Notice No. 1/GBM/2016, of June 1 - Approves the Regulation on the Calculation and Establishment of Mandatory Reserves and Revokes Notice No. 12/GBM/2015, of December 7

GAZETTE OF THE REPUBLIC — OFFICIAL PUBLICATION OF THE REPUBLIC OF MOZAMBIQUE SUMMARY NOTICE The matter to be published in the 'Boletim da República' must be submitted as a duly authenticated copy, one for each subject matter, containing, in addition to the necessary indications for this purpose, the following endorsement, signed and authenticated: For publication in the 'Boletim da República'.

NATIONAL PRESS OF MOZAMBIQUE, S.A.
Prime Minister:
Order/Decree:
Awards the Botão Livestock Development Post to Muirrua Agro-Pecuário, Lda.

Bank of Mozambique:
Notice No. 1/GBM/2016:
Approves the Regulation on the Calculation and Establishment of Mandatory Reserves and revokes Notice No. 12/GBM/2015, of December 7.

Friday, October 21, 2016 | SERIES I — Number 126

PRIME MINISTER
Order/Decree
Within the framework of the restructuring of the State business sector, the Botão Livestock Development Post was identified for restructuring, under Decree No. 21/89 of May 23. In accordance with paragraph 2 of Article 5 of the same Decree and item c) of Article 8 of Law No. 15/91 of August 3, specific negotiations were carried out regarding the alienation of the Botão Livestock Development Post. Having concluded negotiations with Muirrua Agro-Pecuário, Lda., it is urgent to formalize the award of the Botão Livestock Development Post in order to precisely define the rights and obligations of the parties, within the privatization of the unit. Using the competence defined in paragraph 1 of Article 10 of Law No. 15/91, of August 3, I decide:
Single Article. The Botão Livestock Development Post is awarded to Muirrua Agro-Pecuário, Lda.
Maputo, September 20, 2016. Publish.
The Prime Minister, Carlos Agostinho do Rosário.

BANK OF MOZAMBIQUE
NOTICE No. 1/GBM/2016 of October 21
Given the need to adjust the rules for calculating and establishing mandatory reserves to the country's current macroeconomic situation and emerging challenges in the international market, the Bank of Mozambique, under Article 27 of Law No. 1/92 of January 3 (Organic Law of the Bank), determines:

1. The Regulation on the Calculation and Establishment of Mandatory Reserves, attached hereto, is approved, forming an integral part of this Notice.
2. This Notice takes effect from the mandatory reserve establishment period, which begins on June 7, 2016.
3. Notice No. 12/GBM/2015, of December 7, is revoked.
   Doubts arising in the interpretation and application of this Notice must be submitted to the Markets and Reserve Management Department of the Bank of Mozambique. Maputo, June 1, 2016. – The Governor, Ernesto Gouveia Gove.

Regulation on the Calculation and Establishment of Mandatory Reserves
CHAPTER I
Subject Matter and Scope
ARTICLE 1
Subject Matter
This Regulation establishes the rules for calculating and establishing mandatory reserves.

ARTICLE 2
Scope of Application

1. This Regulation applies to all credit institutions provided for in Law No. 15/99, of November 1, with amendments introduced by Law No. 9/2004, of July 21 (Law on Credit Institutions and Financial Companies), holding liabilities referred to in Article 4 of this Regulation and monetary assets with the Bank of Mozambique.
2. The provisions in the preceding paragraph do not apply to credit institutions not authorized to receive public deposits.

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CHAPTER II
Calculation and Establishment
ARTICLE 3
Currencies of Establishment
Mandatory reserves are established:
a) In meticais, for deposits denominated in national currency; and b) In United States dollars, for deposits denominated in foreign currency.

ARTICLE 4
Liabilities Subject to Levy

1. The following constitute the levy base for Mandatory Reserves, as detailed in the attached Mandatory Reserve Calculation Tables forming an integral part of this Regulation:
   a) Resident deposits; b) Non-resident deposits; and c) State deposits.
2. The liabilities referred to in the preceding paragraph must be segregated into national and foreign currencies.

