Chapter

POLAND

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1995.
Exchange Arrangement
CurrencyThe currency of Poland is the Polish zloty.
Exchange rate structureUnitary.
Classification
Independently floatingThe central exchange rate of the zloty was pegged to a basket of five currencies. Effective January 1, 1999, the currency basket was changed to 55% euro and 45% dollar. The central rate was adjusted under a crawling peg policy at a preannounced rate. Effective March 24, 1999, the monthly devaluation rate of the crawling band was reduced to 0.3% from 0.5%. Until March 23, 1999, the exchange rate of the zloty fluctuated around the central rate at ±12.5%. Effective March 24, 1999, the width of the band was increased to ±15% around the central parity. Effective April 12, 2000, the zloty was allowed to float and trade freely against all currencies. Thus, the exchange arrangement was reclassified to the category independently floating from the category crawling band.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketA liquid swap market exists.
Arrangements for Payments and Receipts
Prescription of currency requirementsYes.
Payment arrangements
Bilateral payment arrangements
InoperativeThere are agreements with Iraq, the Syrian Arab Republic, Tunisia, and Turkey. Outstanding balances are being settled in accordance with the terms of the agreements.
Regional arrangementsPoland is a member of the CEFTA.
Clearing agreementsThere are inoperative agreements with members of the former CMEA.
Administration of controlThe authority to make basic changes in the Foreign Exchange Law rests with parliament. Regulations are promulgated by the MOF, in cooperation with the president of the National Bank of Poland (NBP). Individual permits are granted by the president of the NBP. The procedures for issuing such permits are established by the president of the NBP in cooperation with the MOF. Decisions concerning individual foreign exchange permits are subject to appeal to the Supreme Administrative Court. Foreign exchange control is exercised by the MOF, the NBP, foreign exchange banks, border guards, custom authorization authorities, and post offices. Effective January 12, 1999, anew foreign exchange law took effect making the zloty an externally convertible currency and allowing offshore zloty accounts. The new law retains some controls on short-term capital transactions, and permits the NBP to take emergency measures should serious risks arise to the stability and integrity of the financial system.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)In compliance with UN Security Council resolutions, Poland imposed and maintained a ban on trade with Iraq and on exports of certain products to Libya. The Polish government bans, in line with relevant UN Security Council resolutions, exports of arms and military equipment to the following countries: Angola (for UNITA forces), Haiti, Iraq, Liberia, Libya, Rwanda, Somalia, and the Federal Republic of Yugoslavia (Serbia/Montenegro).
In accordance with UN sanctionsYes.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)Polish and foreign nationals may take abroad gold coins (money coined after 1850) that bear value in foreign exchange. They may also bring into Poland coins made from precious metals that are legal tender in Poland.
Controls on domestic ownership and/or tradeResident individuals may hold gold in any form; trading in gold, other than in jewelry form, is subject to permission from the NBP.
Controls on external tradePolish and foreign nationals may take abroad gold coins that bear value in foreign exchange. They may also bring into Poland coins made from precious metals that are legal tender in Poland.
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents and nonresidents may export up to €6,000. Documentary proof of origin is necessary for amounts exceeding this limit. There are no limitations on nonresident exports of foreign currencies, foreign securities, and traveler’s checks. Residents must repatriate foreign exchange within two months of returning to Poland.
Foreign currencyUnder the general foreign exchange permit, Polish nationals may take abroad up to €6,000 or its equivalent in foreign currencies, checks, and traveler’s checks. Documentary proof of origin is necessary for amounts exceeding this limit. Residents must repatriate foreign exchange within two months of returning to Poland. For official and business travel, allowances are based on separate regulations on business travel and on collective wage agreements. Nonresidents are free to take out of Poland up to €2,000 or its equivalent; higher amounts are allowed, subject to permission.
On imports
Domes tic currencyResidents and nonresidents may import up to €6,000. Documentary proof of origin is necessary for amounts exceeding this limit. There are no limitations on nonresident exports of foreign currencies, foreign securities, and traveler’s checks. Residents must repatriate foreign exchange within two months of returning to Poland.
Foreign currencyNonresidents entering Poland are permitted to have up to €2,000 or its equivalent in convertible currencies; higher amounts require permission. Residents must repatriate foreign exchange within two months after returning to Poland.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadResidents (individuals and enterprises) carrying out economic activity abroad may hold foreign exchange accounts abroad to cover the costs of such activity and during their stay abroad. The NBP must be notified about accounts opened abroad, and quarterly balances in these accounts must be reported to the NBP.
Approval requiredYes.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsThese accounts may or may not pay interest, depending on an agreement with the bank, and they may be credited with funds from any title, but conversion into foreign currency and/or transfer abroad within three months from the date of deposit, in the case of term deposits for amounts exceeding Zl 500,000, is prohibited, except for funds freely transferable abroad.
Convertible into foreign currencyThese accounts may be convertible into foreign currency, but approval is required.
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 measuresLicenses are not required for imports from the convertible currency area, with the exception of imports of radioactive materials and military equipment; alcoholic beverages other than beer; tobacco products; crude oil and oils obtained from bituminous minerals; gasoline and light oils; natural gas and other gaseous hydrocarbons; coal; and goods for industrial assembly of motor vehicles.
Negative listThe importation of passenger cars and other passenger vehicles older than 10 years; trucks, vans, other utility cars, and passenger vehicles older than three years for transportation of more than 10 persons; cars with two-cycle engines; and combine harvesters is prohibited.
Licenses with quotasThe importation of petroleum oils and oils obtained from bituminous minerals is subject to quantitative quotas.
Import taxes and/or tariffsAll commercial imports, regardless of country of origin or provenance, are subject to an ad valorem import tariff. Import tariffs are based on the Harmonized System and the Combined Nomenclature of the EU, with six basic rates: zero on equipment for the disabled, mineral resources, textiles, and cattle hides; up to 3% on other raw materials; 6% to 9% on basic parts of semifinished and finished goods; 12% to 25% on industrial goods; 25% to 30% on agriculture and textile products; and 30% on luxury goods. Imports from developing countries are granted preferential treatment under the GSP. Also, imports from 45 developing countries, tropical products, and many goods that are of interest to developing countries enter Poland duty-free. For the remaining goods imported from non-European developing countries whose per capita GDP is lower than Poland’s, duties are reduced by 20% to 30% of the MFN rate. Duties and taxes on imports for export production are refunded. Imports of capital goods for new joint ventures are exempt from customs duties.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds should be repatriated immediately.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesLicenses are required for exports carried out within the framework of international agreements that stipulate bilateral settlements and for temporary exports of capital goods and transport equipment for leasing motor vehicles.
Without quotasLicenses are required for exports of radioactive materials and military equipment. Export licenses are required for goods subject to export quotas. Exports of specific species of live poultry are prohibited.
