Notice No. 05/2018: Exchange Rate Policy - Rules and Procedures for Import and Export of Goods

NOTICE NO. 05/2018
SUBJECT: EXCHANGE RATE POLICY

• Rules and Procedures Applicable to Foreign Exchange Operations for the Import and Export of Goods

Given the need to update the current regulations in the Bank of Angola, with reference to Law No. 5/97, of June 27 - Exchange Law, regarding norms on foreign exchange operations for goods;

Considering that Presidential Decree No. 75/17, of April 07, regulates the administrative procedures to be observed in the licensing of imports and exports of goods, as well as attributes competence to the Bank of Angola to define in its own instrument the modalities of foreign exchange settlement;

Under the combined provisions of paragraph 2 of Article 28 of Law No. 5/97, of June 27, and Article 40 of Law No. 16/10, of July 15 - Law of the Bank of Angola.

I DETERMINE:

CHAPTER I
General Provisions
SECTION I
Object, Scope and Definitions

Article 1.
(Object)
This Notice establishes the rules and procedures to be observed in carrying out foreign exchange operations intended for the settlement of imports and exports of goods in the Republic of Angola.

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ARTICLE 2.
(Scope)

1. This Notice applies to all participants in the realization of foreign exchange operations for the import and export of goods, namely:
   a) Individuals or legal entities, holders of rights and obligations, within the scope of said operations; b) Intermediary banks in said operations; and, c) Public or private entities responsible for guaranteeing compliance with the norms established in this Notice.
2. The provisions of this Notice are not applicable to entities covered by the special exchange regimes of the petroleum and diamond sectors.

Article 3.
(Definitions)
For the purposes of this instrument, the following are understood:
a) Banks - domestic banking financial institutions authorized to carry out foreign exchange operations by the Bank of Angola or those domiciled abroad that are intermediaries in collection/remittance and documentary credit processes. b) Documentary Collection - a payment method in import and export operations of goods, where the exporter ships the goods and sends the documentation to their bank, which will deliver it to the importer's bank for collection or acceptance. c) Documentary Credit or Letter of Credit - commitment assumed by a bank (Issuing Bank) at the request and by instructions of its client Importer (Ordering Party), to make a payment to an Exporter (Beneficiary), through an Intermediary Bank (Advising/Confirming Bank), against the presentation of stipulated documents, provided all terms and conditions have been met. d) Payment Commitment Declaration – document necessary to allow customs clearance of goods to be exported, which in cases of use of: (i) advance payment or documentary credit must be issued and signed by the intermediary bank that attests to the receipt of the advance payment or the formal communication (swift message) from the issuing bank of the documentary credit opened in favor of the exporter; (ii) other payment instruments must be signed by the exporter who assumes the irrevocable commitment to transfer the values resulting from the export to the bank identified in the declaration and signed by the bank that confirms having taken knowledge of the operation. e) Unique Document (Final DU) – customs declaration form for goods, approved by Decree No. 75/02, of November 15, of the Council of Ministers, with adjustments introduced by Executive Decree No. 117/06, of August 11, of the Minister of Finance. f) Import/Export License of Goods (Quota or Provisional DU) – document issued by the Ministerial Department responsible for external trade that authorizes the import and export of goods, under the terms defined in Presidential Decree No. 75/17, of April 07. g) Non-Resident Exchange Persons – individuals or legal entities described as such in the Exchange Law. h) Foreign Exchange Operation – any act, business, or transaction carried out between a resident and a non-resident exchange person that may result in a payment from or to the exterior, or that is simply qualified by law as such. i) Goods Operations – acts and/or contracts between resident and non-resident exchange persons involving the transmission of property rights of movable goods. j) Advance Payment - a payment method in which the importer pays the exporter before the shipment of goods. k) Documentary Remittance - a payment method where documents are sent directly to the importer, without a draft. l) Resident Exchange Persons – individuals or legal entities described as such in the Exchange Law. m) Integrated System of Foreign Exchange Operations (SINOC) – automated information system made available by the Bank of Angola to banks, for registration, monitoring,
and control of foreign exchange operations.

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SECTION II
Principles

Article 4.
(Bank Intermediation)

1. The settlement of import and export operations of goods can only be carried out through a bank.
2. Intermediation and settlement by more than one bank for the same import or export operation of goods is not permitted.

Article 5.
(Licensing by the Bank of Angola)
Import operations of goods with a settlement period exceeding 360 (three hundred and sixty) days from the date of customs clearance of unloading are subject to licensing by the Bank of Angola.

