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48 What documents are required for south african exchange controlpurposes? south africa has a system of exchange control regulations in place that restricts the circumstancesunder which foreign currency can flow out of and into the country, and who may acquire and hold foreigncurrency. These regulations place certain requirements on the exporter concerning the foreignexchange he receives as payment for his exported control policy is dictated by the Treasury (controlled by the Department of Finance) andexecuted by the south african Reserve Bank. The Reserve Bank delegates the day-to-dayadministration of exchange control regulations to authorised dealers in foreign exchange , which refersto most of the banks in south africa . Certain travel agents in south africa have limited authority inrespect of exchange control and may grant overseas travel allowances and issue foreign currencytravellers cheques.

48 W hat documents are required for South African exchange control purposes? South Africa has a system of exchange control regulations in place that restricts the circumstances

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Transcription of 48 W W - tradesecrets.co.za

1 48 What documents are required for south african exchange controlpurposes? south africa has a system of exchange control regulations in place that restricts the circumstancesunder which foreign currency can flow out of and into the country, and who may acquire and hold foreigncurrency. These regulations place certain requirements on the exporter concerning the foreignexchange he receives as payment for his exported control policy is dictated by the Treasury (controlled by the Department of Finance) andexecuted by the south african Reserve Bank. The Reserve Bank delegates the day-to-dayadministration of exchange control regulations to authorised dealers in foreign exchange , which refersto most of the banks in south africa . Certain travel agents in south africa have limited authority inrespect of exchange control and may grant overseas travel allowances and issue foreign currencytravellers cheques.

2 In practical terms, the exporter deals with his bank concerning most foreignexchange matters, including exchange control exchange control regulations of Namibia, Swaziland and Lesotho but not Botswana areharmonised with those of south africa and the whole region is referred to as the Common MonetaryArea (CMA). Note that Namibia, Swaziland, Lesotho and Botswana, together with south africa , form theSouthern african Customs Union (SACU).The basic requirement regarding foreign exchange received for exported goods is that the exporter mustsell his foreign currency to an authorised dealer ( to his bank), within 180 days of receipt of theforeign currency. Furthermore, the exporter must sell the goods and receive the full foreign currencyproceeds within six months of the date of shipment.

3 However, banks may authorise exporters to grantcredit of up to 12 months from the date of shipment. Credit for a longer period, for capital goodsexported, must be referred to the Reserve Bank for approval. The exporter must be paid in a freelyconvertible foreign currency or in rand from a non-resident account. A freely convertible currency isany currency that is generally traded internationally it is not likely that the exporter would want to bepaid in any other currency!Receipt of foreign currency into south africa is controlled by the Reserve Bank through three forms,which the exporter may obtain from his bank: Form F178 must be completed by the exporter when he expects to receive foreign exchange fromthe sale of his export goods. If the consignment is valued at R50 000 or less, Form F178 does notneed to be completed but the proceeds must still be repatriated to south africa .

4 Form E must be completed in order to sell the foreign exchange proceeds to the bank; if theproceeds are less than R40 000, Form E is not required. Form NEP (no exchange proceeds) must be completed by the exporter where the value of theconsignment is greater than R50 000 but does not result in any income for the exporter because itconsists of, for example, no-charge trade samples, or is the replacement of rejected or defectivegoods, or supplements a short completing Form F178, the exporter must state his anticipated export earnings as accurately aspossible. The form is usually attested by the exporter s bank, which will reconcile the foreign exchangereceived into the exporter s account with the amount stated on the form. While the basics of exchangecontrol and the documentation associated with it are relatively simple, complexities can sometimesoccur.

5 The exporter should therefore discuss the foreign exchange control procedure with theinternational division of his bank to ensure that he understands the process and does not incur anypenalty through Form F178 has to be attested, it is one of the documents that the exporter himself mustcomplete. It cannot legally be completed by the freight forwarder, although many offer assistance in to CMA countries. Shipments to Namibia, Swaziland and Lesotho do not require the exporterto complete Form F178/Form NEP. The exporter must complete Form F178/Form NEP for goodsshipped to Botswana if the value of the shipment exceeds R50 travel allowances. The exporter should note that exchange control provisions also limit toR100 000 a year the amount of foreign currency that may be taken out of south africa to spend abroad,whether in the form of currency, travellers cheques or credit card authorisation.

6 The traveller applies forthe allowance on Form A and also completes Form MP928 if he requires credit card authorisation. Hemust have a passenger ticket issued in his name in south africa , and both his ticket and the traveller spassport are endorsed with the amount of the travel allowance being may approve omnibus foreign travel allowance facilities of up to R1 million a year to companiesfor use at their discretion by their staff for bona fide business visits abroad. Applications for facilities inexcess of R1 million must be referred to the Reserve control regulations also apply to foreign expenditure the exporter may wish to incur in respectof advertising, participation in trade fairs, bid bonds, performance guarantees, export settlement refundsor foreign legal expenses. The exporter should discuss any matters of this nature with his control Manual.

7 Publisher: south african Reserve Bank. Cost: R150. Obtainable: south AfricanReserve Bank. E-mail: Web site: Contents: Thismanual is issued to assist authorised dealers in foreign exchange , their customers and other interestedparties by providing a general understanding of the purpose, scope and operation of the exchange controlsystem in the Republic of south africa and in the Common Monetary Area. It is not intended to have theforce of law or any other legal


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