Chapter

Introduction

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 1998
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The report provides a detailed description of the exchange arrangements and exchange restrictions of individual member countries, as well as Aruba and the Netherlands Antilles, for which the Kingdom of the Netherlands has accepted the IMF Articles of Agreement.1 In general, the description relates to the exchange and trade systems as of the end of 1997, but in appropriate cases, reference is made to significant developments that took place in early 1998.

The description of the exchange and trade system is not necessarily confined to those aspects involving exchange restrictions or exchange controls. As in previous reports, questions of definition and jurisdiction have not been raised, and an attempt has been made to describe exchange and trade systems in their entirety, except for the tariff structure and, in most cases, direct taxes on imports and exports.

Following a standardized approach, the description of each system is broken down into similar headings, and the coverage for each country includes a final section that lists chronologically the more significant changes during 1997 and early 1998.

The report is presented in a tabular format that enhances transparency and the uniformity of treatment of the information among countries and includes the coverage on the regulatory framework for capital movements. The information is drawn from a new exchange arrangements and exchange restrictions database established by the IMF. The following country tables present an abstract of the relevant information available to the IMF. The table on Summary Features of Exchange Arrangements and Regulatory Frameworks for Current and Capital Transactions in Member Countries (Appendix I) provides an overview of the characteristics of the exchange and trade systems of IMF member countries. A country table matrix (Appendix II) provides a listing of the possible entries in this database. In cases where the information in an entire section is not available at the time of publication, this is noted by “n.a.” When information in a particular category within a section is not available at the time of publication, the category is not included in the table. When information is available on all but a particular item or items within a category, these are displayed with a note to that effect (i.e., n.a.).

The tabular presentation is organized as follows:

Status Under IMF Articles of Agreement indicates whether the member country has accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF’s Articles of Agreement or whether the country continues to avail itself of the transitional arrangements of Article XIV, Section 2.

Exchange Arrangement provides the description of the exchange arrangement that a member country has furnished to the IMF under Article IV, Section 2(a), including the exchange rate structure (i.e., whether there are one, two, or multiple exchange rates); the classification of the exchange arrangement on the basis of how the exchange rate is determined in the main market when there is more than one market; the existence of exchange taxes or subsidies; and the features of forward exchange markets, if any. Official coverage of forward operations refers to the case where an official entity (the central bank or the government) assumes the exchange risk of a certain foreign exchange transaction.

Arrangements for Payments and Receipts provides a description, where appropriate, of the prescription of currency requirements, the nature of payment arrangements, the administration of exchange control, international security restrictions, the nature of payments arrears, and controls on the trading of gold and domestic and foreign banknotes. Under this section, Prescription of currency requirements describes the requirements affecting the selection of the currency and the method of settlement for 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 the currency for specified categories of payments to and from the countries concerned. Administration of control gives some indication of the authorities’ responsibility for policy and the administration of exchange controls, and of the extent to which their powers are delegated for working purposes. International security restrictions identifies restrictions on payments and transfers for international transactions imposed by member countries for reasons of national or international security. IMF Executive Board Decision No. 144-(52/51) establishes the obligation of members to notify the IMF before imposing such restrictions, or, if circumstances preclude advance notification, members should notify the IMF as promptly as possible, but ordinarily no later than 30 days after imposing the restrictions.

Resident Accounts and Nonresident Accounts describe the manner in which the country treats accounts, if any, that are maintained in the national currency or in foreign currency, locally or abroad, by resident or nonresident account holders, and the facilities and limitations attached to such accounts. When there are more than one type of resident/nonresident account, the nature and operation of the various types are also described.

Imports and Import Payments describes the nature and extent of exchange and trade restrictions on imports and includes information on the existence of a foreign exchange budget (i.e., a priori allocation of a certain amount of foreign exchange, usually on an annual basis, for the importation of specific types of goods, sometimes indicating amounts for specified registered importers); on financing requirements for imports (minimum financing and advance payment requirements, and the existence of advance deposits); and on documentation requirements for the release of foreign exchange for the payment of imports, such as the obligation to domicile the transactions with a specified financial institution, a preshipment inspection aimed at establishing the veracity of the import transaction in terms of volume, quality, and price, the obligation to pay by means of a letter of credit, and the need to submit an import license to obtain the foreign exchange. Import licenses and other nontariff measures uses the following terms to describe the licensing system, if any: (1) Positive list refers to a list in which goods that can be imported are listed; (2) Negative list refers to a list in which goods whose importation is restricted are listed; (3) Open general licenses indicates arrangements whereby certain imports or other international transactions are exempt from the restrictive application of licensing requirements; (4) Licenses with quotas refers 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; and (5) Other nontariff measures may include the prohibition to import a certain good or all goods from a certain country. Also, this section provides a brief description of the import tax/tariff system, specifying whether these revenues are collected through the exchange system, and providing information on whether state monopolies for the importation of certain goods exist.

Exports and Export Proceeds identifies restrictions on the use of export proceeds, as well as regulations on exports, such as financing and documentation requirements (including letters of credit, the provision of guarantees, domiciliation, preshipment inspection, licensing requirements, and taxes levied—in particular through the exchange system—on exports). Repatriation requirements refers to the obligation of exporters to bring into the country export proceeds either by selling them in the foreign exchange market or depositing them in authorized accounts. Surrender requirements refers to regulations requiring the recipient of export proceeds to sell any foreign exchange proceeds in return for local currency, sometimes at a specified exchange rate, to the central bank, commercial banks, or exchange dealers authorized for this purpose.

Payments for Invisible Transactions and Current Transfers describes 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 when regulations differ for the various categories. Indicative limits establishes 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.

Proceeds from Invisible Transactions and Current Transfers gives 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. The concepts of repatriation and surrender requirements are similar to those applied to export proceeds. Restrictions on use of funds refers 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.

Under capital transactions, Capital and money market instruments refers to the public offering or private placement on a primary market or listing on a secondary market. Capital market securities refers to shares and other securities of a participating nature, and bonds and other securities with an original maturity of over one year. Money market instruments refers to securities with an original maturity of one year or less and includes short-term instruments, such as treasury bills, certificates of deposit, and bills of exchange.

Collective investment securities includes 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.

Derivatives and other instruments refers 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).

Credit operations is subdivided into commercial credits covering operations directly linked with international trade transactions or with the rendering of international services; financial credits, which are credits other than commercial credits; guarantees and sureties, including securities pledged for payment or performance of a contract, such as warrants or avals, performance bonds, and stand-by letters of credit; and financial backup facilities, which covers credit facilities used as a guarantee for independent financial operations.

Direct investment refers to investment for the purpose of establishing lasting economic relations, essentially for the purpose of producing goods and services, and, in particular, investments that allow investor participation in their management. 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. Liquidation of direct investment refers to the transfer of principal, including the initial capital and capital gains, of a direct investment as defined above.

Real estate transactions refers to the acquisition of real estate not associated with direct investment. It would include, for example, investments of a purely financial nature in real estate or the acquisition of real estate for personal use.

Personal capital movements covers 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 institutions describes regulations that are specific to these institutions, such as monetary and prudential controls, including reserve requirements; liquid asset requirements; interest rate regulations; credit controls; investment regulations; and open foreign exchange position limits. Provisions specific to institutional investors describes controls specific to institutions, such as insurance companies and pension funds, and may include, for example, controls on the proportion of the institutions’ portfolios that may be held in local or foreign assets. Other controls imposed by securities laws refers 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 income 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
Independent 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.
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 payments agreements are made in bilateral accounting dollars in accordance with the procedures set forth in these agreements. Exchange rates for trade under bilateral payments 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 payments agreements with Bulgaria, China, the Czech Republic, Hungary, Russia, and the Slovak Republic. Some of these have been inactive for several years, and others are being phased out.
OperativeYes.
InoperativeYes.
Regional arrangementsn.a.
Clearing agreementsn.a.
Barter agreements and open accountsn.a.
Administration of control
Exchange control authoritiesForeign exchange transactions are controlled by the government through the DAB. No restrictions apply to transactions in the free exchange market.
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.
Foreign currencyn.a.
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
n.a.
Nonresident Accounts
n.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.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsn.a.
Preshipment inspectionn.a.
Letters of creditPayments for imports through the banking system to countries with which the Islamic State of Afghanistan has payments 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 used as exchange licensesn.a.
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.
Open general licensesn.a.
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.
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.
With quotasn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsForeign exchange for most private purposes may be acquired in the money bazaar. There are no controls on interest payments and transfers of profits and dividends. Information on all other payments or transfers, except for those listed below, was not available at time of publication.
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.
Indicative limits/bona fide testn.a.
Medical costsFor medical treatment, the central bank levies a commission of Af 0.75 per $1.
Prior approvalYes.
Quantitative limitsNormally, the DAB grants $2,500 for medical treatment.
Indicative limits/bona fide testn.a.
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.
Prior approvaln.a.
Quantitative limitsYes.
Indicative limits/bona fide testn.a.
Proceeds from Invisible Transactions and Current Transfers
n.a.
Capital Transactions
Controls on direct investment
Outward direct investmentn.a.
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 shall require no further license in order to operate in the Islamic State of Afghanistan. The Foreign and Domestic Private Investment Law No. 1353 (1974) 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 of 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.
Changes During 1995–1997
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, 1997)

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
Independent 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 U.S. 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 Bulgaria, Cuba, the Czech Republic, Germany, Hungary, the Democratic People’s Republic of Korea, Poland, Romania, and Vietnam. Albania also maintains bilateral payment agreements in convertible currencies with Algeria, Bulgaria, China, Cuba, the Czech Republic, Egypt, Greece, the Democratic People’s Republic of Korea, Romania, Russia, the Slovak Republic, Turkey, Vietnam, and the Federal Republic of Yugoslavia (Serbia/Montenegro).
Administration of control
Exchange control authoritiesThe BOA is vested with the powers to administer exchange controls. The BOA may (1) authorize foreign exchange operations and allow securities banks to conduct foreign exchange operations; (2) define the limits of their activities; and (3) supervise foreign exchange operations to prevent any participant from dominating the market. It monitors licensed banks and foreign exchange bureaus and dealers to ensure that their operations comply with foreign exchange regulations. 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.
Controls on trade in gold (coins and/or bullion)No.
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 brought into 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 up to $15,000 or its equivalent in any other currency.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
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 should be used for the payment of imports equal to or in excess of $200,000 or its equivalent.
Import licenses used as exchange licensesLicenses are required for payments of imports equal to or larger than $5,000.
Import licenses and other nontariff measuresNo.
Import taxes and/or tariffsThere are five tariff rates: zero, 5%, 10%, 20%, and 30% that are applied to the c.i.f. value.
Taxes collected through the exchange systemNo.
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.
Surrender requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesThere are export bans on unprocessed wood and scrap metal.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsThere are no controls on these payments, but supporting documents for transactions exceeding $5,000 are required.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
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
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsPurchases are subject to the prior approval of the BOA.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesSame regulations apply as for shares or other securities of a participating nature.
On money market instrumentsSame regulations apply as for shares or other securities of a participating nature.
On collective investment securitiesSame regulations apply as for shares or other securities of a participating nature.
Controls on derivatives and other instrumentsTransactions in these instruments are subject to the control of the Albanian Securities Commission.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial creditsCommercial banks may not, without prior approval of the BOA, extend credit to nonresidents, except banks and other financial institutions.
By residents to nonresidentsYes.
Financial creditsSame regulations apply as for commercial credits.
By residents to nonresidentsYes.
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 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
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits) Investment regulationsCommercial banks may not, without prior approval of the BOA, extend credit to nonresidents, except to banks and other financial institutions.
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.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Algeria

(Position as of December 31, 1997)

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 floatingThe 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.
Official cover of forward operationsNo.
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 can 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 control
Exchange control authoritiesThe 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 can 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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
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. Outward transfers require individual approval from the BOA.
Convertible into foreign currencyYes.
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 requirementExcept 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 paymentsAll trade-related payments for approved trade transactions are free. Payments relating subscription and membership fees, consulting and legal fees, and transfers for pension require prior approval from the BOA and are subject to indicative limits and/or bona fide tests.
Profit/dividends
Prior approvalProfit remittances are permitted, provided tax obligations have been met.
Amortization of loans or depreciation of direct investmentsn.a.
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 limit is DA 15,000.
Indicative limits/bona fide testYes.
Medical costs
Prior approvalYes.
Quantitative limitsThe limits are DA 15,900 for adults and DA 7,600 for children under 15 years old.
Indicative limits/bona fide testYes.
Study abroad costs
Prior approvalYes.
Quantitative limitsThe limit is DA 7,500.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Quantitative limitsResidents 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.
Gambling/prize earningsn.a.
Family maintenance/alimony
Prior approvalThe BOA must authorize the granting of foreign exchange.
Quantitative limitsLimits are set on a case-by-case basis.
Indicative limits/bona fide testn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsFifty percent of the 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 locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Bonds or other debt securitiesn.a.
On money market instruments
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
On collective investment securities
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Controls on derivatives and other instruments
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsn.a.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsn.a.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsn.a.
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.
Purchase locally by nonresidentsn.a.
Sale locally by nonresidentsn.a.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBanks and financial institutions can borrow from abroad for their own needs or for those of their clients.
Lending to nonresidents (financial or commercial credits)n.a.
Lending locally in foreign exchangeBanks and financial institutions may also on-lend foreign funds borrowed abroad.
Purchase of locally issued securities denominated in foreign exchangen.a.
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 cover: (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.
Changes During 1997
Status under IMF Articles of AgreementSeptember 15. Algeria accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Agreement.