Article 6.
(Preconditions for Carrying Out Foreign Exchange Operations) Prior to carrying out any foreign exchange operation for the import and export of goods, banks must ensure that they know the identity of the ordering party or beneficiary, resident exchange importer or exporter, as the case may be, as well as the nature of their business and the economic basis of the operation, in compliance with identification and diligence duties provided for in Legislation on the Prevention and Combating of Money Laundering and Financing of Terrorism.

CHAPTER II
Import of Goods
SECTION I
Payment Modalities and Settlement

Article 7.
(Payment Modalities and Respective Terms)

1. For the purposes of foreign exchange operations intended for the import of goods, the following payment modalities and respective terms are admitted:
   a) Advance payments:
   i. Subject to the established in the Instruction on Limits of Foreign Exchange Operations of Goods;
   ii. With a maximum period of 180 (one hundred and eighty) days for the entry of goods into the Country, counted from the date of the effective realization of the foreign exchange operation.
   b) Documentary credits:
   i. Mandatory for all importations of goods with a value higher than that established in the Instruction on Limits of Foreign Exchange Operations of Goods;
   ii. With a maximum validity period of 360 (three hundred and sixty) days;
   iii. With option for advance payments of up to 10% (ten percent) of the total amount of the operation.
   c) Collections or Documentary Remittances:
   Subject to the limits referred to in the Instruction on Limits of Foreign Exchange Operations of Goods.
2. It is not permitted to fragment import operations, which is carried out through the issuance of several invoices with values lower than the limit established for advance payments or for remittances and documentary collections, by the same supplier, on, or around, the same date, for goods to be shipped generally, but not necessarily, in the same loading, with the sole objective of avoiding the use of documentary credits.

Article 8.
(Settlement)

1. Importers who have export activity, holders of funds in foreign currency resulting from this activity, must, obligatorily, use the funds they have available, regardless of the settlement modalities referred to in the previous article.
2. The importers referred to in the previous number may resort to the purchase of foreign currency at the bank with which they maintain the business relationship whenever their funds in foreign currency are exhausted.

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3. In the cases of importers not covered by the provision of paragraph 1 of this article, banks are authorized to sell foreign currency to settle imports, regardless of whether they have their own funds in foreign currency.
4. Whenever funds in foreign currency of importers are used, banks must earmark the value of the funds necessary for the settlement of the foreign exchange obligations assumed, at the moment of accepting the intermediation of the operation.
5. Whenever foreign currency is sold, the settlement of the operation must be carried out by debit of the importer's national currency account, at the moment of the settlement of the transaction on the exterior.
6. All payments to non-resident exchange entities, regardless of the use of own funds, are subject to the legislation applicable to payments on the exterior.

SECTION II
Documentary Requirements

Article 9.
(Required Documents for Contracting the Foreign Exchange Operation) At the time of the request for opening documentary credits, the importer must present the following documents:
i. Import license with a date not later than 60 (sixty) days from the date of issuance;
ii. Proforma invoice; and,
iii. Supply contract, when applicable.

Article 10.
(Required Documents for Settlement)

1. For the settlement of foreign exchange operations for import, the following documents must be presented:
   a) In the realization of advance payments, by the importer:
   i. Commercial invoice issued by the exporter;

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ii. Bank guarantee issued by the exporter, when applicable;
iii. Supply contract, when applicable; and,
iv. Import license, when applicable.
b) In the settlement of documentary remittances, by the importer:
i. Commercial invoice;
ii. Transport document;
iii. Unique Document (Final DU);
iv. Supply contract, when applicable; and,
v. Import license, when applicable.
c) In the settlement of documentary collections, the importer's bank must ensure that it receives:

• From the collecting bank:
  i. Commercial invoice;
  ii. Transport document;
  iii. Other import documents in accordance with legislation and complementary norms on the matter;
• From the importer:
  i. Supply contract, when applicable; and,
  ii. Import license.
  d) In the documentary credit modality, the importer's bank must ensure the receipt from the negotiating/confirming bank:
  i. Commercial invoice;
  ii. Transport document;
  iii. Other documents in accordance with the terms of the documentary credit; and,
  iv. Swift messages related to the documentary credits.

2. Without prejudice to the provision of the previous number, banks may request complementary documents that allow certifying the legitimacy of the payment to be made on the exterior.
3. Banks must make available to their clients the documents necessary for the customs clearance of the goods, provided that the documentary and other requirements are met, under this Notice.

