Selling salary dollars on black market is an offence, Ihusaan warns

Individuals who receive salaries or other income in US dollars are committing an offence if they sell the currency through unauthorised channels, Homeland Security and Technology Minister Ali Ihusaan said on Monday.

Speaking at a press conference at the President’s Office on the country’s dollar shortage, Ihusaan urged individuals and businesses to conduct foreign currency transactions only through entities licensed by the Maldives Monetary Authority (MMA) and at authorised rates.

The minister said 63 entities are registered with the MMA to conduct money exchange operations, while a number of businesses continue to operate without licences.

According to Ihusaan, investigations into seven unlicensed operators found that they had traded $76 million through the black market over the past nine months.

“Conducting money exchange without a permit is a criminal offence,” Ihusaan said.

He said using proceeds obtained through such activity for personal purposes, business activities or profit could constitute money laundering under Maldivian law.

Ihusaan said authorities had also investigated the sources supplying foreign currency to unlicensed exchange operators. The investigation found that some businesses earning dollars in the Maldives were supplying currency to the parallel market, he said.

“These individuals can only exchange foreign currency if someone provides it to them. So we investigated who was supplying them with this foreign exchange,” Ihusaan said.

He said the investigation had identified businesses in the tourism sector among those supplying dollars to the parallel market.

“We found that this includes entities earning dollar income within the Maldives, including resort chains. One of these parties exchanged $4 million on the black market over the past nine months,” he said.

Ihusaan also said construction companies providing services to the tourism sector and receiving payments in dollars had been identified as sources of foreign currency entering the parallel market.

The minister said the same legal requirements apply to individuals who receive their salaries in foreign currency.

“Many might view this as a very ordinary, harmless act. But exchanging dollars without a licence is a criminal offence in the Maldives, and this includes individual citizens,” Ihusaan said.

“For instance, if I receive my salary in dollars and sell it on the black market, that is, by definition, unauthorised money exchange.”

He urged individuals and companies to use licensed money changers and conduct transactions at rates permitted by the MMA.

“I urge all parties, companies and individuals alike, not to enter into illegal acts, whether out of unawareness or intent,” he said.

Ihusaan said exchanging foreign currency above rates authorised by the MMA is also prohibited. He added that limited enforcement of existing provisions in previous years should not be interpreted as an indication that the rules would not be enforced.

According to the minister, existing MMA laws and regulations allow fines ranging from MVR 5,000 to MVR 1 million for each transaction conducted in breach of foreign exchange requirements.

He said authorities had begun enforcing the provisions as part of efforts to address activity in the parallel foreign exchange market.

Ihusaan also alleged that some participants in the market were coordinating exchange rates and that political figures were involved.

“They wake up in the morning and call other money exchangers to set the rate for the day. That is how it is currently being done,” he said.

The minister said enforcement action would apply regardless of the identity or status of those involved.

“Laws will be enforced in the Maldives without looking at anyone’s face or status,” Ihusaan said.