Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Back Matter

Back Matter

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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    APPENDIX: COUNTRY TABLE MATRIX
    Status under IMF Articles of Agreement
    Article VIII
    Article XIV
    Exchange Measures
    Restrictions and/or multiple

    currency practices
    International security restrictions
    In accordance with IMF Executive Board Decision No. 144-(52/51)
    Other security restrictions
    Exchange Arrangement
    Currency
    Other legal tender
    Exchange rate structure
    Unitary
    Dual
    Multiple
    Classification
    Exchange arrangement with no separate legal tender
    Currency board arrangement
    Conventional pegged arrangement
    Pegged exchange rate within horizontal bands
    Crawling peg
    Crawling band
    Managed floating with no predetermined path for the exchange rate
    Independently floating
    Exchange tax
    Exchange subsidy
    Forward exchange market
    Official cover of forward operations
    References to legal instruments and hyperlinks
    Arrangements for Payments and Receipts
    Prescription of currency requirements
    Controls on the use of domestic currency
    For current transactions and payments
    For capital transactions
    Transactions in capital and money market instruments
    Transactions in derivatives and other instruments
    Credit operations
    Use of foreign exchange among residents
    Payments arrangements
    Bilateral payments arrangements
    Operative
    Inoperative
    Regional arrangements
    Clearing agreements
    Barter agreements and open accounts
    Administration of control
    Payments arrears
    Official
    Private
    Controls on trade in gold (coins and/or bullion)
    On domestic ownership and/or trade
    On external trade
    Controls on exports and imports of banknotes
    On exports
    Domestic currency
    Foreign currency
    On imports
    Domestic currency
    Foreign currency
    References to legal instruments and hyperlinks
    Resident Accounts
    Foreign exchange accounts permitted
    Held domestically
    Approval required
    Held abroad
    Approval required
    Accounts in domestic currency held abroad
    Accounts in domestic currency convertible into foreign currency
    References to legal instruments and hyperlinks
    Nonresident Accounts
    Foreign exchange accounts permitted
    Approval required
    Domestic currency accounts
    Convertible into foreign currency
    Approval required
    Blocked accounts
    References to legal instruments and hyperlinks
    Imports and Import Payments
    Foreign exchange budget
    Financing requirements for imports
    Minimum financing requirements
    Advance payment requirements
    Advance import deposits
    Documentation requirements for

