authorisation or request, the advising bank may advise the credit without adding its confirmation.10 An irrevocable credit cannot be amended or cancelled without the agreement of the issuing bank, the confirming bank (if any) and the beneficiary.11 1 UCP art 9(a). 2 Art 9(b). 3 Art 9(a)(i) and 9(b)(i). 4 Art 9(a)(ii) and 9(b)(ii). 5 Art 9(a)(iii)(a) and 9(b)(iii)(a). 6 Art 9(a)(iii)(b) and 9(b)(iii)(b). 7 Ibid. 8 Art 9(a)(iv) and 9(b)(iv). 9 Art 9(c)(i). 10 Art 9(c)(ii). 11 Art 9(d). 3.5.9 Amendment of credits The issuing bank will be irrevocably bound by any amendments issued by it from the time of the issuance of such amendments.1 A confirming bank may extend its confirmation to an amendment and will be irrevocably bound as of the time of its advice of the amendment.2 A confirming bank may choose to advise an amendment to the beneficiary without extending its confirmation.3 If it does so it must inform the issuing bank and the beneficiary without delay.4 The terms of the original credit will remain in force for the beneficiary until the beneficiary communicates his or her acceptance of the amendment to the bank that advised the amendment.5 The beneficiary should give notification of acceptance or rejection of the amendment.6 If the beneficiary fails to give such notification, the tender of documents to the nominated bank or issuing bank that conform to the credit and to the amendments which have not yet been accepted, will be deemed to be notification of acceptance by the beneficiary of the amendments and as of that moment the credit will be amended.7 Partial acceptance of amendments contained in one and the same advice of amendment is not allowed and will not be given any effect.8 1 UCP art 9(d)(ii). 2 Ibid. 3 Ibid. 4 Ibid. 5 Art 9(d)(iii). 6 Ibid. 7 Ibid. 8 Art 9(d)(iv). 3.5.10 Examination of documents Banks must examine, with reasonable care, all documents stipulated in the credit, in order to ascertain whether or not they appear, on their face, to be in compliance with the terms and conditions of the credit. Compliance of the stipulated documents on their face with the terms and conditions of the credit must be determined by international standard banking practice as reflected in the UCP. 1 Documents which appear on their face to be inconsistent with one another are considered as not appearing on their face to be in compliance with the terms and conditions of the credit. Banks will not examine documents not stipulated in the credit. If they receive such documents, they must return them to the presenter or pass them on without responsibility.2 A reasonable time is allowed to the issuing bank, the confirming bank (if any) or a nominated bank acting on their behalf, in order to examine the documents and determine whether to take up or refuse the documents and to inform the party from which it received them.3 The period of time allowed must not exceed seven banking days following the day of receipt of the documents.4 If a credit contains conditions without stating the documents to be presented in compliance therewith, banks will deem those conditions as not stated and will disregard them.5 1 UCP art 13(a); Goode Commercial Law 993. 2 Art 13(a). 3 Art 13(b). 4 Ibid. This is a new provision: Goode 1003. 5 Art 13(c). 3.5.11 Refusal to take up documents On receipt of the documents the issuing bank, the collecting bank (if any) or a nominated bank acting on their behalf must determine on the basis of the documents alone whether or not they appear on their face to be in compliance with the terms and conditions of the credit.1 If the documents appear on their face not to be in compliance with the terms and conditions of the credit, the bank may refuse to take up the documents.2 If the bank decides to refuse the documents, it must give notice to that effect by telecommunication, or, if that is not possible, by other expeditious means. It must do so without delay but no later than the close of the seventh banking day following the day of receipt of the documents.3 The notice must be given to the bank from which it received the documents, or to the beneficiary if it received the documents directly from him or her.4 The notice must state all the discrepancies in respect of which the bank refuses the documents.5 It must also state whether it is holding the documents at the disposal of the presenter or is returning them to the latter.6 If the issuing bank determines that the documents appear on their face not to be in compliance with the terms and conditions of the credit, it may in its sole judgement approach the applicant for a waiver of the discrepancies.7 This does not however extend the period of seven banking days.8
1 UCP art 14(b). 2 Ibid. 3 Art 14(d)(i). 4 Ibid. 5 Art 14(d)(ii). This is a new provision: Goode Commercial Law 1003; Paget Law of Banking 687. 6 Ibid. 7 Art 14(c). 8 Ibid; see art 13(b). 3.5.12 Disclaimer of responsibility Banks assume no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any documents or for conditions stipulated in or superimposed on the documents.1 Furthermore, they do not assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods represented by the documents, or for the good faith or acts or omissions, solvency, performance or standing of the consignors, carriers, forwarders, consignees or insurers of the goods or any other person.2 Banks assume no liability or responsibility for the consequences arising out of delay or loss in transit of any messages, letters or documents or for delay, mutilation or other errors arising in the transmission of any telecommunication.3 Banks assume no liability or responsibility for errors in translation or interpretation of technical terms.4 Banks have the right to transmit credit terms without translating them.5 Banks assume no liability or responsibility for the consequences arising out of the interruption of their business by acts of God, riots, civil commotions, insurrections, wars or any other causes beyond their control, or by any strikes or lockouts.6 Unless specifically authorised, banks will not, on resumption of their business, pay, incur a deferred payment undertaking, accept bills or negotiate under credits which expired during such interruption of their business.7 Banks using the services of another bank for the purpose of giving effect to the instructions of the applicant do so for the account and at the risk of the applicant.8 Banks assume no liability or responsibility if the instructions they transmit are not carried out, even if they have themselves taken the initiative in the choice of the other bank.9 1 UCP art 15. 2 Ibid. 3 Art 16. 4 Ibid. 5 Ibid. 6 Art 17. This is known as force majeure. 7 Ibid. 8 Art 18(a); Goode Commercial Law 10001001. 9 Art 18(b); Goode 10001001. 3.5.13 Documents Terms such as \"first class\", \"well known\", \"qualified\", \"independent\", \"official\", \"competent\", \"local\" and the like must not be used to describe the issuers of any documents to be presented under a credit.1 If such terms are incorporated in the credit, banks will accept the document as presented, provided that it appears on its face to be in compliance with the other terms and conditions of the credit and not to have been issued by the beneficiary.2 A document may be signed by handwriting, by facsimile signature, by perforated signature, by stamp, by symbol, or by any other mechanical or electronic method of authentication.3 Unless otherwise stipulated in the credit, a condition under a credit calling for a document to be authenticated, validated, visaed, certified or indicating a similar requirement, will be satisfied by any signature, mark, stamp or label on such document that on its face appears to satisfy the above condition.4 A credit is often established as a transaction following on a contract for the sale of goods on CIF5 terms. Such a contract involves sea transit6 and its nature is firmly established in commercial usage, the essential feature being that the seller's obligation is performed by the delivery of the documents.7 The usual duties of the seller are to ship the goods in accordance with the contract, to procure a contract of affreightment (including a bill of lading), to take out a policy of insurance current in the trade and upon which the buyer may sue, to invoice the goods to the buyer, and to tender to the buyer as soon as possible after shipment the documents in a valid and effective condition.8 A very common expression in CIF contracts is \"acceptance against documents\" which means that on tender of the documents the draft must be accepted.9 1 UCP art 20(a). 2 Ibid. 3 Art 20(b). 4 Art 20(d). 5 The letters CIF stand for \"costs, insurance, freight\". 6 Garavelli & Figli v Gollach & Gomperts 1959 1 SA 816 (W) 820. 7 Frank Wright (Pty) Ltd v Corticus \"BCM\" Ltd 1948 4 SA 456 (C) 463. 8 Frank Wright (Pty) Ltd v Corticus \"BCM\" Ltd supra 464. 9 Alli v Daniel Bros & Co Ltd 1921 AD 292 295. 3.5.14 Bills of lading A bill of lading is an acknowledgment by a ship owner, a master or other agent that certain goods have actually been delivered on board a definite vessel.1 Apart from being a receipt for the goods, the bill of lading also serves as evidence of the contract of carriage and is a document of title.2 The principal document which enables the CIF contract to attain its object is the bill of lading.3 During the period of
transit the bill of lading is, in terms of the law merchant, recognised as the symbol of the goods described in it and the indorsement and delivery of the bill constitutes a symbolic delivery of the goods.4 If a credit calls for a bill of lading covering a porttoport shipment, banks will, unless otherwise stipulated in the credit, accept a document, however named, which: (a) appears on its face to indicate the name of the carrier and to have been signed or otherwise authenticated by the carrier or the master, or a named agent for the carrier or the master;5 (b) indicates that the goods have been loaded on board, or shipped on a named vessel;6 (c) indicates the port of loading and the port of discharge stipulated in the credit;7 (d) consists of a sole original bill of lading, or if issued in more than one original, the full set as so issued;8 (e) appears to contain all the terms and conditions of carriage, or some of such terms and conditions by reference to a source other than the bill of lading;9 (f ) contains no indication that it is subject to a charter party and no indication that the carrying vessel is propelled by sail only;10 and (g) in all other respects meets the stipulations of the credit.11 Unless transhipment is prohibited by the terms of the credit, banks will accept a bill of lading which indicates that the goods will be transhipped, provided that the entire ocean carriage is covered by the same bill of lading.12 Transhipment means unloading and reloading from one vessel to another vessel during the course of ocean carriage from the port of loading to the port of discharge stipulated in the credit.13 1 This English law definition was accepted in Standard Bank of SA Ltd v Efroiken & Newman 1924 AD 171 189. 2 See generally Hare Shipping Law & Admiralty Jurisdiction in SA (1999) 540571; Cowen and Gering Law of Negotiable Instruments in SA (1985) 260264. 3 Garavelli & Figli v Gollach & Gomperts 1959 1 SA 816 (W) 820821. 4 Garavelli & Figli v Gollach & Gomperts supra 821. See also Standard Bank of SA Ltd v Efroiken & Newman supra 189 190; Lendalease Finance (Pty) Ltd v Corporacion De Mercadeo Agricola 1976 4 SA 464 (A) 491492. 5 UCP art 23(a)(i). 6 Art 23(a)(ii). 7 Art 23(a)(iii). 8 Art 23(a)(iv). 9 Art 23(a)(v); banks will not examine the contents of such terms and conditions: ibid. 10 Art 23(a)(vi). 11 Art 23(a)(vii); Goode Commercial Law 902905. 12 Art 23(c). 13 Art 23(b). 3.5.15 Payment of freight Unless otherwise stipulated in the credit, or inconsistent with any of the documents presented under the credit, banks will accept transport documents stating that freight or transportation charges (hereafter referred to as \"freight\") have still to be paid.1 If a credit stipulates that the transport document has to indicate that freight has been paid, banks will accept a transport document on which payment of freight is clearly indicated.2 If the credit requires courier charges to be paid or prepaid, banks will accept a transport document i s s u e d b y a c o u r i e r e v i d e n c i n g t h a t c o u r i e r c h a r g e s a r e f o r t h e a c c o u n t o f a p a r t y o t h e r t h a n t h e c o n s i g n e e .3 T h e words \"freight prepayable\" or \"freight to be prepaid\" or words of similar effect appearing on a transport document will not be accepted as constituting evidence of the payment of freight.4 1 UCP art 33(a). 2 Art 33(b). 3 Ibid. 4 Art 33(c). 3.5.16 Insurance documents Credits should stipulate the type of insurance required and the additional risks (if any) which are to be covered.1 Imprecise terms such as \"usual risks\" or \"customary risks\" must not be used.2 If they are used, banks will accept insurance documents as presented without responsibility for any risks not being covered.3 Failing specific stipulations in the credit, banks will accept insurance documents as presented, without responsibility for any risks not being covered.4 Unless otherwise stipulated in the credit, banks will accept an insurance document which indicates that the cover is subject to a franchise or an excess.5 Where a credit stipulates \"insurance against all risks\", banks will accept an insurance document which contains any \"all risks\" notation or clause, even if the insurance document indicates that certain risks are excluded, without responsibility for any risks not being covered.6 Insurance documents must appear on their face to be issued and signed by insurance companies or underwriters or their agents.7 If the insurance document indicates that it has been issued in more than one original, all the originals must be presented unless otherwise authorised in the credit.8 Cover notes issued by brokers will not be accepted unless s p e c i f i c a l l y a u t h o r i s e d i n t h e c r e d i t .9 U n l e s s o t h e r w i s e s t i p u l a t e d i n t h e c r e d i t , o r u n l e s s i t a p p e a r s f r o m t h e insurance document that the cover is effective at the latest from the date of loading on board or dispatch or taking in charge of the goods, banks will not accept an insurance document which bears a date of issuance later than the date of loading on board or dispatch or taking in charge as indicated in the transport document.10
Unless otherwise stipulated in the credit: (a) the insurance document must be expressed in the same currency as the credit;11 (b) the minimum amount for which the insurance document must indicate the insurance cover to have been effected is the CIF (cost, insurance, freight (\"named port of destination\")) or CIP (carriage and insurance paid to (\"named place of destination\")) value of the goods plus 10%, but only when the CIF or CIP value can be determined from the documents on their face. Otherwise banks will accept as such minimum amount 110% of the amount for which payment, acceptance or negotiation is requested under the credit, or 110% of the gross amount of the invoice, whichever is the greater.12 A purchaser under a CIF contract is entitled to demand as a matter of law an insurance policy which covers and covers only the goods mentioned in the bill of lading and invoice.13 The policy must cover the whole of the contractual journey.14 An insurance policy must be enforceable in law at the time it is tendered. A banker cannot be compelled to accept a policy which had become illegal because of the outbreak of war between its country and the country of which the underwriter was a citizen.15 1 UCP art 35(a). 2 Ibid. 3 Ibid. 4 Art 35(b). 5 Art 35(c). 6 Art 36. 7 Art 34(a). 8 Art 34(b). 9 Art 34(c). 10 Art 34(e). 11 Art 34(f )(i). 12 Art 34(f )(ii). 13 Standard Bank of SA Ltd v Efroiken & Newman 1924 AD 171; Manbre Saccharine Co v Corn Products Co 1919 1 KB 198 205. 14 Landauer & Co v Craven & Speeding Bros 1912 2 KB 94 106. 15 Arnhold Karberg & Co v Blythe Green Jourdain & Co, Theodor Schneider & Co v Burgett & Newsam 1915 2 KB 379. 3.5.17 Commercial invoices Unless otherwise stipulated in the credit, commercial invoices must appear on their face to be issued by the beneficiary named in the credit and be made out in the name of the applicant, but need not be signed.1 Unless otherwise stipulated in the credit, banks may refuse commercial invoices issued for amounts in excess of the amount permitted by the credit.2 The description of the goods in the commercial invoice must correspond with the description in the credit.3 If the description in the invoice deviates from the wording in the credit, the bank is entitled to withhold payment even if the deviation is purely terminological and has no materiality in fact.4 1 UCP art 37(a). 2 Art 37(b). 3 Art 37(c). 4 Rayner (JH) & Co Ltd & Oilseeds Trading Co Ltd v Hambro's Bank [1942] 2 All ER 694; 1943 1 KB 37 (CA); Goode Commercial Law 991. 3.5.18 Other documents If a credit calls for an attestation or certification of weight in the case of transport other than by sea, banks will accept a weight stamp or declaration of weight which appears to have been superimposed on the transport document by the carrier or his or her agent unless the credit specifically stipulates that the attestation or certification of weight must be by means of a separate document.1 1 UCP art 38. 3.5.19 Tolerance as to quantity and amount The words \"about\", \"approximately\", \"circa\" or similar expressions used in connection with the amount of the credit or the quantity or the unit price stated in the credit are to be construed as allowing a difference not to exceed 10% more or less than the amount or quantity or unit price to which they refer. 1 Unless a credit stipulates that the quantity of the goods specified must not be exceeded or reduced, a tolerance of 5% more or less will be permissible, provided that the amount of the drawings does not exceed the amount of the credit.2 This tolerance does not apply where the credit stipulates the quantity in terms of a stated number of packing units or individual items.3 1 UCP art 39(a). 2 Art 39(b). 3 Ibid. 3.5.20 Partial shipments and drawings Partial shipments and drawings are allowed, unless the credit stipulates otherwise.1 Transport documents which appear on their face to indicate that shipment has been made on the same means of conveyance and for the same journey, provided they indicate the same destination, will not be regarded as covering partial shipments.2 Shipments made by post or by courier will not be regarded as partial shipments if the post receipts or certificates of posting or courier's receipts or dispatch notes appear to have been stamped, signed or otherwise authenticated in the place from which the credit stipulates the goods are to be dispatched and on the same date.3 If drawings or shipments by instalments within given periods are stipulated in the credit, and any instalment is not drawn or shipped within the period allowed for that instalment, the credit ceases to be available for that and any subsequent instalment, unless the credit stipulates otherwise.4
1 UCP art 40(a). 2 Art 40(b). 3 Art 40(c). 4 Art 41. 3.5.21 Expiry date and presentation of documents All credits must stipulate an expiry date and a place for presentation of documents for payment, acceptance, or (with the exception of freely negotiable credits) a place for presentation of documents for negotiation.1 An expiry date stipulated for payment, acceptance or negotiation will be construed to express an expiry date for presentation of documents.2 Documents must be presented on or before the expiry date.3 Banks are under no obligation to accept presentation of documents outside their banking hours.4 If an issuing bank states that the credit is to be available \"for one month\", \"for six months\", or the like, but does not specify the date from which the time is to run, the date of issuance of the credit by the issuing bank is deemed to be the first day from which the time is to run.5 In addition to stipulating an expiry date for presentation of documents, every credit which calls for a transport document should also stipulate a specified period of time after the date of shipment during which presentation must be made in compliance with the terms and conditions of the credit.6 If no such period of time is stipulated, banks will not accept documents presented to them later than 21 days after the date of shipment.7 In any event, documents must be presented not later than the expiry date of the credit.8 If the expiry date of the credit or the last day of the period of time for presentation of documents falls on a day on which the bank to which presentation has to be made is closed for reasons other than force majeure,9 the stipulated expiry date or the last day of the period of time after the date of shipment for presentation of documents is extended to the first following day on which the bank is open.10 The latest date for shipment must not be extended by reason of the extension of the expiry date or the period of time after the date of shipment for presentation of documents.11 If no such latest date for shipment is stipulated in the credit (or amendments thereto), banks will not accept transport documents indicating a date of shipment later than the expiry date stipulated in the credit (or amendments thereto).12 1 UCP art 42(a); Goode Commercial Law 997. 2 Ibid. 3 Art 42(b). 4 Art 45. 5 Art 42(c). 6 Art 43(a). 7 Ibid. 8 Ibid. 9 Art 17. 10 Art 44(a). 11 Art 44(b). 12 Ibid. 3.5.22 Terminology relating to shipment The words \"to\", \"until\", \"till\", \"from\" and words of similar import applying to any date or period in the credit referring to shipment are understood to include the date mentioned.1 The word \"after\" is understood to exclude the date mentioned.2 The terms \"first half\", and \"second half\" of a month must be construed respectively as the first to the fifteenth day, and the sixteenth to the last day of the month, all dates inclusive.3 The terms \"beginning\", \"middle\", or \"end\" of a month must be construed respectively as the first to the tenth day, the eleventh to the twentieth day, and the 21st to the last day of the month, all dates inclusive.4 Expressions such as \"prompt\", \"immediately\", \"as soon as possible\" and the like should not be used.5 If they are used, banks will disregard them.6 If the expression \"on or about\" or similar expressions are used, banks will interpret them as a stipulation that shipment is to be made during the period from five days before to five days after the specified date, both end days included.7 1 UCP art 47(a). 2 Art 47(b). 3 Art 47(c). 4 Art 47(d). 5 Art 46(b). 6 Ibid. 7 Art 46(c). 3.5.23 Transferable credits A transferable credit is a credit under which the beneficiary (\"first beneficiary\") may request the bank authorised to pay, incur a deferred payment undertaking, accept or negotiate (the \"transferring bank\"), or in the case of a freely negotiable credit, the bank specifically authorised in the credit as a transferring bank, to make the credit available in whole or in part to one or more other beneficiary/ies (\"second beneficiary/ies\").1 A credit can be transferable only if it is expressly designated as \"transferable\" by the issuing bank.2 T e r m s s u c h a s \" d i v i s i b l e \" , \" f r a c t i o n a b l e \" , \" a s s i g n a b l e \" , a n d \" t r a n s m i s s i b l e \" d o n o t r e n d e r t h e c r e d i t transferable.3 If such terms are used, they must be disregarded.4 The transferring bank will be under no obligation to effect such transfer except to the extent and in the manner consented to by it.5 At the time of making a request for transfer and prior to transfer of the credit, the first beneficiary must irrevocably instruct the transferring bank whether or not he or she retains the right to refuse to allow the transferring bank to advise amendments to the second beneficiary.6 If the transferring bank consents to the transfer under these conditions, it must, at the time of
