LETTER: Exchange control regulations are outdated, scrap them
In his opinion piece, Exchange controls give SA an edge in combating transfer pricing abuse (January 19), Peter Dachs says that SA’s exchange controls help to prevent transfer pricing abuses, for example, where intellectual property is transferred offshore.
While this may be true, generally the regulations are a huge impediment to doing business in SA. The rules are archaic: they were introduced in 1961 pursuant to a 1933 Act of Parliament. They are impenetrable and often incomprehensible, even Kafkaesque. They change regularly, often monthly.
The rules are enforced by bureaucrats sitting in some office in the Reserve Bank building. Letters issued by the Bank contain no names or contact details. The Bank often withholds approval for complex bona fide international transactions with a one-liner, without providing reasons. You cannot contact the Bank directly but have to do so via a go-between retail bank — for a fee — of course.
Investors from foreign jurisdictions with few or no exchange controls are baffled by our regulations.
I say scrap them, they do more harm than good.