Notice No. 13/2023 of December 14 - Exchange Policy - Forward Exchange Operations

PUBLISHED IN THE OFFICIAL GAZETTE, FIRST SERIES, NO. 237, OF DECEMBER 14, 2023 NOTICE NO. 13/2023 SUBJECT: EXCHANGE POLICY

• Forward Exchange Operations

Whereas it is necessary to adapt the criteria and procedures for the contracting of forward exchange operations, with a view to broadening the scope and purpose of such operations; In these terms, under the combined provisions of Article 40, paragraph f) of paragraph 1 of Article 54, and paragraph 1 of Article 98, all of Law No. 24/21 of October 18, the Law of the Banco Nacional de Angola. I HEREBY DETERMINE:

Article 1. (Object)

1. This Notice establishes the criteria and procedures that Banking Financial Institutions, hereinafter referred to as Commercial Banks, must observe when contracting Forward Exchange Operations with their Clients.
2. Forward Exchange Operations are considered to be operations agreed between a Commercial Bank and its Client for the purchase (sale) of Kwanzas and sale (purchase) of a foreign currency, in specific amounts, exchange rate, and future maturity date.

Article 2. (Scope) 3. This Notice applies to Financial Institutions, as provided for in paragraphs 2 and 3 of Article 7 of Law No. 14/21 of May 19, the Law on the General Regime of Financial Institutions.

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Article 3. (Purpose of Forward Exchange Operations)

1. Commercial Banks may only contract Forward Exchange Operations with their Clients, individuals and legal entities, importers, exporters, oil and diamond companies, and state entities for the coverage of exchange rate risk related to specific and identified operations of import or export of goods.
2. Without prejudice to the preceding paragraph, Commercial Banks may also contract Private Forward Exchange Operations with their Clients, individuals.

Article 4. (Currency and Term)

1. Forward Exchange Operations may be contracted between the national currency and any other freely convertible foreign currency.
2. Forward Exchange Operations must have a maximum term of 1 (one) year for legal entities and 6 (six) months for individuals.

Article 5. (Formalization of Contracting)

1. Before carrying out any Forward Exchange Operations, Commercial Banks must enter into a Forward Exchange Contract with their Clients, establishing the general conditions applicable to the aforementioned operations, according to the model in Annex I, attached to this Notice and forming an integral part of it, with the adaptations they deem necessary for individuals and legal entities.
2. Before carrying out each Forward Exchange Operation, Commercial Banks must agree with their Clients on the specific conditions thereof, including the amount, currency, term, exchange rate, among other elements, with reference to the procedure defined in Article 5 of this Notice, depending on the negotiation method of the operation.
3. The Forward Exchange Contract is composed of the general conditions and the specific conditions of each operation.

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Article 6. (Negotiation, Confirmation and Registration of Operations)

1. The specific conditions of each Forward Exchange Operation are negotiated, confirmed by the Client and registered as follows: a) Transactions negotiated outside the FXGO platform – registered by the Commercial Bank in a physical document, according to the model in Annex II attached to this Notice, which forms an integral part of it, confirmed through the Client's signature on the document; b) Forward operations between participants of the FXGO platform must be negotiated through the RFQ (Request for Quote) command. c) In accordance with Directive No. 1/DMA/2020 of June 12, all forward operations with amounts equal to or greater than the equivalent of USD 50,000.00 (Fifty Thousand US Dollars) must be registered on the FXGO platform through the CNF FXGO – Trade Affirmation command, with all fields mandatory to be filled except for the Client's banking coordinates.
2. Without prejudice to the preceding paragraph, Commercial Banks must create conditions for the registration of all Forward Exchange Operations carried out.

Article 7. (Sanctions) Non-compliance with the provisions of this Notice constitutes an offense provided for and punishable under Law No. 05/97 of June 27 - Exchange Law combined with Law No. 14/21 of May 19, the Law on the General Regime of Financial Institutions.

Article 8. (Doubts and Omissions) Doubts and omissions resulting from the interpretation and application of this Notice are resolved by the Banco Nacional de Angola.

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Article 9. (Revocation) Notice No. 22/20 of November 27 is revoked, along with all regulations that contradict the provisions of this Notice.

