Chapter

BELARUS

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 XIVYes.
Exchange Arrangement
CurrencyThe currency of Belarus is the Belarussian rubel.
Exchange rate structure
MultipleAs of March 31, 1999, there were two official exchange rates—the official noncash exchange rate and the “recommended” cash rate. The official noncash exchange rate has been set by the National Bank of Belarus (NBB) in daily trading in the Belarussian Stock and Currency Exchange (BSCE) since March 1, 1999 (when the two previously existing official noncash exchange rates were unified). As of March 31, 1999, the reported interbank rate was virtually identical to the official noncash exchange rate, in part owing to tax liabilities arising from the difference between the unified noncash exchange rate and the actual transaction rate. As of March 31, 1999, the spread between the “recommended” cash rate and the “street” rate was 13%. On June 30, 1999, there were five exchange rates in existence (two official rates and three parallel rates). As of December 31, 1999, four exchange rates are legally quoted in Belarus: (1) the official exchange rate set by the NBB on the basis of trading sessions on the BSCE, which is applied to surrender requirements and accounting transactions; (2) the exchange rate set on the supplementary trading sessions of the BSCE; (3) the weighted average exchange rate in the interbank market; and (4) the cash exchange rate.
Classification
Managed floating with no preannounced path for the exchange rateThe official exchange rate of the rubel was managed within an exchange rate band established in January 1996. Most transactions take place through the interbank market exchange rate.



The official exchange rate and rate of supplementary sessions of the BSCE are administratively set by the NBB. The cash exchange rate is informally recommended by the NBB, but it reflects supply and demand conditions. The interbank exchange rate is believed to be underreported due to the taxation of the differential between the official and transaction exchange rates.



All foreign exchange transactions above a stipulated amount involving the rubel and any one of four foreign currencies (the dollar, the euro, the hryvnia, or the Russian ruble) and above the amounts sold according to the existing mandatory 30% surrender requirement are to be undertaken in the supplementary session of the Minsk Interbank Currency Exchange (MICE) rather than on the interbank market, as before.



Effective January 22, 1999, foreign currency above the mandatory surrender amount may be sold on the interbank market. On December 3, 1999, the limits on volumes of transactions on the interbank market were abolished.
Exchange taxRepatriation of profits in convertible currency is subject to a 15% tax, payable in convertible currency.
Exchange subsidyn.a.
Forward exchange marketThe forward market is regulated by the same provisions as the spot market. On February 10, 1999, foreign currency swap operations by the NBB were discontinued.
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 and bilateral payment agreements between Belarus and the central banks of those countries, settlements between Belarus and CIS member countries are effected in the national currencies of the parties involved in the settlements, in the currencies of the Payment Union Member Countries of the CIS and in freely convertible currencies, in accordance with legislation in effect within the territory of the country. Settlements between Belarus and CIS member countries and the Baltic countries are effected using noncash procedures via correspondent accounts of authorized banks and central banks.



In accordance with bilateral payment agreements between the NBB and the central banks of Armenia, Azerbaijan, the Kyrgyz Republic, Latvia, Moldova, Tajikistan, and Uzbekistan, only settlements for operations ensuing from the functions of central banks are effected via correspondent accounts of central banks. Settlements for all other accounts are effected via correspondent accounts of authorized banks.



In accordance with bilateral payment agreements between the NBB and the central bank of Estonia, settlements between economic agents may be effected both via correspondent accounts of authorized banks and via correspondent accounts of central banks. Effective December 29, 1999, Belarussian rubel payments for exports are allowed, but import invoicing in rubels is generally prohibited for most goods, but the NBB can grant ad hoc waivers on a case-by-case basis.
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 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 Ministry of Foreign Affairs (MFA). Barter agreements are effected at the level of economic agents.
Administration of controlThe Parliament is responsible for legislating exchange control regulations and the NBB for administering them.
International security restrictionsNo.
Payment arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are required to obtain a license from the MOF to deal in precious stones and metals.
Controls on external tradeLicenses for residents to export precious metals and stones are issued by the MFA
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents and nonresidents may export up to the equivalent of 100 times the minimum wage.
Foreign currencyAny person may export Russian rubles up to the equivalent of 500 times the minimum wage set in Russia. Resident and nonresident natural persons may export $500 in cash and any sum in traveler’s checks without permission and any sum with the permission of an authorized bank.
On imports
Domestic currencyUp to the previously exported amount may be imported.
Foreign currencyThere are no limitations on the import of foreign currency other than Russian rubles. For Russian rubles, up to the equivalent of 500 times the minimum wage set in Russia may be imported.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyWithout declaring the sources of their foreign exchange, residents may open foreign currency accounts at commercial banks authorized to transact in foreign exchange.
Held abroadThese accounts may be held abroad, 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. Insurance companies may convert balances to establish insurance funds from net profits.
Nonresident Accounts
Foreign exchange accounts permittedNonresident juridical persons may maintain foreign exchange accounts with authorized banks in Belarus. The source of the funds may be receipts from abroad; proceeds from the sales of goods and services in the territory of Belarus, including sales to residents; debtservice payment; interest earned on balances in the accounts; funds from other foreign exchange accounts of nonresidents in Belarus; and earnings from investments from the performance of other operations with residents and nonresidents. These accounts may be debited for purchases of goods and services and for investments, as well as for payments to residents and nonresidents. Funds from these accounts may be freely repatriated or exchanged for Belarussian rubels at the market exchange rate through authorized banks. However, approval is required to open accounts for nonresident juridical persons, with countries for which the appropriate agreements have been concluded between the governments or the national banks.
Domestic currency accountsNonresident juridical persons may open I (investment), T (current), and C (investment in government securities) accounts at authorized commercial banks. I accounts may be credited with the Belarussian rubel counterpart of foreign exchange sales, dividends, resources from the liquidation of enterprises, and compensation in the event of the nationalization of enterprises. Resources from I accounts may be used to purchase foreign currency, shares of enterprises, privatization checks, etc.



