1. Requirements for the Preliminary License:

a. Submission of a written application to the Governor, signed by the founders or their authorized representative. Where an authorized representative submits the application, the authorization shall be attached to the application.

b. Proof of identity, together with a curriculum vitae for each founder and details of their activities.

c. Submission of a draft Memorandum and Articles of Association and the company’s bylaws.

d. A feasibility study covering at least the next three years, including profit and loss statements, projected balance sheets, and projected cash flows.

e. The company’s three-year business plan.

f. Where one of the founders is a company, the audited financial statements for the latest three years shall be attached.

g. Payment of the prescribed licensing fees.

2. Local Companies Established in Sudan

In addition to the requirements set forth in Article 6(1) above, the following documents shall be submitted:

a. The competency and integrity questionnaire prepared by the Bank.

b. Criminal records of the founders, dated no more than three months prior to the date of application.

c. A certificate of financial standing issued by a licensed bank.

d. A detailed credit report for each founder issued by an accredited credit information agency.

e. Where one of the founders is a local company, a tax and Zakat clearance certificate shall be submitted.

3. Branches of Foreign Companies

In addition to the requirements set forth in Article 6(1) above, the following documents shall be submitted:

a. A true copy of the parent company’s license to conduct exchange business in its country of incorporation.

b. Approval from the competent regulatory authorities at the headquarters of the parent company to open a branch in Sudan.

c. A resolution of the parent company’s Board of Directors approving the establishment of a branch in Sudan.

d. A true copy of the Memorandum and Articles of Association of the parent company.

e. The parent company’s latest three audited financial statements.

4. Validity of the Preliminary License

The preliminary license shall be valid for six months only, during which the requirements for the final license must be completed. The Governor may extend the preliminary license for an additional three months, on one occasion only. Thereafter, the license shall be deemed cancelled and shall not be renewable. The founders shall bear all obligations arising from such cancellation.

Final Licensing Requirements

7. 1. No exchange business may be conducted under the license granted pursuant to Article (6) of these Regulations until a final license has been obtained, subject to the following requirements:

a. A certificate evidencing the deposit of the paid-up capital specified by the Bank.

b. Evidence of compliance with the insurance requirement specified in Article (9) of these Regulations.

c. Establishment of the organizational and administrative structures.

d. Establishment of an internal control and supervision system.

e. Appointment of executive management after submitting the candidates’ CVs, credit reports, and criminal records, and obtaining the Bank’s approval for their appointment.

f. Preparation of suitable company premises and the necessary facilities and equipment for conducting exchange business, and obtaining the Bank’s approval thereof.

2. Local Companies Established in Sudan

In addition to the requirements set forth in Article 7(1) above, the following documents shall be submitted:

a. The Memorandum and Articles of Association and the company registration certificate, duly certified by the General Commercial Registrar.

b. A written undertaking by the founders to comply with the provisions of the Anti-Money Laundering and Combating the Financing of Terrorism Act of 2014, or any law replacing it, as well as other relevant regulations, or any decisions or directives issued by the Bank.

c. Appointment of the Board of Directors after submitting the candidates’ CVs, credit reports, and criminal records, and obtaining the Bank’s approval for their appointment.

3. Branches of Foreign Companies

In addition to the requirements set forth in Article 7(1) above, the following documents shall be submitted:

a. A certificate of registration of the company’s branch in Sudan, duly certified by the General Commercial Registrar.

b. A written undertaking from the parent company to comply with the Bank’s regulations and directives and with the provisions of the Anti-Money Laundering and Combating the Financing of Terrorism Act of 2014, or any law replacing it, as well as other relevant regulations, or any decisions or directives issued by the Bank.

c. A written undertaking from the parent company to meet all current and future obligations arising from the liquidation of the branch or the transfer of its ownership.

Opening Branches, Representative Offices, Agencies, or Windows Outside Sudan

8.

a. Exchange companies shall not open branches, representative offices, agencies, or windows outside Sudan to conduct business without obtaining the Bank’s prior approval.

b. Approval shall also be obtained from the regulatory authority in the country concerned.

Capital

9.

a. The paid-up capital of an exchange company shall not be less than the minimum amount determined by the Governor. The Governor may amend such minimum amount whenever deemed appropriate.

b. The full amount of the capital shall be deposited in an equivalent amount in local currency for a local company and in foreign currency for a foreign company.

c. The capital of foreign companies and the capital held by foreign shareholders in local companies shall be registered with the competent department of the Bank.

d. Exchange companies may increase their authorized and paid-up capital as they deem appropriate, provided that the Bank is notified thereof in writing.

e. The transfer and disposal of shares shall be carried out in accordance with the Companies Act of 2015, the laws and regulations of the Capital Market Regulatory Authority and the Khartoum Stock Exchange, or any laws replacing them.

f. The Bank’s approval shall be obtained in the event of any change in the ownership structure or any acquisition.