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4. For the purposes of this Notice, invoices must contain the elements provided for in the Customs Tariff in force in the Republic of Angola.
5. Before the settlement of any value under the payment instruments referred to above, banks must carefully analyze the supporting documents of the operation to ensure their veracity, the conformity between the documents of the process, and their consistency with the nature of the operation.
6. In cases where there are suspicions of falsification of documentation, banks must refrain from making the payment and must send the process to the criminal investigation bodies, informing the Bank of Angola of the occurrence and the measures taken.

Article 11.
(Exemption from Licensing by the Ministry of Commerce) Foreign exchange operations intended for the settlement of import of goods can be carried out without licensing by the Ministerial Department responsible for external trade, namely:
a) Imported goods whose value does not exceed the equivalent of USD 5,000.00 (Five Thousand United States Dollars); b) Goods transported as accompanied baggage, which enter the national territory through border posts and controls, declared to be under the simplified import regime; and, c) Goods defined in Article 14 of Presidential Decree No. 75/17, of April 7.

Article 12.
(Control of Entry of Goods)

1. In the case of advance payments, the importer must deliver to the bank proof of the entry of goods into the country, within a period of 30 (thirty) days, counted from the date of customs clearance, and may not exceed 180 (one hundred and eighty) days, counted from the date of the settlement of the foreign exchange operation.
2. Banks must:
   a) Create and maintain an updated register of information on:

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i. Compliance with the deadlines for delivery of supporting documentation for advance payments, under the previous number;
ii. The total deduction of any value paid in advance under a documentary credit, as well as the total invoiced value in the negotiation of documents.
b) Whenever non-compliance with the provisions of sub-points i. and ii. of letter a) of this article is verified, adopt, in a timely manner, all necessary procedures to correct the situation, including, among other procedures, immediately notifying the importer; and, c) Send to the Bank of Angola, by the 15 (fifteenth) day of each month, the list of importing entities that have not complied with the provisions of sub-points i. and ii. of letter a) of this article, under terms to be defined in specific regulation.
3. Banks must refuse the carrying out of future operations of the same nature, whenever non-compliance with the provisions of sub-points i. and ii. of letter a) of paragraph 2 of this article is recorded, unless this occurred for justified reasons and has been, in the meantime, duly regularized.

SECTION III
Prohibition of Settlement

Article 13.
(Prohibition of Settlement)

1. Settlement on the exterior of imports of goods that, under the Private Investment Law, must be carried out without recourse to the country's foreign exchange reserves is prohibited.
2. It is prohibited to carry out foreign exchange operations intended to settle imports that resulted from disbursements, in the form of goods, of lines of credit for export promotion and whose reimbursement should occur within the scope of the amortization of the same.
3. It is also prohibited to settle goods resulting from donations, emergency aid, or others, whose documentation expressly exempts foreign exchange settlement.

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SECTION IV
Special Import Modalities

Article 14.
(Import of Consignment Goods)

1. Payment to the consignor (exporter) depends on the presentation to the bank by the consignee (importer), after the sale of the goods and under the terms negotiated with the consignor, of the following documents:
   a) Commercial invoice; b) Unique Document (Final DU); c) Import license; and, d) Documents proving the sale of goods and, in cases of loss or deterioration, a certificate issued by the competent body.
2. The period agreed between the parties for the sale and payment of goods must not exceed 360 (three hundred and sixty) days from the date of entry of goods into the Country.
3. Whenever the goods have not been sold in their entirety and there is a need for returns, the consignee must present to the bank proof of the export customs clearance (Final DU) of the returned goods.

Article 15.
(Goods Entered in Customs Warehouse)
For the purposes of payment of goods, the importer must present to the bank the following documents:
a) Document proving import under this customs regime; b) Commercial invoice; c) Transport document; d) Unique Document (Final DU); e) Import license, when applicable; and, f) Document proving customs clearance.

Article 16.
(Goods Imported in Temporary Regime)
Requests made to the bank for the settlement of goods imported in a temporary regime and converted into definitive import, must be accompanied by the mandatory documents referred to in letters b) to f) of Article 15 of this Notice.