ARTICLE 5
Calculation of the Levy Base

1. The levy base for mandatory reserves is calculated from the simple arithmetic mean of the balances of the liabilities referred to in the preceding article, verified over the calculation period.
2. The calculation periods for the levy base are, each month, as follows:
   a) 1st Period – from the 1st to the 15th day; and b) 2nd Period – from the 16th to the last day of each month.
3. For calculation purposes, deposits denominated in other foreign currencies are converted daily into their US dollar equivalent, using the prevailing valuation exchange rate.
4. The value in US dollars of the deposits referred to in the preceding paragraph is calculated by applying the following conversion factor:
   F_USD = (TaxaME / TaxaUSD) × ME / USD
5. In the formula provided in the preceding paragraph:
   a) F_USD is the conversion factor for the US dollar; b) TaxaME is the daily valuation exchange rate of the foreign currency to be converted; and c) TaxaUSD is the daily valuation exchange rate of the US dollar.

ARTICLE 6
Levy Rate
The levy base referred to in the preceding article is subject to minimum daily rates, fixed at:
a) 10.50%, for the levy base in national currency. b) 15.00%, for the levy base in foreign currency.

ARTICLE 7
Establishment Period

1. The periods for establishing mandatory reserves are as follows:
   a) 1st Period – from the 7th to the 21st day; and b) 2nd Period – from the 22nd to the 6th day of the following month.
2. The mandatory reserves of the 1st establishment period correspond to the 2nd calculation period, and vice versa.

ARTICLE 8
Form of Establishment

1. National currency mandatory reserves may be established in at least one of the following forms:
   a) Cash; b) Checks drawn by the institution itself on other national credit institutions; c) Account-to-account transfer; d) Other financial assets eligible to enter the clearing system, excluding foreign currency demand deposits of credit institutions with the Bank of Mozambique; and e) Cash held in the institution's branches in rural areas, as defined by the Bank of Mozambique.
2. Foreign currency mandatory reserves may be established in at least one of the following forms:
   a) US dollar demand deposits of credit institutions with the Bank of Mozambique; b) Funding of US dollar demand deposit accounts at the Bank of Mozambique, via account-to-account transfer from banks within the country; and c) Funding of US dollar demand deposit accounts, via transfer from the institution's nostro account to the Bank of Mozambique's noso account.

ARTICLE 9
Methodology of Establishment

1. Daily balances of demand deposits, in national currency and US dollars, of credit institutions with the Bank of Mozambique must not be lower, each day, than the mandatory reserve amounts resulting from multiplying the levy base by the rates fixed in Article 6 of this Regulation.
2. Daily excesses of free reserves exceeding 1% of foreign currency mandatory reserves are not permitted.
3. A free reserve excess is considered the portion of the daily balance in each bank's US dollar account that exceeds 1% of the mandatory reserves calculated for the establishment period to which they relate.

CHAPTER III
Penalties
ARTICLE 10
Penalty for Irregularities

1. Without prejudice to applicable legislation, the following irregularities are subject to monetary penalties:
   a) Deficit in mandatory reserves; b) Excess of free foreign currency reserves; and c) Delay in sending information to the Bank of Mozambique regarding the levy base.
2. The penalty for a deficit in mandatory reserves calculated at the end of each day is determined based on the following formulas:
   a) Penalty = [(SD + CX – (r x BI)) x T] / 365 days, for the deficit in mandatory reserves in national currency; and b) Penalty = [(SD – (r x BI)) x T] / 365 days, for the deficit in mandatory reserves in foreign currency.
3. In the formulas provided in the preceding paragraph:
   a) SD is the daily accounting balance of demand deposit accounts in national currency or US dollars, of credit institutions with the Bank of Mozambique, obtained from statements issued by the Maputo Branch of the Bank of Mozambique; b) CX is the value of cash, in national currency, held daily in vaults by credit institutions, as provided for in item e) of paragraph 1 of Article 8 of this Regulation, obtained from information submitted by institutions to the Markets and Reserve Management Department of the Bank of Mozambique; c) r is the minimum daily levy rate for mandatory reserves, as per Article 6 of this Regulation; d) BI is the levy base for mandatory reserves, as per Article 5 of this Regulation; and e) T is the penalty rate for a deficit in mandatory reserves.
4. The penalty rate for a deficit in mandatory reserves referred to in the preceding paragraph corresponds to:
   a) The highest and most recent interest rate for active operations, in national currency, charged by the defaulting credit institution, plus one percentage point, when relating to liabilities in national currency; and b) The highest and most recent interest rate for active operations, in US dollars, charged by the defaulting credit institution, plus one percentage point, when relating to liabilities in foreign currency.
5. The penalty for daily excesses of free reserves in foreign currency calculated at the end of each day is determined based on the following formula:
   Penalty = ER x t / 365 days.
6. In the formula referred to in the preceding paragraph:
   a) ER is the daily excess of free reserves, exceeding 1% of foreign currency mandatory reserves; and b) t is the highest and most recent interest rate for passive operations, in US dollars, charged by the defaulting credit institution, plus one percentage point.
7. The penalty values due for the deficit in Mandatory Reserves and/or excesses of free reserves in foreign currency shall be converted into meticais using the prevailing valuation rate on the date of the infraction.
8. The penalty for delay in sending the information referred to in Article 14 of this Regulation is 10,000.00 Mt (ten thousand meticais) for each day of delay.

