Supplement to the Republic of Zambia Government a9, Gazette dated Tuesday 25th June, 2013 GOVERNMENT OF ZAMBIA Srarutory InstruMeny No, $5 oF 2013 ‘The Bank of Zambia Act (Laws, Volume 20, Cap. 360) ‘The Bank of Zambia (Monitoring of Balance of Payments) Regulations, 2013 ARRANGEMENT OF REGULATIONS Regulations ae ae 10. un 2 14. Is 16. 17, Title and commencement Interpretation Application Monitored transactions Electronic reporting system Foreign currency accounts for exporters and foreign investors Export declaration Notification of remittances above prescribed thresholds Notification of import or export transaction Mode of payment for certain imports or exports Payments to foreign bank accounts External private debt Revord of loan agreements, Returns Applicability of anti-money laundering measures General offence and penalty Revocation of SI No. 32 of 2013 Copies of this Sianory Instrument can be obtained jrom the Government Printen PO Bor 30136, 1010! Lusaka, Price K7.00420 ‘Title ana Statutory Instrument 25th June, 2013, Iv Exercise of the powers contained in section fiiy-seven ofthe Bank of Zambia Act, the following Regulations are hereby made: 1. (1) These Regulations may be cited as the Bank of Zambia commencement (Monitoring of Balance of Payments) Regulations, 2013, Interpretation Act No 46 of 210 Cap. 387 Cap, 321 Cap. 387 (2) These Regulations shall come into effect on I# July, 2013. 2, In these Regulations, unless the context otherwise requires— “Bank” means the Bank of Zambia established under section three of the Act, ‘“Centre”"means the Financial Intelligence Centre established under the Finaneial Intelligence Centre Act, 2010; “commercial bank” means a bank licenced under section four of the Banking and Financial Services Act; “Commissioner-General” means the person appointed as such ‘under section réneteen of the Zambia Revenue Authority Acts “export proceeds” means the monetary consideration paid or payable to an exporter in respect of goods oF services exported from the Republic; “exported manufacturing services” means any work done in the Republic by a person resident in the Republic for an ‘owner of goods resident outside the Republic, and includes, assembling, labelling, packaging, processing and repaic services; “exporter” means a person who is entitled to receive a payment in foreign currency from outside the Republic in respect of goods or services exported from the Republic; “financial service provider” means. financial service provider licenced under the Banking and Financial Services Act; “foreign bank account” means a bank account held in a bank registered and licensed in a jurisdiction outside the Republic; “foreign currency denominated account™ means a bank account provided to a person in the Republic by @ ‘commercial bank and denominated in a currency other than, the cuttency of the Republic; “foreign exchange” includes (@ banknotes and coins, other than the currency of the Republic, which are legal tender outside the Republic;Sth June, 2013 Statutory Instrument 421 (6) a unit of account of an international body to whieh the Republic is a members {c) any financial instrument denominated in a currency other than that of the Republic; (@)_ any right to receive foreign bank notes or coins in respect of any balance at a financial service provider located within or outside the Republic; and (@) foreign currency denominated travetlers cheques, credit and debit cards and similar modes of foreign currency payment; “foreign investor” has the meaning assigned to tin the Zambia, Development Agency Act, 2006; seiNo. tof “imported manufacturing services"means any work done 7008 outside the Republic by a person resident outside the Republic for an owner of goods resident in the Republic, and includes assembling, abelling, packaging, processing nd repair services; “importer” means any person in the Republic who, by reason of goods or services supplied or to be supplied from outside the Republic, is under an obligation to make a foreign currency payment to @ person outside the Republic in respect of the goods or services; “inflows” means current, financial or capital account flows, of money froma jurisdiction outside the Republic toa person presentiin the Republic: nternational transaction” means the buying or selling of, offering to buy or sell, goods or services to or by a person who is not resident in the Republic; “limited deduction direction” means a certificate, issued by the Commissioner-General to give effect to the provisions. of a Double Taxation Agreement entered pursuant to the Income Tax Act: Cap. 223, “money remittance service provider” means a payment system business providing money transfer or transmission services and designated under the National Payment Systems Act, Act No. 1 of 2007; 2006 “outflows” means currents financial or capital account flows of money to jurisdiction outside the Republic from a person422 ‘Act