transfer, advise the second beneficiary of the first beneficiary's instructions regarding amendments. 7 Transferring bank charges in respect of transfers are payable by the first beneficiary, unless otherwise agreed.8 I f t h e transferring bank agrees to transfer the credit, it will be under no obligation to effect the transfer until the charges are paid.9 Unless otherwise stated in the credit, a transferable credit can be transferred only once.10 The credit cannot be transferred at the request of the second beneficiary to any subsequent third beneficiary. 11 However, a retransfer to the first beneficiary is not a prohibited transfer. 12 Fractions of a transferable credit (not exceeding in aggregate the amount of the credit) can be transferred separately, provided partial shipments and drawings are not prohibited.13 The aggregate of such transfers will be considered as constituting only one transfer of the credit.14 The credit can be transferred only on the terms and conditions specified in the original credit with the exception of: (a) the amount of the credit; (b) any unit price stated in it; (c) the expiry date; (d) the last date of presentation of documents; and (e) the period of shipment. Any or all of these may be reduced or curtailed.15 In addition, the name of the first beneficiary can be substituted for that of the applicant, but if the applicant's name is specifically required by the original credit to appear in any documents other than the invoice, this requirement must be fulfilled.16 The first beneficiary has the right to substitute his or her own invoices and drafts for those of the second beneficiary for amounts not in excess of the original amount stipulated in the credit and for the original unit prices if stipulated in the credit.17 On such substitution of invoices and drafts, the first beneficiary can draw under the credit for the difference (if any) between his or her invoices and the invoices of the second beneficiary. 18 W h e n a credit has been transferred and the first beneficiary is to supply his or her own invoices and drafts in exchange for those of the second beneficiary, but fails to do so on first demand, the transferring bank has the right to deliver to the issuing bank the documents received under the transferred credit, including the invoices and bills of the second beneficiary without further responsibility to the first beneficiary. 19 The first beneficiary may request that payment or negotiation be effected to the second beneficiary at the place to which the credit has been transferred up to and including the expiry date of the credit, unless the original credit expressly states that it may not be made available for payment or negotiation at a place other than that stipulated in the credit.20 This is without prejudice to the first beneficiary's right to substitute subsequently his or her own invoices and drafts for those of the second beneficiary and to claim any difference due to him or her.21 1 UCP art 48(a). 2 Art 48(b). 3 Ibid. 4 Ibid. 5 Art 48(c). 6 Art 48(d). 7 Ibid. 8 Art 48(f ). 9 Ibid. 10 Art 48(g). 11 Ibid. 12 Ibid. 13 Ibid. 14 Ibid. 15 Art 48(h). 16 Ibid. 17 Art 48(i). 18 Ibid. 19 Ibid. 20 Art 48(j). 21 Ibid. 3.5.24 Assignment of proceeds T h e f a c t t h a t a c r e d i t i s n o t s t a t e d t o b e t r a n s f e r a b l e d o e s n o t a f f e c t t h e beneficiary's right to assign any proceeds to which he or she may be (or may become) entitled under such credit in accordance with the provisions of the relevant law.1 This relates only to the assignment of proceeds and not to the assignment of the right to perform under the credit itself.2 1 UCP art 49. 2 Goode Commercial Law 1022. 3.6 Termination of relationship 3.6.1 Termination of relationship between banker and customer The relationship between banker and customer may be terminated by mutual agreement or unilaterally by one of the parties.1 There is a distinction between (a) the termination of the contract between banker and customer, and (b) the termination of the duty and authority of the drawee bank to pay a particular cheque drawn on it by its customer as dealt with in s 73 of the Bills of Exchange Act 34 of 1964.2 Any credit balance must be paid to the customer and if the account is overdrawn the overdraft must be repaid.3 Whereas a customer can terminate his or her account immediately, a bank must give reasonable notice of its
intention to do so.4 The bank and customer contract, based on a comprehensive mandate, is generally terminated by the sequestration, liquidation or placing under judicial management of the customer, as well as the death of the customer. Where overdraft facilities were granted to a customer on condition that the grant was subject to the cover of suretyship and the suretyship was terminated, the bank was not obliged to pay out further cheques.5 Change in partnership brought about either by the retirement of a partner or by the admission of a new partner terminates the old partnership and a new partnership is formed.6 The account of the old partnership is closed and a new one opened if required for the new partnership. A partnership is dissolved by the insolvency of any partner.7 In the case of the death of a partner the surviving partners, in the absence of any cause to the contrary, have the right to wind up the partnership.8 The surviving partners are therefore not precluded from operating on the old partnership account for the purposes of winding up the partnership.9 When the affairs of a bank have been completely wound up as contemplated in the Companies Act,10 t h e responsible master of the High Court must transmit a copy of the relevant certificate to the registrar, who on receipt t h e r e o f m u s t c a n c e l t h e b a n k ' s r e g i s t r a t i o n .11 A s r e g i s t r a t i o n a s a b a n k i s a p r e r e q u i s i t e f o r c a r r y i n g o n t h e business of a bank, cancellation of registration terminates the relationship between banker and customer. The duty and authority of a bank to pay a cheque drawn on it by its customer are terminated by receipt of: (a) countermand of payment; (b) notice of the customer's death or incapacity; or (c) notice of the customer having been sequestrated or wound up or placed under judicial management or declared a prodigal, provided such countermand or notice identifies the cheque, in the case of countermand, and the customer with reasonable particularity and gives the drawee a reasonable opportunity to act on it.12 1 Malan Bills of Exchange, Cheques and Promissory Notes in SA Law 386; Paget Law of Banking 116. 2 Malan 386. 3 Chorley Law of Banking 349. 4 Malan 386; Paget 116117. 5 See Volkskas Bpk v Van Aswegen 1961 1 SA 493 (A). 6 Malan 386 fn 290 336. 7 Estate of Stoltenhoff v Howard (1907) 24 SC 693. 8 Vigne's Executor v Mackenzie 1913 TPD 42 47; Ayliff v Eastern Province Guardian Loan & Investment Co 1925 CPD 65 68; Bosman v Registrar of Deeds & the Master 1942 CPD 302 307. 9 Barker Principles and Practice of Banking 21. 10 61 of 1973s 419(1). 11 Banks Act 94 of 1990s 28. 12 Bills of Exchange Act 34 of 1964s 73; Malan 386388. 4 Currency 4.1 Banknotes and coins 4.1.1 Introduction Currency is the money of a country in actual use. In law the quality of money is to be attributed to those things which, issued by the authority of the law and denominated with reference to a unit of account, are meant to serve as universal means of exchange in the country of issue.2 Only South African currency issued by the Reserve Bank has this attribute in the Republic.3 Foreign currency does not have this attribute and is not legal tender in the Republic.4 Legal tender is the medium legally authorised by the state for the payment of debts.5 In terms of the Exchange Control Regulations, the term \"money\" is defined as including foreign currency or any bill of exchange or other negotiable instrument, while \"foreign currency\" means any currency which is not legal tender in the Republic, and includes any bill of exchange, letter of credit, money order, postal order, promissory note, traveller's cheque or any other instrument for the payment of currency payable in a currency unit which is not legal tender in the Republic.6 Courts in South Africa have the power in an appropriate case to grant judgment in a foreign currency. 7 It is implicit in any order to this effect that the judgment debt may be satisfied in South Africa by payment in the foreign currency or by the payment in the rand equivalent at the date of payment.8 2 Goode Commercial Law 2 ed 490; Mann The Legal Aspect of Money 8. 3 SA Reserve Bank Act 90 of 1989ss 14 15 16; Standard Chartered Bank of Canada v Nedperm Bank Ltd 1994 4 SA 747 (A) 781. 4 Standard Chartered Bank of Canada v Nedperm Bank Ltd supra 780A 781G. 5 Cowen and Gering Law of Negotiable Instruments in SA 47. 6 Exchange Control Regulations reg 1. 7 Standard Chartered Bank of Canada v Nedperm Bank Ltd supra 774. 8 Standard Chartered Bank of Canada v Nedperm Bank Ltd supra 777 779. 4.1.2 Legal tender Where there is an obligation to pay, payment means prima facie payment in cash.1 Limitations are placed on the amount of coins which may be legally tendered as cash payments.2 A tender, including a tender by the South African Reserve Bank itself, of a note of the Reserve Bank or of an outstanding note of another bank for which the Reserve Bank has assumed liability, is a legal tender of payment of an amount specified on the note.3 A tender, including a tender by the Reserve Bank itself, of an undefaced and unmutilated coin which is lawfully in circulation in the Republic and of current mass, is a legal tender of payment of money: (a) in the case of gold coins, in settlement of any amount, and the value of each coin will be equal to the net amount at which the bank is prepared to purchase that gold coin on the day of the tender;4 and (b) in the case of other coins, in settlement, per transaction, of an amount not exceeding:
(i) R50, where coins of a denomination of R1 and higher are tendered; (ii) R5, where coins of a denomination of 10c and up to and including 50c are tendered; (iii) 50c, where coins of a denomination of 5c or less are tendered, and the value of each coin tendered will be equal to the amount specified on the coin.5 When in terms of a contract of loan of money the debtor is under an obligation to repay the money lent or to pay any interest on the money lent in coins or notes which are legal tender in the Republic, whether that obligation arose before or after the commencement of the Currency and Exchanges Act,6 the debtor may at his or her option fulfil that obligation by the payment of the amount he or she is bound to pay in banknotes or in coins which are legal tender in the Republic at the time when the payment takes place.7 1 Schneider & London v Chapman 1917 TPD 497 504; Esterhuyse v Selection Cartage (Pty) Ltd 1965 1 SA 360 (W) 361; Gering Handbook on the Law of Negotiable Instruments 70. 2 SA Reserve Bank Act 90 of 1989s 17(2)(b). 3 S 17(1). 4 S 17(2)(a). 5 S 17(2)(b). 6 9 of 1933. 7 S 2(1). 4.1.3 Coins The South African Reserve Bank Act1 provides that any reference in any law, deed, instrument, security for money or other document, contract or agreement whether in writing or not, or any other reference to an a m o u n t d e t e r m i n e d o n t h e b a s i s o f t h e c o i n s s p e c i f i e d i n t h e S c h e d u l e t o t h e C o i n a g e A c t o f 1 9 2 2 ,2 w i l l b e construed as including the equivalent amount determined on the basis of the coins as specified in section 16(1) of the South African Reserve Bank Act3 and in accordance with the values of these coins in comparison with the coins so specified in that Schedule, as set out in section 15(2), and any such reference to coins so specified in section 16(1) will be construed as including a reference to an equivalent amount determined on the basis of the coins set out in that Schedule and in accordance with the said respective values.4 The respective values, in rand and cent, of coins manufactured and issued under other designations than rand and cent and which remain in circulation in terms of s 14(1) are set out in the table to s 15(2). The minister may, from time to time, by notice in the Government Gazette determine the dimension and design of any coin as well as the compilation of a series of coins.5 The minister may authorise the withdrawal from circulation of so many coins as he or she deems to be in excess of requirements or of coins of a specified date or of specified dates or of a specified denomination or of specified denominations.6 The notice issued in the Government Gazette will come into operation on a date specified therein and the provisions of the notice will have the same force of law as if enacted in the Act.7 1 90 of 1989s 18. 2 31 of 1922. 3 90 of 1989. 4 SA Reserve Bank Act s 18. 5 S 19(1)(a). 6 S 19(1)(b). 7 S 19(2). 4.1.4 Offences The South African Reserve Bank Act1 makes specific provision for offences relating to: (a) the forging, alteration or unlawful issue of a note or something purporting to be a note of the bank, or any coin, or the uttering, tender or acceptance of such note or coin;2 (b) the engraving or making on any material of figures, letters, marks, lines or devices which resemble those used in or upon any note of the bank or any coin which is legal tender or the using or knowing possession of such material or coin;3 (c) the defacing, soiling or damaging of a note or defacement of a coin;4 (d) the unauthorised removal of any matrix, master punch, die, collar, piercing or cutting tool, pattern, mould or other tool, machine, engine, instrument or any thing used in the minting of a coin or any useful part thereof, or any coin or bullion from the place of manufacture;5 (e) the unauthorised possession of any blank or defective coin;6 (f ) the fraudulent use of any unauthorised coin or object in a vending machine or machine designed for the collection of fares or tolls;7 (g) the selling or disposal of metal reproductions of the Krugerrand; 1/2Kruggerrand; 1/4Krugerrand or 1/10 Krugerrand, or the placing of \"Krugerrand\" or any derivative thereof on any metal article for disposal or sale;8 (h) the unauthorised destruction of any coin;9 and (i) the sale or disposal of any coin in the knowledge or with the suspicion that such coin is to be dealt with in contravention of these provisions.10 1 90 of 1989. 2 S 34(1)(a)(b). 3 S 34(1)(c)(d). 4 S 34(1)(f ).
5 S 34(1)(g). 6 S 34(1)(h). 7 S 34(1)(i). 8 S 34(1)(j). 9 S 34(1)(k). 10 S 34(1)(l). 4.1.5 Regulations regarding currency, banking or the exchanges The president of the Republic may make regulations in regard to any matter relating to currency, banking or exchanges. 1 The president may, in terms of the regulations, apply any sanctions he or she thinks fit to impose, whether civil or criminal.2 The president may also, by means of the regulations, suspend in whole or part any law relating to currency, banking or exchanges. 3 A n y l a w which is in conflict with any such regulation is deemed to be suspended in so far as it is in conflict with that regulation.4 The minister must cause a copy of every regulation to be tabled before Parliament within 14 days after the first publication thereof in the Government Gazette.5 If that regulation is calculated to raise any revenue, the minister must cause to be attached to that copy a statement of the revenue he or she estimates will be raised during the period of 12 months after its coming into operation. Every regulation calculated to raise revenue ceases to have the force of law from a date one month after it has been so tabled unless it has been approved by Parliament before that date.6 Any regulation may provide for the empowering of specified persons to make orders and rules for any of the purposes for which the president is authorised to make regulations.7 An application to purchase foreign currency by utilising a computer system may be granted or refused by the treasury.8 The computer system (or other electronic device or apparatus) must be capable of absorbing and processing data, and, in accordance with instructions given by the treasury, of making available information, in the form of a document, indicating the refusal or approval of the application.9 1 Currency and Exchanges Act 9 of 1933s 9(1). 2 S 9(2). 3 S 9(3). 4 Ibid. 5 S 9(4). 6 Ibid. 7 S 9(5)(a). 8 S 9(6), as amended by the Judicial Matters Amendment Act 104 of 1996. 9 S 9(6). 4.2 Prevention of counterfeiting of currency 4.2.1 Introduction The Prevention of Counterfeiting of Currency Act1 was passed to provide for the prevention of the counterfeiting of coin and the forging or altering of certain banknotes and for matters incidental thereto and to provide for the extradition of certain persons.2 \"Banknote\" includes any paper money which is legal tender in the state or territory in which it is issued, irrespective of the name by which it is known, but does not include a banknote issued under section 14 of the South African Reserve Bank Act.3 \"Counterfeit coin\" means any coin other than current coin resembling or patently intended to resemble or pass for current coin and includes current coin prepared or altered so as to resemble or pass for coin of a higher denomination.4 \"Current coin\" means any coin the issue and circulation of which in any state or territory as money have been authorised by law.5 1 16 of 1965. 2 Preamble. 3 90 of 1989: Prevention of Counterfeiting of Currency Act 16 of 1965s 1. 4 S 1. 5 Ibid. 4.2.2 Offences relating to current coin and banknotes Any person who: (a) counterfeits or performs any part of the process of counterfeiting any current coin;1 (b) forges or alters a banknote;2 (c) utters, tenders or accepts any counterfeit coin knowing it to be counterfeit, or a forged or altered banknote knowing it to be forged or altered;3 (d) with the intent to counterfeit current coin or to forge a banknote makes, obtains, has in his or her possession or disposes of any tool, instrument or machine: (i) intended for making any counterfeit coin or forged banknote; (ii) intended for the marking of coin round the edges with letters, grainings or other marks or figures resembling letters, grainings, marks or figures round the edges of any current coin; or (iii) capable of being used for preparing any material or receiving any impression resembling that on any current coin;4 (e) gilds, silvers or colours any piece of metal of a size or figure fit to be coined for the purpose of coining it into a counterfeit coin;5
(f ) makes any piece of metal into a size or figure fit to be coined with the intention of facilitating the coining therefrom of counterfeit coin or for the purpose of coining therefrom counterfeit coin;6 (g) impairs, diminishes or lightens any current coin with the intent that such coin when so impaired, diminished or lightened may pass as current coin,7 is guilty of an offence. The penalty for these offences is imprisonment for a period not exceeding 15 years.8 Any person who without lawful authority or excuse: (a) imports or receives into the Republic or exports from the Republic counterfeit coin or any forged or altered banknote;9 (b) buys, sells or is in possession of a piece of metal referred to in paragraphs (e) and (f ) above,10 is guilty of an offence. The penalty for such offences is imprisonment for a period not exceeding five years.11 Any person who without lawful authority or excuse has in his or her possession or disposes of or in any way deals with any filing or clipping or any gold or silver bullion or any gold or silver in dust, solution or otherwise, produced or obtained by impairing, diminishing or lightening current coin, knowing that it has been so produced or obtained, is guilty of an offence.12 The penalty for such an offence is imprisonment for a period not exceeding three years.13 Any person who (a) with intent to defraud, utters, tenders, disposes of or otherwise uses as current coin any medal or piece of metal which is not current coin,14 or (b) without lawful authority or excuse defaces any current coin by stamping thereon any word, letter, device or mark, is guilty of an offence. 15 The penalty for such offences is imprisonment for a period not exceeding 12 months.16 1 Prevention of Counterfeiting of Currency Act 16 of 1965s 2(a). 2 S 2(b). 3 S 2(c). 4 S 2(e)(i)(iii). 5 S 2(f) ). 6 S 2(g). 7 S 2(i). 8 S 2(i). 9 S 2(d). 10 S 2(h). 11 S 2(ii). 12 S 2(j). 13 S 2(iii). 14 S 2(k). 15 S 2(l). 16 S 2(iv). 4.2.3 Extraditable offences The following are extraditable offences: (a) counterfeiting any current coin;1 (b) forging or altering banknotes;2 (c) uttering, tendering or accepting any counterfeit coin, knowing it to be counterfeit or a forged or altered banknote knowing it to be forged or altered;3 (d) without lawful authority or excuse importing or receiving into the state or territory in question a counterfeit coin or a forged or altered banknote;4 (e) making, mending, obtaining or having in his or her possession or disposing of any tool, instrument or machine: (i) intended for making any counterfeit coin or forged banknote; (ii) intended for the marking of coin round the edges with letters, grainings or other marks or figures resembling letters, grainings, marks or figures round the edges of any current coin; or (iii) capable of being used for preparing any material for receiving any impression resembling that on any current coin;5 (f ) attempting to commit any one of these offences.6 If: (a) the Republic has acceded to the Convention for the Suppression of Counterfeiting Currency;7 and (b) a person has been accused or has been convicted within the jurisdiction of a foreign state as defined in the Extradition Act8 of one or more of the offences mentioned in the immediately preceding paragraph;9 and (c) an extradition agreement which has been or is deemed to have been entered into under that Act with such state or a state under whose sovereignty or protection such firstmentioned state is, is in force;10 and (d) the foreign state or state under whose sovereignty or protection that state is has signed and ratified or acceded to the convention,11 that person may, notwithstanding anything to the contrary contained in the Extradition Act 12 or in the extradition