Angola

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Angola is the Angolan readjusted kwanza.
Exchange rate structureUnitary.
Classification
PeggedBeginning July 1, 1996, the authorities pegged the official exchange rate to the dollar and mandated that all transactions take place at the official exchange rate. Exchange houses were no longer allowed to deal at market-determined rates but instead were obliged to deal at rates set for commercial banks. The official exchange rate remained constant until July 21, 1997, when a new fixed rate of KZR 265,000 per dollar was established. 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 6.1% to their buying and selling rates (secondary official). An illegal parallel rate also exists as a result, and the premium as of end-1997 was 30%–35%.
Exchange taxNo.
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 settlement arrangements, which do not contain bilateral payment features, are maintained with Brazil, Portugal, and Spain.
Administration of control
Exchange control authoritiesThe 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 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 foreign exchange transactions.
International security restrictionsNo.
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 must present such documents when the amount exceeds $10,000. When departing Angola, nonresidents visiting the country for purposes of tourism or business are permitted, upon presentation of the corresponding sales vouchers, to repurchase up to 50% of the foreign exchange they sold to institutions accredited to deal in foreign exchange.
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 exceeding the equivalent of $10,000 must be declared upon arrival.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 abroadn.a.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedPrior approval is required to open these accounts; they may be credited with foreign exchange transferred from abroad or the deposit of proceeds from the account holder’s activities in Angola and 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 former residents, but the funds in such accounts may only be withdrawn to cover expenses incurred during their stay in Angola.
Convertible into foreign currencyNo.
Approval requiredn.a.
Imports and Import Payments
Foreign exchange budgetYes.
Financing requirements for imports
Minimum financing requirementsn.a.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsn.a.
Preshipment inspectionYes.
Letters of creditYes.
Import licenses and other nontariff measures
Positive listAll imports are subject to licensing according to a positive list and the foreign exchange budget. The issuance of import licenses for transactions paid with foreign exchange purchased from the banking system is subject to the availability of foreign exchange. The corresponding positive list assigns priority to particular transactions, which are periodically announced by the BNA. Import licenses are also required for statistical purposes even if, exceptionally, 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 90 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.
Import taxes and/or tariffsYes.
Taxes collected through the exchange systemNo.
State import monopolyThere is a state import monopoly on petroleum.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsExcept for foreign oil 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 to retain a certain proportion 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.
Documentation requirements
Letters of creditn.a.
Guaranteesn.a.
Domiciliationn.a.
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, ethnological collections, ships, ostrich products, cattle, and ivory products 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. Restrictions apply to the export of products that are in short domestic supply.
Export taxesYes.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsAll payments require prior approval. Information on indicative limits or the application of bona fide test is not available.
Freight/insuranceService contracts with nonresidents are subject to licensing. Preferential treatment given to domestic air and sea transportation companies, and imports not insured domestically are approved only in exceptional cases.
Profit/dividends
Quantitative limitsForeign investors may remit dividends provided the investment in the resident company exceeds $250,000. In this case, an authorization from the Ministry of Finance (MOF) is required only as a formality.
Amortization of loans or depreciation of direct investmentsn.a.
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 16 years, up to $500 a person a trip to neighboring countries and up to $1,000 a trip to other countries; and (2) individuals over 16 years, up to $1,500 a person a trip to neighboring countries and up to $3,000 a trip to other countries. 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.
Medical costs
Prior approvalForeign exchange is provided through the National Health Board on a case-by-case basis at the official rate.
Quantitative limitsThe limit is $5,000.
Study abroad costs
Quantitative limitsEducation travel expenses 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.
Family maintenance/alimony
Quantitative limitsUp 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.
Credit card use abroadn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsService earnings must be surrendered to the BNA or to the commercial banks within 30 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 (1994) as well as the provisions of foreign exchange legislation and regulations. Implementation is the responsibility of the Foreign Investment Bureau under the Ministry of Planning and Economic Coordination. 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 natureYes.
Bonds or other debt securitiesn.a.
On money market instrumentsYes.
On collective investment securities
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
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 operations
Commercial creditsResident foreign companies must obtain prior authorization from the MOF and, above certain limits, from the BNA to borrow abroad.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial creditsYes.
Guarantees, sureties, and financial backup facilitiesn.a.
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 (education, health, utilities, communications, and transportation infrastructure). Direct investments in the oil 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.
Sale locally by nonresidentsn.a.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadn.a.
Maintenance of accounts abroadn.a.
Lending to nonresidents (financial or commercial credits)n.a.
Lending locally in foreign exchangen.a.
Purchase of locally issued securities denominated in foreign exchangen.a.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsReserve requirements are on local currency deposits only.
Differential treatment of deposit accounts held by nonresidentsn.a.
Open foreign exchange position limitsn.a.
Changes During 1997
Exchange arrangementJuly 1. A new fixed official exchange rate of KZR 265,000 per dollar was introduced.

Antigua and Barbuda

(Position as of December 31, 1997)

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
PeggedThe 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.
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 control
Exchange control authoritiesThe Ministry of Finance (MOF) applies exchange control to all currencies.
International security restrictionsNo.
Payment arrearsYes.
Officialn.a.
Privaten.a.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Foreign currencyn.a.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 domesticallyCommercial banks are required to report external accounts operations to the MOF on a monthly basis.
Held abroadn.a.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedExternal accounts may be maintained in any currency and can 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.
Imports and Import Payments
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence.
Domiciliation requirementsn.a.
Preshipment inspectionn.a.
Letters of creditn.a.
Import licenses used as exchange licensesn.a.
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 in June 1981. Payments for authorized imports are permitted upon application and submission of documentary evidence.
Positive listn.a.
Negative listn.a.
Open general licensesMost goods may be freely imported under open general licenses granted by the MOF and the Ministries of Industry and Commerce.
Licenses with quotasn.a.
Other nontariff measuresn.a.
Import taxes and/or tariffsAntigua and Barbuda applies the CARICOM’s CET. Tariff rates range from zero to 25% for nearly all items. Tariff rates on a number of items, including milk and poultry, are zero. 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.
Taxes collected through the exchange systemn.a.
Exports and Export Proceeds
Export licensesNo.
Export taxesReexports are not subject to any tax if transactions take place within the bonded area.
Taxes collected through the exchange systemn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsQuantitative limits for payments for interest, travel, medical costs, and studies abroad are EC$100,000. Legislation to raise the threshold to EC$250,000 is pending.
Interest payments
Prior approvalYes.
Indicative limits/bona fide testYes.
Profit/dividendsProfits may be remitted in full after compliance with corporate income tax payments.
Amortization of loans or depreciation of direct investmentsn.a.
Payments for travel
Indicative limits/bona fide testYes.
Medical costs
Indicative limits/bona fide testYes.
Study abroad costs
Indicative limits/bona fide testYes.
Subscriptions and membership feesn.a.
Consulting/legal fees
Prior approvalAllowed, if provided for in the contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalAllowed, if provided for in the contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Pensionsn.a.
Gambling/prize earningsn.a.
Family maintenance/alimony
Prior approvalAllowed, if provided for in the contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Credit card use abroadn.a.
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 can be phased over time by the Financial Secretary.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAn alien land-holding 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
Borrowing abroadn.a.
Maintenance of accounts abroadn.a.
Lending to nonresidents (financial or commercial credits)MOF approval is required. Loans are subject to a 3% stamp duty.
Lending locally in foreign exchangen.a.
Purchase of locally issued securities denominated in foreign exchangen.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Argentina

(Position as of December 31, 1997)

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
PeggedThe 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.
Official cover of forward operationsNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions with countries with which there are no payments 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, 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 control
Exchange control authoritiesAll 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 sanctionsThere are restrictions on current payments with respect to Iraq, Libya, and the Federal Republic of Yugoslavia (Serbia/Montenegro).
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 good delivery 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 good delivery gold bars against foreign banknotes. Authorized institutions may export gold to entities abroad.
Controls on exports and imports of banknotesNo.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible. Authorized 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 permittedForeign 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
Eligibility to hold accountsSame regulations as for resident accounts apply.
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 measuresThere are no nontariff barriers on intra-MERCOSUR trade. However, Argentina 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 sector and to some clothing, freezers, furniture, paper, plastics, tires, and iron and steel products.
Negative listRestrictions are in force solely for security, hygiene, and public health reasons.
Licenses with quotasQuantitative restrictions are applied to the automobile sector and to some paper products.
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 will be in force until the end of 1998, at which time tariffs will be reduced to zero.



Argentina and the MERCOSUR countries apply a CET to imports from the rest of the world that encompasses all products, with certain exceptions (Argentina has 300 exceptions) that are subject to a transitional regime until 2001 and 2006. CET rates currently range up to 20%. At the end of the transitional period in 2001, the CET will be 17% for capital goods, and in 2006, the CET will be 16% for computer and telecommunications equipment.



A statistical tax of 0.5% is applied to imports from all countries, except those from MERCOSUR countries, Chile, and Bolivia. This tax is waived for capital goods, fuel, and sensitive goods from the paper, computer, and telecommunications sectors.
Taxes collected through the exchange systemNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesLicenses are required only for goods subject to quantitative restrictions.
With quotasQuantitative restrictions on exports are maintained only on arms, sensitive goods and war materials, narcotics, and protected animal species.
Export taxesA 15% 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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsNo.
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 securitiesThe same conditions as for shares or other securities of a participating nature apply.
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 investmentForeign companies are allowed to invest in Argentina without prior government approval on an equal footing with domestic firms and may enter into any area of economic activity on their own, because no law or regulation forces them to be associated with local partners. This principle applies even in cases where a foreign investment results in full foreign ownership of a domestic company. Some restrictions apply on investment in sensitive sectors, including air transport, fishing, insurance, nuclear plants, and shipyards.
Controls on liquidation of direct investmentForeign investors are entitled to freely repatriate their investment, including earnings, at any time, and also have unrestricted access to the foreign exchange market. These rights assisting foreign investors have been further established under international law by means of over 30 investment promotion and protection agreements, with the following countries: Canada, France, Germany, Italy, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Argentina is a member of the Multilateral Investment Guarantee Agency and the International Center for the Settlement of Investment Disputes, and maintains a valid and active agreement with the Overseas Private Investment Corporation.
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)In the case of credit arising from the “Communicación A 1820 (Argendólares).” extended by financial intermediaries, the funds must be used in the country.
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 security reasons, and according to Law No. 24.241 (Pension Funds Reform), no more than 10% of pension funds may be invested in securities issued by a foreign country, or in securities of foreign corporations.
Limits (min.) on portfolio invested locallyIn the event that the trust’s assets consist of the securities, 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 compositionA mismatch equivalent to 25% of the bank’s capital is permitted for the negative net overall position (assets lower than liabilities) in foreign currencies other than U.S. dollars.
The positive overall position in foreign currencies other than U.S. dollars may be financed up to the amount of liquid net worth.
Other restrictions imposed by securities lawsNo.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Armenia

(Position as of March 31, 1998)

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
Independent 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 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 Ministry of Finance (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 marketThere are no restrictions for forward cover against exchange rate risk operating in the official or the commercial banking sectors. All transactions are negotiated at the market rates.
Official cover of forward operationsYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with other states are made through correspondent accounts maintained by the central banks or any banks of those countries. Settlements may be made in any currency.
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. On October 21, 1994, Armenia 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 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 control
Exchange control authoritiesThe 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 restrictions on capital movements unless otherwise specified by the CBA (in which case, one month’s notice is required).
International security restrictions
In accordance with UN sanctionsn.a.
Payment arrearsThere are commercial arrears vis-à-vis Russia and overdue obligations to the EU.
OfficialYes.
PrivateYes.
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 currencyResidents and nonresidents are authorized to export banknotes up to $500 in cash or its equivalent without any documentation. Amounts exceeding this limit require proof of source.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyResidents may open, maintain, and use foreign currency accounts at licensed banks in Armenia. There are no limits on the amount of foreign currency banknotes that can be purchased with drams from banks or exchange bureaus, and banknotes can be deposited in a foreign exchange account or used for transactions with nonresidents. However, residents may not transfer balances in these accounts to other residents in order to make payments for goods and services.
Held abroadResident natural and juridical persons may open, maintain, and use accounts in banks abroad. Prior approval is required.
Accounts in domestic currency convertible into foreign currencyAccounts in domestic currency may be freely converted into foreign currency.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedNonresident natural and juridical persons may freely open and use foreign exchange accounts with licensed domestic banks. They are also free to make withdrawals to make current transactions. Balances in these accounts may be transferred abroad or sold to licensed domestic banks for drams.
Domestic currency accountsForeign governments and international institutions may freely open dram accounts with banks in Armenia without prior authorization from the CBA. Balances in these accounts may be used for domestic transactions and may be transferred abroad.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsn.a.
Preshipment inspectionn.a.
Letters of creditYes.
Import licenses and other nontariff measures
Positive listYes.
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.
Taxes collected through the exchange systemNo.
Exports and Export Proceeds
Repatriation requirementsThe CBA has the power, as specified by legislation, to impose repatriation requirements on export proceeds.
Surrender 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 paymentsNo.
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 investment
Controls on real estate transactionsNo.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
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.
Provisions specific to institutional investorsNo.
Other restrictions imposed by securities lawsNo.
Changes During 1997
Status under IMF Articles of AgreementMay 29. Armenia accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF.
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.

Aruba

(Position as of December 31, 1997)

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
PeggedThe florin is pegged to the U.S. 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 Netherland Antillean guilders.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of control
Exchange control authoritiesThe CBA administers foreign exchange control.
International security restrictionsNo.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts are permitted, but 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
Eligibility to hold accountsJuridical and natural persons are eligible. The opening of a nonresident account should be reported in writing to the CBA.
Foreign exchange accounts permittedYes.
Domestic currency accounts
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.
Taxes collected through the exchange systemNo.
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 and 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 paymentsAs of January 1, 1997, most restrictions on these transactions were eliminated.
Interest 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.
Profit/dividends
Indicative limits/bona fide testAuthorized documents should be submitted to the CBA with respect to the amount involved.
Amortization of loans or depreciation of direct investments
Indicative limits/bona fide testAuthorization 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 and 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 instrumentsSince January 1, 1997, outward 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) have been free.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsA CBA license is required.
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.
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 securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instruments
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 nonresidentsYes.
To residents from nonresidentsYes.
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 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 transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer into the country by immigrantsYes.
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.
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 restrictions imposed by securities lawsNo.
Changes During 1997
Imports and import paymentsJanuary 1. All restrictions on payments for imports were removed.
Payments for invisible transactions and current transfersJanuary 1. All restrictions on payments and transfers were removed.
Controls on direct investmentJanuary 1. The requirement of a special license for foreign investments of less than Af. 500,000 a year by resident entities (excluding commercial banks and institutional investors) was eliminated.

Australia

(Position as of March 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
Independent 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 nontrade-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.
Official cover of forward operationsNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of control
Exchange control authoritiesThe RBA supervises authorized dealers and regulates open foreign exchange positions. 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 banknotesExportation or importation of notes and coins totaling $A 10,000 or more must be reported to AUSTRAC. Residents must purchase foreign currency from an authorized dealer. Nonresident travelers may take out any foreign currency they brought into Australia.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedLocal purchases and sales of foreign currency must be through an authorized dealer.
Domestic currency accounts
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%. Tariffs on passenger motor vehicles (PMV) are being reduced to 15%, and tariffs on textile, clothing, and footwear will be reduced to a maximum of 25% by the year 2000.



PMV tariffs will stabilize at 15% before falling to 10% in 2005. Tariffs on textile, clothing, and footwear products will also stabilize at a maximum of 25% until 2005, at which time tariffs will be reduced to 17.5% 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.
Taxes collected through the exchange systemNo.
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-related 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.



Exports of red meat and livestock can be made only by persons or firms licensed by the Australian Meat and Livestock Corporation (AMLC). The AMLC is primarily a trade facilitator and does not have the power to purchase, export, or sell meat or livestock. If other countries impose quantitative restrictions on imports of meat or livestock, the AMLC 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 approval by the Department of Primary Industries and Energy (DPIE). 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 paymentsNo.
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 locally by nonresidentsYes.
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 operationsNo.
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 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 that 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. On April 9, 1997, the blanket prohibition on a foreign takeover of any of the major banks was removed.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAll acquisitions of real estate must be approved, 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, and credit concentration.
Investment regulations
In banks by nonresidentsNonresidents may invest in banks up to a limit of 10% of shares. Any investment larger than 10% 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.
Other restrictions imposed by securities lawsThe rules of the Australian Stock Exchange require that, to be a stockbroker, a majority of the directors of the stockholding entity must be Australian residents. This rule does not prohibit foreigners from owning a stockbroking entity.
Changes During 1997
Imports and import paymentsJune 5. The government froze tariffs on passenger motor vehicles at 15% between the years 2000 and 2005, following the implementation of a reform program.



September 10. The government froze tariffs on textile, clothing, and footwear products at 25% between the years 2000 and 2005, following the implementation of a reform program.
Capital transactions
Controls on direct investmentsApril 9. The blanket prohibition on a foreign takeover of any of the major banks was removed. Henceforth, any proposed foreign takeover or acquisition will be assessed on the basis of its merits in accordance with the Foreign Acquisitions and Takeovers Act (1975). The government will apply the principle that any large-scale transfer of Australian ownership of the financial system to foreign hands would be contrary to the national interest.
Changes During 1998
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.