No. 11 of 2006 Cap. 321 Application AetNo. tof 2007 Monitored ‘wansactions Staiutory instrument 25th June, 2013, present in the Republic; “person” means an individual, a company, a partnership, an association and any group of persons acting in concert, whether or not incorporated; “Zambia Development Agency” means the Zambia Development Agency established under section four of the Zambia Development Agency Act, 2006; and “Zambia Revenue Authority means the Zambia Revenue Authority established under section zine of the Zambia Revenue Authority Act. ‘These Regulations apply to— (a financial service provider; (B)@ payment system provider designated undersection seven of the National Payment Systems Act, 2007; (c)an import of goods or services exceeding twenty thousand United States cotlars per transaction, or the equivalent in foreign currency; (d) an export of goods or services exceeding twenty thousand United States dollars per transaction, of the equivaient in foreign currency; (e) a foreign investor; and (Ha local investor who invests outside the Republic. . (1) The Bank shall, in relation to outflows, monitor—— (a) the value of any imported goods; (8) protits or dividends paid to non-re investments made in the Republic: (c) the value of any imported services, including management services; (2) any amounts remitted out of the Republic whether unrequited (gratuitous) or otherwise: (e) loans granted to non-residents; (f trade credits from non-residents; (g) investments madeia the form of equity outside the Republic by persons resident in the Republic: () investments made in the form of debt securities outside the Republic by persons resident in the Republic; and (@ payment of interest or principal or an instalment thereof ‘on private external debe, nts in respect of25th June, 2013 Statutory Instrument (2) The Bank shall, in relation to inflows, monitor— (@) the value of any goods or services exported out of the Republic; (8) profits or dividends received in respect of investments abroad: (c) borrewings from non-residents; (@) trade credits to non-residents; 2) investments in the form of equity from abroad; ( investments in the form of debt securities trom abroad: and (g) receipts of both principal and interest on loans to. non- residents. (3) The Bank shalf, in relation to international transactions, monitor— (a) the value of imported manufacturing services or exported manufacturing services or goods to or from none residents; (B) the net cost effect of telecommunication services; (©) the value of international transport, courier and postal services; (d) the value of accommodation and other hospitality services 10 oF from non-residents; and (©) international money transfers into and cut of the Republic, 5. (1) The Bank shall establish an electronic reporting and ‘monitoring system for purposes of these Regulations. (2) The electronic reporting and monitoring system referred to in sub-regulation (1) may have linkages with other Government agencies or institutions responsible for the collection of revenue and the administration of import and export formalities. 6. (1) Ancexporter or foreign investor shall open and maintain a foreign currency denominated account with a commercial bank tor the purposes of these Regulations, (2) A foreign investor shall — (@) deposit the cash component of the pledged investment info the foreign enrrency denominated account, roferred to in sub-regulation (1), within the period stated in the 433 Electronic reporting systein Foreign ssurreney accounis for exporters and sign investors424 Export eeteration Cap. 421 ‘Woilfication af abave prescribed threskotds Novifcation of import or export Mode of payment for certain impor oF ‘exports Statutory Instrument 25th June, 2013 investment certificate and acquit the deposited amount 40 the Banks (®) upon provision of the pledged capital equipment, acquit the pledged capital equipment to the Bank by producing, documentation indicating the monetary equivalent thereof and (c) upon provision of any other pledged non-cash component, acquit the monetary equivalent thereof to the Bank. 7. (1) Notwithstanding the Control of Goods Act, an exporter shall, for any proposed export, complete the export proceeds ‘monitoring form in Forin Ise out in the Schedule. (2) An exporter shall notify the commercial bank at which the exporter maintains a foreign currency denominated account, of the receipt of export proceeds within one hundred and twenty days from the date of receipt of the export proceeds. 