Notice No. 19-2012 of April 25 Regulating Foreign Exchange Operations for Merchandise Trade

NOTICE NO. 19/2012 of April 19

Given the need to update the regulation of Law No. 5/97, of June 27, the Bills of Exchange Law, regarding the current norms on foreign exchange operations for merchandise, in accordance with the provisions of its Article 18.

Taking into account the provisions of Presidential Decree No. 265/10, of November 26, which regulates the administrative procedures to be observed for the licensing of imports, exports, and re-exports of merchandise, and which also attributes competence to the Bank of Angola to define in its own instrument the modalities of foreign exchange settlement.

In these terms, 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, the Bank of Angola Law, and Article 36 of Presidential Decree No. 265/10.

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 payment of import, export, and re-export of merchandise in the Republic of Angola.

Article 2
(Scope)
This Notice must be observed by all participants in carrying out foreign exchange operations for the import, export, and re-export of merchandise occurring in the Republic of Angola, including entities responsible for ensuring compliance with applicable norms, namely:
a) Individuals or legal entities holding rights and obligations within the scope of said operations; b) Banking financial institutions, intermediaries in said operations.

Article 3
(Definitions)
For the purposes of this instrument, the following are understood:

1. Banks - Banking Financial Institutions domiciled in the Country, authorized to carry out foreign exchange operations by the Bank of Angola.
2. Foreign Banks - Banking Financial Institutions domiciled outside the national territory.
3. Share Capital – Initial investment by partners in a company, represented in the form of shares (if it is a public limited company) or quotas (if it is a limited liability company).
4. Documentary Credit or Letter of Credit - designates any agreement, however named or written, by which a bank, (Issuing Bank) acts at the request and by instructions of a client (the applicant), becoming obligated to:
   a) Make a payment to a third party (the beneficiary) or whom they indicate; or b) Accept and pay commercial drafts drawn by the beneficiary; c) Authorize another bank to make said payment or accept and pay said commercial drafts; d) Authorize another bank to negotiate, against the presentation of stipulated documents, fulfilling the conditions of the Documentary Credit. Depending on the negotiated modality, the Documentary Credit may involve, in addition to the applicant, the beneficiary, and the issuing bank, the advising bank, the negotiating bank, and the confirming bank.
5. Applicant (Buyer) - entity that gives instructions to the bank to open the Documentary Credit.
6. Beneficiary (Seller) - entity in whose favor the Documentary Credit is issued and to whom the amount will be paid in accordance with its terms and conditions.
7. Issuing Bank - Banking Financial Institution that issues the Documentary Credit based on the applicant's instructions.
8. Advising Bank - Banking Financial Institution that receives the letter of credit and communicates its terms and conditions to the beneficiary.
9. Confirming Bank - Banking Financial Institution that assumes before the beneficiary the firm commitment to pay, provided the terms and conditions of the Documentary Credit are met. This commitment is joint with that of the issuing bank.
10. Negotiating Bank - Banking Financial Institution designated by the issuer to proceed with the negotiation of documents, potentially advancing funds to the beneficiary, against the presentation of documents in conformity with the conditions or terms of the Documentary Credit.
11. Single Document - customs clearance form, used to effect customs clearance of merchandise, annotated by the National Customs Service.
12. Import/Export License for Merchandise - document issued by the Ministerial Department responsible for foreign trade that authorizes the import, export, or re-export of merchandise, as defined in Presidential Decree No. 265/10.
13. International Trade Best Practices - uniform rules and usages issued by the International Chamber of Commerce.
14. Foreign Exchange Operation - any act, business, or transaction carried out between a resident and non-resident foreign exchange entity that may result in payment from or receipt from abroad, or that is simply qualified by law as such.
15. Merchandise Operations - acts and/or contracts between resident and non-resident foreign exchange entities involving the transmission of property rights of movable goods.
16. Advance Payment - a payment modality in which the importer pays the exporter before the shipment of the merchandise, bearing the risk of not receiving it or receiving it outside the norms agreed upon by both parties.
17. Deferred Payment - total or partial settlement, carried out by a resident foreign exchange person to a non-resident foreign exchange person or vice versa, resulting from the import or export of merchandise in the form of:
    a) Documentary Collection – In which the exporter ships the merchandise and sends the documentation to the bank, which will deliver it to the importer after collection or acceptance; or b) Documentary Remittance – where documents are sent directly to the importer, without a draft, allowing payment to occur after the customs clearance of the merchandise.
18. Foreign Exchange Residents;
    a) Individuals who have their habitual residence in the Country; b) Legal entities with their seat in the Country; c) Branches, subsidiaries, agencies, or any forms of representation in the Country of legal entities with their seat abroad; d) Funds, institutes, and public bodies endowed with administrative and financial autonomy, with their seat in national territory; e) National citizens who are diplomats, consular representatives, or equivalent, exercising functions abroad, as well as members of their families; f) National individuals whose stay abroad, for a period greater than 90 (ninety) days and less than one year, originates from studies or is determined by the exercise of public functions.
19. Non-Resident Foreign Exchange Entities;
    a) Individuals with habitual residence abroad; b) Legal entities with their seat abroad; c) Individuals who emigrate; d) Individuals who leave the country for a period greater than one year; e) Branches, subsidiaries, agencies, or any forms of representation in foreign territory of legal entities with their seat in the country; f) Diplomats, consular representatives, or equivalent, acting on national territory, as well as members of their families.
20. Group Relationship or Related Entities - A group relationship is considered to exist when a company holds, directly or indirectly, a relationship of dominance over another or others, or when all are subsidiaries of the same parent company. Entities are considered related when there are common shareholders or partners, common administrators, cross-guarantees, or direct commercial interdependence that cannot be replaced in the short term. However, the concept of client group does not apply to links between public companies or companies of another nature controlled by the State resulting from the fact that all are subject to common control.
21. 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.