    release of foreign exchange for imports
    Domiciliation requirements
    Preshipment inspection
    Letters of credit
    Import licenses used as exchange licenses
    Other
    Import licenses and other nontariff measures
    Positive list
    Negative list
    Open general licenses
    Licenses with quotas
    Other nontariff measures
    Import taxes and/or tariffs
    Taxes collected through the exchange system
    State import monopoly
    References to legal instruments and hyperlinks
    Exports and Export Proceeds
    Repatriation requirements
    Surrender requirements
    Surrender to the central bank
    Surrender to authorized dealer
    Financing requirements
    Documentation requirements
    Letters of credit
    Guarantees
    Domiciliation
    Preshipment inspection
    Other
    Export licenses
    Without quotas
    With quotas
    Export taxes
    Collected through the exchange system
    Other export taxes
    References to legal instruments and hyperlinks
    Payments for Invisible Transactions and Current Transfers
    Controls on these transfers
    Trade-related payments
    Prior approval
    Quantitative limits
    Indicative limits/bona fide test
    Investment-related payments
    Prior approval
    Quantitative limits
    Indicative limits/bona fide test
    Payments for travel
    Prior approval
    Quantitative limits
    Indicative limits/bona fide test
    Personal payments
    Prior approval
    Quantitative limits
    Indicative limits/bona fide test
    Foreign workers’ wages
    Prior approval
    Quantitative limits
    Indicative limits/bona fide test
    Credit card use abroad
    Prior approval
    Quantitative limits
    Indicative limits/bona fide test
    Other payments
    Prior approval
    Quantitative limits
    Indicative limits/bona fide test
    References to legal instruments and hyperlinks
    Proceeds from Invisible Transactions and Current Transfers
    Repatriation requirements
    Surrender requirements
    Surrender to the central bank
    Surrender to authorized dealer
    Restrictions on use of funds
    References to legal instruments and hyperlinks
    Capital Transactions
    Controls on capital transactions
    Repatriation requirements
    Surrender requirements
    Surrender to the central bank
    Surrender to authorized dealer
    Controls on capital and money market instruments
    On capital market securities
    Shares or other securities of a participating nature
    Purchase locally by nonresidents
    Sale or issue locally by nonresidents
    Purchase abroad by residents
    Sale or issue abroad by residents
    Bonds or other debt securities
    Purchase locally by nonresidents
    Sale or issue locally by nonresidents
    Purchase abroad by residents
    Sale or issue abroad by residents
    On money market instruments
    Purchase locally by nonresidents
    Sale or issue locally by nonresidents
    Purchase abroad by residents
    Sale or issue abroad by residents
    On collective investment securities
    Purchase locally by nonresidents
    Sale or issue locally by nonresidents
    Purchase abroad by residents
    Sale or issue abroad by residents
    Controls on derivatives and other instruments
    Purchase locally by nonresidents
    Sale or issue locally by nonresidents
    Purchase abroad by residents
    Sale or issue abroad by residents
    Controls on credit operations
    Commercial credits
    By residents to nonresidents
    To residents from nonresidents
    Financial credits
    By residents to nonresidents
    To residents from nonresidents
    Guarantees, sureties, and financial backup facilities
    By residents to nonresidents
    To residents from nonresidents
    Controls on direct investment
    Outward direct investment
    Inward direct investment
    Controls on liquidation of direct investment
    Controls on real estate transactions
    Purchase abroad by residents
    Purchase locally by nonresidents
    Sale locally by nonresidents
    Controls on personal capital transactions
    Loans
    By residents to nonresidents
    To residents from nonresidents
    Gifts, endowments, inheritances, and legacies
    By residents to nonresidents
    To residents from nonresidents
    Settlement of debts abroad by immigrants
    Transfer of assets
    Transfer abroad by emigrants
    Transfer into the country by immigrants
    Transfer of gambling and prize earnings
    References to legal instruments and hyperlinks
    Provisions Specific to the Financial Sector
    Provisions specific to commercial banks and other credit institutions
    Borrowing abroad
    Maintenance of accounts abroad
    Lending to nonresidents (financial or commercial credits)
    Lending locally in foreign exchange
    Purchase of locally issued securities denominated in foreign exchange
    Differential treatment of deposit accounts in foreign exchange
    Reserve requirements
    Liquid asset requirements
    Interest rate controls
    Credit controls
    Differential treatment of deposit accounts held by nonresidents
    Reserve requirements
    Liquid asset requirements
    Interest rate controls
    Credit controls
    Investment regulations
    Abroad by banks
    In banks by nonresidents
    Open foreign exchange position limits
    On resident assets and liabilities
    On nonresident assets and liabilities
    Provisions specific to institutional investors
    Insurance companies
    Limits (max.) on securities issued by nonresidents
    Limits (max.) on investment portfolio held abroad
    Limits (min.) on investment portfolio held locally
    Currency-matching regulations on assets/liabilities composition
    Pension funds
    Limits (max.) on securities issued by nonresidents
    Limits (max.) on investment portfolio held abroad
    Limits (min.) on investment portfolio held locally
    Currency-matching regulations on assets/liabilities composition
    Investment firms and collective investment funds
    Limits (max.) on securities issued by nonresidents
    Limits (max.) on investment portfolio held abroad
    Limits (min.) on investment portfolio held locally
    Currency-matching regulations on assets/liabilities composition
    References to legal instruments and hyperlinks
    Changes during 2006
    Status under IMF Articles of Agreement
    Exchange measures
    Exchange arrangement
    Arrangements for payments and receipts
    Resident accounts
    Nonresident accounts
    Imports and import payments
    Exports and export proceeds
    Payments for invisible transactions and current transfers
    Proceeds from invisible transactions and current transfers
    Capital transactions
    Controls on capital and money market instruments
    Controls on derivatives and other instruments
    Controls on credit operations
    Controls on direct investment
    Controls on liquidation of direct investment
    Controls on real estate transactions
    Controls on personal capital transactions
    Provisions specific to the financial sector
    Provisions specific to commercial banks and other credit institutions
    Provisions specific to institutional investors
    Changes during 2007
    Status under IMF Articles of Agreement
    Exchange measures
    Exchange arrangement
    Arrangements for payments and receipts
    Resident accounts
    Nonresident accounts
    Imports and import payments
    Exports and export proceeds
    Payments for invisible transactions and current transfers
    Proceeds from invisible transactions and current transfers
    Capital transactions
    Controls on capital and money market instruments
    Controls on derivatives and other instruments
    Controls on credit operations
    Controls on direct investment
    Controls on liquidation of direct investment
    Controls on real estate transactions
    Controls on personal capital transactions
    Provisions specific to the financial sector
    Provisions specific to commercial banks and other credit institutions
    Provisions specific to institutional investors

    In addition to the 185 IMF member countries, the report also includes Hong Kong SAR (People’s Republic of China), as well as Aruba and the Netherlands Antilles (both Kingdom of the Netherlands).