agreement, be surrendered to the state in respect of which such agreement is in force in a manner prescribed by any law relating to extradition and in force in the Republic.13 These provisions cease to apply if the convention is denounced on behalf of the Republic,14 or in respect of a state or territory if the convention is denounced on behalf of that state or the state under whose sovereignty or protection that territory is,15 and a period of at least one year has lapsed after such denunciation.16 1 Prevention of Counterfeiting of Currency Act 16 of 1965s 3(2)(a). 2 S 3(2)(b). 3 S 3(2)(c). 4 S 3(2)(d). 5 S 3(2)(e). 6 S 3(2)(f ). 7 S 3(1)(a). The convention was drawn up at Geneva on 20 April 1929. 8 67 of 1962. 9 Prevention of Counterfeiting of Currency Act 16 of 1965s 3(1)(b). 10 S 3(1)(c). 11 S 3(1)(d). 12 67 of 1962. 13 Prevention of Counterfeiting of Currency Act 16 of 1965s 3(1). 14 S 3(3)(a). 15 S 3(3)(b). 16 S 3(3). 4.2.4 Evidence and onus of proof A certificate purporting to have been signed by the DirectorGeneral: Foreign Affairs or a person designated by the directorgeneral, to the effect that a state mentioned in that certificate has signed and ratified or acceded to the convention is, upon its production by any person under any proceedings under any law relating to extradition, admissible in evidence in those proceedings and is prima facie proof of the facts set forth in that certificate.1 If, in any prosecution in connection with the importing or exporting of counterfeit coins or forged or altered banknotes2 being in possession or disposing of filings, clippings, gold or silver bullion or gold or silver in dust, solution or otherwise, produced or obtained by impairing, diminishing or lightening current coin,3 o r defacing any current coin,4 the question arises whether any person had lawful authority or excuse for doing or possessing anything referred to, the onus of proving that such was the case is on the accused.5 1 Prevention of Counterfeiting of Currency Act 16 of 1965s 4(1). 2 S 4(2) read with s 2(d). 3 S 4(2) read with s 2(j). 4 S 4(2) read with s 2(l). 5 S 4(2). 5 Exchange control 5.1 Introduction The president has the powers by virtue of the Currency and Exchanges Act1 to make Exchange Control Regulations. The powers of the president to make such regulations are as wide as they can possibly be.2 The president may make regulations in regard to any aspect of currency, banking or exchange.3 Furthermore, he or she is empowered to make regulations which suspend the whole or part of the Act \"or any other Act of Parliament or any other law relating to or affecting or having any bearing upon currency, banking or exchanges\".4 When a power is conferred, with it are conferred such ancillary powers as are necessary to make the main power effective.5 Included in the powers of the president is the power to provide that infractions of the regulations constitute offences and to lay down appropriate punishments.6 Contravention of the Exchange Control Regulations is regarded by the courts as a very serious offence.7 The object of the Exchange Control Regulations is to control foreign exchange in the public interest.8 They are intended, inter alia, to prohibit the transfer of money or capital from the Republic without the permission of the treasury.9 A person who wishes to obtain foreign currency must purchase it from an authorised dealer. The dealer may only s e l l i t o n t h e t e r m s a n d s u b j e c t t o t h e c o n d i t i o n s i m p o s e d b y t h e R e s e r v e B a n k .10 T h e E x c h a n g e C o n t r o l Regulations restrict the purchase and sale of foreign currency11 and the export of currency;12 require residents to transfer their rights to foreign currency to the treasury13 and to declare their foreign assets and liabilities;14 a n d restrict the export of capital15 and dealings in securities belonging to nonresidents.16 The regulations contain a number of definitions.17 Contravention of the regulations is an offence.18 The treasury may, under prescribed conditions, attach money or goods involved in such contravention.19 The money or goods may be forfeited to the state,20 and the treasury may recover certain \"shortfalls\" upon the realisation of the money or goods forfeited.21 There is provision for persons who feel aggrieved by an attachment or decision of forfeiture to apply to court for review or other appropriate relief.22 1 9 of 1933s 9. See also R v Rathanji 1950 4 SA 170 (N) 171. 2 R v Rathanji supra; R v Parsotam 1949 4 SA 315 (N) 323324; S v De Blom 1977 3 SA 513 (A). See also Wunsh 1995 SALJ 405. 3 R v Rathanji supra. 4 S 9(3); Torwood Properties (Pty) Ltd v SA Reserve Bank 1996 1 SA 215 (W) 226, confirmed on appeal: SA Reserve Bank v Torwood Properties (Pty) Ltd [1996] 4 All SA 494 (SCA); 1997 2 SA 169 (SCA). 5 R v Parsotam supra 324. 6 R v Parsotam supra 324. 7 S v Pillay 1977 4 SA 531 (A); S v Christodoulou, S v Savides, S v Temple, S v Zwyssig 1979 3 SA 523 (A), 8 Nestel v National & Grindlays Bank Ltd 1 9 6 2 2 S A 3 9 0 (A) 395396; Barclays National Bank Ltd v Thompson 1985 3 SA 778 (A); Berzack v Nedcor Bank Ltd [2001] 1 All SA 410 (SCA) 412gh. 9 Ibid; McConnell v SA Stevedores Service Co (Holdings) (Pty) Ltd 1976 2 SA 126 ( C ) 1 2 8 ; Rhodesian Pulp & Paper
Industries Ltd v Plastelect (Pty) Ltd 1975 1 SA 955 ( W ) ; Barclays Bank International Ltd v African Diamond Exporters (Pty) Ltd 1977 1 SA 298 (W); Draft Negotiators Ltd v Grand Cleaners (Pty) Ltd 1977 1 SA 788 (C); S v Jadwat Bros (Pty) Ltd 1977 4 SA 815 (D). 10 Standard Chartered Bank of Canada v Nedperm Bank Ltd 1994 4 SA 747 (A) 781G; and see SA Reserve Bank v Torwood Properties (Pty) Ltd supra. 11 Reg 2. 12 Reg 3. 13 Reg 6. 14 Reg 7. 15 Reg 10. 16 Reg 14. 17 Reg 1. 18 Reg 22. 19 Reg 22A. See SA Reserve Bank v Torwood Properties (Pty) Ltd supra 174. 20 Reg 22B. 21 Reg 22C; Groenewald v Behr 1998 4 SA 583 (T). 22 Reg 22D. See SA Reserve Bank v Torwood Properties (Pty) Ltd supra 174. 5.2 Restriction of purchase, sale and loan of foreign currency and gold No person other than an authorised dealer1 may buy or borrow any foreign currency2 or gold3 from or sell or lend any foreign currency or gold to any person who is not an authorised dealer except with the permission of the treasury4 and on such conditions as it may impose.5 An authorised dealer may not deal in any foreign currency or gold except for such purposes or on such conditions as the treasury may determine.6 The treasury may, in its discretion, prohibit all or any one or more authorised dealers from dealing in any foreign currency or gold with any specified person, fund or foreign government.7 It may also prohibit them from dealing in any foreign currency or gold for any specified purpose or except for such purposes or on such conditions as the treasury may determine.8 Every person other than an authorised dealer desiring to deal in foreign currency or gold must make application to an authorised dealer and must furnish such information and submit such documents as the authorised dealer may require for the purpose of ensuring compliance with any conditions determined by the treasury. 9 N o p e r s o n o t h e r than an authorised dealer may use or apply any foreign currency or gold acquired from an authorised dealer for any purpose other than that stated in his or her application.10 Where as the result of an application to purchase foreign currency a bank issued bank drafts designed to enable the payee mentioned therein to obtain the foreign currency applied for, the drafts themselves were not foreign currency but they constituted the key that opened the door to the sale of foreign currency. 11 No person other than an authorised dealer may do any act calculated to lead to the use or application of such foreign currency or gold for any purpose other than that so stated.12 If a person has, as a result of an application, obtained from an authorised dealer any gold or foreign currency and no longer requires all or any part of such gold or foreign currency for the purpose stated in his or her application, the person must immediately offer what he or she does not require for sale to the treasury or an authorised dealer.13 Such gold or foreign currency not required may be repurchased at the price at which it was sold to the person or such other price as the treasury may determine.14 1 Exchange Control Regulations reg 1; Berzack v Nedcor Bank Ltd [2001] 1 All SA 410 (SCA) 414de. 2 Reg 1. 3 Reg 1; R v Rathanji 1950 4 SA 170 (N). 4 Reg 1; reg 22E; order 2 of the Orders and Rules under the Exchange Control Regulations. 5 Reg 2(1); S v Immelman 1978 3 SA 726 (A); S v Pamensky 1978 3 SA 932 (E). See also S v Herbst 1979 1 SA 306 (O); S v FiddianGreen 1979 2 SA 451 (W). 6 Reg 2(2)(a). 7 Reg 2(2)(b)(i). 8 Reg 2(2)(b)(ii). 9 Reg 2(3). 10 Reg 2(4)(a). 11 S v Amoojee 1971 1 SA 795 (D) 796 797. 12 Reg 2(4)(b). 13 Reg 2(5). 14 Ibid. 5.3 Export of currency, gold and securities and the import of South African banknotes Subject to any exemption which may be granted by the treasury, or by a person authorised by the treasury, no person may, without permission1 granted by the treasury, or by such person, and in accordance with such conditions as the treasury, or such person, may impose: (a) take or send out of the Republic any banknotes, gold, securities2 or foreign currency, or transfer any securities from the Republic elsewhere;3 or (b) send, consign or deliver any banknotes, gold, securities or foreign currency to any person for the purpose of taking, sending or removing such banknotes, gold, securities or foreign currency out of the Republic;4 or (c) take any South African banknotes into the Republic or send or consign any such notes to the Republic;5 or (d) make any payment to, or in favour or on behalf of a person resident outside the Republic, or place any sum to the credit of such person;6 or (e) draw or negotiate any bill of exchange or promissory note, transfer any security or acknowledge any debt, so that a right on the part of such person or any other person to receive a payment in the Republic is created or
transferred as consideration for the receiving of a payment or the acquisition of property by that person or any other person, outside the Republic;7 or for a right on the part of such person or any other person to r e c e i v e a p a y m e n t o r a c q u i r e p r o p e r t y o u t s i d e t h e R e p u b l i c ;8 o r m a k e o r r e c e i v e a n y p a y m e n t a s s u c h consideration; or (f ) grant any financial assistance to any person in the Republic, where, as security for such financial assistance, the person granting the assistance in turn relies on any security, guarantee, undertaking or financial assistance, directly or indirectly furnished by any person resident outside the Republic or by an affected person;9 or (g) grant any financial assistance to any person in the Republic where that person is not resident in the Republic or is an affected person.10 \"Affected person\" means a body corporate, foundation, trust or partnership operating in the Republic or an estate, in respect of which (a) 75% or more of the capital, assets or earnings thereof may be utilised for payment to or to the benefit in any manner of any person who is not resident in the Republic; or (b) 75% or more of the voting securities, voting power, power of control, capital assets or earnings thereof are directly or indirectly vested in or controlled by or on behalf of any person who is not resident in the Republic.11 Nothing in the immediately preceding subregulations prohibits a person authorised by the treasury from doing anything within the scope of his or her authority.12 1 Nestel v National & Grindlays Bank Ltd 1962 2 SA 390 (A) 396. 2 Reg 1. 3 Reg 3(1)(a); S v Temple 1978 3 SA 185 (W); S v Pamensky 1978 3 SA 932 (E); S v Bergmann 1977 3 SA 589 (A). 4 Reg 3(1)(b). 5 Reg 3(1)(b)bis. 6 Reg 3(1)(c). 7 Reg 3(1)(d)(i). See also S v Bedford 1979 3 SA 656 (D); Johnsey v Skjoldhammer 1981 4 SA 88 (D). 8 Reg 3(1)(d)(ii). 9 Reg 3(1)(e). For the interpretation of reg 3(1)(e) prior to its amendment, see Sagit Property Holdings Ltd v Union Bank of Switzerland 1977 3 SA 897 (W); Barclays National Bank Ltd v Brownlee 1981 3 SA 579 (D). 10 Reg 3(1)(f ). 11 Reg 1. 12 Reg 3(2). 5.4 Exemption in respect of court actions Where a plaintiff resident outside the Republic, who has a claim sounding in money, institutes action in a South African court against a defendant who is an incola of the Republic, the obtaining of treasury exemption or permission in terms of the Exchange Control Regulations1 is not a prerequisite to the institution of the action, nor does its absence constitute a valid defence to the plaintiff's claim.2 In the absence of such exemption or permission the court does not have the right to decline to grant judgment in favour of the plaintiff on the ground that the judgment will not be effective.3 The treasury has specifically exempted, in all cases where the treasury's permission would otherwise be necessary, any person from the obligation to obtain the treasury's permission as a prerequisite to the institution of any court action in connection with a transaction mentioned in regulation 3(1)(c), or as a prerequisite to obtain any judgment in such court action, or to execute upon any such judgment.4 1 Barclays National Bank Ltd v Thompson 1985 3 SA 778 (A) 787 796; Rhodesian Pulp & Paper Industries Ltd v Plastelect (Pty) Ltd 1975 1 SA 955 (W) and McConnell v SA Stevedores Service Co (Holdings) (Pty) Ltd 1976 2 SA 126 (C). 2 Barclays National Bank Ltd v Thompson supra 796C. 3 Barclays National Bank Ltd v Thompson supra 796D; Beck 1982 SALJ 125135. 4 Exchange Control Regulations order 12(b) read with reg 3(1)(c). 5.5 Leaving and entering the Republic Every person about to leave the Republic and every person in any place recognised as a place of departure from the Republic, who is requested to do so by the appropriate officer,1 must: (a) declare whether or not he or she has with him or her any banknotes, gold, securities or foreign currency;2 and (b) produce them.3 The officer and any person acting under his or her directions may search that person and examine or search any article which the person has with him or her for the purpose of ascertaining whether the person has with him or her any banknotes, gold, securities or foreign currency and may seize them unless either: (i) the officer is satisfied that the person is exempt from the prohibition imposed by the regulations;4 or (ii) the person produces to the officer a certificate granted by the treasury showing that the exportation by that person of any banknotes, gold, securities or foreign currency which he or she has with him or her does not involve a contravention of the regulations.5 No female may be searched except by a female.6 The officer and any person acting under his or her directions may examine or search any goods consigned or letters or parcels sent from the Republic to a destination outside the Republic for the purpose of ascertaining whether they contain any banknotes, gold, securities or foreign currency.7 The officer may seize any banknotes, gold, securities or foreign currency which he or she finds unless satisfied that the treasury has granted a certificate showing that there has not been a contravention of the regulations and that the certificate was not granted in reliance on any incorrect statement.8 All banknotes, gold, securities and foreign currency which have been seized are forfeited for the benefit of the national revenue fund.9 The treasury may direct that anything seized be refunded or returned, in whole or in part, to the person from whom it was taken or who was entitled to its custody or possession at the time it was seized.10
Every person about to enter the Republic and every person in any place recognised as a place of arrival in the Republic who is requested to do so by the appropriate officer must: (a) declare whether or not he or she has with him or her any South African banknotes;11 and (b) produce them.12 The officer and any person acting under his or her directions may search that person and examine or search any article which the person has with him or her for the purpose of ascertaining whether he or she has any South African banknotes and may seize any notes produced or found unless either: (i) the officer is satisfied that the person is exempt from the prohibition imposed by the regulations;13 or (ii) the person produces to the officer a certificate granted by the treasury showing that the importation by that person of any banknotes does not involve a contravention of the regulations.14 No female may be searched except by a female.15 The officer and any person acting under his or her directions may examine or search any goods consigned or letters or parcels sent to the Republic from a place outside the Republic for the purpose of ascertaining whether they contain any South African banknotes and may seize them, unless satisfied that the treasury has granted a certificate which shows that the sending of such banknotes does not involve a contravention of the regulations and that the certificate was not granted in reliance on an incorrect statement.16 All banknotes seized are forfeited for the benefit of the national revenue fund.17 The treasury may direct that any notes seized be refunded or returned in whole or in part to the person from whom they were taken or who was entitled to have custody or possession of them at the time when they were seized.18 For the purposes of regulation 3(1)(a) any documents of title relating to securities must be deemed to be securities. Furthermore, any reference to securities mentioned in regulation 3(3), (4) and (5) must be construed as including references to such documents of title.19 1 Exchange Control Regulations reg 1. 2 Reg 3(3)(a). 3 Reg 3(3)(b). 4 Reg 3(3)(b)(i). 5 Reg 3(3)(b)(ii). 6 Reg 3(3). 7 Reg 3(4). 8 Ibid. 9 Reg 3(5). 10 Reg 3(5) proviso. 11 Reg 3(6)(a). 12 Reg 3(6)(b). 13 Reg 3(6)(b)(i). 14 Reg 3(6)(b)(ii). 15 Reg 3(6). 16 Reg 3(7). 17 Reg 3(8). 18 Reg 3(8) proviso. 19 Reg 3(9). 5.6 Blocked accounts A \"blocked account\" means an account opened with an authorised dealer to which foreign obligations may be paid when direct remittances are precluded by the regulations.1 Whenever a person in the Republic is under a legal obligation to make payment to a person outside the Republic but is precluded from making payment because of restrictions imposed by the Exchange Control Regulations, the treasury may order such person to make the payment to a blocked account.2 T h e t r e a s u r y m a y d i r e c t b y n o t i c e i n t h e Government Gazette t h a t a l l s u m s d u e b y a n y p e r s o n t o ( a ) p e r s o n s resident in a particular country,3 or (b) any particular person whom the treasury has reasonable grounds to suspect of having contravened the regulations relating to foreign exchange (hereinafter referred to as a \"creditor\")4 must be paid into a blocked account.5 Whenever the treasury has given such a direction: (a) any person who holds or may in the future hold moneys on behalf of a creditor or who is or may in the future become indebted to that creditor must immediately or, as the case may be, on the date on which the moneys become due or the debt becomes payable, pay the moneys or the sum representing the debt into the blocked account;6 (b) no person may, without the permission of the treasury and in accordance with any conditions it may impose, make any payment on behalf of any creditor as defined above;7 (c) any person who owes money to such a creditor but is not under a legal obligation to pay, unless called upon by his or her creditor to do so, must immediately report the amount of his or her indebtedness and the c o n d i t i o n s o n w h i c h t h e a m o u n t w i l l b e c o m e p a y a b l e , t o t h e t r e a s u r y . 8 T h e t r e a s u r y m a y , i f t h e a m o u n t i s payable at call, order the person to pay the amount into a blocked account immediately, or if the amount is payable within a specified period after notice, order the person to pay the amount into a blocked account within such period;9 (d) no person may, without the permission of the treasury and in accordance with any conditions it may impose, undertake any transaction in respect of property or assets belonging to or directly or indirectly controlled by any such creditor, or take any action by means of which any moneys which would otherwise have been accrued to that creditor cease to become due to him or her, or any action by means of which any obligation resting on that person to pay any moneys due or payable to that creditor into a blocked account would otherwise be evaded.10
Any payment made to a blocked account operates, to the extent of the sum paid, as a valid discharge to the person making payment.11 Where the liability is a liability to make the payment in currency other than Republic currency, the amount of the liability in Republic currency and the extent of the discharge are ascertained by converting the amount into Republic currency at a rate fixed by the treasury.12 No sum standing to the credit of a blocked account may be dealt with in any way except with the permission of the treasury and in accordance with any conditions it may impose.13 The treasury may grant exemptions from this regulation and may authorise the refund to any person of moneys paid by such person into a blocked account.14 1 Exchange Control Regulations reg 4(1); Barker Principles and Practice of Banking 516. 2 Reg 4(2); Scalabrino v Brey 1978 4 SA 571 (C). 3 Reg 4(3)(a). 4 Reg 4(3)(b). 5 Reg 4(3). 6 Reg 4(4)(a). 7 Reg 4(4)(b). 8 Reg 4(4)(c). 9 Ibid. 10 Reg 4(4)(d). 11 Reg 4(5). 12 Reg 4(6). 13 Reg 4(7). 14 Reg 4(8). 5.7 Acquisition by treasury of gold Every person resident in the Republic who becomes entitled to sell or to procure the sale of any gold must, within 30 days after becoming so entitled, offer that gold for sale to the treasury or to a person authorised by the treasury.1 The treasury or a person duly authorised may purchase that gold at a price fixed by the treasury, being a price which is not less than the market value of the gold on the day of purchase.2 These provisions do not impose on any person an obligation to offer any gold for sale if he or she is, in respect of that gold, exempted from these provisions by the treasury or by a duly authorised person.3 Such exemption may be withdrawn by the treasury or an authorised person.4 In any criminal proceedings against any person for failure to comply with these provisions, if there is produced any document of which such person is proved or has admitted him or herself to be the author and which contains a statement by that person from which it may reasonably be inferred that any gold is held by that person, it must be presumed, until the contrary is proved, that that person is entitled to sell or procure the sale of the gold in question.5 Similarly, in any criminal proceedings, if it is proved that that person is entitled to sell gold it must be presumed, until the contrary is proved, that the gold in question has not been offered for sale to the treasury or to an authorised person within the stipulated 30 days.6 1 Exchange Control Regulations reg 5(1). 2 Ibid. 3 Reg 5(2)(b). 4 Reg 5(2)(b). 5 Reg 5(3)(a). 6 Reg 5(3)(b). 5.8 Acquisition by the treasury of foreign currency Every person resident in the Republic who becomes entitled to sell or to procure the sale of any foreign currency must, within 30 days after becoming so entitled, make a written declaration of such foreign currency to the treasury or an authorised dealer.1 Every person resident in the Republic who becomes entitled to assign or to procure the assignment of any right to receive outside the Republic in respect of any credit or of any balance at a bank, payment of any amount in foreign currency must, within 30 days after becoming so entitled, make a written declaration of such right to the treasury or an authorised dealer.2 Any person who has made such a written declaration is deemed to have offered that foreign currency or right for sale to the treasury or an authorised dealer and the treasury or authorised dealer may purchase that foreign currency or right at a price which, in the case of foreign currency, is not less than the market value of that currency on the day of purchase, and in the case of a right, at a price which the treasury may fix.3 Any person from whom the treasury or an authorised dealer purchases foreign currency or a right must do all things necessary for the purpose of transferring that currency or assigning that right to the treasury or authorised dealer.4 No person who is entitled to receive a payment in a foreign currency may, except with the permission of the treasury and in accordance with such conditions as it may impose, do or refrain from doing any act with intent to secure that: (a) the receipt by him or her of the whole or any part of the payment in such currency is delayed;5 (b) the payment ceases in whole or in part to be receivable by him or her or receivable in that currency;6 (c) the contingency on which the right to receive payment is dependent does not eventuate.7 Any foreign currency or any right in respect of which a written declaration has been made but which has not been purchased by the treasury or an authorised person, must not be sold, transferred or otherwise disposed of without the permission of the treasury and in accordance with such conditions as it may impose.8 The provisions of these
