Managing foreign exchange along the whole value chain

Volatility in international currency markets is putting importers, exporters and freight companies at risk. Small to medium exporters and importers are often most exposed because they do not have the infrastructure, skills or time to follow and take advantage of these fluctuations, says Pierre Germishuys of CGI, a specialist forex service provider based in Cape Town. In response to the need, CGI is providing a service whereby the company manages both the exchange rate risk and documentation for imports “from order to payment, and beyond”. Many SMEs rely on their banks to handle their forex payments, but the size of their exposures often does not draw the personal attention that is needed to save costs, he says. Bank services are by their nature also limited to the financial transactions, says Germishuys. “CGI wants to offer the full value chain, from the financial commitment to the movement of the goods by assisting with clearing and forwarding via partners, warehousing and distribution out of our own facility”. CGI is in the process of applying for a clearing licence to complete the range of services it provides. The company works closely with the shippers and banks to manage the documentation process in order to clear goods as speedily as possible so as not to incur demurrage charges. “It often happens that the importers, when wanting to settle their offshore commitments, do not have all the customs clearing documents readily available. “One of CGI’s added service offerings is to contact the clearing houses and apply for the documents as needed by the bank in terms of the SA Reserve Bank exchange controls in order to finalise the payment. These documents now have a unique number (MRN) that electronically matches the Supplier Invoice (Bank) and the Customs clearance document (SAD500) to the Sars release notification,” he says. CGI also assists individuals and companies with foreign exchange-related transactions. “South African resident individuals and companies can after a full SA Reserve Bank application secure a loan from a non-resident. We manage the application, the transfer, the interest calculation, and the reporting process,” he says. CGI also assists with the documentation surrounding the sending of gifts and the transfer of travel allowances and the like. “Each South African resident older than 18 years is allowed to invest an amount of R4 million per person per annum offshore with an issued original Sars tax clearance certificate. CGI will assist and guide the process from obtaining a Tax Clearance from Sars to the actual transfer in terms of SA Reserve Bank regulations,” he says. Cape Global Investments (CGI) is an authorised Financial Service Provider under the Financial Services Board (FSB).