Chapter

FIJI

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: August 4, 1972.
Exchange Arrangement
CurrencyThe currency of Fiji is the Fiji dollar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe external value of the Fiji dollar is determined on the basis of a weighted basket of currencies comprising the Australian dollar, the Japanese yen, the New Zealand dollar, the euro, and the U.S. dollar. The exchange rate of the Fiji dollar in terms of the U.S. dollar, the intervention currency, is fixed daily by the Reserve Bank of Fiji (RBF) on the basis of quotations for the U.S. dollar and other currencies included in the basket.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange facilites are provided by authorized dealers for trade transactions for periods of up to six months for exports and nine months for imports, up to a ratio of their capital.
Arrangements for Payments and Receipts
Prescription of currency requirementsAlthough no specific requirements exist, settlements must be made in convertible currencies acceptable to both countries.
Payment arrangementsn.a.
Administration of controlExchange control is administered by the RBF acting as an agent of the government; the RBF delegates to authorized dealers the authority to approve current payments and transfers up to the full amount, except for advance payments for imports. Effective January 1, 2000, no documentary evidence is needed for any current or capital transfer, except insurance, for amounts up to F$10,000.
International security restrictionsn.a.
Payment arrearsn.a.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may freely purchase, hold, and sell gold coins but not gold bullion.
Controls on external tradeThe exportation of gold coins, except coins and collectors’ pieces for numismatic purposes, requires specific permission from the RBF. The importation of gold, other than gold coins, from all sources requires a specific import license from the MOF; these are restricted to authorized gold dealers. Gold coins and gold bullion are exempt from fiscal duty but are subject to a 10% VAT. Gold jewelry is also exempt from fiscal duty but subject to a 10% VAT and is not under licensing control. Samples of gold and gold jewelry sent by foreign manufacturers require import licenses if their value exceeds F$200. Exports of gold jewelry are free of export duty but require licenses if their value exceeds F$1,000. Exports of gold bullion are subject to an export duty of 3%.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports are allowed up to F$500 a trip for travel-related purposes only.
Foreign currencyExports are allowed up to the amount declared at the time of arrival. Local travelers are allowed up to a F$5,000 cash equivalent in foreign currency (inclusive of a maximum of F$500 in local currency) for each overseas trip.
On imports
Domestic currencyTravelers may freely bring in Fiji banknotes, but must declare them to customs or immigration officials on arrival.
Foreign currencyTravelers may freely bring in foreign currency banknotes, but must declare them to customs or immigration officials on arrival in order to export the unused balance on departure.
Resident Accounts
Foreign exchange accounts permittedApplicable to resident individuals and any business entity registered and operating in Fiji.
Held domesticallyThese accounts are permitted, but prior approval is required. Effective January 1, 2000, commercial banks are authorized to approve local deposits up to the amount of F$1,000 per transaction.
Held abroadThese accounts are permitted, but prior approval is required.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited freely with the account holders’ salaries (net of tax), with interest payable on the account, or with payments from other external accounts.
Domestic currency accountsThese accounts may be credited freely with the account holders’ salaries (net of tax); with interest payable on the account; with payments from other external accounts; with the proceeds of sales of foreign currency or foreign coins by the account holder; and with Fiji banknotes that the account holder brought into Fiji, or acquired by debit to an external account, or acquired through the sale of foreign currency in the country during a temporary visit. External accounts may also be credited with payments by residents for which either general or specific authority has been given. External accounts may be debited for payments to residents of Fiji, transfers to other external accounts, payments in cash in Fiji, and purchases of foreign exchange.
Convertible into foreign currencyThese accounts may be converted, but approval is required. Effective January 1, 2000, approval may be granted by the commercial banks.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAuthorized banks may approve advance payments for imports of up to F$500,000 an application without specific approval from the RBF, if such payments are required by the supplier. Documentary evidence is needed for remittances above F$10,000.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence to authorized dealers, who may allow payments for goods that have been imported under either a specific import license or an OGL.
Domiciliation requirementsYes.
Letters of creditYes.
Import licenses and other nontariff measuresImports of poultry and poultry products and lubrication oils from any source require a specific import license. The Ministry of Commerce and Industry (MCI) is responsible for issuing import licenses, with the exception of those for gold and timber. Import licenses and other nontariff measures for gold are issued by the MOF; for timber, they are issued by the Ministry of Forestry. A wide range of consumer goods are imported by national cooperative societies under a joint arrangement with six other Pacific Island countries. The import license for cyclonic building materials is jointly issued by the Department of Fair Trading and Consumer Affairs and the MOF.
Negative listThe importation of a few commodities is prohibited for security, health, or public policy reasons.
Licenses with quotasImport licenses for frozen chicken from the United States are issued on a quota basis.
Other nontariff measuresAll imports must meet required technical standards on labeling, packaging, and expiration date requirements. All agricultural and forestry products are subject to quarantine clearance.
Import taxes and/or tariffsImport tariffs range from 5% to 22.5%. A 10% VAT is also levied.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters are required to collect the proceeds from exports within six months of the date of shipment of the goods from Fiji and may not, without specific permission, grant more than six months’ credit to a nonresident buyer. Customs is delegated to process and approve all export of goods with no monetary return.
