International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
  • ShareShare
Show Summary Details
Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of the Syrian Arab Republic is the Syrian pound.
Exchange rate structure
MultipleOn January 1, 1999, the exchange rate system consisted of four official rates and two unofficial rates. On December 31, 1999, the promotion rate of LS 20.22 per $1, which was used only for payments of allowances to students who started overseas study before January 1, 1991, was eliminated. Currently, the official rates are: (1) the legally designated official rate of LS 11.20/11.25 per $1 applies to the repayment of loans and interests arising from bilateral payments agreements; (2) the budget accounting rate of LS 46.45/46.50 per $1 (also known as the government fee rate) applies to public sector exports of petroleum, all government imports (including essential subsidized commodities and invisibles), and repayment of loans and interest not related to bilateral payments agreements; and (3) the “rate in neighboring countries” of LS 46.00/46.50 per $1 applies to the following transactions: (i) all public and private capital inflows, the 25% of export proceeds surrendered by the private sector, and that part of the 75% of export proceeds retained by private sector exporters that is not used to finance their own imports or sold to other importers; (ii) travel allowances; (iii) tourism and medical expenses; (iv) student allowances; (v) remittances abroad and payments by the public sector approved by the Committee for Foreign Exchange; (vi) all public sector enterprises’ foreign exchange transactions; (vii) earnings of staff of UN and diplomatic missions in the Syrian Arab Republic; and (viii) domestic expenses of foreign oil companies.

The unofficial rates are (1) the free market rate, which stood at LS 49.85 per $1 on December 31, 1999, and (2) the “export proceeds” rate, in which a market-determined rate applies to goods that may be imported only with foreign exchange earned through exports. Exporters who do not use all of their export earnings to import goods may sell their retained foreign exchange earnings to importers in this market. In December 1999, the exchange rate in this market stood at LS 56 per $1.
Conventional pegged arrangementThe official rate is pegged to the dollar at LS 11.20/11.25 per $1, but it applies to a few debt payments relating to bilateral payment arrangements.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe Exchange Office (EO) prescribes the currencies that may be obtained for exports. Proceeds from exports to all countries may be obtained in any convertible currency. Prescription of currency requirements are not applied to outgoing payments. All payments to, and receipts from, Israel are prohibited. With few exceptions, non-Syrians visiting the Syrian Arab Republic are required to settle their bills in foreign exchange.
Payment arrangements
Bilateral payment arrangements
OperativeThere is an agreement with the Islamic Republic of Iran.
InoperativeThere is an agreement with Russia and Sri Lanka.
Administration of controlThe Ministry of Economy and Foreign Trade (MOEFT) determines policy with regard to imports and exports and issues import licenses. The EO issues exchange licenses for invisibles and capital transactions.
International security restrictionsn.a.
Payment arrears
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold are subject to import licensing, while export proceeds must be surrendered to the Commercial Bank of Syria (ComBS).
Controls on exports and imports of banknotes
On exports
Domestic currencySyrian banknotes may not be exported. However, travelers to Jordan and Lebanon who are not eligible for a foreign exchange allowance may take with them up to LS 5,000 a trip. Nonresidents leaving the Syrian Arab Republic are not allowed to reconvert Syrian currency into foreign exchange.
Foreign currencyResidents traveling abroad may take with them foreign exchange up to $2,000 a trip to all countries except Jordan and Lebanon.
Resident Accounts
Foreign exchange accounts permittedResidents are permitted to open foreign exchange accounts. Deposits may be transferred to other resident accounts on condition that their accounts have sources from abroad. Deposits in the form of banknotes may only be withdrawn in that form, unless transferred abroad for medical treatment, education, newspaper subscriptions, and other similar noncommercial purposes. Deposits for a term of 90 days or more accrue a competitive rate of interest.
Held domesticallyYes.
Held abroadApproval is granted if the resident has activities abroad.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedAfter obtaining approval, nonresidents may open accounts in convertible foreign currencies at the ComBS for the deposit of funds from abroad. Balances in such accounts may be sold to local banks, transferred abroad without restriction, or used to pay for authorized imports. Temporary nonresident accounts may be opened in the name of nonresidents temporarily residing in the Syrian Arab Republic. These accounts may not be used, however, for funds received in settlement currencies through payment conventions.
Domestic currency accountsAfter obtaining approval, these accounts may be credited with the proceeds in foreign currencies sold to the authorized banks and with other receipts in foreign currencies; they may be debited without prior approval to pay for Syrian exports to the country of the account holder and for expenses in the Syrian Arab Republic.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetThe foreign exchange requirements of the state trading agencies are met from the annual foreign exchange budget; these agencies automatically receive import licenses upon submission of documentation of their import requirements.
