In a recent snap telephonic survey, Travel News asked 10 travel agents if they still adhered to, or were aware of, a Reserve Bank ruling that requires agencies to monitor and record the issue of air tickets between destinations outside the borders of South Africa. Of the agents contacted, three said they still adhered to the ruling and monitored and recorded those tickets issued, while seven agents were not aware of the ruling or thought it had fallen away.
Travel News can confirm that a communication in the form of a letter, drafted in 2009 by the Exchange Control Department of the South African Reserve Bank as the official interpretation of the Reserve Bank Exchange Control Circular No. 5/2009, is still valid.
The letter says that the ruling can be explained as follows…
For the sale of air tickets where agents sell journeys to their corporate clients for travel between destinations outside the Republic of South Africa, payment may be accepted in rands to cover the cost of passenger tickets in order to accommodate the following:
- Corporate clients and or contractors who may need to second foreign based personnel, or outsourced persons to fulfil contractual obligations.
- Local clients with a global presence who wish to attend conferences and or training travel arranged by their corporate company.
- Leisure bookings by travel agents made via the internet.
The tickets may be issued and paid for in rands in the Republic of South Africa or abroad when an e-ticket is issued on behalf of the corporate client, ie if a South African credit card is utilised or there is a local bank transfer of funds.
This is interpreted by Absa’s International Banking division to mean that if a travel agency’s corporate client’s travel on a ticket between destinations outside the Republic of South Africa is not issued in connection with their international ticket which touches South Africa, their travel and payment must be documented and may need to be proven by the corporate company to the Exchange Control Department of the South African Reserve Bank, if they are requested to do so.
The letter says agents can make payments in respect of package tours offered by operators or companies to employees as part of an incentive scheme but must retain documentary evidence, as well as an official letter from the operator concerned, to explain that these packages are being paid for outside the borders of South Africa.
Lara Saunders, Manager of Sure Giltedge Travel, explained the process for capture of tickets within that agency’s own environment. “Consultants put an entry into the endorsement box of the ticket which must include our SARB number. This only applies to tickets that do not touch SA soil and are not issued in connection with their international ticket. We have a document where consultants record the ticket number, amount, client name and the corporate account number should we or our client be audited by the Reserve Bank.”
Travel agents’ obligations
A representative of Absa’s International Banking Department said the onus was on travel agents to explain the above Exchange Control Ruling to their corporate clients and that it was advisable to obtain sign-off that it had been explained and understood. Ideally this should form part of the corporate agreement between the travel agency and the corporate client.
The representative also confirmed to Travel News that Exchange Control might at any time perform an inspection on whether the ruling had been applied correctly by the travel agent with respect to the following points:
- Was the passenger a legitimate corporate client? i.e. Is there a signed corporate agreement in place?
- Does the agreement make note of the fact that the travel agent has explained the ruling to the corporate client and has clearly stated that the corporate client will be held liable and accountable for any transgressions where the travel agent was not aware of the fact that the ruling had been transgressed? For example, if the client purchased tickets outside of the agency environment.
- Was the ruling applied correctly by the travel agent (the applicable tickets were documented properly)?
- Travel agents must apply for an Exchange Control Application through their bank.
The representative advised: “In addition to documenting those air tickets that are issued between destinations outside the borders of South Africa, travel agents must apply for an Exchange Control Application from their bank. The letter specifies an amount in rands (anticipated sales of offshore tickets in a year period) that will cover the monetary value of those tickets issued on behalf the agency’s legitimate corporate clients for one year. The SARB number required to document tickets will be provided in this letter and permission can be renewed annually by the Reserve Bank and the monetary value increased if necessary.”
Agents must contact their South African bank, who will submit the necessary application to the Exchange Control Department and then generate the Exchange Control letter for the travel agency and its clients.