SECTION II
Principles

Article 4.
(Banking Intermediation)

1. The settlement of import, export, or re-export operations of merchandise can only be carried out through a banking financial institution.
2. Intermediation and settlement through more than one banking financial institution for the same import, export, or re-export operation of merchandise is not permitted.

Article 5.
(Previous Licensing)

1. Foreign exchange operations intended for the import, export, and re-export of merchandise with settlement within a period less than 360 (three hundred and sixty) days from the date of the discharge/loading documents do not require previous licensing from the Bank of Angola, unless they are carried out in a manner different from that established in this Notice.
2. The aforementioned in point 1 does not exempt that whenever necessary, the Bank of Angola requests from importers and exporters information on the foreign exchange operations of merchandise carried out by them, including expected future transaction flows.

Article 6
(Previous Conditions for Carrying Out Foreign Exchange Operations)

1. Prior to carrying out any foreign exchange operation for the import, export, or re-export of merchandise, banks must ensure that:
   a) They know the nature, economic basis, identity, and legitimacy of the applicant, importer, or exporter, resident foreign exchange entity, as the case may be, in compliance with identification and diligence duties provided for in Fiscal Legislation and Prevention and Combating Money Laundering and Terrorism Financing Legislation; b) The foreign exchange operation complies with applicable legislation, for which purpose they must request documentary support in accordance with this Notice;

Article 7.
(Payment Modalities)

1. In foreign exchange operations intended for import, export, and re-export of merchandise, the following settlement modalities are admitted:
   a) Documentary credit; b) Advance Payment; c) Deferred Payment, via:
   i. Documentary Collections;
   ii. Documentary Remittances.
2. In selecting the settlement modality referred to in paragraph 1 of this article, among others, international trade best practices, amounts and risks involved in the transaction, foreign exchange and foreign trade legislation of the Republic of Angola, and the degree of confidence between the parties (Banking Financial Institution, importer, and exporter) must be taken into account.

CHAPTER II
Import of Merchandise
SECTION I
Documentation Requirements

Article 8
(Required Documents for Settlement)

1. Depending on the chosen settlement modality, and for the realization of the respective foreign exchange operation, the importer must obligatorily present to their banking financial institution the following documents:

Documents to be presented
1.1 1.2 1.3 1.4 1.5 1.6
Client letter, containing the registration number as an importer and the Tax ID Number (NIF), requesting the realization of the operation X Proforma Invoice X Original commercial invoice X X Transport document (ii) (i) (i) X X Import License (refer to Article 9 for applicable exemptions) X Single Document (i) (i) (i) (i) X Other documents according to the terms of the documentary credit, X X Supply Contract X Bank Guarantee X

