Notice 3/GBM/2024: Foreign Exchange Operations Norms and Procedures

SUMMARY
NOTICE
The matter to be published in the "Boletim da República" must be submitted in a duly authenticated copy, one for each subject, containing, in addition to the necessary indications for this purpose, the following endorsement, signed and authenticated: For publication in the "Boletim da República". IMPRENSA NACIONAL DE MOÇAMBIQUE, E. P. Bank of Mozambique:
Notice No. 3/GBM/2024:
Establishes norms and Procedures for Conducting Foreign Exchange Operations.
Wednesday, March 20, 2024 I SERIES — Number 57 BANK OF MOZAMBIQUE Notice No. 3/GBM/2024 of March 20 Given the need to establish norms and procedures for conducting foreign exchange operations, as well as a regime relating to the requirements and elements for processing the application for engaging in partial foreign exchange trading, in the exercise of the powers conferred by Articles 9 and 72 of Law No. 28/2022, of December 29, the Foreign Exchange Law, the Bank of Mozambique determines:
CHAPTER I
General Provisions
SECTION I
Object and Scope
Article 1
Object
This Notice establishes norms and procedures for conducting foreign exchange operations, as well as the requirements and elements for processing the application for engaging in partial foreign exchange trading.
Article 2
Scope

1. This Notice applies to:
   a) entities authorized to conduct foreign exchange trading and partial foreign exchange trading; b) resident and non-resident foreign exchange entities covered by Law No. 28/2022, of December 29.
2. This Notice also applies to:
   a) forms of representation of resident and non-resident legal entities; b) concessionaires, special purpose entities, main subcontractors, financiers, non-resident subcontractors, and expatriate personnel acting as stakeholders in the oil and gas sector operating in Mozambique; c) regulatory, supervisory, and judicial administration entities, within the scope of their legally conferred powers.
   Article 3
   Definitions
   The terms and expressions used in this Notice are found in the Glossary, attached, which forms an integral part thereof.
   SECTION II
   General Duties
   Article 4
   Duty of verification
   For the purposes of the provisions of numbers 1 and 2 of Article 16 of Law No. 28/2022, of December 29, entities authorized to conduct foreign exchange trading and partial foreign exchange trading must not carry out operations when the necessary information is not provided or in the absence of supporting documents for the requested operation.
   Article 5
   Form for conducting foreign exchange operations
3. To conduct foreign exchange operations, the applicant must provide information, and for this purpose, fill out the form established by the Bank of Mozambique and submit the respective supporting documents.
4. The form referred to in the previous number contains the terms of the applicant's declaration, in which they assume and confirm the veracity of the information provided, the authenticity of the documents, and that they are informed about the foreign exchange norms related to the operation.
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   Article 6
   Classification of foreign exchange operations
5. Foreign exchange operations must be adequately classified, using the classification table.
6. The Bank of Mozambique establishes, by Circular, the classification table for foreign exchange operations.
   Article 7
   Registration and information on foreign exchange operations
7. Foreign exchange registration must be carried out electronically, in real-time, and comprises, cumulatively:
   a) the collection of all information about the foreign exchange operation, namely, the identification of the parties, the nature of the operation, the amount, the purpose, as well as the verification of its legitimacy; b) the processing of information; c) the issuance of the respective foreign exchange authorization registration letter, when applicable; d) the issuance of the foreign exchange registration bulletin, when applicable; e) the archiving, in electronic or physical format, of supporting documents.
8. For the purposes of the provisions of letter e) of the previous number, authorized entities must organize the submitted documents and establish sequential numbering of the operation, as well as the indication of the date to which it relates.
9. In situations where registration must be carried out by the Bank of Mozambique, the intermediary bank or payment service provider must submit the process within 5 days after receiving the request.
10. The Bank of Mozambique establishes, by Circular, the periodicity, mechanism, and other terms for submitting information on foreign exchange operations.
    Article 8
    Declaration of assets
11. Assets generated, acquired, or held abroad are subject to declaration, namely:
    a) assets of a real nature, real estate and movable property subject to title registration; b) securities and rights with a total amount equal to or greater than the equivalent of USD 250,000.00 (two hundred and fifty thousand United States dollars).
12. The following are subject to asset declaration:
    a) residents, whether individuals or national legal entities; b) residents who are foreigners, from the date of acquiring resident status.