Article 10. (Entry into Force) This Notice enters into force on the date of its publication. PUBLISHED. Luanda, December 06, 2023. THE GOVERNOR MANUEL ANTÓNIO TIAGO DIAS

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ANNEX I Model Forward Exchange Contract (General Conditions)

Between: [Bank Identification], represented by ……., with powers to act, hereinafter abbreviated as Bank; and, [Client Identification] or [Bank Identification], represented by ……, with powers to act, hereinafter abbreviated as Client; The Bank and the Client/Bank, collectively hereinafter referred to as the Parties;

Considering that:

1. The Parties intend to contract between themselves the terms and conditions that will govern the Forward Exchange Operations;
2. This Forward Exchange Contract is freely entered into in good faith and shall be governed by the terms and conditions of the following clauses, and subsidiarily: a) By the General Conditions of current accounts subscribed by the Client; b) By the Exchange Regulations.

Clause 1. (Definitions)

1. Exchange Contract – contract entered into between the Bank and its Client that establishes: a) General Conditions, applicable to Forward Exchange Operations; and, b) Specific Conditions of each operation, including the amount, currency, term, exchange rate, among other elements.
2. Business Days – the days on which the Institutions are open to the public and operating in the main Financial Market of the two currencies in question.
3. Forward Exchange Operation – operation agreed between a Commercial Bank and its Client for the purchase (sale) of Kwanzas and sale (purchase) of a foreign currency, in specific amounts, exchange rate, and future maturity date (hereinafter also referred to as operation or operations).

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Clause 2. (Purpose of Operations) Operations contracted under this contract must have as their sole purpose the mitigation of exchange rate risk resulting from the obligation to settle an import or a forward receipt of an export of goods.

Clause 3. (Confirmation of Client's Acceptance of Specific Conditions)

1. The Bank: a) Registers the specific conditions of the operation agreed with the Client, according to the model attached to this contract; b) Sends the document to the Client, who must return it duly signed, via the channel agreed upon by the Parties, within a maximum period of 24 (twenty-four) hours.
2. The specific conditions of each operation and its acceptance are registered on the FXGO platform.
3. The Parties agree that they shall be bound by the conditions of each operation on the date of acceptance of the specific conditions signed by the Client, in accordance with the preceding subparagraphs of this article. Note: The Bank must eliminate the option that is not applicable to its Client - In the case of Clients who do not trade on the FXGO platform, the Bank must retain subparagraph a) and eliminate subparagraph b), and vice versa for clients who trade on FXGO.

Clause 4. (Guarantees) The Commercial Bank may subject the contracting of any forward operation to the provision of guarantees whenever deemed necessary.

Clause 5. (Settlement of Each Operation)

1. The Client must ensure a sufficient balance in their current account, by 11:00 (eleven) hours on the second business day prior to the maturity date of each operation, in the amount due in the selling currency, so that the Bank can proceed to debit the amounts owed to it on the said maturity date.
2. Non-compliance with the preceding paragraph shall entail the same consequences as an early maturity, as provided for in Clause 7 of this contract.
3. The Client assumes full responsibility for any delays in fund transfers not attributable to the Commercial Bank.

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Clause 6. (Declarations) The Client declares to the Commercial Bank that: a) The risks resulting from the signing of this contract and the contracting of the operations are fully known to them, having been duly weighed and taken into consideration in the process of forming and deciding their will to contract. b) The Client further declares that: i. All necessary authorizations and resolutions for the signing of this contract have been obtained and comply with their bylaws and applicable legislation; ii. The execution of this contract does not violate and will not violate, either the provisions of their bylaws or any obligations undertaken by them in contracts or agreements with third parties, nor shall it place the Client in default or non-compliance with any obligations assumed by them; iii. They are unaware of any litigation, judicial or extrajudicial, that could influence or modify the conditions and legal requirements necessary for the execution of this contract; iv. They will immediately notify the Bank of any situations or events that may in any way affect the timely fulfillment of their obligations arising from this contract or that, under Clause 7 of this Contract, may give rise to its early maturity; v. The responsibilities assumed in this contract constitute direct and unconditional obligations, which rank at least equally with all other present or future responsibilities of the Client, not specifically guaranteed; vi. They will provide information regarding their economic and financial development when requested by the Commercial Bank; vii. They will promptly pay all contributions, fees, and taxes to which they are subject, namely to the General Tax Administration and Social Security, and, when requested by the Bank, will provide the relevant certificates proving the regularity of the aforementioned situations.