1.1 When the settlement modality is a documentary credit opened with advance payment (red clause), in which it is admitted that the exporter may receive part of the transaction value before the shipment of the merchandise, as per paragraph 4 of Article 11 of this Notice;
1.2 When the chosen settlement modality is a documentary credit without advance payment;
1.3 When the chosen settlement modality is advance payment, with a bank guarantee of good performance, as per paragraph 3 of Article 11 of this Notice;
1.4 When the settlement modality is advance payment of the total import value under paragraphs 1 and 2 of Article 11 of this Notice;
1.5 In the documentary collection settlement modality;
1.6 In the documentary remittance settlement modality;
(i) The delivery of documents must be carried out in accordance with the provisions of paragraphs 1 and 2 of Article 12 of this Notice; (ii) The transport documents to be required are the following:
a) Maritime transport - bill of lading; b) Air transport - air waybill; c) Rail transport - dispatch note or equivalent; d) Land transport - consignment note or cargo manifest.

2. Whenever they deem necessary, banks may request any other complementary documents that allow certifying the legitimacy of the payment instruction to the foreign entity, given by their client.

Article 9
(Invoice Requirements)
For the purposes of this Notice, the commercial invoice must contain, at least, the following information:
a) Name and address of the exporter, including telephone, fax, and/or electronic address; b) Name and address of the importer, including telephone, fax, and/or electronic address; c) Delivery address, if different from the billing address; d) Date of the invoice, number, and location; e) Exact description of the merchandise; f) Quantity (units, volume, or square meters), unit price, and commercial value of the invoice, (with indication of the currency); g) Delivery and payment conditions; h) Gross and net weight of the merchandise; i) Country of origin.

Article 10
(Exemption from Licensing)

1. The following foreign exchange operations intended for the settlement of merchandise imports can be carried out without licensing from the Ministerial Department responsible for foreign trade:
   a) Imported merchandise whose value does not exceed the equivalent of USD 5,000.00 (five thousand United States dollars); b) Merchandise transported as accompanied baggage entering the national territory, via border posts and controls declared under the simplified import regime; c) Merchandise defined in Article 14 of Presidential Decree No. 265/10, of November 26.

SECTION III
Advance Payments

Article 11
(Conditions for Advance Payments)

1. Advance payments are permitted when the transaction value does not exceed the equivalent of USD 100,000.00 (one hundred thousand United States dollars).
2. Advance payments abroad in amounts higher than mentioned in the previous point are also permitted provided the following are cumulatively met:
   a) The merchandise is destined for and specifically manufactured for the importer, is difficult to place in an alternative market, or advance payment is industry practice; b) The deadline for the entry of the merchandise referred to in sub-item a) of this point is up to 180 (one hundred and eighty) days from the date of settlement of the advance payment; c) The beneficiary (exporter) of the payment is not a related entity and/or does not have a group relationship with the applicant (importer); d) The total amount of advance payments for ongoing operations is not more than 2.5 times the share capital of the importer, as evidenced in certified accounts dated no more than 360 (three hundred and sixty) days from the date of settlement of the merchandise.
3. Advance payments abroad in amounts higher than mentioned in point 1 of this article may also be carried out upon presentation of a good performance guarantee of equal value, to be provided by a recognized foreign bank and accepted by the importer's bank.
4. Banks may proceed to open documentary credits that allow advance payments of up to 20% of its value.
5. Cumulatively to the aforementioned in the previous paragraphs of this article, the carrying out by banks of advance payments should only occur in the following cases:
   a) If the importer has no situation of non-compliance regarding the delivery of documents to be realized, defined in paragraphs 1 and 2 of Article 12. b) If the importer maintains a regular relationship of satisfaction of their commitments with the bank.
6. Banks must advise their importer clients to avoid, whenever possible, the carrying out of advance payments, potentially using other financial instruments accepted in foreign trade to reduce risks in international commercial transactions.

Article 12
(Deadlines for Document Delivery)

1. Whenever an advance payment is made, the importer is obliged to present to the bank through which the operation was carried out, the document justifying the entry of the merchandise into the Country within the shortest period between 180 (one hundred and eighty) days from the date of effective realization of the foreign exchange operation or 30 days from the date of entry of the merchandise into the Country.
2. When the advance payment was made under a documentary credit, the deadline for presenting documents is equal to the validity period of the letter of credit plus 30 days.
3. It is the responsibility of the importer's bank to verify and ensure to the BNA compliance with the deadline for delivery of documents proving the entry of the merchandise into the Country.
4. In case of non-compliance by the importer, the bank must promptly adopt all necessary procedures to correct the situation, including, among other procedures, formally notifying the non-complier immediately after the expiration of the document delivery deadline.
5. Banks must create and maintain a registry with relevant information regarding the compliance with deadlines for sending supporting documentation for advance payments instructed by their clients.
6. Banks must send to the Bank of Angola - Foreign Exchange Control Department, by the 15th of each month, the list of entities in non-compliance as provided in the previous paragraph.
7. The information mentioned in the previous point must be sent in Excel format, to the electronic address, DCC@bna.ao.
8. Unless for duly justified reasons, the failure to deliver documents proving the entry of the merchandise into the national territory within the regulatory deadline implies the refusal, by banks, to carry out future operations of the same nature, until the situation is resolved.

