Chapter

Compilation Guide

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 1999
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Status Under IMF Articles of Agreement
Article VIIIThe member country has accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF’s Articles of Agreement.
Article XIVThe member country continues to avail itself of the transitional arrangements of Article XIV, Section 2.
Exchange Arrangement
CurrencyThe official legal tender of the country.
Other legal tenderThe existence of another currency that is allowed to be used officially in the country.
Exchange rate structureThe existence of more than one exchange rate that may be used simultaneously for different purposes and/or by different entities. If there is one exchange rate, the system is called unitary; if there are more than one, the system is called dual or multiple.
Classification
Exchange rate with no separate legal tenderThe currency of another country circulates as the sole legal tender, or the member belongs to a monetary or currency union in which the same legal tender is shared by the members of the union.
Currency board arrangementsA monetary regime based on an implicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligation.
Conventional pegged arrangementThe country pegs its currency (formally or de facto) at a fixed rate to a major currency or a basket of currencies, where the exchange rate fluctuates within a narrow margin of at most ±1% around a central rate.
Pegged exchange rate within horizontal bandsThe value of the currency is maintained within margins of fluctuation around a formal or de facto fixed peg that are wider than ±1% around the central rate.
Crawling pegThe currency is adjusted periodically in small amounts at a fixed, preannounced rate or in response to changes in selective quantitative indicators.
Crawling bandThe currency is maintained within certain fluctuation margins around a central rate that is adjusted periodically at a fixed preannounced rate or in response to changes in selective quantitative indicators.
Managed floating with no preannounced path for the exchange rateThe monetary authority influences the movements of the exchange rate through active intervention in the foreign exchange market without specifying, or precommitting to, a preannounced path for the exchange rate.
Independently floatingThe exchange rate is market determined, with any foreign exchange intervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate, rather than at establishing a level for it.
Exchange taxThe existence of a special tax on foreign exchange transactions.
Exchange subsidyForeign exchange transactions are subsidized by using separate, nonmarket exchange rates.
Forward exchange marketThe existence of a forward exchange market.
Official cover of forward operationsOfficial coverage of forward operations refers to the case where an official entity (the central bank or the government) assumes the exchange risk of certain private foreign exchange transactions.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe official requirements affecting the selection of currency and the method of settlement of transactions with other countries. When a country has concluded payment agreements with other countries, the terms of these agreements often lead to a prescription of currency for specified categories of payments to and from the countries concerned.
Payment arrangements
Bilateral payment arrangementsTwo countries conclude an agreement to prescribe specific rules for payments to each other, including cases where private parties are also obligated to use specific currencies. These agreements can be either operative or inoperative.
Regional arrangementsMore than two parties participate in a payment agreement.
Clearing agreementsThe official bodies of two or more countries agree to offset with some regularity the balance that arises in the payments to each other as a result of exchange of goods, services, or less often, capital.
Barter agreements and open accountsThe official bodies of two or more countries agree to offset exports of goods and services to one country with imports of goods and services from the same country, without effective payment.
Administration of controlThe authorities’ division of responsibilities for policy and the administration of exchange controls, and the extent of delegation of powers to outside agencies (often banks authorized to effect foreign exchange transactions).
International security restrictionsRestrictions on payments and transfers for international transactions imposed by member countries for reasons of national or international security.
In accordance with Executive Board Decision No. 144-(52/51)International security restrictions on the basis of IMF Executive Board Decision No. 144-(52/51) establishing the obligation of members to notify the IMF before imposing such restrictions, or, if circumstances preclude advance notification, as promptly as possible.
In accordance with UN sanctionsSanctions imposed against a second party on the basis of a UN decision.
Payment arrearsOfficial or private residents of a member default on their payments or transfers to nonresidents. This category includes only the situation in which the domestic currency is available for the residents to settle their debts, but they are unable to obtain foreign exchange, for example, because of the presence of an officially announced or unofficial queuing system. The category does not cover nonpayment of private parties due to the bankruptcy of the party concerned.
Controls on trade in gold (coins and/or bullion)The existence of separate rules for trading gold both domestically and with foreign countries.
Controls on exports and imports of banknotesThe existence of regulations for the physical movement of means of payment between countries. When information is available, the category distinguishes between separate limits for the:
(1) exports and imports of banknotes by travelers; and
(2) exports and imports of banknotes by banks and other authorized financial institutions.
Resident Accounts
The category describes the manner in which the country treats resident accounts, if any, that are maintained in the national currency or in foreign currency, locally or abroad, and the facilities and limitations attached to such accounts. When there is more than one type of resident account, the nature and operation of the various types of accounts are also described: for example, if residents are allowed to open foreign exchange accounts with or without approval from the foreign exchange authority or if these accounts are allowed to be held domestically or abroad. Also, it is important to note whether the balances on accounts held by residents in domestic currency are allowed to be converted into foreign currency.
Nonresident Accounts
The category describes the manner in which the country treats local nonresident accounts, if any, that are maintained in the national currency or in foreign currency, and the facilities and limitations attached to such accounts. When there is more than one type of nonresident account, the nature and operation of the various types of accounts are also described.
Blocked accountsBlocked accounts of nonresidents are usually accounts in domestic currency. Regulations do not allow or limit the conversion and/or transfer of the balances of such accounts.
Imports and Import Payments
Describes the nature and extent of exchange and trade restrictions in imports.
Foreign exchange budgetInformation on the existence of a foreign exchange plan, i.e., a prior allocation of a certain amount of foreign exchange, usually on an annual basis, for the importation of specific types of goods and services; in some cases, also differentiating between individual importers.
Financing requirements for importsInformation on specific import financing regulations limiting the rights of residents to conclude private contracts in which the financing options differ from the official regulations.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsThe obligation to domicile the transactions with a specified (usually domestic) financial institution.
Preshipment inspectionMost often a compulsory government measure aimed at establishing the veracity of the import contract in terms of volume, quality, and price.
Letters of creditPrivate parties are obligated to use letters of credit as a form of payment for their imports.
Import licenses used as exchange licensesThe import licenses are not used for trade purposes but to restrict the availability of foreign exchange for legitimate trade.
Import licenses and other nontariff measures
Positive listA list including goods that may be imported.
Negative listA list including goods that may not be imported.
Open general licensesThe item indicates arrangements whereby certain imports or other international transactions are exempt from the restrictive application of licensing requirements.
Licenses with quotasRefers to cases where a license for the importation of a certain good is granted, but a specific limit is imposed on the amount to be imported.
Other nontariff measuresMay include the prohibition to import certain goods or all goods from a certain country. Several other nontariff measures are used by members (e.g., phytosanitary examinations, setting of standards, etc.), but these are not entirely covered by the annual report.
Import taxes and/or tariffsA brief description of the import tax/tariff system, including taxes levied on the foreign exchange made available for imports.
State import monopolyPrivate parties are not allowed to engage in the import of certain commodities or they are limited in their activity.
Exports and Export Proceeds
Identifies restrictions on the use of export proceeds as well as regulations on exports.
Repatriation requirementsRefers to the obligation of exporters to bring into the country export proceeds.
Surrender requirementsRefers to regulations requiring the recipient of export proceeds to sell, sometimes at a specified exchange rate, any foreign exchange proceeds in return for local currency to the central bank, commercial banks, or authorized exchange dealers.
Financing requirementsInformation on specific export financing regulations limiting the rights of residents to conclude private contracts in which the financing options differ from the official regulations.
Documentation requirementsThe same categories are used as in the case of imports.
Export licensesRestrictions on the right of residents to export goods. These restrictions may take the form of quotas (when a certain quantity of shipment abroad is allowed) or without quotas, when the licenses are issued at the discretion of the foreign trade authority.
Export taxesA brief description of the export tax system, including the existence of taxes that are levied on the foreign exchange earned by exporters.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersDescribes the procedures for effecting payments abroad for current transactions in invisibles with reference to prior approval requirements, the existence of quantitative and indicative limits, and/or bona fide tests. Detailed information on the most common categories of transactions is provided only when regulations differ for the various categories. Indicative limits establish maximum amounts up to which the purchase of foreign exchange is allowed upon declaration of the purpose of the transaction, mainly for statistical purposes. Amounts above those limits are granted if the bona fide nature of the transaction is established by the presentation of appropriate documentation. Bona fide tests also may be applied for transactions for which quantitative limits have not been established.
Trade-related paymentsThe comprehensive category includes freight/insurance (including possible regulations on non-trade-related insurance payments and transfers); unloading/storage costs; administrative expenses; commissions; and customs duties and fees.
Investment-related paymentsThe comprehensive category includes profits/dividends; interest payments (including interest on debentures, mortgages, etc.); amortization of loans or depreciation of direct investments; and payment and transfer of rent.
Payments for travelIncludes international travel for pleasure, recreation, business, etc.
Personal paymentsThe comprehensive category includes medical costs; study abroad costs; pensions (including regulations on the payment and transfer of pensions by both state and private pension providers on behalf of nonresidents, as well as the transfer of pensions due to residents); and family maintenance/alimony (including regulations on the payment and transfer abroad of family maintenance/alimony by residents and the transfer of family maintenance/alimony received by residents from abroad).
Foreign workers’ wagesTransfer abroad of earnings by nonresidents working in the country.
Credit card use abroadUse of credit and debit cards to pay for invisible transactions.
Other paymentsThe comprehensive category includes subscription/membership fees; authors’ royalties; and consulting/legal fees.
Proceeds from Invisible Transactions and Current Transfers
Encompasses all regulations governing exchange receipts derived from transactions in invisibles, as well as a description of any limitations on their conversion into domestic currency and the use of those receipts.
Repatriation requirementsThe concepts of repatriation and surrender requirements are similar to those applied to export proceeds.
Restrictions on use of fundsRefers mainly to the limitations imposed on the use of receipts previously deposited in certain bank accounts.
Capital Transactions
Describes regulations influencing capital movements. The concepts of controls and capital transactions are interpreted broadly. Thus, controls on capital movements include prohibitions; need for prior approval, authorization, and notification; multiple currency practices; discriminatory taxes; and reserve requirements or interest penalties imposed by the authorities that regulate the conclusion or execution of transactions or transfers with respect to both inward and outward capital flows or the holding of assets at home by nonresidents and abroad by residents. The coverage of the regulations would apply to receipts as well as payments and to actions initiated by nonresidents and residents. Moreover, because of their close association with capital movements, information is also provided on local financial operations conducted in foreign currency. Regarding the latter, it indicates specific regulations in force limiting residents and nonresidents in issuing a security denominated in foreign currency or generally limitations on concluding a contract expressed in terms of foreign exchange.
Controls on capital and money market instrumentsRefers to the public offering or private placement on a primary market or listing on a secondary market.
On capital market securitiesRefers to shares and other securities of a participating nature, and bonds and other securities with an original maturity of more than one year.
Shares or other securities of a participating natureTransactions with shares and other securities of a participating nature are included in this category if the investment is not effected with the goal to acquire a lasting economic interest in the management of the enterprise concerned, which is treated under direct investments.
Bonds or other debt securitiesRefers to bonds and other securities with an original maturity of more than one year. The term “other securities” includes notes and debentures.
On money market instrumentsRefers to securities with an original maturity of one year or less, and includes short-term instruments, such as certificates of deposit and bills of exchange. It also includes treasury bills and other short-term government paper, banker’s acceptances, commercial paper, interbank deposits, and repurchase agreements.
On collective investment securitiesIncludes share certificates and registry entries or other evidence of investor interest in an institution for collective investment, such as mutual funds, and unit and investment trusts.
Controls on derivatives and other instrumentsRefers to operations in other negotiable instruments and nonsecuritized claims not covered under the above subsections. These may include operations in rights; warrants; financial options and futures; secondary market operations in other financial claims (including sovereign loans, mortgage loans, commercial credits, negotiable instruments originating as loans, receivables, and discounted bills of trade); forward operations (including those in foreign exchange); swaps of bonds and other debt securities; credits and loans; and other swaps (interest rate, debt/equity, equity/debt, foreign currency, as well as swaps of any of the instruments listed above). Included here are controls on operations in foreign exchange without any other underlying transaction (e.g., on spot or forward trading on the foreign exchange markets, on forward cover operations, etc.).
Controls on credit operations
Commercial creditsCovers operations directly linked with international trade transactions or with the rendering of international services.
Financial creditsThe category includes credits other than commercial credits granted by all residents, including by banks to nonresidents or vice versa.
Guarantees, sureties, and financial backup facilitiesThe category includes sureties, guarantees, and financial backup facilities by residents to nonresidents and vice versa. It also includes guarantees and sureties, including securities pledged for payment or performance of a contract, such as warrants or avals, performance bonds, and standby letters of credit; and financial backup facilities, which are credit facilities used as a guarantee for independent financial operations.
Controls on direct investmentRefers to investment for the purpose of establishing lasting economic relations both abroad by residents and in the country by nonresidents. These investments are essentially for the purpose of producing goods and services, and, in particular, investments that allow investor participation in the management of the enterprise. It includes the creation or extension of a wholly owned enterprise, subsidiary, or branch, and the acquisition of full or partial ownership of a new or existing enterprise that results in effective influence over the operations of this enterprise.
Controls on liquidation of direct investmentRefers to the transfer of principal, including the initial capital and capital gains, of a direct investment as defined above.
Controls on real estate transactionsRefers to the acquisition of real estate not associated with direct investment. It includes, for example, control on investments of a purely financial nature in real estate or the acquisition of real estate for personal use.
Controls on personal capital movementsCovers transfers initiated on behalf of private persons and intended to benefit another private person. It includes transactions involving property to which a promise of a return to the owner with payments of interest is attached (loans, settlements of debt in their country of origin by immigrants), or transfers free of charge to the beneficiary (gifts and endowments, loans, inheritances and legacies, and emigrants’ assets).
Provisions specific to commercial banks and other credit institutionsDescribes regulations that are specific to these institutions, such as monetary, prudential, and foreign exchange controls. Inclusion of an entry in this part does not necessarily signify that the aim of the measure is to control the flow of capital. Some of these items (borrowing abroad, lending to nonresidents, purchase of locally issued securities denominated in foreign exchange, investment regulations) could merely be repetitions of the entries under respective categories of controls on capital and money market instruments, controls on credit operations, or direct investments when the same regulations apply to commercial banks than to other residents.
Open foreign exchange position limitsThis item describes the existence and contents of regulations on certain commercial bank balance sheet items (including capital) or absolute limits covering commercial banks’ positions in foreign currencies (including gold).
Provisions specific to institutional investorsDescribes controls specific to institutions, such as insurance companies and pension funds.
Other restrictions imposed by securities lawsRefers to additional regulations on capital movements imposed by those laws, such as restrictions on the listing of foreign securities on local security markets.

Islamic State of Afghanistan

(Position as of December 31, 1994)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of the Islamic State of Afghanistan is the Afghani. Two types of Afghanis are in circulation; that which circulates in the north is illegal in Kabul and other areas under Taliban control.
Exchange rate structure
DualThe Da Afghanistan Bank (DAB), the central bank, maintains an official rate defined in terms of the U.S. dollar. The official rate is applied to no more than 10% of convertible currency transactions, including a few transactions of the central government (mainly debt-service payments) and certain foreign currency incomes earned in the Islamic State of Afghanistan. Almost all other official transactions are conducted at a commercial rate set by the government. A free market, in the form of a money bazaar, is also operative. In the north, the free market exchange rate is about Af 75,000 per $1, and in other areas, it is about Af 25,000 per $1. The exchange rate applied to transactions of international organizations is set at 80% of the level of the commercial exchange rate.
Classification
Independently floatingMost convertible currency transactions are effected at the floating commercial market rate. The DAB posts rates for deutsche mark, French francs, Indian rupees, Pakistan rupees, pounds sterling, and Swiss francs.
Exchange taxn.a.
Exchange subsidyn.a.
Forward exchange marketThere are no arrangements for forward cover against exchange rate risk operating in the official market or the commercial banking sector.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with countries with which the Islamic State of Afghanistan maintains bilateral payment agreements are made in bilateral accounting dollars in accordance with the procedures set forth in these agreements. Exchange rates for trade under bilateral payment agreements are determined under each agreement. The proceeds from exports of karakul to all countries must be obtained in convertible currencies. There are no other prescription of currency requirements.
Payment arrangements
Bilateral payment arrangementsThe Islamic State of Afghanistan maintains bilateral payment agreements with Bulgaria, China, and Russia. Some of these have been inactive for several years, and others are being phased out.
OperativeYes.
InoperativeYes.
Administration of controlForeign exchange transactions are controlled by the government through the DAB. No restrictions apply to transactions in the free exchange market.
International security restrictionsn.a.
Payment arrearsn.a.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports and reexports of gold are permitted, subject to regulations. Exports of gold bullion, silver, and jewelry require permission from the DAB and the Ministry of Finance. Commercial exports of gold and silver jewelry and other articles containing minor quantities of gold or silver do not require a license. Customs duties are payable on imports and exports of silver in any form, unless the transaction is made by, or on behalf of, the monetary authorities.
Controls on exports and imports of banknotes
On exports
Domestic currencyTravelers may take out up to Af 2,000 in domestic banknotes and Af 50 in coins.
On imports
Domestic currencyTravelers may bring in up to Af 2,000 in domestic banknotes and Af 50 in coins.
Foreign currencyTravelers entering the Islamic State of Afghanistan are required to spend a minimum of the equivalent of $26 a day in foreign exchange. They may bring in any amount of foreign currency but must declare it when entering the country if they intend to take out any unspent amount on departure, subject to the above minimum conversion requirement.
Resident Accounts
Foreign exchange accounts permittedn.a.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedn.a.
Domestic currency accountsn.a.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetAn annual import program drawn up by the Ministry of Commerce covers both public and private sector imports. Adjustments in the public sector import plan are made as circumstances change. The import plan for the private sector, drawn up on the basis of proposals submitted by the Chamber of Commerce, is indicative.
Financing requirements for importsn.a.
Documentation requirements for release of foreign exchange for imports
Letters of creditPayments for imports through the banking system to countries with which the Islamic State of Afghanistan has payment agreements may usually be made only under LCs. Payments to other countries may be made under LCs, against bills for collection, or against an undertaking by the importer to import goods of at least an equivalent value to the payment made through the banking system. Except for public sector imports under the government budget, all importers are required to lodge minimum import deposits with banks when they open LCs. The deposit ratios, based on the c.i.f. value of imports, are 20% for essential products and range from 30% to 60% for other products.
Import licenses and other nontariff measuresImports are not subject to licenses, but import transactions must be registered before orders are placed abroad.
Positive listMost bilateral agreements, however, specify quantities (and sometimes prices) for commodities to be traded.
Negative listThe importation of certain drugs, liquor, arms, and ammunition is prohibited on grounds of public policy or for security reasons; in some instances, however, special permission to import these goods may be granted. The importation of a few textiles and selected nonessential consumer goods is also prohibited.
Licenses with quotasThere are no quantitative restrictions on most imports, but tariff rates on most consumer items range from 30% to 50%.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExport proceeds from bilateral accounts may be retained in bilateral clearing dollar accounts with the DAB. These retained proceeds may either be used directly by the original exporter or sold to other importers. In either case, the retained proceeds are converted at the clearing rate applicable to that particular bilateral arrangement. In the case of exports to countries trading in convertible currencies, export proceeds may be retained abroad for three, six, or twelve months, depending on the country of destination. During the relevant period, the exporter may use these funds to import any goods not included on the list of prohibited goods. Alternatively, at the end of the relevant holding period limit, foreign exchange holdings abroad must be repatriated and held in a foreign currency account with a bank in the Islamic State of Afghanistan or sold at the commercial exchange rate.
Surrender requirementsProceeds from exports of raisins, fresh fruits, animal casings, skins, licorice roots, medicinal herbs, and wool must be surrendered immediately at the commercial exchange rate.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesExport transactions must be registered. The exportation of opium and museum pieces is prohibited. Otherwise, control is exercised only over exports to bilateral agreement countries.
Without quotasYes.
Export taxesn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersForeign exchange for most private purposes may be acquired in the money bazaar.
Investment-related paymentsNo information is available on amortization of loans or depreciation of direct investments.
Payments for travelThe DAB levies a charge of Af 0.75 per $1 and 1% of hard currency for permits that approve the exportation of convertible currency by authorized travelers.
Prior approvalYes.
Quantitative limitsThe limit for tourist travel is $1,000, except for private travel to India, for which the limit is the equivalent of $700. The limit for business travel is $15,000.
Personal paymentsFor medical treatment, the central bank levies a commision of Af 0.75 per $1. No information is available for other types of personal payments other than medical costs.
Prior approvalYes.
Quantitative limitsNormally, the DAB grants $2,500 for medical treatment.
Foreign workers’ wagesForeign employees working in the Afghan public and private sectors must convert 60% of their foreign currency salaries into Afghanis at the official rate.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsn.a.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instrumentsn.a.
Controls on derivatives and other instrumentsn.a.
Controls on credit operationsn.a.
Controls on direct investment
Inward direct investmentInvestments require prior approval and are administered by the Investment Committee. The law stipulates that foreign investment in the Islamic State of Afghanistan can take place only through joint ventures, with foreign participation not exceeding 49%, and that an investment approved by the Investment Committee requires no further license in order to operate in the Islamic State of Afghanistan. The Foreign and Domestic Private Investment Law includes the following provisions:
(1) income tax exemption for four years (six years outside Kabul province), beginning with the date of the first sale of products resulting from the new investment;
(2) exemption from import duties on essential imports (mainly for capital goods);
(3) exemption from taxes on dividends for four years after the first distribution of dividends, but not more than seven years after the approval of the investment;
(4) exemption from personal income and corporate taxes on interest on foreign loans that constitute part of an approved investment;
(5) exemption from export duties, provided that the products are not among the prohibited exports; and
(6) mandatory procurement by government agencies and departments from enterprises established under the law, as long as the prices are not more than 15% higher than those of foreign suppliers.
Controls on liquidation of direct investmentCapital may be repatriated after five years at an annual rate not exceeding 20% of the total registered capital.
Controls on real estate transactionsn.a.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutionsn.a.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1995–98
The IMF has not received from the authorities the information required for a description of the exchange and trade system since 1995.

Albania

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Albania is the Albanian lek.
Other legal tenderIn special cases, and with prior approval from the Bank of Albania (BOA), foreign exchange may serve as a means of payment.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the lek is determined on the basis of supply and demand for foreign exchange. The BOA calculates and announces the daily average exchange rates for the dollar and 22 other major currencies. No margins are set between buying and selling rates for the official exchange rate. Government transactions are conducted at market rates. However, the commercial banks charge commissions ranging from 0.2% to 2%, depending on the amount, for cashing traveler’s checks.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsPayment for all merchandise trade is made in convertible currencies. All transactions under bilateral payment agreements were suspended in 1992, and the settlement of clearing accounts is pending the outcome of negotiations.
Payment arrangements
Bilateral payment arrangements
InoperativeAlbania maintains bilateral payment agreements in nonconvertible currencies with Algeria, Bulgaria, Cuba, the Czech Republic, Egypt, Hungary, the Democratic People’s Republic of Korea, Poland, Romania, and Vietnam. Albania also maintains bilateral payment agreements in convertible currencies with Bulgaria, China, Cuba, the Czech Republic, Greece, the Democratic People’s Republic of Korea, Romania, Turkey, Vietnam, and the Federal Republic of Yugoslavia (Serbia/Montenegro).
Administration of controlThe BOA is vested with the powers to administer exchange controls. The BOA may (1) license, authorize, regulate, supervise, and revoke the licenses of foreign exchange market operations, as well as second-tier banks; (2) define the limits of their activities; and (3) regulate and supervise foreign exchange operations and international payments. There is a reporting requirement on banks and exchange dealers for transactions above $15,000 or its equivalent at the exchange rate prevailing on the date the transaction is effected.
International security restrictionsNo.
Payment arrears
OfficialAlbania has arrears on debts with China, Greece, Turkey, and with a number of commercial creditors.
PrivateYes.
Controls on trade in gold (coins and/or bullion)n.r.
Controls on exports and imports of banknotes
On exports
Domestic currencyNatural and juridical persons are allowed to take out up to lek 100,000 a person in banknotes and coins. The BOA may authorize larger amounts.
Foreign currencyForeign visitors may take abroad in cash or traveler’s checks foreign exchange in an amount equal to the amount declared when entering the country. Albanian natural or juridical persons are not allowed to export amounts larger than $15,000 or its equivalent.
On imports
Domestic currencyNatural and juridical persons are allowed to import up to lek 100,000 in domestic banknotes and coins. The BOA may authorize larger amounts.
Foreign currencyNatural and juridical persons are allowed to import foreign currency and traveler’s checks up to $15,000 or its equivalent in any other currency.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadResidents (natural or juridical persons) may open and maintain foreign-currency-denominated accounts with banks and financial institutions abroad only with the prior approval of the BOA.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsFor imports equal to or larger than $5,000 or its equivalent, the following documents must be submitted: (1) an application for carrying out the transaction as well as a declaration specifying in detail the nature of the transaction; (2) a contract and an invoice (or a pro forma invoice) issued by the natural or juridical person supplying the goods; and (3) a declaration issued by the natural or juridical person wishing to carry out the transaction with the bank that the underlying document has not been used to support previous transactions.
Letters of creditLCs, bank guarantees, or cash against documents should be used for the payment of imports equal to or in excess of $200,000 or its equivalent.
Import licenses used as exchange licensesYes.
Import licenses and other nontariff measuresThe import of the following products are prohibited: (1) dangerous waste, such as toxic corrosives, residual waste for explosives, and radioactive materials; (2) military poisons, chemical weapons, and other strong poisons; (3) narcotics and psychotropic substances; and (4) animal products from infected countries.
Positive listYes.
Open general licensesYes.
Import taxes and/or tariffsThere are five tariff rates: zero, 5%, 10%, 20%, and 30% that are applied to the c.i.f. value.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsAll private and public companies or individuals operating in the export sector are required to repatriate their foreign exchange receipts.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesThere are export bans on raw hides and skins, metal scraps, copper and articles thereof, works of art, arms and ammunitions, as well as parts and accessories thereof, explosives and pyrotechnic products.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersSupporting documents for transactions exceeding $5,000 are required.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsPurchases of these instruments abroad by residents require prior approval of the BOA. Trade in these instruments is subject to the control of the Albanian Securities Commission.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsTransactions in these instruments are subject to the control of the Albanian Securities Commission, but these are not yet regulated.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.r.
Controls on credit operations
Commercial credits
By residents to nonresidentsCommercial banks may not, without the prior approval of the BOA, extend credit to nonresidents, except banks and other financial institutions.
Financial credits
By residents to nonresidentsCommercial banks may not, without the prior approval of the BOA, extend credit to nonresidents, except banks and other financial institutions.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
Controls on direct investment
Outward direct investmentOutward direct investments are subject to the prior approval of the BOA.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsPurchases are subject to the prior approval of the BOA.
Purchase locally by nonresidentsThe controls relate only to the purchase of land.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
Gifts, endowments, inheritances, and legacies
To residents from nonresidentsn.r.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Commercial banks may not, without the prior approval of the BOA, extend credit to nonresidents, except to banks and other financial institutions.
Lending locally in foreign exchangeThe BOA may impose credit ceilings on outstanding stock of credits for each commercial bank.
Differential treatment of deposit accounts held by nonresidents
Credit controlsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThe limit is 10% of the banks’ capital for a single currency and 20% for all currencies.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsn.r.
Other controls imposed by securities lawsn.r.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Algeria

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: September 15, 1997.
Exchange Arrangement
CurrencyThe currency of Algeria is the Algerian dinar.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe external value of the dinar is set at the interbank foreign exchange market. No margin limits are imposed on buying and selling exchange rates in the interbank foreign exchange market. However, a margin of DA 0.017 has been established between the buying and selling rates of the Bank of Algeria (BOA) for the dinar against the dollar.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketAuthorized banks may provide forward cover to residents, but this has not taken place.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with countries with which no payment agreements are in force are made in convertible currencies. Payments under foreign supply contracts may be made in either the currency in use at the headquarters of the supplier or that of the country of origin of the merchandise, except that transactions with Morocco may be effected in dollars through special clearing accounts maintained at the central banks of the respective countries.
Payment arrangements
Clearing agreementsSpecified noncommercial settlements with Morocco and Tunisia are made through a Moroccan dirham account at the Bank of Morocco and a Tunisian dinar account at the Bank of Tunisia.
Administration of controlThe BOA has general jurisdiction over exchange controls. Authority for a number of exchange control procedures has been delegated to seven commercial banks and the Postal Administration.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may purchase, hold, and sell gold coins in Algeria for numismatic purposes. Unworked gold for industrial and professional use is distributed by the Agence nationale pour la distribution et la transformation de l’or et des autres métaux précieux (AGENOR); this agency is also authorized to purchase gold in Algeria and to hold, process, and distribute any other precious metals.
Controls on external tradeAGENOR is authorized to import and export any precious metals, including gold. Gold used by dentists and goldsmiths is imported by AGENOR. Gold and other precious metals are included on the list of items importable by concessionaires.
Controls on exports and imports of banknotes
On exports
Domestic currencyResident travelers may take out up to DA 200 a person.
Foreign currencyForeign nonresident travelers may reexport any foreign currency they declared upon entry. Resident travelers may export foreign currency withdrawn from their foreign currency accounts up to the equivalent of F 50,000 a trip for an unlimited number of trips a year.
On imports
Domestic currencyResident travelers may reimport up to DA 200 a person. Nonresidents are not permitted to bring in Algerian dinar banknotes.
Foreign currencyThere are no restrictions on the importation of foreign banknotes, but residents and nonresidents must declare them when they enter Algeria.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyThese accounts may be freely credited with book transfers of convertible currencies from abroad using either postal or banking facilities, imported convertible foreign currencies that were declared at the time of the account holder’s entry into the country, and domestic bank-to-bank book transfers between accounts held by individuals. These accounts may be debited freely for book transfers abroad but only through the banking system. They may also be debited for purchases of dinars, for book transfers in dinars, and for purchases of convertible foreign currencies to be physically exported by the account holder. The interest rate payable on deposits in these accounts is fixed quarterly by the BOA.
Economic entities are also allowed to open foreign currency accounts for receiving and making foreign currency transfers, including the retained proportion of their export proceeds. They may transfer funds in these accounts to other foreign currency accounts or use them to make payments in Algeria or to make foreign currency payments for goods and services pertaining to their business.
Held abroadNo.
Accounts in domestic currency convertible into foreign currencyThese accounts are permitted in limited cases, such as for embassies.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with foreign currency banknotes and other means of payment denominated in foreign currency, as well as other dinar-denominated funds that meet all requirements for transfers abroad. They may be debited without restrictions to make transfers abroad, to export through withdrawals of foreign banknotes, and to make dinar payments in Algeria. These accounts pay interest and may not show a net debit position.
Domestic currency accountsFinal departure accounts may be opened, without prior authorization, in the name of any natural person residing in Algeria who is not of Algerian nationality, and who intends to leave Algeria to return to his or her country of origin. These accounts may be credited with an amount equivalent to the holdings as of October 20, 1963, of the person concerned; with the proceeds from sales of real estate by the account holder, provided that the funds are paid directly by a ministerial officer; with the proceeds of the sale of securities through a bank; and with any other payments up to DA 2,000. These accounts may be debited without prior approval for certain payments in Algeria on behalf of the account holder.
Convertible into foreign currencyOutward transfers require individual approval from the BOA.
Blocked accountsIndividual suspense accounts may be opened without authorization and may be credited with payments from any country.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsPayments for imports of gold, other precious metals, and precious stones must be made from foreign currency accounts. External borrowing by importers for import financing purposes must be arranged through the authorized intermediary banks.
Advance payment requirementsExcept when otherwise indicated by the BOA, down payments for imports may not exceed 15% of the total value of imports. When a public agency, public enterprise, or ministry incurs expenditures for imports deemed to be urgent or exceptional, the bank may effect payment before exchange and trade control formalities have been completed.
Advance import depositsAlthough not an official regulation, domiciled banks may require from the importer, as part of their normal commercial operations, a deposit in dinars up to the full value of the imports.
Documentation requirements for release of foreign exchange for importsImports must be insured by Algerian insurers.
Domiciliation requirementsAll imports are subject to obligatory domiciliation at an authorized intermediary bank, which an importer must establish by submitting a commercial contract or pro forma invoice. Import payments may be made freely but only through the domiciled bank, which effects payments in foreign exchange and debits the importer’s account with corresponding amounts in dinars valued at the official exchange rate.
Preshipment inspectionYes.
Letters of creditYes.
Import licenses and other nontariff measuresAny juridical or natural person registered under the Commercial Register (including concessionaires and wholesalers) may import goods without prior authorization; no license is needed.
Negative listThere are no legal restrictions against Israel, but there are no imports from Israel in practice. A small number of imports are prohibited for religious or security reasons.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds must be repatriated within 120 days. Petroleum companies are subject to the same rule, but proceeds may be deposited in a guaranteed account with a foreign correspondent bank of the BOA.
Surrender requirementsAll export proceeds from crude and refined hydrocarbons, byproducts from gas, and mineral products must be surrendered to the BOA. Exporters of other products must surrender 50% of the proceeds to the interbank market; the remaining portion may be retained in a foreign currency account. Exporters may use the funds in these accounts for imports or other payments pertaining to their business, or they may transfer the funds to another foreign currency account. Proceeds from exports of nonhydrocarbons and nonminerals may be surrendered to commercial banks and other authorized participants in the interbank foreign exchange market.
Financing requirementsNo.
Documentation requirementsThe requirements are not enforced in practice.
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionYes.
Export licensesAll exports to Israel are prohibited, and certain exports are prohibited for social or cultural reasons regardless of destination.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related paymentsInformation is not available on the payment or transfer of amortization of loans or depreciation of direct investments.
Prior approvalProfit remittances are permitted, provided tax obligations have been met.
Payments for travelForeign exchange allocation for tourism by Algerian residents was suspended in October 1986. Pilgrims traveling to Saudi Arabia receive an allowance in Saudi Arabian riyals. The amount is fixed for each pilgrimage and may be provided in the form of checks that may be cashed on arrival for those traveling by air or by sea. Travel tickets purchased by nonresidents for travel abroad must be paid for with imported foreign exchange.
Prior approvalYes.
Quantitative limitsThe quantitative limit is DA 15,000.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalApproval of the BOA is required for transfers of pension income. For family maintenance and alimony payments, the BOA must authorize the granting of foreign exchange. Limits are set on a case-by-case basis.
Quantitative limitsThe limits for medical costs are DA 15,900 for adults, and DA 7,600 for children under 15 years old. For studies abroad, the limit is DA 7,500.
Indicative limits/bona fide testInformation is not available on family maintenance and alimony transfers.
Foreign workers’ wagesResidents of other countries working in Algeria under technical cooperation programs for public enterprises and agencies, or for certain mixed companies may transfer abroad up to 100% of their salaries.
Indicative limits/bona fide testYes.
Credit card use abroadNo.
Other payments
Prior approvalApproval of the BOA is required for payments relating to subscriptions and membership fees and consulting and legal fees.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsFifty percent of receipts must be surrendered to the banks.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsCapital transfers to any destination abroad are subject to individual approval by the BOA.
On capital market securities
Shares or other securities of a participating nature
Purchase abroad by residentsYes.
On money market instruments
Purchase abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase abroad by residentsYes.
Controls on credit operationsThere are controls on all credit transactions, guarantees, sureties, and financial backup facilities by residents to nonresidents.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentForeign direct investment is freely permitted, except in certain specified sectors, provided that it conforms to the laws and regulations governing regulated activities and that prior declaration is made to the authorities.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsYes.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBanks and financial institutions may borrow from abroad for their own needs or for those of their clients.
Lending locally in foreign exchangeBanks and financial institutions may on-lend foreign funds borrowed abroad.
Differential treatment of deposit accounts in foreign exchange
Interest rate controlsThe interest rates applicable to foreign currency accounts are determined quarterly by the BOA.
Open foreign exchange position limitsBanks and financial institutions are required to meet the following: (1) a maximum spread of 10% between their position (short or long) in each currency and the amount of their counterpart funds in domestic currency; and (2) a maximum spread of 30% between total exposure (short and long positions, whichever is highest) for all foreign currencies and domestic currency resources.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsn.a.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Angola