Austria

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: August 1, 1962.
Exchange Arrangement
CurrencyThe currency of Austria is the Austrian schilling.
Exchange rate structureUnitary.
Classification
Cooperative arrangementAustria participates in the ERM of the EMS. In accordance with this agreement, Austria maintains the spot exchange rates between the schilling and the currencies of the other participants within margins of ±15% around the cross rates based on the central rates expressed in ECUs. At the same time, it continues to keep the schilling’s external value constant against the deutsche mark. However, to ensure a proper functioning of the system, the Austrian National Bank (ANB) intervenes in concert with the other EMS members to smooth out fluctuations in exchange rates; the intervention currencies are the currencies of participant countries and the U.S. dollar.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Official cover of forward operationsNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with all countries may be made either in foreign currencies or through free schilling 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 control
Exchange control authoritiesMost 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 UN Security Council Resolution No. 833 (1993). 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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThese are accounts affected by UN sanctions against Iraq and Libya.
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 (Art. 113 EEC), i.e., for industrial product 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 EC law.
Positive listYes.
Licenses with quotasYes.
Import taxes and/or tariffsAustria applies the Common Import Regime of the EU.
Taxes collected through the exchange systemNo.
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 paymentsNo.
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 ANB 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 Austrian schillings.
Liquid asset requirementsLiquid asset requirements apply only to deposits held in Austrian schillings.
Investment regulations
Abroad by banksThe qualifying participation of a credit institution may not exceed more than 15% of its own funds. The total book value of all such qualifying participation may not exceed 60% of its own funds.
Open foreign exchange position limitsAn 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.
Provisions specific to institutional investors
Currency-matching regulations on assets/liabilities compositionYes.
Other restrictions imposed by securities lawsNo.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Azerbaijan

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Azerbaijan is the Azerbaijan manat.
Exchange rate structureUnitary.
Classification
Independent floatingThe external value of the manat is determined on the basis of morning and afternoon daily trading sessions. The morning session is limited to Baku Interbank Currency Exchange (BICEX) member banks, which until October 1997 excluded foreign banks. The official exchange rate is determined by the Azerbaijan National Bank (ANB) on the basis of BICEX trading. The afternoon trading, which began on September 25, 1997, is operated by the Organized Interbank Foreign Currency Exchange (OICEX) and 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.
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
OperativeYes.
InoperativeYes.
Clearing agreementsAzerbaijan is a member of the Payment Union of the CIS countries.
Barter agreements and open accountsYes.
Administration of control
Exchange control authoritiesThe 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.
Controls on trade in gold (coins and/or bullion)Controls are administered by the cabinet 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
Foreign currencyYes.
On imports
Foreign currencyYes.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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 persons or 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).
Accounts in domestic currency convertible into foreign currencyNatural and juridical persons may purchase foreign exchange on the BICEX and OICEX, as well as at authorized banks, up to the limit set by the ANB.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedForeign exchange in these accounts may be transferred abroad or sold to the banks for manats. Prior approval is required.
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. Prior approval is required.
Convertible into foreign currencyYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementAdvance 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
Preshipment inspectionn.a.
Letters of creditPrepayments by bank transfers in excess of $10,000 require either a letter of credit or the authorization of the ANB.
Import licenses and other nontariff measures
Negative listYes.
Import taxes and/or tariffsOn January 1, 1997, tariffs were unified at 15% for all 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.
Taxes collected through the exchange systemNo.
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.
Surrender requirementsNo.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
Domiciliationn.a.
Preshipment inspectionn.a.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsSince March 1997, resident individuals were allowed access to the BICEX to purchase noncash foreign exchange for transfer abroad in payment of bona fide current international transactions. However, prior approval is required for transfers abroad with regard to foreign workers’ wages, and gambling and prize earnings.



Since August 1997, any amount may be paid without limitation, on the basis of documents confirming that freight and insurance services (insurance policy) have been actually rendered. General limitations apply to advance payments. These regulations apply also to unloading and storage costs and administrative expenses.
Payments for travel
Quantitative limitsThe limit is $5,000 a trip.
Indicative limits/bona fide testFor business trips, this limit may be exceeded on the basis of an expense estimate.
Medical costs
Quantitative limitsThe limit is $10,000.
Study abroad costs
Quantitative limitsThe limit is $10,000.
Subscriptions and membership fees
Quantitative limitsThe limit is $10,000 a year.
Family maintenance/alimony
Quantitative limitsThe limit is $10,000 a person 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.
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 restrictions, 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 securities and stock exchanges, and joint stock companies, and by in-house instruction of the ANB. Sale is mainly by prior subscription (an organized market is just emerging). A new draft of the Securities Law has been developed, which emphasizes safeguarding investors’ rights.
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 locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Sale or issue abroad by residentsn.a.
On collective investment securitiesn.a.
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
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
To residents from nonresidentsn.a.
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 restriction. 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.
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.
Differential treatment of deposit accounts in foreign exchangen.a.
Differential treatment of deposit accounts held by nonresidentsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Changes During 1997
Exchange arrangementSeptember 25. The Organized Interbank Foreign Currency Exchange (OICEX) started afternoon operations (afternoon market).
Imports and import paymentsJanuary 1. Tariffs were unified at 15% for all goods imported from all countries.
Payments for invisible transactions and current transfersMarch 31. Access to the BICEX by resident individuals for the purchase of noncash foreign exchange in connection with bona fide current transactions was allowed.
Capital transactions
Controls on capital and money market instrumentsDecember 13. Restrictions on the purchase of government securities by nonresidents were lifted.
December 13. Restrictions on the membership of nonresident brokerages in the BICEX stock division were lifted.

The Bahamas

(Position as of December 31, 1997)

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
PeggedThe 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 deal forward 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.
Official cover of forward operationsNo.
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 control
Exchange control authoritiesExchange 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 could export banknotes up to B$70 until February 17, 1997, when the limit was raised to B$200.
Foreign currencyBahamian travelers need CBB approval to export foreign banknotes.
On imports
Domestic currencyImportation is subject to CBB approval.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
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%.
Taxes collected through the exchange systemNo.
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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsThere 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 non-life-insurance premiums, within specified limits. CBB approval is required for payments in excess of those limits or for categories of payments not delegated.
Unloading/storage costs
Prior approvalCBB approval is required for transactions over B$3,000.
Commissions
Prior approvalCBB approval is required for transactions over B$6,000.
Profit/dividends
Prior approvalFor all investments with approved status, permission is given upon application for the transfer.
Amortization of loans or depreciation of direct investmentsn.a.
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.
Medical costs
Indicative limits/bona fide testApart from a B$1,000 cash allowance, authorized dealers may approve all medical payments to doctors or medical establishments.
Study abroad costs
Quantitative limitsUnder delegated authority, residents are entitled to a foreign exchange allowance of B$3,000 a person a trip.
Indicative limits/bona fide testSubject to adequate documentary evidence, an education allowance is granted by the CBB without a limit.
Subscriptions and membership fees
Quantitative limitsUnder delegated authority, the limit is B$1,000.
Consulting/legal fees
Prior approvalYes.
Quantitative limitsUnder delegated authority, the limit is B$3,000.
Indicative limits/bona fide testYes.
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.
Gambling/prize earningsResidents are not allowed to remit funds for gaming purposes.
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.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsResidents are obliged to collect without delay all proceeds.
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 manual 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 instrumentsSame regulations as for bonds and other debt securities apply.
On collective investment securitiesSame regulations as for bonds and other debt securities apply.
Controls on derivatives and other instrumentsSame regulations as for bonds and other debt securities apply.
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 the 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 creditsYes.
Guarantees, sureties, and financial backup facilitiesYes.
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.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
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.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.a.
Other restrictions imposed by securities lawsThere is no securities legislation.
Changes During 1997
Arrangements for payments and receiptsFebruary 17. The limit on exports of banknotes by travelers was raised to B$200 from B$70.

Bahrain

(Position as of December 31, 1997)

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
Limited flexibility in respect to a single currencyThe 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 U.S. dollar, the intervention currency. The middle rate of the dinar for the U.S. 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 U.S. dollars, pounds sterling, and deutsche mark, based on the latest available U.S. 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 U.S. dollars, pounds sterling, and deutsche mark, 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 U.S. dollar rates and the New York market rates against the U.S. 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.
Official cover of forward operationsNo.
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 control
Exchange control authoritiesThere 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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 measuresMandatory government procurements give preference to goods produced in Bahrain and member countries of the Cooperation Council for the Arab States of the Gulf (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).
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.
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, and 125% on alcoholic beverages. On July 1, 1997, the import duty for tobacco was increased to 70% from 50% with a minimum charge of BD 1,300 a kilogram for various tobaccos, and BD 5,600 a kilogram for various cigars and cigarettes.
Taxes collected through the exchange systemNo.
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 paymentsNo.
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 operations
Commercial credits
To residents from nonresidentsControls are applied to offshore banking units and investment banks in Bahrain.
Financial creditsSame conditions apply as for commercial credits.
Guarantees, sureties, and financial backup facilitiesSame conditions apply as for commercial credits.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsGCC nationals are permitted to purchase up to 25% of the total real estate in Bahrain.
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. 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 limitsn.a.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadYes.
Limits (min.) on portfolio invested locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Changes During 1997
Imports and import paymentsJuly 1. Import duty for tobacco was increased to 70% from 50% with a minimum charge of BD 1,300 a kilogram for various tobaccos, and BD 5,600 a kilogram for various cigars and cigarettes.

Bangladesh

(Position as of December 31, 1997)

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
PeggedThe taka is pegged to a weighted currency basket of Bangladesh’s major trading partners. Since January 1, 1996, the Bangladesh Bank (BB) ceased to deal in the currencies of the other ACU countries and now 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.
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, effective January 1, 1996). 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, the Czech Republic, Hungary, and China.
Regional arrangementsBangladesh is a member of the ACU.
Clearing agreementsYes.
Administration of control
Exchange control authoritiesExchange control is administered by the BB in accordance with general policy, formulated in consultation with the Ministry of Finance. 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 can make their imports in terms of the IPO against LCs. Letter-of-credit authorization forms (LCAFs) are issued by authorized dealers and do not require a separate import license.
International security restrictions
In accordance with UN sanctionsAll settlements with Iraq and the Federal Republic of Yugoslavia (Serbia/Montenegro) are prohibited, according to UN Security Council Resolution No. 757 (1992).
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 Bangladesh or a foreign national 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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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 (WES); 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). Prior approval is required.
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
Eligibility to hold accountsJuridical and natural persons are eligible. 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).
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.



Nonresident 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 can 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. Prior approval is required.
Blocked accountsNonresident taka accounts of Bangladesh nationals can be blocked by the BB.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementAdvance 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 can 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%, 22.5%, 30%, and 42.5%.
Taxes collected through the exchange systemNo.
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.
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 (since 1996) 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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsPayments for invisibles related to authorized trade transactions are generally not restricted.
Unloading/storage costs
Prior approvalYes.
Administrative expenses
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 testYes.
Commissions
Quantitative limitsUp to 5% of export receipts (up to 33.3% in the case of books) may be remitted abroad without prior approval from the BB.
Interest payments
Prior approvalNo approval is required if loan agreements conform to Board of Investment (BOI) guidelines.
Profit/dividendsAuthorized 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.
Indicative limits/bona fide testYes.
Amortization of loans or depreciation of direct investmentsn.a.
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.
Medical costs
Quantitative limitsUp to $10,000 may be obtained without prior approval. Larger amounts are subject to the approval of the BB.
Indicative limits/bona fide testYes.
Study abroad costsForeign 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.
Indicative limits/bona fide testApplications for foreign exchange for study abroad are accepted upon verification of their bona fide nature.
Subscriptions and membership fees
Indicative limits/bona fide testYes.
Consulting/legal fees
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.
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.
Pensions
Prior approvalYes.
Gambling/prize earningsGambling is prohibited in Bangladesh.
Family maintenance/alimonyForeign 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 approvalApplications for foreign exchange for family maintenance abroad are accepted upon verification of their bona fide nature.
Credit card use abroad
Prior approvalGeneral approval is given for use of exporters against the foreign exchange retention entitlement and for travel allowance use by other residents.
Quantitative limitsCredit cards may be used up to amounts authorized for travel allowance.
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.
Bonds or other debt securitiesn.a.
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 (1980) 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 nonresidentsBorrowing by industrial enterprises in accordance with BOI guidelines/approval is allowed.
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.
Settlements of debts abroad by immigrantsNormally not allowed, except for repayments on borrowing for industrial investments according to BOI guidelines.
Transfer of assetsThe transfer of moveable personal effects is allowed.
Transfer abroad by emigrantsThe normal travel allowance for residents applies.
Transfer into the country by immigrantsPermitted, subject to the declaration requirement in respect of foreign exchange in excess of $5,000.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadSame 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.
Differential treatment of deposit accounts held by nonresidentsn.a.
Open foreign exchange position limitsBeginning January 1997, the limits that the BB places on each authorized dealer’s net open position were set at 12.5% of capital.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.a.
Limits (max.) on portfolio invested abroadDomestic institutional investors cannot acquire investment assets abroad.
Changes During 1997
Capital transactions
Provisions specific to commercial banks and other credit institutionsJanuary 31. Authorized dealers’ net open position was set at 12.5% of capital.