13. The asset declaration must be made to the Bank of Mozambique, by filling out a form, accompanied by supporting documents, by one of the following means:
    a) electronic; b) physical delivery; c) postal mail; d) other forms indicated by the Bank of Mozambique.
14. The first asset declaration must be made within 30 days after the act of acquisition, generation, or holding of the asset abroad.
15. The update of the asset declaration must be made by March 31 of each calendar year.
16. Assets generated, acquired, or held by foreign citizens before acquiring their resident status are exempt from the declaration duty.
    Article 9
    Repatriation
17. Export proceeds from goods, services, and investment income abroad are subject to repatriation.
18. Income resulting from credits and loans granted abroad is equated to investment income abroad.
19. The repatriation regime for export proceeds from goods, services, and investment income abroad is established by a specific normative instrument.
    Article 10
    Payment and receipt from abroad
20. Payment and receipt from abroad must be made through bank transfer, payment account, or other legally permitted means.
21. In the case of receipt, banks and payment service providers must:
    a) notify the client, within 1 business day, after receiving the transfer message and the respective coverage confirmation, and the beneficiary must submit the supporting documents for the operation within 30 days, after which the intermediary bank or payment service provider may return the funds; b) credit the funds to the client's account, within 2 business days, after the submission of supporting documents for the operation; c) report to the Bank of Mozambique whenever the deadlines referred to in the previous letters are not met and indicate the reasons.
22. In operations involving accounts in national currency, the purchase and sale of currency must be carried out using the spot exchange rate in effect on the date and at the time of the operation, except for those related to the contracting of financial derivatives.
    CHAPTER II
    Foreign Exchange Trading
    SECTION I
    Foreign Exchange Trading Activity
    Article 11
    Conduct of foreign exchange trading
23. Entities authorized to conduct foreign exchange trading must ensure speed, integrity, reliability, and control in carrying out foreign exchange operations.
24. Entities authorized to conduct foreign exchange trading must possess:
    a) an IT system for processing and registering foreign exchange operations; b) a specialized technical staff; c) risk management mechanisms involved in conducting foreign exchange trading; 20 MARCH 2024 703 d) segregation of duties in processing foreign exchange operations; e) staff replacement and succession plans; f) a policy for archiving conducted foreign exchange operations.
    Article 12
    Object of foreign exchange trading
25. Banks and payment service providers may carry out the foreign exchange operations for which they are legally authorized.
26. The conduct of foreign exchange trading by exchange bureaus is limited to the purchase and sale of foreign currency to individuals.
27. The sale of foreign currency is exclusively for travel abroad and is limited to a maximum amount equivalent to USD 10,000.00 (ten thousand United States dollars) per individual aged 18 years or older.
    SECTION II
    Partial Foreign Exchange Trading Activity
    Article 13
    Entities covered and conditions for conducting partial foreign exchange trading
28. Entities authorized under number 2 of Article 24 of Law No. 28/2022, of December 29, may only engage in partial foreign exchange trading when it relates to the services they provide as per their respective authorization.
29. Foreign currency received from partial foreign exchange trading activities must be deposited in a bank within a maximum of 2 business days.
30. Entities authorized to conduct partial foreign exchange trading must apply the exchange rate of the bank with which they have a proven relationship and display the respective rate table in a visible place.
31. The conduct of partial foreign exchange trading is limited to the purchase of foreign currency.
32. Other aspects inherent to the conduct of partial foreign exchange trading activities are governed by Decree No. 56/2023, of October 3.
    Article 14
    Licensing for conducting partial foreign exchange trading
33. For authorization to conduct partial foreign exchange trading, the entities referred to in number 2 of Article 24 of Law No. 28/2022, of December 29, must submit their application to the Bank of Mozambique, accompanied by the following documents:
    a) authenticated copy of the license for their main commercial activity or equivalent document; b) authenticated copy of the identification of the owners or partners of the applicant entity.
34. In the case of license renewal, the applicant only needs to submit the documents referred to in the previous number if there has been a change in any element.
    CHAPTER III
    Foreign Exchange Operations
    SECTION I
    Current Transactions
    SUBSECTION I
    Definition and requirements
    Article 15
    Definition
    Current transactions include, among others, payments and receipts related to:
    a) import and export of goods and services; b) income generated from capital operations; c) unilateral transfers.
    Article 16
    General requirements
35. To verify the legal compliance and registration of current transactions, applicants must present identification documents and documents characterizing the operation.