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Angola is the Angolan readjusted kwanza.
Exchange rate structureUnitary.
Classification
Crawling pegAll transactions take place at the official exchange rate, and exchange houses are obliged to deal at the official exchange rate set for commercial banks. Between July 1998 and September 1998, the central bank implemented weekly devaluations of 4.5% (in dollar terms). In October 1998 and December 1998, the exchange rate was devalued by 6.3% and 12.5%, respectively. The official exchange rate stood at KZR 700,000 per $1 at end-December 1998. These adjustments are not preannounced. The National Bank of Angola (BNA) applies a spread of 1% to its buying and selling exchange rates (primary official), and commercial banks apply a spread of 4.08% to their buying and selling rates (secondary official). An illegal parallel rate also exists as a result, and the premium as of end-1998 was between 58.81% and 58.97%.
Exchange taxThe BNA applies an exchange tax of 1%.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe BNA prescribes the currency to be used in import and export transactions, which is either that of the country of origin of imports or the country of destination of exports, or the dollar.
Payment arrangements
Barter agreements and open accountsBilateral arrangements, which do not contain bilateral payment features, are maintained with Brazil, Portugal, and Spain.
Administration of controlThe BNA is the exchange authority and may delegate its powers pertaining to specific activities to other entities. The BNA has authorized commercial banks and exchange houses to carry out transactions in the official foreign exchange market. Foreign exchange dealers licensed to operate in foreign exchange may deal only in banknotes and traveler’s checks. The BNA has delegated authority to banks to license and execute permitted invisible and capital transactions in foreign exchange.
International security restrictionsn.a.
Payment arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are permitted to hold and trade gold only in the form of jewelry.
Controls on external tradeImports and exports of gold are the monopoly of the BNA.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of domestic currency are prohibited.
Foreign currencyResidents are permitted to take out more than $5,000 in foreign exchange only if they present exchange purchase documents. Nonresidents are allowed to bring into the country any amount of foreign exchange, but these amounts must be declared. When leaving Angola, nonresidents are allowed to take with them up to the amount declared.
On imports
Domestic currencyReimports of domestic currency are prohibited.
Foreign currencyThere are no limits on the amount of foreign banknotes or traveler’s checks that a person may bring into the country, but any amount must be declared upon arrival.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyCheckbooks may not be issued against personal accounts. These accounts may be credited with retained export earnings, foreign currency transferred from abroad, cash, traveler’s checks, foreign payment orders, and interest accrued. They may be debited with sales against domestic currency, but not for settlement of imports of goods and invisibles or capital payments. Transfers between these accounts are prohibited.
Held abroadEnterprises in the petroleum sector are allowed to open foreign exchange accounts to pay for imports of goods and services. Approval is required to open these accounts.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with foreign exchange transferred from abroad or the deposit of proceeds from the account holder’s activities in Angola. They may be debited with the sale of foreign exchange or the repatriation of all or part of the existing deposit.
Domestic currency accountsAccounts in readjusted kwanzas may be opened or held by nonresidents, but the funds in such accounts may only be withdrawn to cover expenses incurred during their stay in Angola. Nonresidents have two types of domestic currency accounts: type A and type B. The type A account must be credited by selling cash and by depositing the receipts from the nonresidents’ activity in the country (when allowed by the BNA), and must be debited by issuance of checks for payments of the local expenses and by the purchase of the means of payments abroad.
The type B account must be credited with the deposit of the receipts of the nonresidents’ activity in the country with residents’ entities (when allowed by the BNA), and must be debited by issuance of checks for payment of local expenses.
Convertible into foreign currencyThese accounts are permitted, but prior approval is required.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsn.a.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionYes.
Letters of creditYes.
Import licenses and other nontariff measures
Positive listAll imports are subject to licensing. The issuance of import licenses for transactions paid with foreign exchange purchased from the banking system is subject to the availability of foreign exchange. Import licenses are also required for statistical purposes even if the foreign exchange is not purchased from the banking system. These licenses are issued upon application. Licenses for imports requiring foreign exchange from the banking system are granted only to importers registered with the Ministry of Commerce and require a pro forma invoice from the supplier valid for 30 days that includes the price and shipment cost, as well as a bank guarantee of payment of the local currency counterpart. Prior to shipment, products must be submitted for inspection to ascertain compliance with market-competitive pricing by the Société générale de surveillance. Import licenses are valid for 180 days after issuance and may be extended once for an additional 180 days. A license fee of 0.1% of the import value is levied. The importation of goods using the importer’s own funds requires the prior sale of foreign currency to a commercial bank in an amount equal to the value of the operation in question. It is also possible to import under the bonded warehouse system, in which case the importer applies to the commercial bank for the requisite authorization, presenting the required documentation. Merchandise imports involving credit from the exporter are subject to analysis by the BNA as a means of ensuring optimal and sound management of external financial resources and guaranteeing compliance with, and maintenance of, a sustainable level of indebtedness. Accordingly, in submitting the import documentation to the commercial bank, importers must attach the terms and conditions of credit with respect to the goods to be imported, and must then follow the same procedures that apply to other arrangements.
Negative listThere are no restrictions regarding the importation of arms, ammunition, and money.
Import taxes and/or tariffsYes.
State import monopolyThere is a state import monopoly on oil and derived products.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsExcept for foreign oil and mine companies, all export proceeds must be surrendered to the BNA or the commercial bank through which exports were carried out. The BNA may authorize exporters of goods and services, not related to oil and mine sectors, to retain the totality of foreign exchange earnings to be deposited in accounts at local banks. Proceeds from exports must be collected and surrendered within 30 days of shipment. Some Angolan firms may receive a portion of their export earnings in foreign exchange in accounts opened abroad for that purpose. The decision to grant eligibility for this special arrangement is based on the role that such accounts play in generating revenue for Angola. However, the amounts involved are determined on a case-by-case basis.
Foreign oil companies are allowed, under a contract, to retain part of export receipts abroad for payment of imports of goods and services, profits transfer, and the amortization of capital. These companies must only import funds for payment of royalties, taxes, and local expenses. Diamond companies are allowed to retain in banks in the country or abroad a percentage of the receipts of exports for payment of imports of goods and services.
Financing requirementsn.a.
Documentation requirements
Letters of creditYes.
DomiciliationYes.
Preshipment inspectionYes.
Export licenses
Without quotasExcept for exports of the foreign oil companies, all exports of goods and services are subject to licensing. Exports of arms and ammunition and ethnological collections are prohibited. Special export regimes apply to aircraft, animals and animal products, historical objects, minerals and mineral products, toxic substances, cotton, rice, pork, coffee, cereals, wood and wood products, tobacco, and petroleum. Reexports of goods other than capital goods and personal belongings are also prohibited.
Export taxesYes.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related paymentsFreight and insurance service contracts with nonresidents are subject to licensing. Preferential treatment is given to domestic air and sea transportation companies, and imports not insured domestically are approved only in exceptional cases.
Prior approvalYes.
Investment-related payments
Prior approvalYes.
Quantitative limitsForeign investors may remit dividends provided the investment in the resident company exceeds $250,000. In this case, an authorization from the MOF is required only as a formality. Regarding limits, there is no information available for the amortization of loans or depreciation of direct investments.
Payments for travel
Quantitative limitsResident nationals may, upon presentation of their passports and airline tickets, purchase foreign exchange from financial institutions as follows: (1) children up to the age of 18 years, up to $2,500 a person a trip to any country; and (2) individuals over 18 years, up to $5,000 a person a trip to any country. Companies may purchase foreign exchange from financial institutions to cover their employees’ travel expenses abroad on trips of up to 30 days for business, service, or training, with the following daily limits: (1) president or equivalent, $350; (2) vice-president or equivalent, $300; and (3) department director or equivalent, $200. If a person returns to Angola earlier than planned, the remaining foreign exchange must be resold to a financial institution.
Personal payments
Prior approvalFor medical expenses, foreign exchange is provided through the National Health Board on a case-by-case basis at the official rate.
Quantitative limitsFor medical expenses, the limit is $5,000. Education travel costs are normally expected to be covered by scholarships, but an additional foreign exchange amount may be granted: up to $2,500 a month is granted to residents who spend up to 90 days abroad for educational, scientific, or cultural purposes. For family maintenance and alimony payments, up to the equivalent of $1,500 a month may be granted to Angolans or foreigners residing abroad who are direct ascendants or descendants of, and financially dependent on, residents in Angola, provided that (1) they are minor descendants under 18 years or, if of legal age, demonstrate that they are students or are incapable of working; or (2) they are ascendants over 60 years or, if younger, demonstrate they are incapable of working. Information is not available for the transfer of pensions.
Indicative limits/bona fide testNo information is available for the transfer of pensions.
Foreign workers’ wages
Prior approvalYes.
Other payments
Prior approvalYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsService earnings must be surrendered to the BNA or to the commercial banks within 180 days of receipt, unless the provider is authorized by the BNA to retain a certain proportion of the proceeds.
Restrictions on use of fundsYes.
Capital Transactions
Controls on capital and money market instrumentsForeign investment activities (i.e., the setting up of new companies or branches, but also acquisition of equity, total or partial takeover of operations, and lending related to profit sharing) are subject to the provisions of the Foreign Investment Law as well as the provisions of foreign exchange legislation and regulations. Implementation is the responsibility of the Foreign Investment Institute. Foreign investments in the areas of petroleum production, diamond mining, and financial institutions are governed by separate legislation. All capital transfers are subject to licensing by the BNA, which has delegated certain authority to the commercial banks.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securitiesNo markets exist in Angola for such securities.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsThere are no such instruments in Angola, but, in principle, transactions are covered by foreign exchange and foreign investment legislation.
Controls on credit operationsThere are controls on all credit operations.
Commercial creditsResident foreign companies must obtain prior authorization from the MOF and, above certain limits, from the BNA to borrow abroad.
Controls on direct investment
Outward direct investmentAccording to the Exchange Control Law, Angolan citizens are permitted to invest abroad.
Inward direct investmentForeign investment is prohibited in the following areas: (1) defense, internal public order, and state security; (2) central banking and currency issue; and (3) other areas reserved for the state. Direct investments in the mining sector are encouraged.
Controls on liquidation of direct investmentForeign investors are guaranteed the right to transfer abroad the proceeds of the sale of investments, including gains and amounts owed to them after payments of taxes due, but prior approval of the MOF is required.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Controls on personal capital movements
Loans
To residents from nonresidentsYes.
Transfer of assets
Transfer into the country by immigrantsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsReserve requirements apply to local currency deposits only.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Liquid asset requirementsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1998
Exchange arrangementSeptember 30. The exchange arrangement was reclassified from “other conventional fixed peg arrangements” to “crawling peg.”
December 31. The official exchange rate was devalued to KZR 700,000 per $1.

Antigua and Barbuda

Position as of December 31, 1998

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 22, 1983.
Exchange Arrangement
CurrencyThe currency of Antigua and Barbuda is the Eastern Caribbean dollar issued by the ECCB.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe Eastern Caribbean dollar is pegged to the U.S. dollar, the intervention currency, at EC$2.70 per US$1. The ECCB also quotes daily rates for the Canadian dollar and the pound sterling.
Exchange taxA foreign exchange levy of 1% is applied on purchases of foreign currency.
Exchange subsidyn.a.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of member countries of the CARICOM must be made either in the currency of the country concerned or in Eastern Caribbean dollars. Exports to Jamaica are settled in U.S. dollars. Settlements with residents of other countries may be made in any foreign currency or in Eastern Caribbean dollars.
Payment arrangements
Regional arrangementsAntigua and Barbuda is a member of the CARICOM.
Clearing agreementsYes.
Administration of controlThe MOF applies exchange control to all currencies.
International security restrictionsNo.
Payment arrearsYes.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesn.a.
Resident Accounts
Foreign exchange accounts permittedExternal accounts may be opened, especially in tourist-oriented industries or export trade where receipts are primarily in foreign currency and a large number of inputs are imported or financed in foreign currency.
Held domesticallyThese accounts may be opened, but commercial banks are required to report external accounts operations to the MOF on a monthly basis.
Held abroadn.a.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedExternal accounts may be maintained in any currency and may be credited with receipts from sales of merchandise (whether from export-oriented or local production) or from remittances. Commercial banks are required to report external accounts operations to the MOF on a monthly basis.
Domestic currency accountsn.a.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsn.a.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence.
Import licenses and other nontariff measuresCertain commodities require individual licenses, unless imported from CARICOM countries. Antigua and Barbuda follows the CARICOM rules of origin adopted.
Open general licensesMost goods may be freely imported under OGLs granted by the MOF and the Ministries of Industry and Commerce.
Import taxes and/or tariffsAntigua and Barbuda applies the CARICOM’s CET. Tariff rates range from zero to 25% for nearly all items. There are no tariffs on a number of items, including milk and poultry. Exemptions from import duties exist for some goods, including basic foods and agricultural goods. Other exemptions for machinery, equipment, and raw materials are granted on a case-by-case basis.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsn.a.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesNo.
Export taxesReexports are not subject to any tax if transactions take place within the bonded area.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles (related to authorized imports) exceeding EC$100,000 require prior approval for certain categories, except for payments for freight, insurance, unloading and storage costs, administrative expenses, commissions, and profits and dividends, which are not subject to controls.
Investment-related paymentsProfits may be remitted in full after compliance with corporate income tax payments. Information is not available on the amortization of loans or depreciation of direct investments.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalApproval is required only for amounts exceeding the equivalent of EC$100,000.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal paymentsInformation is not available on the transfer of pensions.
Prior approvalPayments related to family maintenance and alimony are allowed if provided for in the contract.
Quantitative limitsFor payments related to medical and studies abroad, approval on a case-by-case basis is required only for amounts exceeding the equivalent of EC$100,000.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalThese remittances are allowed, if provided for in the contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalPayments for consulting and legal fees are allowed, if provided for in the contract.
Quantitative limitsThe limit for subscriptions and membership fees is EC$10,000 a year.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Outward direct investmentLarge transfers abroad for investment purposes may be phased over time by the Financial Secretary.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAn alien landholding license is required, and the purchase must be approved by the Cabinet.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)MOF approval is required for these transactions. Loans are subject to a 3% stamp duty.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Argentina

(Position as of January 31, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 14, 1968.
Exchange Arrangement
CurrencyThe currency of Argentina is the Argentine peso.
Other legal tenderTransactions in convertible currencies are permitted, and contracts in these currencies are legally enforceable, although the currencies are not legal tender.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe external value of the peso is pegged to the U.S. dollar under a currency board type of arrangement. Exchange rates of other currencies are based on the buying and selling rates for the U.S. dollar in markets abroad.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketSwap transactions and forward exchange operations are permitted in any currency, and the rates may be freely negotiated.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions with countries with which there are no payment agreements must be settled in freely convertible currencies.
Payment arrangements
Regional arrangementsWithin the framework of the multilateral clearing system of the LAIA, payments between Argentina and Brazil, Chile, Colombia, Dominican Republic, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela are settled voluntarily through payment agreements and a reciprocal credit mechanism. All payments between Argentina and Bolivia must be made through the accounts specified in the agreements.
Argentina has agreements with Cuba, Malaysia, and Russia. Payments between Argentina and these countries are settled on a voluntary basis through accounts opened with the Central Bank of Argentina (BCRA) and the other central banks concerned, with the exception of Cuba, where settlement through the accounts specified in the agreements is obligatory.
Clearing agreementsYes.
Administration of controlAll exchange transactions are carried out through entities authorized expressly for this purpose with no restrictions on the purchase or sale of foreign exchange at market prices. These authorized entities include banks, exchange agencies, exchange houses, exchange offices, and financial companies. Each type of institution is subject to separate regulations. Credit funds and mortgage savings and loan companies may also make certain foreign exchange transactions on the condition that they meet certain additional capital requirements.
International security restrictions
In accordance with UN sanctionsRestrictions on current payments with respect to Iraq, Libya, and the Federal Republic of Yugoslavia (Serbia/Montenegro) are imposed.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may hold gold coins and gold in any other form in Argentina or abroad. Financial institutions, exchange houses, and exchange agencies may buy or sell gold in the form of coins or good delivery bars among themselves, and may buy such gold from their clients, as well as other precious metals, the market value of which is based on the daily list prices of major transactions.
Controls on external tradeThe importation of gold coins and bars is not restricted. Gold exports must be paid for in convertible currencies. Imports of gold by industrial users are subject to a statistical duty of 0.5%, as well as a sales tax. Institutions may carry out arbitrage operations with their clients in gold coins or bars against foreign banknotes. Authorized institutions may export gold to entities abroad.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedAuthorized banks may open accounts in pesos or in foreign exchange provided that identification requirements aimed, inter alia, at preventing money laundering have been met. Foreign exchange accounts must be denominated in convertible currencies and may be credited only with cash or with remittances in the following currencies: U.S. dollars for current accounts, savings, and fixed-term deposits; and other currencies that the BCRA explicitly authorizes at the request of financial institutions for deposits in savings and fixed-term accounts. Credit balances may be used freely in Argentina or abroad. Transfers between accounts may be made freely. The use of checking accounts denominated in U.S. dollars is allowed for domestic transactions.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedAuthorized banks may open accounts in pesos or in foreign exchange provided that identification requirements aimed, inter alia, at preventing money laundering have been met.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionFor a reduced list of products.
Import licenses and other nontariff measures
Negative listRestrictions are in force solely for security, hygiene, and public health reasons.
Open general licensesFor a reduced list of products.
Licenses with quotasQuantitative restrictions are applied to the automobile sector and to some paper products, and to footwear.
Other nontariff measuresThere are no nontariff barriers on intra-MERCOSUR trade. Argentina, however, applies a special regime to automobile and sugar imports with the authorization of MERCOSUR, pending agreement on a common regime for these sectors. Quantitative restrictions are applied to the automobile and to footwear. There is a quantitative restriction on clothes, and some capital and secondhand goods.
Import taxes and/or tariffsA substantial portion of intra-MERCOSUR trade is conducted at a zero tariff rate, but member countries may maintain tariffs for some items. Argentina applies tariffs to certain textiles, paper, and iron and steel products. This regime was in force until the end of 1998, at which time tariffs were reduced to zero. There is no common regime in MERCOSUR for automobiles and sugar.
Argentina and the MERCOSUR countries apply a CET to imports from the rest of the world that encompasses all products. CET rates currently range from zero to 20%. The majority of products are taxed with an additional 3% tariff until December 31, 2000. There are three lists of exceptions to the CET: (1) the national list for 300 products until 2001; (2) capital goods list with 14% CET until 2001; and (3) computers and telecommunications list with a maximum CET of 16% until 2006.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasLicenses are required for arms, sensitive goods, and war materials.
With quotasQuantitative restrictions on exports only on protected animal species.
Export taxesA 5% export duty is applied to untanned, pickled aplite, and wet blue leathers, and a 3.5% duty is applied to soybeans, groundnuts, flax, turnips, sunflower seeds, and cotton.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsUnder the regulations of the National Securities Commision (CNV), foreign investors must meet the same requirements as those applicable to Argentine investors to make a public offering of securities in Argentina. In each case, they must establish a permanent representative office and a domicile in Argentina to receive notices. They must state whether the securities are also being offered to the public in their country of origin, and specify the initial and periodic information requirements to which they are subject. If the CNV believes that the regulations in the country of origin properly protect local investors and guarantee an adequate flow of information, the CNV may lower the requirements for these investors. The CNV may authorize foreign investors on a case-by-case basis to submit only such information as they would periodically submit to the corresponding authority in their jurisdiction of origin.
Bonds or other debt securities
Sale or issue locally by nonresidentsThe same conditions apply as for the sale or issue of shares of a participating nature.
On money market instruments
Sale or issue locally by nonresidentsThe control is applied only for commercial papers.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsApproval of the CNV is required for public offerings.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentYes.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsFor purchases of real estate in border areas, a foreign investor must seek prior approval for the project from the Border Superintendency of the Ministry of Defense. This limitation exists for national security reasons.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)The credit granted by financial intermediaries must be used in the country and must finance investment, production, commercialization, and consumption of goods and services for internal demand or exports.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadYes.
Limits (max.) on portfolio invested abroadThere is a 25% limit of the investment trust portfolio, but this limit does not apply to MERCOSUR. For diversification and according to law, no more than 10% of pension funds may be invested in securities issued by a foreign sovereign, or in securities of foreign corporations issued abroad.
Limits (min.) on portfolio invested locallyIn the event that the trust’s assets consist of the securities, a tender offer should be made in Argentina or abroad with a minimum of 75% of the investment being made in assets issued and traded in Argentina.
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsDue to the implicit list associated with positions in different currencies other than the U.S. dollar, additional capital is required to cover those lists. Deposits and loans in those currencies are computed to build the position.
Changes During 1998
Capital transactions
Provisions specific to institutional investorsSeptember 1. Limits on the net global position in foreign currency were eliminated.
Changes During 1999
Imports and import paymentsJanuary 1. Tariffs on certain textiles, paper, and iron and steel products were reduced to zero for intra-MERCOSUR trade.

Armenia

(Position as of April 30, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 29, 1997.
Exchange Arrangement
CurrencyThe currency of Armenia is the Armenian dram.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the dram against the dollar is determined on the basis of exchange rates in the interbank market and at foreign exchange auctions held five times a week in the Yerevan Stock Exchange (YSE) and twice a week in the Gjumry Stock Exchange (GSE). Banks and financial dealers holding licenses from the Central Bank of Armenia (CBA) may participate in the auctions. Anyone may buy and sell at the auction through banks. However, since late 1996, foreign exchange transactions have taken place predominantly in the interbank market in which the CBA also participates. The CBA intervention in the foreign exchange market is limited to the smoothing of exchange rate fluctuations. The CBA quotes official rates in terms of dollars daily on the basis of the weighted average rate in the interbank market and at the foreign exchange auctions on the previous trading day. This rate is used for accounting valuation of all foreign exchange transactions of all economic agents, including the MOF. Exchange rates for other major currencies are calculated either on the basis of quotations on the YSE, when applicable, or solely on the basis of quotations for the dollar in major international interbank markets against the currencies concerned. Foreign exchange is also freely bought and sold by enterprises and persons without restrictions through authorized banks and licensed exchange bureaus that conduct cash transactions.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketResidents and nonresidents may freely negotiate forward exchange contracts for both commercial and financial transactions in all leading convertible currencies in the domestic exchange market and at major international foreign exchange markets. However, for the time being, the forward exchange market in Armenia is still undeveloped, although some banks sign forward contracts in small amounts.
Official cover of forward operationsYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Bilateral payment arrangements
InoperativeArmenia maintains agreements with Russia and Turkmenistan.
Regional arrangementsArmenia is a signatory of the 1993 Treaty of Economic Union (with Azerbaijan, Belarus, Kazakhstan, Kyrgyz Republic, Moldova, Russia, Tajikistan, and Uzbekistan), which provides for the eventual establishment of a customs union, a payments union, cooperation on investment, industrial development, and customs procedures. Armenia also joined the Agreement on the Establishment of Payments Union of CIS member countries. Armenia is a member of the Black Sea Economic Cooperation (BSEC) organization (with Albania, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine). Bilateral free trade agreements have been signed with Georgia, the Kyrgyz Republic, Moldova, Russia, Tajikistan, and Ukraine, though only the agreement with Russia is in operation.
Clearing agreementsThere is an arrangement with Turkmenistan for the importation of natural gas. In addition, bilateral clearing agreements with the Baltic countries and the other countries of the FSU exist, but all have become largely inoperative.
Administration of controlThe CBA has overall responsibility for regulating financial relations between Armenia and other countries in close collaboration with the MOF. Resident and nonresident currency dealers, including banks, may undertake foreign exchange transactions without restriction. There are no restrictions on current and capital movements unless otherwise specified by the CBA (in which case, one month’s notice is required).
International security restrictionsn.a.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)A license is required for trading.
Controls on domestic ownership and/or tradeThere are no specific regulations governing domestic trade in gold.
Controls on external tradeYes.
Controls on exports and imports of banknotes
On exports
Foreign currencyIndividuals are authorized to transfer, deliver, and export currency denominated in foreign exchange up to $10,000 in cash or its equivalent without any restriction.
Exports exceeding that amount are permitted through bank transfers.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadThese accounts are permitted, but prior approval is required.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listImport licenses from the Ministry of Agriculture and the Ministry of Health are required and granted on a case-by-case basis to import medicinal preparations and pesticides. Imports of weapons, military equipment and parts, and explosives require special authorization from the government.
Import taxes and/or tariffsThere are two rates of customs duties: zero and 10%; most imports are zero rated. Products imported from countries in the CIS are exempted.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsThe CBA has the power, as specified by legislation, to impose repatriation requirements on export proceeds.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required for medicines, wild animals and plants, and textile products exported to the EU. In addition, special government permission is required for the export of nuclear technology, nuclear waste, related nonnuclear products, and technology with direct military applications. Minimum threshold prices for the export of ferrous and nonferrous metals and the reexport of foreign-produced goods thereof remain in force.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsIn accordance with the constitution, nonresidents are not allowed to acquire land in Armenia.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsEffective April 9, 1999, the CBA eliminated the option for banks to hold 50% of required reserves against deposits in foreign exchange in either foreign or domestic currency.
Open foreign exchange position limitsThe long foreign exchange position (the positive difference between foreign assets and liabilities) at the end of any business day must not exceed 40% of the bank’s total capital. Effective March 1, 1998, the overall position must not exceed 40% of the bank’s capital at the end of any business day, while the open position in nonconvertible currencies must not exceed 10% of the bank’s total capital. Effective April 1, 1999, the limit on the overall foreign exchange position was lowered to 30%.
On nonresident assets and liabilitiesYes.
On resident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 1998
Capital transactions
Provisions specific to commercial banks and other credit institutionsMarch 1. The overall position must not exceed 40% of the bank’s total capital at the end of any business day, while the open position in nonconvertible currencies must not exceed 10% of the bank’s total capital.
Changes During 1999
Capital transactions
Provisions specific to commercial banks and other credit institutionsApril 1. The CBA eliminated the option for banks to hold 50% of required reserves against deposits in foreign exchange in either foreign or domestic currency.
April 1. The limit on the overall foreign exchange position of banks was lowered to 30% of their capital.

Aruba

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of Aruba is the Aruba florin.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe florin is pegged to the dollar at Af. 1.79 per $1. The Centrale Bank van Aruba (CBA), the central bank, deals with local commercial banks within margins of 0.002795% on either side of parity.
Exchange taxA foreign exchange commission of 1.3% is levied on all payments to nonresidents, except when settled in Netherlands Antillean guilders. Certain institutions or groups are exempted from paying this commission.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlThe CBA administers foreign exchange control.
International security restrictions
In accordance with UN sanctionsYes.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of domestic banknotes is prohibited.
Foreign currencyThe exportation of foreign banknotes requires a license, except for traveling purposes.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyThese accounts are permitted, but prior approval is required.
Held abroadThe opening of an account held abroad must be reported to the CBA.
Accounts in domestic currency convertible into foreign currencyThese accounts are not allowed.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyBalances up to Af. 200,000 are convertible.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Licenses with quotasThe importation of eggs may be subject to quotas depending on the domestic supply situation.
Import taxes and/or tariffsYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, export proceeds must be converted into local currency within eight working days or credited to a foreign currency account with a local foreign exchange bank or deposited in a foreign bank account approved by the CBA.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersMost restrictions on these transactions have been eliminated.
Investment-related payments
Indicative limits/bona fide testInterest payments on all types of loans can be executed if a license has been obtained from the CBA to conclude the loan. As regards profits and dividends, documents should be submitted to the CBA with respect to the amount involved. Authorization may proceed only if a license was obtained for the loan. In the case of depreciation of direct investments, a special license is required.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, proceeds must be converted into local currency within eight working days or credited to a foreign currency account with a local foreign exchange bank or deposited in a foreign bank account approved by the CBA.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsOutward transactions less than Af. 200,000 a year for natural persons and Af. 500,000 a year for entities (excluding commercial banks and institutional investors) are free. As of July 1, 1998, these ceilings are not only applicable to investments but also to all capital transactions with nonresidents. This implies that a CBA license is only required for capital transaction in excess of these ceilings.
On capital market securitiesThere are controls on all these transactions.
Controls on derivatives and other instrumentsThere are controls on all these transactions.
Controls on credit operationsThere are controls on all these transactions.
Controls on direct investment
Outward direct investmentThe CBA may require divestment, repatriation, and surrender of proceeds to the CBA.
Inward direct investmentYes.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsThere are controls on all these transactions.
Controls on personal capital movementsPersonal capital transactions must be settled through the banking system and foreign accounts approved by the CBA. All personal capital movements, except the transfer of gambling and prize earnings, are controlled.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquid asset requirementsYes.
Credit controlsYes.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadYes.
Limits (min.) on portfolio invested locallyThe limits are 40% of the first Af. 10 million of outstanding liabilities; 50% of the second Af. 10 million; and 60% of the remaining liabilities.
Other controls imposed by securities lawsNo.
Changes During 1998
Capital transactionsJuly 1. The ceilings for capital transfers of natural and juridical persons exempted from license requirements have been increased to Af. 200,000 and Af. 500,000, respectively.

Australia

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: July 1, 1965.
Exchange Arrangement
CurrencyThe currency of Australia is the Australian dollar. It also circulates in several other countries, including Kiribati, Nauru, and Tuvalu.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the Australian dollar is market-determined. Authorized foreign exchange dealers may deal among themselves, with their customers, and with overseas counterparties at mutually negotiated rates for both spot and forward transactions in any currency with regard to trade- and non-trade-related transactions. However, the Reserve Bank of Australia (RBA) retains discretionary power to intervene in the foreign exchange market. There is no official exchange rate for the Australian dollar. The RBA publishes an indicative rate for the Australian dollar based on market observation at 4 p.m. daily.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketActive trading takes place in forward and futures contracts.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlThe RBA has responsibility for oversight of the foreign exchange market, including the authorization of foreign exchange dealers. The Australian Transaction Reports and Analysis Center (AUSTRAC), a law enforcement agency, receives information on international transactions including those in cash, which it can pass on to a number of other enforcement and governmental agencies.
International security restrictions
In accordance with UN sanctionsRestrictions are placed on external payments and transfers relating to Iraq and Libya to give effect to UN Security Council resolutions imposing sanctions against those countries. Restrictions also apply to transactions involving the authorities of the Federal Republic of Yugoslavia (Serbia/Montenegro).
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesThe exportation or importation of notes and coins totaling $A 10,000 or more must be reported to AUSTRAC.
On exports
Foreign currencyResidents must purchase foreign currency from an authorized dealer. Nonresident travelers may take out any foreign currency they brought into Australia.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyLocal purchases and sales of foreign currency must be through an authorized dealer.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyConversion must be effected through an authorized foreign exchange dealer.
Nonresident Accounts
Foreign exchange accounts permittedLocal purchases and sales of foreign currency must be through an authorized dealer.
Domestic currency accountsYes.
Convertible into foreign currencyConversion must be effected through an authorized foreign exchange dealer.
Blocked accountsOnly those accounts affected by UN sanctions are blocked.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresThere are no import-licensing requirements or quotas on imports other than the tariff quota, which applies to certain cheeses and curd.
Negative listFor some products, imports are allowed only if written authorization is obtained from the relevant authorities or if certain regulations are complied with. Among the goods subject to control are narcotic, psychotropic, and therapeutic substances, firearms and certain weapons, certain chemicals and primary commodities, some glazed ceramic ware, and various dangerous goods. These controls are maintained mainly to meet health and safety requirements; to meet certain requirements for labeling, packaging, or technical specifications; and to satisfy certain obligations arising from Australia’s membership in international commodity agreements.
Import taxes and/or tariffsMost tariffs have been reduced to a maximum of 5%. By the year 2000, tariffs on passenger motor vehicles (PMVs) are being reduced to 15%, and tariffs on textiles, clothing, and footwear will be reduced to a maximum of 25%.
PMV tariffs will stabilize at their 2000 levels before falling to 10% in 2005. Tariffs on textile, clothing, and footwear products will also pause at their 2000 levels until 2005, at which time tariffs will be reduced to 17.5% from 25% for clothing and finished textiles, and to 10% from 15% for footwear.
The ANZCERTA establishes free trade in goods. The SPARTECA provides nonreciprocal, duty-free access to most markets in Australia and New Zealand for other members. Trade between Papua New Guinea and Australia is covered by the Agreement on Trade and Commercial Relations between Australia and Papua New Guinea.
Developing countries receive tariff preferences on exports to Australia under the Australian System of Tariff Preferences for Developing Countries, with a uniform preferential margin of 5%. Preferences have been eliminated on imports of certain industries such as textiles, clothing and footwear, chemicals, vegetable and fruit preparations, tuna, and sugar, except from the least-developed countries and South Pacific Island Territories.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport prohibitions and restrictions in effect are designed to ensure quality control, administer trade embargoes, and meet obligations under international arrangements. These prohibitions are also set up to restrict the exportation of certain defense materials; regulate the exportation of goods that involve high technology and have dual civilian and military applications; maintain adequate measures of control over designated cultural property, resources, flora, and fauna; secure conservation objectives; and respond to specific market distortions abroad. Remaining controls on primary products apply mainly to food and agricultural products.
Approval must be obtained from the government to export coal, liquid natural gas, bauxite, alumina, and mineral sands. Export controls apply to uranium to ensure compliance with the government’s nonproliferation policy obligations. Restrictions also apply to certain other nuclear and related materials. Licenses are required for exports of unprocessed wood, including wood chips. The Australian Dairy Corporation administers export control powers in relation to prescribed dairy products under the provisions of the Dairy Produce Act. All exporters of controlled dairy products must be licensed. This system allows the control of exports to markets where quantitative restrictions apply and ensures that export prices do not fall below minimum prices agreed to under the WTO for these products.
Effective July 1, 1998, exports of red meat and livestock can be made only by persons or firms licensed by the Commonwealth Department of Agriculture, Fisheries and Forestry (AFFA). If other countries impose quantitative restrictions on imports of meat or livestock, the AFFA may, in conjunction with industry, introduce measures to control Australian exports to conform with those restrictions.
Other Commonwealth statutory marketing authorities that have export control powers are the Australian Horticultural Corporation, the Australian Honey Board, the Australian Wheat Board, and the Australian Wine and Brandy Corporation. The Australian Wheat Board’s powers make it the sole exporter of Australian wheat.
With quotasAustralia has a complete ban on the export of merino ewes, genetic material, ova, and embryos to any country other than New Zealand. However, merino breeding rams purchased at designated export auctions and semen from rams included in the National Register of Semen Export Donors may be exported, subject to an annual quota (currently limited in total to 900 rams a year), and until December 17, 1998, the approval of the Department of Primary Industries and Energy (DPIE). On December 17, 1998, the responsibilities of the DPIE were altered and the AFFA has to approve the export of semen from rams. No ram sold and nominated for the collection of semen for export may be physically exported. There is no restriction on the export of merino rams or reproductive material to New Zealand. The above restrictions do not apply to merino rams intended for slaughter; however, the export of these rams is subject to controls to ensure they do not enter breeding flocks.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsThe purchase of shares and other securities of a participatory nature, which may be affected by laws and policies on inward direct investment, is restricted. Foreign governments, their agencies, and international organizations are not permitted to issue bearer bonds and, when borrowing in the Australian capital market, must advise the Australian authorities of the details of each borrowing after its completion. Subject to certain disclosure requirements, overseas banks may issue securities in the wholesale capital market in amounts of $A 500,000 or more.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Controls on direct investment
Inward direct investmentPrior authorization is required for (1) proposals by foreign interests that would result in the ownership of a shareholding of 15% or more by a single foreign interest or associates, or 40% or more by two or more unrelated foreign interests in an Australian corporation; however, foreign investment in businesses, other than those in the restricted sectors, with total assets of less than $A 5 million (less than $A 3 million for rural properties) is exempt from examination and notification; (2) all investments in the banking, civil aviation, airports, shipping, media, and telecommunication sectors, which are subject to special restrictions; (3) direct investments by foreign governments or their agencies irrespective of size; and (4) proposals to establish new businesses in other than the restricted sectors of the economy where the total amount of the investment is $A 10 million or more.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAll acquisitions of real estate must be notified, unless exempt by regulation. Acquisitions of nonresidential commercial real estate for development are normally approved as are acquisitions of developed nonresidential commercial real estate. Acquisition of developed nonresidential commercial real estate is exempt where the total value of the property is less than $A 5 million.
Approval is also normally granted for residential land for development or for the acquisitions of dwellings (including condominiums), direct from a developer, either “off the plan,” while under construction, or completed but never occupied, provided that no more than 50% of the total number of dwellings are sold to foreign investors.
Foreign acquisitions of established residential real estate are not normally approved except in cases involving temporary residents who acquire accommodation for a period in excess of 12 months, subject to resale of the property upon departure. Foreign persons who are entitled to reside permanently in Australia are not required to seek approval to acquire any form of residential real estate. Foreign acquisition of residential real estate (including condominiums) within a designated integrated tourist resort is exempt from authorization.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutionsBanks are subject to prudential requirements, e.g., liquidity management, credit concentration.
Investment regulations
In banks by nonresidentsNonresidents may invest in authorized deposit-taking institutions up to a limit of 15%. Effective July 1, 1998, any investment larger than 15% must be approved by the Treasurer.
Open foreign exchange position limitsOn March 27, 1998, the RBA removed open foreign exchange position limits on authorized foreign exchange dealers.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsThe rules of the Australian Stock Exchange require that, to be a participating organization of the Australian Stock Exchange, a majority of the directors of a brokerage must be Australian residents. This rule does not prohibit foreigners from owning a brokerage.
Changes During 1998
Exports and export proceedsJuly 1. The function of issuing licenses transferred back to AFFA when the Australian Meat and Livestock Corporation was concluded.
December 17. The responsibilities of the DPIE were altered in the Administrative Arrangement Orders, and the Department was renamed the Department of Agriculture, Fisheries and Forestry.
Capital transactions
Provisions specific to commercial banks and other credit institutionsMarch 27. The RBA removed open foreign exchange position limits on authorized foreign exchange dealers.
July 1. Under the Financial Sector (Shareholdings) Act a person has to apply to the Treasurer to hold a stake in an authorized deposit-taking institution of more than 15%. The applicant has to satisfy the Treasurer that this is in the national interest.

