Guideline No. 19/2018, of December 3

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GUIDELINE NO. 19/2018 of December 3 SUBJECT: FOREIGN EXCHANGE POLICY

• Foreign Currency Purchase and Sale Auctions
• Organization and Operational Procedures Whereas it is necessary to adjust the organization and operational procedures of foreign currency purchase and sale auctions conducted by the Bank of Angola; Pursuant to the combined provisions of Article 3 of Law No. 16/10, dated July 15, the Bank of Angola Law, and Article 70 of Law No. 12/15, dated June 17, the Framework Law for Banking Financial Institutions, and in exercise of the authority conferred upon me by Article 51 of Law No. 16/10, dated July 15, the Bank of Angola Law. I HEREBY DETERMINE:

1. Object and Scope This Guideline establishes the rules and procedures that Banking Financial Institutions must observe in foreign currency purchase and sale auction sessions conducted by the Bank of Angola.
2. Method for Conducting Foreign Currency Sale or Purchase 2.1 The sale or purchase of foreign currency by the Bank of Angola (Bank of Angola) is conducted through electronic auctions in the Foreign Exchange Market Management System – SGMC, in accordance with the conditions and procedures set forth in this Guideline.

[CONTINUATION OF GUIDELINE NO. 19/2018 Page 2 of 7] 2.2 The Bank of Angola and the Banking Financial Institutions authorized by it participate in the auctions. 2.3 The frequency of the auctions is determined by the Bank of Angola. 3. Access Conditions for Foreign Currency Sale Sessions of the Bank of Angola 3.1 In participating in each foreign currency auction session, Banking Financial Institutions must previously ensure compliance with the legislation and regulations applicable to banking activity, particularly regarding: a) the mandatory reserve level required in national currency; b) the foreign exchange position limit; c) compliance with the minimum regulatory solvency ratio limit; d) the existence of internal control systems and procedures that ensure compliance with legal and regulatory provisions on foreign currency commercialization, including those related to the prevention of money laundering and terrorist financing; and e) submission via SSIF, or in its absence, by email: dcc@bna.ao, by 5:00 PM on each Thursday of every week, the “Needs Map” containing information on foreign exchange resource requirements for operations that are ready to be effectively executed. 3.2 Banking Financial Institutions that fail to meet the above requirements or that present significant deficiencies in their internal control systems will be sanctioned under current regulations, including the prohibition of participation in future auctions.

[CONTINUATION OF GUIDELINE NO. 19/2018 Page 3 of 7] 4. Procedures for Conducting Auctions 4.1 Foreign Currency SPOT Sale Auctions 4.1.1 The amount available for each auction and the denomination of foreign currency are communicated by the Bank of Angola via SGMC or other available and adequate communication means. 4.1.2 Banking Financial Institutions must submit their proposals in SGMC within a maximum period of 30 (thirty) minutes after the auction opens, indicating the amounts and respective exchange rates. 4.1.3 Each Banking Financial Institution may submit up to 4 (four) proposals with different exchange rates, provided that the value of each proposal is not less than USD 250,000.00 (two hundred and fifty thousand United States Dollars) or the equivalent in another foreign currency, consistent with the currency announced for the session. 4.1.4 The total amount of proposals submitted by each Commercial Bank shall be limited to the equivalent of 15% (fifteen percent) of its regulatory own funds. 4.1.5 The total amount that Banking Financial Institutions may purchase weekly is limited to the amount reflected in their “Needs Map” submitted in the previous week. 4.1.6 Whenever Banking Financial Institutions have reached the amount referred to in the previous point, they must abstain from participating in subsequent auction sessions until the end of the week. 4.2 Auctions for Allocation of Ceilings for Letters of Credit 4.2.1 The Bank of Angola may organize specific auctions for the foreign exchange coverage of letters of credit, designated Quantity Auctions, committing to sell foreign currency up to a pre-defined value (ceiling), made available as follows: a) on the auction date, an amount to be determined at the spot exchange rate that can be used for settlement of advances or collateralization; b) up to 5 (five) days before the payment date of each shipment, the remaining amount upon presentation of proof of document negotiation, at the spot exchange rate. 4.2.2 Without prejudice to the procedure described above, the Bank of Angola may assume a sale commitment at a forward exchange rate, in which case it must previously inform Banking Financial Institutions of the applicable terms and conditions. 4.2.3 After the proposal submission period closes, the Bank of Angola communicates the auction result via SGMC and/or other available and adequate communication means. 4.2.4 The ceiling allocated to Banking Financial Institutions in each auction must be used for opening letters of credit within a period of up to 45 (forty-five) days, after which any unused ceiling will be cancelled. 4.2.5 Forty-five (forty-five) days after each quantity auction, Banking Financial Institutions must send the Bank of Angola information on the utilization of allocated ceilings. 4.2.6 Banking Financial Institutions may only submit new proposals in ceiling allocation auction sessions if they have open letters of credit worth 50% of the ceiling allocated in the previous quantity auction.