36. Payments or receipts in connection with foreign trade are conditional upon the presentation of documents proving the supply of goods or the provision of corresponding services.
37. In the case of advance payment, the entry of goods into the national customs territory must occur within 90 days from the date of payment, except in the situation provided for in number 2 of Article 29.
38. Except in cases duly justified by objective and proven reasons by the importer, banks or payment service providers must refrain from carrying out operations of the same modality while the non-compliance with the provisions of the previous number persists.
39. For operations requiring proof of compliance with tax obligations related to the transaction, the following situations must be considered:
    a) when the payment is related to health expenses, education, temporary accommodation, travel and tourism services, and is made directly to the respective service providers, the presentation of said proof is waived; b) when it is not possible to obtain proof of compliance with tax obligations related to the transaction within the legally established deadline for this purpose, the bank may settle the operation, upon presentation of a document issued by the competent authority, proving that the tax associated with the transaction has been paid or secured, and proof of the request for the issuance of that document from the same entity.
40. For the purposes of letter b) of the previous number, the applicant must present proof of compliance with tax obligations within a maximum of 30 days from the date of payment abroad.
41. Non-compliance with the deadline referred to in the previous number results in the refusal, by banks, of future payments abroad without the presentation of proof of compliance with tax obligations related to the transaction, as long as this situation persists.
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    SUBSECTION II
    Import and export of goods
    Division I
    Requirements and procedures
    Article 17
    Requirements for importing goods
42. Any payment abroad for the purpose of definitive import of goods depends on the presentation, by the importer, of documents proving:
    a) the entry of the merchandise into the national customs territory; or b) the shipment of the merchandise to the national customs territory, in cases where the payment method is a documentary credit.
43. Payments abroad related to the import of goods without the presentation of entry or shipment documents may be made in the following cases:
    a) advance payments under a documentary credit, where the start of the import is conditional on the advance payment of a percentage of the price; b) direct advance payments, when at least the following conditions are met:
    i. contract containing the terms and conditions of the operation, where applicable;
    ii. pro-forma invoice;
    iii. the importer is not in a situation of non-compliance with deadlines.
44. Banks or payment service providers must send relevant information to the Bank of Mozambique regarding the degree of compliance with deadlines for the entry of goods into the national territory, associated with advance payments, in cases where this information is not available in the Electronic Single Window (JUE).
    Article 18
    Mandatory documents for import or export of goods Regardless of the payment method adopted, the following documents are mandatory for the definitive import or export of goods:
    a) Commitment Term and Single Document; b) Commercial or pro-forma invoice; c) Contract containing the terms and conditions of the operation, in applicable cases.
    Article 19
    General procedures
45. Payments or receipts to or from abroad related to the definitive import or export of goods must be made through banks or payment service providers.
46. Each definitive import or export operation must be initiated and concluded with the same bank or payment service provider.
47. When initiating a definitive import or export operation of goods, the respective Commitment Term must be issued.
48. In the process of definitive import or export of goods, it must be ensured that the Single Document is associated with the respective Commitment Term.
49. The issuance of the Commitment Term is waived in the following cases:
    a) import of goods whose clearance process is through the Simplified Single Document (DUS); b) imports made by travelers with excess baggage, except for merchandise with commercial signs or characteristics; c) imports or exports made by immigrants and emigrants, including diplomats, miners, and students, when the goods consist of luggage and provisions; d) purchase of virtual goods or software, which should be classified under the category of service provision.
50. The definitive import or export operation may be concluded at an intermediary bank different from the initial one, in the following cases:
    a) liquidation or insolvency of the bank; b) interdiction or suspension of the bank from conducting foreign exchange operations; c) other cases assessed and admitted by the Bank of Mozambique.
51. For the purposes of the previous number, the interested party must send the request to the bank that will intermediate the operation, and this bank to the Bank of Mozambique.
    Article 20
    Relevant elements of the invoice
    For the purposes of letter b) of Article 18, the following are relevant elements of the invoice:
    a) Supplier or exporter:
    i. name;
    ii. full address;
    iii. Country;
    iv. telephone contact;
    v. email address;
    vi. Unique Taxpayer Identification Number (NUIT), in case of export;
    vii. Foreign Trade Operator Identification Number, in case of export, if applicable.
    b) Consignee or importer:
    i. name;
    ii. full address;
    iii. Country;
    iv. telephone contact;
    v. email address;
    vi. NUIT, in case of import;
    vii. Foreign Trade Operator Identification Number, in case of import, if applicable.
    c) invoice issue date and number; d) exact description of the merchandise; e) quantities, brands, models, serial numbers, units, gross and net weight, volume or measurement, and other specifications according to the type of goods or merchandise; f) unit prices, transaction value, and currency in which the values are expressed; g) delivery and payment terms. 20 MARCH 2024 705
    Article 21
    Export of metical notes and coins for numismatic or exhibition purposes
52. The export of metical notes and coins for numismatic and public exhibition purposes is subject to the general procedures for the export of goods, as provided for in this Notice.
