Notice No. 04/2014: Simplified Process for Payment of Imported Goods

Published in the Official Gazette, 1st Series, No. 147, of August 12

NOTICE NO. 04/2014

SUBJECT: SIMPLIFIED PROCESS FOR THE PAYMENT OF IMPORTED GOODS

The integration of bodies involved in the external trade chain, through the automation of processes, has allowed for better monitoring of the various stages of the import process and, in particular, of the procedures applicable to the realization of foreign exchange operations for goods.

For its part, the level of organization achieved by some economic agents, in line with the new dynamics of the economy, allows for the adoption of simplified processes for the settlement of their operations, with the purpose of continuously reducing the financial and administrative costs associated with the importation of goods and increasing the competitiveness levels of the economy, with benefits for the final consumer.

Such a procedure can also contribute to the improvement of governance models and internal organization of companies, through the co-responsibility for the quality and integrity of the administrative processes for the payment of imported goods;

In these terms, under the combined provisions of paragraph 2 of Article 28 of Law No. 5/97, of June 27, Article 40 of Law No. 16/10, of July 15, and Article 36 of Presidential Decree No. 265/10, of November 26;

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I DETERMINE:

Article 1.
(Object)
This Notice establishes the rules and procedures of the "Simplified Process for the Payment of Imported Goods", hereinafter referred to as the "Simplified Process".

Article 2
(Scope)
This Notice applies to all import companies authorized by the Bank of Angola to use the procedures established therein for the payment of import operations of goods and freight costs directly associated.

Article 3
(Simplified Process for the Payment of Imported Goods) The Simplified Process:
a) Dispenses importers from presenting supporting documentation for import operations to banking institutions at the time of the payment request to the exporter. b) Within limits, allows for advance payments of the value of imported goods.

Article 4
(Constitution of Licensing Requests)

1. Licensing requests for the use of the Simplified Process must be sent to the Bank of Angola through intermediary banking institutions and must include the following documents:

CONTINUATION OF NOTICE NO. 04/2014 Page 3 of 10 a) Letter of Commitment from the administration/management body of the import company, in accordance with Annex I; b) Declaration issued by the intermediary banking institution with which the company intends to execute the majority of operations, in accordance with Annex II; c) Certified copy of the company's statutes published in the Official Gazette (3rd series); d) Copy of the proof of Registration as an Importer with the Ministry of Commerce; e) Summary map of the volume of imported goods carried out in the last 3 years by quarter, also containing information on the nature of the imported goods and the main exporters; f) Audited financial statements of the last 3 economic years, in accordance with current legislation, accompanied by the independent auditor's opinion reports on them; g) Letter from the independent auditor who audits the company's financial statements agreeing to carry out a limited assurance reliability work, in accordance with the International Standard on Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000R), and to issue a limited assurance reliability report as a result of the work performed, in accordance with Article 11 of this Notice.
2. Import companies wishing to carry out the operations provided for in this Notice through more than one financial banking institution shall, after receipt of the authorization issued by the Bank of Angola, request the extension of the authorization to other banks, by sending them the document defined in item b) of paragraph 1 of this article.

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Article 5
(Evaluation and Approval of Requests)

1. In the evaluation process of requests, the Bank of Angola considers, among others, the following aspects:
   a) Economic and financial solidity of the import company; b) Volume of goods imported in the last 36 months; c) Degree of compliance with foreign exchange regulations; d) Degree of relevance of the goods to be imported for the national economy; e) Opinion of the independent auditor on the company's financial statements.
2. The decision regarding the request is formally communicated to the company through the intermediary banking institution, within a maximum period of 60 days counted from the date of entry of the process into the Bank of Angola.
3. The approval for the use of the Simplified Process will be evidenced by the issuance of a license by the Bank of Angola.
4. The issuance of the license obliges the import company to submit to the Bank of Angola, through the intermediary banking institution, 12 months after the issuance/renewal of the license, a report issued by its independent auditor, in accordance with Article 11.

Article 6
(Validity Period of the License and procedures for its renewal)

1. The License granted under this Notice is valid for a period of 12 months.

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2. The license may be renewed for an additional period of 12 months, for which the import company must send a request to the Bank of Angola through the intermediary banking institution, accompanied by the independent auditor's report in accordance with Article 11.
3. The Bank of Angola may, whenever it deems fit, request additional information to allow it to evaluate the renewal request.
4. The decision on the approval of the renewal will be formally communicated to the company through the intermediary banking institution, within a maximum period of 60 days, counted from the date of entry of the process into the Bank of Angola or from the date of request for additional information.

Article 7
(Advance Payments - Limits)

1. Companies licensed under this Notice may make advance payments for goods when the value of the import, duly licensed by the Ministry of Commerce, does not exceed the equivalent of Kz 100,000,000.00 (one hundred million Kwanzas).
2. The amount referred to in paragraph 1 of this article represents the maximum value that can be made in terms of advance payment to the same exporter before the entry of the corresponding goods into the country.
3. If the sum of advance payments made to the same exporter exceeds the value of Kz 100,000,000.00 (one hundred million Kwanzas) and the goods have not yet entered the country, for the purposes of this Notice, such payments are considered to belong to the same operation, deliberately fractionated.
4. Advance payments in favor of a group of exporters, before the entry of the goods into the country, is five times that established in paragraph 1, always subject to the limit established in paragraph 2, both of this article.

