Regulatory Alerts2015-11-18
Circular No. 01/DLC/2015, of November 18 - Conversion and Transfer of Export Revenues and Imported Capital
The Bank of Mozambique issued Circular No. 01/DLC/2015 to regulate the conversion and transfer of export revenues and imported capital, ensuring harmonious foreign exchange market operations. The directive expressly prohibits commercial banks from converting foreign currency funds unless they have intermediated the actual export of goods or services, or the importation of foreign investment income. Furthermore, it mandates that repatriated export and investment revenues be strictly allocated to amortizing foreign currency loans, while authorized capital-importing entities may retain funds in foreign currency at their banker's exchange rate and must designate an intermediary commercial bank for prior authorization.
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Bank of Mozambique — Administration
Circular No. 001/DLC/2015 Maputo, November 18, 2015
Subject: Conversion and transfer of export revenues and imported capital
The prevailing situation in the foreign exchange market recommends that the Bank of Mozambique, using its legally conferred powers, issue instructions and clarifications to ensure the harmonious functioning of the market, in line with the current stage of financial sector development.
In this context, and to ensure full compliance with the provisions of current legislation on the matter, the Bank of Mozambique, under paragraph 2 of Article 130 of the Foreign Exchange Law Regulations approved by Decree No. 83/2010, of December 31, as well as under paragraph d) of paragraph 2 of Article 37 of Law No. 1/92, of January 03 – the Organic Law of the Bank:
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Issues the following clarification/instruction:
a) The performance by commercial banks of foreign currency fund conversion operations, in situations where they have not intermediated the respective actual export of goods or services, or the importation of foreign investment income, is expressly prohibited.
b) Following repatriation to the country in accordance with the Law, the transfer, through operations between accounts domiciled in the national banking system, of export revenues from goods and services and foreign investment income, must be solely allocated to the amortization of foreign currency loans.
c) Entities authorized to import capital, such as foreign investment or external loans, may hold funds with commercial banks in foreign currency.
d) The foreign currency funds referred to in the preceding paragraph may only be transacted at the exchange rate of their respective banker.
e) Entities authorized to import capital, upon submitting their prior authorization request to the Bank of Mozambique, must indicate the name of the commercial bank operating in Mozambique that will act as intermediary for the transaction.
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PROMOTING THE VALUE OF THE METICAL AND ECONOMIC GROWTH PROMOTING THE VALUE OF THE METICAL AND ECONOMIC GROWTH
Bank of Mozambique — Administration
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Determines that this Circular takes immediate effect, revoking Circular No. 01/EES/2013, of February 26.
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Establishes that any doubts arising from the interpretation and application of this Circular shall be submitted to the Licensing and Foreign Exchange Control Department.
BANK OF MOZAMBIQUE Markets Division Joana J. David Matsombe (Administrator)
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