Notice No. 02/2020 of January 9, 2020: Exchange Policy - Rules and Procedures for Current Invisible Operations by Corporate Entities

PUBLISHED IN THE OFFICIAL GAZETTE, 1ST SERIES, NO. 3, OF JANUARY 9, 2020 NOTICE NO. 02/2020 SUBJECT: EXCHANGE POLICY

• Rules and Procedures for Carrying Out Current Invisible Exchange Operations by Corporate Entities
  Considering the provisions of Article 3 of Decree-Law 21/98 of July 24, the Bank of Angola has decided to exempt certain current invisible operations ordered by corporate entities from authorization; Under the combined provisions of paragraph 2 of Article 28 of Law No. 5/97, of July 27 - Exchange Law, and Article 40 of Law No. 16/10, of July 15, Law of the Bank of Angola. I HEREBY DETERMINE:
  CHAPTER I
  General and Common Provisions
  Article 1.
  (Subject Matter)
  This Notice establishes the rules and procedures to be observed in carrying out current invisible exchange operations by corporate entities.
  Article 2.
  (Scope)

1. The provisions of this Notice apply to parties involved in carrying out current invisible exchange operations, namely:

CONTINUATION OF NOTICE NO. 02/2020 Page 2 of 11 a) Holders of rights and obligations under the aforementioned operations:
i. Exchange residents - corporate entities;
ii. Non-exchange residents - embassies, diplomatic and consular representations.
b) Financial intermediary institutions in the aforementioned operations.
2. This Notice does not apply to the following identified current invisible operations, which are governed by their own regulations:
a) Those carried out by entities covered by Law No. 2/12, of January 13, Law on the Exchange Regime Applicable to the Oil Sector, b) Those involving the transfer of remuneration resulting from financial applications and capital, including profits, dividends or interest.
Article 3.
(Definitions)
For the purposes of this Notice, the following terms are understood as:
a) Current Invisible Operations Carried Out by Corporate Entities: any current transactions that are neither goods nor capital, when carried out between the national territory and abroad or between residents and non-residents, with a maturity period not exceeding 360 days. b) Current Exchange Operations by Exchange Residents: include payments abroad for services provided by non-exchange residents, for educational, scientific and cultural purposes, for travel and current transfers. c) Exchange Operations by Embassies, Diplomatic and Consular Representations Accredited in Angola: transfers to their home countries, exclusively for accounts of their respective official entities, of funds originating from the country of origin, as well as revenues from consular fees and services charged in Angola. d) Services: provision of assistance or performance of tasks by a non-resident entity in favor of a resident, or vice versa, or the use of an asset under similar circumstances without transfer of ownership of said asset.

CONTINUATION OF NOTICE NO. 02/2020 Page 3 of 11 e) Integrated System for Exchange Operations (SINOC): automated information system made available by the Bank of Angola to Financial Institutions, for the approval and licensing of exchange contracts and registration of payments and receipts made. f) Current Transfers: financial flows sent abroad by public or private sector entities, without counterpart goods, services, financial applications or investment, including contributions to international organizations. g) Transfers for Educational, Scientific and Cultural Purposes: sending of funds by resident corporate entities, with the purpose of covering expenses for persons abroad fulfilling academic, professional or scientific training programs.
Article 4.
(Financial Intermediation)
The intermediation of current invisible operations may only be carried out by an institution authorized to conduct exchange business by the Bank of Angola, within the scope of prevailing legislation.
Article 5.
(Exemption from Licensing)

1. The current invisible operations covered by this Notice are exempt from licensing by the Bank of Angola.
2. The execution of current invisible operations by exchange residents is subject to their validation, registration and settlement in accordance with the provisions of this Notice.
3. Transfers by embassies, diplomatic and consular representations accredited in Angola must be:

CONTINUATION OF NOTICE NO. 02/2020 Page 4 of 11 a) Executed exclusively for accounts of their respective official entities, with banking financial institutions ensuring that the funds to be transferred originate from the country of origin or are revenues from consular fees and services provided in Angola; b) Registered and settled in accordance with the provisions of this Notice.
4. The carrying out of the procedures referred to in the preceding paragraphs must be guaranteed by the head of the exchange control area of the Banking Financial Institution, or another senior executive designated for this purpose.
Article 6.
(Registration of Exchange Operations)

1. Banking Financial Institutions must register all exchange operations in SINOC at the moment of their execution.
2. In cases where operations arise from contracts concluded between the parties, these must be registered in SINOC before the execution of any operation related to them.
3. For the purpose of registering contracts in SINOC, Banking Financial Institutions must insert a technical sheet summarizing the terms of the contract, in the format set out in Annex I to this Notice and forming an integral part thereof, duly signed by a senior executive of the institution designated for this purpose, who is responsible for the veracity and completeness of its content.
4. The Bank of Angola establishes, for operational purposes, the classificatory table of exchange operations, indicating the respective codes and definitions of classificatory categories, with a detailed description of the operations subject to this Notice.

CONTINUATION OF NOTICE NO. 02/2020 Page 5 of 11
Article 7.
(Settlement of Exchange Operations)
1. The settlement of exchange operations subject to this Notice may only be carried out through bank transfer.
2. In operations by exchange residents, the beneficiary of the bank transfer must be the counterparty to the concluded contract, or, in the absence of a contract, the issuer of the invoice, with Banking Financial Institutions ensuring that these are the holders of the beneficiary accounts for the transfers.
3. Banking Financial Institutions must execute transfers by embassies, diplomatic and consular representations accredited in Angola, exclusively to accounts of their respective official entities in their home countries.
4. The exchange coverage for the settlement of operations subject to this Notice must be processed through the use of the payer's own foreign currency funds, or by purchasing foreign exchange from the Banking Financial Institution.
5. The payer's domestic currency account in case of purchasing foreign exchange, or the foreign currency account in case of using the client's own resources, must be debited on the date of execution of the transfer abroad.
CHAPTER II
Current Invisible Operations - Payments by Exchange Residents
Article 8.
(Validation of Operations)
1. Prior to their execution or registration, Banking Financial Institutions must carry out a critical assessment of the nature, justification and legitimacy of each operation based on customer knowledge and supporting documents presented, through the following procedures, among others that may be deemed necessary according to the nature of the operation:
a) Validation of the authenticity of supporting documents; b) Confirmation of the validity of documents in terms of dates; c) Confirmation of the existence of authorization from the relevant Ministerial Department, when the operation so requires; d) Assessment of the adequacy of the operation to the nature and size of the customer's business; e) Identification of situations suspected of money laundering or terrorist financing, in accordance with prevailing regulations.

CONTINUATION OF NOTICE NO. 02/2020 Page 6 of 11
2. Whenever the assessment of operations referred to in the preceding paragraph raises doubts, Banking Financial Institutions must request additional information and refrain from executing them until satisfactory clarification by the payer.
3. Banking Financial Institutions must adopt procedures to prevent reuse and consequent duplication of effects of the documents sent to them.
Article 9.
(Supporting Documentation)

1. Banking Financial Institutions must request the documents deemed necessary for the adequate assessment and validation of operations.
2. Current invisible operations involving the provision of a service valued at more than USD 25,000.00 (twenty-five thousand United States dollars) must be supported by a contract.
3. The provision of transport services in the importation of goods and transfers for educational, scientific and cultural purposes are exempt from presenting a contract.
4. Documents linked to operations covered by this Notice must be kept on file, in accordance with the Framework Law of Financial Institutions.