Austria

(Position as of January 31, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: August 1, 1962.
Exchange Arrangement
CurrencyAs of January 1, 1999, the currency of Austria is the euro. In cash transactions, however, the legal tender remains the Austrian schilling until 2002, when euro banknotes and coins will be issued.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderAustria participates in a currency union (EMU) comprising 11 members of the EU: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Internal exchange rates in respect to the national currencies of EMU participants were fixed to the euro on January 1, 1999, whereas the external exchange rate of the euro is market-determined. The conversion rate between the euro and the Austrian schilling was set at S 13.7603 per €1. The ECB has the right to intervene to smooth out fluctuations in external exchange rates.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with all countries may be made either in foreign currencies or through free euro accounts.
Payment arrangements
Bilateral payment arrangements
OperativeThere are no bilateral payment agreements; however, several bilateral agreements exist for the promotion and protection of investments, which include provisions on transfers between the signatories.
Administration of controlMost exchange transactions are effected through Austrian banks authorized by the central bank.
International security restrictions
In accordance with UN sanctionsRestrictions are imposed on certain current payments and transfers to Libya in accordance with a UN Security Council resolution. Certain restrictions on payments and transfers for current international transactions to the government of Iraq are still in force.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThese are accounts affected by UN sanctions against Iraq and Libya, and by the virtue of EU regulations against the Federal Republic of Yugoslavia (Serbia/Montenegro).
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresExport and import licenses must be issued by the Federal Ministry for Economic Affairs for industrial products and by the Federal Ministry of Agriculture and Forestry for agricultural products. As a member of the EU, Austria applies all import regulations based on the common commercial policy, i.e., for industrial products import restrictions in the textile and clothing sectors and statistical surveillance for products falling under the scope of the ECSC Treaty. There are also regulations vis-à-vis China for imports of some consumer products based on current EU law.
Positive listYes.
Licenses with quotasYes.
Import taxes and/or tariffsAustria applies the Common Import Regime of the EU.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesLicenses for exports must be obtained from the relevant ministry or at the time of clearance from the customs authorities. For most exports, licenses are not required. Export licenses are issued with due consideration for the provisions of relevant EU trade agreements and the fulfillment of quotas established in accordance with such agreements, and the needs of the Austrian economy.
Without quotasYes.
With quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsIn some cases, reporting requirements to the Austrian National Bank exist.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentIn the auditing and legal professions, the transport sector, and the electric power generation sector certain restrictions apply for investments by nonresidents and Austrian residents who are not nationals of one of the countries of the EEA.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsThe acquisition of real estate is subject to approval by local authorities.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsReserve requirements apply only to deposits held in euro.
Liquid asset requirementsLiquid asset requirements apply only to deposits held in euro.
Open foreign exchange position limitsThe net amount of an open position must not exceed 30% of own funds at the end of any business day; the total sum of all open positions must not exceed 50% of own funds.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadYes.
Limits (max.) on portfolio invested abroadYes.
Limits (min.) on portfolio invested locallyYes.
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsNo.
Changes During 1998
No significant changes occurred in the exchange and trade system.
Changes During 1999
Exchange arrangementJanuary 1. The currency of Austria became the euro. The conversion rate between the euro and the Austrian schilling was set irrevocably at S 13.7603 per €1.

Azerbaijan

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Azerbaijan is the Azerbaijan manat.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe external value of the manat is determined on the basis of morning trading sessions. The morning session is limited to Baku Interbank Currency Exchange (BICEX) member banks. The official exchange rate is determined by the Azerbaijan National Bank (ANB) on the basis of BICEX trading. The afternoon trading is operated by the Organized Interbank Foreign Currency Exchange (OICEX), which includes all banks with foreign exchange licenses. The OICEX uses BICEX facilities for clearing and operates under trading rules and procedures laid out in a collective agreement signed by each participating member. Trading under OICEX is, however, restricted to a band of ±0.5% of the official ANB rate. Since September 1998, trading has also been allowed on the open interbank market, which also includes all banks with foreign exchange licenses.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with the Baltic countries, Russia, and the other countries of the FSU are effected through correspondent accounts of the commercial banks in these countries or through correspondent accounts of the respective central banks.
Payment arrangements
Bilateral payment arrangements
InoperativeYes.
Clearing agreementsAzerbaijan is a member of the Payment Union of the CIS countries, which has become inoperative.
Barter agreements and open accountsYes.
Administration of controlThe ANB regulates foreign exchange transactions, conducts foreign currency operations, and administers official gold and convertible currency reserve holdings. The ANB also has overall responsibility for issuing licenses to deal in foreign exchange and to open foreign exchange accounts abroad; for regulating foreign exchange operations, including implementing and monitoring compliance with the law; and for establishing prudential rules governing foreign exchange operations. The Ministry of Trade regulates foreign trade, while the Customs Service Law regulates the organization and operation of customs.
International security restrictionsNo.
Payment arrearsn.a.
Controls on trade in gold (coins and/or bullion)Controls are administered by the cabinet of ministries jointly with the ANB.
Controls on external tradeA license is required to conduct international trade in gold.
Controls on exports and imports of banknotesThe exportation and importation of foreign banknotes are regulated by the ANB and the customs agencies.
On exports
Domestic currencyNo more than 50,000 manats in banknotes may be taken out of the country.
Foreign currencyYes.
On imports
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyNo declaration of the origin of foreign exchange is required for individuals, who may transfer freely foreign exchange held in these accounts to their close relatives up to $10,000 and, upon authorization, larger amounts to their bank accounts abroad, or may freely convert it into domestic currency.
Held abroadResident enterprises may open and use foreign exchange bank accounts in banks abroad, subject to authorization by the ANB. Enterprises are obliged to repatriate the foreign exchange held in accounts abroad (except the amount used to pay for imports).
There is no regulation for individuals who open and use foreign exchange bank accounts in banks abroad.
Accounts in domestic currency convertible into foreign currencyNatural and juridical persons may purchase foreign exchange through authorized banks on the BICEX, the OICEX, and the open interbank market, and authorized banks may also purchase foreign exchange in these markets on their own account, in accordance with the regulations of the ANB. These regulations do not set any limit.
Nonresident Accounts
Foreign exchange accounts permittedForeign exchange in these accounts may be transferred abroad or sold to the banks for manats subject to authorization.
Domestic currency accountsNonresident enterprises may also open and operate accounts in manats and use them for domestic transactions, in accordance with instructions issued by the ANB.
Convertible into foreign currencyThe same regulations apply as for resident accounts.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance import payments of more than 180 days prior to the delivery of goods are not allowed. Prepayments by bank transfers for import contracts of goods and services are limited to the equivalent of $10,000. Subject to authorization of the ANB, the amount may exceed the indicative limit.
Documentation requirements for release of foreign exchange for imports
Letters of creditPrepayments by bank transfers in excess of $10,000 require either an LC or the authorization of the ANB.
Import licenses and other nontariff measures
Negative listYes.
Import taxes and/or tariffsTariffs are unified at 15% for most goods and for imports from all countries. Capital and input goods are subject to a tariff rate of 5%. A customs fee of 0.15% is levied on imports from all sources.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsResidents are required to repatriate all proceeds from exports within 180 days and transfer them to a licensed bank in Azerbaijan within 10 days of receipt, unless specifically exempted by the government. Expenses, commissions, and taxes paid abroad relating to economic activities may be deducted from the proceeds prior to transfer to a licensed bank.
Financing requirementsYes.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersResident individuals are allowed access to the BICEX, the OICEX, and the open interbank market, through authorized banks, to purchase noncash foreign exchange for transfer abroad for paying bona fide current international transactions.
Trade-related payments
Indicative limits/bona fide testAny amount may be paid without limitation, on the basis of documents confirming that trade-related costs have been actually incurred. General limitations apply to advance payments.
Investment-related payments
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testThe indicative limit is $10,000. This limit may be exceeded on the basis of an expense estimate.
Personal payments
Indicative limits/bona fide testThe limit is $10,000 for payments related to medical costs, studies abroad, and family maintenance and alimony.
Foreign workers’ wages
Prior approvalYes.
Other payments
Indicative limits/bona fide testThe indicative limit for subscriptions and membership fees varies from $1,000 to $5,000 a year.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds must be repatriated within six months and transferred to a licensed bank within 10 days of receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securitiesA securities law was approved in September 1998, which emphasizes the safeguarding of investors’ rights.
Shares or other securities of a participating nature
Purchase locally by nonresidentsThere are no controls, except for banks that sell their shares to nonresidents within the quota specified by the ANB.
Sale or issue locally by nonresidentsThis process is regulated by the government in coordination with the ANB by establishing quotas and trading authorization procedures.
Purchase abroad by residentsThe transfer of funds is permitted with the approval of the ANB.
Sale or issue abroad by residentsRegulated by the laws on joint-stock companies, securities, and stock exchanges, and by in-house instruction of the ANB. Sale is mainly by prior subscription (an organized market is just emerging).
Bonds or other debt securities
Sale or issue locally by nonresidentsThe same regulations apply as for shares or other securities of a participating nature.
Purchase abroad by residentsThe same regulations apply as for shares or other securities of a participating nature.
Sale or issue abroad by residentsThe same regulations apply as for shares or other securities of a participating nature.
On money market instruments
Purchase abroad by residentsSubject to authorization by the ANB.
Sale or issue abroad by residentsSubject to authorization by the ANB.
On collective investment securities
Sale or issue locally by nonresidentsSubject to authorization by the ANB.
Purchase abroad by residentsSubject to authorization by the ANB.
Sale or issue abroad by residentsSubject to authorization by the ANB.
Controls on derivatives and other instrumentsThese instruments are currently not available, and the legislation concerning derivatives has not been formulated. Regulations on forward transactions involving government bonds have now been developed on the initiative of banks in collaboration with the ANB. The regulations have not been applied so far, in view of the insignificant volume of government bonds.
Controls on credit operations
Commercial credits
By residents to nonresidentsSubject to authorization by the ANB.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilitiesNo.
Controls on direct investment
Outward direct investmentDirect investment abroad requires ANB authorization.
Inward direct investmentProfits may be reinvested in local currency held in Azerbaijan or converted into foreign currency and transferred without controls. Foreign investors are granted certain privileges: enterprises or joint ventures with foreign equity capital ownership of more than 30% are entitled to a two-year holiday on profit taxes, imports and exports of goods and services may be undertaken without licenses, and exporters of manufactured goods are allowed to retain 100% of their foreign exchange earnings.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital movements
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Lending to nonresidents (financial or commercial credits)Subject to authorization by the ANB.
Purchase of locally issued securities denominated in foreign exchangeYes.
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1998
Exchange arrangementSeptember 30. Open interbank currency trading was allowed.
Capital transactions
Controls on capital and money market instrumentsSeptember 30. A securities law, emphasizing investors’ rights, was approved.

The Bahamas

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: December 5, 1973.
Exchange Arrangement
CurrencyThe currency of The Bahamas is the Bahamian dollar.
Other legal tenderCommemorative coins in denominations of B$10, B$20, B$50, B$100, B$150, B$200, B$250, B$1,000, and B$2,500 in gold, and B$10 and B$25 in silver are legal tender but do not circulate. The U.S. dollar circulates concurrently with the Bahamian dollar.
Exchange rate structure
DualIn addition to the official exchange market, there is a market in which investment currency may be negotiated between residents through the Central Bank of The Bahamas (CBB); the current premium bid and offer rates are 20% and 25%, respectively. The use of investment currency is prescribed for the purchase of foreign currency securities from nonresidents and direct investments outside The Bahamas. In certain circumstances, the CBB may also permit residents to retain and use foreign currency from other sources to make such outward investments.
Classification
Conventional pegged arrangementThe Bahamian dollar is pegged to the U.S. dollar, the intervention currency, at B$1 per US$1. Buying and selling rates for the pound sterling are also officially quoted, with the buying rate based on the rate in the New York market; the selling rate is 0.5% above the buying rate. The CBB deals only with commercial banks. For transactions with the public, commercial banks are authorized to charge a commission of 0.50% buying and 0.75% selling per US$1, and 0.50% buying or selling per £1.
Exchange taxA stamp tax of 1.5% is applied to all outward remittances.
Exchange subsidyNo.
Forward exchange marketCommercial banks may provide forward cover for residents who are due to receive or must pay foreign currency under a contractual commitment. Commercial banks may not, however, sell foreign currency spot to be held on account in cover of future requirements without the CBB’s permission. Authorized dealers may deal in foreign currency forward with nonresidents without prior approval from the CBB. Commercial banks may execute forward deals among themselves at market rates and must ensure when carrying out all forward cover arrangements that their open spot or forward position does not exceed the equivalent of B$500,000 long or short.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe exchange control system of The Bahamas makes no distinction between foreign territories. Settlements with residents of foreign countries may be made in any foreign currency or in Bahamian dollars through an external account. Foreign currencies comprise all currencies other than the Bahamian dollar.
Payment arrangementsNo.
Administration of controlExchange control is administered by the CBB, which delegates to authorized dealers the authority to approve allocations of foreign exchange for certain current payments, including payments for imports up to B$100,000; approval authority for cash gifts is not delegated, except in the Family Islands.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents, other than authorized dealers, are not permitted to hold or deal in gold bullion. However, residents who are known users of gold for industrial purposes may, with the approval of the CBB, meet their current industrial requirements. There is no restriction on residents’ acquisition or retention of gold coins.
Controls on external tradeAuthorized dealers are not required to obtain licenses for bullion or coins, and no import duty is imposed on these items. Commercial imports of gold jewelry do not require a license and are duty free, although a 10% stamp tax is required. A 1.5% stamp tax payable to customs is also required on commercial shipments of gold jewelry from any source.
Controls on exports and imports of banknotes
On exports
Domestic currencyA traveler may export banknotes up to B$200.
Foreign currencyBahamian travelers need CBB approval to export foreign banknotes.
On imports
Domestic currencyImportation is subject to CBB approval.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyThese accounts are permitted, but prior approval is required.
Held abroadThese accounts are permitted, but prior approval is required.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsWith the prior approval of the CBB, authorized banks may also open external accounts in Bahamian dollars for nonresident companies that have local expenses in The Bahamas and for nonresident investors. Authorized banks may freely open external accounts denominated in Bahamian dollars for winter residents and for persons with residency permits who are not gainfully employed in The Bahamas. Persons of a foreign nationality who have been granted temporary resident status are treated in some respects as nonresidents but are not permitted to hold external accounts in Bahamian dollars. External accounts in Bahamian dollars are normally funded entirely from foreign currency originating outside The Bahamas, but income on registered investments may also be credited to these accounts with the approval of the CBB.
Convertible into foreign currencyThese accounts are permitted, but prior approval is required.
Blocked accountsThe accounts of residents emigrating from The Bahamas who are redesignated upon departure as nonresidents are blocked for amounts in excess of B$25,000 for a period of four years. Balances on blocked accounts are transferable through the official exchange market after that time or through the Investment Currency Market at any time; they may also be invested with the approval of the CBB in certain resident-held assets, or they may be spent locally for any other purpose.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPrior approval from the CBB is required to make payments for imports exceeding B$100,000, irrespective of origin, except in the Family Islands, where this authority is delegated to clearing bank branches. This approval is normally given automatically upon submission of pro forma invoices or other relevant documents proving the existence of a purchase contract.
Import licenses and other nontariff measures
Negative listThe importation of certain commodities is prohibited or controlled for social, humanitarian, or health reasons. For all imports of agricultural products, a permit must be obtained from the Ministry of Agriculture. All other goods may be imported without a license. Customs entries are subject to a stamp tax of 7%.
Import taxes and/or tariffsImport duties vary from zero to 210%. The tariff rate on most goods is 42%, and the average tariff rate is 35%. Stamp duties on imports vary from 2% to 7%. There is no import duty on certain tourist-related goods, but these goods are subject to stamp duties ranging from 8% to 20%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsThe proceeds of exports must be offered for sale to an authorized dealer as soon as the goods have reached their destination or within six months of shipment; alternatively, export proceeds may be used in any manner acceptable to the CBB.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExport licenses are not required, except for crawfish, conch, and arms and ammunition.
Export taxesYes.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThere are no restrictions on current payments. However, there are limits on the approval authority delegated to commercial banks by the CBB. Authorized dealers may make payments to nonresidents on behalf of residents for certain services and other invisibles, such as commissions, royalties, education, and nonlife-insurance premiums, within specified limits. CBB approval is required for payments in excess of those limits or for categories of payments not delegated.
Trade-related payments
Prior approvalFor unloading and storage costs and commissions, CBB approval is required for transactions over B$3,000 and B$6,000, respectively.
Indicative limits/bona fide testYes.
Investment-related paymentsInformation is not available for amortization of loans or depreciation of direct investments.
Prior approvalFor all investments with approved status, permission is given upon application for the transfer.
Payments for travel
Prior approvalYes.
Quantitative limitsUnder delegated authority, the limits for tourist travel are B$1,000 a person above the age of 18 years and B$500 a person up to the age of 18 years a trip. For business or professional travel, the limit is B$10,000 a person a year. The allowance for tourist travel excludes the cost of fares and travel services, which are normally obtained against payment in Bahamian dollars to a travel agent in The Bahamas. Foreign exchange obtained for travel may not be retained abroad or used abroad for purposes other than travel; any unused balance must be surrendered within a week of issue or, if the traveler is still abroad, within one week of returning to The Bahamas.
Indicative limits/bona fide testYes.
Personal payments
Quantitative limitsUnder delegated authority, residents are entitled to a foreign exchange allowance of B$3,000 a person a trip for study-related costs.
Indicative limits/bona fide testSubject to adequate documentary evidence, an education allowance is granted by the CBB without a limit. Apart from a B$1,000 cash allowance, authorized dealers may approve all medical payments to doctors or medical establishments.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsThe limit is 50% of wages and salaries.
Indicative limits/bona fide testIf commitments outside The Bahamas are more than 50% of wages and salaries, additional amounts may be remitted. Temporary residents may also repatriate all of their accumulated savings resulting from their employment in The Bahamas.
Credit card use abroad
Prior approvalApproval is required for residents to hold an international credit card, which may not be used to pay for life-insurance premiums and capital items.
Other payments
Prior approvalThere is prior approval for consulting and legal fees.
Quantitative limitsUnder delegated authority, the limit for subscription and membership fees is B$1,000, and B$3,000 for consulting and legal fees.
Indicative limits/bona fide testAn indicative limit is applied to consulting and legal fees.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsResidents are obliged to collect all proceeds without delay.
Surrender requirementsAll foreign currency proceeds must be offered for sale to an authorized dealer without delay.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsAll outward capital transfers require exchange control approval, and outflows of resident-owned capital are restricted. Inward transfers by nonresidents, which are encouraged, are required to go through the exchange control approval process, although the subsequent use of the funds in The Bahamas may require authorization.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsIn principle, inward investment by nonresidents is unrestricted. However, the consent of the CBB is required for the issue or transfer of shares in a Bahamian company to a nonresident and for the transfer of control of a Bahamian company to a nonresident. The extent of such approvals generally reflects the government’s economic and investment policy guidelines.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsResidents are not permitted to purchase foreign currency securities with official exchange, export proceeds, or other current earnings; payment must be made with investment currency. All purchases, sales, and swaps of foreign currency securities by Bahamian residents require permission from the CBB and are normally transacted through authorized agents, who are free to act on behalf of nonresidents in relation to such transactions without any further approval from the CBB. All foreign securities purchased by residents of The Bahamas must be held by, or to the order of, an authorized agent.
Sale or issue abroad by residentsSale proceeds from such resident-held foreign currency securities, if registered at the CBB by December 31, 1972, are eligible for sale in the investment currency market. Unregistered securities may be offered for sale at the official rate of exchange.
Bonds or other debt securities
Purchase locally by nonresidentsNonresident buyers of Bahamian-dollar-denominated securities must fund the acquisition of such securities from foreign currency sources. Interest, dividends, and capital payments on such securities may not be remitted outside The Bahamas, unless the holdings have been properly acquired by nonresidents.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instrumentsThe same regulations apply as for shares or securities of a participating nature.
On collective investment securitiesThe same regulations apply as for shares or securities of a participating nature.
Controls on derivatives and other instrumentsThe same regulations apply as for shares or securities of a participating nature.
Controls on credit operations
Commercial credits
By residents to nonresidentsA resident company wholly owned by nonresidents is not allowed to raise fixed capital in Bahamian dollars, although approval may be granted to obtain working capital in local currency. If the company is partly owned by residents, the amount of local currency borrowing for fixed capital purposes is determined in relation to residents’ interest in the equity of the company. Banks and other lenders resident in The Bahamas must have permission to extend loans in domestic currency to any corporate body (other than a bank) that is also resident in The Bahamas but is controlled by any means, whether directly or indirectly, by nonresidents. However, companies set up by nonresidents primarily to import and distribute products manufactured outside The Bahamas are not allowed to borrow Bahamian dollars from residents for either fixed or working capital. Instead, they must provide all their financing in foreign currency, and foreign currency loans are normally permitted on application.
To residents from nonresidentsResidents other than authorized banks must obtain permission to borrow foreign currency from nonresidents, and authorized dealers are subject to exchange control direction of their foreign currency loans to residents. Residents must also obtain permission to pay interest on, and to repay the principal of, foreign currency loans by conversion of Bahamian dollars. When permission is granted for residents to accept foreign currency loans, it is conditional upon the currency being offered for sale without delay to an authorized dealer, unless the funds are required to meet payments to nonresidents for which permission has been specifically given.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentThe use of official exchange for direct investment abroad is limited to B$100,000 or 30% of the total cost of the investment (whichever is greater) for investments from which the additional benefits expected to accrue to the balance of payments from export receipts, profits, or other earnings within 18 months of the investment will at least equal the total amount of investment and will continue thereafter. Investments abroad that do not meet the above criteria may be financed by foreign currency borrowed on suitable terms, subject to individual approval from the CBB, by foreign currency purchased in the investment currency market, or by the retained profits of foreign subsidiary companies. Permission is not given for investments that are likely to have adverse effects on the balance of payments.
Inward direct investmentCBB approval is required.
Controls on liquidation of direct investmentIn the event of a sale or liquidation, nonresident investors are permitted to repatriate the proceeds, including any capital appreciation, through the official foreign exchange market.
Controls on real estate transactions
Purchase abroad by residentsResidents require the specific approval of the CBB to buy property outside The Bahamas; such purchases, if for personal use, may be made only with investment currency, and approval is limited to one property a family. Incidental expenses connected with the purchase of property for personal use may normally be met with investment currency. Expenditures necessary for the maintenance of the property or arising directly from its ownership may, with permission, be met with foreign currency bought at the current market rate in the official foreign exchange market.
Purchase locally by nonresidentsForeigners intending to purchase land for commercial purposes or property larger than five acres in size must obtain a permit from the Investments Board. If such an application is approved, payment for the purchase may be made either in Bahamian dollars from an external source or in foreign currency. Nonresidents wishing to purchase property for residential purposes may do so without prior approval but are required to obtain a Certificate of Registration from the Foreign Investment Board on completion of the transaction.
Sale locally by nonresidentsApproval is required.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsResidents are not allowed to remit funds for gaming purposes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Lending locally in foreign exchangeExchange control approval is required to make loans to residents.
Open foreign exchange position limitsThe limit is B$500,000 for a long or short position.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsIn the securities market, a Mutual Funds Act and regulation that provides for licensing of Mutual Funds Administrators and Registration of Mutual Funds is enforced.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Bahrain

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: March 20, 1973.
Exchange Arrangement
CurrencyThe currency of Bahrain is the Bahrain dinar.
Exchange rate structureUnitary.
Classification
Pegged exchange rate within horizontal bandsThe Bahrain dinar has a fixed relationship to the SDR at the rate of BD 0.47619 per SDR 1. The exchange rate of the dinar in terms of the SDR may be set with margins of ±7.25% of this fixed relationship. In practice, however, the dinar has maintained a stable relationship with the dollar, the intervention currency. The middle rate of the dinar for the dollar is quoted by the Bahrain Monetary Agency (BMA) and has remained unchanged since December 1980. The BMA provides daily recommended rates to banks for amounts up to BD 1,000 in dollars, pounds sterling, and euros based on the latest available dollar rates against those currencies. The BMA does not deal with the public. In their dealings with the public, commercial banks are required to use the BMA’s rates for dollars, pounds sterling, and euros, but they are authorized to charge a commission of 2% (special rates of commission apply for transactions up to BD 1,000). The banks’ rates for other currencies are based on the BMA’s dollar rates and the New York market rates against the dollar.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThe BMA monitors the forward exchange transactions of commercial banks through the open position of banks’ monthly returns.
Arrangements for Payments and Receipts
Prescription of currency requirementsAll settlements with Israel are prohibited. Otherwise, no requirements are imposed on exchange payments or receipts.
Payment arrangementsNo.
Administration of controlThere is no exchange control legislation.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsYes.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold jewelry are subject to a 10% customs duty, but gold ingots are exempt. Brokers doing business in gold and other commodities must obtain BMA approval before they can register with the Ministry of Commerce.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Letters of creditYes.
Import licenses and other nontariff measures
Negative listLicenses are required for imports of arms, ammunition, and alcoholic beverages. All imports from Israel are prohibited. Imports of a few commodities are prohibited from all sources for reasons of health, public policy, or security. Imports of cultured pearls are prohibited.
Other nontariff measuresMandatory government procurements give preference to goods produced in Bahrain and member countries of the GCC, provided that the quality and prices of these goods are within specified margins of the prices of imported substitutes (10% for goods produced in Bahrain and 5% for goods produced in member countries of the GCC).
Import taxes and/or tariffsThe rates of customs tariffs range between 5% and 10% on most commodities but the rate is 20% on vehicles, launches, and yachts; 100% on tobacco; and 125% on alcoholic beverages.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesAll exports to Israel are prohibited.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsProceeds from invisibles from Israel are prohibited.
Capital Transactions
Controls on capital and money market instrumentsNo exchange control requirements are imposed on capital receipts or payments by residents or nonresidents, but payments may not be made to or received from Israel.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThere is a limit of 25% on holding of shares of joint stock companies by GCC nationals and 24% by other nonresidents.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Purchase locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsPurchase of real estate by nonresidents is prohibited, except for GCC nationals.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutionsBanks are subject to special rules regarding the payment of dividends and the remittance of profits without exchange control restrictions. Licensed offshore banking units may freely engage in transactions with nonresidents, although transactions with residents are not normally permitted.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeLending is limited to 15% of each bank’s capital base.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidents
Liquid asset requirementsYes.
Credit controlsYes.
Open foreign exchange position limitsBanks are allowed to set their own individual limits.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadYes.
Other controls imposed by securities lawsn.a.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Bangladesh

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: April 11, 1994.
Exchange Arrangement
CurrencyThe currency of Bangladesh is the Bangladesh taka.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe taka is pegged to a weighted currency basket of Bangladesh’s major trading partners. The Bangladesh Bank (BB) deals with authorized domestic banks only in dollars, the intervention currency. Authorized banks are free to set their own buying and selling rates for the dollar and the rates for other currencies, based on cross rates in international markets. In early July 1998, the authorities widened the buy/sell margin from 20 to 30 poisha (to approximately 0.7% from 0.4%).
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward contracts are available from authorized banks, covering periods of up to six months for export proceeds and import payments, and up to three months of remittances of surplus collection from foreign shipping companies and airlines. Authorized banks are permitted to retain working balances with their foreign correspondents. Currency swaps and forward exchange transactions are permitted when they are effected against underlying approved commercial transactions.
Official cover of forward operationsThe BB does not transact in the forward market, nor does it regulate transactions beyond the normal requirements of prudential supervision.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements normally take place in convertible currencies and, in some cases, through nonresident taka accounts. Settlements with ACU member countries are required to be effected through the ACU in terms of the AMU (equivalent in value to the dollar). Settlements for trade under bilateral commodity exchange agreements are effected through special nonconvertible dollar accounts. Payments for imports may be made to any country (with the exception of countries from which importation is prohibited). They may be made (1) in taka for credit in Bangladesh to a nonresident bank account of the country concerned; (2) in the currency of the country concerned; or (3) in any freely convertible currency. Export proceeds must be received in freely convertible foreign exchange or in taka from a nonresident taka account.
Payment arrangements
Bilateral payment arrangements
InoperativeBangladesh maintains commodity exchange agreements in nonconvertible dollars with Bulgaria, China, the Czech Republic, and Hungary.
Regional arrangementsBangladesh is a member of the ACU.
Clearing agreementsYes.
Administration of controlExchange control is administered by the BB in accordance with general policy formulated in consultation with the MOF. Commercial banks and specialized financial institutions are issued licenses as authorized dealers (authorized banks) in foreign exchange. The Chief Controller of Imports and Exports of the Ministry of Commerce is responsible for registering exporters and importers and for issuing the Import Policy Order (IPO). Registered importers may make their imports in terms of the IPO against LCs. LC authorization forms (LCAFs) are issued by authorized dealers and do not require a separate import license.
International security restrictions
In accordance with UN sanctionsOn the basis of a UN Security Council resolution, all settlements with Iraq and the Federal Republic of Yugoslavia (Serbia/Montenegro) are prohibited.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeThere are no restrictions on the internal sale, purchase, or possession of gold or silver ornaments (including coins) and jewelry, but there is a prohibition on the holding of gold and silver in all other forms except by licensed industrialists or dentists.
Controls on external tradeThe importation and exportation of gold and silver require special permission. However, adult female travelers are free to bring in or take out any amount of gold jewelry without prior approval from the BB. Exports of gold jewelry and imports of gold and silver for the export/manufacture of jewelry are allowed under the Jewelry Export Scheme.
Controls on exports and imports of banknotes
On exports
Domestic currencyA resident or a nonresident may take out up to Tk 500 in domestic currency.
Foreign currencyNonresidents may take out the foreign currency and traveler’s checks they declared on entry or up to $5,000 or the equivalent brought in without declaration. They may also, without obtaining the approval of the BB, reconvert taka notes up to Tk 6,000 into convertible foreign currencies at the time of their departure. Residents may take out foreign currency and traveler’s checks up to the amount of any travel allocation they are granted, and also up to $5,000 brought in without declaration when returning from a previous visit abroad.
On imports
Domestic currencyThe importation of Bangladesh currency notes and coins exceeding Tk 500 is prohibited.
Foreign currencyForeign currency traveler’s checks and foreign currency notes may be brought in freely up to $5,000, but larger amounts should be declared to customs upon arrival in Bangladesh.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyBangladesh nationals and persons of Bangladesh origin who are working abroad are permitted to open foreign currency accounts denominated in deutsche mark, Japanese yen, pounds sterling, or dollars. These accounts may be credited with (1) remittances in convertible currencies received from abroad through normal banking and postal channels; (2) proceeds of convertible currencies (banknotes, traveler’s checks, drafts, etc.) brought into Bangladesh by the account holders, provided that amounts exceeding $5,000 have been declared to customs upon arrival in Bangladesh; (3) transfers from other foreign currency accounts opened under the former Wage Earners’ Scheme; and (4) transfers from nonresident foreign currency deposit accounts. The accounts may be debited without restriction, subject to reporting to the BB.
Residents, when returning from abroad, may bring in any amount of foreign currency and may maintain a resident foreign currency deposit account with the foreign exchange brought in. However, proceeds of exports of goods and services from Bangladesh or commissions arising from business deals in Bangladesh are not allowed to be credited to such accounts. Balances in these accounts are freely transferable abroad and may be used for travel in the usual manner. These accounts may be opened in deutsche mark, Japanese yen, pounds sterling, and dollars. Exporters and local joint-venture firms executing projects financed by a foreign donor or international agency may open foreign currency accounts. Foreign currency accounts may also be opened in the names of diplomatic missions in Bangladesh, their expatriates, and diplomatic bonded warehouses (duty-free shops).
Approval requiredYes.
Held abroadResidents who had opened an account abroad when previously residing abroad may maintain such an account after returning to Bangladesh.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedBangladesh nationals residing abroad; foreign nationals, companies, and firms registered or incorporated abroad; banks and other financial institutions, including institutional investors; officers and staff of Bangladesh missions and government institutions; autonomous bodies; and commercial banks may open interest-bearing nonresident foreign currency deposit accounts denominated in deutsche mark, Japanese yen, pounds sterling, or dollars. These accounts may be credited in initial minimum amounts of $1,000 or $500 ($25,000 for foreigners), with remittances in convertible currencies and transfers from existing foreign currency deposit accounts maintained by Bangladesh nationals abroad. The accounts bear interest if their terms range from one month to one year. Bangladesh nationals may maintain a foreign currency account abroad while residing abroad and may continue to hold the account after returning to Bangladesh. The balance, including interest earned, may be transferred in foreign exchange by the account holder to any country or to any foreign currency deposit account maintained by Bangladesh nationals abroad. The balances in the accounts, which are freely convertible into taka, must be reported monthly by banks to the BB. Nonresident Bangladeshis who do not open or maintain a foreign currency deposit account while abroad may open a nonresident foreign currency deposit account with foreign exchange brought in from abroad within six months of the date of their return to take up permanent residence in Bangladesh. All nonresident accounts are regarded for exchange control purposes as accounts related to the country in which the account holder is a permanent resident (the accounts of the United Nations and its agencies are treated as resident accounts).
Approval requiredNonresident foreign currency accounts may be opened by authorized dealers without prior approval from the BB for Bangladesh nationals and foreign nationals who reside abroad and for foreign firms operating abroad. Specified debits and credits to these accounts may be made in the account holder’s absence by authorized dealers without prior approval from the BB. Certain other debits and credits may be made without prior approval from the BB, but are subject to ex post recording.
Domestic currency accountsForeign missions and embassies, their expatriate personnel, foreign airline and shipping companies, and international nonprofit organizations in Bangladesh may open interest-bearing accounts, but the interest earned may be disbursed only in local currency.
Convertible into foreign currencyAll diplomatic missions operating in Bangladesh, their diplomatic officers, home-based members of the mission staffs, international nonprofit organizations (including charitable organizations functioning in Bangladesh and their respective personnel), foreign oil companies engaged in oil exploration in Bangladesh and their expatriate employees, UN organizations and other international organizations, foreign contractors and consultants engaged in specific projects, and foreign nationals residing in Bangladesh (regardless of their status) are allowed to maintain convertible taka accounts. These accounts may be credited freely with the proceeds of inward remittances in convertible foreign exchange and may be debited freely at any time for local disbursements in taka, as well as for remittances abroad in convertible currencies. Transfers between convertible taka accounts are freely permitted.
Approval requiredYes.
Blocked accountsNonresident taka accounts of Bangladesh nationals may be blocked by the BB.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance payments for imports require approval from the BB, which is normally given only for specialized or capital goods.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsYes.
Preshipment inspectionAn inspection is required for items prescribed in the Import Policy Order.
Letters of creditPayment against imports is generally permissible only under cover of irrevocable LCs. However, perishable food items of value not exceeding $7,000 a consignment may be imported overland without LCs; capital machinery and industrial raw materials may also be imported without LCs. Recognized export-oriented units operating under the bonded warehouse system may effect imports of up to four months’ requirements of their raw and packing materials by establishing import LCs without reference to any export LC. They may also effect such imports by opening back-to-back LCs (either on a sight basis under the Export Development Fund, or up to 180 days on a usance basis) against export LCs received by them. Authorized dealers may establish LCs on an f.o.b. basis without the approval of the BB, subject to certain conditions. Foreign exchange for authorized imports is provided automatically by authorized dealers when payments are due.
Import licenses and other nontariff measuresAll importers (including all government departments, with the exception of the Ministry of Defense) are required to obtain LCAFs for all imports. Under the authority of the IPO issued by the Chief Controller, importers are allowed to effect imports against LCAFs issued by authorized dealer banks without an import license. Single-country LCAFs are issued for imports under bilateral trade or payments agreements and for imports under tied-aid programs. LCAFs are otherwise valid worldwide, except that imports from Israel and imports transported on flag vessels of Israel are prohibited. Goods must be shipped within 17 months of the date of issuance of LCAFs in the case of machinery and spare parts, and 9 months in the case of all other items.
Positive listItems not specified in the control list of the IPO are freely importable, provided that the importer has a valid import registration certificate.
Negative listThe controlled list contains 110 items in about 1,400 categories at the four-digit level of the Harmonized System Codes. The importation of these items is restricted or prohibited either for public safety, religious, environmental, and social reasons, or because similar items are produced locally. Up to 26 items are restricted purely for trade purposes (7 of which are banned and 19 restricted). Imports from Israel are prohibited.
Open general licensesAll items not on the control list are freely importable by registered importers.
Licenses with quotasImports of specified raw materials and packing materials by industrial consumers are governed by an entitlement system, based on the requirements for various industries during each import program period established by the Board of Investment. Firms in the industrial sector are given an entitlement to import specified raw materials and packing materials, and LCAFs are issued on the basis of the entitlement. The entitlement system does not apply to raw materials and packing materials that are freely importable but does apply to items appearing on the controlled list. Separately, industrial consumers may be issued with LCAFs for parts and accessories of machinery. Goods imported against LCAFs issued to industrial consumers must be used in the industry concerned and must not be sold or transferred without prior approval.
Import taxes and/or tariffsThere are seven tariff bands: zero, 2.5%, 7.5%, 15%, 20%, 30%, and 40%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsProceeds from exports must be received within four months of shipment unless otherwise allowed by the BB. Exporters are permitted to retain 7.5% of the proceeds of exports of ready-made garments and 40% of the proceeds from other exports; they may use retained earnings for bona fide business purposes, such as business travel abroad; participation in trade fairs and seminars; and imports of raw materials, spare parts, and capital goods. They may also be used to set up offices abroad without prior permission from the BB. Joint ventures, other than in the garment industry, located in export processing zones (EPZs) are allowed to retain 80% of their export earnings in a foreign currency deposit account and to place the remaining 20% in a bank account in domestic currency.
Financing requirementsn.a.
Documentation requirements
DomiciliationYes.
Export licensesExports to Israel are prohibited. Exports of about 20 product categories are banned. Some of these are restricted for nontrade reasons, while others are restricted to ensure the supply of the domestic market. Export licenses are required for all banned or restricted items.
With quotasQuotas are imposed on garment exports by the Chief Controller of Imports and Exports on the basis of the previous year’s performance. The Export Promotion Bureau monitors quota use in order to reallocate unfilled quotas.
Export taxesExports of jute are taxed.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles related to authorized trade transactions are generally not restricted.
Trade-related paymentsThere are controls on administrative expenses and commissions.
Prior approvalFor unloading and storage costs, prior approval is required. Up to 5% of export receipts (up to 33.3% in the case of books) may be remitted abroad for commissions without prior approval from the BB.
Investment-related paymentsAuthorized dealers are allowed to remit dividends to nonresident shareholders without the prior approval of the BB on receipt of applications from the companies concerned; applications must be supported by an audited balance sheet and profit-and-loss account, a board resolution declaring dividends out of profits derived from the normal business activities of the company, and an auditor’s certificate that tax liabilities are covered. Authorized dealers may remit profits of foreign firms, banks, insurance companies, and other financial institutions operating in Bangladesh to their head office on receipt of applications supported by documentation. These remittances are, however, subject to ex post checking by the BB.
Prior approvalNo approval is required if loan agreements conform to Board of Investment (BOI) guidelines.
Quantitative limitsInformation is not available for amortization of loans or depreciation of direct investments.
Indicative limits/bona fide testInformation is not available for amortization of loans or depreciation of direct investments.
Payments for travel
Quantitative limitsThe limit for personal travel by resident Bangladesh nationals to countries other than Bhutan, India, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka is $3,000 a year; the allowance for air travel to these seven countries is $1,000 a person a year. For new exporters, the indicative limit for business travel is $6,000, while established exporters are permitted to use balances held under the Export Retention Scheme (7.5% of exports of ready-made garments and 40% of other export proceeds). Manufacturers producing for the domestic market and importers are granted business travel allowances equivalent to 1% of turnover as declared in tax returns, and 1% of the value of imports, respectively. There is an annual ceiling of $5,000 in both cases.
Indicative limits/bona fide testYes.
Personal paymentsForeign currency for education is made available up to the cost of tuition and living expenses, as estimated by the educational institution concerned. No prior permission is required for the remittance of fees for undergraduate, postgraduate, and some professional courses. Foreign exchange is available for the costs of dependents abroad, after production of a certificate from the Bangladesh embassy in the country concerned, up to a reasonable level based on prevailing prices.
Prior approvalPrior approval is required for the transfer of pensions.
Quantitative limitsUp to $10,000 may be obtained for medical costs without prior approval. Larger amounts are subject to the approval of the BB.
Indicative limits/bona fide testApplications for foreign exchange for studies abroad and for family maintenance are accepted upon verification of their bona fide nature.
Foreign workers’ wages
Quantitative limitsForeign nationals may freely remit up to 50% of net salary in connection with service contracts approved by the government. The entire amount of their leave salaries and savings can also be freely remitted.
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalGeneral approval is given for the use by exporters against the foreign exchange retention entitlement and for the use against the travel allowance by other residents.
Quantitative limitsCredit cards may be used up to the amounts authorized for travel allowance.
Other payments
Prior approvalNo prior permission is required for the remittance of royalties and technical fees of up to 6% of sales, and of training and consulting fees of up to 1% of sales.
Indicative limits/bona fide testIndustrial enterprises producing for local markets may remit up to 1% of sales receipts declared in the previous year’s tax return.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsExporters of services are permitted to retain 5% of the proceeds and to use retained earnings for bona fide business purposes. Bangladesh nationals working abroad may retain their earnings in foreign currency accounts or in nonresident foreign currency deposit accounts. Unless specifically exempted by the BB, all Bangladesh nationals who reside in Bangladesh must surrender any foreign exchange coming into their possession, whether held in Bangladesh or abroad, to an authorized dealer within one month of the date of acquisition. However, returning residents may keep, in foreign currency accounts opened in their names, foreign exchange brought in at the time of return from abroad, provided that the amount does not represent proceeds from exports from Bangladesh or commissions earned from business activities in Bangladesh. Residents may retain up to $5,000 brought into the country without declaration. Foreign nationals residing in Bangladesh continuously for more than six months are required to surrender within one month of the date of acquisition any foreign exchange representing their earnings with respect to business conducted in Bangladesh or services rendered while in Bangladesh.
Restrictions on use of fundsForeign exchange retainable as above may be used for travel abroad or bona fide business purposes.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsNonresidents may buy Bangladesh securities through stock exchanges against payment in freely convertible currency remitted from abroad through banking channels.
Sale or issue locally by nonresidentsProceeds from sales, including capital gains and dividends earned on securities purchased in Bangladesh, may be remitted abroad in freely convertible currency. Nonresidents cannot issue securities in Bangladesh.
On money market instrumentsThese transactions are not allowed.
On collective investment securities
Purchase locally by nonresidentsThese transactions are not allowed.
Sale or issue locally by nonresidentsThese transactions are not allowed.
Purchase abroad by residentsThese transactions are not allowed.
Sale or issue abroad by residentsThese transactions are subject to prior approval of the Securities and Exchange Commission. If an instrument is denominated in foreign currency, prior BB approval is required.
Controls on derivatives and other instruments
Purchase locally by nonresidentsThese transactions are not allowed.
Sale or issue locally by nonresidentsThese transactions are not allowed.
Purchase abroad by residentsAuthorized dealer banks may obtain hedging abroad against exchange rate risks on underlying trade transactions.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsExport payments deferred for more than 120 days require BB authorization.
To residents from nonresidentsDeferred import payments are permitted for up to 360 days in advance for capital machinery and for up to 180 days for industrial raw materials. Private industrial units may borrow funds from abroad without the approval of the BOI if the interest rate does not exceed 4% above the LIBOR, if the repayment period is more than seven years, and if the down payment is less than 10%. All other borrowing by industrial units requires prior BOI approval.
Financial credits
By residents to nonresidentsExcept in specific cases, credits are subject to prior BB approval.
To residents from nonresidentsAuthorized dealers (i.e., commercial banks) may obtain short-term loans and overdrafts from overseas branches and correspondents for a period not exceeding seven days at a time.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsBanks may issue guarantees/sureties in favor of nonresidents in relation to permissible current transactions on behalf of residents.
To residents from nonresidentsReceipt of guarantees/sureties by residents from abroad requires full disclosure of the underlying transaction.
Controls on direct investment
Outward direct investmentAll outward transfers of capital require approval, which is sparingly granted for resident-owned capital.
Inward direct investmentInvestments, except in the industrial sector, require approval. The Foreign Private Investment (Promotion and Protection) Act provides for the protection and equitable treatment of foreign private investment, indemnification, protection against expropriation and nationalization, and guarantee for repatriation of investment. There is no ceiling on private investment. Tax holidays are granted for periods of up to nine years, depending on the location.
Controls on liquidation of direct investmentRequests for repatriation of the proceeds from liquidation of direct investment (in unlisted companies) are subject to prior scrutiny of the BB.
Controls on real estate transactions
Purchase abroad by residentsRemittances of funds for these purchases are not permitted.
Purchase locally by nonresidentsPurchases of real estate by a nonresident with funds from abroad are allowed.
Sale locally by nonresidentsRepatriation of sales proceeds are subject to prior approval by the BB, which is not normally granted.
Controls on personal capital movements
Loans
By residents to nonresidentsThese transactions are not allowed.
To residents from nonresidentsThese transactions are not allowed, except for industrial enterprises borrowing according to BOI guidelines/approval.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsTransfer of title to nonresidents by way of inheritances is not restricted, but income from, and sale proceeds of, such assets are normally not transferable abroad and are required to be used locally with prior authorization from the BB.
To residents from nonresidentsA resident Bangladesh national requires the prior approval of the government of Bangladesh for receiving any gift/endowment from a foreign donor. Inheritances are to be disclosed to the BB. Net current income from estates inherited abroad are to be repatriated.
Settlement of debts abroad by immigrantsThese transactions are normally not allowed, except for repayments on borrowing for industrial investments according to BOI guidelines.
Transfer of assetsThese transactions are not allowed, except for moveable personal effects.
Transfer abroad by emigrantsThese transactions are not allowed, except for normal travel allowance permissible to residents.
Transfer into the country by immigrantsThese transactions are permitted, subject to the declaration requirement in respect of foreign exchange in excess of $5,000.
Transfer of gambling and prize earningsGambling is prohibited in Bangladesh.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThe same regulations apply as for financial credits.
Maintenance of accounts abroadThe maintenance of these accounts is subject to notification to the BB.
Lending to nonresidents (financial or commercial credits)Lending to nonresidents is not allowed, except with prior BB approval and in specific cases.
Lending locally in foreign exchangeLending is subject to prior approval by the BB.
Purchase of locally issued securities denominated in foreign exchangePurchases are subject to prior approval by the BB.
Differential treatment of deposit accounts in foreign exchange
Interest rate controlsBanks are required to maintain interest rates on foreign currency deposits in line with international market rates.
Open foreign exchange position limitsThe limits that the BB places on each authorized dealer’s net open position are set at 12.5% of capital.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadDomestic institutional investors may not acquire investment assets abroad.
Other controls imposed by securities lawsn.a.
Changes During 1998
Exchange arrangementJuly 5. The buy/sell margin of the taka was widened.