Barbados

(Position as of April 30, 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
PeggedThe 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 deutsche mark, 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, deutsche mark, and pound sterling.
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.
Official cover of forward operationsNo.
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 Guyana, Jamaica, Suriname, and Trinidad and Tobago may be made in the currency of the CARICOM country. Settlements with residents of Guyana, Jamaica, Suriname, and Trinidad and Tobago should be made in U.S. dollars. Since October 1, 1997, retail outlets have been permitted to issue change in the same foreign currency in which purchases were made.
Payment arrangements
Bilateral payment arrangementsn.a.
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 fixes daily selling rates based on rates supplied by the monetary authorities of these countries. These rates are applicable only to government transactions.
Barter agreements and open accountsn.a.
Administration of control
Exchange control authoritiesExchange control applies to all countries and is administered by the CBB, which delegates to authorized dealers the authority to approve normal import payments and foreign exchange for cash gifts. On October 1, 1997, further authority was delegated to commercial banks in respect of current account transactions ranging from BDS$7,500 to BDS$250,000. The previous range was BDS$5,000 to BDS$250,000 for nontrade flows, while the maximum for advance payments of merchandise imports was BDS$ 100,000. Trade controls are administered by the Ministry of Industry, Commerce, and Business Development (MICBD). 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.
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 MICBD. No license is required to export gold, but exchange control permission is required.
Controls on exports and imports of banknotes
On exports
Domestic currencyUntil September 30, 1997, travelers were permitted to take out up to BDS$200. Since October 1, 1997, travelers may take out up to BDS$500.
Foreign currencyUntil September 30, 1997, travelers were permitted to take out foreign currency notes and coins up to the value of BDS$500. Since October 1, 1997, travelers may take out up to BDS$1,000. Nonresident visitors may freely export any foreign currency they previously brought in.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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. Since October 1, 1997, 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.
Held abroadThese accounts are permitted, but permission of the CBB is required.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedSame 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. Effective October 1, 1997, nonresident holders of foreign currency accounts were no longer 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 requirementEffective October 1, 1997, authorized 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.
Advance import depositsn.a.
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.
Domiciliation requirementsn.a.
Preshipment inspectionn.a.
Letters of creditn.a.
Import licenses used as exchange licensesn.a.
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.
Negative listn.a.
Open general licensesn.a.
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, 1997, the range was changed to 5% to 25%, from 5% to 30%. There is a surtax of 75% on some imports that had been previously subject to quantitative restrictions. On January 1, 1997, a VAT of 15% replaced the consumption tax, luxury surcharge, and stamp duties on imports.
Taxes collected through the exchange systemNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsYes.
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.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsPrior approval is required for payments above the established limits, which are also subject to indicative limits and/or bona fide tests. The established limits are (1) BDS$250,000 for freight and insurance, unloading and storage costs, administrative expenses, and the remittance of profits and dividends; (2) BDS$ 100,000 for commissions, medical costs, and consulting and legal fees; and (3) BDS$50,000 for interest payments, study abroad, and subscription and membership fees. Other specific limits are listed below.
Amortization of loans or depreciation of direct investmentsn.a.
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.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsNonresidents are allowed to remit amounts to cover commitments while employed in Barbados.
Pensions
Quantitative limitsNonresidents may have their pensions remitted to them while residing outside Barbados.
Gambling/prize earningsNonresidents may take out amounts earned.
Family maintenance/alimony
Prior approvalYes.
Quantitative limitsThe limits are BDS$5,000 for cash gifts and BDS$50,000 for alimony and other maintenance expenses.
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.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsForeign currency proceeds from invisibles must be sold to authorized dealers.
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.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsThese purchases require exchange control approval, and certificates of title must be lodged with an authorized depository in 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 securitiesSame regulations apply as for shares or other securities of a participating nature.
On money market instruments
Purchase locally by nonresidentsSame regulations apply as for shares or other securities of a participating nature.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsSame regulations apply as for shares or other securities of a participating nature.
Sale or issue abroad by residentsn.a.
On collective investment securities
Purchase locally by nonresidentsSame regulations apply as for shares or other securities of a participating nature.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsSame regulations apply as for shares or other securities of a participating nature.
Sale or issue abroad by residentsn.a.
Controls on credit operationsThe approval of the CBB is required for credit operations.
Controls on direct investmentInvestments 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.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
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.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsThe limit is BDS$30,000 a year.
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 nontrade 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).
Credit controlsn.a.
Differential treatment of deposit accounts held by nonresidentsNonresident deposit accounts are treated the same as resident deposit accounts. Differential treatment is based on whether the amount is in domestic currency.
Investment regulationsn.a.
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.
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.a.
Changes During 1997
Arrangements for payments and receiptsOctober 1. The limit on the export of currency notes by a traveler from Barbados was increased to the equivalent of BDS$1,000 from BDS$500 in foreign currency notes, and BDS$500 in Barbados currency notes (from BDS$200). Further authority was delegated to commercial banks in respect of current account transactions. Banks were authorized to approve current transactions ranging from BDS$7,500 to BDS$250,000. The previous range was BDS$5,000 to BDS$250,000 for nontrade flows, while the maximum for advance payments for merchandise imports was BDS$100,000. Retail outlets were permitted to issue change to visitors in the same foreign currency in which purchases were made.
Nonresident accountsOctober 1. Nonresident holders of foreign currency accounts were no longer required to obtain central bank approval to remit funds abroad when the funds were not the result of payment for trade or nontrade transactions.
Imports and import paymentsJanuary 1. A VAT of 15% replaced the consumption tax, luxury surcharge, and stamp duties on imports.



April 1. The range of the common external tariff rates was changed to 5% to 25% from 5% to 30%.
Capital transactionsOctober 1. The limit that the Securities Exchange of Barbados has been delegated authority to approve for the purchase and sale of shares listed with the stock exchanges in member states of CARICOM was increased to BDS$2 million.
Controls on personal capital movementsOctober 1. Commercial banks were allowed to approve cash gifts of up to BDS$5,000 a transaction. The previous limit was BDS$1,000.
Provisions specific to institutional investorsOctober 1. The amount institutional investors were allowed to invest in pension funds abroad was increased to the lesser of BDS$250,000 or 25% of local funds available for investment each quarter.
Changes During 1998
Arrangements for payments and receiptsApril 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.

Belarus

(Position as of March 31, 1998)

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 takes place; (2) the afternoon auction rate of the ICB 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 where the exchange rate may not exceed the official auction rate by more than 1%; and (4) a rate for individual cash transactions that is based on the Moscow interbank market.
Classification
Managed floatingThe official exchange rate of the rubel was managed within an exchange rate band established in January 1996 with a fixed upper limit through mid-1996 of Rbl 13,100 per dollar and an upper limit of Rbl 15,000 per dollar through end-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 dollar. Most transactions take place through the interbank market exchange rate. The cash market rate and the afternoon auction rate are market determined, but the afternoon auction rate is limited to the selling of foreign exchange by enterprises.
Exchange taxRepatriation of profits in convertible currency is subject to a 15% tax payable in convertible currency.
Forward exchange marketThe forward market is regulated by the same provisions as the spot market.
Official cover of forward operationsNo.
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 payment union member countries 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 banks of Estonia, Georgia, Kazakhstan, Russia, and Turkmenistan, settlements between economic agents of these countries may be effected both via correspondent accounts of authorized banks and via correspondent accounts of central banks. On March 23, 1998, the NBB halted all rubel transactions between residents and nonresidents and between nonresidents and nonresidents. Effective March 26, 1998, Belarussian rubel payments by nonresidents to residents were allowed again as before, 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 control
Exchange control authoritiesThe 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 Ministry of Finance (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
Eligibility to hold accountsJuridical and natural persons are eligible.
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 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. Nonbank financial organizations can convert balances to perform dealing operations, and insurance companies may do so to establish insurance funds from net profits.
Nonresident Accounts
Eligibility to hold accounts
Juridical personsYes.
Natural personsn.a.
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 in the Baltic countries, Russia, and the other countries of the FSU. These accounts may be debited for purchases of goods and services and for investments in the Baltic countries, Russia, and the other countries of the FSU, 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 requiredn.a.
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” (securities) 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, and privatization checks.



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, 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. Approval is required.
Convertible into foreign currencyBalances from I and C accounts may be converted into foreign currencies, provided that the nonresident holds the government or NBB securities for a minimum period as prescribed by the NBB.
Imports and Import Payments
Financing requirements for imports
Advance payment requirementApproval is required for (1) down payments for goods or services exceeding $100,000; (2) payments for imports more than 60 days in advance of the receipt of the goods in Belarus, which require special permission from the Ministry of Foreign Economic Relations (MFER) (for goods imported under barter or clearing arrangements, the period is 180 days); and (3) interest payments to nonresidents on returned down payments when an original contract is not fulfilled.
Advance import depositsIn September 1997, an import deposit requirement of 10% was introduced for a temporary period of five months on a small number of imported goods (e.g., meat, vodka, and chewing gum).
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsn.a.
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 quotasSince April 1997, the authorities have required importers 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. On March 18, 1997, certain custom duty rates were raised to harmonize them with those applied by Russia. For example, the following rates were raised: for apparel and clothing, to 30% from 20%; for poultry, to 30% from 25%; and the rate for refrigerators was raised by 5 percentage points. 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. On February 10, 1997, the list of goods to which a preferential regime does not apply was expanded.
Taxes collected through the exchange systemNo.
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 requirementsOn June 4, 1997, the mandatory surrender requirement was reduced to 30% from 50%, and most applicable exemptions were eliminated.
Documentation requirementsA transaction certificate is required.
Letters of creditn.a.
Guaranteesn.a.
Domiciliationn.a.
Preshipment inspectionn.a.
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.
Taxes collected through the exchange systemNo.
Other export taxesA rent payment applies for exported timber and products thereof.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsMost payments do not require prior approval and are not subject to quantitative limits. Information on the application of indicative limits and/or bona fide tests is not available.
Amortization of loans or depreciation of direct investmentsn.a.
Payments for travel
Quantitative limitsIndividuals (residents and nonresidents) are permitted to purchase up to $500 a day from an exchange office at the market exchange rate for tourist travel; however, persons who use their international credit cards for tourist travel expenses can purchase foreign exchange to settle the obligations on those cards. There are no restrictions on the purchase of foreign exchange for bona fide expenses related to business travel.
Gambling/prize earningsn.a.
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.
Capital Transactions
Controls on capital and money market instrumentsThe Ministry of Finance and the NBB establish procedures for transactions in securities.
On capital market securitiesYes.
Shares or other securities of a participating naturen.a.
Bonds or other debt securitiesn.a.
On money market instrumentsYes.
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
On collective investment securitiesn.a.
Controls on credit operations
Commercial creditsExternal borrowing by residents must be registered with the NBB.
By residents to nonresidentsn.a.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsn.a.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilitiesn.a.
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, it 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.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadn.a.
Maintenance of accounts abroadThe opening of bank accounts abroad requires approval from the NBB.
Lending to nonresidents (financial or commercial credits)n.a.
Lending locally in foreign exchangen.a.
Purchase of locally issued securities denominated in foreign exchangen.a.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe same reserve requirements apply to both domestic and foreign currency deposits.
Liquid asset requirementsn.a.
Interest rate controlsn.a.
Credit controlsn.a.
Differential treatment of deposit accounts held by nonresidents
Liquid asset requirementsn.a.
Interest rate controlsn.a.
Credit controlsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Changes During 1997
Exchange arrangementDecember 2. The authorities permitted individuals to engage in cash foreign exchange transactions at a market-determined rate.
Imports and import paymentsFebruary 10. The list of goods to which a preferential customs duty rate does not apply was expanded.
March 18. Certain customs duty rates were raised to harmonize them with those applied by Russia.
September 15. A temporary (five months) import deposit requirement of 10% was introduced on a small number of imported goods.
Exports and export proceedsJune 4. The mandatory surrender requirement was reduced to 30% from 50%, and most applicable exemptions were eliminated.
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.
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 the residents were allowed again as before, as well as those by residents to nonresidents, excluding the payments for some groups of commodities for which payment in foreign currency is now required.

Belgium

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of Belgium is the Belgian franc. Belgium and Luxembourg are linked in a monetary association, and the currencies are at par.
Exchange rate structureUnitary.
Classification
Cooperative arrangementBelgium participates in the ERM of the EMS. In accordance with this agreement, Belgium and Luxembourg maintain spot exchange rates between their currencies and the currencies of the other participants within margins of 15% above or below the cross-rates derived from the central rates expressed in ECUs.
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.
Official cover of forward operationsNo.
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 and Libya.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 (toys, shoes, ceramic, porcelain, and glassware). On January 1, 1997, the quota on imports of steel products from Kazakhstan was eliminated.
Import taxes and/or tariffsBelgium applies the Common Import Regime of the EU to imports of most agricultural and livestock products from non-EU countries.
Taxes collected through the exchange systemNo.
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 diamonds, and for some iron and steel products.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsNo.
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 restricted.
Bonds or other debt securitiesn.a.
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 restricted.
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 restricted.
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 restricted.
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
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.a.
Other restrictions imposed by securities lawsNo.
Changes During 1997
Imports and import paymentsJanuary 1. Authorization for imports of certain preserved foodstuffs (tuna, bonito, and sardines) was abolished.



January 1. The quota on imports of steel products from Kazakhstan was lifted.

Belize

(Position as of December 31, 1997)

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 structure
UnitaryThe Belize dollar is pegged to the U.S. dollar, the intervention currency. 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.
Classification
PeggedThe Belize dollar is pegged to the U.S. dollar at the rate of BZ$1 per US$0.50.
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 requirementsThe only prescription of currency requirement relates to a specific list of currencies in which authorized intermediaries are permitted to deal with the public. These currencies include Barbados dollars, Canadian dollars, Eastern Caribbean dollars, Guyana dollars, Trinidad and Tobago dollars, U.S. dollars, and pounds sterling. Payments to a CARICOM member country must be made in the currency of that country.
Payment arrangements
Regional arrangementsBelize is a member of the CARICOM.
Clearing agreementsBelize participates in the CMCF.
Administration of control
Exchange control authoritiesThe 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 currencyEach traveler may take abroad up to the equivalent of BZ$400; visitors may take out up to the amount imported. Amounts beyond these limits require the approval of the CBB, which is liberally granted when justified.
On imports
Domestic currencyEach traveler may bring in up to BZ$100.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
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 administered.
Import taxes and/or tariffsImport tariff rates range from 5% to 35%, 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. On April 1, 1997, the import tariff was reduced to a maximum of 30% from a maximum of 35%.
Taxes collected through the exchange systemNo.
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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsThe 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.
Commissions
Prior approvalApproval is granted by the CBB, subject to clearance by the Commissioner of Income Tax (CIT).
Interest payments
Prior approvalApproval is granted by the CBB, subject to clearance by the CIT.
Profit/dividends
Prior approvalAn income statement and declaration of dividends must be presented along with clearance from the CIT.
Amortization of loans or depreciation of direct investmentsn.a.
Payments for travel
Quantitative limitsThe limits are (1) for nonbusiness travel by residents, up to BZ$5,000 a person a calendar year; (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.
Medical costsPayments are made directly to a doctor or hospital, with original invoices or bills supporting the application.
Study abroad costs
Indicative limits/bona fide testForeign exchange is provided by authorized dealers for payment of correspondence courses when applications are properly documented.
Subscriptions and membership fees
Indicative limits/bona fide testSimilar requirements apply as for study abroad.
Consulting/legal fees
Prior approvalApproval is granted by the CBB, subject to clearance by the CIT.
Foreign workers’ wages
Prior approvalApproval is granted by the CBB, subject to clearance by the CIT.
Pensions
Prior approvalApproval by the CBB is required.
Quantitative limitsn.a.
Indicative limits/bona fide testn.a.
Gambling/prize earningsn.a.
Family maintenance/alimony
Prior approvalApproval by the CBB is required.
Quantitative limitsThe limit for gifts is BZ$100 a donor.
Indicative limits/bona fide testn.a.
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 control is liberally administered.
On capital market securitiesYes.
On money market instrumentsYes.
On collective investment securitiesYes.
Controls on derivatives and other instruments
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 creditsYes.
Financial creditsYes.
Guarantees, sureties, and financial backup facilitiesYes.
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 transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
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 restrictions imposed by securities lawsNo.
Changes During 1997
Imports and import paymentsApril 1. The maximum import tariff was reduced to 30% from 35%.