Insurance

10.

a. Exchange companies shall deposit an insurance amount equivalent to 10% of the paid-up capital, in any of the following forms of security:

A deposit equal to the insurance amount with any bank licensed in Sudan, pledged in favor of the Bank.
A bank guarantee for the insurance amount in favor of the Bank, issued by a bank acceptable to the Bank.

b. The Governor may direct that the above insurance amount be amended as deemed appropriate.

c. The Governor may use the insurance amount to settle any violation committed by the exchange company. The exchange company shall replenish the insurance amount within the period specified by the Governor.

Activities of Exchange Companies

11. The activities of exchange companies shall be limited to the following:

a. Buying and selling foreign currency.

b. Buying and selling travelers’ checks.

c. Purchasing bank checks drawn on correspondent accounts held abroad and maintained with local banks.

d. Purchasing balances of free accounts held with banks operating in Sudan.

e. Conducting foreign transfers, both outgoing and incoming.

f. Any other activities approved by the Governor.

12. Regulations Governing the Activities of Exchange Companies
1. Exchange companies shall comply with the following:

a. Provide the basic infrastructure and facilities required for conducting their business, as determined by the Bank from time to time, in addition to a currency counterfeit detection device that meets advanced technical specifications.

b. Notify the Bank and the competent authorities upon discovering any counterfeit currency.

c. Conduct incoming and outgoing transfers through banks and exchange companies. Where dealing with foreign exchange companies, the company shall obtain documents and licenses proving that such companies are duly licensed by the competent authorities to conduct exchange business.

2. Exchange companies engaged in incoming and outgoing foreign transfers shall:

a. Comply with the provisions of Article (27) of these Regulations.

b. Make the necessary arrangements with their foreign correspondents to ensure the security and timely flow of transfers.

c. Maintain sufficient balances in their accounts inside and outside Sudan to meet the needs of beneficiaries of incoming and outgoing transfers without delay.

d. Not overdraw their accounts with local banks or foreign correspondents, obtain credit facilities, or borrow in any form, provided that their volume of business does not exceed their working capital.

e. Maintain complete supporting documents evidencing arrangements made with correspondents, as well as statements and movements of accounts held with their correspondents and local banks.

f. Verify the name and identity of the transfer applicant or beneficiary when carrying out transfer transactions and retain the relevant supporting documents.

g. Not accept or execute any transfers through any system unless conducted through the SWIFT system or any other transfer system that provides all necessary safeguards for security and confidentiality.

h. Maintain a systematic register of all types of transfers, including the name of the transfer applicant, address, identification details, beneficiary’s name, transfer number, date, amount in foreign currency, and its equivalent in Sudanese pounds.

i. Maintain insurance coverage for cash in both local and foreign currencies with an accredited insurance company.

j. Not deal with any foreign exchange company unless an agreement has been entered into with that company and a copy of the agreement has been deposited with the Bank. The agreement shall specify the responsibilities and obligations of each party towards the other, particularly the limits of responsibilities and obligations towards exchange companies (correspondents) in countries that impose restrictions on foreign currency transfers, and the value of the transfers shall be fully covered.

k. Execute foreign transfers in accordance with the regulations issued by the Governor from time to time.

Prohibited Activities

13. Exchange companies are prohibited from engaging in the following activities:

Accepting deposits or safekeeping funds, borrowing, or granting financing.
Conducting forward transactions in foreign currency.
Opening accounts for customers in foreign or local currency.
Issuing letters of credit or letters of guarantee.
Selling foreign currency to public sector bodies and institutions.
Depositing or accepting local or foreign currency for the purpose of obtaining or providing its equivalent in foreign or local currency at a future date.
Issuing checks in any foreign currency in the names of exchange company employees.
Accepting deferred-payment checks issued in local or foreign currency.
Any other activities prohibited by the Governor.
Administrative Controls

14.

a. Exchange companies shall prepare organizational and functional structures, internal control systems, and security procedures, and shall submit them to the Bank, together with any subsequent amendments thereto.

b. Prior approval from the Bank shall be obtained for the appointment of members of the Board of Directors, the General Manager, and the Deputy General Manager. Such approval shall be obtained after the candidates complete a personal questionnaire and submit their CVs, credit reports, and criminal records. Candidates for the management of an exchange company must possess the required competence and integrity and have appropriate experience and academic and technical qualifications.

c. Prior written approval from the Bank shall be obtained when appointing employees transferring from banks or other exchange companies.

d. Employees of exchange companies shall work on a full-time basis and shall not be entitled to work in any other position. They shall work exclusively for the company and must possess an appropriate level of experience, competence, and integrity.

e. Exchange companies shall develop and qualify their employees by organizing training courses relevant to the nature of their work.