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Article 10.
(Characteristics of Contracts and Invoices)

1. The contracts supporting operations to be carried out under this Notice must, at a minimum, clearly identify the parties including the complete address of each, the subject matter, the term, the rights and obligations of each party and the price.
2. Contracts must not contain:
   a) Vague, imprecise and undetermined subject matter; b) Exorbitant, indeterminate, random or composite prices; c) Clauses that reflect a manifest imbalance between the responsibilities of the parties; d) Restrictions on the free use, by the national party, of technical information; e) Clauses establishing automatic extension; f) Clauses detrimental to the internal public order; g) Clauses undermining national sovereignty, namely, the requirement of diplomatic immunities for persons who do not benefit from them under international norms and instructions.
3. Contract prices must not be calculated based on percentages of turnover, income, sales or purchases, except in cases where international practice so determines.
4. Contracts that, in addition to Current Invisible transactions, include other types of components, namely goods and others that contribute to determining the global price, must highlight the value of these in relation to the rest.
5. In situations where contracts include clauses providing for advance payments, they must also include terms and conditions for the reimbursement of advances, in case services are not provided or contracts are suspended.
6. If contracts include expenses abroad in addition to local nature expenses, the latter must be paid into accounts domiciled in Angola and in domestic currency.
7. The characteristics referred to in the preceding paragraphs, with necessary adaptations, also apply equally to invoices issued by non-exchange resident service providers.
8. Contracts and invoices must be drafted in Portuguese, with those drafted in English or French also admitted, provided that the Banking Financial Institution has internal capacity for adequate interpretation thereof.
   CHAPTER III
   Receipts for Services Provided by Residents to Non-Residents
   Article 11.
   (Revenue from Services Provided to Non-Exchange Residents) The total foreign currency revenue resulting from the provision of services by exchange residents to non-exchange residents, even if received by their representatives abroad in the case of hotel, tourism or any other activities, must be deposited into a foreign currency bank account, held by the resident exchange entity, opened with a Banking Financial Institution domiciled in the Country.

CONTINUATION OF NOTICE NO. 02/2020 Page 8 of 9
CHAPTER IV
Final Provisions
Article 12.
(Penalties)
Violations of the rules of this Notice are punished in accordance with Law No. 5/97, of June 27 - Exchange Law and Law No. 12/15, of June 17 - Framework Law of Financial Institutions.
Article 13.
(Doubts and Omissions)
Doubts and omissions resulting from the interpretation and application of this Notice are clarified by the Bank of Angola.
Article 14.
(Repealing Provision)
Notice No. 13/13 of August 6 is hereby repealed, as well as all normative provisions that contradict what is established in this Notice.
Article 15.
(Entry into Force)
This Notice enters into force on the date of its publication.
LET IT BE PUBLISHED.
Luanda, January 9, 2020.
THE GOVERNOR
JOSÉ DE LIMA MASSANO

ANNEX I
CONTRACT TECHNICAL SHEET

1. INTRODUCTION
   This technical sheet aims to systematize the information contained in the contract concluded between (contracting company) and (contracted company), valued at (contract value), with a validity period of (validity period), and whose subject matter is (subject of the contract).
2. INTERESTED PARTIES
   2.1. CONTRACTING PARTY
   Table 1 - Description of the contracting party
   Name (name)
   Headquarters (headquarters)
   Tax ID/Reg. No.
   (Tax ID)
   Legal Representative
   (legal representative; position)
   Corporate Purpose • (corporate purpose)
   •

• Share Capital1 (share capital)
  Shareholder Structure2, 3
• (partner; share of capital)
  •
  •
• 1 Relative to 20xx
  2 Relative to 20xx.
  3The Shareholder Structure must be filled in only for: the submission of the first contract to the BNA regarding the contracting party in question, and/or whenever there are changes thereto.

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2.2. CONTRACTED PARTY
Table 2 - Description of the contracted party
Name (name)
Headquarters (headquarters)
Tax ID/Reg. No.
(Tax ID)
Legal Representative
(legal representative; position)
Corporate Purpose • (corporate purpose)

• (…)
• (…)
  Share Capital1 (share capital)
  1 Relative to 20xx

3. CONTRACT
   Table 3 - Description of the contract
   Subject • (subject)

• (…)
• (…)
  Signing Date
  (signing date)
  Validity Period
  (validity period)
  Guarantees • (guarantee)
• (…)
  Global Value (global contract value)
  Payment Method
  (payment method)
  Applicable Legislation
  (applicable legislation)
  (Authorized bank signature)