Parliament has passed amendments to the Foreign Exchange Act criminalising the sale and advertising of US dollars at rates above those set by the Maldives Monetary Authority (MMA), with substantial penalties for violations.

The bill was passed with the support of the PNC members present, while MDP members voted against it.

The bill, submitted by Holhudhoo constituency MP Abdulla Sattar Mohamed on behalf of the Government on 12 August, initially sought to remove the authority granted to Category A tourism establishments to exchange up to USD 500 for each tourist and require them to exchange 40 per cent of their foreign currency earnings into Maldivian rufiyaa.

Following its referral to the Finance Committee for reconsideration, several major amendments were introduced.

Under the revised bill, tourism-related businesses and other entities receiving at least USD 25 million annually must deposit their foreign currency earnings into a bank account operated by an MMA-licensed bank and provide the Authority with details of the account.

Category A tourism establishments will also be required to exchange 40 per cent of their total monthly foreign currency earnings into Maldivian rufiyaa.

For businesses with 100 per cent Maldivian ownership, the foreign currency conversion requirement has been set at six per cent of their monthly gross revenue from goods and services.

The amendments further establish that foreign exchange transactions must be conducted at rates set and published by the MMA, or within the prescribed exchange-rate bands.

Selling or attempting to sell foreign currency at rates above the authorised rate will constitute an offence. Depending on the severity of the offence, individuals may be fined between MVR 25,000 and MVR 1 million.

Advertising, promoting or encouraging the purchase or sale of foreign currency at rates above the authorised rate is also prohibited.

The bill prohibits publicly disclosing, publishing, distributing, circulating, repeating or otherwise providing information through digital media, platforms or other means to advertise or promote foreign currency transactions at unauthorised rates.

Individuals found guilty of this offence may be fined between MVR 25,000 and MVR 500,000.

Where a legal entity or registered business is involved in the unauthorised sale, purchase or advertising of foreign currency, the entity may be fined between MVR 100,000 and MVR 5 million.