Barbados

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 3, 1993.
Exchange Arrangement
CurrencyThe currency of Barbados is the Barbados dollar.
Other legal tenderGold coins with face values of BDS$50, BDS$100, BDS$150, BDS$200, and BDS$500 are legal tender and are in limited circulation.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Barbados dollar is pegged to the U.S. dollar, the intervention currency, at BDS$2 per US$1. Buying and selling rates for the Canadian dollar, the euro, and the pound sterling are also officially quoted on the basis of their cross-rate relationships to the U.S. dollar. The quoted rates include commission charges of 0.125% buying and 1.75% selling against the U.S. dollar, and 0.1875% buying and 1.8125% selling against the Canadian dollar, euro, and pound sterling. Effective April 5, 1998, certain businesses are allowed to change foreign currency.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThe Central Bank of Barbados (CBB) periodically obtains forward cover in the international foreign exchange market to cover or hedge its own or the central government’s exchange risks associated with foreign exchange loans that are not denominated in U.S. dollars. Commercial banks are allowed to obtain forward cover in the international markets. The CBB and commercial banks enter into swap transactions in U.S. dollars, while commercial banks freely switch between nonregional currencies.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of countries outside the CARICOM area may be made in any foreign currency or through an external account in Barbados dollars. Settlements with residents of CARICOM countries other than Jamaica, Suriname, and Trinidad and Tobago may be made in the currency of the CARICOM country. Settlements with residents of Jamaica, Suriname, and Trinidad and Tobago may be made in U.S. dollars. Retail outlets are permitted to issue change in the same foreign currency in which purchases were made.
Payment arrangements
Regional arrangementsBarbados is a member of the CARICOM.
Clearing agreementsUnder clearing arrangements with regional monetary authorities, the CBB currently sells only three CARICOM country currencies: the Bahamian dollar, the Eastern Caribbean dollar, and the Belize dollar. The Trinidad and Tobago, Guyana, and Jamaica dollars now float against the U.S. dollar, and the CBB sets indicative selling rates based on rates supplied by the monetary authorities of these countries. These rates are applicable only to government transactions.
Administration of controlExchange control applies to all countries, except those in the OECS, and is administered by the CBB, which delegates to authorized dealers the authority to approve normal import payments and foreign exchange for cash gifts. Further authority is delegated to commercial banks in respect of current account transactions ranging from BDS$7,500 to BDS$250,000. Trade controls are administered by the Ministry of Commerce, Consumer Affairs and Business Development (MCCABD). On April 20, 1998, authorized dealers were permitted to release foreign currency up to the equivalent of BDS$5,000 for certain undocumented imports from CARICOM and BDS$500 for undocumented nontrade transactions, such as visa fees and subscriptions. On September 2, 1998, the authority to approve payments to OECS countries was delegated to authorized dealers.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents, other than the monetary authorities, authorized dealers, and industrial users, are not permitted to hold or acquire gold in any form other than jewelry or coins for numismatic purposes. Any gold acquired in Barbados must be surrendered to an authorized dealer, unless exchange control approval is obtained for its retention.
Controls on external tradeThe importation of gold by residents is permitted for industrial purposes and is subject to customs duties and charges. Licenses to import gold are issued by the MCCABD. No license is required to export gold, but exchange control permission is required.
Controls on exports and imports of banknotes
On exports
Domestic currencyEffective April 20, 1998, travelers may take out up to BDS$500.
Foreign currencyEffective April 20, 1998, travelers may take out up to the equivalent of BDS$1,000. Nonresident visitors may freely export any foreign currency they previously brought in.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallySubject to specific conditions under delegated authority, authorized dealers may maintain foreign currency accounts in the names of individuals and companies resident in Barbados. Certain receipts and payments may be credited and debited to foreign currency accounts under conditions established at the time the account is opened. Other credits and debits require individual approval. However, where authority has not been delegated to authorized dealers, the permission of the CBB is required.
Approval requiredApproval is given on the basis of the anticipated frequency of receipts and payments in foreign currency.
Held abroadThese accounts are permitted, but permission of the CBB is required.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedThe same regulations apply as for resident accounts.
Domestic currency accountsThese accounts may be credited with the proceeds from the sale of foreign currencies, with transfers from other external accounts, with bank interest, and with payments by residents for which the CBB has given general or specific permission. The accounts may be debited for payments to residents of Barbados for the cost of foreign exchange required for travel or business purposes and for any other payment covered by delegated authority to authorized dealers. Other debits and any overdrafts require individual approval.
Convertible into foreign currencyBalances on external accounts are convertible.
Approval requiredNonresident holders of foreign currency accounts are not required to obtain central bank approval to remit funds abroad when the funds were not the result of payment for trade or nontrade transactions.
Blocked accountsThe CBB may require certain payments in favor of nonresidents that are ineligible for transfer to be credited to blocked accounts. Balances in blocked accounts may not be withdrawn without approval, other than for the purchase of approved securities.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAuthorized dealers may release foreign exchange up to the equivalent of BDS$250,000 (c.i.f.) for advance payments for imports into Barbados. Other advance payments require the prior approval of the CBB.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence (invoices and customs warrants) to authorized dealers; payments for imports of crude oil and its derivatives are subject to the approval of the CBB.
Import licenses and other nontariff measuresCertain imports require individual licenses. Some items on the import-licensing list may be freely imported throughout the year, while others are subject to temporary restrictions (particularly agricultural products, which tend to be subject to seasonal restrictions). Individual licenses are also required for imports of commodities that are subject to the provisions of the Oils and Fats Agreement between the governments of Barbados, Dominica, Grenada, Guyana, St. Lucia, St. Vincent, and Trinidad and Tobago whether the goods are being imported from CARICOM countries or from elsewhere. Special licensing arrangements have been made for the regulation of trade between Barbados and other CARICOM countries in 22 agricultural commodities.
Licenses with quotasNot all goods that are subject to licensing are subject to quantitative restrictions or import surcharges.
Import taxes and/or tariffsCustoms duties correspond to the CET of CARICOM. On April 1, 1998, the range of CARICOM CET was narrowed to 5%–20%. There is a surtax of 75% on some imports that had been previously subject to quantitative restrictions. A VAT of 15% is levied.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsYes.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesSpecific licenses are required for the exportation of certain goods to any country, including rice, sugarcane, rum, molasses, certain other food products, sewing machines, portland cement, and petroleum products. All other goods may be exported without license.
Without quotasYes.
With quotasExports of sugar to the United Kingdom and the United States are subject to bilateral export quotas, as are exports of rum to the EU.
Export taxesn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related payments
Prior approvalApproval is required for amounts above the limit.
Quantitative limitsFor freight and insurance, the limit is BDS$250,000 a transaction, including insurance payments and premiums, as long as the amount is approved for payment by the Supervisor of Insurance. The same limit is applied for unloading and storage and administrative expenses; the limit for commissions is BDS$100,000. Above the limits, approval is required.
Indicative limits/bona fide testYes.
Investment-related paymentsNo information is available on the payment of amortization loans or depreciation of direct investments.
Prior approvalYes.
Quantitative limitsThe limit for interest payments is BDS$50,000 a year for individuals. For payments of profits and dividends, approval is required for amounts above BDS$250,000, except for listed companies from the CARICOM region on the securities exchange of Barbados, where the limit is BDS$2 million.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsThe limits are BDS$7,500 a person a calendar year for private travel, and BDS$750 a day; for business travel, up to BDS$50,000 a person a calendar year.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalApproval is required for amounts above the limit.
Quantitative limitsThe limits are as follows: for medical costs, BDS$100,000 a year; for studies abroad, BDS$50,000 a person a year; for cash gifts, BDS$5,000; and for alimony and other maintenance expenses, BDS$50,000. Nonresidents may have their pensions remitted to them while residing outside Barbados.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsNonresidents are allowed to remit amounts to cover commitments while employed in Barbados.
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe limits are BDS$7,500 a person a year for private travel and BDS$750 a day; for business travel, up to BDS$50,000 a person a year.
Indicative limits/bona fide testYes.
Other payments
Prior approvalApproval is required for amounts above the limit.
Quantitative limitsThe limit for subscriptions and membership fees is BDS$50,000 a person a year, and for consulting and legal fees, BDS$100,000 for each nonresident beneficiary.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsForeign currency proceeds from invisibles must be sold to authorized dealers.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThe issuance and transfer to nonresidents of securities registered in Barbados require exchange control approval, which is freely given provided that an adequate amount of foreign currency is brought in for their purchase.
Purchase abroad by residentsThese purchases require exchange control approval, and certificates of title must be lodged with an authorized depository in Barbados except for regional securities purchased through the Securities Exchange of Barbados. Earnings on these securities must be repatriated and surrendered to an authorized dealer.
Sale or issue abroad by residentsExchange control approval is required.
Bonds or other debt securitiesThe same regulations apply as for shares or other securities of a participating nature.
On money market instruments
Purchase locally by nonresidentsThe same regulations apply as for shares and other securities of a participating nature.
Purchase abroad by residentsThe same regulations apply as for shares and other securities of a participating nature.
On collective investment securities
Purchase locally by nonresidentsThe same regulations apply as for shares and other securities of a participating nature.
Purchase abroad by residentsThe same regulations apply as for shares and other securities of a participating nature.
Controls on derivatives and other instrumentsn.a.
Controls on credit operationsThe approval of the CBB is required for all credit operations.
Controls on direct investmentDirect investments require exchange control approval.
Controls on liquidation of direct investmentLiquidation of proceeds is permitted, provided that evidence documenting the validity of the remittance is submitted, all liabilities related to the investment have been discharged, and the original investment was registered with the CBB.
Controls on real estate transactions
Purchase abroad by residentsPurchases require exchange control approval.
Purchase locally by nonresidentsNonresidents may acquire real estate in Barbados for private purposes with funds from foreign currency sources; local currency financing is not ordinarily permitted.
Sale locally by nonresidentsProceeds from the realization of such investments equivalent to the amount of foreign currency brought in may be repatriated freely. Capital sums realized in excess of this amount may be repatriated freely on the basis of a calculated annual rate of return on the original foreign investment as follows: for the last five years, at 8%; for the five years immediately preceding the last five years, at 5%; and for any period preceding the last 10 years, at 4%. Amounts in excess of the sum so derived are restricted to remittances of BDS$30,000 a year.
Controls on personal capital movements
LoansExchange control permission is required for the granting or receiving of loans.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThe limit for gifts is BDS$5,000 and BDS$30,000 a year for endowments, inheritances, and legacies.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsEffective September 4, 1998, the limit was raised to BDS$100,000 from BDS$30,000.
Transfer of gambling and prize earningsNonresidents may take out amounts won.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAny borrowing abroad by authorized dealers to finance their domestic operations requires the approval of the CBB. Authorized dealers may assume short-term liability positions in foreign currencies for the financing of approved transfers in respect of both trade and non-trade transactions.
Maintenance of accounts abroadAccounts must be maintained with overseas correspondent banks.
Lending to nonresidents (financial or commercial credits)Exchange control permission is required.
Purchase of locally issued securities denominated in foreign exchangeInvestment in local securities requires CBB approval.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThere is no reserve requirement on deposits in foreign exchange. For domestic currency deposits in commercial banks, there is a cash reserve requirement of 5%.
Liquid asset requirementsThere is no liquidity requirement on deposits in foreign exchange. For domestic currency deposits in commercial banks, there is a liquidity requirement of 25% (12% in treasury bills, 8% in government debentures, and 5% in cash).
Differential treatment of deposit accounts held by nonresidentsNonresident deposit accounts are treated the same as resident deposit acounts. Differential treatment is based on whether the amount is in domestic currency.
Open foreign exchange position limitsLimits are set by the CBB.
Provisions specific to institutional investorsApproval is required for investment of pension funds abroad. A 6% tax is levied on portfolio investments of pension funds with foreign companies that are not registered with the Barbados Supervisor of Insurance.
Other controls imposed by securities lawsn.a.
Changes During 1998
Exchange arrangementApril 5. Certain business establishments were allowed to change foreign currency.
Arrangements for payments and receiptsApril 20. Travelers were allowed to take out up to BDS$500 in Barbados rates and the equivalent of BDS$1,000 in foreign currency.
April 20. Authorized dealers were permitted to release foreign currency up to the equivalent of BDS$5,000 for certain undocumented imports from CARICOM countries and BDS$500 for undocumented nontrade transactions, such as visa fees and subscriptions.
September 2. The authority to approve payments to OECS countries was delegated to authorized dealers.
Imports and import paymentsApril 1. The range of CARICOM CET was narrowed to 5%-20% from 5%-25%.
Capital transactions
Controls on personal capital movementsSeptember 4. The limit for remittances abroad by emigrants was raised to BDS$100,000 from BDS$30,000.

Belarus

(Position as of January 31, 1999)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Belarus is the Belarussian rubel.
Exchange rate structure
MultipleThere are four exchange rates in effect: (1) the auction rate at the Interbank Currency Exchange (ICB) on which the official exchange rate is based and at which surrender of export receipts take place; (2) the supplementary market (set up in January 1998) where exporters may sell foreign exchange to the National Bank of Belarus (NBB) through banks after fulfilling the surrender requirements; (3) the interbank market rate; and (4) a rate for individual cash transactions.
Classification
Managed floating with no preannounced path for the exchange rateThe official exchange rate of the rubel was managed within an exchange rate band established in January 1996. Depreciation of the rubel within these limits was allowed. In the period between end-February 1997 and end-February 1998, the authorities permitted the official rate to depreciate in nominal terms from Rbl 22,800 to Rbl 32,670 per $1. Most transactions take place through the interbank market exchange rate. The cash market rate and the supplementary auction rate are market-determined, but the supplementary auction rate is limited to the selling of foreign exchange by enterprises.
As of June 1998, the foreign exchange market consisted of the following three segments: (1) the official rate that is determined by the NBB for the “morning” trading session of the Minsk Interbank Currency Exchange (MICE); (2) the cash rate at exchange bureaus that is “orally” (i.e., through the telephone) regulated by the NBB; and (3) an “afternoon” trading session introduced by the NBB in late January 1998.
Effective June 19, 1998, the NBB issued a regulation requiring that all foreign exchange transactions above a stipulated amount involving the rubel, and any one of four foreign currencies (the euro, the U.S. dollar, the Russian ruble, or the hryvnia), and above the amounts sold according to the existing mandatory 30% surrender requirement to be undertaken in the supplementary session of the MICE rather than on the interbank market as before.
Effective January 22, 1999, foreign currency above the mandatory surrender amount may be sold on the interbank market.
Exchange taxRepatriation of profits in convertible currency is subject to a 15% tax payable in convertible currency.
Exchange subsidyn.a.
Forward exchange marketThe forward market is regulated by the same provisions as the spot market.
Arrangements for Payments and Receipts
Prescription of currency requirementsIn accordance with the Agreement on the Establishment of a Payment Union of Member Countries of the CIS (1994) and bilateral payment agreements between Belarus and the central banks of those countries, settlements between Belarus and CIS member countries are effected in the national currencies of the parties involved in the settlements, in the currencies of the Payment Union of Member Countries of the CIS and in freely convertible currencies, in accordance with legislation in effect within the territory of the country. Settlements between Belarus and CIS member countries and the Baltic countries are effected using noncash procedures via correspondent accounts of authorized banks and central banks.
In accordance with bilateral payment agreements between the NBB and the central banks of Armenia, Azerbaijan, the Kyrgyz Republic, Latvia, Lithuania, Moldova, Tajikistan, Ukraine, and Uzbekistan, only settlements for operations ensuing from the functions of central banks are effected via correspondent accounts of central banks. Settlements for all other accounts are effected via correspondent accounts of authorized banks.
In accordance with bilateral payment agreements between the NBB and the central bank of Estonia, settlements between economic agents may be effected both via correspondent accounts of authorized banks and via correspondent accounts of central banks. Effective March 23, 1998, the NBB halted all Belarussian rubel transactions between residents and nonresidents and among nonresidents. Effective March 26, 1998, Belarussian rubel payments by nonresidents to residents were again allowed, as well as those payments by residents to nonresidents, excluding the payments for some groups of commodities for which payment in foreign currency is now required.
Payment arrangements
Bilateral payment arrangementsBelarus maintains bilateral payment agreements with 14 countries, including the CIS countries.
OperativeYes.
Regional arrangementsThere are arrangements with Moscow and various other regions in Russia.
Clearing agreementsThere is an agreement with Uzbekistan calling for the exchange of cotton from Uzbekistan for strategic goods from Belarus on a balanced basis. There are also agreements with Moldova and Ukraine.
Barter agreements and open accountsBarter trade of certain goods requires approval from the Commission of the Council of Ministers on the Issuance of Authorization to Engage in Commodity-Exchange Operations. Barter agreements are effected at the level of economic agents.
Administration of controlThe Parliament is responsible for legislating exchange control regulations and the NBB for administering them.
International security restrictionsNo.
Payment arrears
OfficialYes.
Privaten.a.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are required to obtain a license from the MOF to deal in precious stones and metals.
Controls on external tradePermission for nonresidents to export precious metals and precious stones is granted by the Cabinet of Ministers of Belarus.
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents and nonresidents may export up to the equivalent of 100 times the minimum wage.
Foreign currencyAny person may export Russian rubles up to the equivalent of 500 times the minimum wage set in Russia. Resident and nonresident natural persons may export $500 in cash and any sum in traveler’s checks without permission and any sum with the permission of an authorized bank.
On imports
Domestic currencyUp to the previously exported amount may be imported.
Foreign currencyThere are no limitations on the import of foreign currency other than Russian rubles. For Russian rubles, up to the equivalent of 500 times the minimum wage set in Russia may be imported.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyWithout declaring the sources of their foreign exchange, residents may open foreign currency accounts at commercial banks in Belarus authorized to transact in foreign exchange.
Held abroadThese accounts are permitted, but prior approval of the NBB is required.
Accounts in domestic currency convertible into foreign currencyBalances may be converted for payments to import goods, labor, and services; payments for business trip expenditures and training abroad; and repayments of loans and interest. Insurance companies may convert balances to establish insurance funds from net profits.
Nonresident Accounts
Foreign exchange accounts permittedNonresident juridical persons may maintain foreign exchange accounts with authorized banks in Belarus. The source of the funds can be receipts from abroad; proceeds from the sales of goods and services in the territory of Belarus, including sales to residents; debt-service payment; interest earned on balances in the accounts; funds from other foreign exchange accounts of nonresidents in Belarus; and earnings from investments from the performance of other operations with residents and nonresidents. These accounts may be debited for purchases of goods and services and for investments, as well as for payments to residents and nonresidents. Funds from these accounts may be freely repatriated or exchanged for Belarussian rubels at the market exchange rate through authorized banks.
Approval requiredApproval is required to open accounts for nonresident juridical persons, with countries for which the appropriate agreements have been concluded between the governments or the national banks.
Domestic currency accountsNonresident juridical persons may open I (investment) accounts and T (current) accounts at authorized commercial banks. Nonresident juridical persons may also open C accounts at authorized banks. I accounts may be credited with the Belarussian rubel counterpart of foreign exchange sales, dividends, resources from the liquidation of enterprises, and compensation in the event of the nationalization of enterprises. Resources from I accounts may be used to purchase foreign currency, shares of enterprises, privatization checks, etc.
T accounts are used for current operations. Proceeds from the sale of foreign currencies and of goods and services, and resources from the placement of money in deposits and other debt obligations of banks, etc. are transferred into them. Resources from T accounts may be used to purchase goods and services and bonds, and to pay for current expenditures. Funds in C accounts are used for investments in securities issued by the Belarussian government and the NBB. Proceeds from the sale of freely convertible currencies and/or Russian rubles, as well as proceeds from the redemption or sale of government and NBB securities by nonresidents, are deposited in C accounts if the original purchases were made with payments from C accounts.
Convertible into foreign currencyBalances on type I and C accounts may be converted into foreign currency. In this process, balances on type C accounts may be converted into foreign currency under condition that the nonresident was a holder of securities of the government or the NBB for a period of time established by the NBB. Currently the period of time has not been established (conversion is effected regardless of the period of time that the nonresident holds the securities).
Approval requiredYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsEffective June 1, 1998, the Council of Ministers and the NBB issued a resolution that established a list of priority imports (energy and medicines), which legally could be purchased from nonresidents for rubels in addition to foreign currency. Effective October 23, 1998, imports may be paid for only in foreign exchange. Exceptions to this rule are settlements effected on T accounts (settlements in Belarussian rubels on these accounts may be effected for any goods, labor, and services).
Advance payment requirementsFor (1) down payments for goods or services exceeding $100,000, a foreign bank guarantee is required; (2) payments for imports more than 60 days in advance of the receipt of the goods in Belarus, special permission from the Ministry of Foreign Economic Relations (MFER) is required (for goods imported under barter or clearing arrangements, the period is 180 days).
Documentation requirements for release of foreign exchange for imports
Import licenses used as exchange licensesYes.
Import licenses and other nontariff measures
Positive listImport licenses are required for importing certain pesticides, herbicides, and industrial wastes.
Negative listThe importing of radioactive or toxic wastes, as well as publications or videos that are against state morals, health, or security is prohibited.
Licenses with quotasImporters are required to obtain a license in order to apply for an import quota for ethyl alcohol and alcoholic beverages.
Import taxes and/or tariffsThere are no customs barriers between Belarus and Russia, and a common trade policy for third countries exists. The tariff structure consists of rates of 1% to 5% that apply to goods such as plants, seeds, foodstuffs, raw materials, ores, petroleum, and spare parts, and of rates of 40% to 100% that apply to goods such as weapons, ammunition, precious metal products, carpets, and motor vehicles. Certain customs duty rates were raised to harmonize them with those applied by Russia. There are numerous exemptions. Regular import duty rates apply to countries with MFN status. Duties are applied at twice the MFN rate on imports from countries without MFN status. Duties on imports from developing countries covered by Russia’s system of preferences are half the MFN rate or zero.
State import monopolyImports of alcohol and tobacco products are effected by state monopolies.
Exports and Export Proceeds
Repatriation requirementsAll proceeds must be repatriated within 120 days of shipping, including goods exported under a barter or clearing contract. Special approval of the MFER is needed for longer periods of time.
Surrender requirementsAt the beginning of 1998, the authorities decided informally that 90% of the foreign exchange acquired through the surrender requirement (30%) would be made available to energy-importing enterprises to pay the energy bill. The remainder is generally used for other priority imports, such as medicines. The foreign exchange surrendered by the exchange bureaus is used for various purposes under the guidance of the Committee of State Control, the Cabinet of Ministers, and the Board of the NBB.
On July 20, 1998, a temporary 10% mandatory surrender requirement in the afternoon session of the MICE was introduced until January 1, 1999. The exchange rate applicable to this surrender is the rate prevailing in the afternoon session.
Financing requirementsOn June 30, 1998, a list of exports was designated with a joint resolution of the Council of Ministers and the NBB for which payments may be received only in foreign exchange.
Documentation requirementsA transaction certificate is required.
Export licenses
Without quotasExport bans exist for some medicinal herbs, art and antique collections, certain wild animals, and goods imported into Belarus on a humanitarian basis. Exports of certain goods, including amber, ores and concentrates, and precious metals and stones, require a license that is subject to the approval of the Precious Metals Committee of the Ministry of Finance.
With quotasMineral fertilizers and waste, and scrap of ferrous and nonferrous metals are subject to export quotas and licensing requirements.
Export taxesCustoms duties for exports to non-CIS countries have been eliminated. VAT and excise taxes are collected on excisable goods that are exported to CIS countries.
Other export taxesA rent payment applies for exported timber and products thereof.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Payments for travel
Quantitative limitsIndividuals (residents and nonresidents) are permitted to acquire cash foreign currency up to the equivalent of $200 a day at a single exchange office (purchases of $200 of foreign currency each at several exchange offices can be made). No restrictions have been established on the acquisition by individuals of noncash foreign currency. There are no restrictions on the purchase of foreign exchange for bona fide expenses related to business travel.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAll service export proceeds must be repatriated after 60 days, unless special permission for a longer period of repatriation has been granted by the MFER.
Surrender requirementsA requirement of 30% applies to receipts in freely convertible currencies and Russian rubles.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instrumentsThe MOF and the NBB establish quotas and procedures for transactions by residents and nonresidents in securities. The export and import of securities is allowed without limitation. There is a registration procedure for control purposes with the Committee on Securities (CS).
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThe permit of the NBB, as well as the registration of the CS, is required.
Sale or issue locally by nonresidentsThe permit of the NBB, as well as the registration of the CS, is required.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesRegistration of securities is required. The NBB regulates the issue of CDs and saving certificates by banks. These may be issued both in domestic currency and in foreign exchange. Banks are not allowed to export bank certificates.
Purchase locally by nonresidentsThe permit of the NBB, as well as the registration of the CS, is required.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsAn NBB permit is required to purchase government securities or securities issued by the NBB.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsAn NBB permit is required.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsAn NBB permit is required.
Controls on derivatives and other instruments
Purchase abroad by residentsAn NBB permit is required.
Controls on credit operations
Commercial creditsExternal borrowing by residents must be registered with the NBB.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsAn NBB permit is required if the credit is for more than 180 days.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentForeign investment must be registered at the MFER, and financial institutions must also register it at the NBB. In the case of insurance institutions, foreign investment must also be registered at the State Insurance Oversight Committee. Certain activities require special approval (license). When establishing an enterprise with foreign investments, the size of a foreign investor’s share is not restricted, except for insurance organizations and banks, where it may not exceed 49%.
Controls on liquidation of direct investmentForeign investors are guaranteed full repatriation of their initial investment capital and profits earned in Belarus.
Controls on real estate transactions
Purchase abroad by residentsAn NBB permit is required.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutions
Maintenance of accounts abroadThe opening of bank accounts abroad requires approval from the NBB.
Lending locally in foreign exchangePermitted for settlements with nonresidents.
Open foreign exchange position limitsOpen foreign exchange position limits are established depending on the type of foreign currency (freely convertible currency and currency with restricted convertibility). Requirements are also established with regard to limits on the differential between off-balance-sheet assets and liabilities. Limits are computed as a whole by type of foreign currency regardless of whether the asset (liability) belongs to a resident or nonresident.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1998
Exchange arrangementJanuary 22. The NBB established an additional afternoon market at the ICB where enterprises, after fulfilling their surrender requirements, could sell (but not purchase) foreign exchange through banks to the NBB through auctions.
June 19. The NBB issued a regulation requiring that all foreign exchange transactions above a stipulated amount involving the rubel and any one of four foreign currencies (the euro, the U.S. dollar, the Russian ruble, or the hryvnia), and above the amounts sold according to the existing mandatory 30% surrender requirement to be undertaken in the supplementary session of the MICE rather than on the interbank market as before.
Arrangements for payments and receiptsMarch 23. The NBB halted all Belarussian rubel transactions between residents and nonresidents and between nonresidents and nonresidents.
March 26. Belarussian rubel payments by nonresidents to residents were allowed again as before, as well as those by residents to nonresidents, excluding payments for some groups of commodities for which payment in foreign currency is now required.
Imports and import paymentsJune 1. A resolution established a list of priority imports that legally could be purchased from nonresidents for rubels in addition to foreign currency.
October 23. Imports were allowed to be paid only in foreign exchange.
Exports and export proceedsJune 30. A resolution established a list of export goods for which residents may accept only foreign exchange.
July 20. A temporary, mandatory surrender requirement of 10% was introduced in the afternoon session of the MICE until January 1, 1999.
Changes During 1999
Exchange arrangementJanuary 22. Foreign currency above the mandatory surrender amount may be sold on the interbank market.

Belgium

(Position as of January 31, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyAs from January 1, 1999, the currency of Belgium is the euro. In cash transactions, however, the legal tender remains the Belgian franc until 2002, when euro banknotes and coins will be issued.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderBelgium participates in a currency union (EMU) comprising 11 members of the EU: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Internal exchange rates in respect to the national currencies of EMU participants were fixed to the euro on January 1, 1999, whereas the external exchange rate of the euro is market-determined. The conversion rate between the euro and the Belgian franc was set at BF 40.3399 per €1. The ECB has the right to intervene to smooth out fluctuations in external exchange rates.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketBanks are allowed to engage in spot and forward exchange transactions in any currency, and they may deal among themselves and with residents and nonresidents in foreign notes and coins.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlNo.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)Belgium applies exchange restrictions against Iraq, Libya, and the Federal Republic of Yugoslavia (Serbia/Montenegro).
In accordance with UN sanctionsYes.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThese are accounts affected by international security restrictions.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Positive listIndividual licenses are required for certain specified imports from all countries (most imports do not require an import license when imported from member countries of the EU), including many textile and steel products, diamonds, weapons, and nontextile products from China. All other commodities are free of license requirements.
Licenses with quotasAlong with other EU countries, the BLEU applies quotas on a number of textile products from non-EU countries in the framework of the MFA and also applies a system of minimum import prices to foreign steel products, quotas on a number of steel products from Russia and Ukraine, and quotas on a number of products from China (shoes, ceramic, and porcelain).
Import taxes and/or tariffsBelgium applies the Common Import Regime of the EU to imports of most other agricultural and livestock products from non-EU countries.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required only for a few products (mostly of a strategic character), for weapons, and for diamonds.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThe public issue or sale of debt securities that are not of EU origin is controlled.
On money market instruments
Sale or issue locally by nonresidentsThe public issue or sale of money market securities and instruments that are not of EU origin is controlled.
On collective investment securities
Sale or issue locally by nonresidentsThe public issue or sale of collective investment securities that are not of EU origin is controlled.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsThe public issue or sale of instruments and claims that are not of EU origin is controlled.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentNo authorization is required for inward direct investment in Belgium, except for a takeover by or on behalf of a person, company, or institution from a non-EU state, and the acquisition of Belgian flag vessels by shipping companies not having their principal office in Belgium.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investors
Currency-matching regulations on assets/liabilities compositionThese regulations are maintained, but the introduction of the euro has considerably reduced the significance of such regulations. The EU gives the right to its member states to maintain such regulations.
Other controls imposed by securities lawsNo.
Changes During 1998
No significant changes occurred in the exchange and trade system.
Changes During 1999
Exchange arrangementJanuary 1. The currency of Belgium became the euro. The conversion rate between the euro and the Belgian franc was set irrevocably at BF 40.3399 per €1.