Surrender requirementsOn January 1, 1999, the export retention limit was raised to 40%.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesExport licenses are issued by the customs department and monitored by the Comptroller of Customs. Specific licenses are required only for exports of sugar, wheat bran, copra meal, certain types of lumber, certain animals, and a few other items. The MCI is responsible for issuing export licenses for trochus shells. Irrespective of export-licensing requirements, however, exporters are required to produce an export permit for the commercial consignment of all goods with an f.o.b. value of more than F$1,000; this permit is required for exchange control purposes.
Export taxesA 3% export duty is levied on exports of sugar, gold, and silver.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersMost payments have been fully delegated to authorized banks without any restrictions or limits. Effective January 1, 2000, documentation requirements were also eliminated for amounts up to F$10,000, except for insurance transfers.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related paymentsPayment of interest is allowed, provided prior approval for the loan was granted by the RBF, if the loan is in excess of F$500,000.
Quantitative limitsEffective January 1, 1999, limits on remittances of profits and earnings were removed. Authorized banks may make payments of up to F$100,000 an application for profit remittances without prior approval of the RBF.
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal payments
Prior approvalFor payment of medical costs, no approval is required, provided that payment is made directly to the institution.
Quantitative limitsForeign exchange provided is restricted to amounts due.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Credit card use abroad
Quantitative limitsThe use of credit cards for travel-related expenses is not restricted.
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsResidents are required to sell all their foreign currency receipts to an authorized dealer within one month of their return.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsEffective January 1, 2000, the authority to authorize investments of nonresidents for amounts up to F$100,000 was delegated to the following institutions: (1) the Suva Stock Exchange for investments in listed companies; and (2) commercial banks for investments in Fiji dollar-denominated deposits. Some of the funding for these investments should be from abroad or from earnings in Fiji. The allocation for portfolio investment by private persons is F$10,000, to be utilized as a retail account.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsEffective January 1, 1999, locally incorporated companies are allowed to invest up to F$500,000 a company up to an overall national ceiling of F$10 million to buy shares in companies offshore. Effective January 1, 2000, companies are allowed to invest up to F$l million a company and the overall ceiling was raised to F$30 million. These investments are restricted to the establishment of subsidiary offices and equity purchases in businesses that would assist the growth potential of the Fiji operation.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesThere are controls on all transactions in bonds or other debt securities.
On money market instrumentsThere are controls on all transactions in money market instruments.
On collective investment securitiesThere are controls on all transactions in collective investment securities.
Controls on derivatives and other instrumentsThere are controls on all derivatives transactions.
Controls on credit operationsResidents must obtain prior permission from the RBF to borrow amounts over F$100,000 in foreign currency abroad. Effective January 1, 2000, this limit was increased to F$500,000. Prior RBF permission is required for any up-front fees.
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsEffective January 1, 1999, the limit on bank guarantees was removed and fully delegated to commercial banks.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentEffective January 1, 1999, (1) nonbank financial institutions may invest up to F$65 million in 1999; (2) the limit on overseas investment for individuals and families was increased to F$20,000 a taxpayer, up to an overall ceiling of F$10 million; and (3) the limit on expenditure to set up sales offices or subsidies abroad by local companies was increased to F$500,000 a subsidiary. On January 1, 2000, the limit on establishing sales offices/subsidiaries abroad by local companies was increased to F$l million. Nonbank financial companies were allowed to invest up to F$70 million.
Inward direct investmentForeign investment in Fiji is normally expected to be financed from a nonresident source. Such foreign investment may be given “approved status,” which guarantees the right to repatriate dividends and capital.
Controls on liquidation of direct investmentSuch transactions require specific permission from the RBF, which is readily granted upon evidence that the investment funds originated offshore. Nonresident-owned companies are permitted to repatriate in full the proceeds from sales of assets and capital gains on investments.
Controls on real estate transactions
Purchase abroad by residentsThe purchase of personal property abroad is not permitted.
Purchase locally by nonresidentsApproval by the Ministry of Land is required for purchases of state-owned property. Settlements require RBF approval to ensure proceeds are received in Fiji and that funds originate from abroad.
Sale locally by nonresidentsControls on settlements are effected to safeguard local interest before proceeds from sales are remitted abroad.
Controls on personal capital movements
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsEffective January 1, 1999, the ceiling on emigration allowance was removed. Authorized banks may make payments up to F$100,000 an applicant without the prior approval of the RBF.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAuthorized dealers must obtain permission from the RBF to borrow abroad.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Effective January 1, 1999, the limits for lending to a newly established company or a branch of a company in Fiji (other than a bank) that is controlled directly or indirectly by persons who reside outside Fiji was raised to F$l million. Effective January 1, 2000, this limit was raised to F$5 million. Lenders may also authorize temporary overdrafts without reference to the RBF. Borrowing by nonresident individuals is fully delegated to lending institutions and commercial banks.
Lending locally in foreign exchangeThe banks and nonbank financial institutions may not lend foreign currency to any resident of Fiji without the specific permission of the RBF.
Purchase of locally issued securities denominated in foreign exchangeYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsAn individual may (together with his or her relatives) own up to 15% of the voting shares of a bank or credit institution. Ownership through a company may be up to 30%. This does not preclude the establishment of branches or subsidiaries incorporated in Fiji of 100% nonresident-controlled financial institutions.
Open foreign exchange position limitsNet open position limits in terms of each bank’s actual capital are set at the greater of 12.5% or F$0.4 million, and 25% or F$0.8 million up to a maximum of F$7.5 million, for a single currency and overall foreign currency, respectively.

