Amendments to Section 7 (Additional Requirement) and Annex D of Circular No. 471 dated 24 January 2005 on the Sale of Foreign Exchange by Foreign Exchange Dealers/ Money Changers

CIRCULAR NO. 652 Series of 2009

Subject:  Amendments  to  Section 7 (Additional Requirement)  and Annex D of Circular No. 471 dated 24 January 2005 on the Sale of Foreign Exchange by Foreign Exchange Dealers/ Money Changers

Pursuant to Monetary Board Resolution No. 594 dated 23 April 2009, Section 7 (Additional Requirement) and Annex D of Circular No. 471 dated 24 January 2005 are hereby amended as follows:

Section 1. Section 7 (Additional Requirement) shall read as follows:

“FXDs/MCs shall require an accomplished application form and submission/presentation of supporting documents listed in Item A of Annex D for the sale of foreign exchange in the amount exceeding USD10,000 or its equivalent for non-trade current account purposes. For the sale of foreign exchange for all other purposes, FXDs/MCs shall require submission of an accomplished application form and supporting documents listed in Items B, C and D of Annex D, regardless of the amount involved.”

Section 2. The supporting documentary requirements under Annex D of Circular No. 471 shall be replaced by the following:

Minimum Documentation Requirements for the Sale of Foreign Exchange by Foreign Exchange Dealers/Money Changers

A. Sale of Foreign Exchange for Non-Trade Current Account Purposes Exceeding USD10,000

Purposes

Documents Required (All originals except as indicated)

1. Foreign Travel Funds

Applicant’s passport and passenger ticket

2. Educational Expenses/Student Maintenance Abroad

Photocopy of proof of enrolment with, or billing statement from, school abroad

3. Correspondence Studies

Photocopy of proof of enrolment with, or billing statement from, school abroad

4. Medical Expenses

Photocopy of billing statement (for services rendered/expenses incurred abroad) or certification issued by doctor/hospital abroad indicating cost estimate (on the treatment to be administered)

5. Emigrants’ assets (including inheritance, legacies, and income from properties) a. Photocopies of: i. Emigrant's visa  or  proof of residence of emigrant abroad; ii. Notarized Deed of Sale covering assets (e.g., real estate, vehicles, machineries/ equipment, etc.); and iii. Proof of income received from properties in the Philippines b. In the absence of the emigrant, a notarized Special Power of Attorney (SPA) for emigrant's representative/agent.  If SPA was executed abroad, original of SPA authenticated by Philippine consulate abroad.

6. Salary/bonus/dividend/other benefits of foreign expatriates (including peso savings)

a. Employment contract/Certification of employer on the amount of compensation paid to the foreign national during the validity of the contract stating whether the same had been paid in foreign exchange or in pesos, and if in foreign exchange, proof that the foreign exchange was previously sold for pesos to AABs; b. ACR I-Card and DOLE Alien Employment Permit of the foreign national; c. Applicant’s notarized certification that the FX remitted is net of local expenses incurred or net of previous transfers abroad; and d. If amount to be remitted comes from sources other than salaries, information regarding the sources supported by appropriate documents should be submitted.

7. Foreign nationals’ income taxes due to foreign governments

a. ACR-I Card and DOLE Alien Employment Permit; and b. Photocopy of income tax return covering the income tax payment sought to be remitted.

8. Sales proceeds of domestic assets by foreign expatriates

a. ACR I-Card; and b. Photocopy of proof of sale of asset/s

9. Producers’ Share in Movie Revenue/TV Film Rentals

a. Statement of remittable share rental or rental; and b. Photocopy of contract/agreement

10. Commissions on Exports due Foreign Agents

a. Billing statement from non-resident agent; and b. Photocopy of contract/agreement

11. Freight Charges on Exports/Imports

a. Billing statement; and b. Photocopy of contract/agreement

12. Charters and Leases of Vessels/Aircrafts

a. Billing statement from non-resident lessor/owner of vessel/aircraft; andb. Photocopy of contract/agreement

13. Port Disbursements abroad for aircraft and vessels of Philippine registry or chartered by domestic operators and salvage fees

a. Billing statement; and b. Photocopy of contract/agreement

14. Satellite and other telecommunication services

a. Billing statement; and b. Photocopy of contract/agreement

15. Other services such as advertising, consultancy, IT, fees for other professional services

a. Billing statement; and b. Photocopy of contract/agreement

16. Share in Head Office Expenses (including reimbursements)

a. Audited schedules of allocation of expenses for the periods covered; b. Certification from the head office  that the share in head office expenses remain unpaid and outstanding; and c. Audited financial statements of the Philippine branch

17. Insurance/Reinsurance Premium due to foreign insurance companies

Billings/ Invoices of insurance companies/ brokers abroad

18. Claims against domestic insurance companies by brokers abroad

Billings/ Invoices from foreign insurer/ reinsurer

19. Net Peso Revenues of Foreign Airlines/Shipping Companies

a. Statement of Net Peso Revenues (Peso revenues less expenses) certified by authorized officer of airline/shipping company; and b. Photocopy of contract/agreement

20. Royalty / Copyright / Franchise / Patent/ Licensing Fees

a. Statement/Computation of the royalty/ copyright/franchise/patent/licensing fee; and b. Photocopy of contract/agreement.