regulations do not impose on any person an obligation in respect of any foreign currency or any right if he or she is exempted from the regulations by the treasury.9 Such exemption may be withdrawn by the treasury.10 Any person who has at any time since the commencement of the regulations been in the Republic is deemed, until the contrary is proved, to have been and still to be resident in the Republic.11 Subject to any exemption which may be granted by the treasury, a person may not export from the Republic goods which exceed in value R20 or a greater amount determined by the treasury unless the relative bill of entry export in respect of those goods is accompanied by a declaration completed and signed by the consignor or a person authorised by the consignor and attested by an authorised dealer. 12 Where goods are forwarded by post the declaration must be furnished to the postmaster at the time the parcel is handed in at the post office.13 Where goods are exported to countries outside the Republic from stations where there are no customs offices, a copy of the declaration must be handed to the attesting authorised dealer for submission to the South African Reserve Bank.14 The treasury may direct that the declaration must be completed in respect of any commodity or article irrespective of its value.15 \"Value\", for customs purposes, means value as defined in section 108 of the Customs Act16 and for the purposes of an authorised dealer the full proceeds of the goods exported.17 If, in any criminal proceedings against any person for a contravention of the regulations relating to the sale of foreign currency, there is produced any document of which such person is proved or has admitted him or herself to be the author and which contains a statement by that person from which it may reasonably be inferred that any foreign currency is held by him or her, it must be presumed, until the contrary is proved, that that person is entitled to sell or procure the sale of the foreign currency in question.18 If, in any criminal proceedings against any person for a contravention of the regulations relating to the assignment of a right to receive outside the Republic payment of any amount in a foreign currency, there is produced any document of which such person is proved or has admitted him or herself to be the author, and which contains a statement by that person from which it may be reasonably inferred that any amount is standing to his or her credit outside the Republic or that he or she has any balance at a bank outside the Republic, until the contrary is proved, it must be presumed that such person is entitled to assign or procure the assignment of such right.19 If in any criminal proceedings against any person for such contravention it is proved that that person is entitled to sell or to procure the sale of or to assign or to procure the assignment of any foreign currency, it must be presumed, until the contrary is proved, that the written declaration has not been made to the treasury or an authorised dealer within the required period.20 1 Exchange Control Regulations reg 6(1); S v Placido 1980 2 SA 850 (T). 2 Reg 6(2). The validity of reg 6(2) was upheld in S v Bedford 1979 3 SA 656 (D). 3 Reg 6(3). 4 Reg 6(4). 5 Reg 6(5)(a). 6 Reg 6(5)(b). 7 Reg 6(5)(c). 8 Reg 6(6). 9 Reg 6(7). 10 Reg 6(8). 11 Reg 6(9); S v Placido supra. 12 Reg 6(10)(a). 13 Reg 6(10)(a) proviso (i). 14 Reg 6(10)(a) proviso (ii). 15 Reg 6(10)(b). 16 Act 55 of 1955. This Act has been repealed: see Customs and Excise Act 91 of 1964s 72. See reg 6(10)(c)(i). 17 Reg 6(10)(c)(ii). 18 Reg 6(11); S v Placido supra. 19 Reg 6(12). 20 Reg 6(13). 5.9 Declaration of foreign assets and liabilities Every person resident in the Republic who is entitled to sell or to procure the sale of any foreign asset must, within 30 days after becoming so entitled, make a written declaration of such foreign asset to the treasury or an authorised dealer.1 This declaration must state when and how the foreign asset was acquired, where it is held and whether and to what extent it is held in cover for any foreign liability.2 Any foreign asset in respect of which a declaration has been made, must not be sold, transferred or otherwise disposed of without the permission of the treasury and in accordance with such conditions as it may impose.3 This provision does not impose on any person an obligation in respect of any foreign asset if he or she is exempted from this regulation by the treasury.4 The treasury may withdraw any exemption granted.5 Any person who has at any time since the date of publication of this regulation been in the Republic is deemed, until the contrary is proved, to have been and still to be resident in the Republic.6 1 Exchange Control Regulations reg 7(1). The validity of reg 7(1) was upheld in S v Bedford 1979 3 SA 656 (D). 2 Reg 7(1); S v Bedford supra. 3 Reg 7(2); S v Bedford supra. 4 Reg 7(3). 5 Reg 7(4). 6 Reg 7(5). 5.10 Power to prescribe currencies in respect of certain transactions The treasury may from time to time prescribe by notice in the Government Gazette or by instructions to authorised dealers the currency or the manner in which payment may or may not be made in connection with imports or exports or other transactions involving payments between persons in the Republic and persons
outside.1 No person may, except with the permission of the treasury and in accordance with such conditions as it may impose, make or receive payment otherwise than in the currency or in the manner prescribed.2 Without prejudice to the generality of these provisions, any notice and instructions may relate to payments (including any particular payment): (a) in connection with the import or export of any commodity specified in the notice or instructions to or from all countries or to or from all countries except any countries specified in the notice or instructions or to or from any country so specified,3or (b) in connection with any particular transaction.4 Where the treasury has prescribed the currency or manner in which payment may or may not be made in connection with the export of a commodity to a country, the provisions regarding declarations to be made in regard to export of goods apply mutatis mutandis to the export from the Republic of any commodity to that country.5 1 Exchange Control Regulations reg 8(1). 2 Ibid. 3 Reg 8(2)(a)(i)(iii). 4 Reg 8(2)(b). 5 Reg 8(3) read with reg 6(10). 5.11 Limitation of optional ports of destination No person may, except with the permission of the treasury and in accordance with such conditions as it may impose, consign any goods to any destination other than that specified in the declaration in regard to foreign exchange proceeds of export1 unless the other destination is in the same monetary area.2 Similarly, no person may give or accept instructions after the despatch of the goods for their diversion to any other destination unless such other destination is in the same monetary area.3 If, in any criminal proceedings, it is proved that goods have been diverted to a country other than that designated as the destination of the goods on the prescribed documents, it will be presumed, until the contrary is proved, that the goods were consigned to and received in such other country and not the country designated on such documents.4 1 Exchange Control Regulations reg 9(1) read with reg 6(10)(a). 2 Reg 9(1). 3 Ibid. 4 Reg 9(2). 5.12 Restriction on export of capital No person may, except with the permission of the treasury and in accordance with such conditions as it may impose, export from the Republic during any period of 12 months a total quantity of goods which exceeds in value1 R20 or such greater amount as determined by the treasury if: (a) no payment for the goods has been or is to be received in the Republic from a person outside;2 or (b) the goods are exported at a price which is less than the value thereof;3 or (c) the period within which payment for the goods is to be made exceeds six months from the date of shipment from the Republic or such shorter period as an authorised dealer may determine in respect of such goods.4 Similarly a person may not, without the required permission, take out of the Republic goods, including personal apparel, household effects and jewellery which have a value in excess of R600 or of such greater amount as d e t e r m i n e d b y t h e t r e a s u r y . 5 T h e p r o v i s i o n s r e l a t i n g t o t h e d i s c l o s u r e a n d p r o d u c t i o n o f a n d t h e s e a r c h f o r banknotes, gold, securities and foreign currency and the forfeiture thereof apply to goods taken out of the Republic in terms of this subregulation.6 No person may, without the required permission, enter into any transaction in terms of which capital or any right to capital is directly or indirectly exported from the Republic.7 1 In terms of the Exchange Control Regulations reg 10(3) and the Customs and Excise Act 91 of 1964s 72. 2 Reg 10(1)(a)(i); S v De Blom 1977 3 SA 513 (A). 3 Reg 10(1)(a)(ii). 4 Reg 10(1)(a)(iii). 5 Reg 10(1)(b). 6 Reg 10(2) read with reg 3(3), (4) and (5). 7 Reg 10(1)(c); S v Runds 1978 4 SA 304 (A); S v De Castro 1979 2 SA 1 (A). 5.13 Assignment to treasury of right to exported goods Whenever a person has exported goods from the Republic and has failed to sell those goods within six months from the date of shipment or within such shorter period as may have been determined by an authorised dealer, and without permission to export such goods without sale or without payment within the prescribed period, then that person must within 14 days from the date of expiry of that period report in writing to the treasury or to an authorised dealer that the said goods have not been sold, and the treasury may then order that person to assign to the treasury or to a person authorised by the treasury his right to those goods.1 The sum payable as consideration for any assignment is a sum determined by or on behalf of the treasury but must not be less than the amount realised by the treasury after deduction of the cost of realisation.2 After the coming into force of this regulation, a person may not export any goods on conditions which would preclude him or her from giving effect to an order of the treasury to assign the goods in question.3 1 Exchange Control Regulations reg 11(1). 2 Ibid.
3 Reg 11(2). 5.14 Goods purchased outside the Republic Whenever a person in the Republic has purchased goods in any country outside the Republic and has paid for or made a payment on account of those goods, but they have not been consigned to the Republic within four months from the date on which the payment was made, that person must within 14 days from the date of expiry of the fourmonth period report in writing to the treasury or an authorised dealer that the goods have not been consigned and the treasury may then order that person to assign to it or to a person authorised by it, his or her right to the goods.1 The sum payable for any assignment must be such as the treasury may fix but must not be less than the amount realised by the treasury after deduction of the cost of realisation.2 After the date of the coming into force of this regulation a person may not purchase any goods on conditions which would preclude him or her from giving effect to an order by the treasury to a person to assign to it or to a person authorised by it the right to the goods.3 If, in any criminal proceedings against any person for failure to make the required report to the treasury or an authorised dealer, it is proved that that person was unable after the expiration of a period of six months from the date upon which any payment was made by him or her to produce the bill of entry import in respect of the goods in question after having been called upon to do so by the treasury or an authorised dealer, it must be presumed, until the contrary is proved, that the goods in question were not consigned to the Republic within four months from that date.4 No person in the Republic who has purchased any means of transport outside the Republic may, after the means of transport has been consigned and brought to the Republic, permit such means of transport to leave the Republic for the conveyance of any persons or goods for reward outside the Republic, except with the consent of the treasury and subject to such conditions as it may impose.5 \"Means of transport\" includes any ship, aircraft, motor vehicle, tractor or roller.6 1 Exchange Control Regulations reg 12(1). 2 Ibid. 3 Reg 12(2). 4 Reg 12(3). 5 Reg 12(4). 6 Ibid. 5.15 Prohibition of export of goods imported from countries outside the sterling area No person may, except with the permission of the treasury and in accordance with such conditions as it may impose, export from the Republic any article imported from any country outside the sterling area.1 An article manufactured in the Republic in whole or in part from imported products, materials or parts is deemed to be of South African origin and not to have been imported from a country outside the sterling area.2 The term \"manufactured\" includes processed or assembled.3 1 Exchange Control Regulations reg 13(1). 2 Reg 13(2). 3 Reg 13(3). 5.16 Restriction on dealings in securities belonging to nonresidents No one may, without permission from the treasury or a person authorised by the treasury and in accordance with such conditions as the treasury or the authorised person may impose: (a) acquire or dispose of any controlled security.1 \"Controlled security\" means any security which is registered in the name of a nonresident, or of which a nonresident is the owner, or in which a nonresident has an interest, or any security acquired from a nonresident or acquired outside the Republic by any person, irrespective of the residence of that person;2 (b) act as nominee for a nonresident or appoint a nonresident as a nominee in respect of any dealings in securities.3 \"Nominee\" means a person through whose agency all or any of the rights of the owner of a security are exercised.4 \"Nonresident\" means a person resident outside the Republic;5 (c) make any entry in a security register which involves the transfer of the security into or out of the name of a nonresident;6 (d) change an address of a nonresident in any security register, but a change to an address in the same monetary area as that currently recorded in the register is permissible;7 (e) enter in a security register or do any act with the intent to secure the entry in such register of an address in the Republic if he or she knows or has reason to believe that the purchaser of the security is a nonresident or that a nonresident has an interest in the security;8 (f ) transfer a security owned by a nonresident or in which a nonresident has an interest from a United Kingdom register or from the London section of a register to a South African register.9 Any person who holds, possesses or has in his or her custody any controlled securities must submit those securities to an authorised dealer within 30 days from the commencement of this regulation or within 30 days from the date on which the person becomes the holder of those securities or on which those securities came into his or her possession or are placed in his or her custody, whichever is the later date. 10 These controlled securities must be accompanied by a list giving the following particulars: (a) the full name and country of residence of the owner with a signed declaration by the holder that to the best of his or her knowledge the owner is actually resident in the country stated;11
(b) the name of the company or body which issued the securities;12 (c) the total number of securities;13 (d) the full name and residential address of the person in possession of the securities or who has the securities in his or her custody.14 For the purpose of facilitating identification of controlled securities the treasury may direct authorised dealers to affix to those securities their stamp with such indorsement as the treasury may determine.15 1 Exchange Control Regulations reg 14(1)(a). 2 Reg 14(3)(a)(i)(ii). 3 Reg 14(1)(b). 4 Reg 14(3)(c). 5 Reg 14(3)(b). 6 Reg 14(1)(c). 7 Reg 14(1)(d). 8 Reg 14(1)(e). 9 Reg 14(1)(f ). 10 Reg 14(2)(a). 11 Reg 14(2)(b)(i). 12 Reg 14(2)(b)(ii). 13 Reg 14(2)(b)(iii). S v Ismail 1993 1 SACR 26 (D). 14 Reg 14(2)(b)(iv). 15 Reg 14(2). 5.17 Prohibition of dealings in bearer securities and bearer options No one may pay any dividend or interest coupon issued in respect of any bearer security irrespective of whether such coupon became payable before or after commencement of the regulation.1 No one may issue any bearer option or extend the currency period of any existing bearer option.2 No one may dispose of, acquire or otherwise deal in any bearer security or any bearer option issued after the date of publication of the regulation in the Government Gazette.3 The treasury or a person authorised by it may grant exemption from the provisions of these regulations.4 The provisions of the regulations relating to applications for permission to convert bearer securities apply mutatis mutandis in respect of applications for exemption relating to bearer securities or to dividend or interest coupons issued in respect of such bearer securities.5 The owner of any bearer security may, with the permission of the treasury and in accordance with such conditions as it may impose, convert that security into a registered security.6 Application for permission to convert any bearer security into any registered security must be accompanied by a sworn declaration in the form prescribed by the treasury, duly completed by the owner of the security or his or her authorised agent.7 The provisions of this regulation apply in respect of all bearer securities and bearer options irrespective of whether such securities or options were or are issued inside or outside the Republic.8 \"Option\" means the right to subscribe for or take up the whole or any part of an issue of capital.9 1 Exchange Control Regulations reg 15(1). 2 Reg 15(2). 3 Reg 15(3)(a)(b). 4 Reg 15(6)(a). 5 Reg 15(6)(b). 6 Reg 15(4). 7 Reg 15(5). 8 Reg 15(7). 9 Reg 15(8). 5.18 Control of capital issues Except with the consent of the treasury and in accordance with such conditions as it may impose, no person may, during any period of 12 months: (a) make in the Republic an issue or issues of capital which amount in the aggregate to more than R10 000;1 or (b) renew or postpone the date of maturity of securities maturing for repayment in the Republic which amount in the aggregate to more than R10 000.2 The treasury may from time to time, by notice in the Government Gazette: (a) exempt particular classes of issuers of capital, either generally or in respect of particular classes of issues of capital, from the operation of the regulation;3 or (b) increase, either generally or in respect of particular classes of issuers or issues of capital, the prescribed aggregate exemption limit of R10 000.4 It may by similar notice withdraw the firstmentioned notice or reduce to not less than R10 000 any exemption limit prescribed in that notice, as the case may be.5 A person who raises capital in the Republic by the issue of any securities, whether within or outside the Republic, or who issues any securities, whether for cash or otherwise, or receives any money on loan on the terms or in the expectation that the loan will be repaid wholly or partly by the issue of securities or by the transfer of any securities issued after the making of a loan, is deemed to make an issue of capital.6 The amount of capital issued or to be issued is deemed to be the amount to be raised by the issue or the total
nominal value of the securities, whichever is the greater.7 The raising of any loan by any local authority is deemed to constitute an issue of capital, whether or not securities are issued or transferred in connection with such loan.8 No local authority may without the written consent of the treasury raise any loan outside the Republic.9 If there is included in any advertisement, prospectus or other document which offers for subscription any securities, any statement intimating that the treasury has approved or consented to the issue of the securities, that statement must be included only at the top or commencement of the advertisement, prospectus or other document and must be made and qualified in the following words: \"The Treasury has consented under Exchange Control Regulation 16 to the issue of the securities referred to hereunder, but that consent does not imply that the Treasury has investigated or is responsible in any way for the soundness of the proposals involved or for the correctness of any statements made or opinions or estimates given in connection with such proposals.\"10 1 Exchange Control Regulations reg 16(1)(a). 2 Reg 16(1)(b). 3 Reg 16(2)(a). 4 Reg 16(2)(b). 5 Reg 16(2). 6 Reg 16(3)(a)(i)(ii). 7 Reg 16(3)(b). 8 Reg 16(4). 9 Reg 16(5). 10 Reg 16(6). 5.19 Businesses controlled by persons outside the Republic Where the control of any business is established outside the Republic, any transaction with a branch or subsidiary of that business in the Republic must be treated as if the branch or subsidiary were a separate person.1 The manager or controller of that branch or subsidiary in the Republic must assume the same obligations under the regulations as he or she would have been required to assume if that branch or subsidiary were independent of control from outside the Republic.2 1 Exchange Control Regulations reg 17. 2 Ibid. 5.20 Provision of security The treasury or a person authorised by it may order any person to provide security that he or she will comply, either generally or in respect of any particular transaction, with the provisions of any of these regulations specified by the treasury or by a person authorised by it.1 The security must be in the form and amount determined by the treasury.2 Where the person who has provided security has failed to comply with the provisions of the regulations in respect of which the security has been provided, the treasury may direct that the security be forfeited for the benefit of the national revenue fund.3 The forfeiture of that security does not prevent any other action against the person concerned for his or her failure to comply with the provisions of these regulations.4 1 Exchange Control Regulations reg 18(1). 2 Ibid. 3 Reg 18(2). 4 Ibid. 5.21 Furnishing of information The treasury or any person authorised by it may order any person to furnish any information at that person's disposal which the treasury or authorised person deems necessary for the purposes of the regulations, and any person appointed by the treasury for the purpose may enter the residential or business premises of a person so ordered and may inspect any books or documents belonging to or under the control of that person.1 If any person makes any statement in any information furnished in compliance with that order which is in conflict with any other statement previously made by him or her in giving information required in connection with the subject matter of that order, he or she is deemed to have made an incorrect statement in terms of the regulations relating to penalties2 and may, on being charged with making two conflicting statements, be convicted of making an incorrect statement in contravention of that regulation upon proof of the two statements in question and without proof as to which of the said statements was incorrect, unless he or she proves that when each statement was made he or she believed it to be true.3 1 Exchange Control Regulations reg 19(1). 2 Reg 22. 3 Reg 19(2). 5.22 Stamp duty and forms Stamp duty is not chargeable on any document made for the sole purpose of meeting the requirements of the regulations.1 The treasury may prescribe such forms for the purpose of these regulations as it may think expedient.2 1 Exchange Control Regulations reg 20. 2 Reg 21. 5.23 Offences and penalties It is an offence for any person to contravene or fail to comply with any provision of the regulations or to contravene or fail to comply with the terms of any notice, order, permission, exemption or condition made, conferred or imposed under the regulations.1 It is an offence for any person to obstruct any person in the execution of any power or function assigned to him or her by the regulations or to make any incorrect statement in any declaration made or return