Benin

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Benin is the CFA franc issued by the BCEAO.
Exchange rate structureUnitary.
Classification
PeggedThe CFA franc is pegged to the French franc, the intervention currency, at the fixed rate of CFAF 1 per F 0.01, 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 French franc 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 marketForward exchange contracts may be arranged with prior authorization of the Ministry of Finance (MOF).
Official cover of forward operationsNo.
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
InoperativeThere is an arrangement with Hungary.
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or French francs against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Administration of control
Exchange control authoritiesExchange control is administered by the Directorate of Monetary and Financial Affairs in the MOF, in conjunction with the Directorate of External Commerce in the Ministry of Commerce and Tourism. The MOF, however, in collaboration with the BCEAO, draws up the exchange control regulations.
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, which is seldom granted.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedThe 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
Positive listn.a.
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.
Taxes collected through the exchange systemNo.
State import monopolyImports of petroleum products are made by a state company and licensed private operators.
Exports and Export Proceeds
Repatriation requirementsReceipts must be collected within 180 days of the arrival of the shipment at its destination.
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.
Guaranteesn.a.
DomiciliationProceeds must be domiciled with an authorized intermediary bank when valued at more than CFAF 500,000.
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 quotasOn January 29, 1997, exports of teakwood and other varieties of unprocessed wood and charcoal were banned.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsPayments for invisibles to France, Monaco, and the Operations Account countries 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. All payments are subject to indicative limits and/or bona fide tests.
Amortization of loans or depreciation of direct investments
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
Quantitative limitsThe limits are CFAF 500,000 a trip for tourists and CFAF 75,000 a day for business travel.
Indicative limits/bona fide testBona fide tests are conducted by authorized intermediaries; for amounts exceeding the indicative limits, approval by the MOF is required.
Study abroad costs
Indicative limits/bona fide testBona fide tests are conducted by authorized intermediaries, and for amounts exceeding the indicative limits, by the MOF.
Foreign workers’ wages
Prior approvalYes.
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.
Indicative limits/bona fide testBona fide tests are conducted by authorized intermediary banks.
Family maintenance/alimony
Indicative limits/bona fide testBona fide tests are conducted by authorized intermediaries, and for amounts exceeding the indicative limits, by the MOF.
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.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsTransfers of capital abroad are subject to restrictions. Capital may enter the WAEMU zone freely, except for direct investments, which are subject to prior declaration, and some borrowing transactions, which require prior approval. The following transactions do not require authorization: (1) borrowing guaranteed by the state; and (2) foreign shares comparable to securities whose issue, advertisement, or sale in Benin have already been authorized. With the exception of controls on foreign securities, the preceding measures do not apply to relations with France, Monaco, WAEMU member countries, and Operations Account countries. In addition, specific controls exist on deposit taking from foreign individuals, companies, and institutions; and all advertisements to place funds abroad, underwrite construction, or conduct real estate operations abroad. These special measures also apply to relations with France, Monaco, and Operations Account countries.
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 authorization by the MOF, as are sales of holdings in foreign companies or entities. A resident may acquire securities issued or sold by a nonresident having prior authorization only after said resident has obtained prior approval from the MOF. There is no restriction on the sale of securities constituting the liquidation of an investment that is an outright sale between a nonresident and a resident, provided that the financial settlement of the transaction is in order. The settlement of a transaction in securities via transfer abroad or deposit to a nonresident’s account requires a foreign exchange authorization, which must be submitted to the MOF for approval, along with the appropriate documentation.
Purchase abroad by residentsThese transactions and the outward transfer of funds for such purchases require the approval of the MOF.
Sale or issue abroad by residentsResidents may freely sell securities of resident companies abroad. If, as a result of these transactions, companies established in Benin become foreign controlled, the foreign investors are required to make a prior declaration to the MOF. The sale of securities constituting the liquidation of a foreign investment must be declared beforehand to the MOF. Proceeds in foreign currency from the sale or liquidation of such an investment must be surrendered to an authorized intermediary bank.
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 nonresidentsThese sales are subject to prior approval by the MOF, except for sales constituting the liquidation of an investment, which are unrestricted. The transfer of proceeds from these transactions requires a foreign exchange authorization, which is to be submitted to the MOF along with the appropriate documentation.
Purchase abroad by residentsThese operations are subject to prior approval by the MOF.
Sale or issue abroad by residentsResidents may freely sell money market instruments abroad. Sales constituting the liquidation of an investment are subject to prior declaration. The proceeds in foreign exchange from the sale or liquidation must be surrendered to an authorized banking intermediary. The issue of money market instruments abroad by residents is subject to the controls applicable to borrowing.
On collective investment securities
Sale or issue locally by nonresidentsAuthorization from the MOF is required.
Purchase abroad by residentsAuthorization from the MOF is required.
Controls on derivatives and other instrumentsThese instruments are virtually unknown in Benin. They are subject to the general controls applicable to securities and investments.
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
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.
Commercial credits
By residents to nonresidentsGranting of such credits is subject to the following provisions. First, 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. Second, 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.



The transfer abroad of funds needed to service a loan is subject to authorization if the loan itself requires prior approval. The request for approval must be accompanied by the necessary proof of the validity of the transaction, i.e., authorization to borrow, references of loan disbursement records, and other related information.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe granting of guarantees, backing, and security is subject to prior authorization by the MOF. Outward transfers of the funds in question require foreign exchange authorization, which must be submitted to the MOF for approval, along with the appropriate documentation.
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 nonresidentsThere are no 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.
Settlements 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 transfer 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.
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. For loans and financial credits or the purchase of securities issued abroad, prior approval by the MOF is required.
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.
Other restrictions imposed by securities lawsNo.
Changes During 1997
Exports and export proceedsJanuary 29. Exports of teakwood and other varieties of unprocessed wood and charcoal were prohibited.

Bhutan

(Position as of December 31, 1997)

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
PeggedThe 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.
Administration of control
Exchange control authoritiesThe Ministry of Finance (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.
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
Eligibility to hold accountsYes.
Juridical personsn.a.
Natural personsn.a.
Foreign exchange accounts permittedThe following categories of persons are permitted to open and maintain 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 in executing projects financed by donor agencies, and (4) any person who is the national of a third country and who is resident in Bhutan.
Held domesticallyApproval of the RMA is required to open these accounts.
Held abroadn.a.
Nonresident Accounts
n.a.
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. On August 21, 1997, Bhutan adopted new foreign exchange regulations, making foreign exchange available for most current account purposes. 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 measuresIn 1997, the MOF issued rules and procedures for imports of goods from third countries to replace the former “trade license for import” introduced jointly by the Ministry of Trade and Industries and the Division of Revenue and Customs. The rules and procedures were introduced to streamline the procurement system and further the process of trade liberalization.
Positive listn.a.
Negative listn.a.
Import taxes and/or tariffsImports from India are free from tariffs and are subject only to the Bhutan sales tax. 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%).
Taxes collected through the exchange systemNo.
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.
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.
Taxes collected through the exchange systemn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsAll invisible payments, other than those made in Indian rupees, must be approved by the RMA. Under the new foreign exchange regulations adopted on August 21, 1997, 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.
Medical costs
Quantitative limitsLimits are prescribed by the RMA for the cost of treatment, medicine, and living expenses.
Study abroad costsBhutanese students who have secured admission to universities and institutions in third countries for studies or for training are permitted to purchase foreign exchange from authorized banks for their fees, stipends, and other 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 limitsYes.
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.
Capital Transactions
Controls on capital and money market instrumentsAll capital transactions must be approved by the RMA.
On capital market securitiesYes.
Shares or other securities of a participating naturen.a.
Bonds or other debt securitiesn.a.
On money market instrumentsYes.
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
On collective investment securitiesYes.
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
Controls on derivatives and other instrumentsYes.
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
Controls on credit operations
Commercial creditsYes.
By residents to nonresidentsn.a.
To residents from nonresidentsn.a.
Financial creditsYes.
By residents to nonresidentsn.a.
To residents from nonresidentsn.a.
Guarantees, sureties, and financial backup facilitiesYes.
By residents to nonresidentsn.a.
To residents from nonresidentsn.a.
Controls on direct investmentYes.
Outward direct investmentn.a.
Inward direct investmentn.a.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsYes.
Purchase abroad by residentsn.a.
Purchase locally by nonresidentsn.a.
Sale locally by nonresidentsn.a.
Changes During 1997
Imports and import paymentsAugust 21. Bhutan adopted new foreign exchange regulations, making foreign exchange available for most current account purposes.
Payments for invisible transactions and current transfersAugust 21. Under the new foreign exchange regulations, the RMA has been given the power to set limits (indicative in most cases) up to which foreign exchange can be made available for payments for invisible transactions.

Bolivia

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 5, 1967.
Exchange Arrangement
CurrencyThe currency of Bolivia is the boliviano.
Exchange rate structureUnitary.
Classification
Managed floatingThe 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 rates of the deutsche mark, Japanese yen, pound sterling, and 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. Sales of foreign exchange by the CBB to the public are subject to a commission of Bs 0.01 per $1 over its buying rate.
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 control
Exchange control authoritiesThe CBB is in charge of operating the auction market for foreign exchange. The Ministry of Finance (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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 creditThe LC has 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.
Taxes collected through the exchange systemNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsRepatriation requirements were eliminated on July 30, 1997.
Surrender requirementsSurrender requirements were eliminated on July 30, 1997.
Financing requirementsNo.
Documentation requirementsNo.
Preshipment inspectionExports other than hydrocarbons are subject to an inspection fee of 1.55% for nontraditional products and 1.6% for traditional products; these fees are paid by the government and not by the exporters.
Export licensesNo.
Export taxesThere is a system of tax rebates for indirect taxes and import duty paid on inputs 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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these payments
Interest payments
Prior approvalPublic sector purchases of foreign exchange for debt service must be approved by the MOF and the CBB.
Profit/dividends
Prior approvalProfit 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. Effective December 23, 1997, all overseas credits of less than a two-year term became subject to reserve requirements.
Open foreign exchange position limitsThe limit is 80% of the value of the banks’ net worth minus their fixed assets.
Provisions specific to institutional investorsNo.
Other restrictions imposed by securities lawsNo.
Changes During 1997
Exchange arrangementDecember 31. The exchange rate arrangement of Bolivia was reclassified to “managed floating” from “independently floating.”
Exports and export proceedsJuly 30. Repatriation and surrender requirements were eliminated.
Capital transactions
Provisions specific to commercial banks and other credit institutionsDecember 23. All overseas credits with terms of less than two years became subject to reserve requirements.

Bosnia and Herzegovina

(Position as of June 30, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Bosnia and Herzegovina is the convertible marka (KM), which was introduced for electronic payments on August 12, 1997, and in banknotes beginning June 22, 1998.
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 Croatian majority area of Bosnia and Herzegovina, and the Yugoslav dinar circulates in the Republika Srpska.
Exchange rate structureUnitary.
Classification
PeggedThe 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 convertible marka for deutsche mark.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of control
Exchange control authoritiesThere are no foreign exchange controls in place for transactions in convertible marka.
International security restrictions
In accordance with UN sanctionsn.a.
Controls on exports and imports of banknotes
On exports
Domestic currencyn.a.
Foreign currencyThere are no limits on the amount of cash that may be taken across international borders.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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 abroadLegal entities may hold accounts abroad related to their business. Approval is required from the Ministry of Finance (MOF) in the two entities.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsAll importers in the Federation must be registered with a local court and the Ministry of Foreign Trade (MFT). An importer may purchase foreign exchange to pay for foreign goods and services without drawing on foreign exchange held in bank accounts. Also, the MFT classifies goods into three regimes: free; subject to quotas (for the protection of local industry); and banned (for health, environmental, or military reasons). In the Republika Srpska, importers must use all foreign exchange held in bank accounts before they are entitled to purchase any further foreign exchange from a commercial bank or from the National Bank of Republika Srpska (NBRS). Commercial banks ration foreign exchange, with priority given to raw materials and goods that meet basic human needs. Restrictions are imposed on the importation of goods of which domestic production is significant.
Domiciliation requirementsn.a.
Preshipment inspectionn.a.
Letters of creditn.a.
Import licenses used as exchange licensesn.a.
Import licenses and other nontariff measures
Positive listn.a.
Negative listn.a.
Open general licensesn.a.
Licenses with quotasYes.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsNo.
Export licensesExporters in the Federation must be registered with the MFT and with a local court. Exporters in the Republika Srpska must be registered with the NBRS and a local court. The MFT imposes certain controls on the reimportation of some exports.
Export taxesYes.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsNo.
Restrictions on use of fundsPayments of pensions from Germany were officially resumed in December 1995 following an agreement by which the CBBH provides documentation to Germany that the pensions 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 nonresidentsOnly juridical persons can receive these credits; credit for more than three months must be registered with the CBBH.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsOnly prudential regulations on banks apply.
Controls on direct investmentNo.
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 nonresidentsn.a.
Sale locally by nonresidentsn.a.
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 exchangen.a.
Differential treatment of deposit accounts in foreign exchangen.a.
Differential treatment of deposit accounts held by nonresidentsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Changes During 1997
Exchange arrangementAugust 12. Electronic payments for the convertible marka were introduced.
Changes During 1998
Exchange arrangementJune 22. Convertible marka banknotes were introduced.

Botswana

(Position as of February 28, 1998)