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Clause 7. (Early Maturity)

1. Without prejudice to any other rights conferred upon them by law, the Bank may consider all operations contracted with the Client under this Contract to have matured early if the Client fails to comply with any obligation arising therefrom, including the obligation set forth in paragraph 1 of Clause 5 of this contract, if not regularized within 2 (two) business days following its occurrence, for which purpose the Bank must notify the Client in writing as provided for in Clause 11 of this Contract.
2. The Bank may also consider the obligations arising from this Contract to have matured early upon the occurrence of any of the following situations, on the date of their occurrence, or, in cases where they are subject to regularization, if not regularized within 2 (two) business days following their occurrence: a) Breach of any other contract of any nature with the Bank; b) Failure to meet commitments to Social Security, the General Tax Authority, or any entity comprising the National Financial System; c) Occurrence of any circumstance that constitutes, or may come to constitute, a substantial change in the Client's financial capacity to fulfill their obligations under this contract.
3. The Commercial Bank shall notify the Client of the occurrence of early maturity under the preceding paragraphs, which shall apply from the date of receipt of the notification by the Client, as provided for in Clause 11 of this Contract.

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Clause 8. (Cancellation of Pending Operations)

1. Upon the occurrence of early maturity as provided for in Clause 7 of this contract, the Commercial Bank shall proceed with the immediate cancellation of all pending Operations contracted under this contract.
2. The cancellation date shall occur 5 (five) business days after the Client's receipt of the written notification referred to in paragraph 3 of Clause 7 of this contract.
3. The Commercial Bank shall calculate the amount related to the cancellation, which consists of any exchange rate differences resulting from the variation between the forward exchange rate stipulated in the specific conditions of each operation and the hedging exchange rate in the market for that position on the date of calculation, with the global cancellation amount determined by the sum of the exchange differences assessed for all operations not yet matured.
4. If the amount required to cover the position results in a loss for the Bank, the Client shall pay the respective amount to the Commercial Bank, whereas if it results in a profit for the Bank, the Bank must pay that amount to the Client.
5. The calculated cancellation amount shall be paid to the entitled Party within 5 (five) business days after its calculation, with the Commercial Bank being obliged, in the event the value is due by the Client, to notify the Client of the calculated amount with sufficient advance notice to allow the Client to comply with the defined deadline.
6. In the cases provided for in Clause 7 of this Contract, and after settling any cancellation amount owed by itself, the Bank shall be discharged from all its obligations arising from this contract, with nothing being claimable by the Client under it, under any title whatsoever.
7. The Commercial Bank may debit any current account held by the Client for any amounts arising from the execution of operations contracted under this contract, due and unpaid in a timely manner, as well as expenses incurred due to the Client's breach of the contract, including the calculated cancellation amount.
8. In case of default in payment by the Client of any amount due under this contract, default interest shall accrue at the interest rate to be defined by the Commercial Bank, which shall apply daily to the outstanding amount for the duration of the default.

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Clause 9. (Voluntary Early Performance) Without prejudice to the provisions of the preceding Clauses, either Party may propose to the other the early performance of any operation, which shall be agreed upon on a case-by-case basis, under terms and conditions to be defined by written agreement between the Parties.

Clause 10. (Information Provision to Clients)

1. The Commercial Bank must provide the Client, monthly, with a list of pending operations, identifying the essential commercial terms of each, including their respective valuation.
2. If the Client identifies discrepancies, they must notify the Commercial Bank in writing of such fact, with both Parties undertaking the necessary efforts to resolve these discrepancies as swiftly as possible.
3. In the absence of communication from the Client regarding the existence of any discrepancies within 5 (five) business days from the date of receipt of the operations list, it shall be considered correct.