With quotasExports of waste and scrap of copper, nickel, aluminum, lead, zinc, and tin are subject to quota restrictions.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersWhen payments exceed €20,000, all current operations must be done through domestic banks. Residents and nonresidents must document the payment or transfer to the bank if they exceed €20,000.
Credit card use abroadCredit card use abroad is permitted, but the transaction must be in compliance with regulations.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds must be repatriated immediately. Natural persons receiving proceeds while they are abroad must repatriate the proceeds within two months after returning to Poland.
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 nonresidentsPurchase of Polish securities by nonresidents is free, except for shares of which the freedom to purchase may be limited by Poland’s restrictions of foreign direct investment. Purchases of securities by nonresidents with maturity of less than one year require a permit.
Sale or issue locally by nonresidentsA Securities and Exchange Commission (SEC) permit is required for publicly traded securities.
Purchase abroad by residentsA foreign exchange permit is required for residents to make portfolio investments in securities issued by nonresidents not domiciled or not having their seat in OECD countries or in countries with which the Republic of Poland has not concluded agreements on the promotion and mutual protection of investment. This regulation does not apply when residents purchase securities gratuitously. Residents need a foreign exchange permit to purchase securities with a maturity of less than one year.
Sale or issue abroad by residentsResidents are permitted to issue securities only in OECD countries or in the countries with which the Republic of Poland has concluded agreements on the promotion and mutual protection of investments. Residents need a foreign exchange permit to sell or issue securities with a maturity of less than one year.
Bonds or other debt securitiesThe same regulations apply as for shares or other securities of a participating nature.
On money market instruments
Purchase locally by nonresidentsNBP approval is required, except for transactions carried out by the treasury, authorized banks, and other authorized financial institutions.
Sale or issue locally by nonresidentsNBP approval and SEC notification are required.
Purchase abroad by residentsNBP approval is required, except for transactions carried out by authorized banks and other authorized financial institutions.
Sale or issue abroad by residentsA permit is required for maturities of less than one year.
On collective investment securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
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.
Controls on derivatives and other instruments
Purchase locally by nonresidentsAs from January 12, 1999, financial derivative instruments listed on the Warsaw Stock Exchange, the Polish Financial Stock S.A., and CeTO S.A. may be traded freely. Operations carried out by authorized banks and other authorized financial institutions may be made freely.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsAuthorized institutions may effect these transactions freely.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial creditsThe NBP must be notified within 20 days.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsFinancial credits with maturities of less than one year require a permit.
To residents from nonresidentsFinancial credit operations with nonresidents resulting in a zloty debt with a maturity of less than one year are prohibited if the value of the transaction exceeds the equivalent of €50,000.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsAn NBP foreign exchange permit is required for guarantee transactions related to claims that are the result of restricted foreign exchange transactions.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentAn NBP foreign exchange permit is required for direct investments exceeding the equivalent of €1 million, with the exception of purchasing shares and interests of companies based in OECD countries and in the countries with which Poland has ratified agreements on the promotion and mutual protection of investments.
Inward direct investmentThere are no controls in the foreign exchange law, but there are sectoral restrictions.
Controls on liquidation of direct investmentThe transfer of profits from joint ventures and from investments in shares of Polish companies is not restricted, and invested capital may be repatriated once outstanding obligations to creditors are discharged.
Controls on real estate transactions
Purchase abroad by residentsAn NBP foreign exchange permit is required for the purchase abroad by residents (natural persons) of real estate located abroad if the price on the day of such purchase is in excess of the equivalent of €50,000, and for the transfer abroad of the foreign currency required for the purchase of such real estate.
Purchase locally by nonresidentsNonresidents may acquire real estate or other immovable property in Poland only with permission from the Ministry of the Interior, except in the form of an inheritance. Under the Law on Acquisition of Real Estate by Foreigners, foreigners may also acquire real estate without permit if (1) it is a separate apartment; (2) they have lived in Poland for at least five years after getting a permanent residence visa; (3) they are married to a Polish citizen for at least two years (the purchased real estate must form a part of matrimonial community property); or (4) real estate is purchased by nonresident legal persons for statutory purposes, and the area of real estate does not exceed 4,000 square meters in urban areas. The Council of Ministers may issue a regulation defining other cases where a permit is not required, providing that the area of acquired real estate does not exceed 4,000 square meters in urban and 10,000 square meters in rural areas. The Council of Ministers may also extend the area to be acquired without permit to 12,000 square meters in urban and 30,000 square meters in rural areas.
Sale locally by nonresidentsYes.
Controls on personal capital movements
LoansThere are no controls on family loans.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsNBP approval is needed for gifts above €10,000.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThere are controls on short-term borrowing.
Lending to nonresidents (financial or commercial credits)Banks are permitted to purchase securities abroad within the limits specified in the regulation by the president of the NBP on the types of securities issued abroad to be purchased by authorized banks.
Differential treatment of deposit accounts in foreign exchangeBanks are not allowed to hold accounts for nonresidents in the form of time deposits in zloty with a maturity of less than three months for amounts exceeding Zl 500,000.
Reserve requirementsThe reserve requirement on foreign currency accounts differs from that on zloty accounts.
Differential treatment of deposit accounts held by nonresidentsEffective January 12, 1999, a foreign exchange permit is required for deposit transactions made by nonresidents where the transaction involves deposits exceeding Zl 500,000 maturing in less than three months, and for foreign currency deposit transactions made by residents, except for those related to direct or portfolio investments that require no foreign exchange permits, or for those made from bank accounts maintained by individuals when residing abroad.
Open foreign exchange position limitsA bank’s open (net) foreign currency position (long or short) in relation to a single foreign currency may not exceed 15% of the bank’s capital. The president of the NBP, on the bank’s motion, may consent to a foreign currency paid in consideration for equity to be included in computation of the bank’s foreign currency position.
Provisions specific to institutional investorsInsurance companies are not affected by the foreign exchange operations in the country, and an MOF permit is required to commence insurance business. An MOF permit is required for investments by nonresidents in insurance companies through shares allowing for 25%, 33%, 50%, 60%, and 75% of votes, respectively, at general shareholders’ meetings. Prudential regulations establishing limits for investment of insurance funds in the country and abroad are provided by the act on insurance operating activity.