CHAPTER III
Export of Goods

Article 17.
(Payment Modalities, Procedures and Mandatory Documents)

1. In foreign exchange operations intended for the export of goods, the following settlement modalities are admitted:
   a) Advance payment; b) Irrevocable and non-transferable documentary credit, with a maximum validity period of up to 180 (one hundred and eighty) days; and, c) Others that may be defined by the Bank of Angola based on specific needs verified occasionally in the market resulting from, among other factors, the specificity of the goods or international settlement standards.
2. For the receipt of resources resulting from the export of goods, in the advance payment modality, the exporter must present to the bank the following documents:
   a) Proforma invoice; b) Supply contract, if applicable; and, c) Export License.
3. In the documentary credit payment modality:
   a) The exporter must indicate to the importer the bank domiciled in the Country where they hold their account, and through which, the documentary credit and any alterations to it must be notified, and payments credited (Advising Bank).

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b) The advising bank, before notifying the beneficiary of the documentary credit or any alterations to it, must ensure that:
i. The credit risk of the issuing or confirming bank, as applicable, is acceptable;
ii. Its terms and conditions are in accordance with the exchange legislation of the country;
iii. The exporter has conditions to comply with the terms of the documentary credit;
iv. The coordinates of the beneficiary's account reflected in the documentary credit are those of the importer's account with the advising bank; and,
v. When necessary, ensure the indispensable alterations to guarantee compliance with the provisions of sub-points ii and iii.
c) The exporter must present to the bank that notified the documentary credit, immediately after each shipment:
i. The original of the documentary credit;
ii. The documents as required by the documentary credit;
iii. Export License; and,
iv. Final DU.
d) The advising bank must ensure:
i. The sending of documents regarding each shipment to the issuing bank or confirming bank, as applicable, of the documentary credit within the deadlines provided for in the same; and,
ii. The entry of export revenue into the Country, within the period indicated in the documentary credit and its registration in SINOC.
4. The advising bank must issue the Payment Commitment Declaration, meeting the conditions for this purpose, according to the model of the Annex, which is an integral part of this Notice.

Article 18.
(Settlement of Exports)
The total foreign currency revenue resulting from each operation of export of goods must be deposited in a foreign currency bank account, titled by the exporting entity, opened with a bank domiciled in the Country.

Article 19.
(Availability of Foreign Currency)

1. The exporter must sell, within a period of 5 (five) days, counted from the date of entry of resources into the Country, to the intermediary bank of the operation, 50% (fifty percent) of the foreign currency resources resulting from each export operation, at the exchange rate negotiated with the bank at the date of the realization of the operation.
2. The remaining 50% (fifty percent) of the foreign currency resulting from export activity can only be used for:
   a) The realization of payments on the exterior within the scope of its activity; b) The reimbursement of financings contracted in foreign currency and payment of interest, costs, and expenses related; c) Financial applications with the bank where the funds are domiciled; and, d) The purchase of national currency for the payment of expenses or other responsibilities to resident exchange persons.
3. Banks can only proceed to the sale of foreign currency to exporting entities for the purpose of payments of goods or services to the exterior, after exhausting the exporter's resources in foreign currency.
4. Payments to be made to non-resident exchange entities are subject to the legislation and regulation applicable to payments on the exterior.
5. The provision of paragraph 1 of this article is applicable only to export revenues credited to the exporter's account after the date of entry into force of this Notice.
6. The Bank of Angola may approve a different percentage than that defined in paragraph 1 of this article, upon request of the exporter through their bank, in cases where this is justified, considering, among other factors, the volume of imports necessary for the development of the export activity.

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Article 20.
(Exemption from Prior Licensing)
Foreign exchange operations for the receipt of foreign currency resulting from the export of goods do not require prior licensing by the Bank of Angola, unless they are carried out in a manner different from that established in this Notice.

Article 21.
(Compensation for Deficient Quality/Quantity/Specification of Exported Goods)

1. Requests regarding compensation claimed by importers abroad for any deficiency, must be resolved through:
   a) Transfers corresponding to the value of the claimed goods; b) Compensation by deduction of the export product; and, c) Sending of identical goods in substitution for the goods arrived improper for any reason, without values to be paid by the importer.
2. Whenever the exported goods have already been fully settled, the exporter may request a transfer of the values to be returned to the importer, and must present to the bank the following documents:
   a) Letter duly justified on the payment to be made, indicating the name and bank coordinates of the foreign beneficiary which must obligatorily be the importer, the value and reason for the payment; b) Copy of the credit note issued by the exporter, proving the amount to be settled; c) Copy of the correspondence exchanged with the importer of the goods regarding the complaint presented, in which the destination given or to be given to the improper goods, in case of deficiency of quality or specification, is stated.