The South African Reserve Bank administers exchange controls through its Exchange Control Department, and through commercial banks authorised to deal in foreign exchange. Selecting the correct payment term and complying with South African exchange control regulations are essential components in ensuring payment.
As an importer, you will automatically be granted foreign exchange to pay for your imports if payment is to be made directly to your foreign supplier or to any collecting bank on his behalf. However, the Exchange Control Department does not provide foreign exchange for imports prior to them being shipped or dispatched to South Africa.
As research and consultancy company, Whitehouse & Associates explains: “When South African authorised dealers of foreign exchange open documentary import letters of credit in favour of foreign exporters, payment is effected against presentation by the exporters of invoices and shipping documents to the foreign negotiating bank before the goods have arrived in South Africa.”
You can get foreign exchange in advance for not more than 33,3% of the ex-factory value of the goods, under certain circumstances. As the importer, you need to keep all documentation, including original stamped documents for inspection purposes for at least two years.