Foreign currency import payments

by David du Plessis and Trent Wiseman | November 14, 2023

The South African Reserve Bank (SARB) plays a crucial role in regulating and overseeing the flow of foreign payments in and out of South Africa. These requirements are in place to maintain financial stability, protect the country’s economic interests, and ensure compliance with international regulations. Understanding SARB’s requirements for foreign payments is essential for individuals and businesses engaged in international transactions.

All foreign currency transactions are subject to exchange control regulations as set out by The South African Reserve Bank (SARB). These controls encompass measures such as prohibiting the conversion of specific asset proceeds, mandating the surrender of foreign exchange earnings to central or local banks, requiring authorizations, setting quantitative restrictions, or using indirect methods, such as interest rate changes. These controls are typically implemented to address concerns about currency outflows but can also be used to regulate currency inflows that may pose a threat to an economy.

These exchange control regulations have significant and tangible impacts on the day-to-day operations of South African businesses, this is especially true for importers and exporters.

Proper documentation is crucial for foreign payments. One of the key factors to ensure no delays in payment processing as well as compliance with SARB regulations, is the provision of accurate and comprehensive documentation. This is crucial in ensuring transparency, traceability, and legality. In essence, documentation serves as the backbone when effecting foreign payments.

The SARB’s regulations, along with requirements set out by the South African Revenue Service (SARS) require that all final import payments, classified under BOP 103 01, are submitted with the following supporting documentation:

  • Commercial invoice: This must be made out to the party paying the invoice and include the company’s full registered name. The invoice must declare the currency in which the transaction is taking place and must be the actual value of the imported goods.
  • Single Administrative Document (SAD 500): A Customs Declaration form which is designed to ensure that imported goods are properly declared to SARS.
  • EDI/Paperless Release Notification: This is a document issued by an importer’s freight/logistics supplier. The EDI contains a Movement Reference Number (MRN) issued by customs, which is used to ensure that the foreign currency provided was used for the reasons stated by the importer and that goods have indeed entered South Africa.
  • Customs Worksheet: This document shows the value of calculations, the rate of exchange and conversion to rand along with a factor calculation with regards to dutiable charges calculated proportionally.
  • Waybill: A document issued by a logistics carrier that gives details and instructions relating to the shipment of cargo.

In order to make an advance import payment, classified under BOP 101 01, the SARB has historically only required the following in order to process foreign transactions:

  • Pro-forma Invoice for deposit payments: or
  • Commercial Invoice and Bill of Lading (A contract issued by a shipping company that acknowledges the receipt of a cargo shipment.) for pre-clearing payments.

However, as of 01 December 2023 it will be compulsory for every advance import payment of R50 000 and more to apply for an Advance Payment Notification (APN) number via SARS e-filing. The APN has been designed in order to make it easier for taxpayers to comply with their tax obligations while assisting SARS with detecting non-compliant taxpayers. This APN will be submitted to the importer’s paying bank along with the supporting documentation. The paying bank will then record, validate and report the APN given by the importer to the SARB and SARS once the payment has been completed. Due to the unchartered waters South African importer’s find themselves in regarding the new regulations it is important to note some key features of this new regulatory requirement:

  • The APN is valid for a period of 30 days and the authorised dealer should receive the instruction for the advance payment within the validity period of the APN.
  • Should payment not be made within the validity period, a new APN must be issued.
  • The South African bank through which the payment will be effected should always be mentioned when applying for the APN via e-filing.
  • Failure by clients to provide the APN will cause a delay to effect the payment.
  • The paying bank will be able to assist clients in generating an APN (called a Bank-Generated APN), but this will only be possible under exceptional circumstances. In this case the client must generate an APN via e-filing and provide it to the paying bank within 48 hours.
  • APNs are not required for advance payments into the Common Monetary Area (Eswatini, Lesotho and Namibia).

While the above documents are required in order to complete import payments, certain foreign transactions may require additional documentation such as contracts, tax clearance certificates, or SARB approvals when requested by authorized dealers or the SARB.

In conclusion, incomplete or inaccurate documentation can lead to delays or potential rejection of foreign payment transactions. Inadequate paperwork might trigger additional inquiries or requests for supplementary information, causing setbacks in the transfer process. Thus, it’s essential for individuals and businesses involved in international transactions to understand and adhere to these regulations.

Non-compliance with SARB’s requirements can lead to legal consequences and hinder the smooth flow of funds across borders. To navigate the complexities of foreign payments, it is advisable to work with authorized financial provider who can guide you through the process and ensure that you meet all the necessary regulatory requirements.


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