Chapter

REPUBLIC OF CONGO

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, 1996.
Exchange Arrangement
CurrencyThe currency of the Republic of Congo is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at the fixed rate of CFAF 100 per €0.1524. Exchange transactions in euros between the BEAC and commercial banks take place at the same rate. Buying and selling rates for certain other foreign currencies are also officially posted, with quotations based on the fixed rate for the euro and the rate for the currency concerned in the Paris foreign exchange market. Payments to all countries are subject to a commission of 0.75%, with a minimum charge of CFAF 75; exempt from this commission are payments of the state, the Postal and Telecommunications Administration, the BEAC, salaries of Congolese diplomats abroad, expenditures of official missions abroad, scholarships of persons studying or training abroad, payments made on behalf of individuals for purchases of books and newspapers not intended for sale, and debt-service payments due from companies that have entered into an agreement with the Republic of Congo. An additional commission of 0.25% is levied on all payments to countries that are not members of the BEAC.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThere are no spot or forward exchange markets for the CFA franc. However, exporters and importers can always cover their position on the Paris foreign exchange market.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause the Republic of Congo is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC members and the Comoros) are made in CFA francs, euros, or the currency of any other Operations Account country. Settlements with all other countries are usually made in any of the currencies of those countries or in French francs through foreign accounts in euros.
Payment arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Clearing agreementsYes.
Administration of controlPayments to France and the Operations Account countries, although subject to declaration, are unrestricted. Settlements and investment transactions with all foreign countries, however, are subject to control.



The General Directorate of Credit and Financial Relations (DGCRF) in the Ministry of Economy, Planning, and Finance (MEPF) supervises borrowing and lending abroad. Exchange control is administered by the MEPF, which has delegated approval authority to the DGCRF. All exchange transactions relating to foreign countries must be effected through authorized intermediaries—that is, the Postal and Telecommunications Administration and authorized banks.
International security restrictionsNo.
Payment arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are free to hold gold in the form of coins, art objects, or jewelry; however, to hold gold in any other form, the prior authorization of the MEPF is required.
Controls on external tradeThe prior authorization of the MEPF is required to import or export gold in any form. Exempt from the authorization requirement are (1) imports and exports by or on behalf of the Treasury or the BEAC and (2) imports and exports of manufactured articles containing a small quantity of gold (such as gold-filled or gold-plated articles). Both licensed and exempt imports of gold are subject to customs declaration. There are no official exports of gold.
Controls on exports and imports of banknotes
On exports
Domestic currencyThere is no limit on the amount of banknotes that residents or nonresidents may export from the Republic of Congo to any member country of the BEAC area of issue, but exports of banknotes outside the CAEMC area are prohibited.
Foreign currencyResidents traveling for tourist or business purposes to France or the Operations Account countries are allowed to take out an unlimited amount in banknotes or other payment instruments in French francs. The reexportation of foreign banknotes is allowed up to the equivalent of CFAF 250,000; the reexportation of foreign banknotes above these ceilings requires documentation demonstrating either the importation of foreign banknotes or their purchase against other means of payment registered in the name of the traveler, or through the use of nonresident deposits lodged in local banks. The reexportation by nonresident travelers of means of payment other than banknotes issued abroad and registered in the name of the nonresident traveler is not restricted, subject to documentation that the banknotes had been purchased with funds drawn from a foreign account in CFA francs or with other foreign exchange.
On imports
Domestic currencyThere is no limit on the amount of banknotes that residents and nonresidents may import from a member country of the BEAC area of issue to the Republic of Congo. However, imports of banknotes from outside the area of issue are prohibited.
Foreign currencyTravelers are authorized to enter the Republic of Congo with banknotes and coins other than CFA francs.
Resident Accounts
Foreign exchange accounts permittedYes.
Held abroadThese accounts are permitted, but approval is required.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedForeign exchange accounts are intended primarily for the use of international agencies and embassies. However, prior approval is required.
Domestic currency accountsThe regulations pertaining to nonresident accounts are based on regulations that were applied in France before the abolition of all capital controls in 1989. Because the BEAC has suspended the repurchase of BEAC banknotes exchanged outside the area of issue, these may not be credited to foreign accounts in euros.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions with countries other than France and the Operations Account countries must be domiciled with an authorized bank. Licenses for imports from these countries must be domiciled with an authorized bank and approved by the Foreign Trade Directorate and the DGCRF.
Preshipment inspectionYes.
Import licenses used as exchange licensesThe approved import license entitles importers to purchase the necessary exchange, provided that the shipping documents are submitted to an authorized bank.
Import licenses and other nontariff measuresAn annual import program classifies imports by the following zones: (1) the countries of the CAEMC, (2) France, (3) other Operations Account countries, (4) EU countries other than France, and (5) all remaining countries. Nine product items under this program require licenses, and others are subject to ex post declaration.
Open general licensesExcept for cement, goods from all countries may be imported freely and without licenses. All imports, however, are subject to declaration.
Licenses with quotasImports of cement are subject to quotas.
Other nontariff measuresAll imports of commercial goods must be insured through authorized insurance companies in the Republic of Congo.
Import taxes and/or tariffsThe common duty rates of the CAEMC member countries are 5% for basic necessities, 10% for raw materials and capital goods, 20% for intermediate and miscellaneous goods, and 30% for consumer goods products requiring special protection. Intra-CAEMC customs duties are 20% of the common external rates.