53. The export of metical notes and coins for numismatic and public exhibition purposes must be carried out upon presentation of the following documents:
    a) applicant's identification; b) proof of the planned exhibition event or the existence of conditions for exhibition.
    Article 22
    Payment modalities
    The following payment modalities are admitted for settling transactions related to the import and export of goods:
    a) documentary credit; b) documentary remittance; c) direct payment, advance and deferred.
    Article 23
    Control procedures
54. The mandatory documents must be verified by banks, through the JUE, taking into account the payment method adopted.
55. The bank must create an individual file, in electronic or physical format, which must include the following documents:
    a) Commitment Term; b) Single Document; c) Documentary credit letter and its amendments, if applicable; d) Commercial invoice; e) Contract containing the terms and conditions of the operation, in cases of partial import; f) Remittance letter, if applicable; g) Settlement or payment slip; h) Other correspondence related to the operation.
    Article 24
    Processing of the Commitment Term
56. The Commitment Term is processed through the JUE or another legally permitted system.
57. The Commitment Term is created by the importer or exporter to initiate the import or export.
58. The intermediary bank approves or rejects the Commitment Term within 72 hours of receiving the request.
59. The approval of the Commitment Term is preceded by the intermediary bank's confirmation that the importer or exporter is its client, as well as compliance with the duty of verification.
60. The intermediary bank may approve a Commitment Term for payments made by a bank card it issued, provided that the payment for the import of goods is not for commercial purposes.
61. For the purposes of the previous number, the intermediary bank must verify the legitimacy of the transaction by confirming the movement in the account associated with the card and that the amount matches the Commitment Term.
62. Banks must approve Commitment Terms for clients who settle imports and exports outside the national financial system, provided the origin of funds is one of the following:
    a) foreign direct investment; b) external loan; c) bank account opened abroad; d) donation; e) Other legally permitted fund sources.
63. Banks must also approve Commitment Terms related to the import or export of samples, upon verification of the respective supporting document in the JUE.
    Article 25
    Responsibilities of stakeholders
64. The issuance of the Commitment Term makes the importer or exporter and the intermediary bank responsible for the operation.
65. Banks must register and keep updated financial information on each Commitment Term.
66. In the case of importing goods through direct advance payment, the bank must monitor, at the JUE level, compliance with the 90-day deadline for the entry of goods into the national customs territory.
67. Whenever the intermediary bank certifies that it concerns export proceeds from goods under the direct advance payment method, it must request the issuance of the respective Commitment Term.
68. For deferred payments and other modalities, the intermediary bank must confirm the entry or exit of goods into or from the national customs territory, through the JUE, before making the payment or receipt.
69. The importer or exporter must ensure that the Single Document is associated with the corresponding Commitment Term in the JUE.
70. If the Single Document is not associated with the Commitment Term in the JUE, the importer or exporter must prove the entry or exit of the goods into the national territory.
71. For the purposes of the previous number, the importer or exporter must present the original version of the Single Document to the intermediary bank of the operation, accompanied by an opinion from the competent customs authority recognizing compliance with customs clearance procedures, for banking use and subsequent return.
    Division II
    Payments for the import of goods
    Article 26
    Payment for goods
    Payments for the import of goods are made in accordance with the payment modalities provided for in Article 22.
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    Article 27
    Documentary credit
72. Under the documentary credit modality, the initiative to open the credit belongs to the importer and must include, mandatorily, the following information:
    a) full name of the beneficiary and their address; b) amount and currency of the credit; c) type of credit; d) reimbursement conditions; e) brief description of the merchandise, including quantities and unit price, as indicated in the pro-forma invoice; f) summary description of the required documents; g) place of shipment and destination of the merchandise; h) partial shipments permitted or not; i) transshipments permitted or not; j) validity for shipment, where applicable; k) validity of the credit; l) method of notification to