21. Net Peso Revenues of embassies/ consulates of foreign countries

Statement of net peso revenues (Peso revenues less expenses) certified by the Embassy's/Consulate's authorized officer

22. FX obligations of Philippine credit card companies to international credit card companies/non-resident merchants

Summary billings

23. Support of dependents abroad

a. Consular certificate or its equivalent documents to prove that the dependent is permanently residing abroad not earlier than one (1) year from FX application date; and b. Certified true copy of birth certificate, marriage contract, adoption papers, whichever is applicable

24. Subscriptions to foreign magazines or periodicals

a. Billing statement

25. Membership dues and registration fees to associations abroad

a. Proof of membership; and b. Billing statement

26. Mail fees

a. Copy of contract or agreement; and b. Billing statement

B. Sale of Foreign Exchange for Payment of Foreign/Foreign Currency Loans, Regardless of Amount

Purposes

Documents Required (All originals except as indicated)

Foreign/Foreign Currency Loan Payments

Payments related to Guarantees and Similar  Arrangements including Risk Take Over Arrangements

Resulting FX liabilities arising from guarantees and similar arrangements including Risk Take Over Arrangements (RTO) not involving foreign/FCDU loans

Payments related to Build-Operate-Transfer and Similar Financing Schemes with Transfer Arrangements

Regular Fees

Billing statement from creditor.

Amounts that may be purchased shall be limited to maturing amounts on scheduled due dates. Remittance of FX purchased shall coincide with the due dates of the obligations to be serviced. FX-selling entity shall stamp “FX SOLD”, date of sale and the amount/s sold on the original billing statement.

Copies of: a. Agreements/contracts covered by the guarantee/similar arrangement; b. Standby Letter of Credit (SLC) or guarantee contract/agreement; c. Proof/ notice of original obligor’s default and creditor’s call on the guarantee; and d. Billing statement from the non-resident or local bank guarantor

Copies of: a. Covering agreements/contracts; b. Billing statement from the private sector project company/proponent

C. Sale of Foreign Exchange for Capital Repatriation/Remittance of Dividends/Profits/Earnings, Outward Investments and Residents’ Investments in Foreign Currency-Denominated Bonds/Notes Issued by the Republic of the Philippines and Other Philippine Entities, Regardless of Amount

Purposes

Documents Required (All originals except as indicated)

1. Capital Repatriation of:

a. Portfolio Investments in:

i. PSE-listed securities ii. Peso Government Securities iii. Money Market Instruments (MMI) iv. Peso Bank Deposits

b. Foreign Direct Equity Investments

Broker's sales invoice Confirmation of Purchase for Peso Government Securities Matured Contract for MMI Proof of withdrawal of deposit or matured certificate of deposit, as applicable

a. Photocopy of Proof of Sale or relevant documents showing the amount to be repatriated; in case of dissolution/capital reduction, proof of distribution of funds/assets such as statement of net assets in liquidation; b. Detailed computation  of the amount applied for in the attached format prepared by the selling stockholder’s representative; and c. Photocopy of pertinent audited financial statements

2. Remittance of Dividends/ Profits/ Earnings/ Interests  a. Photocopy of PSE-cash dividends notice and Phil. Central Depository (PCD) printout of cash dividend payment or computation of interest earned issued by MMI issuer or bank; b. Photocopy of secretary’s sworn statement on the Board Resolution covering the dividend declaration; c. Photocopy of latest audited financial statements or interim financial statements covering the dividend declaration period (for direct foreign equity investments)

3. Residents’ Outward Investment

a. Direct Equity Investments

b. Portfolio Investments

a. Photocopy of investment proposal/agreement, or subscription agreement; and b. Photocopy of Deed of Sale or Assignment of the investments

a. Photocopy of subscription agreement, or bond/stock offering; b. Swift payment order instruction from the counterparty/broker/trader indicating the name of payee and type/kind of investment authenticated by the broker/trader; and c. Photocopy of investor’s order to broker/trader to buy the securities

4. Residents’ Investments in FX-Denominated Bonds/Notes Issued by the Republic of the Philippines and Other Philippine Entities

a. Photocopy of subscription agreement or bond offering; b. Swift payment order instruction from the counterparty/broker/trader indicating the name of payee and type/kind of investment authenticated by the broker/trader; and c. Photocopy of investor’s order to broker/trader to buy the securities

D. Sale of Foreign Exchange for Payment of Importations, Regardless of Amount

Payment for merchandise imports

a. Bill of lading or airway bill covering the merchandise imports; and b. Commercial invoice

as required under Section 9(b) of Republic Act No. 9160 (Anti-Money Laundering Act of 2001) dated 29 September 2001, as amended, FXDs/MCs shall retain photocopies of documents presented to support foreign exchange purchases for five (5) years from date of such purchase.

Section 3.  Effectivity.  This Circular shall take effect fifteen (15) calendar days after publication either in the Official Gazette or in a newspaper of general circulation.

FOR THE MONETARY BOARD

ARMANDO L. SURATOS Officer-In-Charge