How, when, and what you pay for an import is determined by two things:
- The sales agreement (contract) you have with your supplier, and
- The South African Reserve Bank (SARB)’s laws regarding exchange control (international payments)
Do note: This article covers only the basic parameters of what is allowed when you’re paying for imports.
To read the complete set of SARB guidelines regarding import payments via your business, consult the Currency and Exchanges guidelines for business entities. If you are trading in your own name, these limits will be detailed in the SARB Currency and Exchanges guidelines for individuals.
Payment via your company credit and/or debit cards
Business entities may pay for small transactions (e.g. imports over the Internet) using a credit or debit card up to the value of R50,000 per transaction.
An international purchase that exceeds R50,000 may not be split into two or more payments to circumvent this limit.
Any transaction larger than R50,000 must be overseen by an authorised dealer. This would be the forex division of your commercial bank or a foreign exchange broker.
Paying for imports via an autorised dealer
Business entities may purchase foreign currency to pay for the actual price of imported goods, freight charges, insurance cover, and any other incidental charges incurred in the purchase and shipment of the goods. Payment for commissions and agent fees are also allowed, provided that the rate of commission or fee is normal in the particular industry.
Payments for imports may only be made against one of the following documentation:
- A commercial invoices issued by the foreign supplier
- One of the transport documents as prescribed by the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits (UCP 600) and its supplement for electronic presentation, the eUCP, evidencing transport of the relative goods to South Africa
- A Freight Forwarders Certificate of Receipt or Freight Forwarders Certificate of Transport
- The consignee’s copy of the prescribed SARS Customs Declaration (SAD500)
The requirement for certain business entities to submit supporting documentation to their authorised dealer for every import payment may be dispensed. To obtain this dispensation the business must apply to SARB’s Financial Surveillance Department via their autorised dealer.
Regarding payments for freight
Business entities must ensure that original, final freight invoices are presented to their authorised dealer for payment. Under no circumstances may quotes and/or pro forma invoices be presented for payment.
SARB’s terms of payment for imports
Advance payments
Advance foreign payments to cover the cost of permissible imports, other than capital goods, against the presentation of an invoice may be submitted to SARB by the entity’s authorised dealer. This is providing that documentary proof of import is also presented to SARB immediately after customs clearance of the goods, thereby confirming that the goods have been received in South Africa.
Capital goods
Advance import payments of up to 100% of the ex-factory cost of capital goods to be imported are allowed, up to the transaction value of
R10 million. Advance payment for the importation of capital goods over R10 million may only be provided for up to 50% of the ex-factory cost of the goods to be imported.
Cash-on-delivery consignments
Business entities may purchase foreign currency for the purpose of advance payments and/or cash-with-order requests to cover the cost of permissible imports, provided that within 14 days a copy of the relative transport document is submitted to SARB. This document must be dated and signed by members of the South African Association of Freight Forwarders (SAAFF), and submitted to SARB via the entity’s authorised dealer.
Payments older than 12 months
Payments in respect of imports where the required import documents are older than 12 months may be effected via an authorised dealer, provided that no interest has been charged by the foreign supplier.
Evidence of importation
Importers must produce the documentation listed above to their authorised dealer at the time of making payment.
From the date of payment, the goods must be consigned to the South African importer within the expiry period of four months.
If payment for an import has been made from South Africa, but the goods are not expected to be shipped within four months of the date of
payment, the importer must inform their authorised dealer, in writing, of the delay in delivery within 14 days of the end of the expiry period.
If the importer fails to provide import documentation or to report the non-receipt of goods within the above-mentioned four-month period to their authorised dealer, foreign currency may cease to be provided to the importer until the matter has been satisfactorily resolved.
Any non-compliance will be reported to the Financial Surveillance Department of SARB which may issue an instruction to all authorised dealers that no foreign currency may be provided to such importer until the matter has been satisfactorily resolved.
Without access to foreign currency, the entity in question would not be able to perform any imports until the SARB instruction is lifted.
Charges that do not result in an import
International payments that do not result in the importation of goods (for example, that are incidental to cancellation of orders) must be declared to SARB.
To do so, business entities must provide documentary evidence to their authorised dealer to effect payment for the expenses incurred.
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Have more questions regarding import and export? Get in touch with our consultants for the insight and registrations you need to thrive in international trade.
