Notice No. 14/2022 of July 5 on Foreign Exchange Policy for Capital Operations by Resident Corporate Entities

PUBLISHED IN THE OFFICIAL GAZETTE, FIRST SERIES, NO. 123, OF JULY 5, 2022 NOTICE NO. 14/2022 SUBJECT: FOREIGN EXCHANGE POLICY

• Foreign Exchange Capital Operations by Resident Corporate Entities

The ongoing evolution of the foreign exchange market necessitates updating the regulations governing capital operations by resident corporate entities. This update aims to simplify the regulatory framework and eliminate the requirement for licensing by the Central Bank of Angola (Banco Nacional de Angola) for capital operations, while maintaining rigorous validation requirements for all foreign exchange transactions, considering the critical role of correctly processing these operations in safeguarding the national financial system and international banking correspondence relationships. In this context, the amendments also aim to strengthen the responsibilities of banking financial institutions and emphasize the importance of detailed customer due diligence in validating foreign exchange operations. Pursuant to the combined provisions of paragraph 1 of Article 2 of Decree No. 23/98, dated July 24, approving the Regulations on Capital Operations; paragraph 2 of Article 28 of Law No. 5/97, dated June 27, the Foreign Exchange Act; Article 39 and paragraph 1 of Article 98, both of Law No. 24/21, dated October 18, the Central Bank of Angola Act. I HEREBY DETERMINE:

Article 1. (Subject Matter) This Notice establishes the rules and procedures to be observed in carrying out capital foreign exchange operations by corporate entities, namely contracts and other legal instruments through which rights or obligations are established or transferred between residents and non-residents, including credit operations.

Article 2. (Scope) The provisions of this Notice apply to: a) Banking Financial Institutions acting as intermediaries in the operations; and, b) Foreign exchange residents - corporate entities.

Article 3. (Financial Intermediation) The intermediation of foreign exchange operations covered by this Notice may only be carried out by a Banking Financial Institution, hereinafter referred to as Commercial Bank, authorized to conduct foreign exchange trading under the prevailing legislation.

Article 4. (Exemption from Licensing) The Central Bank of Angola delegates authority to Commercial Banks to carry out the capital operations covered herein without requiring specific licensing, provided that the provisions of this Notice are complied with.

Article 5. (Reporting to the Central Bank of Angola) Information regarding foreign exchange operations conducted under this Notice must be reported to the Central Bank of Angola in accordance with terms defined by it in specific regulations.

Article 6. (Customer Due Diligence)

1. Commercial Banks may only execute foreign exchange operations ordered by clients who have complete and updated account opening files, in accordance with the identification and due diligence obligations set forth in the legislation and regulations on the Prevention and Combating of Money Laundering, Terrorist Financing, and Proliferation of Weapons of Mass Destruction.
2. Commercial Banks must also ensure the collection of all necessary information to achieve a comprehensive understanding of their clients, including, where applicable, the following elements, which must be obtained on a minimum annual basis: a) Financial information; b) Confirmation of no outstanding debts with the tax authority; and, c) Confirmation of no irregularly registered debts in the Credit Information and Risk Central.
3. Without prejudice to the preceding paragraph, Commercial Banks must obtain additional financial information tailored to each client's characteristics, namely: a) Financial Statements audited or certified by an independent entity registered with the Angolan Order of Accountants and Chartered Accountants, or approved by the Court of Auditors, where applicable.

Article 7. (Foreign Exchange Coverage and Settlement) Foreign exchange operations covered by this Notice must be executed exclusively through bank transfers to the benefit of the foreign exchange non-resident beneficiary specified in the underlying legal instrument.

Article 8. (Evaluation of Foreign Exchange Operations)

1. Commercial Banks must conduct a rigorous evaluation of foreign exchange operations requested by their clients, applying necessary procedures to ensure legitimacy, considering, where applicable and among other elements, the following: a) The risk level assigned to the client under prevailing legislation and regulations on money laundering prevention, terrorist financing combat, and proliferation of weapons of mass destruction; b) The nature and size of the client's activity and its consistency with the purpose and value of the operation; c) The legitimacy of holding national currency funds used to purchase foreign currency, or clients' own foreign currency resources within their activity; d) The client's historical foreign exchange operations and their consistency with the operation to be executed; e) The nature and size of the beneficiary's activity and its consistency with the purpose and value of the operation, when justified by the nature and value; and f) The supporting documents for the operation, their authenticity, validity, and adequacy, considering the operation's value and nature.
2. Whenever there are suspicions of document forgery or other behaviors deemed fraudulent, Commercial Banks must refrain from executing the foreign exchange operation and must forward the file to criminal investigation authorities, notifying the Central Bank of Angola of the occurrence and measures taken.
3. Whenever Commercial Banks know, suspect, or have sufficient grounds to suspect that a money laundering, terrorist financing, or underlying offense-related operation has occurred, is ongoing, or was attempted, they must comply with the legislation and regulations on the Prevention and Combating of Money Laundering, Terrorist Financing, and Proliferation of Weapons of Mass Destruction.

Article 9. (Repatriation of Profits and Dividends) Distributed profits or dividends, as well as the value of divestment resulting from investments made abroad by foreign exchange resident corporate entities, must be repatriated to the credit of a bank account domiciled in a Commercial Bank headquartered in the country within 60 days, counted from the date of payment.

Article 10. (Movement of Foreign Currency Revenues) For the purposes of the preceding paragraph, foreign currency credited to the account may be moved in accordance with prevailing regulations on the movement of foreign currency accounts held by foreign exchange resident corporate entities.

Article 11. (Penalties) Non-compliance with this Notice is punishable under Law No. 5/97, dated June 27, the Foreign Exchange Act, and Law No. 14/21, dated May 19, the General Regime of Financial Institutions Act.

Article 12. (Doubts and Omissions) Doubts and omissions arising from the interpretation and application of this Notice are resolved by the Central Bank of Angola.

Article 13. (Repealing Provision) Instruction No. 01/03, dated February 7, is hereby repealed, along with all regulations contrary to the provisions of this Notice.

Article 14. (Entry into Force) This Notice enters into force the day following its publication. PUBLISHED. Luanda, June 27, 2022. THE GOVERNOR JOSÉ DE LIMA MASSANO