Clause 11. (Notices and Communications)

1. All communications between the Parties must be sent to the coordinates indicated below, under penalty of being considered not carried out:

CLIENT BANK Attn: Address: Email Address:

2. Written communications to be made under this contract must be sent to the recipient by: a) Registered letter with proof of receipt; b) Registered mail with acknowledgment of receipt; c) Transmission via email with read receipt, or by publication through internet banking if the client has previously subscribed to this service and agreed to receive notifications regarding this contract through this medium.
3. Any communication shall be deemed carried out: a) If delivered by registered letter or mail with acknowledgment of receipt on the date of the signature evidencing receipt; b) If sent by email, on the date of the read receipt; c) If made available on internet banking, on the date the Client accesses the application and/or 5 (five) business days from the Bank's publication of the information in said application.
4. If the communication is received by the Client after 16:30 (sixteen hours and thirty minutes) on a business day of the communication's reception location, it shall be deemed to have been effected on the following business day.
5. The Parties undertake to immediately communicate any changes to their physical address or email address.

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Clause 12. (Expenses) Expenses inherent to this contract shall be borne by the Client, including those that may be introduced by law after its signing and that burden them due to retroactive application, as well as judicial and extrajudicial expenses, including attorney fees, that the Commercial Bank must incur to secure or obtain payment of its credits.

Clause 13. (Contract Amendments)

1. In the event of any amendment to a law, regulation, or operational requirement resulting from compliance with requirements imposed by legislation or regulation applicable to the Commercial Bank or the Client, the Commercial Bank reserves the right to modify the provisions of this contract at any time, with the amendments communicated to the Client as provided for in Clause 11 of this Contract.
2. The amendments referred to in the preceding paragraph shall only apply to operations contracted between the Parties after 15 (fifteen) days from the date of the Client's receipt of the communication referred to in the preceding paragraph, unless the Client notifies the Commercial Bank of their non-acceptance within that period, in which case such communication shall constitute a waiver of this contract, with the provisions of Clause 14 of this Contract applying in this situation.
3. Any alteration or modification of the contract shall only be valid if reproduced through a written document signed by the Parties, so if the Client does not communicate their acceptance within the period referred to in the preceding paragraph, it shall be deemed that a waiver of the contract occurred, with the provisions of Clause 14 of this Contract applying in this situation.
4. If this contract is deemed null or voidable, in whole or in part, or if its performance is impossible due to legal provision or a third party's act, the Parties undertake to perform all acts and enter into all agreements deemed necessary to achieve the same result without the verification of the defects that determined the nullity or annulment of the contract, to make its full performance possible.

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Clause 14. (Duration and Termination)

1. This contract is valid for an indefinite period, and either Party may, at any time, terminate it by sending written communication to the other Party by registered or registered letter, with such termination taking effect 15 (fifteen) days from the date of receipt of the said communication by the respective Party.
2. If operations are in force whose maturity date occurs after the termination date of the contract, this shall remain in force until the maturity date of the same, with no new operations being contracted after the date of receipt of the communication referred to in the preceding paragraph.

Clause 15. (Applicable Law and Jurisdiction)

1. This Contract shall be governed by Angolan Law.
2. The jurisdiction agreed upon by the Parties shall be competent to resolve any issues arising from this contract, with the express exclusion of any other.

Clause 16. (Effects) This Contract shall take effect from the date of its signing, and shall be drafted in two original copies, with each party holding one copy. Date .../…./…….

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ANNEX II Specific Conditions (Note to Commercial Banks: Include only in the case of contract signing with Clients who do not trade on the FXGO Platform)

Date Currency to be Sold by the Bank Currency to be Purchased by the Bank Client's Kwaza Current Account Client's Foreign Currency Current Account Deadline for Return of Specific Conditions Signed by the Client (24 hours after they have been sent) Maturity Date Term Forward Exchange Rate Amount to be Sold by the Bank Amount to be Purchased by the Bank Required Guarantee Amount Default Interest Rate Other Conditions:

We Confirm Our Agreement to the Terms of the Operation By the Bank By the Client Date: Date: Received by the Bank Signed: Date: