Currency Coordination corner

The first three months of the year were given over to the production and publication of the Remittances of Foreign Balances (RFB) survey, which was released to all contributors in March 2007. The second and third quarters of 2007 have seen significant lobbying efforts undertaken in several countries:

Algeria: The IATA Regional Programme Manager StB will coordinate a meeting with the local airline representatives in Algeria so that we may obtain a clearer view of the issues faced in Algeria and better target IATA’s lobbying efforts.

Ethiopia: On 24 August, IATA sent a letter requesting the Central Bank accept certification by an external auditor only, and that they perform a secondary check only on occasion at airline offices, as it deems necessary. Per the advice of the IATA Country Manager – East Africa, focus at this time will be placed on the removal of the Central Bank’s duplicate audit. The request regarding the removal of the 1.5 % commission has been withdrawn for the time being and will be addressed in future correspondence.

Ghana: IATA will implement a BSP in Ghana by the end of 2007.

Libya: Libyan Arab Airlines have, in fact, been removed from the repatriation process and the 3% commission they were charging has been dropped, as of April sales and not as of March sales as originally announced.

Mozambique: On 10 July a letter was sent to the Central Bank of Mozambique requesting that airline requests for repatriation be given priority in the allocation of hard currency. The bank responded on 27 July stating that the issue should be taken up with the commercial banks and the Mozambique Tax Authority. IATA Currency Coordination has asked for the airlines reaction to the letter and advice on next steps.

Nigeria: IATA will implement a BSP in Nigeria by the end of 2007.

Sudan: Dual circulation of the new Sudanese Pound, introduced on 10 January 2007 at a rate of 100 Dinar to the Pound, was terminated end June 2007. The Sudanese Dinar has now ceased to be legal tender, and only the Pound (SDG 938) will be accepted.

Venezuela: Recent IATA activity regarding the repatriations from Venezuela include the following:

• A significant amount of information was gathered from the airlines’ local representatives in order to obtain a clearer picture of the current situation on repatriation from Venezuela. Seven international airlines operating in Venezuela and participating in the Venezuela BSP provided feedback. The survey results were as follows:
  • a) Airlines are able to repatriate funds within six to eight weeks after submission of their applications for remittance. Major US carriers in the market advised that they were satisfied with this situation and that no further pressure should be exerted on CADIVI.
  • b) Some airlines need up to three months to collect the full documentation and ensure compliance with local tax regulations.
  • c) Delays occur if all documentation is not provided with the remittance application. In most cases, the missing documentation is:
    • i) Missing copy of the SWIFT transfer message through which the previous remittance was made by the airline (required by CADIVI as proof that the funds have been transferred abroad through the established banking channels).
    • ii) Missing explanation of variances compared with previous remittance applications.
    • iii) Wrong or missing copies of the tax form (e.g. Planilla IVA).
    • iv) Missing “Solvencia” Certificate (i.e. proof that airline has met its local social payment obligations).
• A service has also been established by the BSP clearing bank, Banco Mercantil, to assist airlines in remittance of funds providing
  • a) A detailed guide specifying each step required for remittance of funds out of Venezuela
  • b) Review of the remittance application and documents prepared by the client airlines, prior to its submission to CADIVI
  • c) Follow-up of the application with CADIVI, keeping the airlines informed until the remittance is approved
• In addition to the above, for those airlines that only want to have their Remittance Applications “pre-audited” to ensure the supporting documentation is complete and correct, we have sought and received proposals from two leading audit firms.