Government authorities
Competent authorities
16What are the relevant government agencies or departments with authority over projects in typical project areas? What is the nature and extent of their authority? What is the history of state ownership in these sectors?
The government agencies or departments with authority over projects depend on the relevant industry sector of a project. Generally speaking, the respective ministries (energy, infrastructure, transport, health, etc. and, where applicable, environment) are responsible for the initiation, authorization and major regulation of projects, either directly or through the through their government departments. In this context, the most competent authorities with entities on the projects are:
- the National Institute of Mines;
- the National Institute of Petroleum;
- the Ministry of Land Environment and Rural Development;
- the Agency for the Promotion of Investments and Exports; and
- the Bank of Mozambique.
General legal issues
Government authorization
What government approvals are required for typical project finance transactions? What fees and other charges apply?
With regard to the remittance of capital from a local company to foreign investors, the rules and procedures to be observed when carrying out foreign exchange transactions provide that foreign investors (shareholders) and lenders must register with of the commercial bank – acting as an intermediary of the Bank of Mozambique (BoM) – the importation of capital within 90 days from the date of transfer of the funds, under penalty of being filed an infringement procedure . In addition, without prejudice to the consequences provided for the non-registration of foreign exchange transactions under the general conditions, the non-registration of foreign direct investments after three years from the date of the effective entry of the investment value determines the non-recognition of the right to export profits or dividends, as well as the re-export of invested capital. The same goes for the disbursement of loans.
Apart from the BoM, the Investment and Export Promotion Agency (APIEX) is another competent authority with regard to the implementation of an investment project. Depending on the amount of investment, the government or APIEX are responsible for authorizing, monitoring and supervising investment projects. A fee of 0.1 percent of the amount of the proposed investment is due for the authorization of the investment project. With the issuance of investment project authorization conditions, project companies can benefit from tax, foreign exchange and labor incentives.
Registration of financing
Do any of the financing or project documents need to be registered or filed with any governmental authority or otherwise comply with legal formalities to be valid or enforceable?
In addition to the foreign exchange restrictions associated with cross-border financing structures and out-of-jurisdiction capital transfers, the Civil Code establishes that financing agreements of any amount must be notarized to be valid.
In addition, the Regulations on the Execution of Civil Construction Works (Decree No. 94/2013 of December 31, 2013) imposes the obligation to govern construction contracts by Mozambican law. In addition, contractors are required to register the construction contracts they enter into with the Ministry responsible for public works.
Regarding applicability, local bill documents must be signed in Portuguese or translated into Portuguese, by a sworn translator. Mozambique is not a signatory to the Hague Convention; therefore, apostilled documents are not valid and cannot be used to instruct notarial deeds in Mozambique – all official documents issued abroad may need to be notarized if the notary or registrar doubts the authenticity of the document. Therefore, it is advisable to legalize before the notary public and the Mozambican consulate of the country of origin all official documents, issued abroad, to be used to instruct notarial deeds in Mozambique and to be sent by courier in Mozambique to translation purposes.
For ease of execution, it is advised that all signatures in project documents be notarized by a notary public.
Financing or project documents executed by public entities may be subject to the approval of the administrative court to enter into force.
Special rules apply in the case of exploration and production concession contracts in the Rovuma Basin under Decree Law No. 2/2014 of December 2, 2014.
Arbitral awards
How are contractual provisions and international arbitration awards recognized by local courts? Is the jurisdiction a member of the ICSID Convention or other major dispute settlement conventions? Are certain types of disputes not arbitrable? Are there types of disputes subject to automatic internal arbitration?
Arbitral awards are recognized by local courts subject to the requirements and procedures for the enforcement of arbitral awards set forth in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and provided that they are made on the territory of another Contracting State.
Mozambique has been a contracting state to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards since 1998. The Constitution of Mozambique provides that international conventions are recognized in the domestic legal system and have the same force as legislation. internal. In addition, the Arbitration Law stipulates that international conventions prevail over the law and other internal provisions.
Mozambique is also a Contracting State to the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States and to ICSID, as well as to the ICSID Additional Facility Rules approved on September 27, 1978 and is a member of the International Chamber of Commerce.
Mozambican law establishes that all disputes are arbitrable, with the exception of disputes of a personal nature (for example, family matters) or disputes that are expressly submitted to the exclusive jurisdiction of a court of law.
Disputes regarding labor rights and disputes arising out of or in connection with administrative agreements are subject to internal arbitration.
Special rules apply in the case of exploration and production concession contracts for the Rovuma Basin under Decree Law No. 2/2014 of December 2, 2014.
Law of agreements
What jurisdictional law generally governs project agreements? Which jurisdictional law generally governs funding agreements? What matters are governed by domestic law?
The Mozambican Civil Code establishes that contracts are governed by the law chosen by the parties, if this choice is related to the contract or is supported by a good faith interest of the parties.
If a foreign law is elected in accordance with these rules, it will not be accepted if it violates the fundamental principles of Mozambican public policy and certain Mozambican principles and rules that are mandatory for the project sector.
Concession contracts and other project agreements entered into with public entities are generally governed by the general laws and regulations of Mozambique and by the specific laws and regulations applicable to the sector where the project will be implemented. Construction contracts relating to works to be carried out in Mozambique must always be governed by Mozambican law.
Funding agreements are generally governed by English law.
Mozambican conflict of laws rules state that rights regarding possession, ownership and other related rights to movable or immovable property are governed by the law of the place where the property is located. This includes creating security over these assets.
Special rules apply in the case of exploration and production concession contracts for the Rovuma Basin under Decree Law No. 2/2014 of December 2, 2014.
Submission to a foreign jurisdiction
Is a submission to foreign jurisdiction and waiver of immunity effective and enforceable? Do local courts enforce judgments of foreign courts without re-examining the case on the merits?
Submission to foreign jurisdictions and waivers of immunity are generally valid and enforceable in Mozambique, to the extent permitted by law. Submission to foreign jurisdiction is prohibited, regardless of contractual provisions, if, in accordance with Mozambican mandatory rules of procedure, Mozambican courts have jurisdiction to adjudicate a certain matter.
Environment, social and governance
Relevant ESG issues
What environmental, social and governance (ESG) issues are relevant in typical project sectors? Are project companies in your jurisdiction subject to ESG reporting requirements or other ESG laws or regulations?
Environmental challenges, including deforestation, declining fish stocks, and the loss and degradation of wetlands and rivers, are always critical in typical project areas and projects are subject to environmental laws and regulations, environmental assessments assessment and approvals (if applicable) and environmental monitoring.
Projects are subject to greater scrutiny from communities and public opinion, and social and governance issues are increasingly scrutinized. Companies are paying more and more attention to diversity. The growing relevance of ESG issues is also reflected in the planned inclusion of ESG-related clauses in certain agreements. Also, following the global pandemic, project companies plan to implement carbon footprint control through hybrid work and digitalization, with environmental benefits (reduction of CO2 emissions).
As part of the government’s commitment to becoming an inclusive middle-income country by 2030, using its resources wisely to preserve its ecosystems and sustainable and efficient development, the Green Economy Action Plan has was developed and approved by the Council of Ministers on October 15, 2013. , although ambitious progress remains limited.
Regarding reporting and disclosure, some project companies make voluntary disclosures and have created environmental and social management and monitoring plans that assess and manage the impact and risks of projects. In particular, their main objective is to ensure that projects’ environmental and social plans comply with the International Finance Company Performance Standards and the Equator Principles.
Date declared by law
Correct the
Indicate the date the above information is accurate.
June 15, 2022
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