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Angola: Forward foreign exchange transactions

18/12/2023

Angola: Forward foreign exchange transactions

By way of Order 13/23, of 14 December 2023, the Angolan Central Bank (BNA) has issued regulations on forward foreign exchange transactions to take place between banks and their clients. Below is an outline of the new rules:

1- A forward foreign exchange transaction is defined as a transaction between a bank and a client providing for the purchase/sale of an agreed amount in Angolan currency (Kwanza) at a set date in the future in exchange for the sale/purchase of an agreed amount in a foreign currency at an exchange rate agreed at present.

2- Banks can only enter into forward forex transactions with the following clients:

  • Importers;
  • Exporters;
  • Oil companies;
  • Diamond companies;
  • State entities.

On an exceptional basis, banks may enter into private forward forex transactions with their individual clients.

3- The forward forex transaction must be exclusively aimed at covering/hedging the foreign exchange risk associated with specific import or export operation.

4- Forward forex transactions may involve the Angolan currency – Kwanza – and any freely convertible foreign currency.

5- The maximum term of a forward forex transaction is 1 year for corporate clients and 6 months for individual clients.

6- The general clauses of forward forex contracts must follow the template contained in Appendix I to Order 13/23.

7- The particular clauses of forward forex contracts must contain the minimum information described in Order II to Order 13/23.

8- All transactions in excess of USD 50.000 must be registered in the Bloomberg FXGO platform. In any event, banks must ensure that all forward forex transactions are duly registered in their systems.

9- The bank may request that the client provides a guarantee to secure a forward forex transaction.

10- The client must have funds available in its account to settle the transaction at least 2 business days prior to the settlement date.

11- The bank must inform the client, on a monthly basis, of all pending forward forex transactions with a description of the main terms of each transaction.

The previous BNA Order 22/20, of 27 November 2020, was repealed and replaced with BNA Order 13/23.

Rui Amendoeira, OneLegal Partner

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Angola – Banking regulations – External Auditor

07/12/2023

Angola – Banking regulations – External Auditor

The Angolan Central Bank (BNA) released a new regime for the provision of external audit services to financial institutions by way of Order 12/23, of 4 December 2023. Below is an outline of the new regime:

  • BNA Order 12/23 is applicable to the financial institutions operating in Angola and the holding companies which are subject to BNA supervision under the Financial Institutions Law (Law 14/21, of 19 May 2021);
  • Financial institutions must be audited by an External Auditor at least once a year, except in the case of banks which must be audited every six months. In addition, BNA may request extraordinary audits at any time;
  • The External Auditor is appointed on the basis of a proposal submitted by the financial institution’s Audit Committee which is approved by the Shareholders Meeting. The contract with the External Auditor is entered into by the Board of Directors;
  • The External Auditor of banks must be an audit firm licensed to operate in Angola under the Audit and Accounting Regulations, Law 3/01, of 23 March 2001;
  • The External Auditor of non-banking financial institutions may be an audit firm or an individual auditor licensed under the same regulations (unless the institution’s annual turnover exceeds Kz. 4.000.000.000,00 in which case an audit firm must be appointed);
  • The External Auditor must produce reports on:
    • The financial statements;
    • Other accounting matters to be defined in specific legislation.
  • The audit report prepared by the External Auditor must be attached to the respective financial statements and submitted to the Shareholders Meeting for approval at least 30 days in advance;
  • The External Auditor must inform BNA of any issues which may impact its audit report, and otherwise must report to and discuss with BNA any adverse findings;
  • The External Auditor must prepare and submit to BNA a comprehensive report on the audited financial statements, which must include the minimum information listed in Order 12/13.
  • The main focal point of the External Auditor within the financial institution is the Audit Committee;
  • The External Auditor must be totally independent in performing its work, which includes respecting, inter alia, the following principles:
    • The External Auditor cannot provide to the financial institution, during the audit period or in the prior 12 months, any tax advisory or reporting services, preparation of financial statements, bookkeeping, salary processing, internal controls and risk management, legal services, human resources services, cost control, among others, and otherwise it cannot participate in any management decisions of the financial institution;
    • The External Auditor cannot have any, direct or indirect, financial interest in the financial institution;
    • The External Auditor cannot be a member of, or otherwise participate in any management body of the financial institution, including those responsible for compliance, internal auditing and risk management.
  • The audit teams cannot include any person who has served in a statutory body of the financial institution in the 24 months prior to the auditing work;
  • Financial institutions must change their External Auditor after a maximum of 4 years. A minimum period of 4 years must lapse before the same External Auditor can be reappointed;
  • BNA may request that a financial institution changes its External Auditor in case:
    • the External Auditor does not have the aptitude, capacity or experience required to performed the job;
    • the External Auditor is not independent;
    • the mandatory reports have not been produced through fault of the External Auditor.

Rui Amendoeira, OneLegal Partner

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