Belize

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 14, 1983.
Exchange Arrangement
CurrencyThe currency of Belize is the Belize dollar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Belize dollar is pegged to the U.S. dollar, the intervention currency, at the rate of BZ$1 per US$0.50. The Central Bank of Belize (CBB) quotes daily rates for the Canadian dollar, the pound sterling, and a number of currencies of CARICOM member countries.
Exchange taxA stamp duty of 1.25% is levied on all conversions from the Belize dollar to a foreign currency.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Regional arrangementsBelize is a member of CARICOM.
Clearing agreementsBelize participates in the CMCF.
Administration of controlThe CBB is responsible for administering exchange control, which applies to all countries. Authority covering a wide range of operations is delegated to the commercial banks in their capacity as authorized dealers. Only in exceptional cases or in applications involving substantial amounts is reference made directly to the CBB. However, all applications for foreign exchange processed by authorized dealers are regularly forwarded to the CBB for audit and record keeping.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may not hold gold except with specific authorization from the CBB.
Controls on external tradeGold may not be imported or exported without the approval of the CBB.
Controls on exports and imports of banknotes
On exports
Domestic currencyEach traveler may take abroad up to BZ$100. Amounts beyond these limits require the approval of the CBB, which is liberally granted when justified.
Foreign currencyThe amount of foreign currency that each resident traveler may take abroad is left to the discretion of the commercial banks. It is subject to availability and guided by limits. Nonresidents may take out up to the amount imported or the limits specified.
On imports
Domestic currencyEach traveler may bring in up to BZ$100.
Resident Accounts
Foreign exchange accounts permittedThese accounts may be opened both domestically and abroad, but prior approval is required.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedBanks must have permission from the CBB to open external or foreign currency accounts.
Domestic currency accountsThese accounts may be credited with proceeds from the sale of foreign currency.
Convertible into foreign currencyYes.
Blocked accountsThe CBB may stipulate that sums to be credited or paid to foreign residents be credited to a blocked account.
Imports and Import Payments
Foreign exchange budgetYes.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPrepayments for imports require authorization from the CBB; in most cases such authorization is delegated to the commercial banks. The CBB rations its sales of foreign exchange to commercial banks on an ad hoc basis, except for a few essential import items, such as fuel and pharmaceuticals.
Letters of creditYes.
Import licenses and other nontariff measures
Negative listFor reasons of health, standardization, and protection of domestic industries, import licenses from the Ministry of Commerce and Industry are required for a number of goods—mostly food and agricultural products, and certain household and construction products; such licenses are liberally granted.
Import taxes and/or tariffsImport tariff rates range from 5% to 25%, with a number of items (particularly, agricultural inputs) entering duty free. Imports by most of the public sector and certain nonprofit entities, imports of an emergency or humanitarian nature, and goods for reexport are exempt from import duties; goods originating from the CARICOM area are also exempt. Some items are subject to revenue replacement duties ranging from 15% to 25%. Specific duties and surcharges apply to certain products. There is a 15% VAT.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsExport proceeds must be surrendered to authorized dealers not later than six months after the date of shipment, unless otherwise directed by the CBB. The CBB makes direct purchases of sugar export proceeds, bypassing the traditional practice of purchasing from commercial banks.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required for live animals, excluding pets; fish, crustaceans, and mollusks, excluding agricultural species; lumber and logs; beans; citrus fruits; and sugar.
Without quotasYes.
Export taxesReexports and transshipments are subject to a 3% customs administration fee.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThe CBB rations its sale of foreign exchange for invisible payments to commercial banks on an ad hoc basis, except for a few essential items, such as insurance.
Trade-related paymentsThere are controls on the payment of commissions.
Prior approvalFor the payment and tranfers of commissions, approval is granted by the CBB, subject to clearance by the Commissioner of Income Tax (CIT).
Investment-related paymentsInformation is not available on the payment of amortization of loans or depreciation of direct investments.
Prior approvalFor interest payments, approval is granted by the CBB, subject to clearance by the CIT. For transfer of profits and dividends, income statement and declaration of dividends must be presented along with clearance from the CIT.
Payments for travel
Quantitative limitsThe limits are (1) for nonbusiness travel by residents, up to BZ$5,000 a person a trip; (2) for business travel by residents, BZ$500 a person a day, up to a maximum of BZ$20,000 a year; (3) for business or nonbusiness travel by nonresidents, BZ$500 a person a year, unless payment is made from an external account or from proceeds of foreign currency. Resident travelers are required to sell their excess holdings of foreign currencies to an authorized dealer upon returning to Belize.
Indicative limits/bona fide testYes.
Personal paymentsPayments related to medical costs are made directly to a doctor or hospital, with original invoices or bills supporting the application.
Prior approvalFor transfer of pension and payments for family maintenance and alimony, approval by the CBB is required.
Quantitative limitsThe limit for gifts is BZ$100 a donor.
Indicative limits/bona fide testForeign exchange is provided by authorized dealers for payment of correspondence courses when applications are properly documented.
Foreign workers’ wages
Prior approvalApproval is granted by the CBB, subject to clearance by the CIT.
Other payments
Prior approvalFor the transfer of consulting and legal fees, approval is granted by the CBB, subject to clearance by the CIT.
Indicative limits/bona fide testSimilar requirements apply for subscriptions and membership fees as for study abroad.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsProceeds must be sold to an authorized dealer.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsAll capital transfers require the approval of the CBB, but controls are liberally administered.
Controls on derivatives and other instrumentsYes.
Controls on credit operationsYes.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentInward direct investment must be registered with the CBB for future repatriation of profits.
Controls on liquidation of direct investmentRepatriation of proceeds requires clearance by the CIT.
Controls on real estate transactionsYes.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Benin

(Position as of February 28, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Benin is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at the fixed rate of CFAF 100 per €0.1524, which is the official buying and selling rate. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris exchange market and the fixed rate between the euro and the CFA franc. They include a bank commission of 0.25% on transfers to all countries outside the WAEMU, which must be surrendered to the Treasury.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketEffective February 1, 1999, residents were authorized to contract forward exchange cover in accordance with the regulations on imports and exports of goods and services.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with France, Monaco, and other countries linked to the French Treasury through an Operations Account are made in CFA francs, French francs, or the currency of any other Operations Account country.
Payment arrangements
Bilateral payment arrangements
InoperativeYes.
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Administration of controlExchange control is administered by the MOF, which also supervises the following: borrowing abroad; the issuing, advertising, or offering for sale of foreign securities in Benin; inward direct investment and all outward investment; and the soliciting of funds in Benin for placement in foreign countries. Effective February 1, 1999, the amount of transfers authorized without supporting documentation was raised to CFAF 300,000 from CFAF 100,000.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeAuthorization from the Directorate of External Commerce, issued after a favorable ruling by the Directorate of Monetary and Financial Affairs of the MOF, is required to hold, sell, import, export, or deal in raw diamonds and precious and semiprecious materials. In practice, residents are free to hold, acquire, and dispose of gold in any form in Benin.
Controls on external tradeImports and exports of gold from or to any other country require prior authorization of the MOF.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe export of CFAF banknotes by travelers is not prohibited. However, repurchase of exported banknotes by the BCEAO remains suspended. Furthermore, the shipment of BCEAO banknotes between authorized intermediaries and their correspondents located outside the WAEMU zone is strictly forbidden.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers is allowed up to the equivalent of CFAF 250,000; the reexportation of foreign banknotes above these ceilings requires documentation demonstrating either the importation of the foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits in local banks.
On imports
Domestic currencyTravelers may freely import CFAF banknotes. The amounts must be declared at customs, however.
Foreign currencyResident and nonresident travelers may bring in any amount of foreign banknotes and coins (except gold coins) of countries outside the Operations Account area. Residents bringing in foreign banknotes and foreign currency traveler’s checks exceeding the equivalent of CFAF 25,000 must declare them to customs upon entry and sell them to an authorized intermediary bank within eight days.
Resident Accounts
Foreign exchange accounts permittedEffective February 1, 1999, residents are allowed to open foreign exchange accounts with local banks or with banks abroad after obtaining authorization from the MOF with the approval of the BCEAO.
Held domesticallyAccounts in foreign currency held by residents with domestic financial institutions are subject to prior authorization by the MOF.
Held abroadCurrently, the law does not expressly forbid the holding of accounts in banks located abroad. It does, however, forbid any transfer that would constitute the amassing of assets abroad by a resident, except where authorized by the MOF.
Accounts in domestic currency convertible into foreign currencyOnly nonresidents may hold convertible accounts without restriction.
Nonresident Accounts
Foreign exchange accounts permittedEffective February 1, 1999, authorization is issued by the BCEAO.
Approval requiredThe law does not contain specific provisions regarding nonresident accounts in foreign currency. In practice, the law is interpreted as requiring prior authorization for these accounts from the MOF.
Domestic currency accountsBecause the BCEAO has suspended the repurchase of banknotes circulating outside the territories of the WAEMU zone, nonresident accounts may not be credited or debited with BCEAO banknotes. These accounts may not be overdrawn without prior authorization of the MOF. Transfers of funds between nonresident accounts are not restricted.
Convertible into foreign currencyNonresidents may freely debit their foreign accounts in francs for the purpose of purchasing foreign currency on the official foreign exchange market.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll imports exceeding CFAF 500,000 are subject to the requirement.
Preshipment inspectionAll imports exceeding CFAF 3 million are subject to inspection.
Import licenses and other nontariff measures
Negative listCertain imports, e.g., narcotics, are prohibited from all sources.
Import taxes and/or tariffsCustoms duties consist of four bands: 5%, 10%, 15%, and 20%. A statistical tax of 5% is levied on the c.i.f. value of imports.
State import monopolyImports of petroleum products are made by a state company and licensed private enterprises.
Exports and Export Proceeds
Repatriation requirementsReceipts must be collected within 180 days of the arrival of the shipment at its destination. Effective February 1, 1999, proceeds from exports to WAEMU countries are no longer required to be repatriated.
Surrender requirementsProceeds must be surrendered to authorized banks within 30 days of the payment due date. They must then be surrendered to the BCEAO by the authorized intermediaries as transfers via the issuing institution.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
DomiciliationProceeds must be domiciled with an authorized intermediary bank when valued at more than CFAF 500,000. Effective February 1, 1999, exports to WAEMU countries need not be domiciled.
Export licenses
Without quotasExports are permitted on the basis of a simple authorization from the Directorate of Foreign Trade, which issues a certificate of origin, as needed. Exports of diamonds, gold, and all other precious metals, however, require prior authorization of the MOF, with the exception of articles with a small gold content, travelers’ personal effects weighing less than 500 grams, and coins (fewer than 10 pieces, irrespective of their face value and denomination).
With quotasExports of teakwood and other varieties of unprocessed wood and charcoal are banned.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles to France, Monaco, and the Operations Account countries (WAEMU members, and Cameroon, Central African Republic, Republic of Congo, Gabon, Equatorial Guinea, Chad, and the Comoros) are permitted freely; those to other countries are subject to approval. Payments for invisibles related to trade are permitted by a general authorization when the basic trade transaction has been approved or does not require authorization. Bona fide tests are conducted by authorized intemediary banks. Effective February 1, 1999, payments and incomes of foreign ships in the WAEMU zone and WAEMU ships abroad are included under current operations.
Investment-related payments
Prior approvalThe transfer of funds to service loans requires prior approval if the loan itself was subject to approval. Payments for the depreciation of direct investment are not expressly provided for in the regulation and, as such, require prior approval from the MOF.
Payments for travel
Prior approvalPrior approval is required only for allowances that exceed the indicative limits and is granted after a bona fide test.
Quantitative limitsEffective February 1, 1999, limits on foreign exchange allowances were eliminated. The threshold of foreign exchange to be surrendered by residents after travel was raised to CFAF 300,000 from CFAF 50,000.
Indicative limits/bona fide testBona fide tests are conducted by authorized intermediaries; and for amounts exceeding the indicative limits, by the MOF.
Personal payments
Prior approvalFor payments related to studies abroad and family maintenance and alimony, prior approval is required when amounts requested exceed the indicative limits.
Indicative limits/bona fide testBona fide tests are conducted by authorized intermediary banks; and for amounts exceeding the indicative limits, by the MOF.
Foreign workers’ wages
Quantitative limitsUpon presentation of an appropriate pay voucher, a residence permit, and documents indicating family situation, foreigners working in Benin may transfer up to 50% of their net salary abroad if they live with their family in Benin, or up to 80% if their family is living abroad.
Credit card use abroad
Quantitative limitsThe same limits apply as for tourist and business travel.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsReceipts from France, Monaco, and Operations Account countries are exempt from the requirement. Proceeds from transactions with France, Monaco, and the Operations Account countries may be retained. Effective February 1, 1999, all amounts due from residents of other countries in respect of services, and all income earned in those countries from foreign assets, must be collected and surrendered within one month of the due date or the date of receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsCapital movements between Benin and France, Monaco, and the Operations Account countries are free of restrictions. Capital transfers to all other countries require authorization from the MOF and at least 75% of investment abroad must be financed by foreign borrowing.
The liquidation of foreign investment is subject to reporting to the MOF and the reinvestment of proceeds is subject to prior authorization, except for the countries mentioned above. If no authorization is given for the reinvestment, the proceeds in foreign exchange must be surrendered to an authorized intemediary bank within one month. Transfers of capital abroad are subject to restrictions. Capital inflows to WAEMU countries are unrestricted with the exception of direct investment, which is subject to prior declaration, and certain borrowing operations, which require prior authorization.
In line with the new direction of economic policy aimed at attracting foreign investment, new exchange laws currently being adopted by the WAEMU member states provide for the elimination of all restrictions on capital inflows.
In implementation of the provisions indicated in this document, the term “foreigner” refers to countries that are not members of the franc zone. However, with respect to the local issue and offer for sale of foreign securities, the term “foreigner” means all the countries outside the territory of the member state concerned.
With the exception of the issue and sale in the country of foreign securities, operations in securities are not covered explicitly by specific laws. However, by their nature, these operations are still subject to the provisions governing foreign investment and lending.
Effective February 1, 1999, transfers related to the sale of foreign securities by residents and to proceeds of disinvestments by nonresidents were allowed. Foreign investment in WAEMU countries became unrestricted. Such operations are subject to reporting for statistical purposes. The prior authorization of the Public Saving and Financial Market Regional Council is required for the issuance and marketing of securities and capital assets of foreign entities, as well as for publicity and advertising of investments abroad. Any investment by residents abroad requires the prior approval of the MOF.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThe issue of securities in Benin by nonresidents is subject to prior approval by the MOF, as are sales of holdings in foreign companies or entities.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesThe same provisions apply as for shares or other securities of a participating nature.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Controls on derivatives and other instrumentsThese instruments, which are virtually unknown in Benin, are governed by the regulations generally applicable to securities and investments, except options, which after February 1, 1999, residents may freely purchase or sell abroad.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operationsThe issue of a loan in the form of securities requires prior approval by the MOF. Such approval is not required, however, for loans contracted by authorized intermediaries or for borrowing under specific conditions in terms of the amount and interest rate. Effective February 1, 1999, foreign borrowing by residents became unrestricted.
Commercial credits
By residents to nonresidentsGranting of such credits is subject to the following provisions: (1) Claims resulting from exports of goods must be collected and the corresponding amounts repatriated through the BCEAO within 30 days of the payment due date stipulated in the commercial contract. In general, the period allowed for payment must not exceed 180 days following the arrival of the merchandise at its destination. (2) Claims resulting from service provision must also be collected and subsequently surrendered on the foreign exchange market within two months of the payment due date, which is not subject to administrative limits.
To residents from nonresidentsThese credits may be freely granted. Repayment is usually authorized, subject to presentation of the relevant proof of execution of the commercial operation or provision of the service and of the payment due date.
Financial credits
By residents to nonresidentsThe granting of financial credits is subject to prior authorization by the MOF. The transfer of funds abroad for this purpose requires a foreign exchange authorization, submitted to the MOF for approval, along with the appropriate documentation.
To residents from nonresidentsThese credits may be freely granted. Transfers of such funds must be processed through an authorized intermediary. However, if these operations take place between a direct investment company established in Benin and its parent company located abroad, they are considered direct investments and are therefore subject to prior declaration to the MOF.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe granting of guarantees, backing, and security is subject to prior authorization by the MOF.
To residents from nonresidentsThese facilities are freely granted, and the funds involved must be transferred from abroad by an authorized intermediary. However, if these operations take place between a direct investment company established in Benin and its parent company located abroad, they are considered direct investments and are therefore subject to prior declaration to the MOF.
Controls on direct investment
Outward direct investmentInvestment abroad by a resident, including the purchase of real property, is subject to prior approval by the MOF. The investor must submit a written request indicating the authorized intermediary charged with making the payment. Whether the funds are transferred abroad or deposited to a foreign account in francs, the payment may not be made before the end of the period agreed to by the parties.
Inward direct investmentThese investments are subject to prior declaration to the MOF, which has a two-month period during which it may request postponement of projects. The transfer of a direct investment by one nonresident to another nonresident is also subject to prior declaration.
Controls on liquidation of direct investmentProceeds from the sale or liquidation of foreign direct investments or the sale of real property may be freely transferred abroad or credited to a foreign account in francs upon presentation of the required documentation to the MOF and receipt of its response. The liquidation of investments—whether inward or outward—must be declared to the Ministry within 20 days of each transaction.
Controls on real estate transactions
Purchase abroad by residentsInvestment abroad by a resident, including the purchase of real property, is subject to prior approval by the MOF. The investor must submit a written request indicating the authorized intermediary charged with making the payment. Whether the funds are transferred abroad or deposited to a foreign account in francs, the payment may not be made before the end of the period agreed to by the parties.
Purchase locally by nonresidentsNo restrictions on purchases, except in the case of direct investment in an enterprise, branch, or corporation.
Sale locally by nonresidentsProceeds from the sale or liquidation of foreign direct investments and the sale of real property may be freely transferred abroad or credited to a foreign account in francs upon presentation of the appropriate documentation to the MOF and receipt of its response.
Controls on personal capital movements
Loans
By residents to nonresidentsLending by residents to nonresidents requires the prior authorization of the MOF.
The individuals concerned may not engage in such operations as a regular profession without first being licensed and included in the list of financial institutions.
To residents from nonresidentsThe borrower must obtain prior authorization from the MOF if the amount of the loan exceeds CFAF 50 million and if the interest rate exceeds the normal market rate. Loans contracted to finance imports and exports are exempt from authorization.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsWith the exception of inheritances and legacies, payment of which is generally expressly authorized, other operations require prior authorization of the MOF.
Settlement of debts abroad by immigrantsImmigrants who have obtained resident status must obtain prior authorization from the MOF for the settlement of debts contracted abroad while they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsUpon presentation of emigration documents, the parties concerned may tranfer a maximum of CFAF 250,000 a person without prior authorization. Amounts over and above this ceiling may be transferred with authorization from the MOF.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAuthorized intermediaries may borrow freely abroad.
Maintenance of accounts abroadBanks and financial institutions are not authorized to hold liquid assets outside the WAEMU zone, except to cover current operations.
Lending to nonresidents (financial or commercial credits)These transactions may be freely conducted in the case of commercial credits. Effective February 1, 1999, for other loans and financial credits or the purchase of securities issued abroad, prior authorization by the MOF is required, after the approval of the BCEAO.
Lending locally in foreign exchangeDomestic lending denominated in foreign exchange or purchases of foreign-currency-denominated securities issued in Benin require prior authorization by the MOF.
Purchase of locally issued securities denominated in foreign exchangeThese purchases require prior approval by the MOF.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Investment regulationsThe same regulations apply as for foreign investment.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThere are no prudential ratios; open positions result through special derogations.
Provisions specific to institutional investorsEffective February 1, 1999, restrictions are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.
Other controls imposed by securities lawsYes.
Changes During 1998
Capital transactions
Controls on capital and money market instrumentsSeptember 16. The WAEMU regional stock exchange began operations in Abidjan.
Changes During 1999
Exchange arrangementJanuary 1. The CFA franc peg to the French franc was replaced with a peg to the euro.
February 1. Residents were authorized to contract forward exchange cover in accordance with the regulations on imports and exports of goods and services.
Arrangements for payments and receiptsFebruary 1. The amount of transfers authorized without supporting documentation was raised to CFAF 300,000 from CFAF 100,000.
Resident accountsFebruary 1. Residents are allowed to open foreign exchange accounts with local banks or with banks abroad after obtaining authorization from the MOF with the approval of the BCEAO.
Nonresident accountsFebruary 1. Authorizations to open nonresident accounts are issued by the BCEAO.
Imports and import paymentsFebruary 1. The limit for the domiciliation requirement was raised to CFAF 5 million.
Exports and export proceedsFebruary 1. Proceeds from exports to WAEMU countries are no longer required to be repatriated.
February 1. Exports to WAEMU countries need not be domiciled.
Payments for invisible transactions and current transfersFebruary 1. Limits on foreign exchange allowances were eliminated. The threshold of foreign exchange to be surrendered by residents after travel was raised to CFAF 300,000 from CFAF 50,000.
February 1. All amounts due from residents of other countries in respect of services, and all income earned in those countries from foreign assets, must be collected and surrendered within one month of the due date or the date of receipt.
February 1. Payments and incomes of foreign ships in the WAEMU some and WAEMU ships abroad are included under current operations.
Capital transactions
Controls on capital and money market instrumentsFebruary 1. Transfers related to the sale of foreign securities by residents and to proceeds of disinvestments by nonresidents were allowed. Foreign investment in WAEMU countries became unrestricted. Such operations are subject to reporting for statistical purposes. The prior authorization of the Public Saving and Financial Market Regional Council is required for the issuance and marketing of securities and capital assets of foreign entities, as well as for publicity and advertising of investments abroad. Any investment by residents abroad requires the prior approval of the MOF.
Controls on derivatives and other instrumentsFebruary 1. Transfers relating to option purchases were allowed.
Controls on credit operationsFebruary 1. Foreign borrowing by residents became unrestricted.
Provisions specific to commercial banks and other credit institutionsFebruary 1. Loans granted to nonresidents are subject to the prior authorization of the MOF, after the approval of the BCEAO.
Provisions specific to institutional investorsFebruary 1. Restrictions are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.

Bhutan

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Bhutan is the Bhutanese ngultrum.
Other legal tenderThe Indian rupee is also legal tender.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe ngultrum is pegged to the Indian rupee at a rate of Nu 1 per Re 1. The rates for currencies other than the Indian rupee are determined on the basis of the prevailing quotations by the Reserve Bank of India for those currencies.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Bilateral payment arrangements
OperativeYes.
Administration of controlThe MOF controls external transactions and provides foreign exchange for most current and capital transactions. The MOF has delegated to the Royal Monetary Authority (RMA) the authority to release foreign exchange (other than Indian rupees) for current transactions. The RMA is charged with implementing the surrender requirements for proceeds from merchandise exports and approving the use of foreign exchange for payments for invisible transactions.
Payments and remittances by residents to nonresidents other than in cash and traveler’s checks are required to be channeled through authorized banks in Bhutan.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold and silver, up to stipulated quantities, by Bhutanese citizens are permitted. Imports beyond this requires special permission from the MOF.
Controls on exports and imports of banknotesThe importation and exportation of cash and securities are subject to declaration of value at the customs point of entry into, and departure from, Bhutan.
On exports
Domestic currencyYes.
Foreign currencyYes.
On imports
Domestic currencyYes.
Foreign currencyForeign currency notes purchased from authorized banks or declared on entry may be exported freely.
Resident Accounts
Foreign exchange accounts permittedThe following categories of persons are permitted to open and maintain U.S.-dollar-denominated foreign currency accounts with authorized banks in Bhutan: (1) diplomatic missions in Bhutan and their expatriate employees, (2) representative offices of donor agencies and their expatriate employees, (3) third-country contracting firms and their expatriate employees engaged to execute projects financed by donor agencies, and (4) any person, who is the national of a third country, who is resident in Bhutan.
Held domesticallyThese accounts are permitted, but approval of the RMA is required.
Held abroadResidents of Bhutan are not allowed to hold foreign exchange accounts abroad. However, Bhutanese citizens living abroad must close foreign exchange accounts upon return and repatriate any balances to Bhutan.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts are permitted, but prior approval is required.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Approval requiredYes.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetAn import license issued by the MOF is required for the importation of capital and intermediate goods from countries other than India. Foreign exchange for all payments related to merchandise imports is automatically made available by authorized banks against import licenses.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsYes.
Letters of creditYes.
Import licenses and other nontariff measuresImport licenses are governed by Rules and Procedures for Imports of Goods from third countries issued by the MOF.
Import taxes and/or tariffsImports from India are free from tariffs and are subject only to the Bhutan sales tax (BST). Tax rates range from zero for essential commodities to 50% on tobacco products and alcoholic beverages.
Imports from countries other than India are subject to tariffs. The maximum tariff rate is 30%, with the exception of the rates for beer (50%), and for tobacco and other alcoholic beverages and spirits (100%). Effective September 1998, the BST is levied at the existing scheduled rates on all third-country imports, in addition to the applicable tariff.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsProceeds in currencies other than the Indian rupee must be surrendered to the RMA either directly or through the Bank of Bhutan within 90 days.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionYes.
Export licenses
Without quotasYes.
With quotasYes.
Export taxesExport taxes are applied only to exports of unprocessed timber, apples, oranges, and cardamom. Exports to countries other than India receive a rebate at rates ranging from 5% to 20% of the c.i.f. value, with the lowest rate applying to unprocessed primary products and the highest rate applying to processed products.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAll invisible payments, other than those made in Indian rupees, must be approved by the RMA. The RMA is charged with setting limits (indicative in most cases) up to which foreign exchange can be made available for payments for invisible transactions.
Investment-related paymentsNo information is available on the payment of amortization of loans or depreciation of direct investments.
Payments for travel
Quantitative limitsThere is a travel allowance of $1,500 per ticketed passenger per calendar year. In case of business travel, the foreign exchange cost of an air ticket and country-specific per diem covering accommodation are provided to travelers. There are no time limits, but two weeks is considered the norm.
Personal paymentsEducational fees and tuition are covered fully and without any limits through direct payments to the universities or institutions abroad. Students also receive a monthly stipend of $900 and a one-time settling-in allowance of $1,500; the settling-in allowance and three monthly stipends are paid in advance.
For medical expenses, subject to referral by a local physician for treatment abroad, foreign exchange is provided to cover the cost of treatment and medicine and for living expenses abroad. Living expenses vary from country to country, but there are no set limits for the other expenses, and all reasonable expenses are covered.
Quantitative limitsA citizen of Bhutan who, under the recommendation of a medical specialist, is proceeding to a third country for medical treatment is permitted to purchase foreign exchange from authorized banks, within the limit prescribed by the RMA for the cost of treatment, medicine, and living expenses.
Foreign workers’ wages
Prior approvalAny national of a third country who, with the prior approval of the royal government of Bhutan, is employed directly by a public or private organization in Bhutan is permitted to remit his or her salary and savings in foreign exchange through an authorized bank.
Quantitative limitsThe RMA may set limits on any or all such remittances as it deems necessary.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsForeign exchange proceeds of any receipts or holdings by Bhutanese citizens and companies should be repatriated to Bhutan by transferring such claims and funds to authorized banks in Bhutan.
Surrender requirementsAll receipts from invisible transactions in currencies other than the Indian rupee must be surrendered to the RMA.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsAll capital transactions must be approved by the RMA.
Controls on derivatives and other instrumentsYes.
Controls on credit operationsYes.
Controls on direct investmentYes.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsYes.
Controls on personal capital movementsYes.
Provisions specific to commercial banks and other credit institutions
Maintenance of accounts abroadYes.
Investment regulations
Abroad by banksUp to $5 million (gross) investment is allowed.
In banks by nonresidentsn.a.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadYes.
Other controls imposed by securities lawsn.a.
Changes During 1998
Imports and import paymentsSeptember 1. The BST is levied at the existing scheduled rates on all third-country imports, in addition to the applicable tariff.

Bolivia

(Position as of April 30, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 5, 1967.
Exchange Arrangement
CurrencyThe currency of Bolivia is the Bolivian boliviano.
Exchange rate structureUnitary.
Classification
Crawling pegThe official selling rate is determined at auctions held daily by the Central Bank of Bolivia (CBB). The official exchange rate is the average of the bid rates accepted in the latest auction and applies to all foreign exchange operations in Bolivia. The auctions are conducted by the Committee for Exchange and Reserves in the CBB. Before each auction, the Committee decides on the amount of foreign exchange to be auctioned and a floor price below which the CBB will not accept any bids. This floor price is the official exchange rate and is based on the exchange rate of the dollar. The CBB is required to offer in all auctions unitary lots of $5,000 or multiples thereof; the minimum allowable bid is $5,000. Successful bidders are charged the exchange rate specified in their bid. In general, the spreads between the maximum and minimum bids have been less than 2%. Economic agents may buy and sell foreign exchange freely. All public sector institutions, including public enterprises, must purchase foreign exchange for imports of goods and services through the CBB auction market. Until January 13, 1999, sales of foreign exchange by the CBB to the public were subject to a commission of Bs 0.01 per $1 over its buying rate when the commission was raised to Bs 0.02.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Regional arrangementsPayments between Bolivia and Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela must be made through accounts maintained with each other by the CBB and the central bank of the country concerned, within the framework of the multilateral clearing system of the LAIA.
Clearing agreementsYes.
Administration of controlThe CBB is in charge of operating the auction market for foreign exchange. The MOF, together with the CBB, is in charge of approving public sector purchases of foreign exchange for debt-service payments.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)Gold may be traded freely, subject to a tax that varies according to the gross value of sale of gold bullion: 7% on the gross value of sale of gold bullion for official quotations larger than $700 a troy ounce; 1% for official quotations between $400 and $700; and 4% for official quotations of less than $400 a troy ounce.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Letters of creditLCs have to be opened at a bank in the Bolivian banking system.
Import licenses and other nontariff measures
Negative listCertain imports are controlled for reasons of public health or national security.
Import taxes and/or tariffsBolivia has a general uniform import tariff of 10%. A tariff of 5% is applied to capital goods and a rate of 2% is applied to imports of books and printed matter. Donations of food, including wheat, are exempt from the import tariff.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirements
Preshipment inspectionEffective April 1, 1999, the process of export verification has been eliminated and replaced by a revision process by public entities. If necessary, however, exporters may contract specialized agencies for verification.
Export licensesNo.
Export taxesThere is a system of tax rebates for indirect taxes and import duty paid on production costs of exported goods and services, including the duty component of depreciation of capital goods used. Exporters of small items whose value in Bolivia’s annual exports is less than $3 million, receive tax rebates of 2% or 4% of the f.o.b. export value under a simplified procedure, and other exporters receive tax and import duty rebates based on annually determined coefficients that reflect their documented cost structure. Effective April 1, 1999, tax rebates for large exporters are based on the duties paid on total production costs.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related paymentsThere are no controls on the payment for amortization of loans or depreciation of direct investments.
Prior approvalPublic sector purchases of foreign exchange for debt service must be approved by the MOF and the CBB. Profit remittances are subject to a 12.5% tax, which is computed as equivalent to the 25% income tax times the presumed net profit of 50% of the amount remitted.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Surrender requirementsBanks, exchange houses, hotels, and travel agencies may retain the proceeds from their foreign exchange purchases from invisible transactions, including those from tourism. They are required, however, to report daily their purchases on account of these transactions.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Commercial credits
To residents from nonresidentsAll foreign credits, including suppliers’ credits to government agencies and autonomous entities, and credits to the private sector with official guarantees are subject to prior authorization by the MOF and to control by the CBB. All proceeds of borrowings from foreign public sector agencies must be surrendered to the CBB.
Financial credits
To residents from nonresidentsYes.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadFinancial institutions may make loans in the form of credits denominated in foreign currency for imports of capital goods and inputs for the external sector with resources from international financial institutions, foreign government agencies, or external lines of credit. All overseas credits of less than a two-year term are subject to reserve requirements.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsBy May 31, 1998, differential treatment of foreign exchange deposits was eliminated by lifting the reserve requirement for boliviano deposits with a maturity of more than one year. The changes also include a provision to extend reserve requirements to all foreign liabilities of banks.
Open foreign exchange position limitsThe limit is 80% of the value of the banks’ net worth minus their fixed assets.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadThe maximum limit that pension fund administrators may invest abroad varies between 10% and 50% of the total value of the Individual Capitalization Fund. The specific limit is decided by the CBB. Pension fund administrators may invest abroad through authorized primary and secondary markets.
Other controls imposed by securities lawsNo.
Changes During 1998
Capital transactions
Provisions specific to commercial banks and other credit institutionsMay 31. Changes were made in the reserve requirement for eliminating it for boliviano deposits of more than one year. Reserve requirements were extended to all foreign liabilities of banks.
Changes During 1999
Exchange arrangementJanuary 12. The commission on the sales of foreign exchange by the CBB to the public was increased to Bs 0.02 per $1.
Exports and export proceedsApril 1. Tax rebates for large exporters are based on the duties paid on their total production costs, while the process of export verification was eliminated and replaced by a pension process managed by public entities.

Bosnia and Herzegovina

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Bosnia and Herzegovina is the convertible marka (KM).
Other legal tenderThe deutsche mark circulates widely in the two constituent entities of Bosnia and Herzegovina. In addition, the Croatian kuna circulates widely in the Croat majority area of Bosnia and Herzegovina, and the Yugoslav dinar circulates in the Republika Srpska.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe convertible marka is pegged to the deutsche mark at KM 1 per DM 1. The Central Bank of Bosnia and Herzegovina (CBBH) no longer publishes indicative exchange rates for other currencies. The CBBH guarantees unrestricted convertibility of the KM for DM.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlThere are no foreign exchange controls in place for transactions in KM.
International security restrictionsn.a.
Payment arrearsn.a.
Controls on trade in gold (coins and/or bullion)n.a.
Controls on exports and imports of banknotes
On exports
Domestic currencyYes.
Foreign currencyThere are no limits on the amount of cash that may be taken across international borders.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyIndividuals and exporters may hold foreign exchange in accounts with commercial banks and do not need to supply evidence of the source of these funds.
Held abroadThese accounts may be opened, but prior approval is required from the MOF in the two entities.
Accounts in domestic currency convertible into foreign currencyThe conversion of KM deposits in DM is guaranteed and commercial banks may convert balances on these accounts into any other currency.
Nonresident Accounts
Foreign exchange accounts permittedNo approval is required if the investment is registered according to the investment law.
Domestic currency accountsYes.
Convertible into foreign currencyThese accounts may be opened, but prior approval is required.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Positive listYes.
Negative listYes.
Open general licensesYes.
Licenses with quotasYes.
Other nontariff measuresYes.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsYes.
Financing requirementsNo.
Documentation requirementsExporters have to be authorized to engage in foreign trade. Customs requires that exporters provide documents accompanying the goods.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsNo.
Restrictions on use of fundsFollowing an agreement with Germany, the CBBH will provide documentation to Germany on pensions from Germany that are being paid by the commercial banks under its jurisdiction to the workers concerned.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsOnly prudential regulations on banks apply.
Controls on direct investmentIn March 1998, a liberal state foreign investment law was adopted.
Controls on liquidation of direct investmentFull repatriation of capital is permitted, after compliance with tax laws.
Controls on real estate transactions
Purchase abroad by residentsMOF approval is required.
Purchase locally by nonresidentsYes.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
To residents from nonresidentsThe foreign exchange law prescribes limits.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer into the country by immigrantsYes.
Transfer of gambling and prize earningYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Credit controlsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsThere are controls in the law on stocks, shares, and securities.
Changes During 1998
Capital transactions
Controls on direct investmentMarch 31. A liberal state foreign investment law was adopted.