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 on 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
PeggedThe exchange rate of the pula is determined with reference to a weighted basket of currencies comprising the SDR and currencies of the country’s regional trading partners. The central bank deals in four currencies: the dollar, the South African rand, the deutsche mark, and the pound sterling. On February 17, 1997, foreign exchange bureaus were licensed to deal in foreign currencies.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange cover is offered by the commercial banks, and the maturity dates of forward contracts/transactions are not restricted by exchange controls, but instead left to commercial judgment.
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.
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.
Clearing agreementsn.a.
Barter agreements and open accountsn.a.
Administration of control
Exchange control authoritiesThe Bank of Botswana administers exchange control on behalf of the government of Botswana. For practical/operational purposes, several administrative powers of the Bank of Botswana have been delegated to commercial banks.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)Dealing in gold is restricted and may only be dealt with in terms of Sections 3 and 4 of the Exchange Control Regulations, which state that only authorized dealers are permitted to deal in gold.
Controls on domestic ownership and/or tradeYes.
Controls on external tradeYes.
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents are allowed to export up to P 10,000 a person a day.
Foreign currencyResidents may 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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyCommercial banks are authorized to open foreign currency accounts for permanent, 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. Between February 17, 1997 and 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, the restriction on the specified foreign currencies was removed, and commercial banks were authorized to open foreign currency accounts for their customers for any amount in any currency at the discretion of banks.
Approval requiredn.a.
Held abroadThe Bank of Botswana may authorize residents to maintain foreign currency accounts with banks abroad in cases where there is a proven legitimate commercial need for such facility, e.g., payment for imports.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyNonresidents are permitted to open nonresident pula accounts in Botswana without prior Bank of Botswana approval.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementAdvance payments are permitted for a legitimate commercial need.
Documentation requirements for release of foreign exchange for importsPayments for imports of value exceeding P 10,000 a transaction require supporting documentation before foreign exchange is released.
Import licenses and other nontariff measures
Negative listYes.
Open general licensesn.a.
Licenses with quotasn.a.
Import taxes and/or tariffsAs a member of the SACU. Botswana applies a common external tariff only on imports from outside the SACU.
Taxes collected through the exchange systemNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds must be received in a foreign currency or from a nonresident pula account within six months of the date of exportation. 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 may be permitted by the Bank of Botswana on a case-by-case basis.
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 paymentsThere are no controls on most current account transactions. However, authorized dealers must require 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.
Interest paymentsAuthorized dealers are 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 is required if the charge is more than 2% a month.
Prior approvalYes.
Quantitative limitsYes.
Profit/dividendsAuthorized dealers may authorize remittances of interim dividends without reference to the Bank of Botswana for companies listed in the Botswana Stock Exchange and may approve other remittances of dividends/profits without reference to the Bank of Botswana subject to satisfactory supporting documentation.
Amortization of loans or depreciation of direct investments
Quantitative limitsThe repayment may not be more than P 2 million for a company and P 200,000 for individuals.
Payments for travelPermanent and temporary residents are now 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 must be surrendered to an authorized dealer within six months of the date of return.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirements
Surrender requirementsThe amount of unused foreign currency for travel that a resident may retain for future travel use is the equivalent of P 10,000 in currency or traveler’s checks. Any excess amount must 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 may be surrendered in 30 days instead of 3 days.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsPurchases should be financed by funds from nonresident sources. Nonresident-controlled companies may make internal portfolio investments, which need not be financed with funds from external sources. The maximum holding by a nonresident portfolio investor in the stock of any one company listed on the Botswana Stock Exchange is limited to 10% of total issued and paid-up stock. The aggregate shareholding by nonresidents may not exceed 55% of the free stock (that is, total stock issued and paid up less stock held by nonresident direct investors) of such a company.
Sale or issue locally by nonresidentsNonresidents are permitted to issue long-term, pula-denominated bonds traded on the Botswana Stock Exchange. However, prior approval of the Bank of Botswana and the Botswana Stock Exchange is needed before bonds can be issued.
Purchase abroad by residentsIndividuals and business entities may invest abroad up to P 1 million and P 30 million, respectively, in offshore securities.
Bonds or other debt securities
Sale or issue abroad by residentsYes.
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.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThe same conditions apply as for shares or other securities of a participating nature.
On collective investment securities
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsThe same conditions apply as for shares or other securities of a participating nature.
Sale or issue abroad by residentsn.a.
Controls on credit operations
Commercial credits
By residents to nonresidentsNonresident-controlled companies (including branches of foreign companies) can borrow locally from all sources up to P 1 million. Banks and other credit institutions in Botswana are 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.
To residents from nonresidentsAuthorized dealers are 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 in respect of individuals and companies, respectively, without any prior reference to the Bank of Botswana. Interest on these loans is restricted to 1% above the relevant LIBOR and 1/2% above the bank prime lending rate for foreign-denominated and pula loans, respectively.
Financial credits
By residents to nonresidentsThe same regulations apply as for commercial credits.
To residents from nonresidentsThe same regulations apply as for commercial credits.
Guarantees, sureties, and financial backup facilitiesThe same regulations apply as for commercial credits.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentAuthorized dealers may make foreign currency available to individuals and companies of 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.
Controls on liquidation of direct investmentProceeds up to P 100 million may be repatriated immediately, but the excess of that amount may be repatriated in tranches to be agreed upon with the Bank of Botswana.
Controls on real estate transactions
Purchase abroad by residentsPurchases limited to P 1 million for individuals and P 30 million for business entities are allowed, provided they use their foreign exchange allowances.
Purchase locally by nonresidentsn.a.
Sale locally by nonresidentsn.a.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
To residents from nonresidentsThis is subject to indicative limits of P 200,000 for individuals and P 2 million for companies.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsThe same conditions apply as for loans.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBorrowing is subject to prior approval by the Bank of Botswana.
Maintenance of accounts abroadThese accounts may only be maintained by authorized dealers.
Lending to nonresidents (financial or commercial credits)Nonresident-controlled companies (including branches of foreign companies) can borrow locally from all sources up to P 500,000. Banks and other credit institutions in Botswana are 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.
Lending locally in foreign exchangeAuthorized dealers are permitted to make these loans to any customer in Botswana.
Purchase of locally issued securities denominated in foreign exchangeA special dispensation has been made permitting dual listing of scripts of companies incorporated outside Botswana and listed in reputable international stock markets on an open register basis.
Open foreign exchange position limitsThe limit is 10% of the core capital of a bank.
On nonresident assets and liabilitiesn.a.
On resident assets and liabilitiesn.a.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.a.
Limits (max.) on portfolio invested abroadThe limit is 70% of the investor’s assets outside Botswana.
Limits (min.) on portfolio invested locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Changes During 1997
Exchange arrangementFebruary 17. Foreign exchange bureaus (bureaux de change) were licensed to deal in foreign currencies.
Resident accountsFebruary 17. Commercial banks were authorized to open on-shore foreign currency accounts in any foreign currency of the customer’s choice, up to the equivalent of P 1 million for individuals and P 10 million for companies. The total amount of school fees paid by an employer on behalf of an employee’s dependent studying outside Botswana are to be treated as part of the employee’s remuneration or gross earning and accordingly debited to the temporary resident’s account on payment.
Exports and export proceedsFebruary 17. The maximum limits for exports free of payments increased for the following goods: bona fide nonmonetary gifts, P 10,000 a permanent resident a year; rejected goods, P 50,000 a transaction, subject to providing documentary evidence; and commercial samples (i.e., goods for exhibitions or other promotional purposes), P 10,000 a transaction.
Capital transactions
Controls on capital and money market instrumentsFebruary 17. The dual-listing of scripts of international companies listed on reputable recognized international stock markets was permitted on an “open register basis,” subject to meeting the requirements of the Botswana Stock Exchange. The restriction of nonresidents to the 5% share holding of a listed company and the aggregate of 49% holding of the “free stock” of any listed company does not apply to share holding in a foreign dual-listed company in Botswana.
Controls on credit operationsFebruary 17. The local financing of corporate bodies and branches resident in Botswana that are controlled by nonresidents increased to P 1 million from P 500,000.
Controls on direct investmentFebruary 17. Banks were authorized to sell foreign currency to residents who wish to invest outside Botswana up to a limit of P 10 million (up from P 1 million) for companies and other corporate bodies a calendar year. Amounts exceeding these limits must be referred to the Bank of Botswana. Income from such investments must be reported to the Commissioner of Taxes and sale proceeds on final liquidation, if not reinvested, must be repatriated to Botswana.
Provisions specific to commercial banks and other credit institutionsFebruary 17. The initial tranche (an amount that a nonresident-controlled entity can borrow without having brought capital from external sources) was increased to P 1 million. The 4:1 debt-to-equity ratio will apply after the initial tranche of P 1 million. Any application for local financing support in excess of the prescribed limit requires prior approval from the Bank of Botswana.
Provisions specific to institutional investorsFebruary 17. The maximum limit for portfolio investment by institutional investment offshore increased to 70% from 65% of the total asset portfolio.
Changes During 1998
Exchange arrangementFebruary 25. The maturity dates of forward contracts will no longer be restricted by exchange controls, but instead left to commercial judgment of the commercial banks subject to banks adhering to the foreign exchange exposure limits.
Arrangements for payments and receiptsFebruary 25. 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 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 (i.e., goods for 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 will not be restricted by nonresidents by exchange controls. Nonresidents, however, will not be permitted to buy any instrument of money market for the purpose of absorbing excess liquidity from the domestic financial system. Nonresidents are now permitted to issue pula-denominated bonds, provided such instruments are listed on the Botswana Stock Exchange 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 Botswana Stock Exchange. The maximum holding by a nonresident portfolio investor in any equity securities listed on the Botswana Stock Exchange 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 invest outside Botswana up to a limit of P 30 million (up from P 10 million) for companies and other corporate entities, and up to a limit of P 1 million (up from P 100,000) for individuals a calendar year. Income from such investment must be reported to the Commissioner of Taxes and sale proceeds on final liquidation, 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 to 10:1 from 4:1. Prior approval of the Bank of Botswana is required for any amounts in excess of this limit.

Brazil

(Position as of February 28, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Brazil is the Brazilian real.
Exchange rate structure
DualThere are two official exchange rates: the free or commercial rate used for most transactions, and the floating or tourist rate. Foreign exchange is legally traded in both markets, depending on the nature of the transaction.
Classification
Managed floatingIn both exchange markets, the rates are freely negotiated between the authorized dealers and their clients. Banks conduct arbitrage operations between both markets; spot transactions must be settled within two working days. The Central Bank of Brazil (CBB) establishes an adjustable band for the external value of the national currency. A band of R$1.05–R$1.14 was set on February 19, 1997, and the current band of R$1.12–R$1.22 was established on January 22, 1998. Rates for other currencies are based on the U.S. dollar rates in Brazil and the rates for specific currencies in the international market. 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 was reduced to zero on May 2, 1997. Effective June 1, 1997, a 2% 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; (3) holdings of short-term assets in Brazil by nonresidents; and (4) remittances related to obligations of credit card administration companies to pay for purchases by its customers since December 10, 1997.
Exchange subsidyNo.
Forward exchange marketBanks are permitted to trade foreign exchange on a forward basis without restriction; such transactions must be settled within 360 days. Banks may pay their clients a premium, corresponding to the expected variation of the domestic currency in relation to the currency subject to negotiation, by way of forward operations. In addition, when an exchange contract for forward settlement is concluded, banks can provide short-term financing to exporters by providing domestic currency in advance, before or after the shipment of goods.
Official cover of forward operationsNo.
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 dollars.
Payment arrangements
Bilateral payment arrangements
OperativeSettlements with Hungary are made in 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 control
Exchange control authoritiesThe National Monetary Council is responsible for formulating 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 Planning and Budget enforces limits on foreign borrowing by the public sector. Foreign trade policy is formulated by the Ministry of Industry, Trade, and Tourism, 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 Ministry of Finance coordinates public sector import policy.
International security restrictions
In accordance with UN sanctionsThere are restrictions imposed on Libya and Iraq.
Payment arrears
PrivateForeign exchange for payments of principal and interest corresponding to medium-and long-term debt in arrears over 180 days had to be obtained in the floating-rate exchange market prior to April 23, 1997, when it was required that foreign exchange for payments of debt in arrears be obtained in the same exchange market (free-rate exchange market) through which the payments should have been made on due dates.
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 without restriction but must declare to customs any amount over the equivalent of US$10,000.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedInstitutions authorized to operate in the floating-rate market, such as tourism agencies, the Brazilian postal authority, credit card companies, and the Brazilian Reinsurance Institute (Brasil Resseguros S.A. (IRB)), may open these accounts.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 accountsYes.
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 can be repatriated to foreign countries. These resources continue to be available to nonresidents once thery are withdrawn, but only in national currency.
Blocked accountsNo.
Imports and Import Payments
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. Exchange contracts may be settled within 180 days. Payment for financed imports for periods of up to 360 days must be contracted for future liquidation 180 days in advance, except in the following cases: (1) imports due to drawback transactions; (2) imports of petroleum and some of its byproducts; (3) imports up to the equivalent of US$10,000; and (4) imports up to the equivalent of US$40,000 embarked prior to June 30, 1998, and originating from MERCOSUR, Bolivia, or Chile, with payment occurring up to two months after the registration of the import declaration.
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) was established on January 1, 1997. The subsystem 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).



Federal ministries and subordinate agencies and public enterprises are required to submit, for approval by the Ministry of Planning and Budget, an annual investment program specifying their expected import requirements.
Domiciliation requirementsImports 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 (Great Britain and Northern Ireland) are subject to domiciliation requirements.
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 LC.
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 licensesOpen general import licenses are no longer issued by the SECEX. Issuance is restricted to their annexes, up to the existing remainder of issued open general licenses.
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 can 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 70%. For vehicles carrying more than nine persons, the tariff is 65%. For automobiles, transport vehicles, motorcycles, and bicycles, tariffs are 70%, while assemblers established in Brazil are favored with a special tariff of 35%. A special tariff of 35% applies to imports from Japan, the EU, and South Korea for a period of 12 months, and for a quota of 50,000 vehicles, which is distributed on a trimonthly basis according to the export performance of each country.
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 allows 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 its 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.
Surrender requirementsYes.
Financing requirementsAdvances on foreign exchange contracts are allowed for operations with a settlement period of up to 360 days, and the time for anticipatory settlements is 180 days. Also, for products considered essential for the supply of the domestic market (fuel, mineral oils, chemical products, plastics, wood pastes, paper, cotton, linen and synthetic thread, flat steel, and aluminum) the maximum period is 180 days.
Documentation requirementsDocumentation includes invoices, international shipment notification, and export registration.
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 Finance Minister. 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.
Export taxesWith the exception of exports of raw hides of cattle, horses, sheep, or any other raw hides, which are subject to an export duty of 9%, exports are free from export duty. Exports of coffee and cocoa are subject to a zero-rate duty. Exports of primary and semimanufactured products, as well as products used by companies to produce export goods, are exempted from the value-added tax.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsPayments for current invisibles not covered by current regulations require approval from the CBB’s Exchange Department (DECAM) or the FIRCE. All payments and transfers are subject to indicative limits and/or bona fide tests.
Freight/insuranceInsurance requires prior approval from the IRB
Prior approvalYes.
Unloading/storage costsThere are established rules and surveillance procedures related to the operations freely conducted in the commercial market.
Interest paymentsPayments 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/dividendsIn addition to certain restrictions on remittances stipulated in the Foreign Investment Law (1962), limits on income tax deductions are placed on remittances of royalties and technical assistance fees. However, since 1996, under Law 9249 (1995), it has been possible 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.
Prior approvalRemittances 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.
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.
Amortization of loans or depreciation of direct investmentsOn November 23, 1997, the minimum average maturity for external loans was reduced to one year from three years for new loans and to six months from three years for renewed loans. On February 26, 1998, these minimum maturities were increased to two years for new loans and to one year for renewed loans. These limits do not apply to certain loans directed to specific economic sectors, mainly the agricultural sector, for which the minimum maturity is six months. 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 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).
Gambling/prize earningsRemittances for gambling are not permitted.
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.
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 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) established by Resolution 2318 (1996) 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 investment funds. Resources of societies, portfolios, and investment funds established in accordance with Resolution No. 2384 (1997) were 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 holding period for financial transfers resulting from inflows, flow-backs, 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.



To promote greater integration of the capital markets of the signatory countries of the MERCOSUR, an additional mechanism was established in 1992 to attract foreign resources targeting the Brazilian stock market. 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 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. 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 holding 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. Circular 2794 (1997) permits employees of firms belonging to foreign economic groups to purchase shares of the main company up to US$20,000.
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 can 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 nonresidentsThere are no specific rules for these transactions.
Sale or issue locally by nonresidentsThere are no specific rules for these transactions.
Purchase abroad by residentsThere are no specific rules for these transactions.
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 24 months for new issues.
On collective investment securities
Purchase locally by nonresidentsPortfolio investment by foreign investors in fixed-income instruments is restricted to two classes of fixed-income funds: the fixed-income funds that are subject to a transaction tax of 7% and the privatization funds that are subject to a transaction tax of 5%. As of April 24, 1997, the transaction tax for fixed-income funds was reduced to 2% from 7%, and that for privatization funds was eliminated.



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 nonresidentsThere are no regulations on these operations.
Purchase abroad by residentsThere are no regulations on these operations.
Sale or issue abroad by residentsForeign 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.



A minimum of 60% of the fund’s investments must be in securities representative of the federal government’s external debt and a maximum of 40% in other securities traded in the international market. These securities must be kept abroad in a custodian 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 a 15% 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.
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 nonresidentsYes.
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, 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.



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, except for foreign investments via the contribution of goods. 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 prior authorization by the CBB and 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 transactions
Purchase abroad by residentsTransfers for the purchase of residential or commercial real estate abroad may be made through the floating exchange rate market.
Purchase locally by nonresidentsThe purchase of real estate in Brazil is not restricted. Foreign investments in the capital of Brazilian enterprises (including resources to be used for investment in the capital of real estate enterprises) by parties resident, domiciled, or headquartered abroad are unrestricted and are not subject to prior authorization by the CBB. The exchange occurs on the free exchange rate market.
Controls on personal capital movements
LoansThere are no regulations on these operations.
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.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsThe beneficiary must prove he or she is leaving Brazil definitively, and certificates of Secretariat of Federal Revenue are required.
Transfer into the country by immigrantsThere are no controls, but documentary support is required.
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. In April 1997, the rate of the IOF applied to lending operations in foreign currency was reduced to zero from a range of up to 3%.
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.
Differential treatment of deposit accounts in foreign exchangen.a.
Differential treatment of deposit accounts held by nonresidentsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsLimits differ according to the exchange market in which the transactions take place as follows: (1) banks authorized to conduct foreign exchange operations in the free exchange rate market may hold long positions of up to US$5 million, including all currencies and all of each bank’s branches. Amounts exceeding this ceiling must be deposited with the CBB in dollars. The ceiling on banks’ short exchange position is contingent upon each bank’s adjusted net worth; and (2) on the floating exchange rate market, the following ceilings have been set:



(a) For licensed banks, the long exchange position is US$1 million (any amount in excess of this ceiling must be deposited with the CBB), and the short exchange position is contingent on the institution’s adjusted net worth;



(b) 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;



(c) Licensed tourism agencies do not maintain exchange positions, but they are required to observe the daily operational ceiling (cash) of US$200,000; any surpluses must be sold to licensed banks or dealers; and



(d) Providers of tourist accommodations may have cash holdings in foreign currencies of up to US$100,000 to meet their operational needs; any surpluses must be sold to licensed banks or dealers.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.a.
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 subscriptions to shares issued by open companies, and certificates of deposit for shares issued by companies headquartered in MERCOSUR countries.
Currency-matching regulations on assets/liabilities compositionn.a.
Changes During 1997
Exchange arrangementFebruary 19. The adjustable band for the external value of the real was revised to R$1.05–R$1.14 per U.S. dollar.



