Chapter

SAMOA

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: October 6, 1994.
Exchange Arrangement
CurrencyThe currency of Samoa is the Samoa tala.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe exchange rate is determined on the basis of a fixed relationship with a weighted basket of currencies of Samoa’s main trading partners. The Central Bank of Samoa (CBS) has the authority to make discretionary exchange rate adjustments against the currency basket within a margin of up to 2%.
Exchange taxThe exchange levy of 1% charged on gross sales of foreign exchange was eliminated on January 1, 1999.
Exchange subsidyNo.
Forward exchange marketCommercial banks are permitted to make forward exchange contracts.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlOverall responsibility for the administration of exchange control rests with the CBS, which delegates part of its powers to authorized banks. In principle, all payments to nonresidents require the CBS’s approval. However, the ANZ Bank (Samoa) Ltd., the National Bank of Samoa, and the Pacific Commercial Bank—the only authorized banks—are empowered to approve certain payments without limits and others up to specified amounts.
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 currencyResidents are allowed to export SAT 2,000 as part of their travel allowance.
Foreign currencySamoan residents are allowed to export the equivalent of SAT 5,000 in foreign currency. Nonresidents may export the amount of foreign currency they brought into the country.
Resident Accounts
Foreign exchange accounts permittedResidents who earn foreign exchange in the normal course of their business may open, with the approval of the CBS, external or foreign currency accounts with one of the three commercial banks.
Held domesticallyThese accounts are permitted, but approval is required.
Held abroadThese accounts are permitted, but approval is required.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents who earn foreign exchange may open a foreign currency deposit account if there is a need to settle overseas commitments. However, approval is required to open these accounts.
Domestic currency accountsThese accounts are permitted, but approval is required.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsThe limit for advance payments is SAT 10,000.
Documentation requirements for release of foreign exchange for importsNo limits are imposed on imports under an open account. However, payment requires CBS approval.
Import licenses and other nontariff measures
Negative listThe importation of a few products is prohibited for reasons of security or health. The importation of used cars requires prior approval of the CBS.
Import taxes and/or tariffsImport duties are applied on an ad valorem basis on c.i.f. values. The maximum import tariff is 20%. Rates on machinery and agricultural imports are generally levied at 10% or lower, while those on motor vehicles at 20%. As of May 28, 1999, there are only four general rates of duty—zero, 5%, 10%, and 20%.



In addition, an import excise tax is applied to imports of alcohol, soft drinks, tobacco, petroleum, and passenger cars. Enterprises producing for export may receive full or partial exemption from duties and excise taxes on inputs and capital equipment.
Taxes collected through the exchange systemThere is a value-added goods and service tax.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsExport proceeds must be surrendered to the authorized banks within three months of the date of shipment, except for export proceeds from goods shipped to American Samoa, which must be surrendered to the authorized bank within four weeks of the date of shipment.
Financing requirementsYes.
Documentation requirementsCertificates validated by an authorized bank are required for exports in excess of SAT 250.
Export licenses
Without quotasAll exports require export licenses issued by the Customs Department. Exports may be prohibited by the Director of Agriculture on grounds of low quality, or by order of the head of state to alleviate domestic shortages.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for certain invisibles may be approved by the authorized banks up to specified limits. Payments in excess of these limits, as well as payments for all other invisibles, require the prior approval of the CBS, which is granted when applications are supported by documentary proof that capital transactions are not involved. The CBS’s approval process governing the remittance of invisible payments is concerned only with whether a transaction is bona fide.
Trade-related payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Investment-related paymentsA 15% withholding tax is levied on remittances of interest payments on overseas loans, and of dividends at the source. Information is not available for the payment of amortization of loans or depreciation of direct investments.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalYes.
Quantitative limitsResidents and expatriates traveling overseas for private purposes are entitled to a foreign currency allowance equivalent to SAT 400 a person a day, subject to a limit of SAT 5,000 a person a trip; children under 15 years of age are entitled to 50% of the adult allowances. A daily allowance of SAT 600 a person is allotted for business travel, with a limit of SAT 6,000 a trip.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsAuthorized banks may approve transfers of gifts to relatives and dependents, either for special family occasions or for maintenance, up to SAT 500 a person a year. Requests for larger amounts may be approved by the CBS on a case-by-case basis.
Indicative limits/bona fide testAlthough no limit is set on remittances to cover expenses for medical treatment abroad, documentary evidence must be provided to support requests for such remittances. There is no specific limit for costs to study abroad, but the amount requested must be supported by documentary evidence confirming that the beneficiary is enrolled at an educational institution abroad and costs are in line with the prevailing costs in the country of study.
Foreign workers’ wages
Prior approvalExpatriate workers with local contracts of one year and longer are considered residents and need CBS approval if they wish to repatriate funds in excess of 80% of their net earnings on a fortnightly or monthly basis. Earnings not repatriated during the contract may be repatriated at the end of the contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testAs regards subscriptions and membership fees, no specific limit exists, but amounts requested must be supported by documentary evidence.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsAll proceeds must be surrendered to the authorized banks. Resident travelers must, on their return, sell to the banks all unused foreign exchange brought in.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsAll capital transactions (inward and outward) require approval of the CBS. Local money markets are beginning to develop following the introduction of open market operations by the CBS. No capital market has yet developed in Samoa.
On capital market securities
Shares or other securities of a participating nature
Purchase 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 abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsAll credits operations require CBS approval.
Controls on direct investment
Outward direct investmentInvestments require CBS approval.
Controls on liquidation of direct investmentRepatriation of investments requires CBS approval.
Controls on real estate transactions
Purchase abroad by residentsPurchases require CBS approval.
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.
Settlement of debts abroad by immigrantsYes.
Transfer of gambling and prize earningsThere are no restrictions for nonresidents, but residents require approval from the CBS.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBorrowing requires CBS approval.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsAll outward capital transfers by residents require the specific approval of the CBS.
Changes During 1999
Exchange arrangementJanuary 1. The exchange levy of 1% charged on gross sales of foreign exchange was eliminated.
Imports and import paymentsMay 28. Four general rates of duty remained—zero, 5%, 10%, and 20%.

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