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: February 15, 1961.
Exchange Arrangement
CurrencyAs of January 1, 1999, the currency of Italy is the euro. In cash transactions, however, the legal tender remains the Italian lira until 2002, when euro banknotes and coins will be issued.
Exchange rate structureUnitary.
Exchange arrangement with no separate legal tenderItaly participates in a currency union (EMU) comprising 11 members of the EU: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Internal conversion rates in respect to the national currencies of EMU participants were fixed to the euro on January 1, 1999, whereas the external exchange rate of the euro is market determined. The conversion rate between the euro and the Italian lira was set at Lit 1936.27 per €1. The ECB has the right to intervene to smooth out fluctuations in external exchange rates.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketPremiums and discounts in the forward exchange market are normally left to the interplay of market forces.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with foreign countries are normally made in quoted currencies or in euro on foreign accounts.
Payment arrangements
Clearing agreementsItaly maintains clearing accounts with Croatia and Slovenia. The accounts are used for trade in cross-border areas. The balances in these accounts may be used only to finance trade between certain districts of Croatia and Slovenia and the Italian provinces of Trieste and Gorizia. The balances are not transferable. There is no automatic mechanism through which outstanding balances are settled within 90 days. Only Italy is allowed to maintain a debit balance on these accounts.
Administration of controlEffective August 4, 1999, when the requirement for banks to obtain an authorization to carry out foreign exchange transactions was eliminated, residents were allowed to conduct foreign exchange transactions freely, with settlements to be effected either indirectly, through the Bank of Italy (BOI), other financial intermediaries, and the Poste Italiane S.p.a., or directly, by drawing on external accounts or by offsetting debts and credits vis-à-vis other residents or nonresidents. Operators and intermediaries must, for statistical purposes, transmit data to the Italian Foreign Exchange Office on their foreign transactions that exceed the equivalent of Lit 20 million by filling out a foreign exchange statistical return.
International security restrictions
In accordance with Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsCertain restrictions are imposed on the making of payments and transfers for current international transactions with respect to the Federal Republic of Yugoslavia (Serbia/Montenegro), Iraq, and the UNITA movement in Angola. Sanctions against Libya were suspended on April 5, 1999.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeDomestic purchases and sales of gold with a total amount exceeding the equivalent of Lit 20 million must be declared to the Foreign Exchange Office.
Controls on external tradeEffective January 17, 2000, purchases and sales of gold with a total amount exceeding the equivalent of Lit 20 million must be declared to the Foreign Exchange Office. Before that date, purchases and sales of gold were reserved for the monetary authorities. Residents were allowed to purchase and import unrefined gold under ministerial license for industrial purposes. The exportation of unrefined gold was subject to licensing by the Ministry of Foreign Trade. The importation and exportation of gold coins, including coins that are legal tender in a foreign country, were unrestricted. Imports of unrefined gold were not subject to a VAT, whereas imports of gold coins were subject to a VAT of 20%.
Controls on exports and imports of banknotesResidents and nonresidents are allowed to take with them into or out of the country without limits cash and securities in Italian lire and/or foreign currency. For fiscal and antimoney-laundering purposes, the transfer of cash and/or securities with a total amount exceeding the equivalent of Lit 20 million must be declared by filling out a form when crossing the border into or out of non-EU countries and submitting the form to border customs offices; for EU-country entry or exit, this declaration must be submitted at banks, customs offices, post offices, or a customs guard station within 48 hours after entry into Italian territory or 48 hours prior to exit from Italian territory. For transfers by letter, the declaration must be submitted within 48 hours after receipt or at the time of mailing. The declaration has to be sent by banks, customs offices, post offices, or customs guard stations to the Italian Foreign Exchange Office.
On exports
Domestic currencyYes.
Foreign currencyYes.
On imports
Domestic currencyYes.
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThese are accounts that have been blocked in compliance with UN Security Council resolutions.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresImports are governed by EU regulations according to which imports of most products, except for textiles and some products originating from China, are free of licensing and quantitative restrictions. Imports from non-EU countries of most products covered by the CAP are subject to variable import levies, which have replaced all previous barriers to imports. Common EU regulations are also applied to imports of most other agricultural and livestock products from non-EU countries. Payments for imports are not regulated, without prejudice to the general rules cited in the section on Administration of Control.
Negative listYes.
Licenses with quotasYes.
Import taxes and/or tariffsYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExports to non-EU countries are free, with the exception of high-technology products included in an EU Regulation and of oil extracted from the seabed, which are subject to ministerial authorization.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On collective investment securities
Sale or issue locally by nonresidentsThe public offering in Italy of securities issued by mutual funds that are not covered by EU directives is subject to authorization.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutions
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsThe public offering in Italy of financial products is subject to prior communication to the supervisory authority to which the prospectus to be published should be attached.
Changes During 1999
Exchange arrangementJanuary 1. The currency of Italy became the euro. The conversion rate between the euro and the Italian lira was set irrevocably at Lit 1936.27 per €1.
Arrangements for payments and receiptsApril 5. Sanctions against Libya were suspended.

June 15. Sanctions were imposed on the Federal Republic of Yugoslavia (Serbia/Montenegro).

August 4. Banks were no longer required to obtain authorization to carry out foreign exchange transactions.
Changes During 2000
Arrangements for payments and receiptsJanuary 17. Transactions involving domestic ownership and trade of gold were liberalized.

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