Financing requirements for importsWhen foreign exchange is not made available, private imports must be financed with the importers’ own resources through external credit arrangements, foreign currency deposits maintained in the Syrian Arab Republic by nonresidents, or foreign exchange purchased from other private or mixed enterprises through the intermediary of the ComBS at the “rate in neighboring countries.” Imports of many goods are restricted to specific methods of financing. A number of imports may only be imported using foreign exchange generated through exports.
Advance import depositsA non-interest-bearing advance deposit is required for public sector imports for an amount equal to 100% of the value of the imports. Private sector imports are not subject to this requirement if they are financed from abroad. If the ComBS requires an LC, an import deposit is required in the amount of 100% of the value of the import plus a 3% fee.
Documentation requirements for release of foreign exchange for imports
Letters of creditPrivate importers may choose to import products specified on the permitted list by opening LCs at the ComBS.
Import licenses and other non tariff measuresAll imports valued at more than LS 2,000 (LS 1,000 for imports from Lebanon) require licensing. A fee ranging from LS 104 to LS 454 is charged upon the issuance of an import license. Imports from the Syrian free zones are allowed for certain industrial goods and for goods imported directly from the country of origin. Imports of commodities originating in Israel are prohibited.
Positive listThe list of items that the private sector is permitted to import includes certain agricultural goods, industrial goods, and raw materials. Imports of goods not on the permitted list are prohibited, with certain exceptions. Imports must come directly from the country of origin, but the MOEFT has the authority to permit certain goods to be imported from countries other than the country of origin.
Negative listThere is a general list of goods that may not be imported from non-Arab countries. A separate list of prohibited imports from member countries of the Arab Free Trade Area includes only goods prohibited for health, safety, religious, or environmental reasons.
Import taxes and/or tariffsAn import surcharge of 2% is charged on all imports; government imports and imports of certain essential items are exempted. Imports for customs duty purposes are valued at different exchange rates (LS 11.25, LS 23, LS 43, and LS 46.50 per $1), according to the categories of goods, while import tariffs range up to 200%. All previous special levies on imports have been replaced by a unified import surcharge ranging from 6% to 35%.
State import monopolyMany basic commodities (such as paper, salt, tobacco, wheat, iron and steel, and certain agricultural machinery) are imported only by state trading agencies or, for their own account, by certain private sector importers.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsUntil May 7, 1999, exporters were required to repatriate and surrender the proceeds to the ComBS within 60 days of the date of shipment to Lebanon, within four months of the date of export shipment to other Arab countries, and within six months of the date of shipment to any other country. On May 8, 1999, these deadlines were amended and currently exporters are required to repatriate and surrender export proceeds within six months of the date of export shipment to Arab countries and within nine months from the date of shipment to any other country. These periods may be extended to nine months for exports to Arab countries and 12 months for exports to other countries, after the approval of the EO, which is granted upon presentation of a proof of need. Private sector exporters of manufactured goods are required to surrender 25% of their export proceeds to the ComBS at the “rate in the neighboring countries,” and to retain the remainder to finance permitted imports. Public sector enterprises may retain 100% of their export proceeds in special foreign currency accounts. In the case of fruits and vegetables, private sector exporters may retain 100% of the proceeds.
Financing requirementsThe ComBS may accept prepayments for exports of Syrian products.
Documentation requirementsExports of a few goods to all countries and all exports to Israel are prohibited.
Letters of creditYes.
Preshipment inspectionYes.
Export licensesExports of wheat, barley, cotton, cotton yarn, and their derivatives are made by the government organizations dealing in cereals and cotton. Petroleum product exports are handled by the state Petroleum Marketing Office. Exports of certain other commodities are also reserved for government agencies, state trading agencies, or specified companies.
Without quotasYes.
Export taxesProducts of agricultural origin are subject to the agricultural production tax of 12.5% ad valorem. The processed products that qualify for tax reimbursement include dried, frozen, and processed fruits and vegetables; ginned cotton, cotton wool, cotton clothing, and cotton seed oil; and olive oil. On January 7, 1999, cotton, cotton seeds, cotton yarn, and textiles also became exempt from the agricultural production tax, provided the goods are exported or processed. On February 1, 2000, additional agricultural products became exempted from the agricultural production tax.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersMost payments for invisibles must be made at the “rate in the neighboring countries.”
Trade-related payments
Prior approvalYes.
Investment-related paymentsRemittances of profit and dividends must be authorized by the EO upon proof of payment of income tax. Profits from projects approved by the Higher Committee for Investment under the investment law may be repatriated freely. Information is not available on the amortization of loans or depreciation of direct investments.
Prior approvalYes.