SECTION IV
Settlement

Article 13
(Foreign Exchange Coverage)

1. Foreign exchange coverage for the settlement of merchandise import operations can proceed as follows:
   a) By using external currency funds available in the importer's bank account. In cases where the importer enjoys the prerogative granted under Article 21 of this Notice, funds available in this account must be used prioritarily. b) By debit of the national currency account, at the time of settlement of the transaction abroad; c) Through the use of international payment cards under the terms established in own regulation.
2. For foreign exchange coverage of contracts intended for merchandise import with settlement within 360 days, banks may enter into forward exchange contracts with their clients.

Article 14
(Settlement Requirements and Deadlines)

1. Foreign exchange operations intended for merchandise imports can only be carried out after the intervening bank has received all required documents as indicated in Article 8 and the operation has been registered in SINOC.
2. The settlement of imports must also comply with deadlines previously agreed upon by the parties, expressed in the presented documents.
3. Foreign exchange operations intended for the settlement of merchandise must be carried out within 360 (three hundred and sixty) days from the date of the Single Document.
4. The carrying out of a foreign exchange operation intended for the settlement of merchandise abroad, based on documents that have exceeded the deadline mentioned in the previous paragraph, is subject to licensing by the Bank of Angola under the regulation on capital operations, and the request must be directed to the Foreign Exchange Control Department, 30 (thirty) days after the aforementioned deadline has been exceeded.
5. When the terms of the import contract provide for payment of the merchandise in a period greater than 360 (three hundred and sixty) days after the date of the Single Document, the foreign exchange operations resulting from said contracts must also be treated within the scope of capital operations.

Article 15
(Prohibition of Settlement)

1. Settlement abroad of merchandise imports that, under Articles 12 and 13 of Law No. 20/2011, of May 20, the Private Investment Law, must be carried out without recourse to the Country's foreign exchange reserves is not permitted.
2. It is prohibited to carry out foreign exchange operations intended to settle imports that resulted from disbursements, in the form of goods, of export promotion credit lines, and whose reimbursement must occur within the scope of the amortization of said lines.
3. It is also prohibited to settle merchandise originating from donations, emergency aid, or others, whose documentation expressly exempts foreign exchange settlement.

SECTION VI
Import Modalities

Article 16
(Consignment Imports)

1. When the agreed modality is consignment import, payment to the consignor (exporter) depends on the presentation to the bank, by the consignee (importer), at the end of the merchandise sales period, of the following:
   a) Mandatory documents referred to in paragraph 1.6 of Article 8 of this Notice; b) Document proving the sale of the merchandise and, if applicable, the loss or deterioration thereof, attested by a competent body.
2. If the sale has not been carried out and there is a return of the merchandise, the consignee (importer) must present to the bank, proof of the shipment of the remaining merchandise to be returned to the consignor (exporter).

Article 17
(Merchandise Entered in Bonded Warehouse)

1. Foreign exchange operations intended for the settlement of merchandise imports entered in bonded warehouse must contain the customs document proving the entry thereof in bonded warehouse.
2. Whenever the settlement of the merchandise is carried out before the document referred to in the previous paragraph is issued, the processes must still contain one of the following elements:
   a) Copy of the request to open the negotiable documentary credit against the presentation of the merchandise dispatch document or remittance letter including such document; b) Document proving the dispatch of the merchandise;

Article 18
(Merchandise Imported under Temporary Regime and Merchandise Destined for Bonded Warehouses) Requests made to the bank for the settlement of merchandise imported under a temporary regime must be accompanied by the mandatory documents referred to in paragraph 1 of Article 8 of this Notice for deferred payments.

CHAPTER III
Export of Merchandise

Article 19
(Required Documents)

1. Exporters must negotiate with foreign importers one of the following settlement modalities for the product of the export...