May 2. The tax on foreign exchange transactions was eliminated.
Arrangements for payments and receiptsApril 23. Foreign exchange for payments of debt arrears must be obtained in the same exchange market (free rate exchange market) through which the payments should have been made on due dates.
Imports and import paymentsJanuary 1. An import subsystem, SISCOMEX/IMPORT, was introduced, which 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.



May 2. The application of the IOF, at a rate of 25%, to exchange operations effected for the payment of imports of services was discontinued.
Payments for invisible transactions and current transfersNovember 13. The minimum average maturity was reduced to one year from three years for external loans, and to six months from three years for renewed loans.
Capital transactions
Controls on capital and money market instrumentsApril 24. The IOF fixed-income fund was reduced to 2% from 7% and that for real property investment funds was eliminated. The IOF ceased to to be levied on IOF loans contracted by residents, including banks.
Controls on derivatives and other instrumentsMay 22. Under Resolution 2384 (1997), resources of societies, portfolios, and investment funds established under Resolution 1289 (1987) could be used to regulate derivatives in futures markets for the purpose of maintaining their current market values.
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.
Payments for invisible transactions and current transfersFebruary 26. The minimum average maturities for external loans were increased to two years for new loans and to one year for renewed loans.

Brunei Darussalam

(Position as of December 31, 1997)

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
PeggedThe 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 Inter-changeability 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.
Official cover of forward operationsNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Regional arrangementsBrunei Darussalam is a member of the ASEAN.
Administration of control
Exchange control authoritiesThere are no formal exchange controls, but the Ministry of Finance (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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible. There is no distinction between accounts of residents and nonresidents of Brunei Darussalam.
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 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.
Taxes collected through the exchange systemNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
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.
With quotasn.a.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsThe provision of foreign exchange for these payments is subject to a bona fide test. Interest payments are subject to a 20% withholding tax. Information on transfers for amortization of loans and depreciation of direct investments was not available at the time of publication.
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 restrictions, 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, agro-forestry, and aquaculture.
Sale locally by nonresidentsn.a.
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investorsNo.
Other restrictions imposed by securities lawsNo.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Bulgaria

(Position as of January 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Bulgaria is the Bulgarian lev.
Exchange rate structureUnitary.
Classification
PeggedOn July 1, 1997, the Law on the Bulgarian National Bank (BNB) was amended by parliament effectively establishing a currency board arrangement. The deutsche mark 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. The BNB is required to sell and purchase on demand and without restriction deutsche mark for the 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 Cambodia, Guinea, the Lao People’s Democratic Republic, Democratic People’s Republic of Korea, Romania, and the Syrian Arab Republic. Bulgaria has outstanding transferable ruble accounts with Germany, Hungary, Mongolia, Poland, and Romania. The bilateral payment arrangements and/or barter agreements with Pakistan and China were terminated on January 16, 1997 and January 22, 1997, respectively. The debit balances with Poland and Hungary are expected to be settled by end-March 1998 and end-April 1998, respectively; agreement on arrangements to settle the debit balance with Germany is close, and settlement of the debit balance with Romania is under negotiation.
Barter agreements and open accountsThere are inactive agreements with the Islamic State of Afghanistan, Ethiopia, Ghana, Guyana, Mozambique, Nicaragua, and Tanzania. According to a bilateral protocol between the respective banks of India and Bulgaria, India’s obligations are payable in goods and services.
Administration of control
Exchange control authoritiesForeign exchange control is exercised by the Ministry of Finance (MOF), the BNB, authorized banks, customs administration, border guards, and port offices.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)Yes.
Payment arrears
PrivateSeveral 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. However, in September 1996, the Constitutional Court declared the ban on trade unconstitutional.
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 the form of 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 such articles purchased in the country whose value shall not exceed the amount of convertible foreign currency imported and declared by the nonresident at customs. Resident juridical persons are allowed to import and export gold with the permission of the MOF and the Ministry of Trade and Tourism (MTT).
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
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 may 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
Eligibility to hold accountsJuridical and natural persons are eligible.
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 measuresImports of tobacco products; coal, petroleum, and other fuels; livestock and meat; dairy products; certain grains; ferrous metals and alloys; and sugar must be registered at the MTT.
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 products, narcotic and psychotropic products, gambling machines, etc. Licenses for most of these goods are normally granted within two working days.
Negative listImports of certain goods (dangerous substances with ozone-depleting potential, including machinery and equipment for air conditioning using Freon 12; refrigerators, freezers, and other equipment using Freon 11 or 12) are restricted for health and security reasons.
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. Certain products are allowed temporarily to be imported without custom duties within specified quantities (i.e., active substances for the production of insecticides, fungicides, and herbicides, some agricultural machinery and their spare parts, flour, live breeding animals, etc.). Other products may be temporarily imported without custom duties and without quantity restrictions (i.e., equipment, spare parts, informational products, and chemicals for environment emissions control; special installations for recovery of poisoned lands; substances, materials, and equipment for replacement of ozone-destruction 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.). On July 1, 1997, the import surcharge was reduced to 4% from 5% and is to be gradually reduced and eliminated in 2000.
Taxes collected through the exchange systemNo.
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, ferrous and nonferrous metals and alloys must be registered.
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 and wild flora and fauna, livestock, radioactive materials, crafts and antiques, seeds, untreated wood, jewelry, and rare and precious metals. Licenses are normally granted within two working days.
Without quotasYes.
With quotasExports of ferrous metals scrap are subject to quotas.
Export taxesOn January 1, 1998, the export tax on cereals was abolished, while certain export taxes were amended. Export taxes are levied on certain types of timber, raw hides, certain livestock, wool, sunflower oil, grain, and waste and scrap of ferrous and nonferrous metals. Taxes are quoted in dollars but paid in leva.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsPayments for freight and insurance, unloading and storage costs, administrative expenses, commissions, study abroad costs, subscriptions and membership fees, and consulting and legal fees are subject to indicative limits and/or bona fide tests.
Interest payments
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.
Profit/dividendsProfits and dividends may be transferred abroad, provided the foreign investor has paid his/her taxes.
Amortization of loans or depreciation of direct investmentsPayments of principal on loans approved by the MOF are allowed against presentation of the approval and loan agreement, and a bank document certifying receipt of the convertible exchange. There are no restrictions on transfers of depreciation of direct investment.
Prior approvalYes.
Medical costs
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.
Study abroad costs
Quantitative limitsFor study abroad, the 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.
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.
Pensions
Prior approvalApproval of the MOF is required.
Gambling/prize earnings
Prior approvalApproval of the MOF is required.
Family maintenance/alimonyThese 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 approvalYes.
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 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 residentsThere are no controls, except 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 investmentYes.
Inward direct investmentIntercompany loans require MOF permission. Foreign direct investments are guaranteed against expropriation, except for nationalization through legal process. Foreign firms are granted the same status as domestic firms.
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.
Gifts, endowments, inheritances, and legaciesThe permission of the MOF is required for gifts and endowments.
Settlements of debts abroad by immigrantsThe permission of the MOF is required.
Transfer of assets
Transfer abroad by emigrantsThe 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. Licensed commercial banks, however, may borrow abroad 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.
Lending to nonresidents (financial or commercial credits)Licensed banks are not prohibited from such lending.
Lending locally in foreign exchangeLicensed banks are not prohibited from such lending.
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 limitsEach bank is required to observe daily and as of the date of the preparation of its monthly report (1) a maximum ratio of 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 60% between its net open foreign currency position and the amount of its own funds, excluding the deutsche mark.
Provisions specific to institutional investorsNo.
Other restrictions imposed by securities lawsNo.
Changes During 1997
Exchange arrangementJuly 1. The Bulgarian lev was pegged to the deutsche mark in the context of a currency board arrangement.
Arrangements for payments and receiptsJanuary 16. The bilateral payment arrangement and/or barter agreement with Pakistan was terminated.



January 22. The bilateral payment arrangement and/or barter agreement with China was terminated.
Imports and import paymentsFebruary 14. The Regulation on the 1997 Export and Import Regime was amended several times in 1997, altering import bans, import registration arrangements, and import tariff rates and coverage. The regulation was abolished on November 28, 1997.



July 1. The import surcharge was reduced to 4% from 5%.
Exports and export proceedsFebruary 14. The Regulation on the 1997 Export and Import Regime was amended several times in 1997, altering export bans, export registration arrangements, and export tariff rates and coverage.



October 1. The export tax on cereals was reduced to 10% from 15%.
Capital transactions
Controls on capital and money market instrumentsOctober 24. The requirement that portfolio investments by nonresidents be registered at the MOF was abolished.
Controls on direct investmentOctober 24. The requirement that direct investments by nonresidents be registered at the MOF was abolished.
Changes During 1998
Imports and import paymentsJanuary 1. The Regulation on the 1998 Export and Import Regime altered import bans, import registration arrangements, and import tariff rates and coverage.
Exports and export proceedsJanuary 1. The Regulation on the 1998 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%.
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 and as of the date of the preparation of its monthly report (1) a maximum ratio of 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 60% between its net open foreign currency position and the amount of its own funds, excluding the deutsche mark.

Burkina Faso

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Burkina Faso is the CFA franc issued by the BCEAO.
Exchange rate structureUnitary.
Classification
PeggedThe CFA franc is pegged to the French franc, the intervention currency, at the fixed rate of CFAF 1 per F 0.01. 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 French franc 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 marketA new decree issued in 1997 stipulates that forward exchange cover may be arranged by importers under conditions to be specified by a subsequent circular. The implementation circular has not yet been adopted.
Official cover of forward operationsNo.
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 are made in CFA francs, French francs, 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 French francs, 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 French francs against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Administration of control
Exchange control authoritiesExchange control is administered by the Directorate of the Treasury in the Ministry of Finance (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.
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 have been liberalized since May 1996, and on that date, the monopoly granted to the Comptoir Burkinabè des métaux précieux was extended for a transitional period of one year.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyThe 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.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedThe 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 million must be domiciled with an authorized bank.
Preshipment inspectionAn inspection is required for quality and price.
Import licenses and other nontariff measuresA technical import visa (certificat de conformité) 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%.
Taxes collected through the exchange systemNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
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
Letters of creditn.a.
Guaranteesn.a.
DomiciliationAll export transactions of more than CFAF 3 million must be domiciled with an authorized intermediary bank.
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%.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsAll payments are subject to indicative limits and/or bona fide tests.
Profit/dividends
Indicative limits/bona fide testThe limits are CFAF 500,000 a trip a tourist and CFAF 75,000 a person a day for business travel.
Amortization of loans or depreciation of direct investments
Prior approvalTransfers abroad for the amortization of loans do not require approval. However, payments for depreciation of direct investments require the approval of the MOF, since depreciation is not specifically mentioned in the regulations.
Payments for travel
Prior approvalPrior approval is required only for those 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.
Medical costs
Prior approvalYes.
Study abroad costs
Prior approvalYes.
Quantitative limitsn.a.
Family maintenance/alimony
Prior approvalYes.
Quantitative limitsn.a.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe limits are those applicable to tourist and business travel.
Indicative limits/bona fide testn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsResident 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.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsWith respect to capital transactions between Burkina Faso and foreign countries, the term “foreign countries” refers to all countries that are not members of the WAEMU.



Foreign investments in Burkina Faso, loans from residents living abroad, and issues or sales of foreign securities in Burkina Faso require a simple declaration for statistical purposes.



The prior approval of the MOF is required for the following transactions: investments and loans abroad; door-to-door sales; advertisements, communiques, or announcements for investing funds abroad or subscribing for construction projects located abroad.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThe issuance and sale of securities in Burkina Faso must be declared to the MOF for statistical purposes. A resident may purchase securities issued or sold by a nonresident only after obtaining prior authorization from the MOF. There is no restriction on the sale of securities constituting the liquidation of an investment when it takes the form of a transfer between a nonresident and a resident, provided that the financial settlement of the operation is in order. The settlement of a securities operation by outward transfer or by deposit to a nonresident’s account requires an exchange authorization, which must be approved by the MOF, as well as documents attesting to the validity of the operation.
Purchase abroad by residentsThese operations, as well as the outward transfer of funds for this purpose, require prior authorization from the MOF.
Sale or issue abroad by residentsResidents are free to sell the shares of resident companies abroad. The sale of securities constituting the liquidation of an investment abroad is subject to prior declaration to the MOF, and the proceeds in foreign exchange from the sale or liquidation must be surrendered to an authorized intermediary bank.
Bonds or other debt securitiesThe same regulations apply as for shares and securities of a participating nature.
Sale or issue locally by nonresidentsThe issuance and sale of securities in Burkina Faso by nonresidents require prior authorization from the MOF.
Purchase abroad by residentsThese operations, as well as the outward transfer of funds for this purpose, require prior authorization from the MOF.
Sale or issue abroad by residentsThese transactions require authorization by the MOF.
On money market instruments
Sale or issue locally by nonresidentsIssues and sales must be reported to the MOF.
Purchase abroad by residentsThese operations, as well as the outward transfer of funds for this purpose, require prior authorization from the MOF.
Sale or issue abroad by residentsResidents may freely sell money market instruments abroad. Sales constituting the liquidation of an investment are subject to prior declaration. The proceeds in foreign exchange from the sale or liquidation must be surrendered to an authorized intermediary bank. Money market instruments issued abroad by residents are subject to the regulations on borrowing.
On collective investment securities
Sale or issue locally by nonresidentsIssues and sales must be reported to the MOF.
Purchase abroad by residentsAuthorization is required.
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.
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.
By residents to nonresidentsYes.
To residents from nonresidentsThere are no restrictions on the granting of these facilities, and the funds involved must be transferred from abroad through an authorized intermediary.
Controls on direct investment
Outward direct investmentInvestments (including real estate purchases) made abroad by residents are subject to 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.
Inward direct investmentInward investments must be reported for statistical purposes.
Controls on liquidation of direct investmentThe liquidation is subject to MOF approval. After settlement, the liquidation or sale must be reported to the MOF and the BCEAO within 20 days following each operation.
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.
Purchase locally by nonresidentsThere are no restrictions on these purchases.
Sale locally by nonresidentsThe same regulations apply as for the liquidation of direct investment.
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 legaciesAuthorization of the MOF is required.
By residents to nonresidentsIn general, inheritances and dowries are authorized gifts; endowments require prior approval.
To residents from nonresidentsYes.
Settlements 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 assetsThis requires authorization of the MOF.
Transfer abroad by emigrantsThese transfers may be made upon submission of emigration documents to the authorized agent handling the settlement.
Provisions specific to commercial banks and other credit institutions
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 direct investments.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThere are no prudential ratios. Open positions result from special dispensations.
Other restrictions imposed by securities lawsNo.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Burundi

