On 20 November 2018, the Bank of Tanzania (BoT) suspended the licensing of new forex bureaus as it moved against illegal operators and suspected money laundering in the sector.
BoT governor Florens Luoga said all pending applications had been put on hold and no fresh ones would be received until new rules and regulations were introduced.
He said the regulator had already identified traders who obtained permits illegally and warned that their licences would be revoked. Their shops, he added, would be shut down after formal notice is issued.
According to Prof Luoga, a six-month investigation uncovered a growing number of illegal forex traders linked to money laundering activity. He also said the central bank’s two earlier efforts to stop the practice had failed because of what he described as a “wide syndicate that prevented enforcement of the regulations.”
The crackdown came after a coordinated operation in Arusha on Monday, which he said was planned with several investigative agencies so that registered bureaux de change and black market outlets could be inspected at the same time. The move unsettled customers and the wider business community in the northern tourist hub.
At around noon, Tanzanian military officers cordoned off forex bureaus while BoT officials raided the premises. The shops remained closed, with unarmed soldiers guarding the area and no access allowed to the public.
Prof Luoga said the army was used because most police officers were deployed to guard centres during the ongoing Form Two national examinations.
He said traders found to have broken the law would be arrested and prosecuted in court.