Nonresidents are allowed to invest in participating units issued by trust funds. There are no foreign exchange restrictions on the transfer abroad by nonresidents of foreign currency purchase against Polish currency associated with remission of participating units in trust funds.
Other controls imposed by securities lawsNo.
Changes During 1999
Exchange arrangementJanuary 1. The currency composite was changed to a basket composed of 55% euro and 45% dollar.



March 24. The monthly devaluation rate of the crawling band was reduced to 0.3%. The width of the band was increased to ±15% around the central parity.
Arrangements for payments and receiptsJanuary 12. A new foreign exchange law took effect.
Capital transactionsJanuary 12. A new foreign exchange law took effect that differentiates between banks and nonbank entities, noting that banks may conduct some short-term capital transactions, which would require a special foreign exchange permit for non banks.
Controls on derivatives and other instrumentsJanuary 12. Financial derivative instruments listed on the Warsaw Stock Exchange may be traded freely.
Provisions specific to commercial banks and other credit institutionsJanuary 12. A foreign exchange permit is required for deposit transactions made by nonresidents where the transaction involves deposits exceeding Zl 500,000 maturing in less than three months, and for foreign currency deposit transactions made by residents, except for those related to direct or portfolio investments that require no foreign exchange permits, or for those made from bank accounts maintained by individuals when residing abroad.
Changes During 2000
Exchange arrangementApril 12. The zloty was allowed to float and trade freely against all currencies. The exchange arrangement was reclassified to the category independently floating from the category crawling band.

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