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Burundi is the Burundi franc.
Exchange rate structureUnitary.
Classification
PeggedThe 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 ECU, and the SDR. Commercial banks are authorized to buy and sell foreign exchange on their own account and on behalf of their customers at rates within maximum margins of ±1% of the middle rate established by the BRB.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketCommercial banks are allowed to borrow foreign exchange to hedge against exchange rate risks. Exporters of coffee are also allowed to borrow foreign exchange through their banks or from their customers for purposes of crop financing and hedging against exchange risks.
Official cover of forward operationsNo.
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.
Regional arrangementsRegional agreements exist with Eastern and Southern African countries.
Clearing agreementsClearing agreements exist with members of COMESA and CEPGL.
Administration of control
Exchange control authoritiesControl over foreign exchange transactions and foreign trade is vested in the BRB; authority to carry out some transactions is delegated to six authorized banks.
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 currencyn.a.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
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.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance import depositsFor the time being, a deposit of 25% of the declared value of the merchandise is payable when an import and payment declaration is authorized.
Documentation requirements for release of foreign exchange for importsAll 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 (f.o.b.) 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.
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.
Taxes collected through the exchange systemNo.
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, compared to 30% previously. 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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsAll payments for invisibles require approval and, in most cases, are subject to indicative limits and/or bona fide tests.
Freight/insuranceShipping insurance on coffee exports normally must be taken out in Burundi francs with a Burundi insurer.
Unloading/storage costs
Indicative limits/bona fide testThese transfers are limited to amounts indicated by invoice.
Commissions
Indicative limits/bona fide testn.a.
Interest payments
Indicative limits/bona fide testn.a.
Profit/dividendsPrivate 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).
Payments for travel
Quantitative limitsThe foreign exchange allowance for business travel is $200 a person a day or its equivalent ($250 for exporters), subject to a maximum limit of 15 days a trip. There is no limit on the number of trips for each person.
Medical costs
Quantitative limitsThe limit is FBu 700,000, with additional transfers allowed upon presentation of supporting documents.
Indicative limits/bona fide testA supporting medical certificate is required.
Study abroad costs
Quantitative limitsLimits depend on whether the student is an undergraduate or a postgraduate.
Indicative limits/bona fide testEnrollment and graduation certificates are required.
Subscriptions and membership fees
Quantitative limitsLimited to amounts indicated by invoices.
Consulting/legal fees
Quantitative limitsLimited to amounts indicated by invoices.
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.
Pensions
Indicative limits/bona fide testApplications must be submitted to the Social Security Institute.
Gambling/prize earnings
Quantitative limitsn.a.
Indicative limits/bona fide testn.a.
Family maintenance/alimony
Quantitative limitsThe limit is FBu 150,000 a month, but is temporarily suspended.
Indicative limits/bona fide testn.a.
Credit card use abroadThe use of credit cards is not permitted.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsExchange receipts from invisibles must be surrendered 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.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Bonds or other debt securitiesn.a.
On money market instruments
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
On collective investment securities
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsn.a.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsn.a.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsn.a.
Controls on direct investment
Outward direct investmentYes.
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 locally by nonresidentsYes.
Sale locally by nonresidentsn.a.
Controls on personal capital movements
Loansn.a.
Gifts, endowments, inheritances, and legaciesYes.
By residents to nonresidentsn.a.
To residents from nonresidentsn.a.
Settlements of debts abroad by immigrantsn.a.
Transfer of assetsn.a.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadPrior approval of the BRB is required.
Maintenance of accounts abroadYes.
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 nonresidentsn.a.
Investment regulations
Abroad by banksPrior approval of the BRB is required.
In banks by nonresidentsYes.
Provisions specific to institutional investorsNo.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Cambodia

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Cambodia is the Cambodian riel.
Other legal tenderThe U.S. 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 floatingThe 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 control
Exchange control authoritiesThe 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. A new foreign exchange law aligning the de jure regime with current practice was adopted by the National Assembly on August 22, 1997.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeThe export or import 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 banknotesThe export or import of a means of payment equaling or exceeding $10,000 in foreign exchange or its equivalent in domestic currency by a traveler shall be declared to customs officers at border crossings of Cambodia.
On exports
Domestic currencyYes.
Foreign currencyExports are subject to prior notification to the NBC.
On importsSame regulations apply as for exports.
Domestic currencyYes.
Foreign currencyThere are no limits, but imports must be declared on entry.
Resident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyThere are no limits on the balances of these accounts; the funds may be used to settle domestic obligations, and all transactions can be settled in foreign currency.
Held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 a banker’s order in support of their applications to purchase foreign exchange, and may later 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 shall be credited to the exporter’s account with the domiciled bank in accordance with Article 8 of the existing law.
Preshipment inspectionPreshipment import inspection is required for most goods.
Letters of credit
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.
Taxes collected through the exchange systemNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters or importers of goods and services must make payments for their commercial transactions with other countries 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
Letters of creditn.a.
Guaranteesn.a.
DomiciliationThe proceeds from exports of goods or services must be credited to the exporter’s account with a domiciled bank in accordance with Article 8 of 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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsPayments 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, the limits are not enforced.
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.
Capital Transactions
Controls on capital and money market instrumentsThere 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 Cambodia that are 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.
On capital market securitiesYes.
On money market instrumentsYes.
On collective investment securitiesYes.
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 operationsLoans 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. The NBC may, in the event of a foreign exchange crisis, issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries.
Commercial creditsYes.
Financial creditsYes.
Guarantees, sureties, and financial backup facilitiesYes.
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 the 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 Cambodia may be transferred freely. However, such transfers shall 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.
Sale locally by nonresidentsn.a.
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 legacies
To residents from nonresidentsYes.
Transfer of assetsSuch operations must take place through authorized intermediaries.
Transfer abroad by emigrantsYes.
Provisions specific to commercial banks and other credit institutionsAuthorized intermediaries must provide the NBC with periodic statements in the form of transfers or settlements and of outflows and inflows of capital carried out between Cambodia and other countries. Any exports of cash in foreign currency by authorized intermediaries are subject to prior declaration to the NBC. Loans and borrowings, 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 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 certain transactions specified in the law, on their foreign exchange position, or on any loans in domestic currency extended to nonresidents.
Lending to nonresidents (financial or commercial credits)Banks may lend to residents doing business within Cambodia.
Purchase of locally issued securities denominated in foreign exchangen.a.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsn.a.
Credit controlsThere are global and individual limits.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsBanks are not allowed to exceed their short or long positions 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 restrictions imposed by securities lawsThere are no securities laws.
Changes During 1997
Arrangements for payments and receiptsAugust 22. A new law on foreign exchange was enacted.

Cameroon

(Position as of December 31, 1997)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Cameroon is the CFA franc issued by the BEAC.
Exchange rate structureUnitary.
Classification
PeggedThe CFA franc is pegged to the French franc at the fixed rate of CFAF 1 per F 0.01. Exchange transactions in French francs 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 French franc and the rates in the Paris exchange market for the currencies concerned. A commission of 0.5% is levied on transfers to countries that are not members of the BEAC, except transfers in respect of central and local government operations, payments for imports covered by a duly issued license and domiciled with a bank, scheduled repayments on loans properly obtained abroad, travel allowances and official representation expenses paid by the government and its agencies for official missions, and payments of reinsurance premiums.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange cover requires the prior authorization of the exchange control authorities. It must be denominated in the currency of settlement prescribed in the contract, and the maturity period must be between three months and nine months. Settlements must be effected within eight days of the maturity date of the forward contract.
Official cover of forward operationsNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSince Cameroon is an Operations Account country, settlements with France, Monaco, and the Operations Account countries are made in CFA francs, French francs, 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 French francs 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 French francs 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.a.
Administration of control
Exchange control authoritiesExchange control is administered by the Directorate of Economic Controls and External Finance of the Ministry of Finance (MOF). Exchange transactions relating to all countries must be effected through authorized intermediaries (i.e., the Postal Administration and authorized banks).
International security restrictions
In accordance with UN sanctionsn.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 MOF, 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 currencyYes.
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 currencyImports of domestic currency are permitted within authorized limits at the time of departure.
Foreign currencyYes.
Resident Accounts
Eligibility to hold accountsNo.
Foreign exchange accounts permittedNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedOnly accounts of CFA francs convertible into foreign currency are permitted.
Approval requiredn.a.
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 CFAF francs.



Nonresidents are allowed to maintain bank accounts in convertible francs; however, prior approval is required. 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 convertible franc 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 convertible franc 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 with foreign currency.
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 actual delivery of goods) are authorized up to 50% of the value of imports.
Advance import depositsAdvance import deposits are permitted if stipulated by the underlying contracts.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions valued at more than CFAF 2 million must be domiciled with an authorized intermediary. Transactions involving goods in transit must be domiciled with a foreign bank.
Preshipment inspectionImports from all countries are subject to inspection by the SGS (Société générale de surveillance).
Letters of creditLCs are allowed but are optional.
Import licenses and other nontariff measuresImport licenses have been abolished for 90% of imports. Importers bringing in more than CFAF 2 million of goods are required to submit an import declaration to the private inspection agency (SGS). In general, licenses have been replaced by simple declarations to the banks, but imports of certain products are still subject to licensing.
Positive listA list is published annually by the Ministry of Industry and Trade (MINDIC) in the Programme général des échanges (PGE).
Negative listCertain imports are prohibited for ecological, health, or safety reasons.
Open general licensesSuch licenses are available 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 are 20% of the rates applicable to nonmembers.
Taxes collected through the exchange systemImport surcharges apply to imports from countries outside the UDEAC. An import surcharge of 20% is applied to maize meal, while a 10% surcharge is applied to imports of 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 a monopoly on the supply of refined petroleum products.
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.
Surrender requirementsExport proceeds must be surrendered within the eight-day period following repatriation.
Financing requirementsNo.
Documentation requirements
Letters of creditLCs are optional.
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 CFAF 2 million and above. Export licenses are issued by the MOF.
Without quotasYes.
Export taxesAn export tax of 10% is levied on coffee, cocoa, cotton, rubber, sugar, palm oil, and medicinal plants; 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.
Taxes collected through the exchange systemNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsAll payments and transfers are subject to prior approval, indicative and quantitative limits, and/or bona fide test. Payments 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.
Freight/insuranceExcept in the case of foreigners working in Cameroon temporarily who have been insured previously, residents and nonresidents are not allowed to contract insurance abroad when the same services are available in Cameroon. However, the payments of premiums for authorized contracts are not restricted.
Commissions
Prior approvalPrior approval is required for advance payments (up to 50%).
Amortization of loans or depreciation of direct investmentsn.a.
Payments for travel
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 MOF 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.
Foreign workers’ wages
Quantitative limitsThe transfer of up to 50% of the salary of a foreigner working in Cameroon is permitted upon presentation of the appropriate pay voucher and of the most recent tax return.
Credit card use abroad
Prior approvalThe use of credit cards, which must be issued by resident financial intermediaries and approved by the MOF, is limited to the ceilings indicated above for tourism and business travel.
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 restrictions, 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 a declaration is made to the MOF.
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 MOF 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 securitiesn.a.
On money market instruments
Purchase locally by nonresidentsSuch purchases require the agreement of the MOF.
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 nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
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 MOF 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 MOF 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 MOF is required.
To residents from nonresidentsPrior declaration is required.
Guarantees, sureties, and financial backup facilitiesYes.
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 MOF, 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 MOF, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the MOF 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 MOF, 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 residentsYes.
Purchase locally by nonresidentsn.a.
Sale locally by nonresidentsn.a.
Provisions specific to commercial banks and other credit institutionsSubject to precautionary provisions in respect of registered capital laid down by the Banking Commission, the composition of the registered capital of a credit establishment is freely defined by its social organs. Banks with foreign majority participation must submit to the monetary authorities information on all current transactions abroad and obtain prior approval for any changes in the structure of their equity holdings. Foreign managers must be approved by the monetary authorities and reside in Cameroon.
Borrowing abroadYes.
Maintenance of accounts abroadCorrespondent accounts are permitted.
Lending to nonresidents (financial or commercial credits)Banks may lend to nonresidents who maintain accounts with them.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts held by nonresidentsNo deposit accounts in foreign exchange are permitted. Only deposits in convertible CFA francs are permitted for nonresidents.
Investment regulationsn.a.
Open foreign exchange position limitsYes.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.a.
Limits (max.) on portfolio invested abroadYes.
Limits (min.) on portfolio invested locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Changes During 1997
No significant changes occurred in the exchange and trade system.

Canada

(Position as of December 31, 1997)

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 structure
UnitaryThe Canadian authorities do not maintain margins in respect of exchange transactions.
Classification
Independent 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.
Official cover of forward operationsNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of control
Exchange control authoritiesThere 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 notified the IMF on July 23, 1992, that in compliance with UN Security Council Resolution No. 757 (1992), certain restrictions had been imposed 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 sanctionsCanada imposed restrictions on financial transactions with Bosnia and Herzegovina in accordance with UN Security Council Resolution No. 942.
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
Eligibility to hold accountsJuridical and natural persons are eligible.
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Eligibility to hold accountsJuridical and natural persons are eligible.
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 measures
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. However, the prohibition of imports of used vehicles from the United States was eliminated in 1994. 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 (Memoranda of Understanding) 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).
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 (July 5, 1997), 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.
Import taxes and/or tariffsNo.
State import monopolyCertain monopolies exist at the federal level.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasThe Export Control List identifies all goods that are controlled in order to implement intergovernmental arrangements, maintain supplies, or ensure security. It includes all items identified in the International Munitions List, the International Industrial List, and the International Atomic Energy List. In addition, controls are maintained for supply reasons and for purposes of promoting further processing in Canada (e.g., logs and herring roe) and for nonproliferation purposes (chemical, biological, and nuclear weapons and their delivery systems). The Area Control List includes a limited number of countries to which all exports are controlled. At present, the following countries are on the Area Control List: Angola, Myanmar, and Libya. Permits are required for the exportation of listed goods to all countries except, in most cases, the United States, as well as for all goods destined to countries on the Area Control List.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these paymentsNo.
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 investmentSpecific restrictions exist on inward direct investments in the broadcasting, telecommunications, transportation, financial, fishery, and energy sectors. In addition, under the provision of the Investment Canada Act new foreign investments are generally subject to notification requirements but not to review requirements. As a result of the NAFTA, only direct acquisitions of businesses with assets exceeding Can$172 million for 1997 and Can$179 million for 1998 were subject to review. Indirect acquisitions are no longer subject to review. These provisions were multilateralized as part of Canada’s implementation of the Uruguay Round results. Investments subject to review are required only to pass a test proving that they will yield a net benefit to Canada.



Different thresholds apply in the case of investments made by non-WTO investors and in culturally sensitive sectors. The direct acquisition of a business with assets greater than Can$5 million and the indirect acquisition of a business with assets greater than Can$50 million, and indirect acquisition involving Can$5 million to Can$50 million assets representing more than 50% of the value of the total international transaction in question, is subject to review.



The establishment of a new business, the direct acquisition of a business with assets of less than Can$172 million in 1997 and Can$179 million for 1998, and the indirect acquisition of a business by investors from WTO members are not subject to review and need only be notified, except in cases when the Canadian business represents 50% or more of the value of the total assets acquired in the international acquisition. (The acquisition of a Canadian enterprise may be considered “direct” when it involves the acquisition of control of a corporation carrying on a Canadian business, and “indirect” when it involves the transfer of control by share acquisition of a non-Canadian corporation that controls a Canadian corporation carrying on a Canadian business.)



The direct acquisition of a business whose assets exceed the above-mentioned limit is reviewed and assessed according to its net benefit to Canada, authorization being generally granted. All acquisitions or investments to establish a new business in cultural sectors such as book publishing, sound recording, and film production are normally subject to review. Reviewable cases must be resolved within 75 days, unless the investor agrees to a longer time period. In practice, most cases are resolved within 45 days.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsThere are no controls; however, withholding taxes apply to sale locally or by nonresidents.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investorsNo.
Other restrictions imposed by securities lawsNo.
Changes During 1997
Exports and export proceedsAugust 11. Myanmar was added to the Area Control List.

Cape Verde

(Position as of March 31, 1998)

Status Under IMF Articles of Agreement
Article XIVYes.