Chapter

CAMBODIA

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 Cambodia is the Cambodian riel.
Other legal tenderThe 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%. The official exchange rate applies mainly to external transactions conducted by the government and state-owned enterprises.
Classification
Managed floating with no preannounced path for the exchange rateThe 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 controlThe 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.
International security restrictionsNo.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeThe import or export 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 banknotes
On exportsThe export of means of payment equaling or exceeding $10,000 in foreign exchange or its equivalent in domestic currency by a traveler must be declared to customs officers at border crossings of Cambodia.
Domestic currencyYes.
Foreign currencyExports are subject to prior notification to the NBC.
On importsThe same regulations apply as for exports.
Domestic currencyYes.
Foreign currencyThere are no limits, but imports exceeding $10,000 or equivalent must be declared on entry.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThere are no limits on the balances of these accounts, and the funds may be used to settle domestic obligations, and all transactions may be settled in foreign currency.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
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 banker’s order in support of their applications to purchase foreign exchange, and 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 the existing law.
Preshipment inspectionPreshipment import inspection was temporarily suspended on June 30, 1999.
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.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters or importers of goods and services must make payments for their commercial transactions with the rest of the world through authorized intermediaries.
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
DomiciliationThe proceeds from exports of goods or services must be credited to the exporter’s account with a domiciled bank in accordance with 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 quotasEffective June 30, 1999, exports of garments, gems, and rice to the United States and sawed timber are subject to a quota. Exports of antiques and several categories of logs are restricted.
Export taxesAn export tax of 10% of the estimated market value applies to exports of timber and other selected exports.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments 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, there are no limits.
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.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital and money market instrumentsThere are no specific laws on capital market securities, and there are no securities markets in Cambodia.
Controls on derivatives and other instrumentsn.a.
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.
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsYes.
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 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 the Kingdom of Cambodia may be transferred freely. However, such transfers have to 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.
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 of transfers or settlements and of outflows and inflows of capital carried out between Cambodia and the rest of the world. Any export of foreign currency banknotes by authorized intermediaries is subject to prior declaration to the NBC. Loans and borrowing, 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 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, their foreign exchange position, or any loans in domestic currency extended to nonresidents.
Lending to nonresidents (financial or commercial credits)Banks may lend to nonresidents doing business within Cambodia.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsBanks are not allowed to exceed their short or long position 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.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsThere are no institutional investors in Cambodia.
Other controls imposed by securities lawsThere are no securities laws.
Changes During 1999
Imports and import paymentsJune 30. Preshipment inspection of goods was temporarily suspended.
Exports and export proceedsJune 30. Garment, gem, and rice exports to the United States became the subject of quotas.

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