Instruction No. 14/2018, dated November 19

INSTRUCTION NO. 14/2018 of November 19
SUBJECT: EXCHANGE RATE POLICY

• Remuneration of Collateral Deposits Associated with Letters of Credit

Considering that Notice No. 05/18, dated July 17, regarding the rules and procedures applicable to foreign exchange operations for the import and export of goods, provides for the mandatory use of letters of credit for imports exceeding the limits defined in Instruction 09/2018, dated July 10;

There is a need to safeguard the interests of consumers of financial services, in cases where Commercial Banks require the establishment of collateral to cover the credit risk inherent to letters of credit;

In exercise of the competence conferred upon me by the combined provisions of paragraph 2 of Article 28 of Law No. 5/97, dated July 27 - Exchange Rate Law, and Article 40 of Law No. 16/10, dated July 15 - Law of the National Bank of Angola.

I DETERMINE:

1. Value and Remuneration of Collateral Deposits Associated with Letters of Credit
   1.1. In cases where Commercial Banks decide, according to their assessment of the customer's credit risk, to require a collateral deposit for covering the payment risk of the letter of credit, the value of said collateral may not exceed the value of the letter of credit, converted into national currency at the reference exchange rate of the Commercial Bank at the time the collateral is established.

CONTINUATION OF INSTRUCTION NO. 14/2018 Page 2 of 2
1.2. The collateral deposits referred to in point 1.1 of this Instruction and those referred to in paragraph 4 of Article 8 of Notice No. 5/2018, dated July 17, must be remunerated.
1.3. The remuneration of deposits established under point 1.1 of this Instruction must be indexed to LUIBOR and may be subject to a commercial margin deduction.
1.4. The collateral deposits established under paragraph 4 of Article 8 of Notice No. 5/2018, dated July 17, must be remunerated at the interest rate in force within Commercial Banks.
2. Sanctions
Violation of the rules provided in this Instruction is punishable under Law No. 12/15, dated June 17 - Law of the Bases of Financial Institutions and Law No. 5/97, dated June 27 - Exchange Rate Law, without prejudice to other legislation that may apply.
3. Doubts and Omissions
Doubts and omissions resulting from the interpretation and application of this Instruction are resolved by the National Bank of Angola.
4. Entry into Force
This Instruction enters into force on the date of its publication.
PUBLISHED.
Luanda, November 19, 2018.

THE GOVERNOR
JOSÉ DE LIMA MASSANO