Cancellation of the License and Appointment of the Official Liquidator

15. The Governor shall have the authority to cancel the final license in the following cases:

a. If the exchange company does not commence its business within two months from the date of issuance of the license.

b. If the licensed company ceases to conduct its business without providing substantial reasons.

c. If the company fails to maintain the minimum paid-up capital determined by the Governor where such minimum capital has been increased.

d. If the company violates any directive issued under the provisions of the Currency Dealing Regulation Act of 1981, the Banking Business Organization Act of 2004, the Anti-Money Laundering and Combating the Financing of Terrorism Act of 2014, or any laws replacing them, or any regulations, decisions, or directives issued by the Bank.

e. If the company incurs consecutive losses resulting in the erosion of its capital and fails to take measures to rectify its financial position.

f. If the company is declared bankrupt.

g. If the shareholders request cancellation of the license after all outstanding obligations have been confirmed by a legal auditor accredited by the Bank.

h. In cases of merger or acquisition.

Liquidation

16.

a. The Governor may issue an order for liquidation and appoint an official liquidator. The Governor may also request the court to approve the appointment of such official liquidator.

b. A company may voluntarily liquidate itself, provided that it obtains the Bank’s prior approval and complies with the conditions specified by the Bank.

c. No company may be voluntarily liquidated except under the supervision of the court.

d. The license shall cease to be effective upon the issuance of a decision to liquidate the exchange company or upon cancellation of its license.

Priority of Payments Upon Liquidation

17.

a. Upon the liquidation of any company, the following amounts shall be paid in the order of priority set out below:

Claims of transfer beneficiaries or persons entitled to any other activities referred to in Article (11) of these Regulations.
Employees’ entitlements.
All debts due to lessors in respect of real estate or movable property.
Non-commercial debts owed to the Government.
All other debts and obligations, which shall rank equally in priority.

b. The obligations referred to in paragraph (1) above shall be paid immediately from the assets to the extent necessary to satisfy them, after reserving the amounts required to cover the costs and expenses of liquidation.

c. The shareholders’ rights in the company shall be settled by distributing any remaining funds among them in proportion to the shares or interests held by each shareholder, after all obligations referred to in paragraph (1) above have been fully satisfied.

Restriction on the Amount of Foreign Currency Held by Exchange Companies

18. The Bank may determine the maximum amount of foreign currency that an exchange company may hold.

Commissions

19. Exchange companies shall disclose the commissions charged to customers for the services provided by the exchange company.

Determination and Disclosure of Exchange Rates

20.

a. Exchange companies shall determine the buying and selling rates of foreign currency in accordance with the policy established by the Bank.

b. Each exchange company shall publicly display, on a daily basis, the buying and selling rates of foreign currency in a prominent location both inside and outside the company’s premises.

Working Hours

21. The Governor shall determine the working days and hours of exchange companies.

Place of Business

22. Exchange companies shall conduct their business at their head office and at any other location approved by the Bank, subject to fulfillment of the conditions specified by the Governor.

Maintenance of Accounts and Auditing
Accounts and Records

23.

a. Every exchange company operating in Sudan shall maintain proper books, records, and accounts showing all daily transactions carried out by the company.

b. Every exchange company operating in Sudan shall use numbered and sequentially issued financial receipts for both buying and selling transactions.

c. Every exchange company operating in Sudan shall use an electronic accounting system.

Request for Information

24. The Bank shall have the right to request any exchange company to provide periodic reports and any information or data it deems necessary.

Inspection

25. The activities of exchange companies shall be subject to annual inspection by the Bank.

Annual Financial Statements

26.

a. All exchange companies shall appoint an external legal auditor approved by the Bank.

b. The external legal auditor shall not be changed during the period specified by the Bank.

c. All exchange companies shall submit to the Bank, within the first three months of each financial year, their audited annual financial statements for the preceding year, audited by the legal auditor approved by the Bank.

d. The Governor may, in the public interest, appoint a legal auditor to audit the accounts of an exchange company, provided that the company shall bear the audit fees.

Combating Money Laundering and Terrorist Financing

27. All exchange companies shall comply with the provisions and regulations stipulated in the Anti-Money Laundering and Combating the Financing of Terrorism Act of 2014, or any other law replacing it, as well as any approved international standards or local regulations issued in this regard.

Bank Directives

28. The Governor shall have the right to issue general or specific directives to exchange companies concerning their activities. Such directives shall be binding and mandatory for implementation.

Currencies Permitted for Exchange Companies

29. The Bank shall determine the foreign currencies that exchange companies are permitted to deal in.

Prohibition on the Export and Import of Foreign Currency

30. An exchange company shall not export from or import into Sudan any foreign currency except pursuant to an authorization issued by the Bank.

Violation of the Provisions of the Regulations

31.

a. Any exchange company that violates the provisions of these Regulations or any order or circular issued pursuant thereto shall be subject to the penalty prescribed under the Administrative and Financial Penalties Regulations issued by the Bank.

b. Any exchange company that provides incorrect or misleading information shall be subject to the provisions of the Administrative and Financial Penalties Regulations issued by the Bank.

I hereby certify that the Board of Directors of the Central Bank of Sudan approved these Regulations at its meeting No. (3) of 2022, held on 20 Rabi’ al-Thani 1444 AH, corresponding to 14 November 2022.

Hussein Yahya Janqoul
Governor of the Central Bank of Sudan
Chairman of the Board of Directors