The limit on gross outstanding forward foreign exchange sales contracts is set at 50% of each bank’s capital in Fiji, provided net outstanding forward exchange sales contracts does not exceed F$15 million.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadYes.
Limits (max.) on portfolio invested abroadThe limit for 1999 was F$65 million, of which nonbank financial institutions are permitted to place F$15 million offshore, and the Fiji National Provident Fund may place F$50 million.
Other controls imposed by securities lawsn.a.
Changes During 1999
Exports and export proceedsJanuary 1. The export retention limit was raised to 40% from 25% of an exporter’s total export earnings for the previous year.
Capital transactionsJanuary 1. Locally incorporated companies were allowed to invest up to F$500,000 a company, up to an overall national ceiling of F$10 million to buy shares in companies offshore.
Controls on credit operationsJanuary 1. The limit on bank guarantees was removed and fully delegated to commercial banks.
Controls on direct investmentJanuary 1. The limit on expenditure to set up sales offices or subsidiaries abroad by local companies was increased to F$500,000 a subsidiary.



January 1. The limit on overseas investments for individuals and their relatives was increased to F$20,000 a taxpayer, up to an overall ceiling of F$10 million.



January 1. Nonbank financial institutions may invest up to F$65 million in 1999.
Controls on personal capital movementsJanuary 1. The ceilings on the emigration allowance and operating profits for nonresident investors were removed.
Provisions specific to commercial banks and other credit institutionsJanuary 1. The limits for lending to a newly established company or a branch of a company in Fiji (other than a bank) that is controlled directly or indirectly by persons who reside outside Fiji was raised to F$l million.
Changes During 2000
Arrangements for payments and receiptsJanuary 1. No documentary evidence is needed for any current or capital transfer below F$10,000.
Resident accountsJanuary 1. Commercial banks may authorize local deposits up to F$1,000 per transaction.
Nonresident accountsJanuary 1. Approval to convert domestic currency balances into foreign exchange is to be granted by commercial banks.
Payments for invisible transactions and current transfersJanuary 1. Documentation requirements were eliminated for amounts up to F$10,000. January 1. Only insurance transfers in excess of F$10,000 require documentary evidence.
Capital transactions
Controls on capital and money market instrumentsJanuary 1. The authority to authorize investments in a publicly listed company and Fiji dollar-denominated deposits of nonresidents for amounts up to F$100,000 was delegated to the Suva Stock Exchange and the commercial banks.



January 1. The ceiling of investment abroad by a locally incorporated company was raised to F$5 million a company, and the overall ceiling was raised to F$30 million.
Controls on credit operationsJanuary 1. The limit above which RBF authorization is required for residents to borrow from abroad was raised to F$500,000 from F$100,000.
Controls on direct investmentJanuary 1. The limit on establishing sales offices/subsidiaries abroad by local companies was increased to F$l million a company. Nonbank financial institutions may invest up to F$70 million.
Provisions specific to commercial banks and other credit institutionsJanuary 1. The limit to establish a new company by nonresidents was raised to F$5 million.



January 1. The limit for commercial bank lending to a nonresident-owned company was raised to F$5 million from F$l million.

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