Botswana

(Position as of February 28, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 17, 1995.
Exchange Arrangement
CurrencyThe currency of Botswana is the Botswana pula.
Exchange rate structure
DualExternal loans undertaken by parastatals before October 1, 1990 are protected from exchange rate movements under a Foreign Exchange Risk-Sharing Scheme (FERSS). Under the scheme, risks associated with exchange rate fluctuations up to 4% are fully borne by the borrower, while the next 6% and the following 5% of fluctuations are shared between the borrower and the government in ratios of 50:50 and 25:75, respectively. Risks associated with exchange rate fluctuations in excess of 15% are fully borne by the government. The scheme is symmetrical in that the borrower and the government share any gains from an appreciation in the external value of the pula on the same basis. Under the FERSS, borrowers obtain foreign exchange for servicing their external debt at exchange rates that may differ from the market rate by more than 2%. The scheme is to be phased out once the existing loans are fully repaid. No new loans will be issued under the scheme.
Classification
Conventional pegged arrangementThe exchange rate of the pula is determined with reference to a weighted basket of currencies comprising the SDR and the South African rand. The central bank deals in four currencies: the dollar, the South African rand, the euro, and the pound sterling. Foreign exchange bureaus are licensed to deal in foreign currencies, on a spot basis only.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange cover is offered by the commercial banks, and effective February 25, 1998, the maturity dates of forward exchange contracts/transactions are not restricted by exchange controls, but instead left to commercial judgment of the participants.
Official cover of forward operationsYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsPayments to or from residents of foreign countries must normally be made or received in a foreign currency or through a nonresident-held pula account in Botswana. Effective February 25, 1998, residents were permitted to make payments for goods and services sourced from outside Botswana using pula-denominated checks, provided traders outside Botswana are willing to accept such checks. Banks in Botswana are, in turn, authorized to settle such checks when sent for collection by banks outside Botswana, subject to supporting documentation for checks in amounts exceeding P 10,000.
The requirement for payment from abroad to be made in foreign currencies was abolished with the removal of exchange controls on February 8, 1999. Transacting parties are free to determine the currency of the transaction.
Payment arrangements
Bilateral payment arrangementsBotswana is a signatory to various bilateral trade agreements: China, the Czech Republic, Republic of Korea, Malawi, Romania, Russia, the Slovak Republic, the Federal Republic of Yugoslavia (Serbia/Montenegro), Zambia, and Zimbabwe.
OperativeYes.
InoperativeYes.
Regional arrangementsBotswana is a member of the SACU, which allows for free import movements and, hence, has no restrictions on trade-related payments among the SACU countries.
Administration of controlUntil the abolition of exchange controls on February 8, 1999, the Bank of Botswana administered exchange control on behalf of the government of Botswana. For practical/operational purposes, several administrative powers of the Bank of Botswana had been delegated to commercial banks.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)Until the abolition of exchange controls on February 8, 1999, dealing in gold was restricted, and was only dealt with in terms of Sections 3 and 4 of the Exchange Control Regulations, which stated that only authorized dealers were permitted to deal in gold.
Controls on exports and imports of banknotes
On exports
Domestic currencyUntil February 8, 1999, residents were allowed to export up to P 10,000 a person a day. Since then, travelers are only required to complete a declaration form for amounts equal to or in excess of P 10,000 at the time of travel.
Foreign currencyUntil February 9, 1999, residents were allowed to take out up to the equivalent of P 10,000 a trip. Visitors may take out any foreign currency that they brought in with them.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyCommercial banks are authorized to open foreign currency accounts for permanent and temporary residents and nonresidents. These accounts facilitate foreign receipts and payments for approved transactions, without having to convert foreign currency receipts into pula and vice versa, and to protect against fluctuations in exchange rates. Until February 24, 1998, commercial banks were allowed to open foreign currency accounts in any currency at their discretion, up to the equivalent of P 1 million for individuals and P 10 million for companies. On February 25, 1998, commercial banks were authorized to open foreign currency accounts for their customers for any amount in any currency at the discretion of banks.
Held abroadOn February 25, 1998, residents were permitted to open and maintain foreign currency abroad without prior approval from the Bank of Botswana.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsUntil February 8, 1999, when exchange controls were abolished, advance payments were permitted only for a legitimate commercial need.
Documentation requirements for release of foreign exchange for importsUntil February 8, 1999, payments for imports of value exceeding P 10,000 a transaction required supporting documentation before foreign exchange was released.
Import licenses and other nontariff measuresImport licenses are regulated by customs and excise legislation.
Negative listYes.
Import taxes and/or tariffsAs a member of the SACU, Botswana applies a common external tariff only on imports from outside the SACU.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsUntil February 8, 1999, residents were required to obtain proceeds in a foreign currency or from a nonresident pula account within six months of the date of exportation. Effective February 8, 1999, repatriation requirements were abolished. Effective February 25, 1998, maximum limits for exports free of payments increased for the following goods: bona fide nonmonetary gifts, P 20,000 for a permanent resident a year; rejected goods, P 100,000 a transaction, subject to providing documentary evidence; and commercial samples (i.e., goods for exhibitions or other promotional purposes), P 150,000 a transaction.
Surrender requirementsRetention of export proceeds for up to one year to finance certain transactions was permitted by the Bank of Botswana on a case-by-case basis. Effective February 8, 1999, surrender requirements were abolished.
Financing requirementsn.a.
Documentation requirementsNo.
Export licensesCertain exports are subject to licensing, mainly for revenue reasons. The exportation of a few items, such as precious and semiprecious stones, requires permits.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersUntil February 8, 1999, when exchange controls were abolished, authorized dealers required documentary evidence for payments in excess of P 10,000 a transaction to establish that the payment is for a legitimate purpose and a current account transaction.
Investment-related paymentsAuthorized dealers may authorize remittances of interim dividends without reference to the Bank of Botswana for companies listed in the Botswana Stock Exchange (BSE) and may approve other remittances of dividends/profits without reference to the Bank of Botswana subject to satisfactory supporting documentation.
Quantitative limitsAuthorized dealers were permitted to authorize interest payments at a rate not exceeding 2% a month on import-related payment charges, i.e., interest charged on arrears, but prior Bank of Botswana approval was required if the charge was more than 2% a month. The repayment of loans was not to be more than P 2 million for a company and P 200,000 for individuals. Effective February 8, 1999, these requirements were abolished.
Indicative limits/bona fide testUntil February 8, 1999, there were indicative limits for the payment of interest.
Payments for travel
Quantitative limitsPermanent and temporary residents were permitted to retain unused foreign exchange travel facilities in foreign currency notes, coins, or traveler’s checks up to the equivalent of P 10,000 instead of P 2,000. Any excess amount was to be surrendered to an authorized dealer within six months of the date of return. Effective February 8, 1999, these requirements were abolished.
Personal payments
Prior approvalUntil February 8, 1999, residents required prior approval of the Bank of Botswana to take up pension from nonresidents.
Foreign workers’ wagesNo.
Quantitative limitsEffective February 8, 1999, no restrictions are imposed on remittances of foreign workers’ wages.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Surrender requirementsThe amount of unused foreign currency for travel that a resident was allowed to retain for future travel use was the equivalent of P 10,000 in currency or traveler’s checks. Any excess amount was to be surrendered within six months of the date of return. Effective February 25, 1998, foreign currencies received in payment for goods and services in Botswana by traders were to be surrendered in 30 days instead of three days. Effective February 8, 1999, foreign currencies received in payment for goods and services in Botswana by traders may be retained and surrendered to authorized dealers or other foreign exchange dealers at the discretion of such traders.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsEffective February 25, 1998, no restrictions are placed on the participation of nonresidents in debt instruments issued in the domestic market, except that nonresidents are not permitted to purchase central bank bills (Bank of Botswana Certificates—BoBCs), or any money market instrument, the purpose of which is to mop up excess liquidity in the system.
Sale or issue locally by nonresidentsNonresidents are permitted to issue long-term, pula-denominated bonds traded on the BSE, subject to the listing requirements of the BSE.
Purchase abroad by residentsIndividuals and business entities could invest abroad up to P 1 million and P 30 million, respectively, in offshore securities. These limits were abolished on February 8, 1999.
On money market instruments
Purchase locally by nonresidentsNonresidents are not permitted to buy the monetary instruments used by the Bank of Botswana to absorb excess liquidity.
Controls on derivatives and other instrumentsThese transactions are subject to foreign exposure limits of a particular bank.
Controls on credit operations
Commercial credits
By residents to nonresidentsNonresident-controlled companies (including branches of foreign companies) were allowed to borrow locally from all sources up to P 1 million. Banks and other credit institutions in Botswana were permitted to grant loans and other credit facilities to nonresident-controlled entities up to 10:1 debt-to-equity ratio (after the initial tranche of P 1 million), without prior authorization from the Bank of Botswana. These limits were abolished on February 8, 1999.
To residents from nonresidentsEffective February 25, 1998, authorized dealers were permitted to receive loan funds from nonresident sources on behalf of the permanent resident customers up to an equivalent of P 200,000 and P 2 million for individuals and companies, respectively, without any prior reference to the Bank of Botswana. Interest on these loans was restricted to 1% above the relevant LIBOR and ½% above the bank prime lending rate for foreign-denominated and pula loans, respectively. These limits were abolished on February 8, 1999.
Controls on direct investment
Outward direct investmentAuthorized dealers were allowed to make foreign currency available to individuals and companies for amounts of up to P 1 million and P 30 million, respectively, for either acquiring interest in existing business ventures or establishing new business. Companies must have been in operation for two years and registered with the Commissioner of Taxes. These limits and requirements were abolished on February 8, 1999.
Controls on liquidation of direct investmentAfter February 25, 1998, proceeds up to P 100 million were allowed to be repatriated immediately, but the excess of that amount was allowed to be repatriated in tranches as agreed upon with the Bank of Botswana. With the abolition of exchange controls on February 8, 1999, these limits were removed.
Controls on real estate transactions
Purchase abroad by residentsPurchases limited to P 1 million for individuals and P 30 million for business entities were allowed, provided they used their foreign exchange allowances. These limits were removed on February 8, 1999.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Loans to nonresident customers are restricted to 25% of unimpaired capital of a commercial bank, and in aggregate, loans to nonresidents should not exceed 800% of a bank’s unimpaired capital.
Purchase of locally issued securities denominated in foreign exchangeThese transactions are subject to the listing requirements of the BSE.
Open foreign exchange position limitsPrudential limits are set for exposure per currency and for the overall foreign currency risk exposure. For major dealing currencies, the limit is 15% of a bank’s unimpaired capital and for others, it is 5%. The limit for the overall foreign exchange exposure is 30% of the unimpaired capital of a bank using the shorthand method.
Provisions specific to institutional investorsEffective February 25, 1998, while the initial tranche (an amount that a nonresident-controlled entity can borrow without having brought capital from external sources) remained at P 1 million, the debt-to-equity ratio was increased from 4:1 to 10:1. Prior approval of the Bank of Botswana is required for any amount in excess of this limit.
Limits (max.) on portfolio invested abroadInstitutional investors, such as pension funds and life assurance companies, may invest not more than 70% of their assets outside Botswana. This restriction is imposed by the Registrars of Insurance and Pension and Provident Funds.
Other controls imposed by securities lawsn.a.
Changes During 1998
Exchange arrangementFebruary 25. The maturity dates of forward contracts are no longer restricted by exchange controls, but left to the commercial judgment of the commercial banks subject to banks adhering to the foreign exchange exposure limits.
Arrangements for payments and receiptsFebruary 25. Residents are permitted to make payments for goods and services sourced from outside Botswana using pula-denominated checks, provided traders outside Botswana are willing to accept such checks. Banks in Botswana are in turn authorized to settle such checks when sent for collection by banks outside Botswana, subject to supporting documentation for checks of amounts in excess of P 10,000.
Resident accountsFebruary 25. The limits on foreign currency accounts that may be opened with banks in Botswana have been removed. Residents are free to open foreign currency accounts for any amount at the discretion of banks.
Exports and export proceedsFebruary 25. The maximum limits for exports free of payments increased for the following goods: bona fide monetary gifts, P 20,000 for a permanent resident a year; rejected goods, P 100,000 a transaction, subject to providing documentary evidence; and commercial samples (that is, goods of exhibitions or other promotional purposes), P 150,000 a transaction.
Proceeds from invisible transactions and current transfersFebruary 25. Foreign currencies received in payment for goods and services in Botswana by traders may be surrendered in 30 days instead of three days.
Capital transactions
Controls on capital and money market instrumentsFebruary 25. Participation in any pula bond issue by nonresidents is not restricted by nonresidents by exchange controls. Nonresidents, however, are not permitted to buy any instrument of money market, the purpose of which is to mop up excess liquidity from the domestic financial system.
Nonresidents are now permitted to issue pula-denominated bonds, provided such instruments are listed on the BSE and are long-term instruments with an original maturity in excess of one year, subject to prior approval of the Bank of Botswana and the BSE.
The maximum holding by an individual nonresident portfolio investor in any equity securities listed on the BSE was increased to 10% of total issued and paid-up shares of a company. The cumulative aggregate shareholding for all nonresident portfolio investors or their nominees thereof was also increased to 55% of the free stock of a locally incorporated company.
Controls on credit operationsFebruary 25. The amount that residents of Botswana may borrow from external sources was increased to P 200,000 from P 100,000 for individuals, and to P 2 million from P 1 million for companies and other corporate entities.
Controls on direct investmentFebruary 25. Banks were authorized to sell foreign currency to residents who wish to make investments outside Botswana up to a limit of P 30 million (up from P 10 million) for companies and other corporate entities up to a limit of P 1 million (up from P 100,000) for individuals a calendar year. Income from such investments must be reported to the Commissioner of Taxes and sale proceeds on final liquidation, and if not reinvested, must be repatriated to Botswana.
Controls on liquidation of direct investmentFebruary 25. The immediate repatriation of disinvestment proceeds was increased to P 100 million from P 50 million, with any excess being repatriated in tranches at the Bank of Botswana’s approval.
Provisions specific to institutional investorsFebruary 25. While the initial tranche (an amount that a nonresident-controlled entity can borrow without having brought capital from external sources) remained at P 1 million, the debt-to-equity ratio was increased from 4:1 to 10:1. Prior approval of the Bank of Botswana is required for any amounts in excess of this limit.
Changes During 1999
Arrangements for payments and receiptsFebruary 8. All exchange controls were abolished.

Brazil

(Position as of March 31, 1999)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Brazil is the Brazilian real.
Exchange rate structureUnitary.
Classification
Independently floatingBefore January 18, 1999, there were two official exchange markets. In both exchange markets, the rates were freely negotiated between the authorized dealers and their clients. Banks conducted arbitrage operations between both markets; spot transactions had to be settled within two working days. The Central Bank of Brazil (CBB) established an adjustable band for the external value of the national currency. A band of R$1.12-R$1.22 was established on January 22, 1998. On March 31, 1998, the band was changed to R$1.1370 per US$1 (floor) and R$1.1420 per US$1 (ceiling). On April 30, 1998, the spread of the band was widened to 60 basis points from 50 basis points. The new band was R$1.1435 per US$1 and R$1495 per $1 (ceiling). Rates for other currencies were based on the U.S. dollar rates in Brazil and the rates for specific currencies in the international market.
Effective January 13, 1999, the central bank widened the exchange rate band within which the real fluctuated to between R$1.20 and R$1.32. Widening the band allowed for a gradual depreciation of the real. The central bank also announced that it was to adjust the band every three days. The new band allowed for a 10 percent variation between the floor and ceiling.
However on January 18, 1999, the central bank announced that the exchange rate of the real will be determined by market forces. Central bank interventions in the foreign exchange market will be occasional, limited, and designed to counter disorderly market conditions.
Transactions in the exchange markets are carried out by banks, brokers, and tourist agencies authorized to deal in foreign exchange; the tourist agencies and brokers deal only in banknotes and traveler’s checks.
Exchange taxThe maximum tax on credit, foreign exchange operations, and insurance operations and on transactions in financial instruments or securities (IOF) is limited by law to 25%. For foreign exchange transactions, this tax is zero. A 0.5% tax is applied to the following transactions: (1) investments in Brazilian fixed-income funds; (2) inflows related to interbank operations between foreign financial institutions and banks authorized to conduct foreign exchange transactions in Brazil; and (3) holdings of short-term assets in Brazil by nonresidents. A 2.5% tax is applied to remittances related to obligations of credit card administration companies to pay for purchases by its customers.
Exchange subsidyNo.
Forward exchange marketBanks are permitted to trade foreign exchange on a forward basis within the statutory limits (bought, sold) of the exchange position; such transactions must be settled within 360 days.
Arrangements for Payments and Receipts
Prescription of currency requirementsPrescription of currency is related to the country of origin of imports or the country of final destination of exports, unless otherwise prescribed or authorized. Settlements with Hungary are made in the terms specified in the bilateral agreement. Settlements with countries with which Brazil has no payment agreements and no special payment arrangements are made in U.S. dollars.
Payment arrangements
Bilateral payment arrangements
OperativeSettlements with Hungary are made in U.S. dollars every 90 days, and interest rates payable on balances are based on those in the international capital market.
Regional arrangementsBrazil is a member of LAIA.
Clearing agreementsPayments between Brazil and Argentina, Bolivia, Chile, Colombia, the Dominican Republic, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela can be made through special central bank accounts within the framework of the multilateral clearing system of the LAIA.
Administration of controlThe National Monetary Council is responsible for formulating the overall foreign exchange policy. In accordance with the guidelines established by the Council, exchange control regulations affecting foreign capital and the management of international reserves are under the jurisdiction of the CBB. The Ministry of Budget and Management enforces limits on foreign borrowing by the public sector. Foreign trade policy is formulated by the Ministry of Development, Industry, and Trade, implemented by the Secretariat of Foreign Trade (SECEX) and carried out by the Department of Foreign Trade Operations (DECEX). The Department of International Negotiations (DEINT) or the SECEX is responsible for formulating guidelines for tariff policy. The DEINT also decides on changes in customs duties under the provisions of existing legislation. The MOF coordinates public sector import policy.
International security restrictions
In accordance with UN sanctionsThere are restrictions imposed on Libya and Iraq.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)There are two separate markets for gold transactions: the financial and commercial markets. Over 50% of transactions occur in the financial market, which is regulated by the CBB. The first domestic negotiation of newly mined gold on this market is subject to a 1% financial transactions tax. Rules regarding gold transactions for industrial purposes are defined separately by the federal states, which also establish different rates for the commercial tax levied on them. The CBB and authorized institutions are empowered to buy and sell gold on the domestic and international markets. Purchases of gold are made at current domestic and international prices; the international price is considered a target price.
Controls on domestic ownership and/or tradeYes.
Controls on external tradeThe CBB and authorized institutions may buy and sell gold for monetary use on the international market. Imports and exports of gold for nonmonetary use are subject to the same procedures as those that are applied through the SECEX in respect of other products.
Controls on exports and imports of banknotesTravelers may take out or bring in domestic or foreign banknotes, checks, or traveler’s checks without restriction but must declare to customs any amount over the equivalent of US$10,000.
Resident Accounts
Foreign exchange accounts permittedInstitutions authorized to operate in the foreign exchange market may open these accounts.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be held by embassies, foreign delegations, and international organizations recognized by the Brazilian government; foreign international transportation companies; foreign citizens in transit in the country; and Brazilian citizens living abroad.
Domestic currency accounts
Convertible into foreign currencyNatural and juridical persons (financial and nonfinancial institutions) may hold these accounts. Only the resources deposited in nonresident banks or the resources that have entered Brazil through foreign currency sales and have not been withdrawn may be repatriated to foreign countries. These resources continue to be available to nonresidents once they are withdrawn, but only in the national currency.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsExternal financing of imports for periods in excess of 360 days must be registered in the “Financial Operations Registry,” an electronic system. Financing is considered approved by the CBB if the registration is not refused by its Department of Foreign Capital (FIRCE) within five days. The time to finalize anticipatory settlements for critical imports is 30 days. Payment for financed imports for periods of up to 360 days must be contracted for future liquidation, before the registration of the import declaration (ID) of the foreign obligation must be paid until the last day of the second month after the month that the related ID registration took place elapsed, except in the following cases: (1) imports due to drawback transactions; (2) imports of petroleum and some of its by-products; (3) imports up to the equivalent of US$10,000; (4) imports up to equivalent of US$80,000 embarked prior to June 30, 1999, and originating from MERCOSUR, Bolivia, or Chile, with payment occurring up to two months after the ID registration; and (5) imports of popular food products specified by the MOF.
Documentation requirements for release of foreign exchange for importsAll importers must be registered in the SECEX Importer and Exporter Register. Goods may be imported by firms and persons and must be registered by the CBB, except for imports by the public sector (federal, state, and municipal); imports by PETROBRAS (the Brazilian government oil enterprise) and contracting or subcontracting firms engaged in oil exploration through risk contracts; imports of medicine by individuals up to US$5,000; imports of samples without commercial value, except for pharmaceutical products up to US$1,000; imports of products, except for those prohibited or under special control, by individuals for personal consumption; and imports of goods considered as passengers’ baggage for personal use. The import subsystem of the Integrated Foreign Trade System (SISCOMEX/IMPORT) allows importers, carriers, banks, and brokers to register the various stages of an import process directly through the interlinked computers of SECEX, customs, and the CBB. Imports are grouped into the following three broad categories: (1) imports that do not require prior administrative documentation, including samples without commercial value and certain educational materials; (2) imports that require prior import licenses issued by the SISCOMEX/IMPORT; and (3) prohibited imports. Importers are permitted to purchase foreign exchange in the exchange market within 360 days of the settlement date. There is also a limit on the direct importation and purchase on the domestic market of consumer goods by the public sector (the government, autonomous agencies, and public enterprises).
Domiciliation requirementsRequired for imports originating or proceeding from countries under restrictions determined by the UN Security Council and imports of bovines in any form originating or proceeding from the United Kingdom.
Letters of creditThe drafts or LCs must be settled on maturity against the presentation of the appropriate documents by the importer. Exchange contracts for imports financed under LCs must be closed on the date of settlement or two working days before the maturity date of the LCs.
OtherFederal ministries and subordinate agencies and public enterprises are required to submit, for approval by the Ministry of Budget and Management, an annual investment program specifying their expected import requirements.
Import licenses and other nontariff measuresSome imports require prior approval from the DECEX (i.e., an import license), which is usually given promptly to registered importers of nonprohibited items. As a rule, licenses are valid for 60 days, except for imports of custom-made capital goods. The Secretariat of Federal Revenue issues clearance certificates for certain groups of commodities to special bonded warehouse importers. Import licenses for a number of specified imports may be obtained after the commodities have been landed and customs clearance obtained. The importation of certain products requires approval of the Ministry of Science and Technology. For some products, eligibility for exemption from import duties may be precluded by the existence of a satisfactory domestic equivalent. Most imports are exempt from prior approval requirements.
Negative listImports of agrochemical products not authorized under Brazilian regulations, weapons, and certain drugs that are not licensed for reasons of security, health, morality, or industrial policy are prohibited.
Open general licensesOGLs are no longer issued by the SECEX. Issuance is restricted to their annexes, up to the existing remainder of issued OGLs.
Licenses with quotasIn addition to imports under Brazilian concessions covered by the LAIA agreement, goods imported into the Manaus and Tabatinga free zones are subject to an annual quota. Foreign goods up to the equivalent of US$2,000 imported into the Manaus free trade zone may be transferred to other parts of Brazil (as a passenger’s baggage) free of import taxes. In accordance with WTO rules, quotas are imposed on imports of textiles from China, Hong Kong SAR, Korea, Panama, and Taiwan Province of China due to their effect on the domestic industry. The tariff rate on imports of toys is 25% plus a possible safeguard extension of 15%. For vehicles carrying more than nine persons, the tariff is 65%. For automobiles, transport vehicles, motorcycles, and bicycles, tariffs are 35%, while assemblers established in Brazil may be favored with a special tariff of 17.5%.
Other nontariff measuresSanitation and measurement requirements must be observed.
Import taxes and/or tariffsThe MERCOSUR customs union agreement stipulates a CET ranging from zero to 20% on about 85% of traded goods, and the remaining 15% of goods (including a list of national exceptions, capital goods, and computer goods) are subject to a schedule of adjustments designed to bring them into line with the CET within five or six years. The adjustment regime allowed Brazil and Argentina to maintain tariffs on some intra-area trade until January 1, 1999, and Paraguay and Uruguay to maintain some intra-area tariffs until January 1, 2000. The number of goods on Brazil’s list of national exceptions to MERCOSUR is 450.
Taxes collected through the exchange systemForeign exchange transactions related to imports of goods have IOF exemption, and foreign exchange transactions related to imports of services have a tariff of zero.
State import monopolyImports of petroleum and derivatives are conducted by the state.
Exports and Export Proceeds
Repatriation requirementsYes.
Financing requirementsAdvances on foreign exchange contracts are allowed for operations with terms up to 360 days, and the maximum time for anticipatory settlements is 180 days related to the shipment day.
Documentation requirementsDocumentation includes invoices, international shipment notification, and export registration. There is a simplified arrangement for foreign exchange transactions related to exports up to the equivalent of US$10,000.
Preshipment inspectionInspection is required for commodities subject to standardization.
Export licensesExports of wild animals and their hides, hair, plumes, or eggs in any form, jacaranda-da-Bahia wood, ipecacuanha plants, red and drab varieties of honey, and antiques of more than 100 years are prohibited. Exports of certain goods require prior approval of the SECEX, including those effected through bilateral accounts, exports without exchange cover, exports on consignment, reexports, commodities for which minimum export prices are fixed by the SECEX, and exports requiring prior authorization from government agencies.
SISCOMEX integrates the activities related to the registration, monitoring, and control of foreign trade operations into a single computerized flow of information. The SISCOMEX comprises two subsystems (exports and imports). The exports subsystem allows exporters, carriers, banks, and brokers to register the various stages of an export process directly through the interlinked computers of the SECEX, customs, and the CBB.
With quotasExports of sawed or cleft pine woods, mahogany, Brazilian walnut, and virola are subject to quotas. For exports of ethyl alcohol and sugar in any form, including sugarcane syrup inappropriate for human consumption, the eligibility for exemption from the export tax of 40% is subject to quotas on the basis of an annual quantity exceeding domestic necessity authorized by the Industry, Trade, and Tourism Minister and the MOF. Imports under Brazilian concessions subject to quotas due to agreements in the LAIA member countries and goods imported into the Manaus and Tabatinga free zones are subject to an annual quota. Foreign goods up to the equivalent of US$2,000 imported into the Manaus free trade zone may be transferred to other parts of Brazil (as a passenger’s baggage) free of import taxes.
Export taxesExports are free from these taxes or are subject to a zero rate duty, with the exception of exports of (1) raw hides, which are subject to an export duty of 9%; and (2) cigarettes to Latin America, which are subject to an export duty of 150%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for current invisibles not covered by current regulations require approval from the CBB’s Exchange Department (DECAM) or the FIRCE. Indicative limits/bona fide tests apply to all payments for invisible transactions and current transfers.
Trade-related paymentsFor unloading and storage costs there are established rules and surveillance procedures related to the operations freely conducted in the commercial market. The payment of insurance requires prior approval from the Brazilian governmental reinsurance enterprise.
Prior approvalYes.
Investment-related paymentsIn addition to certain restrictions on remittances stipulated in the Foreign Investment Law, limits on income tax deductions are placed on remittances of royalties and technical assistance fees. It has been possible, however, to make payments of interest on own capital. This kind of payment may be deducted from income tax liability to determine the taxable income of companies, subject to income withholding tax at the rate of 15%. Profit remittances related to direct investments are exempt from withholding for income tax purposes. Payments due to depreciation of direct investments are not established by the laws and regulations. As a result, remittances abroad from direct investments are treated as dividends, interest on own capital, capital gains, and return (repatriation) of capital.
Prior approvalPayments for medium- and long-term external debt are subject to prior approval by, and registration with, the CBB’s FIRCE, and the issue of a certificate of registration, which is the authorization to remit abroad the related interest, expenses, and fees, provided that due taxes are paid. Profit and dividend remittances are allowed only when the foreign capital concerned, including reinvestments, contracts for patents and trademarks, and for technical, scientific, and administrative assistance, are registered with the CBB’s FIRCE. Those contracts must be registered with the Financial Registration, an electronic system that was available only for import financing.
Quantitative limitsAmounts due as royalties for patents or for the use of trademarks, as well as for technical, scientific, and administrative assistance and the like, may be deducted from income tax liability to determine the taxable income, up to the limit of 5% of gross receipts in the first five years of the company’s operation; amounts exceeding this limit are considered profits.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsExchange proceeds from current invisibles must be sold to the authorized banks at the prevailing market rate.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instrumentsResidents are allowed to purchase bonds or other debt securities, money market securities, and collective investment securities through dedicated offshore investment funds (FIEX).
Foreign investment funds are organized in the form of open-end mutual funds. Participation is limited exclusively to natural and juridical persons and to funds and other collective investment entities resident, domiciled, or headquartered in Brazil. Foreign investment funds may be managed by a multipurpose bank, commercial bank, investment bank, brokerage firm, or securities distributor under the supervision and direct responsibility of the manager of the institution.
Until February 10, 1999, a minimum of 60% of the fund’s investments had to be in securities representative of the federal government’s external debt and a maximum of 40% in other securities traded in the international market. Then the minimum share of Brady bonds in FIEX funds was increased to 80%. These securities must be kept abroad in a custodial account in the fund’s name. The fund is authorized to conduct operations in organized derivative markets abroad solely for the purpose of hedging the securities making up the respective portfolio.
Inward and outward transfers of resources through foreign investment funds are subject to registration with the CBB for purposes of monitoring and controlling Brazilian investment, as well as the respective income, investment repatriation, and capital gains. Transfers are processed in foreign currency through the free exchange rate market.
Earnings from the redemption of shares of foreign investment funds are subject to an IOF of 0.38%. There is also a 20% income tax to be withheld by the managing institution of the foreign investment funds on the date of the redemption payment or credit and paid within three working days of the two-week period following the occurrence of the taxable event.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThe direct purchase of shares of Brazilian companies by nonresidents basically occurs through direct investments and portfolio investments made by institutional investors through the managers of the respective portfolios. Depositary receipts (DRs) constitute another method of acquiring shares through stock exchanges. They provide a mechanism for the placement of shares of Brazilian enterprises in the international markets. DRs are certificates representing a certain number of shares of a given enterprise that confer upon their holders all of the rights inherent in said shares, including dividends, bonuses, splits, and market-quoted value. A Brazilian sponsoring enterprise places its shares in the custody of an institution headquartered in Brazil and authorized by the Securities Commission (CVM) to provide custody services for the specific purpose of DR issues (custodian institution). At the same time, an institution abroad (the depositary bank) issues the corresponding DRs based on the securities held in custody in Brazil. Investments effected through the DR mechanism are exempt from income tax on capital gains. The rate applicable to earnings obtained in Brazil is 10%, as these are investments in variable-income assets. In addition, there are specific regulations for investments in the MERCOSUR environment.
As for other securities, such as debentures and other fixed-income securities, the regulations do not provide for direct purchases by nonresidents, although they may be effected indirectly through fixed-income funds. Resources of societies, portfolios, and investment funds established in accordance with Resolution No. 2,384 are allowed to be applied in debentures convertible to equities. Securities portfolios held in the country by foreign institutional investors (i.e., pension funds, nonprofit institutions, and insurance companies) must be managed by an institution operating in the country and authorized by the CVM. The foreign investor has the option of applying for two types of registration for the portfolio: an “individual account” or an “omnibus account.” The individual account registration allows the investor to operate in its own name only, while the omnibus account registration allows the account holder to operate only on behalf of third parties, known in the market as “passengers.”
The management institution is responsible for the registration of foreign investment with the CBB, foreign exchange settlements, the collection of taxes, portfolio bookkeeping, and the safekeeping of documents related to the portfolio.
There is no limit or hold period for financial transfers resulting from inflows, flowbacks, and profits or dividends from capital duly registered with the CBB, provided that the accounting rules and tax laws are complied with. The transfers must be processed through banks authorized to conduct foreign exchange operations, with guaranteed access to the free foreign exchange market to purchase foreign currency.
Natural and juridical persons resident or domiciled in MERCOSUR countries may invest freely in Brazilian stock exchanges without the necessity of trading through investment funds or portfolios. The Brazilian market may be accessed directly by contacting a member institution of the Brazilian securities distribution system, or indirectly through the intermediation of an institution in the securities distribution system of the investor’s country.
The Brazilian intermediary institution, through which the foreign investor trades, represents the investor vis-à-vis the Brazilian authorities with respect to the operational, exchange, and tax aspects, and provides information on the operations executed. These investments may be made in U.S. dollars, in the currency of the country of origin of the investment, or in reais. Operations involving the repatriation of capital are exempt from income tax withholding.
Earnings from variable-income investments are subject to a 10% income tax withholding (but exempt from income tax on capital gains), and those from fixed-income investments are subject to a 15% income tax withholding except those from fixed-income funds as of September 1, 1999, when the tax was reduced to zero. Remittances of capital gains are subject to income tax at a rate of 15%.
Sale or issue locally by nonresidentsThe sale of shares of foreign enterprises in Brazil is regulated essentially for the MERCOSUR environment through share custody certificates or directly. The only way to sell other foreign securities in Brazil is through DRs, which allow the placement of certificates representing these shares in the Brazilian market. Inward and outward remittances associated with investments must be processed through banks authorized to conduct foreign exchange operations in the floating exchange rate market for transactions from MERCOSUR countries and in the free exchange rate market for DR transactions. There are no limits or hold periods for the investments, although authorization is required for DR issues.
Purchase abroad by residentsBrazilian natural and juridical persons may make investments through the purchase of custody certificates on Brazilian stock exchanges representing shares issued by companies headquartered in MERCOSUR countries. These securities may be purchased through foreign investment funds or through direct equity investments in enterprises abroad. Regulations permit employees of firms belonging to foreign economic groups to purchase shares of the main company up to US$20,000. Outside MERCOSUR, residents are allowed to purchase depository receipts, issued abroad, based on securities issued in Brazil by resident issuers.
Sale or issue abroad by residentsIn addition to the rules already mentioned governing the purchase of shares on stock exchanges by residents and the specific regulations for MERCOSUR, collective investments may be made through Brazilian investment companies and funds.
Issues of securities abroad by residents are accorded the same treatment as direct external borrowing operations. Thus, exchange contracts involving the entry of foreign currencies must be authorized in advance by the CBB. Fund transfers associated with issues of securities abroad are subject to the conditions of the respective certificates of registration issued by the CBB, the conditions of which are set forth in the contract between the debtor and the creditor.
Bonds or other debt securities
Purchase locally by nonresidentsNonresidents are allowed to purchase bonds or other debt securities through dedicated investment funds.
Sale or issue locally by nonresidentsn.r.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsBonds and some other debt securities may be issued by residents, but are subject to prior approval by, and registration with, the CBB’s FIRCE and the issue of a certificate of registration, which is the authorization to remit abroad the related interest, expenses, fees, and amortization of principal, provided that due taxes are paid. There is a minimum average maturity of 90 days.
On money market instruments
Purchase locally by nonresidentsNonresidents are allowed to purchase money market instruments issued by the central bank through dedicated investment funds.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securitiesResidents are allowed to issue commercial paper subject to approval by, and registration with, the CBB’s FIRCE and the issue of a certificate of registration, which is the authorization to remit abroad the related principal and other payments, provided that due taxes are paid.
Purchase locally by nonresidentsPortfolio investments by foreign investors in fixed-income instruments are restricted to two classes of fixed-income funds: the fixed-income funds that are subject to a transaction tax of 0.5%, from March 17, 1999, through June 30, 1999, and 2% thereafter, and the privatization funds, which are tax free.
Collective investment in local shares by nonresidents is regulated in investment companies, investment funds, and diversified stock portfolios. For collective investments in other securities, the instruments provided for in the regulations are the foreign capital fixed-income funds, privatization funds, real estate investment funds, and emerging enterprises investment funds. The IOF is assessed on the latter two types of investments at rates ranging from zero to 10%. Their establishment, as well as changes in their bylaws, must be authorized in advance by the CVM, except for the foreign capital fixed-income funds. The constitution of those funds must be announced in writing to the CBB within a maximum of five days. The CBB may determine changes in the regulations of the fixed-income funds. Funds entering the country are subject to registration with the CBB for purposes of controlling foreign capital and future remittances abroad of cash dividends or bonuses and capital gains realized in the sale of the company’s shares.
Inward and outward remittances associated with investments must be processed through banks authorized to conduct foreign exchange operations, with guaranteed access to the free exchange rate market to purchase foreign currency.
Sale or issue locally by nonresidentsn.r.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instruments
Purchase locally by nonresidentsForeign capital fixed-income funds may conduct operations in organized derivative markets in the country, including futures operations carried out in markets managed by stock exchanges or commodities, and futures exchanges. The resources of investors from MERCOSUR countries may be invested in the domestic options and futures market. The use of funds entering the country for the purchase of fixed-income securities and in operations carried out in derivatives markets is prohibited. There are no restrictions on investments in derivatives operations in Brazil by recipients of direct investments.
Sale or issue locally by nonresidentsNonresident financial institutions are allowed to issue swaps in the domestic market, subject to constituting the regulatory capital charge against the counterparty credit risk of such operations if they are not guaranteed by a clearing house.
Purchase abroad by residentsPrivate sector entities may engage in hedging operations with financial institutions or stock exchanges abroad to protect themselves against the risk of variations in interest rates, exchange rates, and commodity prices. The costs of such operations must conform to the parameters in force in the international market. The CBB may, at its sole discretion, require foreign exchange compensation sufficient to eliminate the effects of operations not in line with the established objective, or executed outside those parameters, without prejudice to other sanctions that may apply. Payments and receipts in foreign currency scheduled or expected to occur in the future in connection with commercial or financial rights or obligations may also be protected by hedging. Hedging operations, however, are limited at any time (1) in interest rate and currency swaps, to the amount of the underlying commercial or financial rights and obligations remaining in foreign currency; and (2) in commodities swaps, where open positions are limited to the physical volume of the commodity to be exported, imported, or traded in the domestic market.
Sale or issue abroad by residentsThe same regulations apply as for purchases abroad by residents.
Controls on credit operations
Commercial credits
By residents to nonresidentsOnly two forms of credits are permitted: (1) the Exporting Financing Program (PROEX), which is financed with national budget funds—PROEX resources may not be used to establish any facility for foreign public or private entities, insofar as financing is granted on a case-by-case basis, because credit may not be made available to nonresidents for use in several installments spread over a period of time; and (2) the Machinery and Equipment Export Financing Program (FINAMEX), which is operated through agent banks by the Special Agency for Industrial Financing (FINAME). It provides funds so that financial institutions (FINAME agents) can grant loans to national exporters at rates and on terms similar to those available to their foreign competitors.
To residents from nonresidentsCommercial credits with terms in excess of 360 days must be authorized by, and registered with, the FIRCE of the CBB.
Prepayment of exports must be authorized by the CBB prior to the entry of the foreign exchange into Brazil. Operations governed by these regulations have a 361-day minimum term and are exempt from income tax and from the taxes on credit, exchange, insurance operations, and securities operations. The CBB authorizes and registers external financing for imports of capital goods, intermediate goods, raw materials, and other goods and merchandise, regardless of the type of importer or the destination of the merchandise, if the operations have a term of at least one year.
In private sector import operations without the direct or indirect surety or guarantee of a public sector entity, the financing terms—interest rate, spread, down payment—are freely contracted by the parties. In the case of a public sector entity and in cases involving the direct or indirect surety or guarantee of a public sector entity, interest rates may not exceed the LIBOR rate for the reference period plus specified maximum spreads.
Financial credits
By residents to nonresidentsRequests for authorization may be approved by the CBB, as there is no legal impediment to doing so.
To residents from nonresidentsThe proceeds of financial credits granted to residents must be kept within the country, and the resources must be used for investment in economic activities. Exchange contracts involving the entry of foreign exchange in connection with borrowing are subject to prior approval by the CBB. The minimum average maturity for external loans is 90 days.
Payments for medium- and long-term external debt in foreign currency are subject to prior approval by, and registration with, the CBB’s FIRCE, and the issue of a certificate of registration, which is authorization to remit abroad the related principal amortization (repayments).
Remittances of loan, credit, or financing interest in excess of the interest rate indicated in the respective contract and registration are considered as principal payments. A 15% income tax rate is levied on remittances of interest and other income associated with foreign loan operations, except when bilateral agreements to avoid dual taxation specify another rate or when the borrower or lender is tax exempt.
The federal government, states, municipalities, the federal district, and their foundations and agencies, as well as multilateral organizations and foreign government agencies located abroad are exempted.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsGuarantees by nonfinancial juridical persons in credit operations for their foreign subsidiaries are subject to prior authorization by the CBB.
Exchange operations involving financial transfers abroad in execution of bank sureties and guarantees in question are carried out exclusively through the floating exchange rate market when such guarantees relate or are linked to (1) imports and other foreign currency operations not covered by certificates issued by the CBB or by a facility; and (2) repatriation of amounts entering the country as advance payment for exports in the event of nonshipment of the goods.
Exchange operations involving financial transfers associated with the execution of payment guarantees for imports, loans, or external financing covered by certificates of authorization or registration issued by the CBB are processed through the free exchange rate market.
To residents from nonresidentsThere are no restrictions on guarantees provided by nonresidents to residents in connection with foreign capital registered with the CBB, subject to the presentation of a formal statement by the foreign entity furnishing the guarantee. Data concerning the guarantee and the costs incurred in obtaining it are included in the Certificate of Authorization or Registration of the guaranteed operation. If costs are incurred in obtaining the guarantee, the credit operation must be authorized in advance by the CBB.
There are no specific regulations governing other operations. In the event of execution of a guarantee, the beneficiary must arrange for the entry of the corresponding foreign exchange directly through the banking system.
Controls on direct investment
Outward direct investmentBanks authorized to conduct foreign exchange operations may transfer up to US$5 million for each financial group, including all remittances in the last 12 months, and they are basically required to keep on file and make available to the CBB the documents mentioned in said regulations. Transfers exceeding the established limit must first be submitted to the CBB no less than 30 days in advance of the exchange contract, and, regardless of the amount, exchange operations in which the purchaser of the foreign exchange is an entity belonging to the direct or indirect public administration are subject to prior authorization by the CBB. In this case, remittances must be processed through the free exchange rate market.
Brazilian enterprises may invest in financial institutions abroad through the floating exchange rate market. However, such investments by nonfinancial enterprises require prior approval of the CBB and must meet some specified conditions. Investments abroad by institutions authorized to operate by the CBB must obtain the prior opinion of the CBB’s Department of Financial System Organization and satisfy several conditions, especially with respect to paid-up capital, net assets, time in operation, fixed-asset ratio, and borrowing ceilings.
Inward direct investmentApplications for the registration of foreign direct investment and technology are not subject to prior authorization. Investments in commercial banks are limited to 30% of the voting capital, if there are restrictions on the operations of Brazilian banks in the markets where their main offices are located. The establishment in Brazil of new branches of financial institutions domiciled abroad is prohibited. Also, any increase in the percentage of equity participation in financial institutions headquartered in Brazil by natural or juridical persons resident or domiciled abroad is prohibited, except for authorizations resulting from international agreements, from reciprocity arrangements, or in the interest of the Brazilian government as expressed by presidential decree.
In the case of highway freight transportation, there are limitations on equity participation of up to one-fifth of the voting capital stock, except for companies established before July 11, 1980, to which different rules apply. In future capital increases by subscription, however, such entities are required to pay up to four-fifths of said increases in ordinary registered shares through national underwriters.
Foreign participation in journalistic and radio and television broadcasting enterprises is prohibited. Direct or indirect equity participation by foreign enterprises or capital in the health care sector in Brazil is also prohibited, except in special cases.
The registration of foreign investment through the verification of patent or trademark rights as a means of paying in capital is subject to prior recording of the deed of transfer or assignment of the rights to use the patent or trademark with the National Institute of Industrial Property, and is limited to the value stated in the latter. The investment is registered in the currency of the country where the beneficiary is domiciled or headquartered, and must be requested from the CBB by the party receiving the investment.
Foreign investments via the contribution of goods without exchange cover are subject to electronic registration with the CBB and authorization by the SECEX. The goods, machinery, or equipment must be used in the production of goods or the provision of services, must have a useful life of more than five years, and must be part of the enterprise’s assets for at least five years.
Investments through currency transfers are not subject to prior authorization. This type of investment may take place through the free exchange rate market to pay up the subscribed capital of enterprises already operating in Brazil, to organize a new enterprise, or to acquire an interest in an existing Brazilian enterprise.
Branches of foreign companies may be opened, subject to the prior issuance of an authorizing decree by the president of the republic. A branch is considered an office of a foreign enterprise. Enterprises established in Brazil with any degree of foreign equity participation are not covered by this restriction.
The entry of resources associated with the investment must be processed through a banking institution authorized to conduct foreign exchange operations.
Controls on liquidation of direct investmentRemittances of proceeds must be processed through banks authorized to conduct foreign exchange operations.
Controls on real estate transactionsNo.
Controls on personal capital movements
Loansn.r.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsGifts and endowments require the approval of the CBB.
To residents from nonresidentsThere are no controls, but documentary support is required.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsThe beneficiary must prove he or she is leaving Brazil definitely and certificates of Secretariat of Federal Revenue are required.
Transfer into the country by immigrantsThere are no controls, but documentary support is required.
Transfer of gambling and prize earningsRemittances for gambling are not permitted.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadForeign borrowing for terms exceeding 360 days is subject to authorization and registration with the CBB. The CBB requires that banks authorized to conduct foreign exchange operations obtain facilities abroad for terms of up to 360 days to extend commercial credit in Brazil.
The National Bank for Economic and Social Development, private investment or development banks, commercial banks authorized to conduct foreign exchange operations, and multipurpose banks with a commercial portfolio (if authorized to conduct foreign exchange operations and holding an investment or development portfolio) are permitted to contract loans abroad to be onlent to enterprises in Brazil by issuing commercial paper. They may also borrow abroad by issuing floating-rate notes, fixed-rate notes, floating-rate certificates of deposit, fixed-rate certificates of deposit, government bonds, and private bonds.
Financial institutions in the National Rural Credit System may borrow abroad to finance costs, investment, or the marketing of agricultural and livestock production.
Banks may raise funds abroad to be onlent to natural or juridical persons to finance the construction or purchase of new real estate. Banks authorized to conduct foreign exchange operations may use facilities contracted for terms exceeding 360 days with banks abroad to finance imports by resident enterprises. The public sector may engage in external credit operations for the settlement of internal debt. The rate of the IOF applied to lending operations in foreign currency is zero.
Lending to nonresidents (financial or commercial credits)There are no legal provisions authorizing banks or credit institutions headquartered in Brazil to grant financial loans to nonresidents or to purchase securities issued abroad for terms exceeding 360 days. This restriction does not apply to the foreign branches of Brazilian banks with regard to commercial credit.
Lending locally in foreign exchangeAll contracts, securities, or other documents, as well as any obligations executable in Brazil that require payment in foreign currency, are null and void. Consequently, banks are prohibited from granting foreign currency loans within Brazil. However, this restriction does not apply to the onlending of external foreign currency loans.
Purchase of locally issued securities denominated in foreign exchangeDomestic operations in foreign currencies are prohibited.
Open foreign exchange position limitsUntil February 1, 1999, the limits differed according to the exchange market in which the transactions took place. After February 1, 1999:
(1) Banks authorized to conduct foreign exchange operations may hold long positions of up to US$6 million, including all currencies and all of each bank’s branches. Amounts exceeding this ceiling have to be deposited with the CBB in U.S. dollars. The ceiling on banks’ short exchange position is contingent upon each bank’s adjusted net worth.
(2) For licensed dealers (brokerage firms; securities distributors; and credit, financing, and investment enterprises), the ceiling on the long exchange position is US$500,000, and no short exchange position is allowed.
(3) Licensed tourism agencies may not maintain exchange positions, but they are required to observe the daily operational ceiling (cash) of US$200,000; any surpluses have to be sold to licensed banks or dealers.
(4) Providers of tourist accommodations may have cash holdings in foreign currencies of up to US$100,000 to meet their operational needs; any surplus has to be sold to licensed banks or dealers.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadInstitutional investors may invest up to 10% of their technical reserves in investment fund shares abroad. Private social security agencies may also invest up to 50% of their reserves, together with other investments up to the same ceiling, in shares of open companies, publicly issued convertible debentures, bonds for subsciptions to shares issued by open companies, and certificates of deposit for shares issued by companies headquartered in MERCOSUR countries.
Other controls imposed by securities lawsn.a.
Changes During 1998
Exchange arrangementJanuary 20. The adjustable band for the external value of the real was revised to R$1.12-R$1.22.
March 31. The band was changed to R$1.1370-R$1.1420 per US$1.
April 30. The spread of the band widened to 60 basis points from 50, the new band being R$1.1435-R$1.1495.
Arrangements for payments and receiptsJuly 30. Travelers may take out or bring in domestic and foreign banknotes, cheques, or traveler’s checks without restriction, but must declare amounts in excess of the equivalent of US$10,000.
Exports and export proceedsSeptember 8. A simplified arrangement for foreign exchange transactions related to exports up to the equivalent of US$10,000 was introduced.
Capital transactions
Controls on credit operationsFebruary 26. The minimum average maturities for external loans were increased to two years for new loans and to one year for renewed loans.
Changes During 1999
Exchange arrangementJanuary 13. The exchange rate band was widened to R$1.20-R$1.32.
January 18. The exchange rate became determined by market forces. The exchange rate arrangement was reclassified to “independently floating.”
March 12. The tax applied to foreign capital fixed-income funds was reduced to 0.5% from 2% for the period March 7 through June 30, 1999.
Imports and import paymentsMarch 17. The timeframe for contracting foreign exchange transactions related to imports became more flexible.
Capital transactionsFebruary 10. The minimum share of Brazilian Brady bonds in FIEX funds has been increased to 80% from 60%.
Controls on credit operationsJanuary 27. The minimum average maturity for external loans was reduced to 90 days.
Provisions specific to commercial banks and other credit institutionsFebruary 1. The ceiling on banks’ short-exchange position became equal to each bank’s net worth.