ARTICLE 11
Payment of Penalty
The Bank of Mozambique debits the demand deposit account, in national currency, of the defaulting credit institution for the penalty values calculated according to the preceding article of this Regulation.

ARTICLE 12
Aggravation of Penalty
The penalty rates provided for in paragraph 4 of Article 10 of this Regulation are subject to an aggravation of ten percentage points, whenever, during a specific establishment period, an institution incurs deficits or excesses of free reserves for two or more days, consecutive or not.

ARTICLE 13
Account Blocking

1. If, over four consecutive establishment periods of mandatory reserves, an institution incurs a deficit in two of those periods (consecutive or not) for three or more days, the Bank of Mozambique blocks the balance of the free movement account.
2. Only credit movements are permitted in the blocked account, without prejudice to any additional measures provided for in the Interbank Clearing and Settlement Regulations.
3. The institution is notified of the account blocking, with a minimum advance notice of four days from the date of its effective implementation.
4. The institution whose account is blocked must, upon receipt of the notification,:
   a) Immediately instruct the opening of a new account for clearing and other types of operations, with the Maputo Branch of the Bank of Mozambique; and b) Fund the blocked account to comply with mandatory reserves.
5. The Bank of Mozambique reserves the right to transfer from the new account to the blocked account the balances necessary for the institution to comply with Mandatory Reserves.
6. While deficits persist in the blocked account, a penalty is applied to daily deficits based on the rate provided for in Article 9 of this Regulation.
7. Within a period of no less than four establishment periods of mandatory reserves, the Bank of Mozambique may instruct the lifting of the account blocking.

CHAPTER IV
Final Provisions
ARTICLE 14
Submission of Information

1. Credit institutions covered by this Regulation must submit to the Bank of Mozambique, referencing the calculation period indicated in paragraph 2 of Article 5, the information contained in the attached Mandatory Reserve Calculation Tables, which form an integral part of this Notice.
2. The Mandatory Reserve Calculation Tables referred to in the preceding paragraph must be received at the Bank of Mozambique by the third business day following the end of the calculation period to which they refer, and may be corrected until the last business day prior to the start of their respective establishment period.
3. Late submission of tables is an indispensable condition for accepting tables relating to subsequent periods.
4. Any correction occurring during the establishment period to which the information relates and that implies a reduction in the levy base is not considered for penalty calculation purposes, with prior information prevailing in these cases.
5. Credit institutions are obliged to retain, for a period of five years, all documents enabling them to prove the information contained in the Tables referred to in paragraph 1 of this article.

1076 | SERIES I — NUMBER 126
ARTICLE 15
Exemption Period

1. All credit institutions enjoy an exemption in establishing mandatory reserves, for a maximum period of three months, starting from the date of commencement of their activities.
2. If the institution wishes to join the Interbank Markets before the end of the period referred to in the preceding paragraph, it must waive the remaining exemption period, in order to comply with item a) of Article 3 of Notice No. 5/GBM/13, of September 18, Regulation on the Market Operations System.
3. The exemption referred to in paragraph 1 of this article is automatic, and its terms are formally communicated by the Regulation and Licensing Department of the Bank of Mozambique.