rendered for the purposes of the regulations, unless that person proves that he or she did not know and could not by the exercise of a reasonable degree of care have ascertained that the statement was incorrect.2 It is an offence for any person to refuse or neglect to furnish any information which he or she is required to furnish under the regulations.3 Any person convicted of any of these offences is liable to a fine not exceeding R250 000 or to imprisonment for a period not exceeding five years, or to both such fine and imprisonment.4 Where a person is convicted of an offence against any of the regulations in relation to any security, foreign currency, gold, banknote, cheque, postal order, bill, note, debt, payment or goods, the fine which may be imposed on that person is a fine not exceeding R250 000 or a sum equal to the value of the security, foreign currency, gold, banknote, postal order, bill, note, debt, payment or goods, whichever is the greater.5 1 Exchange Control Regulations reg 22. 2 Ibid. 3 Ibid. S v Placido 1980 2 SA 850 (T); Francis George Hill Family Trust v SA Reserve Bank 1990 3 SA 704 (T); SA Reserve Bank v Torwood Properties (Pty) Ltd 1997 2 SA 169 (A) 174; affirming 1996 1 SA 215 (W); S v African Bank of SA Ltd 1990 2 SACR 585 (W). 4 Ibid. 5 Ibid. 5.24 Attachment of money or goods The regulations also make provision for the attachment of certain money and goods and the blocking of certain accounts; the forfeiture and disposal of money or goods attached or in respect of which orders have been issued or made; the recovery of certain amounts by the treasury; the review of or institution of actions in connection with attachment and forfeiture of certain money or goods; and the delegation of powers by the minister.1 The regulations authorise the treasury to prohibit any person from withdrawing or causing to be withdrawn any money held in any account. The money which the prohibition relates to must be money of the person who, as a matter of fact or as a matter of reasonable suspicion, has committed a contravention of the regulations or has benefited or been enriched thereby. There must be a link between the money which is to be the subject of the prohibition and the person from whom it is to be recovered.2 1 Exchange Control Regulations reg 22AE. See Groenewald v Behr 1998 4 SA 583 (T). 2 Key v Van Staden 1995 4 SA 328 (T). 5.25 Definition of sterling area In addition to the Republic of South Africa and Namibia the following areas are declared to be included in the sterling area: United Kingdom, Channel Islands and Isle of Man, Australia, Bahrain, Bangladesh, Barbados, Botswana, Brunei, Ceylon (now Sri Lanka), Cyprus, Fiji, the Gambia, Ghana, Guiana, Iceland, India (including Sikkim), Republic of Ireland, Jamaica, Hashemite Kingdom of Jordan, Kenya, Kuwait, Lesotho, Malawi, Malaysia, Malta, Mauritius, New Zealand, Nigeria, Pakistan, Qatar, Samoa, Sierra Leone, Singapore, Solomon Islands, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Uganda, United Arab Emirates, Yemen, Zambia, any protectorate, protected state or trust territory within the meaning of the British Nationality Acts, 1948 and 1958, and any British dominion not mentioned before, except Canada and Rhodesia (now Zimbabwe).1 1 Orders and Rules Under the Exchange Control Regulations order 1. The regulations do not necessarily refer to the correct current nomenclature. 5.26 Powers of the Reserve Bank and appointment of authorised dealers The minister has appointed the Reserve Bank to carry out any powers and functions assigned to the treasury by regulations1 with the exception of those in regulations 3(5) and (8), 16, 20 and 22.2 Certain specified banks have been appointed as authorised dealers.3 The minister has authorised these banks to order any person to furnish information required by them for the purposes of and in connection with their functions under the regulations.4 1 Exchange Control Regulations. The minister is the Minister of Finance. 2 Orders and Rules Under the Exchange Control Regulations order 2. 3 Order 3(a). 4 Order 3(b). 5.27 Exemption of certain countries from regulation 5.3 It is not necessary to obtain the permission of the treasury: (a) to take or send out of the Republic any banknotes to Namibia, Lesotho and Swaziland; (b) to draw or negotiate any bill of exchange or promissory note or (only in the case of Namibia) to transfer any security or to acknowledge any debt so that a right on the part of such person or any other person to receive a payment in the Republic is created or transferred as consideration for: (i)the receiving by such person or any other person of a payment or the acquisition by such person or any other person of property in Namibia, Lesotho and Swaziland; or (iia) right on the part of such person or any other person to receive a payment or acquire property in Namibia, Lesotho and Swaziland;1 or to make or receive any payment as such consideration. 1 Orders and Rules Under the Exchange Control Regulations order 4. 5.28 Other orders and rules Provision is made for the forms to be used to declare foreign exchange
proceeds of exports1 and foreign assets and liabilities.2 Goods exported to Lesotho and Swaziland are exempted from the regulation relating to the export of goods from the Republic.3 The treasury has prescribed that, except with the permission of a bank authorised under the Exchange Control Regulations to deal in foreign exchange, Republic currency may not be received in payment by any person in respect of goods exported from the Republic by that person.4 The minister has exempted all companies and persons, other than municipalities or other local authorities, from the operation of the regulation5 regarding control of capital issues.6 The minister has, in respect of the raising of loans by any local authority, increased to one million rand the aggregate exemption limits of R10 000.7 A person who desires information or advice on exchange or currency matters or who requires approval or permission in respect of exchange, currency or gold transactions should apply to the exchange control through his or her bankers in the Republic or, if such person has no bankers, through one of the banks appointed as authorised d e a l e r s .8 T h e f o r m s o f r e t u r n s , a p p l i c a t i o n s , d e c l a r a t i o n s a n d p e r m i t s p r e s c r i b e d b y t h e t r e a s u r y f o r u s e i n connection with transactions governed by the regulations are not stocked by the treasury or the government printer but by the banks appointed as authorised dealers.9 1 Orders and Rules Under the Exchange Control Regulations order 5. 2 Order 6. 3 Order 7; reg 6(10)(a). 4 Order 8. 5 Exchange Control Regulations reg 16(1). 6 Order 9(a). 7 Order 9(b). 8 Order 10(a). 9 Order 10(b). 6 Money laundering 6.1 Introduction 6.1.1 The term defined Money laundering or money laundering activity in broad terms means any activity which has or is likely to have the effect of concealing or disguising the nature, source, location, disposition or movement of the proceeds of unlawful activities or any interest which anyone has in such proceeds.1 1 Financial Intelligence Centre Act 38 of 2001s 1(1). 6.1.2 Regulation of money laundering Money laundering is regulated by: (a) the Prevention of Organised Crime Act;1 (b) the Financial Intelligence Centre Act;2 and (c) the Banks Act.3 1 121 of 1998; and the Prevention of Organised Crime Regulations GN R416, 1 April 1999 as amended by Government Gazette 21504 GN R 850, 1 September 2000. 2 38 of 2001; and the regulations in terms of the Act: Government Gazette 24176 GN R1595 and 1596, 20 December 2002. 3 94 of 1990; and regs 46, 47 and 48 published under the Act: Government Gazette 22737 GN R1112, 8 November 2000 as amended by GN R1464, 22 November 2002. 6.2 The Prevention of Organised Crime Act 6.2.1 Remit of the Act The Prevention of Organised Crime Act1 applies to \"proceeds of unlawful activity\" which is much wider than \"proceeds of crime\". 1 121 of 1998. 6.2.2 Terms defined \"Proceeds of unlawful activity\" is defined in the Prevention of Organised Crime Act1 as \"any property or any service, advantage, benefit or reward which was derived, received or retained, directly or indirectly, in the Republic or elsewhere, at any time before or after the commencement of this Act, in connection with or as a result of any unlawful activity carried on by any person, and includes any property representing property so derived.\"2 \"Unlawful activity\" is defined to mean \"any conduct which constitutes a crime or which contravenes any law whether such conduct occurred before or after the commencement of the Act and whether such conduct occurred in the Republic or elsewhere\".3 1 121 of 1998. 2 S 1(1)(xv). 3 National Director of Public Prosecutions v Basson [2002] 2 All SA 255 (SCA). 6.2.3 \"Knows and ought reasonably to have known/suspected\" T h e P r e v e n t i o n o f O r g a n i s e d C r i m e A c t1 restricts the definitions of the offences relating to proceeds of unlawful activities to situations where the person \"knows or ought reasonably to have known\", or, in the case of the reporting obligation in the Financial Intelligence Centre Act,2 suspects or knows that the property is the proceeds of unlawful activities.3 For purposes of the Act a person has knowledge of a fact if:
(a) the person has actual knowledge of the fact; or (b) the court is satisfied that the person believed there to be a reasonable possibility of the existence of that fact and then failed to obtain information to confirm the existence of that fact.4 A person who negligently fails to appreciate the criminal nature of the money or property and engages in a transaction involving such money or property, commits an offence. For purposes of the Act, a person ought reasonably to have known or suspected a fact if the conclusions that he or she ought to have reached are those which would have been reached by a reasonably diligent and vigilant person having both: (a) the general knowledge, skill, training and experience that may reasonably be expected of a person in his or her position; and (b) the general knowledge, skill, training and experience that he or she in fact has.5 1 121 of 1998. 2 38 of 2001. 3 Prevention of Organised Crime Act 121 of 1998s 29. 4 Prevention of Organised Crime Act s 1(2). 5 S 1(3). 6.2.4 Money laundering offences The Prevention of Organised Crime Act1 creates three main general money laundering offences, namely: (a) The substantive money laundering offence. In terms of this offence, Any person who knows or ought reasonably to have known that property is or forms part of the proceeds of unlawful activities and: (b) enters into any agreement or engages in any arrangement or transaction with anyone in connection with that property, whether such agreement, arrangement or transaction is legally enforceable or not; or (c) performs any other act in connection with such property, whether it is performed independently or in concert with any other person, which has or is likely to have the effect of: (i) concealing or disguising the nature, source, location, disposition or movement of the said property or the ownership thereof or any interest which anyone may have in respect thereof; or (ii) enabling or assisting any person who has committed or commits an offence, whether in the Republic or elsewhere, to avoid prosecution, or to remove or diminish any property acquired directly, or indirectly, as a result of the commission of an offence, will be guilty of an offence.2 (b) Assisting another to launder the proceeds of unlawful activities. In terms of this offence, A person commits an offence in terms of s 5 if he or she knows or ought reasonably to have known that another person has obtained the proceeds of unlawful activities and enters into any agreement with anyone or engages in any agreement or transaction whereby: (i) the retention or the control by or on behalf of the said other person of the proceeds of unlawful activity is facilitated; or (ii) the proceeds of unlawful activities are used to make funds available to the other person, or to acquire property on his or her behalf, or to benefit him or her in any other way.3 (c) Acquisition, use or possession of proceeds of unlawful activities. In terms of this offence, any person who acquires, uses or has possession of property and who knows or ought reasonably to have known that it is or forms part of the proceeds of unlawful activities of another person, commits an offence.4 1 121 of 1998. 2 S 4. 3 S 5. 4 S 6. 6.2.5 Penalties A person who is convicted of a money laundering offence1 is liable to a maximum fine of one hundred million rand or to imprisonment for a period not exceeding 30 years.2 A person who is charged with negligently committing one of the money laundering offences3 can raise as a defence the fact that he or she reported under the Financial Intelligence Centre Act.4 1 Prevention of Organised Crime Act 121 of 1998ss 4 5 6. 2 S 8. 3 Ss 4 5 6. 4 38 of 2001. 6.3 Financial Intelligence Centre Act 6.3.1 Introduction In broad terms, the Financial Intelligence Centre Act1 seeks to combat money laundering activities. It complements the Prevention of Organised Crime Act2 and provides the administrative framework for money laundering. Different sections of the Financial Intelligence Centre Act3 will come into force at different times.4 It establishes a Financial Intelligence Centre5 and tasks it with the responsibility of identifying the proceeds of unlawful activities and the combating of money laundering. Other objectives include disclosing information to
investigating authorities, the intelligence services and the South African Revenue Services under defined circumstances and exchanging information with similar bodies in other countries regarding money laundering activities.6 To achieve its objectives the centre must process, analyse and interpret information disclosed to it, inform and co operate with investigating and other authorities and give guidance to persons who fall within the purview of the Act regarding their performance in terms of the Act.7 1 38 of 2001. 2 121 of 1998. 3 38 of 2001. 4 Ss 120 and ss 7282 (except s 79) came into operation on 1 February 2002. Schs 1,2 and 3 came into effect on 1 March 2002, and s 29 on 3 February 2003. See also Government Gazette 24349 Proc 5 of 2003, 31 January 2003. 5 S 2. 6 S 3(1)(2). 7 S 4. 6.3.2 Application of the Act The Financial Intelligence Centre Act1 applies to \"accountable institutions\",2 t o supervisory bodies,3 to reporting institutions4 and to persons who \"carry on business\".5 Different obligations are imposed on the different institutions or persons, with the most onerous of these being imposed on \" accountable institutions\". Banks and other financial institutions are \"accountable institutions\" within the definition of the Act.6 1 38 of 2001. 2 Defined in Sch 1 to the Act. 3 Defined in Sch 2. 4 Defined in Sch 3. 5 S 29. 6 Sch 1. 6.3.3 Money laundering control measures The Financial Intelligence Centre Act1 imposes extensive \"know your customer\" requirements on accountable institutions. Among other things, accountable institutions are obliged to identify and verify new and existing customers,2 and keep records of the identity of the client, the nature of the transaction, the parties to that transaction and the amounts involved.3 Accountable institutions are also obliged to formulate and implement internal rules,4 to provide training to all employees and to appoint a person to monitor compliance.5 Failure to implement rules, to provide training and to appoint a compliance person constitutes an offence.6 A person convicted of one of these offences is liable to a fine not exceeding one million rand or to imprisonment for a period not exceeding five years.7 A c c o u n t a b l e i n s t i t u t i o n s a r e a l s o o b l i g e d t o r e p o r t c a s h8 t r a n s a c t i o n s9 ( a b o v e a l i m i t t o b e p r e s c r i b e d ) a n d i n t e r n a t i o n a l e l e c t r o n i c t r a n s f e r s10 t o t h e c e n t r e . F a i l u r e t o r e p o r t c a s h t r a n s a c t i o n s o r e l e c t r o n i c t r a n s f e r s constitutes an offence.11 The penalty on conviction is imprisonment for a period not exceeding five years or a fine not exceeding one million rand.12 Suspicious13 and unusual transactions must also be reported. This obligation is, however, more widely cast in that it applies not only to accountable institutions but to any person who carries on business.14 Any person who carries on a business or is in charge of or manages a business and who knows or suspects that: (a) the business has received or is about to receive the proceeds of unlawful activities; (b) a transaction or series of transactions to which the business is a party: (i) facilitated or is likely to facilitate the transfer of the proceeds of unlawful activities; (ii) has no apparent business or lawful purpose; (iii) is conducted for the purpose of avoiding giving rise to a reporting duty under the Act; or (iv) may be relevant to the investigation of an evasion or attempted evasion of a duty to pay any tax, duty or levy imposed by legislation administered by the Commissioner for the South African Revenue Service; or (c) the business has been used or is about to be used in any way for money laundering purposes, must, within the prescribed period after the knowledge was acquired or the suspicion arose, report to the centre the grounds for the knowledge or suspicion and the prescribed particulars concerning the transaction or series of transactions.15 Transactions in respect of which inquires were made but which were not concluded must also be reported if they may have caused any of the consequences set out above.16 To avoid any duplicity of reports in respect of the same transaction and in order to provide for further evaluation of this suspicion, provision is made for employees to report their suspicions to a money laundering reporting officer or senior person within the business.17 Failure to report constitutes an offence.18 A person convicted of this offence will be liable to imprisonment for a period not exceeding 15 years, or to a fine not exceeding ten million rand.19 1 38 of 2001. 2 S 21. 3 S 22. A number of exemptions have been granted in terms of the regulations: Government Gazette 24176 GN R 1595, 20 December 2002.
4 S 42. 5 S 43. 6 Ss 6162. 7 S 68(2). 8 S 1. 9 S 28. 10 S 31. 11 Ss 54 56. 12 S 68. 13 In R v van Heerden 1958 3 SA 150 (T) 152. 14 S 29(1). 15 S 29(1). 16 S 29(2). 17 See s 69. 18 S 52(2). 19 S 68. 6.3.4 Tipping off No person who made or must make a report may disclose that fact or any information regarding the contents of any such report to any other person, including the person in respect of whom the report is or must be made, unless authorised to do so in terms of the Financial Intelligence Centre Act.1 No person who knows or suspects that a report has been made or is to be made may disclose that fact or any information regarding the contents of any such report to any other person unless so authorised in terms of the Act.2 Failure to comply is an offence. If convicted, a person is liable to imprisonment for a period not exceeding 15 years or to a fine not exceeding ten million rand.3 1 38 of 2001s 29(3). 2 S 29(4). 3 S 68. 6.3.5 Secrecy and confidentiality The obligation to report and disclose information overrides any duty of secrecy owed to the customer or client whether such duty is imposed by any law, the common law or any agreement.1 The common law right to legal professional privilege as between an attorney and his or her client is preserved.2 1 Financial Intelligence Centre Act 38 of 2001s 37(1). 2 S 37(2). 6.3.6 Protection of persons reporting No action, whether criminal or civil, can be instituted against any person who in good faith has made a report as required by the Financial Intelligence Centre Act.1 A person who has made, initiated or contributed to a report cannot be made to give evidence in criminal proceedings. Such person is a competent but not a compellable witness. Unless a person gives evidence at the criminal proceedings no evidence concerning his or her identity will be allowed.2 1 38 of 2001s 38(1). 2 S 38(2)(3). 6.3.7 Continuation of transactions A person who has reported in terms of section 29 of the Financial Intelligence Centre Act1 may continue with the transaction unless the centre directs otherwise.2 1 38 of 2001. 2 S 33. 6.4 Banks Act 6.4.1 General Under the Banks Act,1 banks are required to establish independent compliance functions as part of their risk management and to implement and maintain policies and procedures to guard against the bank being used for purposes of market abuse including money laundering.2 1 94 of 1990. 2 Regs 46, 47 and 48 published in Government Gazette 22737, 5 October 2001. 7 Financial Advisory and Intermediary Services Act 7.1 General The Financial Advisory and Intermediary Services Act1 regulates the business of rendering financial advice2 and intermediary services3 to clients in respect of a wide range of financial products.4 Included in the definition of \"financial product\" is a deposit as defined in the Banks Act5 in respect of deposits which are for a period of more than 12 months. Deposits of less than 12 months will be subject to a specific code.6 A bank or mutual bank will not be rendering an \"intermediary service\"7 where the bank or mutual bank acts merely as a conduit between a client and another product supplier.8 With effect from a date determined by the minister by notice in the Government Gazette, a person may not act or offer to act as a financial services provider unless such person has been issued with a licence and is registered.9 1 37 of 2002. 2 Defined in s 1(1). 3 S 1(1). 4 Ibid. 5 94 of 1990. 6 Financial Advisory and Intermediary Services Act 37 of 2002s 15(2)(b). 7 S 1(1). 8 S 3(b).
