Instruction No. 14/2018 of November 19

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

• Remuneration of Collateral Deposits Associated with Letters of Credit
  Whereas Circular No. 05/18, dated July 17, regarding the rules and procedures applied 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 for other payment instruments in Instruction 09/2018, dated July 10; Whereas it is necessary 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 in 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 of Article 40 of Law No. 16/10, dated July 15 - Law of the National Bank of Angola. I HEREBY DETERMINE:

1. Value and Remuneration of Collateral Deposits Associated with Letters of
   Credit
   1.1. In cases where Commercial Banks decide, based on their assessment of the
   customer's credit risk, to require a collateral deposit for the coverage of payment risk under a 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 foreign 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 Circular 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 reduced by a commercial margin.
1.4. The collateral deposits established under paragraph 4 of Article 8 of Circular
No. 5/2018, dated July 17, must be remunerated at the interest rate in force at Commercial Banks.
2. Sanctions
Violation of the rules set forth in this Instruction is punishable under Law No. 12/15, dated June 17 - Law of the Bases of Financial Institutions, and under Law No. 5/97, dated June 27 - Exchange Rate Law, without prejudice to any other legislation that may apply.
3. Doubts and Omissions
Doubts and omissions arising 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

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