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5. For the purpose of determining the amounts established in the previous paragraphs of this article, regarding transactions concluded in foreign currency, the average market exchange rate, published by the Bank of Angola, on the days of payment, must be considered.

Article 8
(Advance Payments - Entry of Goods into the Country)

1. Advance payments under documentary credits:
   The deadline for the entry of goods into the country must comply with that defined in the letter of credit;
2. Direct advance payments, without the use of documentary credits:
   a) The importer is obliged to guarantee the entry of the goods into the country within 180 (one hundred and eighty) days from the date of the advance payment; b) In the case of equipment specifically manufactured for use in national territory, the production period contractually defined must be considered, but never exceeding 24 months.
3. Licensed companies must adopt diligence measures to ensure the reimbursement of advanced funds, in case of non-delivery, or defective delivery of the goods.

Article 9
(Responsibility of the Banking Financial Institution)

1. Prior to the execution of foreign exchange operations, in accordance with this Notice, banking financial institutions must certify the following:
   a) Financial capacity:
   i. the importer demonstrates having generated resources through its activity for the payment of the import.

CONTINUATION OF NOTICE NO. 04/2014 Page 7 of 10 b) Foundation and legitimacy of the transaction:
i. the products to be imported are part of the normal activity of the importer.
c) The beneficiary of the payment is the exporter of the goods, and their location is coherent with their origin.
2. Banking financial institutions that have doubts about the compliance, by any importer, of the conditions referred to in the previous number, must exempt themselves from carrying out the requested operations and report, within 72 hours, to the Foreign Exchange Control Department of the Bank of Angola, the situations of non-conformity detected.
3. The intermediary banking financial institutions of the operations covered by this Notice must register in SINOC, and in the other subsystems made available by the Bank of Angola for this purpose, the information regarding the payments made.

Article 10
(Responsibility of the Licensed Company)

1. Within the scope of this Notice, it is the responsibility of the administration or management body of the licensed import company:
   a) To guarantee the existence of an internal control system in its company that ensures that:
   i. the operations carried out under this Notice fully comply with foreign exchange legislation and all current regulations on the matter, including Notice 19/12 of April 19 and this Notice;
   ii. all documents required by Article 8 of Notice No. 19/12 of April 19 are archived sequentially by settlement date

CONTINUATION OF NOTICE NO. 04/2014 Page 8 of 10 and in a way that allows easy access by independent auditors and by the inspection services of the Bank of Angola;
iii. the aforementioned documents are maintained for a period of ten years.
b) To know the risks and penalties associated with non-compliance with current foreign exchange regulations; c) To communicate to the Bank of Angola, Foreign Exchange Control Department, any situations of violation of foreign exchange norms detected internally, as well as the corrective measures adopted; d) To communicate to the Bank of Angola the advance payment operations carried out under Article 7 in which the goods were not delivered within the due deadlines (or were not delivered in conditions), and the diligence measures adopted by the company to ensure the reimbursement of the advanced funds. e) To send to the Bank of Angola, annually, up to 12 months from the date of issuance or renewal of the license, the limited assurance reliability report prepared by independent auditors; f) To inform the Bank of Angola in case of termination of the contractual relationship with the independent auditor.

Article 11
(Responsibility of the Independent Auditor)

1. It is the responsibility of the independent auditor to carry out the limited assurance reliability work in accordance with the International Standard on Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000R) and to issue a limited assurance reliability report to:

CONTINUATION OF NOTICE NO. 04/2014 Page 9 of 10 a) Express a conclusion on the company's compliance with foreign exchange legislation and current regulations on the matter, including Notice 19/12 of April 19 and this Notice, regarding the operations covered by this Notice, carried out in the 12 months prior to the date of the report; b) Report situations of non-conformity detected during the work.
2. The work of the independent auditor must include, among others, the procedures referred to in Annex III.

Article 12
(Suspension of Authorization)
In the event of irregularities in the compliance with the provisions of this Notice, the Bank of Angola may at any time provisionally or definitively suspend the license granted, by communicating to the licensed company and to the financial institutions.

Article 13
(Sanctions)
Violations of the norms of this Notice, whether by licensed companies or by Banking Institutions, will be punished in accordance with Law No. 5/97, of June 27 - Foreign Exchange Law, and Law No. 13/05 of September 30 – Law of Financial Institutions.

Article 14
(Doubts and Omissions)
Doubts and omissions raised in the interpretation and application of this Notice will be resolved by the Bank of Angola.

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Article 15
(Entry into force)
This Notice enters into force 30 days after the date of its publication.

PUBLISH.
Luanda, on August 07, 2014.
THE GOVERNOR
JOSÉ DE LIMA MASSANO