Payments for travelResidents traveling abroad may take with them foreign exchange up to $2,000 a trip to all countries except Jordan and Lebanon. Of this amount, up to the equivalent of LS 5,000 a trip may be purchased at the official rate for travel to Arab countries (except Jordan and Lebanon), and up to the equivalent of LS 7,500 a trip for travel to non-Arab countries. Travelers to Jordan and Lebanon are not eligible for a foreign exchange allowance, but may take with them up to LS 5,000 a trip in Syrian banknotes. For children 15 years and younger, the allowances are 50% of the above amounts. On departure, residents of Syrian nationality must pay an exit tax of LS 600 a person if traveling to Arab countries and LS 1,500 a person for other destinations. An airport stamp tax of LS 200 is added to this tax.
Quantitative limitsYes.
Personal payments
Prior approvalThe allowance for medical treatment must be authorized by the Ministry of Health and for studies abroad by the Ministry of Higher Education.
Quantitative limitsThe limit for family maintenance and alimony is LS 250 for each transfer and is effected upon presentation of proof of need.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsUp to 60% of the salaries received by foreign technicians and experts employed in the Syrian Arab Republic and 50% of the salaries of personnel of foreign diplomatic and international missions in the Syrian Arab Republic may be transferred. Foreign staff connected with foreign direct investments are allowed to transfer 100% of severance pay.
Credit card use abroadYes.
Other payments
Prior approvalYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsProceeds from a few transactions by the public sector relating to bilateral payment agreements must be sold at the old official rate of LS 11.20 per $1, and the remainder plus those from transactions by the private sector must be sold at the “rate of neighboring countries.” All Syrian employees working abroad are subject to an annual tax of $50-$700, depending on their profession, and are allowed import tax exemptions on luxury items (valued between $500 and $7,000) if the equivalent funds are surrendered at the budget accounting rate. Syrian government employees who are on leave and working abroad are required to repatriate and convert a minimum of 25% of each year’s earnings received in foreign exchange at the “rate of neighboring countries.”
Restrictions on use of fundsYes.
Capital Transactions
Controls on capital and money market instrumentsAll capital transfers to and from the Syrian Arab Republic take place at the “rate in neighboring countries.” Exports of capital require the approval of the EO.
On capital market securitiesThere is no market in medium- and long-term government bonds in the Syrian Arab Republic. Bonds are issued on an as-needed basis to government-owned banks to supplement their capital base.
Shares or other securities of a participating nature
Purchase abroad by residentsYes.
On money market instrumentsThe only instruments available in the Syrian Arab Republic are investment bonds issued by the Popular Credit Bank (PCB) as agent of the government. The bonds, which carry an interest rate of 9% a year, have 10-year maturity but have a short-term effective holding period as they are redeemable after three to six months. They may only be purchased by nonbank Syrian residents and by the PCB itself.
Purchase abroad by residentsYes.
On collective investment securitiesThese instruments do not exist in the Syrian Arab Republic.
Purchase locally by nonresidentsn.r.
Sale or issue locally by nonresidentsn.r.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.r.
Controls on derivatives and other instrumentsn.a.
Controls on credit operationsThere are controls on all credit operations.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentThe Syrian Arab Republic provides special facilities for the investment of funds of immigrants and of nationals of Arab states, including a seven-year tax exemption from all taxes in the tourism and agricultural industries. Projects with minimum fixed assets of LS 10 million approved by the government benefit from a number of exemptions from exchange and trade regulations, including exemption from customs duties of imports of required machinery, equipment, and vehicles. Mixed companies with at least 25% public participation are exempted from all taxes for seven years and private companies are exempted for five years; exemption periods may be extended by an additional two years if the company exports at least 50% of its output. Investors are permitted to hold foreign currency accounts to finance convertible currency requirements. These accounts comprise all capital and loans secured in foreign currency and 75% of foreign currency exports. All profits may be transferred freely. The Syrian Arab Republic has investment guarantee agreements with France, Germany, Switzerland, and the United States.
Controls on liquidation of direct investmentInvestors are free to repatriate foreign exchange capital after five years from the date of investment. Capital may be repatriated after six months if the project suffers from events beyond the control of the investor.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsNonresidents and foreign nationals may acquire immovable property only after presenting evidence that they have converted into Syrian pounds the foreign exchange equivalent of the price of property at the authorized local bank.
Sale locally by nonresidentsProceeds are required to be held in a blocked account and repatriated gradually.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsForeign currency deposits are not subject to reserve requirements.
Interest rate controlsYes.
Credit controlsYes.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1999
Exchange arrangementJanuary 1. The budget accounting rate was adjusted to LS 46.45/46.50 per $1 from LS 45.45/45.50 per $1.
December 31. The promotion exchange rate was eliminated.
Exports and export proceedsJanuary 7. The agricultural production tax on cotton, cotton seeds, cotton yarn, and textiles was abolished in certain cases.
May 8. The deadlines for repatriating and surrendering export receipts were raised to six months in the case of exports to Arab countries and to nine months in the case of other countries.
Changes During 2000
Exports and export proceedsFebruary 1. A number of agricultural products were exempted from the agricultural production tax.

    Other Resources Citing This Publication