Q&A – 11 September 2023

Remarrying to former spouse

I lived in a happy marriage for over 20 years. However, six years ago things went bad and I divorced my husband. By the time the divorce was issued, our children were adults already. Recently, in the course of organizing a send-off party with my former husband for our daughter, we eventually became very close with my former husband and our affection for each other started to grow again. Even after the party, our bond is becoming stronger overtime including caring for each other. As a result of this development, we have started discussions of reuniting and living together as we see good hopes of having a happy reunion. However, given the above background, we are wondering if it’s legally possible to resume our previous marriage and tear the decree of divorce so that it does not exist any more so that we are considered remarried. Is that possible?
PP, Dar

It is pleasant to hear that you, former love birds are, intending to reunite and live together once again in a marriage. According to section 112 of the Law of Marriage Act (Act), a marriage is considered to be dissolved where a decree of divorce is granted unless an appeal or notice of appeal is filed within 30 days from the date of the decree. In your case you have not mentioned if there was an appeal to the decree for divorce, therefore your previous marriage was dissolved and no longer exists. You cannot change this fact by tearing your divorce decree as legally you are divorced.

However, subsection 2 of section 112 of the Act provides that a marriage which has been dissolved shall not be an impediment to subsequent marriage of either of the parties thereto. This means that remarrying your former husband will be regarded under our law like any other marriage. Hence you will need to remarry as the previous marriage is no longer recognized in the eyes of the law.

Failure to register foreign loan

I work for a company which deals with the importation and sale of motor vehicles from China, Japan, UK and other countries. Due to the recent scarcity of USD in Tanzania which affects our business considering we pay the manufacturers and distributors in USD, we resolved to process a USD loan from one of our shareholders who is abroad. Since it was an emergency, we made quick arrangements including signing a loan agreement which shall be for a period of three years and the money was sent four months ago to our account in Tanzania. I heard that there is a law that such a foreign loan should be registered by the Bank of Tanzania (BoT)? Is that correct and what are the consequences?
TT, Dar

In Tanzania, the Bank of Tanzania is entrusted with the responsibility to monitor among others the private sector external debts. External debts are carefully monitored so as to ensure that the economy has the capacity to honour its debt obligations. What you heard is very true. The Foreign Exchange Regulations 2022 (Regulations) provides a requirement for any foreign loan to a resident in Tanzania with a tenure exceeding 365 days to be registered by the BoT and assigned a Debt Registration Number (DRN).  A DRN is a unique identification code assigned to identify registered external loans in the external loans database at BOT. Further such DRN shall be the reference for disbursement, debt service and any other transaction related to that loan.

Since the loan to your company is for a period of 3 years, it falls under the loans which are mandatorily required to be registered by the BoT as per the Regulations. Upon signing the loan agreement, your company was supposed to submit a certified copy of the loan agreement and any other relevant documents to your bank within 14 days for registration purposes. Your bank was supposed to submit such documents to the BoT within 7 days after receiving them from your company for the issuance of a Debt Registration Number. Therefore, considering your circumstances, you and likely your bank are already in contravention of the Foreign Exchange Act and the Regulations and subject to imposition of penalties by the BOT. Not only your company as the borrower, but the law also imposes a penalty on your bank for receiving the proceeds of a loan and failing to submit the required documents to BoT for registration as per requirement of the law.

The Foreign Exchange Regulations 2022 have recently been amended. Previously, a penalty of TZS 1M would have been imposed on your company for each day the loan remains unregistered. However, with the current amendments, the penalty is a flat TZS 4M or imprisonment for a term not exceeding 14 years or to both. In addition to the above and when registering the loan with BoT, you should take note that the Regulations require that the loan agreement should not contain unfavorable terms and conditions including, but not limited to, that the Interest rate and other charges on foreign loan should reflect the prevailing market conditions for the relevant currency of borrowing. It is also a requirement that the loan agreement should not include conditions precedent which require the borrower to open a foreign currency account outside the United Republic. In case the loan agreement has such terms, the BoT will not register such a loan.

Moreover, as per guidance issued by the BoT the loan agreement should contain a minimum of the following information: Name of lender and borrower; Contact details such as postal address, fax number, telephone number and physical address of lender and borrower; Loan amount and currency of transaction; Purpose of the loan; Applicable interest rate; Loan maturity period; Loan repayment schedule with clearly indicated dates; Clauses on events of defaults and consequences thereof; A clause indicating applicable law Disbursements indicating amount, disbursement date and currency; Debt service payments indicating principal and interest paid and value dates; Other charges paid, i.e. commitment fee, management fees etc; Details on loan enhancements or cancellations; and Details on loan restructuring or refinancing.