T accounts are used for current operations. Proceeds from the sale of foreign currencies and of goods and services, and resources from the placement of money in deposits and other debt obligations of banks, etc. are transferred into them. Resources from T accounts may be used to purchase goods and services and bonds, and to pay for current expenditures. Funds in C accounts are used for investments in securities issued by the Belarussian government and the NBB. Proceeds from the sale of freely convertible currencies and/or Russian rubles, as well as proceeds from the redemption or sale of government and NBB securities by nonresidents, are deposited in C accounts if the original purchases were made with payments from C accounts.
Convertible into foreign currencyBalances on I and C accounts may be converted into foreign currency. In this process, balances on C accounts may be converted into foreign currency under condition that the nonresident was a holder of securities of the government or the NBB for a period of time established by the NBB. Approval is required to convert these accounts into foreign currency.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsImports for goods and services for Belarussian rubels with payment to correspondent accounts of nonresident banks are permitted only with NBB approval.
Advance payment requirementsFor down payments for goods or services exceeding $100,000, a foreign bank guarantee is required. For payments for imported services more than 90 days in advance of the performance of the services and for imported goods more than 60 days in advance of the receipt of the goods, permission of the MFA is required; for advance payment of more than 180 days, NBB approval is required.
Documentation requirements for release of foreign exchange for imports
Import licenses used as exchange licensesYes.
Import licenses and other nontariff measuresImport licenses are required for importing certain herbicides and industrial wastes.
Positive listAll goods may be imported freely, except those subject to prohibitions and restrictions.
Negative listThe importing of radioactive or toxic wastes, as well as publications or videos that are against state morals, health, or security, is prohibited.
Licenses with quotasImporters are required to obtain a license in order to apply for an import quota for ethyl alcohol and alcoholic beverages.
Import taxes and/or tariffsThe Republic of Belarus has abolished customs controls and customs processing of goods moving between Belarus and Russia. Efforts are under way to establish a uniform trade policy in relation to third countries. The tariff structure consists of higher rates (from 30% to 100%) that apply to goods such as weapons, ammunition, precious metal products, carpets, motor vehicles, alcohol, and certain others. Regular (base) import duty rates apply to countries with MFN status. The preferential treatment given to goods from developing countries (duties that are 75% of the base rates) and from the least developed countries that have this status (goods from which are imported duty-free) is applied to a certain list of goods imported onto the customs territory of Belarus. Duties are applied at twice the MFN rate on imports from countries without MFN status. On January 1, 2000, customs duties on textiles from the EU were temporarily reduced. On July 1, 1999, a temporary surcharge for barter transactions was introduced at the following rates: 5% for barter transactions carried out in accordance with decisions of the Republic of Belarus Council of Ministers or that entail the delivery to Belarus of raw materials, supplies, components, and equipment to support economic agents’ own production operations; and 15% for other barter transactions. Economic agents are not subject to the surcharge for barter transactions that entail the delivery to Belarus of goods that appear on a list established by the Republic of Belarus Council of Ministers.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsForeign exchange proceeds from exports of goods and services must be repatriated within 90 days (60 days within Europe) of shipping, including goods exported under a barter or clearing contract. Special approval of the MFA is needed for longer periods of time; special approval of the NBB is needed for periods in excess of 180 days.
Surrender requirementsA temporary 10% mandatory surrender requirement in the afternoon session of the MICE was introduced on December 11, 1999, and was in effect until January 1, 2000. The exchange rate applicable to this surrender was the rate prevailing in the main session.



In the first quarter of 2000, 35.2% of the foreign exchange acquired through the surrender requirement was earmarked to pay for fuel and energy resources. The remainder was generally applied to other priority imports.