8. (1) An importer shall, for any proposed import of goods or services, complete and submit fo a commercial bank the import monitoring form in Form II set out in the Schedule, (2) An importer who temits foreign exchange through @ commercial bank in accordance with sub-regulation (1) shall, by away of acquittal, pravide the commercial bank with customs clearance of the imported goods or evidence of provision of the relevant services before the remission of funds, within one hundred and twenty days from the date of the transfer of the funds, (3), The Bank may, on application by an importer, extend the period within which the importer may make an aequittal under sub- regulation (2) (4) Where an importer fails to acquit an import transaction throngha commercial bank in accordance with sub-regulation (2), the commercial bank shall not facilitate any further remittance of funds by the importer. 9. A commercial bank shall, for any import ot export in respect of which a declaration is made under regulation 7 or 8, notify the Bank by filing a return in Form III set out in the Schedule. 10, Notwithstanding regulation 3, an importer or exporter shall ‘ensure that payment for an import or export is as follows: (@) for all imports in value of, or in excess of, five thousand United States dollars of the equivalent in any other foreign currency, by means of electronic transfer of funds;25th June, 2013, Statutory Inssruaienit 425 (8) for all non-credit payments for exports in value of, of in excess of, five thousand United States dollars or the equivalent in any foreign eutreney, by means of electronic transfer of funds; and (0) for an export on credit terms in value of, or in excess of, two hundred thousand United States dollars or the equivalent in any foreign currency, by letter of credit issued by a bank outside the Republic or confirmed by a commercial bank. 11. (1) The following payments to a foreign bank account or Payments to ‘non-resident person shall be processed through a commercial bank: fotcige bank (@dividends; “owe (B) royalties: (c) management Fees; (@) technical fees; (e) commissions; (A) consultancy fees; (g) government securities maturities; and (hi other related transactions, (2) A person making any payment referred to in sub-regulation (1) shall submit the following documents to the commercial bank: (a) for dividends in foreign exchange— @aboard resolution of the declaration of the dividends (ii) a tax clearance certificate issued by the Zambia Revenue Authority in the name of the business paying the dividends; evidence of payment of applicable taxes on the dividends concemned, where applicable; (iv) evidence of payment of corporate or income tax, where applicable; (v) where tax is zero percent or at a reduced rate, ‘whether under the provisions of any written law of agreement, or where withholding tax is exempt, a withholding tax exemption letter or dispensttion in the nature ofa limited deduction direction issued under the hand of the Commissioner-General; and426 Statmory Instrument 25th June, 2013 (vi) management or audited accounts certified by an accountant registered with the Zambia Institute of Chartered Accountants; (®) for royalties, management fees, technical fees, commissions or consultancy fees in foreign exchange— (i) # tax clearance certificate; Gi) an invoice in the name of the declared recipient of the funds; (iii) the agreement governing the payment of royalties cor management fees: (iv) where tax is zero percent or ata reduced rate or withholding tax is exempt, a withholding tax exemption letter or dispensation in the nature ofa “limited deduction direction” issued under the hand of the Commissioner-Generals (¥) payment details ata bank outside the Republic in the recipient's nana (vi) evidence of payment of applicable taxes; and (vii) management or audited accounts certified by an external auditor registered with the Zambia Tnstitute of Chartered Accountants: and (0) fora foreign investor in Government securities — (i) 2 copy of the application form to invest in Government securities; Gi) a copy of the award notice: Gil) evidence of the inward funds wansfer for the investment; and (iv) the maturity payment voucher. Exel 12. (1) A person who obtains a foreign exchange loan from a private deot non-resident lender or who provides @ loan to a non-resident borrower shall register with the Bank, through a commercial bank, the borrowing or the lending in Form ITf set out in the Schedule. (2) A subsidiary of foreign company which comacts a foreign cexchanige denominated Ioan from a parent company, shareholder, partner or affiliated entity ora local parent company which provides a toan to a foreign subsidiary, shareholder, partner or its foreign affiliated company, shall provide to a commercial bank a signed facility, loan or similar agreement and shail in each case disclose—25th June, 2013, Statutory Instrument (a) the rate of interest on the loan; (6) the duration of the loan; ang (©) the repayment schedule, (3) A commercial bank shall, with respect to an external private debt of lending to a non-resident, facilitate outward or inward debt service remittances if— (a) tle debt is registered in accordance with this regulation; and (6) in the case of an outward debt service remittance, proof of payment of applicable taxes on the interest