Circular No. 02/EES/2011 on Advance Payments for Goods and Services

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--- Bank of Mozambique --- Administration

ECONOMIC STUDIES AND FOREIGN

CIRCULAR NO. 02/EES/2011

Maputo, June 8, 2011

SUBJECT: Advance Payments for Goods and Services

Law No. 11/2009, of March 11, the Exchange Law, established a new exchange regime where the principle of freedom of current transactions prevails, defined – by exclusion – as those not qualified as capital operations, with operations involving goods and services standing out among them. These no longer require authorization from the exchange authority, needing only registration, which is carried out by entities authorized to conduct foreign exchange business.

Given the need to issue instructions to ensure that the rules of the new exchange regime are implemented with the desired consonance with the aforementioned principle, the Bank of Mozambique, under paragraph 2 of Article 130 of the Regulation of the Exchange Law, approved by Decree No. 83/2011, of December 31, as well as under item d) of paragraph 2 of Article 37 of Law No. 1/92, the Organic Law of the Bank of Mozambique, clarifies:

1. Regarding the requirements established in paragraphs 3 to 6 of Article 20 and in Article 29 of the Regulation of the Exchange Law, banks shall process requests whenever there is good faith.

2. Good faith must be assessed based on objective elements, namely:

   a) Existence of a valid contract between the supplier and the beneficiary of the goods or services; b) Existence of a proforma invoice.

3. Requests processed under the terms of this Circular must be organized and archived autonomously, in a manner that allows for their specific control by the Bank of Mozambique, when necessary.

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4. This Circular enters into force on July 11, 2011, revoking all provisions to the contrary.

5. Doubts arising from the interpretation and application of this Circular must be submitted to the Foreign Department of the Bank of Mozambique.

Waldemar Fernando de Sousa ADMINISTRATOR

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