The surrender requirement for freely convertible currency and Russian rubles at the official exchange rate is currently 30%. On March 1, 2000, however, an additional 10% surrender requirement was introduced temporarily for subsequent sale of these funds to the Belarussian State Petroleum and Chemical Concern for the purchase of petroleum, other hydrocarbon raw materials, and petroleum products.
Financing requirementsNo.
Documentation requirementsA transaction certificate and a statistical declaration are required.
Export licenses
Without quotasExport bans exist for some medicinal herbs, art and antique collections, certain wild animals, and goods imported into Belarus on a humanitarian basis. Exports of certain goods, including amber, ores and concentrates, and precious metals and stones, require a license that is subject to the approval of the MOF.
With quotasMineral fertilizers and waste, and scrap of ferrous and nonferrous metals are subject to export quotas and licensing requirements.
Export taxesEffective December 1, 1999, in the context of the common customs area, customs duties were established that are analogous to those of Russia on natural and liquefied gas that are exported from the customs territory of Belarus outside the member states of the Customs Union. VAT and excise taxes are collected on excisable goods that are exported to CIS countries, with the exception of Kazakhstan, the Kyrgyz Republic, Moldova, Tajikistan, and Ukraine.
Other export taxesA rent payment applies for exported timber and products thereof.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Payments for travel
Quantitative limitsIndividuals (residents and nonresidents) are permitted to acquire cash foreign currency up to $200 a day at a single exchange office. There are no restrictions on the purchase of foreign exchange for bona fide expenses related to business travel, up to the standard business travel allowances established by the legislation.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAll service export proceeds must be repatriated within 90 days unless special permission for a longer period of repatriation has been granted by the MFA. Special permission from the NBB is required for a period exceeding 180 days.
Surrender requirementsA requirement of 40% applies to receipts in freely convertible currencies and Russian rubles.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instrumentsThe MOF and the NBB establish quotas and procedures for transactions by residents and nonresidents in securities. The export and import of securities is allowed without limitation. There is a registration procedure for control purposes with the Belarus State Committee on Securities (BSCS).
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsBSCS registration is required for shares to be exported.
Sale or issue locally by nonresidentsBSCS registration is required for shares to be imported.
Purchase abroad by residentsA permit from the NBB and registration with the BSCS are required.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesRegistration of securities is required. The NBB regulates the issue of CDs and saving certificates by banks. These may be issued both in domestic currency and in foreign exchange. Banks are not allowed to export bank certificates.
Purchase locally by nonresidentsThe same regulations apply as for shares or other securities of a participating nature.
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 residentsYes.
On money market instruments
Purchase locally by nonresidentsAn NBB permit is required to purchase government securities or securities issued by the NBB.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsAn NBB permit is required.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsAn NBB permit is required.
Controls on derivatives and other instruments
Purchase abroad by residentsAn NBB permit is required.
Controls on credit operations
Commercial credits
To residents from nonresidentsExternal borrowing by residents must be registered with the NBB.
Financial credits
By residents to nonresidentsAn NBB permit is required if the credit is for more than 180 days.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentForeign investment must be registered at the Ministry of Foreign Economic Relations; financial institutions must also register it at the NBB. In the case of insurance institutions, foreign investment must also be registered at the State Insurance Oversight Committee. Certain activities require special approval (license). When establishing an enterprise with foreign investments, the size of a foreign investor’s share is not restricted, except for insurance organizations and banks, where it may not exceed 49%.
Controls on liquidation of direct investmentForeign investors are guaranteed full repatriation of their initial investment capital and profits earned in Belarus.
Controls on real estate transactions
Purchase abroad by residentsAn NBB permit is required.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Lending in rubels to nonresidents is prohibited.
Lending locally in foreign exchangeThese transactions are permitted only for settlements with nonresidents.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsRubel deposits of nonresident banks are subject to a 46% reserve requirement.
Investment regulations
Abroad by banksAn NBB permit is required.
Open foreign exchange position limitsOpen foreign exchange position limits are established depending on the type of foreign currency (freely convertible currency and currency with restricted convertibility). Requirements are also established with regard to limits on the differential between off-balance-sheet assets and liabilities. Limits are computed as a whole by type of foreign currency regardless of whether the asset (liability) belongs to a resident or nonresident.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1999
Exchange arrangementJanuary 22. Foreign currency above the mandatory surrender amount may be sold on the interbank market.



February 10. Foreign currency swap operations by the NBB were discontinued.



March 31. Two exchange rates remained in operation.



June 30. Five exchange rates were in existence.



December 3. The limits on volumes of transactions on the interbank market were abolished.



December 31. Four exchange rates are legally quoted in Belarus.
Arrangements for payments and receiptsDecember 29. Invoicing of exports in rubels was allowed.
Imports and import paymentsJuly 1. A temporary surcharge of 5% or 15% was introduced on barter transactions.
Exports and export proceedsDecember 1. Customs duties were introduced on natural and liquefied gas exported outside the customs union with Russia.



December 11. temporary 10% surrender requirement on the afternoon trading session of the currency exchange was introduced to which the prevailing rate in the main session was applicable.
Changes During 2000
Imports and import paymentsJanuary 1. Customs duties on textiles from the EU were reduced for a period of six months.
Exports and export proceedsJanuary 1. The temporary 10% surrender requirement was abolished.



March 1. An additional 10% surrender requirement was introduced temporarily for the subsequent sale of these funds to the Belarussian State Petroleum and Chemical Concern for the purchase of petroleum, petroleum products, and other new hydrocarbon materials.

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