ANNEX 1: MANDATORY RESERVE CALCULATION TABLE FOR DEPOSITS IN METICAIS

DESIGNATION	t Day	t + 1 Day	t + 2 Day	t + … Day	t + n Day	SIMPLE MEAN RO
A. RESIDENT DEPOSITS
Demand Deposits	4000010	4000020	4000030	4000040	4000050	4000060
Deposits with Prior Notice	4000011	4000021	4000031	4000041	4000051	4000061
Time Deposits	4000012	4000022	4000032	4000042	4000052	4000062
Other Deposits	4000018	4000028	4000038	4000048	4000058	4000068
Mandatory Deposits	400007
B. NON-RESIDENT DEPOSITS
Demand Deposits	4001010	4001021
Deposits with Prior Notice	4001011	4001022
Time Deposits	4001012	4001023
Other Deposits	4001013	4001024
Mandatory Deposits	400103
C. STATE DEPOSITS
From Administrative Public Sector
Demand Deposits	40000000	40000010	40000020
Deposits with Prior Notice	40000001	40000011	40000021
Time Deposits	40000002	40000012	40000022
Other Deposits	40000008	40000018	40000028
TOTAL
Daily Balances: From financial societies	From public companies	From private companies	Individuals
Collective organizations that are not companies	From emigrants	From enterprises	From other non-residents
Central Administration	Local Administration	Social Security

21 DE OUTUBRO DE 2016 1075 | SERIES I — NUMBER 126
ANNEX 2: MANDATORY RESERVE CALCULATION TABLE FOR DEPOSITS IN FOREIGN CURRENCY

DESIGNATION	t Day	t + 1 Day	t + 2 Day	t + … Day	t + n Day	SIMPLE MEAN RO
Foreign Exchange Valuation USD	ZAR	EUR	GBP	…
A. RESIDENT DEPOSITS
Demand Deposits	4000110	4000120	4000130	4000140	4000150	4000160
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Deposits with Prior Notice	4000111	4000121	4000131	4000141	4000151	4000161
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Time Deposits	4000112	4000122	4000132	4000142	4000152	4000162
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Daily Balances: From financial societies	From public companies	From private companies	Individuals
Collective organizations that are not companies	From emigrants

1078 | SERIES I — NUMBER 126
ANNEX 2 (continuation): MANDATORY RESERVE CALCULATION TABLE FOR DEPOSITS IN FOREIGN CURRENCY

DESIGNATION	t Day	t + 1 Day	t + 2 Day	t + … Day	t + n Day	SIMPLE MEAN RO
Other Deposits	4000118	4000128	4000138	4000148	4000158	4000168
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Mandatory Deposits	400017
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
B. NON-RESIDENT DEPOSITS
Demand Deposits	4001110	4001120
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Deposits with Prior Notice	4001111	4001121
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Time Deposits	4001112	4001122
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Other Deposits	4001113	4001123
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Mandatory Deposits	400113
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
From financial societies	From public companies	From private companies	Individuals
Collective organizations that are not companies	From emigrants
From enterprises	From other non-residents

ANNEX 2 (continuation): MANDATORY RESERVE CALCULATION TABLE FOR DEPOSITS IN FOREIGN CURRENCY

DESIGNATION	t Day	t + 1 Day	t + 2 Day	t + … Day	t + n Day	SIMPLE MEAN RO
C. STATE DEPOSITS
Social Security
Demand Deposits	40001000	40001010	40001020
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Social Security
Deposits with Prior Notice	40001001	40001011	40001021
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Social Security
Time Deposits	40001002	40001012	40001022
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
Social Security
Other Deposits	40001008	40001018	40001028
USD / ZAR / EUR / GBP / …	Total USD + Countervalue in USD of Other Currencies
TOTAL: Central Administration	Local Administration

Price — 13.95 MT
NATIONAL PRESS OF MOZAMBIQUE, S.A.