Important Update: SARB Clarification on Cross-Border Payments for DMCs
Several DMC members have approached us regarding cross-border payments via their South African banks. Recently, banks have started requesting detailed information (names, passport numbers, and addresses) for each individual traveller. We recognise that this information is often not readily available and is especially challenging to provide when managing large group travel. Furthermore, supplying such information would contravene the POPI Act as well as European privacy laws.
This week, SATSA met with a high-level delegation from the South African Reserve Bank (SARB) to express our concerns. Cross-border payments are regulated by the Exchange Control Regulations of 1961. I am pleased to report that the SARB has confirmed that the relevant section of the Act does not require Authorised Dealers (South African banks) to obtain the details of non-resident travellers.
The SARB delegation will raise this issue at their next scheduled meeting with Authorised Dealers and will provide clear guidance that individual traveller details are not required.
Please see below a communication from Herman Eksteen, Manager of Financial Operations in the Financial Surveillance Department at the South African Reserve Bank.
Feel free to share this communication with your bank if they continue to request traveller details.
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Good afternoon Mr Frost,
Thank you for taking the time to meet with the Financial Surveillance Department (FinSurv) earlier this afternoon.
The current South African exchange control regime relies on Authorised Dealers to ensure that the regulations, rules, requirements and conditions applicable to cross-border and foreign exchange transactions are adhered to. The regulations are set out in the Exchange Control Regulations (Regulations) of 1961, and the rules, requirements and conditions in amplification of the Regulations are conveyed to the Authorised Dealers in the Currency and Exchanges Manual for Authorised Dealers (Authorised Dealer Manual).
The Authorised Dealer Manual is available on our website by following the links: www.resbank.co.za > What we do > Financial Surveillance > Documents > Currency and Exchanges Manual for Authorised Dealers. A copy of the current version of the Authorised Dealer Manual is also attached hereto for ease of reference.
Our discussions this afternoon centred on two sections of the Authorised Dealer Manual, being section B.8(C) (see pages 118 and 119/293), which deals with foreign exchange disbursements on behalf of resident travellers, as well as section B.4(B)(viii) (see pages 101 and 102/293), which deals with land arrangements for both residents and non-residents.
It is, however, necessary to specifically point to section B.4(B)(viii)(g) of the Authorised Dealer Manual, which reads as follows:
“Where a local tour wholesaler or operator receives Rand from a non-resident in respect of an inbound tour package, Authorised Dealers may permit the conversion of such Rand into foreign currency in the spot market to enable the tour wholesaler or operator to settle foreign expenses in respect of the non-CMA portion of the tour package.”
The aforementioned section, which is the crux of our meeting this afternoon, does not require the Authorised Dealer to be provided with details of non-resident travellers.
You will also recall that I mentioned the second aspect of these types of payments, where foreign currency is received from abroad and credited to a customer foreign currency (CFC) account in the name of the tour operator, which is subject to FinSurv’s specific prior approval. These approvals are valid for a period of 12 months and are linked to a specific limit (which can be reviewed, if needed). Our approvals are based on the same policy as section B.4(B)(viii)(g) and by implication do not require the particulars of the individual travellers.
Please do not hesitate to contact me should you require any further information or assistance in this regard.
Kind regards
Herman Eksteen
Manager of Financial Operations in the Financial Surveillance Department at the South African Reserve Bank.
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To download a copy of the SARB - Currency and Exchanges Manual for Authorised Dealers, click here.
