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Administration Guide - Declarations
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What declarations must I submit in terms of the policy?
A monthly declaration of turnover.
 Click here to view the form (Sample)
Why does Credit Guarantee require these declarations?
The premium is charged on the turnover declared.
What if I don't submit these declarations in time?
Your rights under the policy may be prejudiced (i.e. you may be precluded from claiming in the event of a cause of loss).
What information must this declaration contain?
The declaration must show the total gross invoiced value of shipments made to all insured buyers in each country listed in the schedule to the policy, split according to the terms of payment allowed. If you make shipments to government buyers, these must be listed separately. If your policy covers shipments to associated buyers and if you shipped goods during the relevant month to such buyers, these should also be declared separately, for example:
| United Kingdom |
cad
1-3m
4-6m |
R1 000
R2 000
R2 000 |
United Kingdom
Associated buyers |
1-3m |
R10 000 |
Germany
Government buyers |
cadLC
1-3m |
R1 000
R3 000 |
France
Government buyers |
1-3m |
R6 000 |
The abbreviations for the terms of payment used above have the following meaning:
cadLC: Cash against presentation of shipping documents from an irrevocable letter of credit opened and/or confirmed before shipment of the goods by a bank in the buyer's country and not confirmed by a bank in South Africa.
cad: Cash against presentation of shipping documents through a bank in the buyer's country.
1-3m: Open credit - including accepted bills of exchange - payment to be made by not later than three months after date of shipment or month-end statement or delivery or arrival of goods.
4-6m: Open credit - including accepted bills of exchange - payment to be made later than three months but not later than six months after date of shipment or month-end statement or delivery or arrival of the goods.
1-3mLC: Payment from an irrevocable letter of credit opened and/or confirmed before shipment of the goods by a bank in the buyer's country and not confirmed by a bank in South Africa and payable after, but not later than three months from the date of presentation of the shipping documents. Payment under the letter of credit may not be condition upon any action or discretion of the buyer.
4-6mLC: Payment from an irrevocable letter of credit opened and/or confirmed before shipment of the goods by a bank in the buyer's country and not confirmed by a bank in SOuth Africa and payable after three months, but not later than six months from the date of presentation of shipping documents. Payment under the latter of credit may not be conditional upon any action or discretion of the buyer.
TT7d: Telegraphic transfer within seven days from the date of shipment. This rate will only apply provided you actually receive payment in South Africa within seven days from date of bill of lading. Otherwise cad rate, or where documents are released before payment, open credit premium rates will apply..
In order to simplify the completion of your monthly declaration with particular regard to the column headed Terms of payment specified in the schedule to the policy, please complete as shown hereunder.
If your schedule shows the terms of payment cadLC, cad etc, code them as shown under the respective headings:
Terms of Payment
Government Buyers
cadLC
- cadLC
cad
cadGB cad
1-3mLC
- 1-3LC
1-3m
1-3GB 1-3
4-6mLC
- 4-6LC
4.6m
4-6GB 4-6
TT7d
- TT7
|
Terms of Payment
Private Buyers
cadAC
1-3AC
4-6AC
|
If your schedule, or an Additional schedule, has an S1 or S2 etc added to the terms of payment, code as follows:
Terms of Payment
Government Buyers
cadLCS1
cadLC1
cadS1
cadDGS1 cadS1
1-3mLCS1
1-3LCS1
1-3mS1
1-3GBS1 1-3S1
4-6mLCS1
4-6LCS1
4-6mS1
4-6GBS1 4-6S1
TT7dS1
TT7S1
|
Terms of Payment
Private Buyers
cadACS1
1-3ACS1
4-6ACS1
|
Please use these abbreviations when completing your monthly declaration of turnover so that there can be no doubt about the terms of payment on which you made the relevant shipments. This will ensure that the correct premium rate is levied on the shipments concerned.
Must I give details for individual buyers?
In general, no. We are, however, entitled to ask for this information, in which
case it must be given. Normally, totals for the countries to which shipments
are made are sufficient and the only split needed is that mentioned in the previous answer.
You must, however, retain the information on which the declarations are based,
to substantiate an eventual claim.
What period must each declaration cover?
It must cover the shipments for the previous month.
When must declarations be submitted?
By not later than the 21st of the month following that for which shipments are declarable.
Thus, shipments during June should be shown in the June declaration which should be sent in by 21 July.
Must I submit a return if there were no shipments during that month?
Yes, a "nil" return must be submitted. But if your policy is classified in a special
condition as an incidental shipments policy, a declaration must only be submitted
once a shipment has been made.
What must I do if a shipment is made on terms not included in the policy?
You should ask us if we can include the new terms in the policy. Cover only
extends to transactions concluded on terms of credit within the period of
credit shown in the schedule to the policy.
What must I do if a shipment is to be made to a country not listed in the Annexure A to the policy?
The fact that a country is not listed in Annexure A does not mean that we will not be able to cover that country. If you have an all-markets policy, then you must apply for cover in the usual way. If, however, your policy is for selected markets, then you may choose whether you wish to cover that country or not. The "whole turnover principle" in proviso 4 states that when a country is covered, then all buyers in that country must be offered for cover.
Must letter of credit transactions be included in monthly turnover declarations?
Yes, unless -
- the letter of credit is confirmed by a bank in South Africa before shipment, or unless
- the policy carries a special condition to the effect that shipments payable against presentation of documents under such letters of credit are specifically excluded from the cover of the policy.
Note that irrevocable letters of credit not payable at sight/cad must always be declared.
Must invoice amounts in a foreign currency be declared in that currency, or in SA rand?
In South African rand. Amounts in foreign currencies must be converted at
the TT buying rate of exchange ruling at the date of shipment if no forward
exchange cover contract was concluded in respect of the contract of sale.
If such a forward exchange contract was concluded, then the rate of exchange
quoted in that contract must be used.
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