Chapter

Compilation Guide

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2002
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Status Under IMF Articles of Agreement
Article VIIIThe member country has accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF’s Articles of Agreement.
Article XIVThe member country continues to avail itself of the transitional arrangements of Article XIV, Section 2.
Exchange Arrangement
CurrencyThe official legal tender of the country.
Other legal tenderThe existence of another currency that is allowed to be used officially in the country.
Exchange rate structureIf there is one exchange rate, the system is called unitary; if there are more than one exchange rates that may be used simultaneously for different purposes and/or by different entities, the system is called dual or multiple. Different effective exchange rates resulting from exchange taxes or subsidies are not included in this category.
Classification
Exchange arrangement with no separate legal tenderThe currency of another country circulates as the sole legal tender, or the member belongs to a monetary or currency union in which the same legal tender is shared by the members of the union.
Currency board arrangementA monetary regime based on an explicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligation.
Conventional pegged arrangementThe country pegs its currency (formally or de facto) at a fixed rate to a major currency or a basket of currencies, where the exchange rate fluctuates within a narrow margin of at most ±1% around a central rate.
Pegged exchange rate within horizontal bandsThe value of the currency is maintained within certain margins of fluctuation around a formal or de facto fixed peg. The margins are wider than ±1% around the central rate.
Crawling pegThe value of the currency is adjusted periodically in small amounts at a fixed, preannounced rate or in response to changes in selective quantitative indicators.
Crawling bandThe value of the currency is maintained within certain fluctuation margins around a central rate that is adjusted periodically at a fixed, preannounced rate or in response to changes in selective quantitative indicators.
Managed floating with no preannounced path for the exchange rateThe monetary authority influences the movements of the exchange rate through active intervention in the foreign exchange market without specifying, or precommitting to, a preannounced path for the exchange rate.
Independently floatingThe exchange rate is market determined, with any foreign exchange intervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate, rather than at establishing a level for it.
Exchange taxForeign exchange transactions are subject to a special tax. Bank commissions charged on foreign exchange transactions are not included in this category; rather, they are listed under the exchange arrangement classification.
Exchange subsidyForeign exchange transactions are subsidized by using separate, nonmarket exchange rates.
Forward exchange marketThe existence of a forward exchange market.
Official cover of forward operationsOfficial coverage of forward operations refers to the case where an official entity (the central bank or the government) assumes the exchange risk of certain foreign exchange transactions.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe official requirements affecting the selection of currency and the method of settlement for transactions with other countries. When a country has concluded payments agreements with other countries, the terms of these agreements often lead to a prescription of currency for specified categories of payments to, and receipts from, the countries concerned. The category includes information on the use of domestic currency in transactions between residents and nonresidents, both domestically and abroad. The category also indicates whether there are any restrictions on the use of foreign currency among residents.
Payments arrangements
Bilateral payments arrangementsTwo countries conclude an agreement to prescribe specific rules for payments to each other, including cases where private parties are also obligated to use specific currencies. These agreements can be either operative or inoperative.
Regional arrangementsMore than two parties participate in a payments agreement.
Clearing agreementsThe official bodies of two or more countries agree to offset with some regularity the balances that arise from payments to each other as a result of the exchange of goods, services, or— less often—capital.
Barter agreements and open accountsThe official bodies of two or more countries agree to offset exports of goods and services to one country with imports of goods and services from the same country, without payment.
Administration of controlThe authorities’ division of responsibility for monitoring policy, administering exchange controls, and determining the extent of delegation of powers to outside agencies (often banks are authorized to effect foreign exchange transactions).
International security restrictionsRestrictions on payments and transfers in connection with international transactions imposed by member countries for reasons of national or international security.
In accordance with IMF Executive Board Decision No. 144-(52/51)International security restrictions on the basis of IMF Executive Board Decision No. 144-(52/51), which establishes the obligation of members to notify the IMF before imposing such restrictions, or, if circumstances preclude advance notification, as promptly as possible.
In accordance with UN sanctionsSanctions imposed against a second body on the basis of a UN decision.
Payments arrearsOfficial or private residents of a member default on their payments or transfers in foreign exchange to nonresidents. This category includes only the situation in which domestic currency is available for residents to settle their debts, but they are unable to obtain foreign exchange, for example, because of the presence of an officially announced or unofficial queuing system. The category does not cover nonpayment by private parties due to bankruptcy of the party concerned.
Controls on trade in gold (coins and/or bullion)The existence of separate rules for trading in gold, both domestically and with foreign countries.
Controls on exports and imports of banknotesThe existence of regulations for the physical movement of means of payment between countries. Where information is available, the category distinguishes between separate limits for the (1) export and import of banknotes by travelers and (2) export and import of banknotes by banks and other authorized financial institutions.