Import surcharges of 30% have been introduced on imports of goods previously subject to quantitative restrictions. These surcharges are to be eliminated in three to six years, with the longer period applying to certain agricultural and textile products.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to countries outside the CAEMC zone must be collected and repatriated within 180 days of arrival of the commodities at their destination.
Surrender requirementsExport proceeds must be surrendered within eight days from the payment due date.
Financing requirementsn.a.
Documentation requirements
DomiciliationAll export transactions relating to countries other than France, Monaco, and the Operations Account countries must be domiciled with an authorized bank.
Export licensesAll exports require an exchange commitment that must be underwritten within eight days from the export date.
Without quotasYes.
Export taxesExport taxes of up to 13% apply to certain goods.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles to France and the Operations Account countries are permitted freely; payments to other countries are subject only to declaration and presentation of appropriate documents to the MEPF for approval. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization.
Investment-related paymentsThe regulations in force guarantee the repatriation of profits, dividends, and proceeds from disinvestment abroad.
Prior approvalPayments for depreciation of direct investments require DGCRF authorization.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalYes.
Quantitative limitsResidents traveling for tourist or business purposes to France or the Operations Account countries are allowed to take out an unlimited amount in banknotes or other payment instruments in CFA francs. The allowances for travel to countries outside the franc zone are subject to the following regulations: (1) for tourist travel, CFAF 100,000 a day, with a maximum of CFAF 2 million a trip; (2) for business travel, CFAF 250,000 a day, with a maximum of CFAF 5 million a trip; (3) for official travel, the equivalent of mission expenses paid to civil servants and other government employees, or for tourists a foreign exchange allowance on the same terms; and (4) for medical expenses, up to CFAF 100,000 a day with a maximum of CFAF 2.5 million a trip. All resident travelers, regardless of destination, must declare in writing all means of payment at their disposal at the time of departure and surrender within eight days all means of payment exceeding the equivalent of CFAF 25,000. Allowances in excess of the limits are subject to the authorization of the MEPF.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsPayments of pensions, medical expenses, studies abroad, alimony, and family maintenance are authorized upon presentation of supporting documents.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsThe transfer of the entire net salary of a foreigner working in the Republic of Congo is permitted upon presentation of the appropriate pay voucher, provided that the transfer takes place within three months of the pay period. Transfers by residents of amounts smaller than CFAF 500,000 to nonmember countries of the franc zone are subject to simple declaration, and those exceeding CFAF 500,000 require prior authorization. Transfers to nonmember countries by nonresidents living in the Republic of Congo for less than one year are subject to authorization. Members of diplomatic missions and employees of international organizations are exempt from this requirement.
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe use of credit cards, which must be issued by resident financial intermediaries and approved by the MEPF, is limited to the ceilings applied for tourist and business travel.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAll amounts due from residents of foreign countries with respect to services and all income earned in those countries from foreign assets must be collected when due.
Surrender requirementsProceeds should be surrendered within one month of the due date.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsCapital movements between the Republic of Congo, France, Monaco, and the Operations Account countries are free, although ex post declarations are required. Most international capital transactions are subject to prior authorization. Capital transfers abroad require exchange control approval and are restricted, but capital receipts from abroad are generally permitted freely.



All foreign securities, foreign currency, and titles embodying claims on foreign countries or nonresidents that are held in the Republic of Congo by residents or nonresidents must be deposited with authorized banks in the Republic of Congo.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThe issuing, advertising, or offering for sale of foreign securities in the Republic of Congo requires prior authorization from the MEPF. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the Congolese government; and (2) shares similar to securities whose issuing, advertising, or offering for sale in the Republic of Congo has previously been authorized.
Purchase abroad by residentsYes.
On money market instruments
Purchase abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase abroad by residentsYes.
Controls on credit operations
Commercial creditsSpecial controls (in addition to any exchange control requirement that may apply) are maintained over borrowing and lending abroad.
By residents to nonresidentsAll lending in CFA francs to nonresidents is prohibited unless special authorization is obtained from the MEPF. The following are, however, exempt from this authorization: (1) loans in foreign currency granted by registered banks, and (2) other loans whose total amounts outstanding do not exceed the equivalent of CFAF 5 million for any one lender. The making of loans that are free of authorization and each repayment must be reported to the General Directorate of Credit and Financial Relations within 20 days.
To residents from nonresidentsBorrowing requires prior authorization from the MEPF. However, loans contracted by registered banks and small loans, where the total amount outstanding does not exceed CFAF 10 million for any one borrower, the interest is no higher than 5%, and the term is at least two years, are exempt from this requirement. The contracting of loans that are free of authorization and each repayment must be reported to the General Directorate of Credit and Financial Relations within 20 days of the operation. Borrowing backed by a guarantee from the government is exempt from authorization.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentThe prior approval of the MEPF is required.
Inward direct investmentInvestments (including those made through foreign companies that are directly or indirectly controlled by persons in the Republic of Congo and those made by overseas branches or subsidiaries of companies in the Republic of Congo) require the prior approval of the MEPF, unless they involve the creation of a mixed-economy enterprise.
Controls on liquidation of direct investmentThe full or partial liquidation of direct investments must be declared to the MEPF within 20 days.
Controls on real estate transactionsn.a.
Controls on personal capital movementsn.a.
Provisions specific to commercial banks and other credit institutionsn.a.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1999
Exchange arrangementJanuary 1. The CFA franc peg to the French franc was replaced with one to the euro.

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