[CONTINUATION OF GUIDELINE NO. 19/2018 Page 5 of 7] 4.2.7 The opening and payment of letters of credit, partial or total, must be registered in SINOC and reported via SSIF. 4.3 Purchase Auctions 4.3.1 The amount and denomination of foreign currency that the Bank of Angola intends to purchase through auction are communicated via SGMC or other available and adequate means. 4.3.2 Banking Financial Institutions must submit their foreign currency sale proposals in SGMC, indicating the amount and respective exchange rate. 5. Criteria for Selecting Submitted Proposals 5.1 Banking Financial Institutions' proposals to purchase foreign currency from the Bank of Angola are selected in descending order of exchange rate, starting with the proposal offering the highest rate, until the total available amount is exhausted. 5.2 Banking Financial Institutions' proposals to sell foreign currency to the Bank of Angola are selected in ascending order, starting with the proposal offering the lowest rate, until the total amount available from Banking Financial Institutions or sought by the Bank of Angola is exhausted. 5.3 Whenever proposals with equal rates are submitted and it is not possible to satisfy all requests, the available amount will be allocated proportionally to the amount of each submitted proposal. 5.4 The total amount of proposals submitted by each participating Banking Financial Institution in the auction session shall be limited to 25% of the offering placed by the Bank of Angola.

[CONTINUATION OF GUIDELINE NO. 19/2018 Page 6 of 7] 5.5 The Bank of Angola reserves the right to exclude proposals deemed speculative or outside the context of equilibrium, stability, and dynamism in the foreign exchange market. 5.6 After the proposal submission period closes, the Bank of Angola communicates the auction result via SGMC and/or other available and adequate communication means. 6. Procedures for Settlement of Operations and Restrictions 6.1 The settlement of foreign currency purchase and sale operations occurs on D+2. 6.2 Access to rediscount operations for the settlement of foreign currency acquired in auction sessions is not permitted. 6.3 Whenever there is an absence or insufficiency of resources for settling the operations provided in this Guideline, the following sanctions are applied concurrently to the non-compliant Banking Financial Institution: a) cancellation of the purchased amount without coverage; b) monetary fine; c) prohibition from participating in the next 3 (Three) auction sessions. 7. Commercialization of Foreign Currency Acquired from the Bank of Angola 7.1 The foreign currency acquired under this Guideline must be obligatorily used to cover operations listed in the Needs Map submitted to the Bank of Angola, in accordance with current regulations. 7.2 Acquired currency that is not commercialized and exceeds the foreign exchange position limit by the end of the day must be resold to the Bank of Angola at the prevailing BNA purchase exchange rate.

[CONTINUATION OF GUIDELINE NO. 19/2018 Page 7 of 7] 8. Other Sale Modalities and Purposes 8.1 The Bank of Angola may conduct extraordinary foreign currency purchase and sale sessions with an intervention character, defining specific participation criteria. 8.2 For coverage of operations ordered by a sovereign body, or whenever the supply of essential goods and services is involved, the BNA may adopt alternative foreign currency sale modalities. 9. Doubts and Omissions Doubts and omissions arising from the interpretation and application of this Guideline are resolved by the Bank of Angola. 10. Revocation Guideline No. 01/2018, dated January 19, is hereby revoked, along with all regulations contrary to the provisions of this Guideline. 11. Entry into Force This Guideline enters into force on January 2, 2019. PUBLISHED. Luanda, December 3, 2018. THE GOVERNOR JOSÉ DE LIMA MASSANO