Export Proceeds Repatriation
Export proceeds repatriation is a rule requiring exporters to bring their foreign-currency earnings back into the country within a set period, and often to sell some or all of them to local banks or the central bank for local currency.
Also called: repatriation of export proceeds · repatriation requirement · surrender requirement · export proceeds surrender
The rule has two parts that are worth separating. Repatriation requires the money to come home, typically within 90 to 180 days of shipment. Surrender requires the exporter to convert a stated share into local currency. Some countries impose only the first; many reserve-short countries impose both.
The purpose is to capture foreign currency for the national reserves and stop it accumulating offshore. Regulators see export earnings kept abroad as leakage. Exporters see the rule as a cost, because they are forced to sell at the official rate and then buy foreign currency back when they need to pay suppliers.
For a payment provider collecting on behalf of exporters, these rules decide where funds may be held and for how long. A collection account abroad that keeps an exporter's receipts offshore beyond the permitted period can put the client in breach of exchange-control law, whatever the provider's own licence says.
In practice
Periods, surrender percentages and exemptions change often and vary by sector. Extractive industries are frequently subject to stricter treatment.
See also
- Capital ControlsCapital controls are government limits on moving money into or out of a country, or on converting its currency at the official rate. Imposed by a central bank or finance ministry, they determine whether a payment corridor is workable at all, and in which direction.
- Foreign Exchange ReservesForeign exchange reserves are the foreign-currency assets a central bank holds and can use at short notice: deposits and government securities in major currencies, gold, Special Drawing Rights and the country's reserve position at the IMF.
- Currency ConvertibilityCurrency convertibility is the ability to exchange a currency for foreign currency without official restriction. A currency may be convertible for trade payments but restricted for investment flows, and a legal right to convert does not guarantee the foreign currency is available.
- CFA FrancThe CFA franc is the name shared by two separate currencies used by fourteen African countries: the West African CFA franc (XOF) and the Central African CFA franc (XAF). Both are pegged to the euro at the same rate but are issued by different central banks.
- Virtual AccountA virtual account is an account number, often a virtual IBAN, that routes incoming payments into a single underlying real account while recording which customer or invoice each payment relates to. It identifies money; it does not hold any.