9 S 7(1). Precedents CONTENTS A Opening and management of accounts 1 Application to open a cheque account 2 Signing instructions (accompanying the application to open a cheque account) 3 Application to open a savings/investment account 4 Minimum requirements for the granting of building loans in conjunction with the National Building Regulations and Building Standards Act 103 of 1977 5 Application for a credit card 6 Certified copy of resolution 7 Stop payment instruction 8 Application for a debit order B Negotiable instruments 1 Promissory note by a single maker 2 Promissory note by joint and several makers 3 Promissory note payable by instalments 4 Promissory note containing pledge of collateral security 5 Promissory note made payable at a particular place 6 Promissory note made by a company 7 Bill of exchange payable on demand or at sight or on presentation 8 Bill of exchange payable after date or after sight 9 Bill of exchange payable in instalments with or without interest with or without an acceleration clause 10 Nontransferable bill of exchange 11 Bill of exchange drawn without recourse 12 General and absolute acceptance 13 Qualified acceptance 14 General endorsement 15 Special endorsement 16 Restrictive endorsements 17 Endorsement negativing liability 18 Ordinary cheque 19 Not transferable cheque 20 General crossing 21 Special crossing 22 Not negotiable crossing 23 Notice of dishonour to drawer of a bill 24 Notice of dishonour to endorser of a bill 25 Notice of dishonour to endorser of a promissory note 26 Notice of dishonour to drawer of a cheque 27 Protest by a notary of a bill of exchange 28 Protest by a householder when services of a notary cannot be obtained 29 Notarial act of honour required on payment for honour supra protest 30 Share warrant C Securities for advances 1 Cession of insurance policy 2 Cession of claims 3 Cession of claim to inheritance 4 Cession of book debts 5 Pledge 6 Pledge of claim 7 Suretyship (incorporating cession of claims) 8 Mortgage of a ship to secure a current account 9 Mortgage of an aircraft to secure capital sum and interest 10 Mortgage of an aircraft to secure a current account D Indemnities 1 General indemnity 2 Undertaking to provide for accommodation bill and to indemnify acceptor 3 Indemnity to sureties in respect of their liability on a promissory note E Compromise
1 Extrajudicial agreement of compromise between a debtor and his creditors F Novation 1 Substitution of surety A Opening and management of banking accounts Precedent 1 Application to open a cheque account Particulars regarding the applicant If a natural person: (Insert name, identity number, address) If a partnership: (Insert names of partners, identity numbers, addresses of partners; trading name of partnership) If an estate or trust: (Insert particulars regarding the executor or trustee, address and copy of letters of appointment issued by the Master of the High Court) If a company or close corporation: (Insert company or close corporation number and registered address and annex copies of certificate of incorporation, certificate to commence business, founding statement or amended founding statement, shareholders agreement) The following administrative particulars may be required: Particulars of existing accounts; Particulars to be printed on cheque forms deposit slips and bank statements; Instructions regarding the transfer of interest, banking charges etc to other accounts. Terms and conditions pertaining to the cheque account: 1 The applicant whose particulars appear above, agrees to conduct a cheque account with the bank in terms of the following terms and conditions: 2 The applicant warrants that the information supplied in this document is correct, of material importance, and directly relevant to the application. 3 The applicant undertakes to advise the bank immediately should any information become obsolete or change substantially, or should any material fact emerge which could have the effect of influencing the relationship between the applicant and the bank. 1 The bank will receive and collect payment of any bill note or instrument entrusted to it by the applicant for the credit of the cheque account of the applicant, and shall make it available as cash to the applicant after clearing thereof. Should the bank make payment against instrument which have not been cleared, it shall be made at the risk of the applicant, and the bank shall not be held liable for any such payment. 2 The bank shall make payment of any cheque, bills of exchange, promissory note or any other instrument of payment drawn made or accepted by the applicant and shall debit such payment to the cheque account of the applicant regardless of whether such account is in credit or not. 3 Should the applicant overdraw the cheque account without prior arrangement with the bank, or should the applicant exceed the amount of overdraft agreed with the bank without prior arrangement, the bank shall be entitled, without any notice to the applicant, to: 3.1 refuse to make payment of the instrument which would have the effect of requiring a payment on the part of the bank that has not been arranged; or 3.2 make such payment and demand that any amount with which the account is overdrawn be repaid forthwith; 3.3 demand the payment of interest on the amount with which the account is in debit at a rate in its discretion, but not exceeding any legally stipulated maximum; 3.4 debit such interest against the account on a monthly basis. 4 The bank shall acquire a lien over any instrument with a monetary value which is placed in its possession by the applicant and shall be entitled to collect such instrument for the credit of any account of the applicant which is in debit. 5 The bank shall be entitled to debit the cheque account of the applicant with such banking charges as are agreed upon with the applicant, or are usual for the type of business conducted by the bank, and these charges shall include fees, commissions, interest, costs and levies. 6 The bank shall be entitled to prove the indebtedness of the applicant, or the amount of interest due or the rate
of interest by way of a certificate issued under the signature of a manager of the bank, and the correctness of the certified amount or information supplied in the certificate shall be assumed, until disproved by the applicant. 7 The bank shall be entitled to disclose any information which the applicant has made available to the bank relating to the applicant and his business to any other related business in the group of which the bank forms a part, and shall be entitled to disclose the manner in which the applicant conducts the cheque account to any credit bureau upon request. 8 The applicant warrants that all information that he may in future provide to the bank regarding his financial position will be accurate and reliable, and that such information will form the basis of the continued banking and financing contract between the applicant and the bank. The applicant will advise the bank immediately any material change occurs relating to any information supplied to the bank at any time. 9 Should the applicant require of the bank to provide a commitment for the payment of any amount drawn on the banking account of the applicant in any manner whatsoever, the applicant shall not be entitled to withdraw such instruction after the issuing thereof, unless the applicant also provides the bank with the document issued by it containing the commitment for cancellation. 1 0 The address stated by the applicant in the information provided above shall serve as domicilium citandi et executandi as well as the chosen address for the delivery of all notices which the bank may wish to address to the applicant. The applicant may change such address after due notice to the bank, but the change of address shall only be effective after the bank has provided the applicant with a receipt thereof. All notices given by the bank to the applicant shall be deemed to have been delivered to the applicant on the day that it has been physically handed to the applicant, or three days after it has been posted to the applicant. 1 1 The applicant consents to the jurisdiction of the Magistrates Court that has jurisdiction over his person as c o n t e m p l a t e d b y s e c t i o n 4 5 o f t h e M a g i s t r a t e ' s C o u r t A c t 3 2 o f 1 9 4 4 f o r a n y p r o c e e d i n g s t h a t t h e b a n k m a y institute against the applicant. Notwithstanding this agreement, the bank shall be entitled to institute proceedings in the High Court if it deems it necessary and in any case the SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses:16 1 2 (Signatures of witnesses) (Signature of, or on behalf of applicant) SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses: 1 2 (Signatures of witnesses) (Signature of, or on behalf of bank) Precedent 2 Signing instructions (accompanying the application to open a cheque account) To: The Manager, ABC Bank, DEF Branch. I, the undersigned, (or: We the members/directors/partners/liquidator/trustee of) of address (supply the address of the applicant for a cheque account) request the following/have taken the following resolution, subject to the conditions set out below: 1 That a cheque account be opened in the name of (the applicant) at the DEF branch of ABC bank. 2 The bank is required to accept the signatures of the duly authorised signatories on all cheques, notes and bills or any other instrument presented to the bank, and to act in accordance with the instructions contained in such documents; to pay in terms of such instructions whether the account is in credit or not and to debit any payment to the account of the applicant; to accept any contract or document purported to be signed by the authorised signatories of the applicant pertaining to deposits, guarantees, letters of credit, savings accounts, telegraphic, electronic or counter transactions and to act accordingly. 3 The names of signatories may be changed from time to time, but the amendment will only be effective as far as the bank is concerned after notification thereof has been received by the bank.
4 The bank is requested to act on the request of any of the signatories cancelling the payment of negotiable instruments or any other request for payment or debit order, and to provide to the bearer of a written request cheque books, deposit slips, bank statements and certificates of balance regarding the relevant account, deposit or transmission. 5 The bank is requested to hand any matter that may be in the possession of the bank for purposes of safe keeping to the bearer of a written request purported to be signed by any of the authorised signatories. 6 This authority shall be kept at the branch of the bank where the account is opened, and shall remain operative until amended or revoked. 7 The bank shall not be held liable for loss flowing from any unobtrusive amendments effected to any cheques bills or notes which were completed with erasable stationery material. 8 All cheques, bills or notes, withdrawal slips transfer or payment instructions concerning the account which can reasonably be deemed to have been signed or accepted by a signatory of the applicant and which has been directed to the bank for execution shall be regarded as a regular instruction to the bank to act in terms thereof. 9 The applicant undertakes to advise the bank forthwith should any of the chequebooks, accounts, records, deposit books or slips or cards supplied by the bank to the applicant be stolen or are lost. The applicant undertakes to take reasonable security precautions for the safe keeping of all banking material provided to it by the bank and in particular to keep any PIN number secure. 10 Any credit balance which is available on any account conducted by the applicant with the bank or any affiliated business may in the discretion of the bank be used to liquidate any debit on any account conducted by the applicant with the bank or an affiliated business. 11 The bank shall be entitled to cede any liability of the applicant to the bank to any party of its choice. 12 Nothing herein contained will be interpreted to be a renunciation by the bank of any common law right, or any right which accrues in terms of banking practice. 13 If the bank allows the account to be overdrawn, or allows a payment against uncleared paper or effects which has the result of overdrawing the account, it shall not have the effect of creating a presumption or an estoppel against the bank. 1 4 If the account is opened in the name of a partnership, company, close corporation, trust or association, all d o c u m e n t s o f w h a t e v e r n a t u r e i s s u e d b y t h e a p p l i c a n t s h a l l b e s i g n e d b y (i n s e r t n u m b e r ) o f t h e s i g n a t o r i e s appended hereto. SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses: 1 2 (Signatures of witnesses) (Signature of, or on behalf of applicant) SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses: 1 2 (Signatures of witnesses) (Signature of, or on behalf of bank) Appendix Name of signatory Specimen signature Precedent 3 Application to open a savings/investment account I/We the undersigned do hereby apply to open a savings/investment account subject to the conditions set out below.
New account number: Particulars of existing accounts: Particulars of applicant: Name: Address: Particulars of account: Savings or investment. (Delete which is inapplicable) Type of savings/investment account required: Savings accounts available: Here list the available range of savings accounts. I n v e s t m e n t a c c o u n t s a v a i l a b l e : (H e r e l i s t t h e a v a i l a b l e r a n g e o f i n v e s t m e n t accounts.) Information regarding savings accounts: Do you require a debit card/ATM card/Savings account book Information regarding investment accounts: Amount invested: R........ Term .......... years or months or ....... Days Increase in investment: R ........ per ......... Commencement date: (insert date) Information regarding interest: Interest to be paid: Monthly/quarterly/yearly/on maturity Provide details of the account to be credited with interest: Institution name and branch: Name of accountholder: Account number: Commencement date (or at maturity). Conditions 1 Interest rates payable on savings account may be changed without notice. 2 Banking charges/service fees may be changed without notice. 3 Investments which require investment in the money market shall be effected by brokers appointed by the bank. 4 Investments which entail the using of a card or book shall be subject to the following: 4.1 The bank shall be entitled to debit the investment with all amounts withdrawn by means of a card or personal identification number (\"PIN\"). If the card or PIN is lost or stolen the bank shall remain so entitled until written notice of the theft or loss is received by the bank. The bank shall be entitled to interest on the amount paid out if such payments result in the account becoming overdrawn. 4.2 The bank may impose limits on the frequency of withdrawals as well as the frequency of transfers between accounts. 4.3 The card and the savings account book remain the property of the bank, and shall be returned upon request. 4.4 Interest shall be paid on any account which is overdrawn calculated at the rate applicable to accounts which are overdrawn without prior arrangement with the bank. 4.5 The bank shall be advised immediately and in writing of the loss or theft of the card or PIN or book referring to the particular account. 4.6 I/we undertake not to allow any third party to use the card, or to make the PIN number known to any third party. 4.7 I/we select the address supplied above as domicilium citandi et executandi. 4.8 I/we consent to the jurisdiction of the magistrate's court for purposes of adjudicating any claim which may arise from this agreement, and consent to a costs order based on the scale of attorneyandclient. 4 . 9 I a g r e e t h a t a c e r t i f i c a t e g i v e n u n d e r t h e h a n d o f a m a n a g e r o f t h e b a n k s h a l l p r o v i d e prima facie p r o o f o f
my/our indebtedness to the bank, and shall provide prima facie proof of the use of a bank card or PIN for any particular transaction. It shall not be necessary to provide proof of the appointment of the signatory of the certificate. 5 I acknowledge that the information provided above is accurate and that it shall constitute the basis of the application for the facility required. I acknowledge that nothing contained herein shall in any way detract from the application of the normal procedures and practices of the bank. SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses: 1 2 (Signature of, or on behalf of applicant(s)) (Signatures of witnesses) SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses: 1 (Signature on behalf of bank) 2 (Signatures of witnesses) Precedent 4 Minimum requirements for the granting of building loans in conjunction with the National Building Regulations and Building Standards Act 103 of 1977 1.1 Definitions 1.1.1 \"the bank\" means \"ABC BANK\" (hereinafter referred to as \"the Bank\"). 1 . 1 . 2 \"Acceptable\" shall mean acceptable in terms of standard building practice or conforming with the requirements of the National Building Regulations. 1.2 Conformity with building regulations All work shall conform to and be carried out in accordance with the National Building Regulations or Local Authority Bylaws. Plans submitted to the Bank shall have been approved by the relevant authority and shall be accompanied by a schedule indicating all finishes. 1.3 Materials and construction methods Acceptable materials and methods of construction are indicated below. If for any reason it is desired to use new types of materials or construction methods, the prior consent of the Bank must be obtained. The Bank reserves the right to either accept or reject any material or method without any recourse to the Bank. 1.4 Site identification The client shall prior to commencement of the building point out the boundary pegs or beacons on the building site to the Bank's inspector. If the pegs or beacons are not identifiable, the client shall employ the services of a land surveyor in order to determine the positions. 1.5 Notice of trench inspections The client shall give the Bank three working days notice of the time when the foundation trenches or any other matter for which inspection is called for will be ready for inspection. No building work shall commenced or continued with unless such inspection has taken place. 1.6 Progress payments 1.6.1 No progress payments will be made unless the approved plans or notice of approval, builders waiver of lien, contractors all risk insurance policy and all other documents relating to the loan shall have been completed and signed by both the client and the builder. 1.6.2 The required notice has been given. 2 Preparation of the site
2.1 Clearing the site 2.1.1 The building site shall be cleared of all refuse and vegetation. The site shall be examined for termite workings and, if necessary, treated in terms of SABS Code 0124 which relates to soil poisoning. 2.1.2 Where trees or tree roots within the building area are removed, the ground must be consolidated. 2.2 Unstable soil conditions 2.2.1 The Bank may request the client to have tests taken of the soil by a registered geotechnical soil engineer. If the soil is found to be unstable, a registered structural engineer shall prepare specifications and drawings for the reinforcing of both foundations and superstructure in conjunction with the geotechnical soil engineer, to the satisfaction of the Bank. 2.2.2 The engineer shall supervise the work and furnish a certificate of approval on completion of the work. 2.3 Excavations 2.3.1 Any excavation for any foundations hall be taken down to firm natural ground unless otherwise specified by a structural engineer. 2.3.2 All excavations shall be trimmed to be horizontal and vertical. Any excavation in solid rock with surfaces which are not horizontal or vertical shall be pinned as stated in item 2.3.3. 2.3.3 Where any foundation is placed on solid rock, the bearing area shall be cleaned and, stepped or pinned so as to prevent lateral movement of such foundation. 2.3.4 Except where the foundation for any external masonry wall is placed on solid rock, the excavation shall be at least 300 mm below the adjoining finished ground level. 2.3.5 Trenches are to be levelled and stepped. The length of the steps shall be the same thickness as specified for the concrete footings in proportion to the calculated brick courses. Any excavations taken out too deep shall be made up to the correct levels with Class A concrete; back filling and ramming will not be accepted. 2.4 Dimensions of foundation footings for masonry walls 2.4.1 Deemed to satisfy rules for foundations These are general dimensions as set out in the National Building Regulations but are subject to change as determined by the local authority or structural engineer. Strip foundation dimension: minimum thickness: 200 mm minimum width: 600 mm 2.4.2 General guide for sizes of foundations (subject to local authority or structural engineer approval): External 345 mm walls 715 mm x 200 mm External 270 mm cavity walls 645 mm x 200 mm External 230 mm walls 600 mm x 200 mm Internal 110 mm walls 450 mm x 200 mm 2.4.3 Chimneys, steps and high gables Concrete to project not less than 150 mm beyond perimeter of brickwork x 200 mm thickness. 2.5 Dimensions of foundation footings under timber frame walls Foundations shall be constructed in accordance with SABS 082. (Refer to National Building Regulations.) 2.6 Dimensions of foundation footings under masonry boundary walls Concrete foundations shall be wall width plus 300 mm and shall not be less than 150 mm thick. 3 Concrete and masonry 3.1 Foundations 3.1.1 Foundations shall be reinforced where required and thickness shall not be less than 200 mm. Steps shall be a minimum depth depending on the slope of the ground with an overlap of at least 150 mm. 3.1.2 Foundation footings in unstable soils shall be carried out as described in paragraph 2.2 above. 3.2 Where any concrete floor slab is thickened to form a foundation 3.2.1 The thickness, including that of such floor slab, shall not be less than that required for a continuous strip foundation of 200 mm. 3.2.2 The width of the thickened portion below such floor slab shall not be less than that required for a continuous strip foundation as required by the local authority.
3 . 2 . 3 The use of this system shall only be allowable on condition that the soil is machine compacted and consolidated to a density of 90% modified AASHO which will be verified and checked by an engineer who must furnish the Bank with a certificate of such a test. 3.3 Concrete 3.3.1 Subject to prior approval only machinemixed concrete is allowed. 3.3.2 Where approved, sitemixed concrete shall be composed of: 6 parts coarse aggregate SABS 1083 3 parts clean sand SABS 1083 1 part cement SABS 471, 831 and 626 20 to 44 litres of water to every 50 kg bag of cement The concrete used shall have a compressive strength of not less than 10 MPA at 28 days. The nominal size of coarse aggregate to be used shall be from 19,00 mm to 26,5 mm. 3.3.3 Readymixed concrete shall comply with SABS 878. 3.3.4 Reinforced concrete All reinforced concrete shall be in accordance with plans and specifications prepared and supervised by a registered civil or structural engineer, and certified on completion. 3.4 Foundation walls 3.4.1 Foundation walls shall be of solid masonry, hard burnt clay bricks, stone, concrete blocks or other approved material. Foundations shall comply with paragraph 3.4.3. 3.4.2 The height of any foundation wall shall not exceed 1,5 m. Where this height is exceeded the wall shall be designed by a structural engineer. 3.4.3 Minimum thickness of foundation walls: Minimum thickness of wall (mm) Acting as a retaining wall Not acting as a retaining wall Difference in ground Type of foundation Wall level Height Less 500 750 Less 300 500 1 000 than to to Than to to to 500 750 1 000 300 500 1 000 1 500 mm mm mm mm mm mm mm Single External 140 190 220 140 140 140 190 leaf brick to internal 190 220 90 140 140 190 Single leaf hollow block External to 140 190 220 140 140 140 190 (cavities filled with external 140 190 220 90 140 140 190 concrete) Cavity walls (cavity filled to 150 External 190 190 220 190 190 190 190 mm below damp proof course level) 3.5 Fillings 3.5.1 The filling under concrete surface beds shall consist of earth, sand or other acceptable material free of clay and organic matter, well watered and rammed in layers of not more than 150 mm, covered by at least 100 mm hardcore. 3.5.2 Concrete surface beds (i) Shall be a minimum thickness of 75 mm. In the event of a filling exceeding 1 meter in height the surface bed is to be adequately reinforced. All concrete surfaces shall be chipped, thoroughly washed, cleaned and slurried with cement grout immediately before screeds are laid. (ii) The concrete mix used shall be as described in paragraph 3.3(b). 3.6 Termites 3.6.1 Protection Where there is evidence of termites, the soil shall be poisoned with an approved registered soil poisoning material. A clearance certificate is to be submitted by a registered pest control company.