Brunei Darussalam

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: October 10, 1995.
Exchange Arrangement
CurrencyThe currency of Brunei Darussalam is the Brunei dollar.
Other legal tenderThe Singapore dollar is also legal tender.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe Brunei dollar is issued by the Brunei Currency Board (BCB) only against payments in Singapore dollars and at par. Under the terms of a 1967 Currency Interchangeability Agreement (CIA) between the BCB and the Board of Commissioners of Currency of Singapore (BCCS), the Singapore dollar is customary tender in Brunei Darussalam and the Brunei dollar in Singapore. The BCB and BCCS have accepted each other’s currency and have agreed to mutual exchange at par and without charge. They have instructed their banks to do the same with their customers. Any excess currency is repatriated regularly, with the issuing institution bearing the costs, and settlements are made in the other country’s currency. The BCB deals only in Singapore dollars and does not quote rates for other currencies. Banks, however, are free to deal in all currencies, with no restrictions on amount, maturity, or type of transaction.
The Brunei Association of Banks fixes daily buying and selling rates for electronic transfers and sight drafts in 17 other currencies on the basis of the interbank quotations for these currencies in relation to the Singapore dollar. Banks in Brunei Darussalam must apply these rates for transactions with the general public for amounts up to B$100,000. Exchange rates for amounts exceeding B$100,000 are set competitively by each bank on the basis of the current interbank quotations for the Singapore dollar on the Singapore market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThere is no forward market for foreign exchange in Brunei Darussalam. However, as a result of the CIA, foreign exchange risk can be hedged in terms of Singapore dollars by resorting to facilities available in that country, including foreign currency futures and options traded on the Singapore International Monetary Exchange (SIMEX), over-the-counter forward transactions arranged by banks in Singapore, and the short-term foreign exchange swap market operated among the banks in the Singapore money market.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Regional arrangementsBrunei Darussalam is a member of the ASEAN.
Administration of controlThere are no formal exchange controls, but the MOF retains responsibility for exchange control matters.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeOnly banks licensed to operate in Brunei Darussalam, and gold dealers and jewelers specifically authorized by the MOF may buy and sell gold bars. Gold bars are not subject to import duty, but a 10% duty is levied on the importation of gold jewelry.
Controls on external tradeYes.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThere is no distinction between accounts of residents and nonresidents of Brunei Darussalam.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listA few imports are banned or restricted for environmental, health, safety, security, or religious reasons.
Import taxes and/or tariffsExcept for cigarettes and alcoholic beverages, most imports are subject to tariff rates of up to 200%. Some 70% of items (including basic foodstuffs, construction materials, and educational materials) are zero rated. Most other goods are subject to tariff rates of 5%, 15%, or 20%. Fireworks are subject to a 30% duty, while automobiles are subject to duties ranging between 40% and 200%, depending on engine size. In accordance with the CEPT scheme for the AFTA, Brunei Darussalam will eliminate its tariffs on imports from other ASEAN members by 2003, with the exception of about 120 tariff lines that are permanently excluded from the plan.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsn.a.
Documentation requirementsNo.
Export licensesExport licenses are required for alcoholic beverages, cigarettes, diesel, gasoline, kerosene, rice, salt, and sugar. There are no export taxes.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThere are indicative limits/bona fide tests for all payments for invisible transactions and current transfers.
Investment-related paymentsInterest payments are subject to a 20% withholding tax. Information is not available on the payment of amortization of loans and depreciation of direct investments.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentThere are no sectoral controls, but activities relating to national food security and those based on local resources require some degree of local participation. Industries producing for the local market that are not related to national food security and industries that solely export may be fully foreign owned. Joint ventures are particularly encouraged in export-import industries and activities supporting such industries. At least one-half of the directors of a company must be either Brunei citizens or residents of Brunei Darussalam.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsOnly Brunei citizens are allowed to own land. However, foreign investors may lease land on a long-term basis, including sites destined for industry, agriculture, agroforestry, and aquaculture.
Controls on personal capital movements
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Bulgaria

(Position as of April 30, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: September 24, 1998.
Exchange Arrangement
CurrencyThe currency of Bulgaria is the Bulgarian lev.
Exchange rate structureUnitary.
Classification
Currency board arrangementAn amendment of the Law on the Bulgarian National Bank (BNB) effectively established a currency board arrangement. The deutsche mark (DM) was chosen as the peg currency, and the lev was pegged at the rate of lev 1,000 per DM 1, close to the current market rate at that time. Effective January 1, 1999, the euro replaced the deutsche mark as a peg at the rate of lev 1,955.83 per €1. The BNB is required to sell and purchase on demand and without restriction currencies of the EMU member countries for lev on the basis of spot exchange rates that may not differ from the official exchange rate by more than 0.5%.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsBalances continue to exist on clearing accounts maintained under former bilateral arrangements. These arrangements are now inoperative, and the only transactions that take place on clearing accounts are those that are intended to settle the balances. Valuation and settlement of the balances take place in convertible currencies.
Payment arrangements
Bilateral payment arrangements
InoperativeThere are arrangements with Albania, Cambodia, Guinea, the People’s Democratic Republic of Korea, the Lao People’s Democratic Republic, Romania, and Syria. Bulgaria has outstanding transferable ruble accounts with Cuba, Mongolia, and Romania. The settlement of the debit balance with Romania is under negotiation. The debit balance with Poland was settled on March 31, 1998, with Hungary on April 30, 1998, whereas with Germany, it was restructured on the same date.
Barter agreements and open accountsThere are inactive agreements with the Islamic State of Afghanistan, Ethiopia, Ghana, Guyana, Mozambique, Nicaragua, and Tanzania.
Administration of controlForeign exchange control is exercised by the MOF, the BNB, authorized banks, the customs administration, border guards, and port offices.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)Yes.
Payment arrears
PrivateFour commercial banks that are in bankruptcy have outstanding debt-service arrears.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeThe MOF controls the acquisition, possession, processing, and disposal of gold, silver, and platinum. The BNB is the only institution entitled to purchase, sell, and hold gold. All domestic transactions for industrial purposes must be conducted at current prices through the BNB. Commercial banks are allowed to make transactions in precious metals. Resident individuals may hold gold but may not trade or deal in it.
Controls on external tradeThe BNB is the only institution entitled to import or export gold without special permission. Local natural persons are not allowed to export and import precious metals, precious stones, and coins made of precious metals without a permit from the MOF in any amounts other than those generally considered to be normal for personal and family use. Banks authorized to make currency transactions abroad may export and import precious metals, provided the latter represent objects of bank operations and the BNB has issued a permit. Nonresidents may import precious metals in ingots, their products and precious stones, as well as coins made of precious metals in amounts generally considered to be normal for personal and family use. Nonresidents leaving the country may export precious metals in ingots, their products and precious stones, as well as coins made of precious metals up to the amounts imported and declared by them, as well as articles of such composition purchased in the country whose value shall not exceed the amount of convertible foreign currency imported and declared by them at customs. Resident legal persons are allowed to import and export gold with the permission of the MOF and the Ministry of Trade and Tourism.
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents and nonresidents may take out banknotes and coins up to lev 10,000; permission from the BNB is required for larger amounts.
Foreign currencyResidents may take out up to the equivalent of $1,000 without restriction, from $1,000 to $10,000 upon presentation of a statement of account (receipt) by a bank, and more than $10,000 with the permission of the BNB.
On imports
Domestic currencyResidents and nonresidents may bring in banknotes and coins up to lev 10,000; permission from the BNB is required to import larger amounts.
Foreign currencyThe amount must be declared, and nonresidents may take out unspent foreign currency notes upon departure.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyResidents may maintain these accounts in Bulgaria. Balances on these accounts earn interest at international market rates. The crediting and debiting of foreign currency accounts are not subject to any regulations. Transfers abroad may be made with permission from the MOF and the BNB, except for cases related to payments for invisible transactions and current transfers. These payments can be realized after the required documents are presented to the respective commercial bank.
Held abroadWhile opening accounts with foreign banks is not explicitly banned, like all transfers abroad, transfers from Bulgaria to these accounts are subject to regulation. Prior permission from the BNB and MOF is required.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThe crediting and debiting of these accounts are not subject to any regulations.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsYes.
Import licenses and other nontariff measures
Positive listLicenses are required for imports of military hardware and related technologies, natural gas, endangered flora and fauna, radioactive and nuclear materials, pharmaceuticals, herbicides, pesticides, unbottled alcohol, jewelry, rare and precious metals, asbestos, asbestos products, narcotic and psychotropic products, gambling machines, etc. Licenses for most of these goods are normally granted within two working days. The Export and Import Trade Policy Measures eliminated import licenses for natural gas.
Negative listImports of certain goods (dangerous substances with ozone-depleting potential, machinery and equipment for air conditioning using Freon 12; refrigerators, freezers, and other equipment using Freon 11 or 12) are banned for health and security reasons.
Other nontariff measuresImports of tobacco products; coal, petroleum, and fuels; livestock and meat; dairy products; certain grains; ferrous metals and alloys; textiles; and sugar must be registered at the Ministry of Trade and Tourism. Effective August 23, 1998, the import of products for the production of CDs also has to be registered. Effective January 1, 1999, the registration regime was abolished for tobacco products, livestock and meat, dairy products, and certain grains and sugar. A registration regime was introduced for natural gas and scrap.
Import taxes and/or tariffsImport tariffs range from 5% to 80%, and are calculated on a transaction-value basis in foreign currency and converted to leva. The maximum rate of import tariffs for nonagricultural goods is 35%, and for agricultural goods, it is 74%. Certain products are allowed temporarily to be imported without customs duties within specified quantities (active substances for the production of insecticides, fungicides, and herbicides, some agricultural machinery and their spare parts, flour, live breeding animals, etc.). Other products are allowed temporarily to be imported without customs duties (equipment, spare parts, information technology products, and chemicals for control of the environment and emissions control; special installations for recovery of poisoned lands; substances, materials, and equipment for replacement of ozone-destructive technologies; equipment, machines, and spare parts used in mines and geological research activities; installations, equipment, and spare parts for production of energy from nontraditional alternative sources; medical equipment for human and veterinary medicine, etc.). The import surcharge of 4% was reduced to 2% on July 1, 1998, and eliminated on January 1, 1999. The arithmetic mean tariff for all products was reduced to 16.18% from 17.88%. Certain temporary import tariff quotas were abolished.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports must be repatriated.
Surrender requirementsProceeds do not have to be surrendered; they may be retained in foreign currencies or sold in the interbank exchange market.
Financing requirementsNo.
Documentation requirementsExports of tobacco products, coal, petroleum, meat, dairy products, wine, certain grains, textiles, pharmaceuticals, CDs, ferrous and nonferrous metals and alloys must be registered with the Ministry of Trade and Tourism. Effective January 1, 1999, the registration requirement for tobacco products, meat, dairy products, and wine were abolished, whereas a registration requirement was introduced for scrap metal.
Export licensesOn January 1, 1998, the Regulation on the Export and Import Regime abolished certain bans and altered the coverage of export registration arrangements. Special licenses are required for the settlement of outstanding balances of the multilateral clearing arrangements. Export licenses are required for exports of military hardware and related technologies, endangered flora and fauna, wild plants and animals, livestock, radioactive materials, crafts and antiques, seeds, untreated wood, jewelry, and rare and precious metals. Licenses are normally granted within two working days. On April 27, 1999, the exports to the Federal Republic of Yugoslavia (Serbia/Montenegro) of oil products and some chemical goods (with dangerous substances) were banned for health and ecological reasons.
Without quotasYes.
Export taxesOn January 1, 1998, the export tax on cereals was abolished while certain export taxes were amended; taxes were reduced on average by 40%. Until October 1, 1998, export taxes were levied on certain types of timber, raw hides, certain livestock, wool, sunflower oil, grain, and waste and scrap of ferrous and nonferrous metals. On October 1, 1998, export taxes on sunflower oil, sunflower seeds, and processed wood details were abolished. Effective January 1, 1999, the export tax on livestock, scrap, copper products, wool, grain, and raw hides was eliminated. Taxes are quoted in dollars, but paid in leva.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related payments
Indicative limits/bona fide testPayments needed for trade are processed by banks against appropriate documents, proving the necessity of the transfer.
Investment-related paymentsProfits and dividends may be transferred abroad, provided the foreign investor has paid his/her taxes.
Indicative limits/bona fide testPayments of interest are allowed on loans approved by the MOF against presentation of the approval and loan agreement, and a bank document certifying receipt of the convertible exchange.
Personal paymentsRemittances related to family maintenance and alimony payments are not explicitly regulated, but have been treated implicitly as transfers abroad that are not related to merchandise imports, and therefore require prior permission from the BNB in consultation with the MOF.
Prior approvalApproval of the Ministry of Health is required for medical treatment against the presentation of the protocol by the committee on medical treatment abroad (under the Ministry of Health) and a document by a foreign medical treatment institution. For pensions, approval of the MOF is required.
Quantitative limitsThe presentation of a document by the foreign educational and training institution is required, as well as approval of the MOF. Costs related to education are limited to $10,000 a year.
Indicative limits/bona fide testYes.
Foreign workers’ wagesThese remittances are not explicitly regulated but have been treated implicitly as transfers abroad that are not related to merchandise imports, and therefore require prior permission from the BNB in consultation with the MOF. Prior permission is not required in cases where foreign workers are employed in Bulgarian companies abroad.
Prior approvalYes.
Other payments
Indicative limits/bona fide testThe presentation of documents issued by the respective international organization proving the necessity of the transfer is required.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions must be repatriated.
Surrender requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThere are no controls, except for privatization funds’ shares, which are nontradable in the secondary market.
Purchase abroad by residentsExcept for licensed commercial banks, prior permission of the BNB, in consultation with the MOF, is required.
Bonds or other debt securities
Purchase abroad by residentsExcept for licensed commercial banks, prior permission of the BNB, in consultation with the MOF, is required.
Sale or issue abroad by residentsExcept for licensed commercial banks, prior permission of the BNB, in consultation with the MOF, is required.
On money market instruments
Purchase abroad by residentsExcept for licensed commercial banks, prior permission of the BNB, in consultation with the MOF, is required.
Sale or issue abroad by residentsExcept for licensed commercial banks, prior permission of the BNB, in consultation with the MOF, is required.
On collective investment securities
Purchase locally by nonresidentsThere are no controls, except for privatization funds’ shares, which are nontradable in the secondary market.
Sale or issue locally by nonresidentsPrior permission of the MOF is required.
Purchase abroad by residentsExcept for licensed commercial banks, prior permission of the MOF, in consultation with the BNB, is required.
Sale or issue abroad by residentsExcept for shares issued by residents in foreign currency and for shares issued by privatization funds, which are nontradable in the secondary market.
Controls on derivatives and other instruments
Purchase abroad by residentsExcept for licensed commercial banks, prior permission of the BNB, in consultation with the MOF, is required.
Sale or issue abroad by residentsExcept for licensed commercial banks, prior permission of the BNB, in consultation with the MOF, is required.
Controls on credit operations
Commercial creditsCredits extended abroad or received from abroad require the permission of the MOF.
Financial creditsExcept for licensed commercial banks, credits extended abroad or received from abroad require the permission of the MOF.
Guarantees, sureties, and financial backup facilitiesExcept for licensed commercial banks, residents need permission from the MOF.
Controls on direct investment
Outward direct investmentInvestments abroad require permission from the MOF.
Inward direct investmentOnly intercompany loans require permission from the MOF.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsPurchases must be approved by the MOF.
Purchase locally by nonresidentsPrior permission of the MOF is required. Nonresidents may not purchase and own land. If they inherit land, they must dispose of it within a three-year period.
Sale locally by nonresidentsPrior permission of the MOF is required.
Controls on personal capital movements
LoansResidents require the permission of the MOF for borrowing and lending.
Gifts, endowments, inheritances, and legaciesThe permission of the MOF is required for gifts and endowments.
Settlement of debts abroad by immigrantsThe permission of the MOF is required.
Transfer of assets
Transfer abroad by emigrantsThe permission of the MOF is required.
Transfer of gambling and prize earningsThe permission of the MOF is required.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadLicensed banks may borrow abroad without the authorization of the BNB only if they do not request a guarantee from the government of Bulgaria and if their borrowing complies with the prudential regulations set up by the BNB.
Maintenance of accounts abroadYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThese accounts are subject to some restrictions set by the BNB.
Liquid asset requirementsYes.
Open foreign exchange position limitsEffective January 13, 1998, the requirements for observing open foreign currency positions were increased. Each bank is required to observe daily (1) a maximum ratio of up to 25% between its open position in any particular currency and the amount of its own funds, excluding the euro and the currencies of the EMU countries; and (2) a maximum ratio of up to 60% between its net open foreign currency position and the amount of its own funds, excluding the euro and the currencies of the EMU countries.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 1998
Status under IMF Articles of AgreementSeptember 24. Bulgaria accepted the obligations of Article VIII.
Arrangements for payments and receiptsMarch 3. The debit balance with Poland was settled.
April 30. The debit balance with Hungary was settled and the balance with Germany was restructured.
Imports and import paymentsJanuary 1. The Regulation on the Export and Import Regime altered import bans, import registration arrangements, and import tariff rates and coverage.
August 23. The import of products for the production of CDs has to be registered.
Exports and export proceedsJanuary 1. The Regulation on the Export and Import Regime abolished certain export bans, altered the coverage of export registration arrangements, abolished the export tax on cereals, and amended certain export taxes. Taxes were reduced on average by 40%.
January 1. The export tax on cereal was abolished, while other export taxes were amended.
October 1. Export taxes on sunflower oil, sunflower seeds, and processed wood details were abolished.
Capital transactions
Provisions specific to commercial banks and other credit institutionsJanuary 13. The requirements for observing open foreign currency positions were increased. Each bank is required to observe daily (1) a maximum ratio of up to 25% between its open position in any particular currency and the amount of its own funds, excluding the deutsche mark; and (2) a maximum ratio of up to 60% between its net open foreign currency position and the amount of its own funds, excluding the euro and the currencies of the EMU countries.
Changes During 1999
Exchange arrangementJanuary 1. The euro replaced the deutsche mark as a peg at the rate of lev 1,955.83 per €1.
Imports and import paymentsJanuary 1. The import surcharge was eliminated.
January 1. The Export and Import Trade Policy Measures eliminated import licenses for natural gas. The registration regime was abolished for tobacco products, livestock and meat, dairy products, and certain grains and sugar. A registration regime was introduced for natural gas and scrap. The temporary import tariff quotas were abolished. The arithmetic mean tariff for all products was reduced to 16.18% from 17.88%. The maximum rate of import tariffs for nonagricultural goods is 35%, and for agricultural goods it is 74%.
Exports and export proceedsJanuary 1. The Export and Import Trade Policy Measures abolished the registration requirements for tobacco products, meat, dairy products, and wine. The license requirements for export of sunflower oil and livestock were abolished. The export of scrap must be registered. The export tax on livestock, scrap, copper products, wool, grain, and raw hides was eliminated.
April 27. The exports to the Federal Republic of Yugoslavia (Serbia/Montenegro) of oil products and some chemical goods (with dangerous substances) were banned for health and ecology reasons.
Capital transactions
Provisions specific to commercial banks and other credit institutionsJanuary 1. Each bank is required to observe daily (1) a maximum ratio of up to 25% between its open position in any particular currency and the amount of its own funds, excluding the euro and the currencies of the EMU countries; and (2) a maximum ratio of 60% between its net open foreign currency position and the amount of own funds, excluding the euro and the currencies of the EMU countries.

Burkina Faso

(Position as of February 28, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Burkina Faso is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at the fixed rate of CFAF 100 per €0.1524. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris exchange market and the fixed rate between the euro and the CFA franc. They include a bank commission of 0.25% on transfers to all countries outside the WAEMU, which must be surrendered in its entirety to the Treasury.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketEffective February 1, 1999, residents were authorized to contract forward exchange cover in accordance with the regulations on imports and exports of goods and services.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause Burkina Faso is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (WAEMU members, and Cameroon, the Central African Republic, Chad, the Comoros, the Republic of Congo, Equatorial Guinea, Gabon, and Guinea-Bissau) are made in CFA francs, euros, or the currency of any other Operations Account country. Certain settlements are channeled through special accounts. Settlements with all other countries are usually effected either through correspondent banks in France or the country concerned in the currencies of those countries, or through foreign accounts in CFA francs, in euros, or in other currencies of the Operations Account area.
Payment arrangements
Bilateral payment arrangements
InoperativeYes.
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Clearing agreementsA multilateral clearing agreement exists within the framework of the WAMA between WAEMU members, Cape Verde, the Gambia, Ghana, Guinea, Liberia, Mauritania, Nigeria, and Sierra Leone.
Administration of controlExchange control is administered by the Directorate of the Treasury in the MOF. The approval authority for exchange control (except for imports and exports of gold, forward exchange cover, and the opening of external accounts in foreign currency) has been delegated to the BCEAO, which is also authorized to collect, either directly or through banks, financial institutions, the Postal Administration, or judicial agents, any information necessary to compile balance of payments statistics.



All exchange transactions relating to foreign countries must be effected through authorized banks, the Postal Administration, or the BCEAO. Settlements with a country outside the Operations Account area must be formally approved by the customs administration.



Effective February 1, 1999, the amount of transfers authorized without supporting documentation was raised to CFAF 300,000 from CFAF 100,000.
International security restrictionsNo.
Payment arrears
OfficialRestructuring of arrears of debts to Libya and the Baltic countries, Russia, and the other countries of the FSU is in progress.
Privaten.a.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold require prior MOF authorization, which is seldom granted. Exempt from this requirement are (1) imports by or on behalf of the Treasury or the BCEAO; (2) imports of manufactured articles containing minor quantities of gold (such as gold-filled or gold-plated articles); and (3) imports by travelers of gold objects up to a combined weight of 500 grams. Both licensed and exempt imports of gold are subject to customs declaration. Exports of gold are liberalized.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of CFA franc banknotes by nonresident travelers is not prohibited. However, repurchases by the BCEAO of exported banknotes are still suspended. In addition, shipments of BCEAO banknotes among authorized intermediaries and their correspondents situated outside the WAEMU are officially prohibited.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers is allowed up to the equivalent of CFAF 500,000; the reexportation of foreign banknotes above this ceiling requires documentation demonstrating either the importation of the foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits lodged in local banks.
On imports
Domestic currencyThere are no restrictions on the importation by resident or nonresident travelers of banknotes and coins issued by the BCEAO.
Foreign currencyResidents and nonresidents may bring in any amount of foreign banknotes and coins (except gold coins) of countries outside the Operations Account area. Residents bringing in foreign banknotes and foreign currency traveler’s checks exceeding the equivalent of CFAF 50,000 must declare them to customs upon entry and sell them to an authorized intermediary bank within eight days.
Resident Accounts
Foreign exchange accounts permittedEffective February 1, 1999, residents are allowed to open foreign exchange accounts with local banks or with banks abroad after obtaining authorization from the MOF, with the approval of the BCEAO.
Held domestically
Approval requiredThe holding of these accounts is subject to prior approval by the MOF upon the recommendation of the BCEAO and in coordination with the Chairman of the Council of Ministers of the WAEMU.
Held abroadThe holding of these accounts is not explicitly prohibited, but regulations prohibit any transfer tending to develop a resident’s foreign holdings, unless approved by the MOF.
Approval requiredYes.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedEffective February 1, 1999, the authorization is issued by the BCEAO.
Approval requiredThe holding of these accounts is not expressly covered by regulations. In practice, based on an interpretation of the regulations, such holdings require the prior approval of the MOF.
Domestic currency accountsBecause the BCEAO has suspended the repurchase of banknotes circulating outside the WAEMU territories, nonresident accounts may not be credited or debited with BCEAO banknotes. These accounts may not be overdrawn without the prior authorization of the MOF. Transfers of funds between nonresident accounts are not restricted.
Convertible into foreign currencyForeign accounts denominated in CFA francs may be freely debited for the purpose of purchases by nonresidents of any foreign currencies on the official exchange market.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions exceeding CFAF 3 milllion must be domiciled with an authorized bank. The threshold was raised to CFAF 5 million on February 1, 1999.
Preshipment inspectionAn inspection is required for quality and price.
Import licenses and other nontariff measuresA technical import visa is required for sugar, insecticides, wheat and cereal flour, tires and inner tubes for motorcycles, vegetable oil, milk, electrical batteries, food preserves, and rice. The Ministry of Industry, Commerce, and Mines may, on the basis of criteria established by the MOF, waive the prescribed formalities for imports from countries with which Burkina Faso has concluded a customs union or free-trade-area agreement.
Positive listImport licenses were eliminated and replaced with Pre-Import Declarations (DPIs) issued for all import operations valued at CFAF 500,000 and over.
Negative listImports of ivory and fishing nets with a mesh smaller than 3 square centimeters are restricted.
Import taxes and/or tariffsImports, with a few exceptions, are subject to customs duties of 5%; the rates on cereals range from 4% to 26%, plus a statistical tax of 4%.