    These include (1) a change in the name of the category “Restrictions imposed in accordance with UN sanctions” to “Other security restrictions” under category II.2 (“International Security Restrictions”); (2) the addition of a “Reference to legal instruments and hyperlinks” at the end of the section on “Exchange Measures”; (3) the inclusion of two subcategories—“Surrender to the central bank” and “Surrender to authorized dealers”—in the category “Surrender requirements” under categories “Export and Export Proceeds” and “Proceeds from Invisible Transactions and Current Transfers”; (4) the inclusion of the categories “Repatriation requirements” and “Surrender requirements” in the section on “Capital Transactions”; (5) reclassification of exchange arrangements of countries in currency unions to reflect the behavior of the common currency; and (6) the explicit inclusion of the criteria for the classification of the exchange rate structure.

    The information on exchange measures imposed for security reasons is based solely on the information directly provided by the country authorities.

    If restrictions in any country have changed since the date of issuance of the relevant document (i.e., countries have implemented changes after this date), these changes will be reflected in the next edition of this report.

    The IMF also strengthened its internal procedures for the classifications of the exchange rate arrangements and reclassified several previously contested cases.

    The AREAER distinguishes between controls that are prudential in nature and controls that are applied to the financial sector but are akin to capital controls. The report covers only cross-border or cross-currency prudential regulations. Hence, it does not cover prudential measures that do not differentiate between domestic currency and foreign exchange and/or residents and nonresidents.

    The categories comprise (1) exchange arrangement with no separate legal tender, (2) currency board arrangement, (3) conventional pegged arrangement, (4) pegged exchange rate within horizontal bands, (5) crawling peg, (6) crawling band, (7) managed floating with no predetermined path for the exchange rate, and (8) independently floating.

    The technical reclassification involved Guinea and República Bolivariana de Venezuela, their exchange rate structures having been reclassified as dual, while the exchange rate structures of Belize, Botswana, Cambodia, and Turkmenistan became unitary.

    On June 3, 2006, the State Union of Serbia and Montenegro ceased to exist following Montenegro’s declaration of independence.

    For three countries, information is not available on the existence of exchange restrictions or MCPs.

    Information on exchange restrictions and MCPs in the AREAER does not report on whether such exchange restrictions or MCPs have been approved by the IMF.

    See the Board paper for information, “Article VIII Acceptance by IMF Members—Recent Trends and Implications for the Fund, May 16, 2006,” www.imf.org/external/pp/longres.aspx?id=568.

    The standard review of the exchange systems of some of these countries was under way in 2006.

    A member should notify the IMF before imposing such measures. The notifications are immediately circulated to the Board. The member may assume that the IMF has no objection unless the IMF informs the member otherwise within 30 days of the notification. The IMF’s approval of an exchange restriction pursuant to Decision No. 144-(52/51) is granted for an unlimited period of time.

    The following transactions were exempted from the URR: (1) direct investment, government loans, and investments in immovable assets; (2) foreign loans signed prior to December 19, 2006; (3) sales of foreign exchange agreed to before December 19, 2006; (4) interbank transactions on their own account; (5) foreign currencies sold or exchanged by embassies and international organizations; (6) rollover of hedging swap transactions; (7) foreign currency loans or foreign currencies from the issuance of debt instruments; (8) foreign currencies for the purchase of nonperforming loans or for payments of guarantee obligations under court order; and (9) traveler’s checks and foreign banknotes.

    Capital controls and prudential measures are highly intertwined owing to the many overlaps in their application. For example, some of the prudential measures (such as application of discriminatory reserve requirements to deposit accounts held by residents and nonresidents) can actually be regarded as capital controls because they distinguish between transactions with residents and nonresidents and hence influence capital flows.

    Inclusion of an entry in this category does not necessarily indicate that the aim of the measure is to control the flow of capital.

    See, for instance, Ariyoshi, and others, Capital Controls: Country Experiences with Their Use and Liberalization, IMF Occasional Paper No. 190 (Washington: International Monetary Fund, 2000).

    This type of tax is often called a “Tobin tax,” as the idea of an international currency transactions tax was first advanced by the late economist James Tobin (“A Proposal for Monetary Reform,” Eastern Economic Journal, Volume IV, No. 3–4, July/October 1978, pp. 153–59), who proposed a small tax on all foreign exchange dealings. He advocated putting “sand in the wheels of international finance” by increasing transaction costs. Because the tax burden increases with the frequency of transactions carried out, theoretically short-term investments are discouraged, whereas trade credit, FDI, and longer-term instruments in general are affected only marginally.

    The definition of current payments and transfers in the IMF’s Articles of Agreement does not fully correspond to the balance of payments definition. It also includes normal short-term banking and credit facilities, moderate amounts for amortization of loans, and depreciation of direct investments.

    URRs may also be used to limit capital outflows by making them more sensitive to domestic interest rates. For example, a 100% URR imposed on banks for capital outflows undertaken on their own account would lead to a loss of double the interest income of the equivalent domestic currency transaction, minus the interest income derived from the foreign currency transaction.

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