3.7 Damp proofing 3.7.1 Under walls and window sills (i) Damp proofing shall be placed under all walls at a minimum height of 150 mm above ground level and shall comply with SABS 248 (bituminous dampproof courses) or Class B of SABS 952 (polyethylene sheet for waterproofing of structure 375 microns embossed) or SABS 298 (mastic asphalt waterproofing) or other approved material. (ii) The dampproof course shall be laid to full width under walls and wall plates for suspended floors without longitudinal joints. The overlaps at ends, angles and junctions shall be a minimum of 150 mm. (iii) Damp course laid under window sills shall be taken down within the thickness of the wall and under the first full course of brickwork. The dampproof course shall not be laid directly below the sill bedding material. 3.7.2 Under surface beds (i) A dampproof membrane SABS 952 Type C, plain surface, 250 microns thick, shall be laid in damp areas where a high water table is prevalent or where the Bank considers it necessary. (ii) The sheets shall be laid in the widest practical widths to minimise joints and shall be turned up into the dampproof course in the walls. Any joints shall be sealed with pressuresensitive tape applied over the leading joint. 3.7.3 Sides of tanking (i) Damp proofing of horizontal and vertical tanking, unless otherwise specified, shall be in accordance with SABS Code of Practice 021, or waterproofed with EVA polyethylene SABS Specification 952, Type C, plain surface, 1 000 microns or 500 microns, as specified. (ii) All joints to sheeting to be joined with a specially formulated jointing strip to form a fully waterproofed seal, strictly in accordance with the manufacturer's specifications. 3.7.4 Timber frame walls (i) In any timber frame wall a dampproof course shall be installed between the bottom plate of the wall and any foundation wall or concrete floor slabs. (ii) The dampproof course, 375 microns thick, shall extend over the full thickness of each wall. 4 Masonry 4.1 Bricks Clay bricks shall be sound, hard, well burnt and acceptable to the Bank and in accordance with SABS 227. Sand lime bricks shall comply with SABS 285 (calcium silicate masonry units). Cement bricks shall comply with SABS 987 (cement bricks). 4.2 Blocks Hollow clay bricks shall comply with SABS 559 (hollow clay building blocks) and concrete blocks with SABS 527 (concrete building blocks). 4.3 Mortar Mortar shall be composed as follows (measured per volume): Cement mortar 6 parts clean sand 1 part cement Compo mortar 1 part cement (1 pkt = 50 kg) 1 part lime (SABS 523) (1 pkt = 25 kg) Not more than 10 parts sand Mortar mix for use with cement blocks and bricks shall be in accordance with the manufacturer's recommendations. Note: Special mortars other than those indicated above, which have proved satisfactory, are acceptable but prior approval of their use is required. 4.4 Free standing walls/boundary walls 4.4.1 The height, thickness and pier size for any free standing wall shall conform to the relevant values shown in the table below and where piers are indicated they shall project equally on both sides of such walls. 4.4.2 A dampproof course shall not be installed in any free standing wall. 4.4.3 Where moisture is likely to be encountered from ground water, highdensity bricks with a water absorption not exceeding 6 percent shall be used in any free standing wall up to 150 mm above ground level.
4.4.4 Freestanding/boundary walls: Nominal wall Maximum allowable height Piers thickness (mm) above finished ground (m) Without With Minimum Maximum piers (m) piers (m) dimensions spacing (centre to centre) (m) (mm) 90 0,8 1,2 290 x 290 1,9 350 x 350 2,1 110 1,0 1,5 340 x 340 2,5 390 x 390 3,7 140 1,3 1,8 470 x 470 4,2 490 x 490 5,2 190 1,5 2,2 _________ ____________ 230 1,8 2,4 290 2,2 2,6 340 2,4 4.5 Brickwork/Blockwork 4.5.1 All masonry shall be plumb, level, straight and true, correctly bonded and shall rise uniformly with no portion exceeding 1,2 m above any other part of the work, with the brickwork raked back for tying in and correct bonding to further work. Block bonding or toothing of the brickwork is not permitted. 4.5.2 Bricks of a different composition are not to be mixed and built into the same wall. 4 . 5 . 3 A l l e x p a n s i o n j o i n t s i n b r i c k w o r k a r e t o b e p r o v i d e d w i t h a n a p p r o v e d b i t u m e n i m p r e g n a t e d s o f t b o a r d , \"compribond\" polysulphide sealer or an expandable polyethylene strip. 4.5.4 External walls shall be beam filled to the underside of the roof covering. 4.5.5 Brick gable walls above plate level shall not be less than 140 mm thick. (Note: Where construction differs from the above, special permission shall be obtained from the Bank.) 4.6 Chimneys 4 . 6 . 1 T h e h e i g h t o f a n y c h i m n e y o u t l e t s h a l l b e n o t l e s s t h a n o n e m e t e r a b o v e t h e h i g h e s t p o i n t o f c o n t a c t between chimney and roof. 4.6.2 Where the angles of the slopes of the roof are less than 10 degrees and the chimney not more than 600 mm from the line of the ridge, the height of the chimney shall not be less than 600 mm above the line of the ridge. 4.7 Parapet walls 4.7.1 Any parapet shall have a thickness of not less than 190 mm or 1/6th of its height, whichever is the greatest. 4.7.2 All parapet walls to be sealed off against damp penetration with an approved capping or a dampproof membrane, 375 microns thick, laid under the last course of brickwork. 4.7.3 Parapet walls shall not be less than 300 mm above the roof covering. 4.8 Retaining walls of masonry 4.8.1 Where any retaining wall exceeds a height of 1,5 meters the wall shall be designed by a structural engineer. 4.8.2 Subsoil drainage shall be provided behind such wall together with sufficient weep holes to prevent the accumulation of water behind the wall. 4.8.3 No horizontal dampproof course of sheet material shall be used in any such retaining wall. 4.9 Permissible dimensions for timber frame walls: Wall type Stud size Stud Maximum Max Max spacing panel length height storey height (m) (m) 6,0 (m) Supported Supported 6,0 4,0 3,0 3,0 both ends one end 3,0 4,0 (mm) (mm) (m) (m) 3,0 114 x 38 400 4,8 2,4 114 x 38 600 4,0 2,0 Structural 76 x 38 450 3,6 1,8 Non 114 x 38 600 4,8 3,0 structural 76 x 38 600 4,2 2,4 4 . 9 . 1 A n y e x t e r n a l m a s o n r y c l a d d i n g o r i n f i l l i n g p a n e l i n a f r a m e d b u i l d i n g s h a l l b e s e c u r e l y a n c h o r e d t o t h e structure. 4.9.2 Where the are of window openings in such a panel exceeds 25 percent of the face area, the panel shall be anchored to the structure in such a manner that will permit relative vertical movement but restrain the wall from
lateral movement 4.9.3 Such cladding shall be supported on suitable beams, slabs or nibs at each storey and adequate provision shall be made for relative vertical movement between the masonry and the structure frame at the underside of such supports. 4.9.4 Movement joints shall be provided in such cladding at intervals not exceeding 10 m to allow for relative horizontal movement. 4.10 Provision of roof anchorage 4.10.1 In the case of a building of timberframe construction, provision for the secure fixing of any timber roof truss, rafter or beam to the wall shall be made in the manner described in SABS 082. 4 . 1 0 . 2 I n t h e c a s e o f a w a l l e r e c t e d o f m a s o n r y u n i t s o f c o n c r e t e , a g a l v a n i s e d s t e e l s t r a p o r w i r e s h a l l b e embedded in the wall at positions suitable for fixing any timber roofs truss or beam to such wall. 4.10.3 Such strap or wire shall extend into the wall to a depth of at least 300 mm in the case of a heavy roof (concrete or clay tiles or slate), or at least 600 mm in the case of a sheeted roof. In cases where the depth of the masonry or in situ concrete is less than 300 mm or 600 mm respectively, such strap or wire shall extend as far as possible into such masonry or concrete. 4.10.4 The size of such strap shall not be less than 30 mm wide and 1,2 mm thick or such wire shall consist of not less than 2 strands of 4 mm diameter. 4.11 Lintels 4 . 1 1 . 1 A l l s p a n s o f m a s o n r y o v e r w i n d o w s , d o o r s a n d o p e n i n g s i n e x c e s s o f 2 m t o b e s u p p o r t e d b y a p r e stressed lintel or brick masonry lintels as designed by a structural engineer. 4.11.2 Lintels shall have bearings of not less than 225 mm on walls at ends. 4.12 Reinforced brick lintels 4.12.1 Reinforced brick lintels shall be built with sound machinemade bricks in 3:1 cement mortar, with all vertical and horizontal joints filled solid with mortar throughout the required number of courses and to a distance of at least 330 mm on either side of the clear opening. 4.12.2 The number of courses over lintels in the various size openings shall be as specified in the table hereunder, and reinforcing steel wires or rods shall be built into the first horizontal joint over the bottom course as laid down therein. 4.12.3 Reinforced brick lintel: Clear or daylight span Number of courses Reinforcement Not exceeding 1 m 4 One row of 74 mm wide brick Over 1 m to 1,5 m 6 reinforcement as described below for Over 1,5 m to 2 m 7 each half brick width of soffit, do Three 6,3 mm diameter mild steel rods for each half brick width of soffit. 4.12.4 Brick reinforcement shall be of harddrawn mild steel comprising two 3,15 mm diameter main wires spaced 75 mm apart and 2,8 mm diameter cross wires spaced not more than 300 mm apart, welded to main wires. 4.12.5 The reinforcing wires and rods shall be of length at least equal to the width of the clear opening plus 330 mm at each end. The reinforcement shall be evenly spaced in the brick joint, with the outer wires or rods having at least 20 mm cover from face of brickwork. 4.13 Steps 4.13.1 Steps shall be of brick or concrete as specified in paragraph 3.1 with granolithic or other acceptable finish, built on an adequate foundation. 4.13.2 Risers shall be uniform and shall not exceed 200 mm. 4.13.3 Treads shall not be less than 250 mm and shall be finished with a nonskid surface. Handrails shall measure 850 mm vertically from the top of the tread. 4.14 Surface beds 4.14.1 The concrete used for any unreinforced concrete slab shall have a compressive strength of not less than 10 MPA at 28 days or be mixed in the proportions by volume of: 1 part cement 4 parts sand; and 5 parts coarse aggregate
and the thickness of such slab shall not be less than 75 mm. 4.15 Doors and windows 4.15.1 Doors and window frames to be of approved type manufacture. 4.15.2 Where necessary steel doors and frame used within a 20 kilometre radius of the coast shall be hotdipped galvanised in accordance with SABS Specification 763. 4.15.3 All steel door and window frames shall be fitted with at least three lugs on either side of the frame, which are to be built into the wall. 4.15.4 All wooden door and window frames to receive 1,6 mm thick galvanised hoopiron cramps 32 mm wide with ends turned 50 mm up against stiles of frames and each twice screwed to frame and built 450 mm into the walls. The cramps shall not be spaced more than 0,85 mm apart on any frame. 4.15.5 I n t e r l e a d i n g d o o r s b e t w e e n g a r a g e a n d d w e l l i n g s h a l l b e f i r e p r o o f e d i n t e r m s o f l o c a l a u t h o r i t y requirements. 5 Carpenter and joiner 5.1 Structural timber All timber shall comply with and bear the SABS mark 563, 653, 876, 1089 and/or 1245, and where required by governing regulations, treated against wood pest infestation. Where necessary all woodwork in contact with brick or stone shall be treated in accordance with SABS 05. 5.2 Roofing 5.2.1 All joints of roof trusses constructed on site, except for lightweight roof coverings, shall be fixed together with four 90 x 4 mm nails and bolted with 10 mm bolts. All nails shall protrude at least 25 mm and be firmly clenched. 5.2.2 Timber of lesser dimensions than specified above is acceptable in the form of engineered trusses designed and constructed by specialist companies. The structural stability of the roof must be supported by a warranty from the company. 5.2.3 Hip rafters shall not be less than 228 x 38 mm to form a half principal. All web members shall be at least 38 x 114 mm Grade 4 material. Dragon ties shall be used for slate or tile roofs. 5.2.4 Roof construction shall have adequate cross bracing fixed at an approved pitch in accordance with sound building practice. 5.2.5 Roof trusses shall not be supported on internal nonload bearing walls. NB: i The prior consent of the Bank must be obtained for any other method of roof construction. ii No roof covering shall be built into walls. 5 Roofing specifications: Class of Type Truss Timber Maximum Minimum Minimum Maximum Minimum Maximum Roof of roof member size span pitch of End lap of Spacing size spacing of covering (mm) (m) of Roof roof roof trusses/ of Batten/ batten/ (sealed) bearing purlin purlin (mm) (mm) beams Class B Asbestos 38 × 114 3,1 11. 200 1,00 m 76 × 50 mm 1,40 m 4,0 15. 175 centres fixed on centres Medium corrugated Rafters 38 × 152 6,1 17. 150 edge 3,1 weight sheeting 38 × 228 4,5 7,1 Tie 38 × 114 6,0 22. 150 beams 38 × 152 8,2 26. 150 38 × 228 10,0 4,7 Class B Asbestos 38 × 114 5,9 17. 26. 0,800 m As per with centres 38 × 38 mm manufacturers Medium slates, tiles Rafters 38 × 152 7,2 60 underlay 0,950 m specifications weight and 38 × 228 6,0 26. & over centres 8,2 1,100 m shingles Tie 38 × 114 10,0 without centres 38 × 51 mm 0,760 m beams 38 × 152 4,7 centres 5,9 1,00 m 38 × 228 7,2 underlay centres 51 × 51 mm Class A Concrete 38 × 114 17. 26. As per 38 × 38 mm As per Heavy tiles Rafters 38 × 152 with manufacturers SA pine manufacturers weight specifications OR specifications 38 × 228 underlay 26. & 32 × 32 mm 38 × 114 over saligna 38 × 152 without Tie 38 × 228 underlay 30 × 50 mm beams SA fine fixed on edge 11. 15. =
0,80 Class C Galvanised Rafters 38 × 114 6,2 5. 11. 250 1,35 m 75 × 50 mm 15. 20. = Light corrugated 38 × 152 8,0 11. 15. 150 centres fixed on 1,00 weight 38 × 228 10,0 15. 17. 150 edge iron 17. 22. 150 20. 25. = 0,60 mm 1,00 25. 30. = 1,00 Tie 38 × 114 4,5 11. 15. Unsealed 30. & beams 38 × 152 5,9 15. 17. 250 over = 1,00 38 × 228 8,7 17. 22. 225 200 38 × 114 6,2 10. 15. N/A 1,050 m 38 × 38 mm As per Metal tiles Rafters 38 × 152 8,0 with centres SA pine manufacturers 10,0 OR specifications 38 × 228 underlay Tie 38 × 114 4,5 15. & over 32 × 32 mm beams 38 × 152 5,9 without saligna 38 × 228 8,7 underlay 300 mm only 50 mm rib Class C Ribtrough Bearer 38 × 228 4,0 Up to 5. allowable if 1,00 m 76 × 50 mm Up to 5. = Light metal beams 50 × 228 5,0 (50 mm fulllength centres fixed on 1,20 weight 76 × 228 6,0 sheets are not without edge sheeting rib) manufactured top tile 5. 15. 1,40 15. & over to = 1,80 5. 15. suit size 0,700 m 36 mm rib (36 mm centres Up to 5. = 120 with top 5. 15. 1,1 rib) 15. & over = tile 1,2 28 mm rib 15. & over Up to 5. = (28 mm rib) 0,90 5. 15. 1,00 15. & over = 1,10 Class A Slate 38 × 114 3,1 20. 45. 75 mm 0,600 m 140 mm Heavy Rafters 38 × 152 4,0 with masses of centres weight 6,1 slate m2 = 38 × 38 mm 38 × 228 underlay 69 kg 0,700 m Tie 38 × 114 3,1 mass of 190 mm beams 38 × 152 4,5 centres 38 × 228 7,1 slate per 38 × 38 mm m2 = 40 kg Bottom three Class B 75 100 0,700 m 20 40 mm rows at 150 Medium Rafters at top centres diameter weight Thatch 7,0 30. 300 mm thick mm end 4th last top three rows at 270 Tie 100 125 45. 150 mm thick mm beams at top 7,5 to 9,0 Top three end rows at 150 mm Fixing of roof covering Fixing of all roof coverings shall be fixed strictly in accordance with the manufacturer's specifications and SABS codes of practice. Class B medium weight: Asbestos corrugated sheeting Fixing shall be with corrosionresistant screws, selfdrive or machinedriven type screws with approved type washers. Holes for screws to be drilled 2 mm oversize and not punched. In coastal areas it may be necessary to increase the pitch of the roof by 5. at the discretion of the Bank. Class B medium weight: Asbestos slates, tiles and shingles Slates shall be laid in a staggered pattern fixed with two 40 mm galvanised or copper clout nails. Class A heavy weight: Concrete tiles Unless otherwise specified, every third tile in each course and all tiles to exposed eaves and verges shall be secured with storm clips according to manufacturer's specifications. Class C light weight: Galvanised corrugated iron Fixing shall be with corrosionresistant screws, selfdrive or machinedriven type screws with approved type washers. Roof sheets shall be fixed with a side lap of 1 2 corrugations. In coastal areas it may be necessary to increase the pitch of the roof at the discretion of the Bank. Ridging shall not be less than 450 mm wide and shall be of the same thickness as the roof sheeting. Class C light weight: Metal tiles All tiles shall be fixed with two corrosionresistant nails. Tiles on exposed eaves, gables and gutters to receive additional fixing. Class C light weight: Ribtrough metal sheeting Fixing shall be with corrosionresistant screws 90 mm x No 14 carbon steel type hexagonal head. All side and end laps to be sealed off with sealer strip and fixed with 25 mm x No 14 selftapping screw. All holes for fixing shall be drilled and not punched. All roofs at apexes to be sealed off with
poly and metal closers. The flute of the sheeting to be turned up at apex or parapets and turned down into gutters to form a drip (special tool for bending). All roof timber to be sealed off from the weather with a rustresistant capped flashing along the sections of the fascia/barge boards and concealed gutters etc. Class A heavy weight: Slate Roofing slates shall be fixed in \"broken bond\" and be double nailed with anti corrosion nails. A three or fiveply aluminiumfaced malthoid foil to be placed under the battens. Slates to comply with SABS Specification 995. Class B medium weight: Thatch Thatching shall be secured to the battens with tarsoaked twine. Joints of rafters shall be suitably strapped or bolted and securely fixed to the external walls. All poles shall be treated against wood borer, beetles and termites as described in SABS Code 05. Provisions shall be made for adequate lightning conductors as described in SABS Code 03. 5.3 Floors 5.3.1 All floors shall be fixed in accordance with sound building practice. 5.3.2 All under floor woodwork shall be treated with a preservative to prevent infestation of insects and pests. 5.3.3 Adequate cross ventilation is also to be provided. 5.3.4 Floor coverings to be laid strictly in accordance with the manufacturer's specifications and SABS codes of practice. 5.3.5 Upper floors (i) Joists with spans up to 3 m shall be 228 x 38 mm and spans in excess of 3 m shall be designed by an engineer. (ii) Joists shall be spaced not more than 450 mm apart and strutting provided as deemed necessary. All floors above ground floor shall have acceptable sound insulation. 5.4 Ceilings Ceilings shall be of approved materials, fixed in an acceptable manner. Where applicable, cornices shall be of a suitable material, neatly fixed in long lengths. At least one trapdoor of minimum size 600 mm x 600 mm shall be provided and ceiling heights shall comply with the National Building Regulations. 5.5 Ironmongery All doors, casements, fanlights, etc shall be fitted with suitable hinges, locks and furniture, where applicable. Ironmongery exposed to the weather shall be of a noncorrosive type. 6 Plasterer and wall tiler Materials 6.1 Sand The sand shall be sharp, free of loam and organic matter. 6.2 Cement The cement shall comply with SABS 471. 6.3 Lime Lime for undercoats shall be Type A2 or A2P of SABS 523, and Type A1P for putty plasters. 6.4 External plaster External plaster shall be 5 parts sand and 1 part cement. All wall surfaces shall be cleaned and wetted as required. Plaster to be of uniform thickness of approximately 12 mm. 6.5 Internal plaster Internal plaster to be of a uniform thickness of at least 12 mm and shall be rendered to an acceptable finish and composed of: 6.5.1 6 parts sand and 1 part cement, 6.5.2 or, when lime is used, in the following proportions by volume: Sand Lime Cement 15 20 4 0 3 1 2 2 1 3
6.6 Floor screeds 6.6.1 Screeds shall be 1 part cement to 3 parts coarse sand and shall not be less than 20 mm thick. 6.6.2 The screed shall be laid to a true and level finish and to the satisfaction of the subcontractors executing the various finishes. 6.6.3 All surfaces shall be thoroughly cleaned with a steel brush and a cement grout applied before the grano is laid. 6.7 Glazed wall tiles 6 . 7 . 1 Glazed wall tiles shall be of an acceptable quality and shall comply with the requirements of SABS Specification 22, and shall be fixed with a mortar mix of 4:1 or an acceptable adhesive, as described in SABS Code 010769. 6.7.2 Glazed floor tiles Fixing to be done strictly in accordance with the manufacturer's specifications. 7 Plumber 7.1 Gutters and down pipes 7.1.1 Gutters, down pipes and rain water goods shall comply with SABS specifications and be fixed in accordance with the manufacturer's specifications. 7.1.2 All rain water to be discharged away from walls below the DPC level in accordance with the local authority requirements. 7.1.3 Where gutters are omitted a concrete apron of suitable width must be cast around the buildings to discharge water away from the buildings. 7 . 1 . 4 V a l l e y s , b o x g u t t e r s a n d s o a k e r s s h a l l b e o f a p p r o v e d m a t e r i a l , s i z e a n d d e s i g n a n d s h a l l b e f i x e d i n accordance with the SABS specifications. 7.2 Flashings Flashings shall be of approved and durable material and shall be fixed in accordance with the manufacturer's specifications. 7.3 Water supply 7.3.1 The water supply shall be in accordance with the local authority requirements. 7.3.2 At least one stand pipe shall be erected in a suitable position and all materials and fittings used shall comply with SABS Specification 509. 7.3.3 Where water is not available from the local authority, water from a bore hole used for domestic purposes must meet with the necessary health requirements. 7.3.4 Bore hole water for domestic use shall provide an acceptable yield. A supporting certificate of the water yield must be furnished. 7.4 Drains 7.4.1 All drainage work to buildings shall be carried out by a registered plumber and drains shall be accurately laid to the lines and gradients shown on the drainage drawings as approved by the local authority. 7.4.2 All drains shall be tested in accordance with the local authority requirements and passed before the property may be occupied and the drains put into use. 7.5 Storm water drainage Storm water shall be discharged away from the buildings by means of pre cast concrete storm water channels, surface or underground drains, and shall comply with the requirements of the local authority. 7.6 Septic and conservancy tanks Septic and conservancy tanks shall be of a size and design approved by the local authority. 7.7 French drains and soakage pits 7.7.1 French drains and soakage pits shall be in accordance with the local authority regulations. 7.7.2 Drainage clearance certificate The Bank may request that a drainage clearance certificate be furnished for any type of drain. 8 Glazier
8.1 Glass All glass shall be free of defects and shall be set in putty, sprigged where necessary and fixed in accordance with the manufacturer's specifications and the SABS code of practice. Permissible thickness and size of glass panes: Minimum thickness Maximum area 3 mm 0,75 m2 4 mm 1,5 m2 6 mm over 3,5 m2 8.2 Safety glazing Maximum area Minimum thickness 1 m2 6 mm 8.2.1 Where any pane of glass installed in a window is less than 300 mm from the floor level and is not of safety glass, such a pane must be guarded by a barrier to prevent persons coming into physical contact therewith. 8.2.2 Where any bath enclosure or shower cubicle is formed by panes of glass, such panes shall be of safety glass. 8.2.3 Any glass used in any shop front and having an area greater than 1 m2, shall be of safety glass. 8.2.4 Where glass is used in any wall or balustrade to a stairway or ramp and is not less than 1,8 meters above the pitch line of the stairway, the surface of the ramp or landing, such glass shall be of safety glass. 9 Painter 9.1 Painting and varnishing All paints, stains, varnishes, linseed oil, knotting, distempers and wall finishes shall be of an approved manufacturer and shall be used exactly as supplied in strict compliance with the manufacturer's instructions and in terms of the SABS codes of practice. 10 Electrician and gas installation 10.1 All electrical and gas installations shall be carried out strictly in accordance with local authority or service supply requirements. 10.2 The Bank reserves the right to call for a certificate of approval of the installation. 11 Fencing of site The site shall be fenced with acceptable material, unless otherwise agreed upon by the Bank. 12 Clearing of site The site shall be cleared of all building rubble upon completion of work and left clean. All earth banks over 1,2 meters in height shall be suitably cut back and trimmed in terms of the SABS code of practice and to the Bank's approval. 13 Storm water drainage disposal and seepage water control 13.1 Adequate precautions shall be taken to drain surface and seepage water away from buildings. 13.2 The necessary precautions are also to be taken to prevent flooding and damage of buildings in terms of the local authority and the Bank requirements. 13.3 The Bank reserves the right to call for drainage plans designed by an engineer and such work is to be carried out in strict accordance with the plans and specifications of the local authority. 14 Swimming pools 14.1 The Bank reserves the right to call for plans and specifications of the pool prior to construction. 14.2 A d e q u a t e p r e c a u t i o n s s h a l l b e t a k e n a g a i n s t s t o r m w a t e r d a m a g e t o e l e c t r i c a l p u m p s a n d f l o o d i n g o f swimming pools. 14.3 The construction requirements with regard to fences and gates shall comply with the requirements of SABS 1390.