component is produced, (4) Suberegulation (1) does nat apply to loans for a period of Jess than thirty days. 13, (1) The Bank shall maintain an electronic depository of oan agreements in respect of externally contracted debt and shall assign a unique identification number to each loan agreement 2) The Bank shall only register orassign a unique identification number fo each transaction if — (a) the borrower or lender provides evidence of the receipt of remittance of the loan amount into or out ofa bank account hosted by a corsmercial bank and held in the name of, or for the benefit of the borrower or lender; (2) the borrower provides evidence of the importation and physical delivery into the Republic of the goods constituting the loan amount or partial payment, or in the case of services, the delivery of the services. (3) Apperson who contracted a private external debt or provided a loan before the coming into operation of these Regulations shall, within thirty days, provide the information referred to in sab- regulations (2) and (3) oF regulation 12 to facilitate the registration of the debt in accordance with these Regulations, 14. A commercial bank oF money remittance service provider shall submit a report, on a monthly basis, o the Bank of— (@) all remittances of foreign exchange into and out of the Republic; (®) all withdrawals and deposits, by debit or eredit card, of cash or payment for goods or services in foreign currency in any thirty-day period; aan Record of fosn agreements Returns28 General offenceane penalty Revocation of SINo. 3200 2013 Stateaory Instrument 25th June, 2013 (c) any transfers by a person within any thirty day period from a foreign curreacy account in the Republic to any foreign currency account held abroad; and (@) any private borrowing repayment out of, or private lending receipt into, the Republic, 15. These Regulations do not exempta financial service provider from the financial service provider's obligations under the Financial Intelligence Centre Act, 2010, the Prohibition and Prevention of Moncy Laundering Act, 2001, or any other written law relating to money laundering and proceeds of erime. 16. (1) A person who contravenes any provision of these Regulations commits an offence and is liable, upon conviction, t0 ¢ fine not exceeding one hundred thousand penalty units or to imprisonment for a period not exceeding ten years, or to both. (2) Where an offence under these Regulations is committed by a body corporate or an unineorporate body, every director or manager of the corporate or unincorporate body is liable, upon conviction, asf the director or manager had personally committed the offence, unless the director or manager proves tothe satisfaction of the court that the act constituting the offence was done without the knowledge, consent or connivance of the director or manager or that the director or manager took reasonable steps to prevent the commission of the offence. 17. The Bank of Zambia (Monitoring of Balance of Payments) Regulations, 2013. are hereby revoked.25th June, 2013, Staturory Instrument 429 ‘SCHEDULE (Regulations 7, 9 and 12) For (Regulation 3) Serial Nun WANK OF ZAMBIA THE BANK OF ZAMBIA (MONITORING OF BALANCE OF PAYMENTS) REGULATIONS, 2013 EXPORT MONITORING FORM 1 Sapo saa] FET ys Ale eer FT eee aD Eau Ta a (Whee APT) Ene (te sete 10. Aceavr Nave fo Critter Tat oft Santer TT Accel Noe vo Cre etiam 15, $200.00 and above 1 $0,060 a abe (Sy Letra Lo Ret (heel Fone Noten Apes Troe} FT No 1S. Kein! Cowtonng Bak ‘et nplobhe= ‘stasis [Fee Cramer Wo] Coveney] Ua | Tas Ve] 7 \GondServces Exped (Gece taf experts Fi out ado ht func ee pe) Copper bat Gold Panels th aa ‘a i Niner 19. Nae aioe Rape PDair ive (pnee ery delta he eign araney zed [tite sae depres dried one ive aul bese fe the Repeat & ps fasivie ase the Rapa af Zain wan one tad ed tvey (124) dae The de of ipa ad se dpsed nr Sr a sccm sae at une gt or Nr ahh eta hereon siveaboveieweandecnet ic ng ene wc Dal oat Pace of Sine sams of Anthrse Sigaory lowieat Use On [emssto! Serie PravderiComnera Gaal et Oues Agscatan Resa ‘rt, in Resa nu paneer! fs Apakeauos Caseked i Cowen [Yew 2. Gos 1 be esos Varied en Consens No Ne Sate 7 pa bs ome ae [ba Stef Canna Bank fet Sheep anon Rosas Ah430) Statwory Instrument Acai exert posses Pee Da Fa Fyne OE [Rent [ eee Fa Te Maar swmpercoameal task [Sane SiaataT pore ae Sips Cont TEE eB oT CREA TG Caan RO LOS a PRE TT]25th June, 2013, Stanuory Instrument 431 RANK OF 24 n ‘THE BANK OF ZAMBIA (MONITORING OF SALANCE OF PAYMENTS) REGULATIONS, 2013, IMPORT REMITANCE MONITORING FORM {Fie opi) T Taparecorteriner Deine [Kae ene er “ene he Carns a mise Noho (D1, Ena ote Dat 7 Baan Nw rad Ao hae Ean Oa Rae Ades Nee ‘Coa Cust “eho ‘Account Encl ‘SET code 9 imprteTRonits Accs! 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Coomera Sap 59, Bik of nba Step A.B. Crikwanoa, Lusawa Minister of Finance 251 Juve, 2013 [ruras.102/9/3]