All imports from outside the ECOWAS are subject to a solidarity communal levy of 1%, and imports of certain goods that are also locally produced are subject to a protection tax ranging from 10% to 30%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsEffective February 1, 1999, exports between WAEMU countries are excluded from the repatriation requirement.
Surrender requirementsExport proceeds must be surrendered within one month of the date on which payments fall due. The authorized intermediary banks must then surrender such foreign exchange to the BCEAO via transfer through the bank of issue.
Financing requirementsNo.
Documentation requirements
DomiciliationAll export transactions of more than CFAF 3 million must be domiciled with an authorized intermediary bank, except for exports between WAEMU countries, which, effective February 1, 1999, need not be domiciled.
Export licensesExport licenses were eliminated and replaced with preexport declarations (DPEs) issued for exports valued at CFAF 500,000 and over. Gold, diamonds, and all other precious metals are subject to MOF authorization. Exports of ivory are subject to special regulations.
Export taxesMost exports are subject to a customs stamp tax of 6% and a statistical duty of 3%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersIn the case of transfers not exceeding CFAF 100,000, no supporting document is required. This threshold was increased to CFAC 300,000 on February 1, 1999. Residents are required to pay through a licensed intermediary. Effective February 1, 1999, payments and incomes of foreign ships in the WAEMU zone and WAEMU ships abroad are included under current operations.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalPayments for depreciation of direct investments require the approval of the MOF, since depreciation is not specifically mentioned in the regulations.
Indicative limits/bona fide testThere are no indicative limits and bona fide tests for the transfers of profits and dividends.
Payments for travel
Prior approvalPrior approval is required only for foreign exchange allowances in excess of the indicative limits. Such approval is granted after a bona fide test.
Quantitative limitsFor travel outside the franc zone, the limits are the equivalent of CFAF 1 million a person a trip for tourist travel, with no limit on the number of trips or age distinctions, and the equivalent of CFAF 200,000 a person a day for business travel over a period of one month.
Personal payments
Prior approvalThere is prior approval for payment of medical costs and studies abroad.
Quantitative limitsNo information is available for the existence of quantitative limits for study abroad.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe limits are those applicable to tourist and business travel.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsEffective February 1, 1999, all proceeds must be surrendered to an authorized dealer within one month of the due date. Resident travelers must declare to customs any foreign means of payment in excess of CFAF 50,000 that they bring in and must surrender these to an authorized bank within eight days of their return. This amount was raised to CFAF 300,000 effective February 1, 1999.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsCapital movements between Burkina Faso and France, Monaco, and the Operations Account countries are free of restrictions. Capital transfers to all other countries require authorization from the MOF, and at least 75% of investment abroad must be financed by foreign borrowing. The liquidation of foreign investment is subject to reporting to the MOF, and the reinvestment of proceeds is subject to prior authorization except in the franc zone countries. If no authorization is given for the reinvestments, the proceeds in foreign exchange must be surrendered to an authorized intermediary bank within one month. Effective February 1, 1999, the amount that may be transferred without supporting documents is CFAF 300,000.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsEffective February 1, 1999, prior authorization is required from the Regional Council for Public Savings and Financial Markets. The issuance and sale of securities in Burkina Faso must be declared to the MOF for statistical purposes.
Purchase abroad by residentsThe purchase of foreign securities from nonresidents is generally authorized.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Controls on derivatives and other instrumentsThese instruments, which are virtually nonexistent in Burkina Faso, are governed by the regulations generally applicable to securities and investments, except options, which, effective February 1, 1999, residents may freely purchase or sell abroad.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsThere are no restrictions on credits related to exports of goods, provided that the date on which payment falls due is not more than 120 days after the date of shipment. For credits in connection with services rendered there are no restrictions, provided that payment takes place no more than one month after the date on which payment falls due.
To residents from nonresidentsThere are no restrictions, and repayments of commercial credits are generally approved, subject to the presentation of documents attesting to the validity of the commercial operation or of the services rendered, as well as the payment due date.
Financial credits
By residents to nonresidentsThese credits require prior approval from the MOF. Outward transfers necessary to service such facilities require an exchange authorization, subject to the approval of the BCEAO acting on behalf of the MOF and substantiated by documentation.
To residents from nonresidentsThere are no restrictions on these credits, but they must be reported for statistical purposes. The necessary funds must be transferred from abroad through an authorized agent. There are no restrictions on repayments of loans, provided that the authorized agent handling the settlement is provided with documentation attesting to the validity of the transaction.
Guarantees, sureties, and financial backup facilitiesThe same regulations apply as for financial credits.
Controls on direct investment
Outward direct investmentThe investor must designate the authorized intermediary that will execute the payment. Whether the payment is made by an outward transfer of funds or by deposit to a foreign account in euros, it cannot be executed until after the period agreed to by the parties.
Inward direct investmentInward investments must be reported for statistical purposes.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsInvestments made abroad by residents require prior authorization from the MOF. The investor must make the request in writing and designate the authorized intermediary that will execute the payment. Whether the payment is made by an outward transfer of funds or by deposit to a foreign account in francs, it cannot be executed until after the period agreed to by the parties.
Controls on personal capital movements
LoansThe same regulations apply as for securities and investments.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsIn general, inheritances and dowries are authorized gifts; endowments require prior approval.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsImmigrants who have acquired resident status must obtain prior approval from the MOF to settle debts incurred abroad when they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsThese transfers may be made upon submission of emigration documents to the authorized agent handling the settlement.
Transfer into the country by immigrantsThese transfers require authorization of the MOF.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutionsThe same regulations apply as for lending to nonresidents.
Lending to nonresidents (financial or commercial credits)MOF approval is required. There are no restrictions if these operations involve commercial credits. Prior authorization from the MOF is required for loans, financial credits, or the purchase of securities issued abroad.
Lending locally in foreign exchangeThe same regulations apply as for lending to nonresidents.
Purchase of locally issued securities denominated in foreign exchangeThe same regulations apply as for lending to nonresidents.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidentsMonetary regulations make no distinction between resident deposit accounts, nonresident deposit accounts, and foreign deposit accounts.
Investment regulationsThe same regulations apply as for foreign investments.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThere are no prudential ratios. Open positions result from special dispensations.
Provisions specific to institutional investorsEffective February 1, 1999, controls are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.r.
Limits (max.) on portfolio invested abroadn.r.
Limits (min.) on portfolio invested locallyn.r.
Currency-matching regulations on assets/liabilities compositionn.r.
Other controls imposed by securities lawsNo.
Changes During 1998
Capital transactionsNovember 20. The WAEMU regulation of external financial relations of the member states was adopted. Any investment abroad by a resident in the WAEMU countries became free from controls. Also, from the same date, the liquidation of foreign investments by residents and inward direct investments became liberalized.
Controls on capital and money market instrumentsSeptember 16. The WAEMU regional stock exchange began operations in Abidjan.
Controls on derivatives and other instrumentsNovember 20. Residents’ buying and selling of options was liberalized.
Changes During 1999
Exchange arrangementJanuary 1. The CFA franc peg to the French franc was replaced with the euro.



February 1. Residents were authorized to contract forward exchange cover in accordance with the regulations on imports and exports of goods and services.
Arrangements for payments and receiptsFebruary 1. The amount that may be transferred without supporting documents was increased to CFAF 300,000.
Resident accountsFebruary 1. Residents were allowed to open foreign exchange accounts with local banks or with banks abroad after obtaining authorization from the MOF, with the approval of the BCEAO.
Nonresident accountsFebruary 1. Authorization to open foreign exchange accounts is now issued by the BCEAO.
Imports and import paymentsFebruary 1. The domiciliation threshold for import operations was raised to CFAF 500,000.
Exports and export proceedsFebruary 1. Exports between WAEMU countries are no longer subject to domiciliation and repatriation requirements.
Payments for invisible transactions and current transfersFebruary 1. Payments and incomes of foreign ships in the WAEMU zone and WAEMU ships abroad are included under current operations.
Proceeds from invisible transactions and current transfersFebruary 1. All proceeds must be surrendered to an authorized dealer within one month of the due date.
Capital transactionsFebruary 1. Prior authorization of the Regional Council for Public Savings and Financial Markets is required for the issue and offer for sale of securities by foreign entities.
Controls on derivatives and other instrumentsFebruary 1. Transfers relating to option purchases were allowed.
Provisions specific to institutional investorsFebruary 1. Controls are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.

Burundi

(Position as of March 31, 1999)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Burundi is the Burundi franc.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Burundi franc is pegged to a basket of currencies of Burundi’s main trading partners. The Bank of the Republic of Burundi (BRB) quotes the exchange rate for 15 currencies, the euro, and the SDR.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThe BRB centralizes all foreign exchange operations. It can allow commercial banks to borrow foreign exchange to hedge against exchange rate risks for themselves or for their customers engaged in coffee export.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements relating to trade with the Democratic Republic of the Congo and Rwanda in products specified in the commercial agreements with these countries are effected through a clearing process, with balances paid in convertible currencies. Nonresidents staying in a hotel or guest house in Burundi must pay their hotel bills by selling convertible currencies or by using a credit card. Payment in Burundi francs is, however, acceptable in the case of guests for whom a resident company or individual has assumed responsibility with prior authorization from the BRB and in the case of nationals of the Democratic Republic of the Congo and Rwanda, who produce declarations of means of payment issued under the auspices of the CEPGL.
Payment arrangements
Bilateral payment arrangements
OperativeThere are trade agreements with the Democratic Republic of the Congo and Rwanda. The agreements are not fully operational due to the present unfavorable economic situation.
Regional arrangementsRegional agreements exist with Eastern and Southern African countries.
Clearing agreementsClearing agreements exist with members of COMESA and CEPGL.
Administration of controlControl over foreign exchange transactions and foreign trade is vested in the BRB; authority to carry out some transactions is delegated to commercial banks. All foreign exchange operations are temporarily centralized at the BRB.
International security restrictionsNo.
Payment arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeHolders of gold mining permits issued by the ministers responsible for mining and customs may open purchasing houses for gold mined by artisans in Burundi. Gold produced by artisans may be sold only to approved houses.
Controls on external tradeExports of gold must be declared in Burundi francs at the average daily rates communicated by the BRB. Gold exports are authorized jointly by the mining and customs departments.
Controls on exports and imports of banknotes
On exports
Domestic currencyAll travelers may take out up to FBu 5,000.
Foreign currencyThe license is based on supporting documents.
On imports
Domestic currencyTravelers may bring in up to FBu 5,000.
Foreign currencyTravelers may bring in any amount of foreign currency quoted by the BRB in addition to traveler’s checks.
Resident Accounts
Foreign exchange accounts permittedExporters of nontraditional products and enterprises in free trade zones may hold foreign exchange accounts.
Held domesticallyAuthorized banks may freely open foreign exchange accounts, but must forward copies of relevant documents to the BRB.
Held abroadPrior BRB authorization is required to open these accounts.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be maintained by (1) natural and juridical persons of foreign nationality who reside abroad; (2) enterprises authorized to operate in the free trade zone; (3) exporters of nontraditional products who are authorized to retain 50% of their export proceeds; (4) Burundi nationals residing abroad; and (5) any other natural or juridical persons authorized by the BRB. These accounts may be credited freely with any convertible currency received from abroad. They may be debited freely for (1) conversion into Burundi francs for payments in Burundi; and (2) payments abroad for travel and representation or for the purchase of foreign goods, except for banknotes. These accounts must not be overdrawn. However, they may bear interest freely. The related bank charges and commissions must be settled in foreign exchange; and (3) up to the equivalent of $100 may be withdrawn in banknotes upon presentation of travel documents. Withdrawals in excess of this amount are subject to the prior authorization of the central bank. If no deposits are made to the foreign account within three months of its opening, the account must be closed.
Domestic currency accounts
Convertible into foreign currencyAccounts in convertible Burundi francs may be maintained by (1) natural persons of foreign nationality (such as staff of diplomatic missions) who are temporarily established in Burundi; (2) juridical persons of foreign nationality with special status (such as diplomatic missions and international organizations); and (3) any other natural or juridical persons authorized by the BRB. These accounts may be credited freely with any convertible currency, and they may be debited freely for withdrawals of Burundi francs or for conversion into foreign exchange. Up to the equivalent of $100 in foreign currency may be withdrawn in banknotes upon presentation of travel documents (a passport and an airline ticket) for an unlimited number of trips. Withdrawals of banknotes in excess of this amount are subject to the prior authorization of the BRB. These accounts may bear interest freely and must not be overdrawn. If no deposits are made within three months of opening the account, it must be closed.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance import depositsEffective June 24, 1998, the advance import deposit was set at 50% of the import value, with the exception of key products, which were subject to a rate of 25%.



Effective July 28, 1998, oil products and those imported by Brassière et Limonadiere du Burundi are subject to a deposit rate of 10%.



The deposit requirement was suspended on March 1, 1999.
Documentation requirements for release of foreign exchange for importsEffective July 3, 1998, the task of verifying import declarations and payments by commercial banks requires prior approval of the BRB. All goods imported into Burundi must be insured by approved Burundi insurers, and premiums must be paid in Burundi francs.
Preshipment inspectionAll consignments of imports exceeding FBu 3 million in value may be subject to preshipment inspection with regard to quality, quantity, and price by an international supervising and oversight organization on behalf of the Burundi authorities.
Import licenses used as exchange licensesYes.
Import licenses and other nontariff measures
Negative listFor the time being, imports of luxury or nonessential goods may not be traded at the official exchange rate. Effective July 31, 1998, the negative import list was expanded.
Import taxes and/or tariffsBurundi is a member of the COMESA. There are five customs duty bands (10%, 12%, 15%, 40%, and 100%) applied to imports from countries not belonging to COMESA. Imports of petroleum products are subject to import duties ranging from 6% to 40%. A 6% service tax, which replaced the statistical tax, is levied on the c.i.f. value of imports, in addition to any applicable customs duties and fiscal duties.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsExport proceeds must be collected within 30 days of the date of export declaration at customs for shipment by air or within 90 days for all other shipments. Deadlines for the collection of proceeds from exports of nontraditional products are set by the bank carrying out the operation.
Surrender requirementsAll proceeds from traditional exports must be surrendered to an authorized bank. Exporters of nontraditional products may retain up to 50% of proceeds. Exporters operating in the free trade area are not required to surrender their export proceeds to an authorized bank.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesExport taxes are levied on a range of exports. The generally applicable rate is 5%. For green coffee, the rate is set at each crop season. As of October 1998, the export tax on coffee was 31%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAll payments for invisibles require approval.
Trade-related paymentsShipping insurance on coffee exports normally must be taken out in Burundi francs with a Burundi insurer.
Indicative limits/bona fide testUnloading and storage costs are limited to amounts indicated by invoice.
Investment-related paymentsPrivate joint-stock companies may transfer 100% of the return on foreign capital and of the share allocated to foreign directors after payment of taxes. Airlines are authorized to transfer abroad 100% of their earnings after deduction of local expenses. Transfer of rental income is permitted (after payment of taxes and a deduction of 20% for maintenance expenses). Transfers for income from rents and sale of real estate are suspended.
Indicative limits/bona fide testNo information is available on payments of interest.
Payments for travelAllowances for travel are suspended. Limited allocations of foreign exchange are authorized for official missions and business travels.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal paymentsPension transfers are carried out through the Social Security Institute.
Quantitative limitsThe limit for medical costs is FBu 700,000, with additional transfers allowed upon presentation of invoices. For studies abroad and for family maintenance and alimony payments, allowances are suspended.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Quantitative limitsUpon presentation of evidence of payment of taxes, foreign nationals residing and working in Burundi are permitted to transfer abroad up to 70% of their net annual income (80% in the case of foreign nationals working for companies that export at least 50% of their production).
Indicative limits/bona fide testA work contract is required.
Credit card use abroadThe use of credit cards is not permitted.
Other payments
Quantitative limitsConsulting and legal fees are limited to amounts indicated by invoices.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsExchange receipts from invisibles must be surrended to authorized banks.
Restrictions on use of fundsYes.
Capital Transactions
Controls on capital and money market instrumentsCapital transfers abroad by residents require individual authorization.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Purchase abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
On money market instruments
Purchase abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
Controls on direct investment
Outward direct investmentThe provision of foreign exchange for outward direct investments is suspended.
Inward direct investmentYes.
Controls on liquidation of direct investmentTransfers of foreign capital on which a repatriation guarantee has been granted require individual authorization.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadPrior approval of the BRB is required.
Maintenance of accounts abroadPrior authorization of the MOF is required.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidents
Credit controlsDebit balances are not permitted on foreign exchange accounts.
Investment regulations
Abroad by banksPrior approval of the BRB is required.
In banks by nonresidentsYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsn.a.
Changes During 1998
Imports and import paymentsJuly 31. The negative import list was expanded.
Changes During 1999
Imports and import paymentsMarch 1. The advance import deposit requirement was suspended.

Cambodia

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Cambodia is the Cambodian riel.
Other legal tenderThe dollar circulates freely and is used for payments.
Exchange rate structure
DualThe exchange rate system comprises two rates: the official rate and the market rate. Adjustments to the official exchange rate are made daily by the National Bank of Cambodia (NBC) to limit the spread between the official and parallel market rates to less than 1%. In practice, the spread exceeds this range from time to time. The official exchange rate applies mainly to external transactions conducted by the government and state-owned enterprises.
Classification
Managed floating with no preannounced path for the exchange rateThe NBC quotes daily official rates, at which the Foreign Trade Bank of Cambodia buys and sells foreign exchange. Other commercial banks are free to buy and sell foreign exchange at their own rates. Exchange transactions take place at the market rate. Foreign exchange dealers are permitted to buy and sell banknotes and traveler’s checks at the market rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlThe responsibility for the management of foreign exchange rests with the Ministry of Economy and Finance and the NBC. The NBC is authorized to license commercial banks and other agents to engage in foreign exchange transactions and to regulate current and capital transactions. In practice, no restrictions apply.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeThe import or export of raw gold is subject to prior declaration to the NBC if the value of each transaction equals or exceeds $10,000.
Controls on exports and imports of banknotes
On exportsThe export of means of payment equaling or exceeding $10,000 in foreign exchange or its equivalent in domestic currency by a traveler must be declared to customs officers at border crossings of the Kingdom of Cambodia.
Domestic currencyYes.
Foreign currencyExports are subject to prior notification to the NBC.
On importsThe same regulations apply as for exports.
Domestic currencyYes.
Foreign currencyThere are no limits, but imports must be declared on entry.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyThere are no limits on the balances of these accounts, the funds may be used to settle domestic obligations, and all transactions may be settled in foreign currency.
Held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedRegulations applied to residents also apply to nonresidents.
Domestic currency accountsNo.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsLoans and borrowings, including trade credits, may be freely contracted between residents and nonresidents, provided that the loan disbursements and the repayments thereof are made through authorized intermediaries.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAuthorized intermediaries may be required by the NBC to submit proof of payment of imports by banker’s order in support of their applications to purchase foreign exchange, and later may also be required to provide various documentary evidence confirming the entry of goods into the country. When the collection is made, the proceeds from exports of goods or services are credited to the exporter’s account with the domiciled bank in accordance with the existing law.
Preshipment inspectionPreshipment import inspection is required for most goods.
Import licenses and other nontariff measures
Negative listImports of certain products are subject to control or are prohibited for reasons of national security, health, environmental well-being, or public morality.
Import taxes and/or tariffsImport duties are levied, and an excise tax of 10% applies to selected imports.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters or importers of goods and services must make payments for their commercial transactions with the rest of the world through authorized intermediaries. When the collection is made, proceeds from exports of goods or services must be credited to the exporter’s account with a domiciled bank.
Surrender requirementsYes.
Financing requirementsLoans and borrowings, including trade credits, may be freely contracted between residents and nonresidents, provided that the loan disbursements and the repayments thereof are made through authorized intermediaries.
Documentation requirements
DomiciliationThe proceeds from exports of goods or services must be credited to the exporter’s account with a domiciled bank in accordance with the existing law.
Export licenses
Without quotasExports of a limited list of goods by both state-owned and private sector entities must be licensed by the Ministry of Commerce. Export licenses are required for sawed timber, logs, and rice.
With quotasExports of rice, gems, and sawed timber are subject to a quota. Exports of antiques are restricted.
Export taxesAn excise tax of 10% of the estimated market value applies to exports of timber and other selected exports.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles related to trade are not restricted, but are regulated by the Investment Law.
Payments for travel
Quantitative limitsAn exchange allowance of $10,000 a person is granted at the official rate for all types of travel, irrespective of the length of stay; amounts in excess of this limit must be approved by the NBC. In practice, however, there are no limits.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsThe requirement applies only to state-owned enterprises.
Surrender requirementsOnly proceeds from invisibles earned by state-owned enterprises must be surrendered.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instrumentsThere are controls on all capital and money market securities. There are no specific laws on capital market securities, and there is no issue of securities in national currency. Such operations must be undertaken solely through banks permanently established in the Kingdom of Cambodia, considered as authorized intermediaries. In the event of a foreign exchange crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, particularly on capital and money market securities.
Controls on derivatives and other instrumentsThere are no derivatives in national currency.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operationsThere are controls on all credit operations. Loans and borrowing, including trade credits, may be freely contracted between residents and nonresidents, provided that the loan disbursements and the repayments thereof are made through authorized intermediaries.
Controls on direct investment
Outward direct investmentThe requirement of government approval is not enforced.
Inward direct investmentForeign investors are required to obtain approval from the Council for Development of Cambodia, but there are no foreign exchange restrictions.
Controls on liquidation of direct investmentProceeds from the liquidation of foreign direct investment taking place in accordance with the provisions of the investment law of the Kingdom of Cambodia may be transferred freely. However, such transfers have to be made through authorized intermediaries, which must report to the NBC all amounts equal to or exceeding $100,000.
Controls on real estate transactions
Purchase locally by nonresidentsNonresidents may not own land in Cambodia.
Controls on personal capital movements
LoansLoans and borrowings, including trade credits, may be freely contracted between residents and nonresidents, provided that the loan disbursements and the repayments thereof are made through authorized intermediaries.
Gifts, endowments, inheritances, and legaciesYes.
Transfer of assetsSuch operations must take place through authorized intermediaries.
Provisions specific to commercial banks and other credit institutionsAuthorized intermediaries must provide the NBC with periodic statements of transfers or settlements and of outflows and inflows of capital carried out between the Kingdom of Cambodia and the rest of the world. Any export of foreign currency banknotes by authorized intermediaries is subject to prior declaration to the NBC. Loans and borrowing, including trade credits, may be freely contracted between residents and nonresidents, provided that the loan disbursements and repayments thereof are made through authorized intermediaries. However, in the event of foreign exchange crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, particularly on certain transactions specified in the law, their foreign exchange position, or any loans in domestic currency extended to nonresidents.
Lending to nonresidents (financial or commercial credits)Banks may lend to nonresidents doing business within Cambodia.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Credit controlsThere are global and individual limits.
Investment regulationsYes.
Open foreign exchange position limitsBanks are not allowed to exceed their short or long position in any single foreign currency by more than 5% and in all foreign currencies by more than 15% of the bank’s net worth. Residents and nonresidents are not treated differently.
Provisions specific to institutional investorsThere are no institutional investors in Cambodia.
Other controls imposed by securities lawsThere are no securities laws.
Changes During 1998
No significant changes occurred in the exchange and trade system.

Cameroon

(Position as of January 31, 1999)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Cameroon is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the French franc at the fixed rate of CFAF 100 per €0.1524. Exchange transactions in euros between the BEAC and commercial banks take place at the same rate. Buying and selling rates for certain other foreign currencies are also officially posted, with quotations based on the fixed rate for the euro and the rates in the Paris exchange market for the currencies concerned. The commission levied by commercial banks is freely set by each bank. However, such commission does not apply to government operations, transfers in settlement of imports covered by an import declaration domiciled with a bank, scheduled repayments of loans properly obtained, and travel allowance or representation expenses paid for official missions.
Exchange taxn.r.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause Cameroon is an Operations Account country, settlements with France, Monaco, and the Operations Account countries are made in CFA francs, euros, or the currency of any other Operations Account country. Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries or in euros through foreign accounts in French francs.
Payment arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Clearing agreementsThere are clearing arrangements in the context of the CEEAC.
Barter agreements and open accountsn.r.
Administration of controlExchange control is administered by the Directorate of Economic Controls and External Finance of the Ministry of Economy and Finance (MEF). Exchange transactions relating to all countries must be effected through authorized intermediaries (i.e., the Postal Administration and authorized banks). Effective September 16, 1998, exchange bureaus are also authorized to effect foreign exchange transactions.
International security restrictionsThere are no such restrictions under the legislation in force. However, in practice, decisions are taken in accordance with the resolutions of the international community (IMF, UN, etc.).
Payment arrearsn.a.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are free to hold, acquire, and dispose of gold jewelry in Cameroon. Approval of the Ministry of Mines, Water, and Energy (MMWE) is required to hold gold in any other form. Such approval is normally given only to industrial users, including jewelers. Newly mined gold must be declared to the MMWE, which authorizes either its exportation or its sale to domestic industrial users. Exports are made only to France.
Controls on external tradeImports and exports of gold require prior authorization of the MMWE and the MEF, although such authorization is seldom granted for imports. Exempt from this requirement are (1) imports and exports by or on behalf of the monetary authorities, and (2) imports and exports of manufactured articles containing a small quantity of gold (such as gold-filled or gold-plated articles). Both licensed and exempt imports of gold are subject to customs declaration.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of all coins and banknotes are subject to a prior declaration.
Foreign currencyAll resident travelers, regardless of destination, must declare in writing all means of payment at their disposal at the time of departure. The reexportation of foreign banknotes is allowed up to the equivalent of CFAF 250,000; reexportation above this ceiling requires documentation showing either the importation of foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of deposits lodged in local banks.
On imports
Domestic currencyResident travelers are authorized to import into Cameroon a maximum of CFAF 300,000 to cover their initial expenses upon their return to Cameroon.
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedEffective August 26, 1998, residents were permitted to open foreign currency accounts at commercial banks.
Held domesticallyThe opening of foreign exchange accounts exclusively for use by enterprises in the strategic sector (petroleum), which are also allowed to maintain their accounts in a foreign currency, is subject to the prior authorization of the MEF.
Held abroadThe opening and maintenance of accounts abroad are forbidden.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedOnly accounts of CFA francs convertible into foreign currency are permitted.
Domestic currency accountsThe regulations pertaining to nonresident accounts are based on those applied in France. Since the BEAC has suspended the repurchase of BEAC banknotes circulating outside its zone of issue, BEAC banknotes received by the foreign correspondents of authorized banks and mailed to the BEAC agency in Yaoundé (capital of Cameroon) may not be credited to foreign accounts in CFA francs.



Nonresidents are allowed to maintain bank accounts in euros. These accounts, held mainly by diplomatic missions, international institutions, and their nonresident employees, may be credited only with (1) proceeds of spot or forward sales of foreign currencies transferred from abroad by account owners; (2) transfers from other nonresident euro accounts; and (3) payments by residents in accordance with exchange regulations. These accounts may be debited only for (1) purchases of foreign currencies; (2) transfers to other nonresident euro accounts; and (3) payments to residents in accordance with exchange regulations. Nonresidents may not maintain accounts in CFA francs abroad or accounts in foreign currency in Cameroon.
Convertible into foreign currencySuch accounts may be credited and debited only in foreign currency.
Approval requiredPrior authorization of the MEF is required.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsImport payments are made in accordance with the terms of the underlying contracts. However, advance payments (i.e., before the actual delivery of goods) are authorized up to 50% of the value of imports.
Minimum financing requirementsThere are no restrictions on import financing. The amounts to be transferred must correspond to those contained in the pertinent import declaration.
Advance payment requirementsUp to 50% of prefinancing is authorized; the balance is authorized only upon presentation of the pertinent trade documents.
Advance import depositsAdvance import deposits are permitted if stipulated by underlying contracts.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions for domestic consumption and valued at more than CFAF 2 million must be domiciled with a licensed bank. Transactions involving goods in transit must be domiciled with a bank in the country of final destination.
Preshipment inspectionAll imports are subject to inspection by the Société générale de surveillance (SGS).
Letters of creditLCs are allowed but are optional.
Import licenses and other nontariff measuresImport licenses are almost totally abolished. Importers of more than CFAF 2 million are required to fill out an import declaration with the SGS. The importing of certain products, which are included on a list established each year by the Ministry of Industrial and Commercial Development (MINDIC), remains subject to licensing.
Positive listA list of products still subject to authorization is published annually by the MINDIC in the Programme général des échanges.
Negative listCertain imports are prohibited for ecological, health, or safety reasons.
Open general licensesSuch licenses are available especially for long-term supply contracts.
Licenses with quotasQuotas are applicable to imports by container.
Import taxes and/or tariffsImport tariffs range from 5% to 30%. Duties on products from members of the UDEAC were eliminated in January 1998. Import surcharges apply only to imports from countries outside the UDEAC.
Taxes collected through the exchange systemSurcharges apply only to imports from countries outside the UDEAC and to imports of maize meal and cement.
State import monopolyThere is a state import monopoly only for imports relating to sovereign expenditure (such as defense and security). In addition, the national oil refinery (SONARA) has the monopoly on the supply of refined petroleum products. The extent of its monopoly was reduced to 80% on June 30, 1998.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to all countries must be repatriated within 30 days of the payment date stipulated in the sales contract. Oil companies are exempt from the repatriation requirement. However, waivers may be granted by the President of the Republic to companies of a strategic nature that represent the national interests.
Surrender requirementsExport proceeds must be surrendered within the eight-day period following repatriation.
Financing requirementsNo.
Documentation requirementsFor exports of fresh food products (vegetables, fruits), a health certificate is required before shipment.
DomiciliationExports to all countries are subject to domiciliation requirements for the appropriate documents. Export transactions valued at CFAF 2 million or more must be domiciled with an authorized bank.
Preshipment inspectionExports to all countries are subject to inspection by the SGS.
Export licensesLicenses are required for all exports valued at the equivalent of at least CFAF 2 million. Export licenses are issued by the MEF.
Without quotasYes.
Export taxesEffective January 1, 1998, the export tax levied on coffee, cocoa, cotton, rubber, sugar, palm oil, and medicinal plants was reduced to 5% from 10%; a specific tax of CFAF 4,000 a ton is levied on bananas. An export tax of 17.5% is applied to timber, and a rate of 12.5% is applied to the log equivalent of processed woods. Export taxes established in the Budget Law are collected by the Directorate of Customs.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments in excess of CFAF 2 million for invisibles to France, Monaco, and the Operations Account countries require prior declaration and are subject to presentation of relevant invoices. Payments for invisibles related to trade follow the same regime as basic trade transactions, as do transfers of income accruing to nonresidents in the form of profits, dividends, and royalties.
Trade-related paymentsWith the exception of insurance expenses, agents may obtain authorization for the payment of all other trade-related expenses.
Prior approvalThe payment of such expenses is authorized upon presentation of invoices and related documents when the latter are not taken into account in the basic commercial contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Investment-related paymentsDistributed profits, dividends, and other interest paid by residents to nonresidents may be transferred.
Prior approvalYes.
Quantitative limitsTransfers are authorized on the basis of conventions, contracts, minutes of annual meetings (as regards profits and dividends), and loan repayment schedules (as regards interest).
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalAuthorization is required for any acquisition of foreign currency by residents traveling to countries other than member countries of the franc zone.
Quantitative limitsResidents traveling for tourism or business purposes to countries other than France, Monaco, and the Operations Account countries may be granted foreign exchange allowances subject to the following regulations: (1) for tourist travel, CFAF 100,000 a day, up to CFAF 5 million a trip; (2) for business travel, CFAF 250,000 a day, up to CFAF 10 million a trip; and (3) allowances in excess of these limits are subject to the authorization of the MEF or, by delegation, the BEAC. Returning resident travelers are required to declare all means of payment in their possession upon arrival at customs and to surrender them within eight days. In July 1998, the limit on foreign exchange allowances for travelers was increased to $10,000 from $1,000 a person a trip. The number of trips allowed is no longer limited.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Indicative limits/bona fide testYes.
Foreign workers’ wagesForeigners working in Cameroon are authorized to transfer up to 50% of their remuneration upon presentation of their pay slip and their most recent statement of income.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testLimits are determined on the basis of supporting documents provided.
Credit card use abroad
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testLimits are determined on the basis of supporting documents provided.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAll receipts from services and all income earned abroad must be collected within one month of the due date.
Surrender requirementsForeign currency receipts must be surrendered within one month of collection. Returning resident travelers are required to declare all means of payment in their possession upon arrival at customs and to surrender them within the following eight-day period.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsCapital transactions between Cameroon and France, Monaco, and the Operations Account countries are free of exchange control. Outward capital transfers to all other countries require exchange control approval and are restricted. Inward capital transfers are free of controls, except for foreign direct investments and borrowing, which are subject to registration and authorization.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsTransactions are permitted, provided declaration is made to the MEF.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThe issuing, advertising, or offering for sale of foreign securities in Cameroon requires prior authorization of the MEF and must subsequently be reported to it. Exempt from authorization, however, and subject only to a report after the fact, are operations in connection with shares similar to securities, when their issuing, advertising, or offering for sale in Cameroon has already been authorized. All foreign securities and titles embodying claims on nonresidents must be deposited with an authorized intermediary and are classified as foreign, whether they belong to residents or nonresidents.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesThe same regulations apply as for shares or other securities of a participating nature.
On money market instrumentsTransactions in money market instruments require authorization from the MEF.
On collective investment securities
Purchase locally by nonresidentsPrior authorization of the MEF is required.
Sale or issue locally by nonresidentsPrior declaration to the MEF is required.
Purchase abroad by residentsPrior authorization of the MEF is required.
Sale or issue abroad by residentsPrior declaration to the MEF is required.
Controls on derivatives and other instrumentsn.a.
Controls on credit operations
Commercial credits
By residents to nonresidentsLending abroad by natural and juridical persons, whether public or private, whose normal residence or registered office is in Cameroon, or by branches or subsidiaries in Cameroon of juridical persons whose registered office is abroad, requires prior authorization of the MEF and must subsequently be reported to it. The following are, however, exempt from prior authorization and require only a report: (1) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (2) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between Cameroon and countries abroad or between foreign countries, in which these persons or firms take part; and (3) loans of up to CFAF 500,000, provided the maturity does not exceed two years and the rate of interest does not exceed 6% a year.
To residents from nonresidentsBorrowing abroad by natural and juridical persons, whether public or private, whose normal residence or registered office is in Cameroon, or by branches or subsidiaries in Cameroon of juridical persons whose registered office is abroad, requires prior authorization of the MEF and must subsequently be reported to it. The following are, however, exempt from this authorization and require only a report: (1) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between Cameroon and countries abroad or between foreign countries, in which these persons or firms take part; (2) loans contracted by registered banks and credit institutions; and (3) loans backed by a guarantee from the government.
Financial credits
By residents to nonresidentsThe authorization of the MEF is required.
To residents from nonresidentsPrior declaration is required.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentDirect investments abroad (including those made through foreign companies that are directly or indirectly controlled by persons in Cameroon and those made by branches or subsidiaries abroad of companies in Cameroon) require prior approval of the MEF, unless they take the form of a capital increase resulting from the reinvestment of undistributed profits or do not exceed 20% of the fair market value of the company being purchased.
Inward direct investmentForeign direct investments in Cameroon (including those made by companies in Cameroon that are directly or indirectly under foreign control and those made by branches or subsidiaries of foreign companies in Cameroon) require prior declaration to the MEF, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the MEF has a period of two months from receipt of the declaration during which it may request postponement.
Controls on liquidation of direct investmentThe full or partial liquidation of direct investments in Cameroon requires only a report to the MEF, unless the operation involves the relinquishing of a participation that had previously been approved as constituting a direct investment in Cameroon.
Controls on real estate transactions
Purchase abroad by residentsPrior authorization of the MEF is required.
Purchase locally by nonresidentsPrior declaration to the MEF is required.
Sale locally by nonresidentsPrior declaration to the MEF is required.
Controls on personal capital movements
LoansLoans, except for those representing an authorized investment, those relating to the provision of services or to the financing of commercial transactions, and those for amounts not exceeding CFAF 500,000, are subject to the prior authorization of the MEF.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legaciesThe authorization of the MEF is required for transfers related to these operations.
Settlement of debts abroad by immigrantsPrior authorization of the MEF is required.
Provisions specific to commercial banks and other credit institutions
Maintenance of accounts abroadCorrespondent accounts are permitted.
Lending to nonresidents (financial or commercial credits)Yes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts held by nonresidentsOnly deposits in convertible CFA francs are permitted for nonresidents.
Open foreign exchange position limitsYes.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadYes.
Other controls imposed by securities lawsn.a.
Changes During 1998
Arrangements for payments and receiptsSeptember 16. Exchange bureaus were authorized to effect foreign exchange transactions.
Resident accountsAugust 26. Residents were permitted to open foreign currency accounts at commercial banks.
Imports and import paymentsJanuary 1. Duties on products from members of the UDEAC were eliminated.



June 30. The monopoly of SONARA on the supply to the market of refined petroleum products was reduced to 80%.
Exports and export proceedsJanuary 1. The export tax on coffee, cocoa, cotton, rubber, sugar, palm oil, and medicinal plants was reduced to 5%.
Payments for invisible transactions and current transfersJuly 31. The limit on foreign exchange allowances for travelers was increased to $10,000 a person a trip. The number of trips allowed is no longer limited.
Changes During 1999
Exchange arrangementJanuary 1. The CFA peg to the French franc was replaced with a peg to the euro.

Canada

(Position as of December 31, 1998)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: March 25, 1952.
Exchange Arrangement
CurrencyThe currency of Canada is the Canadian dollar.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the Canadian dollar is determined on the basis of supply and demand; however, the authorities intervene from time to time to promote orderly conditions in the market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange rates are freely determined in the exchange market.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlThere are no exchange controls. The licensing of imports and exports, when required, is handled mostly by the Department of Foreign Affairs and International Trade, but other departments also issue licenses in specialized fields.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)Canada maintains certain restrictions on the making of payments and transfers for current international transactions in respect of the Federal Republic of Yugoslavia (Serbia/Montenegro).
In accordance with UN sanctionsIn accordance with UN Security Council resolutions, Canada imposes restrictions on financial transactions with Bosnia and Herzegovina.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeReexports of gold of U.S. origin to all countries except the United States require a permit. Commercial imports of articles containing minor quantities of gold, such as watches, are unrestricted and free of license.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permitted
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsCertain assets connected to Iraq, Libya, and the Federal Republic of Yugoslavia (Serbia/Montenegro) are frozen, pursuant to resolutions of the UN Security Council.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresMeasures consistent with international trade obligations (e.g., antidumping, countervailing duties, and safeguard provisions) are maintained. Under the terms of the Canada-Chile Free Trade Agreement, the two countries agreed to mutual exemption from antidumping measures for each other’s goods when the applicable tariff has been eliminated in both countries or after six years, whichever is earlier.
Negative listImport permits are required for the importation of certain agricultural products, certain textile products and clothing, certain endangered species of fauna and flora, natural gas, material and equipment for the production or use of atomic energy, certain military armaments, and certain internationally controlled drugs. In addition, Health Canada does not permit the importation of drugs not registered with it. Commercial imports of used motor vehicles (less than 15 years old) have been generally prohibited, except from the United States. The prohibition on imports of used vehicles from Mexico will be phased out by January 1, 2019.
Open general licensesYes.
Licenses with quotasImports of some clothing and certain textile products, usually in the form of bilateral restraint agreements concluded under the MFA negotiated within the framework of the GATT, are also subject to quantitative restrictions. In accordance with the provisions of the Uruguay Round Agreement on textiles and clothing, Canada’s system of import controls on textiles and clothing is being liberalized in stages over a 10-year period beginning January 1, 1995. As a result of the commitments made under the Uruguay Round Agreement, Canada has agreed to replace all agricultural import restrictions with tariff rate quotas and to ensure import access levels as negotiated in the Uruguay Round (or under the Canada-United States Free Trade Agreement).
Import taxes and/or tariffsNo.
State impo