15 Additional work as follows: WE THE UNDERSIGNED UNDERTAKE TO THE BANK THAT THE WORK SHALL BE CARRIED OUT IN ACCORDANCE WITH THE ABOVE STATED MINIMUM REQUIREMENTS AS WELL AS ANY ADDITIONAL CONDITIONS AND REQUIREMENTS THAT MAY BE DEMANDED BY THE INSPECTORS OF THE BANK. WE INDEMNIFY THE BANK AND HOLD IT HARMLESS AGAINST ALL LOSSES, CLAIMS OR ACTIONS OF WHATEVER NATURE MADE AGAINST THE BANK (WHETHER BY US, OUR ESTATE OR ANY OTHER PERSON) ARISING FROM OR IN CONNECTION WITH THE WORK TO BE CARRIED OUT HEREUNDER TO ERECT THE BUILDING SITUATED ON: Erf/Stand No Township Signature of Owner Date Signature of Builder Date A COPY OF THIS DOCUMENT IS TO BE RETAINED BY THE CLIENT AS A CHECK TO ENSURE THAT THE WORK DONE BY THE BUILDER COMPLIES WITH THE REQUIREMENTS OF THIS DOCUMENT. Precedent 5 Application for a credit card Indicate which card currently being used by the bank is applied for. Provide the required personal details regarding the applicant (eg title, surname, names, identity number, address, place of employment, marital status and details of spouse etc). Provide the required financial details (bankers, banking accounts, liabilities, transaction financing, other cards etc). Provide details regarding employment of applicant and spouse. Provide such information for credit rating credit control as the bank may require. If an additional card is required, provide such particulars regarding the additional user/s as may be required. Conditions of use I/We the undersigned, (insert name(s) of signatories) 1 do hereby declare that the information as supplied above is correct 2 do hereby acknowledge that I/we have read the conditions of use subscribed hereto, and that these conditions will govern the use of the card. SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses: 1 2 (Signature of, or on behalf of applicant(s)) (Signatures of witnesses) SIGNED at (place) on this (day, month, year) in the presence of the undersigned witnesses Witnesses: 1 (Signature on behalf of bank) 2 (Signatures of witnesses)
Conditions 1 The card shall be valid from the commencement date indicated thereon to the last day of the month of the expiry date indicated thereon, subject to the card having been signed by the cardholder in the space provided therefore. 2 The card may be used only by the cardholder to which it has been issued and it is not transferable. 3 The cardholder shall sign a voucher whenever the card is used to obtain cash (other than by means of a automatic teller machine) or to purchase goods or services. 4 If a purchase is made or a service obtained through an electronic funds transfer unit, a sales voucher shall likewise be signed unless the supplier of the goods or services expressly waives the signing of a sales voucher. 5 Failure to sign a written authority when requiring cash goods or services does not relieve the cardholder from responsibility should the bank make a payment to the supplier thereof. 6 The bank undertakes to pay on behalf of a cardholder the consideration for goods or services or a cash advance supplied to the cardholder by a supplier in that amount indicated on the sales voucher or where an electronic funds transfer unit was used, the amount of the transaction that was authorised and transferred to the account of the supplier. The bank shall debit the card account of the cardholder with every such transaction. 7 No liability of whatever nature or flowing from whatever cause shall attach to the bank as a result of the purchase or use of the card by the card holder when entering in to any transaction with a supplier. 8 The bank undertakes to credit the account of the supplier in accordance with the instruction contained on the sales voucher. 9 The card is and remains the property of the bank. The bank shall at any time be entitled to demand the return of the card and may from the time of demand refuse to make any payment of any debt incurred while using the card. Such a demand shall be deemed to be valid if it is directed verbally to the cardholder, or if it is done by posting a registered letter addressed to the address of the cardholder as it is supplied above. 1 0 If the bank should decide to cancel the card, it shall be entitled to consolidate all debts incurred by using the card, and it shall be entitled to regard all such debts as due and payable. It shall be entitled to transfer the debt to any account of the cardholder of its choice. 11 The bank shall be entitled to advise all suppliers of the fact that the card has been cancelled, and that the bank will no longer exercise its right to pay the debt incurred by the cardholder in accordance with the vouchers presented to the bank. 1 2 T h e c a r d h o l d e r m a y n o t u s e t h e c a r d t o o b t a i n m o n e y o r c r e d i t f o r a n a m o u n t e x c e e d i n g t h e a m o u n t a g r e e d upon. 13 Without any notice to the cardholder should any of the following events occur: 13.1 the death of the cardholder; 13.2 the sequestration or liquidation of the cardholder; 13.3 abuse of the card and the credit facility by the cardholder. In such an event the total amount outstanding shall be due and payable to the bank without further notice. 1 4 The cardholder shall make monthly payments to the bank in accordance with the amount indicated on the statement, and on the date indicated on the statement. Any unpaid balance shall generate interest at the percentage agreed upon, or, failing such an agreement, at the maximum rate of interest legally allowed. 1 5 The cardholder shall be entitled to be credited with interest on all credit balances for the period that the account is in credit at the rate currently paid by the bank on accounts of a like nature. 1 6 T h e u s e o f t h e c a r d o u t s i d e t h e S o u t h A f r i c a n m o n e t a r y a r e a s h a l l b e g o v e r n e d b y t h e e x c h a n g e r e g u l a t i o n s published by the Reserve Bank from time to time. 17 If the bank has to resort to court action to collect any amount due by the cardholder, the bank shall be entitled to collect all expenses as well as costs based on the attorneyandclient scale from the cardholder. The bank shall be entitled to repay any amount due on the card account from any amount standing to the credit of the cardholder in any account conducted by the bank. 1 8 If the card is lost, or if the personal identity number become known to any one else than the cardholder, the cardholder shall straightaway inform the bank in writing of such occurrence. The cardholder shall in any event be liable for the payments that the bank might make in respect of any transaction entered into before such notification. This liability of the cardholder may be avoided in the event that the cardholder is a member of the lost card protection scheme and has abided by the rules thereof. 19 Should the cardholder be of the opinion that he is not liable to the bank for the payment of any debit posted to his card account, he shall within 30 days of the date of the account on which the debit appears, refer the matter to the bank and shall otherwise be deemed to have admitted liability of the statement. 2 0 The bank shall be entitled to recover from the cardholder an annual fee to cover bank charges in amount
determined by the bank from time to time, in respect of every card issued by the bank to the cardholder or every transactions effected with such card. The fee shall be debited to the card account on an annual basis and every transaction, which attracts banking charges, shall be debited on a monthly basis. 21 The bank may upon request, issue secondary linked cards and the cardholder agrees that all debits incurred on such secondary cards shall be debited to his credit card account and that such debits shall not in any manner affect the credit agreement between himself and the bank. Payment of such debits and the interest rate applicable shall be at the discretion of the bank. 22 A certificate signed by any manager, assistantmanager or accountant of the bank, certifying the amount of the c a r d h o l d e r ' s i n d e b t e d n e s s t o t h e b a n k a n d t h e a p p r o p r i a t e r a t e o f i n t e r e s t s h a l l b e prima facie p r o o f o f s u c h indebtedness and the rate of interest. 23 The magistrate's court which has jurisdiction over the cardholder shall by agreement have jurisdiction in terms of Section 45 of the Magistrate's Court Act 32 of 1944, as amended. 24 The bank shall be entitled to supply credit information relevant to the cardholder and the card account to any credit bureau at the discretion of the bank. Precedent 6 Certified copy of resolution I/We, the undersigned, hereby certify that the following resolution was passed at a duly constituted meeting of the board of directors/members/committee of (name of entity) held at (place) on (day, month, year) and has been duly recorded in the minute book: \"Resolved: That a banking account for the (name of entity) be opened with (name of bank) at the (name of branch) and that the bank be and is hereby authorised and requested to honour all cheque, bills of exchange , promissory notes or other negotiable instruments drawn, signed, accepted or made on behalf of the (name of entity) and to debit these items to the account to be kept at the bank by the (name entity) whether such account be in credit or otherwise, to hold the (name of entity) liable for all cheques, bills of exchange, promissory notes and all agreements indemnities and documents in connection with all banking transactions including the deposit and withdrawal of money on fixed depositor savings bank account, provided that all such documents are signed by any (provide number) signatories of the (name of entity) as advised to the bank. This resolutions will remain in force until the bank is advised otherwise.\" SIGNED at (place) on this (day, month, year) (Signature of executive officer) Precedent 7 Stop payment instruction To: The Manager Date: ABC Bank I/We the undersigned (provide name of client) Duly authorised thereto hereby instructs the bank to: 1 * cancel payment; 2 * change a previous stop payment instruction; 3 * cancel a previous stop payment instruction; (*Delete which is not applicable) Account number: ............ of the following: 1. Cheque(s) number .......... to .......... 2. Bill number .............. to .......... 3. Promissory note(s) number ........ to ......... Date of instrument: .......... Payee .......... Amount .......... Reason for stop payment instruction ..................
.................................. or bank guaranteed ......* Is the instrument bank certified Indemnification I/We ............. hereby indemnify the bank against any claim of whatever nature arising from this instruction in the event that the instrument is bank certified or bank guaranteed, and I will have no claim against the bank if any such instrument is paid by the bank. SIGNED at (place) on this (day, month, year) (Signature of bank official) SIGNED at (place) on this (day, month, year) Witnesses: 1 2 (Signatures of witnesses) (Signature of client) (*This document needs to be stamped in terms of the Stamp Duty Act, in the event that the indemnity is given.) Precedent 8 Application for a debit order To: The Manager ABC Bank I, the undersigned, ............. (name of applicant) do hereby request the bank to implement the following debit order: (or to amend the existing debit order or to cancel an existing debit order): Account to be credited: ............... (account number of recipient and clearing code) Account to be debited: ............... (account number and clearing code) The amount and frequency of payment are to be determined by the holder of the credit account; or (delete which is not applicable) The amount and frequency of the payment is as follows: Regular payment date: .......... Amount ......... Number of payments: ............. Weekly Month end Four monthly Biweekly Bimonthly Half yearly Monthly Quarterly Yearly Variations in debit order instructions where the amount and frequency of payment are determined by the creditor: Personal loans: 1 Instalment and arrears 2 Instalment only Mortgage loans: 1 Instalment and arrears; 2 Due amount
3 Instalment only. Credit cards: 1 A fixed amount on regular payment date 2 Minimum amount payable as per statement 3 Full amount payable as per statement 4 Full amount outstanding as per statement. (Delete which is not applicable) SIGNED at (place) on this (day, month, year) (Signature of client) B Negotiable instruments Precedent 1 Promissory note by a single maker (Maker's address) (Date) On demand (or (state) months after date or after sight) I promise to pay to (name of payee) or order (or to (name of payee) or bearer) the sum of (state amount) for value received. (Signature of maker) Precedent 2 Promissory note by joint and several makers (Addresses of all makers) (Date) On demand (or (state) months after date or after sight) we promise to pay (or w e jointly and severally promise to pay) to (name of payee) or order (or bearer) the sum of (state amount) for value received. (Signature of makers) Precedent 3 Promissory note payable by instalments (Address) (Date) I/We promise to pay to (name of payee) or order (or bearer) the sum of (state total amount) in the instalments as set out under 1 below on the dates set out under 2 below for value received: 12 Amount: (state) Date: (state) Amount: (state) Date: (state) In default of payment of any instalment the whole amount payable under this note is to become due and payable immediately.
(Signature(s) of maker(s)) Precedent 4 Promissory note containing pledge of collateral security (Maker's address) (Date) On demand (or (state) months after date or (state) days after sight) I promise to pay to (name of payee) only (o r at order) the sum of (state amount) for value received plus interest at the rate of (state) % per annum. I hereby pledge to (name of payee) as collateral security for the due payment of the amount (description of pledge) and in default of payment as aforesaid I hereby authorise the said (name of payee) either by auction, private treaty, or otherwise, to sell or dispose of the (pledge) and to reimburse himself the said sum of (state amount) plus interest calculated at the rate of (state) % per annum, rendering to me any surplus which may be forthcoming from such sale or disposal. (Signature of maker) Precedent 5 Promissory note made payable at a particular place (Maker's address) (Date) (State) months after date (o r (state) months or (state) days after sight o r on demand) I promise to pay at (name of bank and specify branch) to (name of payee) or order the sum of (state amount) for value received. (Signature of maker) Precedent 6 Promissory note made by a company (Registered address of company) (Date) On demand (or (state) months after date or (state) days after sight) the (name of company), promises to pay (name of payee) or order the sum of (state amount) for value received. Per Pro (or for and on behalf of (name of company)) Precedent 7 Bill of exchange payable on demand or at sight or on presentation (Drawer's address) (Date) R.................... (state amount of bill) On demand (or At sight or On presentation) pay to (name of payee) or order (or pay to (name of payee) or bearer or pay to my order) the sum of (state amount for which
bill is drawn) for value received. (Signature of drawer) To: (Name of drawee) (Drawee's address) Precedent 8 Bill of exchange payable after date or after sight (Drawer's address) (Date) R.................... (state amount of bill) (State) months (or other fixed time) after date or after sight pay to (name of payee) or order (or bearer or pay to my order) the sum of (state amount for which bill is drawn) for value received. (Signature of drawer) Precedent 9 Bill of exchange payable in instalments with or without interest with or without an acceleration clause (Drawer's name) (Date) R.................... (state amount of bill) On the date indicated under 1 below, pay to (name of payee) or order (or pay to (name of payee) or bearer or pay to my order) the instalment indicated under 2 below, together with accrued interest calculated at (state) % per annum on the outstanding balance of this bill. 12 Date: (state) Amount: (state) Date: (state) Amount: (state) Date: (state) Amount: (state) (If applicable the following can be added: In the event of a default in the payment of any instalment, the balance of the bill becomes due and payable.) (Signature of drawer) To: (Name of drawee) (Drawee's address) Precedent 10 Nontransferable bill of exchange (Drawer's name) (Date) R.................... (state amount of bill) (State) months after date pay to (name of payee) only the sum of (state amount for which bill is drawn) for value received. Not transferable.
(Signature of drawer) To: (Name of drawee) (Drawee's address) Precedent 11 Bill of exchange drawn without recourse (Drawer's address) (Date) R.................... (state amount of bill) (State) months after date pay to (name of payee) or order without recourse to me (or sans recours) the sum of (state amount for which bill is drawn) for value received. (Signature of drawer) To: (Name of drawee) (Drawee's address) Precedent 12 General and absolute acceptance 1.1 AB & Co. 1.2 Accepted AB & Co. 1.3 Accepted payable at (place) AB & Co. Precedent 13 Qualified acceptance 2.1 (Conditional): Accepted payable on (state condition). 2.2 (Partial): Accepted as to (state amount for which bill has been accepted where bill has been drawn for a greater amount). 2 . 3 (Local): Accepted payable at (name of bank and/or branch) at the address (state address) only and not elsewhere. 2.4 (As to time): Accepted payable (state) months from date of bill. 2.5 (By one or more of the drawers but not all): Accepted A. Precedent 14 General endorsement A & Co. Precedent 15 Special endorsement Pay B or order (or pay to the order of B) A & Co. Precedent 16 Restrictive endorsements
Pay A only. Pay A for the account of B. Pay A or order for collection. Precedent 17 Endorsement negativing liability Pay C or order without recourse. Precedent 18 Ordinary cheque X Bank Ltd (Date) (Address of drawee bank) Pay (name of payee) or order (or bearer) the sum of (state amount in words) (state amount in figures) (Signature of drawer) Precedent 19 Not transferable cheque X Bank Ltd (Date) (Address of drawee bank) Pay (name of payee) or order (or bearer) the sum of (state amount in words) (state amount in figures) Not transferable. (Signature of drawer) Precedent 20 General crossing or & Co Precedent 21 Special crossing X Bank Ltd Z Branch or X Bank to Y Bank for collection
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