Resident Accounts
Indicates whether resident accounts that are maintained in the national currency or in foreign currency, locally or abroad, are allowed and describes how they are treated and the facilities and limitations attached to such accounts. When there is more than one type of resident account, the nature and operation of the various types of accounts are also described: for example, whether residents are allowed to open foreign exchange accounts with or without approval from the exchange control authority; whether these accounts may be held domestically or abroad; or whether the balances on accounts held by residents in domestic currency may be converted into foreign currency.
Nonresident Accounts
Indicates whether local nonresident accounts maintained in the national currency or in foreign currency are allowed and describes how they are treated and the facilities and limitations attached to such accounts. When there is more than one type of nonresident account, the nature and operation of the various types of accounts are also described.
Blocked accountsAccounts of nonresidents, usually in domestic currency. Regulations prohibit or limit the conversion and/or transfer of the balances of such accounts.
Imports and Import Payments
Describes the nature and extent of exchange and trade restrictions on imports.
Foreign exchange budgetInformation on the existence of a foreign exchange plan, i.e., prior allocation of a certain amount of foreign exchange, usually on an annual basis, for the importation of specific types of goods and/or services; in some cases, also differentiating between individual importers.
Financing requirements for importsInformation on specific import-financing regulations limiting the rights of residents to conclude private contracts in which the financing options differ from the official regulations.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsThe obligation to domicile the transactions with a specified (usually domestic) financial institution.
Preshipment inspectionMost often a compulsory government measure aimed at establishing the veracity of the import contract in terms of volume, quality, and price.
Letters of creditParties are obligated to use letters of credit as a form of payment for their imports.
Import licenses used as exchange licensesImport licenses are not used for trade purposes but to restrict the availability of foreign exchange for legitimate trade.
Import licenses and other nontariff measures
Positive listA list of goods that may be imported.
Negative listA list of goods that may not be imported.
Open general licensesIndicates arrangements whereby certain imports or other international transactions are exempt from the restrictive application of licensing requirements.
Licenses with quotasRefers to cases where a license for the importation of a certain good is granted, but a specific limit is imposed on the amount to be imported.
Other nontariff measuresMay include the prohibition to import certain goods from all countries or all goods from a certain country. Several other nontariff measures are used by members (e.g., phyto-sanitary examinations, setting of standards, and so forth), but these are not covered fully in the Report.
Import taxes and/or tariffsA brief description of the import tax/tariff system, including taxes levied on the foreign exchange made available for imports.
Taxes collected through the exchange systemIndicates if any taxes apply to the exchange side of an import transaction.
State import monopolyPrivate parties are not allowed to engage in the import of certain products or they are limited in their activity.
Exports and Export Proceeds
Describes restrictions on the use of export proceeds, as well as regulations on exports.
Repatriation requirementsThe obligation of exporters to repatriate export proceeds.
Surrender requirementsRegulations requiring the recipient of repatriated export proceeds to sell, sometimes at a specified exchange rate, any foreign exchange proceeds in return for local currency to the central bank, commercial banks, foreign exchange markets, or exchange dealers authorized for this purpose.
Financing requirementsInformation on specific export-financing regulations limiting the rights of residents to conclude private contracts in which the financing options differ from the official regulations.
Documentation requirementsThe same categories as in the case of imports are used.
Export licensesRestrictions on the right of residents to export goods. These restrictions may take the form of quotas (where a certain quantity of shipment abroad is allowed) or the absence of quotas (where the licenses are issued at the discretion of the foreign trade control authority).
Export taxesA brief description of the export tax system, including any taxes that are levied on the foreign exchange earned by exporters.
Payments for Invisible Transactions and Current Transfers
Describes the procedures for effecting payments abroad in connection with current transactions in invisibles, with reference to prior approval requirements, the existence of quantitative and indicative limits, and/or bona fide tests. Detailed information on the most common categories of transactions is provided only when regulations differ for the various categories. Indicative limits establish maximum amounts up to which the purchase of foreign exchange is allowed upon declaration of the nature of the transaction, mainly for statistical purposes. Amounts above those limits are granted if the bona fide nature of the transaction is established by the presentation of appropriate documentation. Bona fide tests also may be applied to transactions for which quantitative limits have not been established.
Trade-related paymentsIncludes freight/insurance (including possible regulations on non–trade related insurance payments and transfers); unloading/storage costs; administrative expenses; commissions; and customs duties and fees.
Investment-related paymentsIncludes profits/dividends; interest payments (including interest on debentures, mortgages, and so forth); amortization of loans or depreciation of foreign direct investments; and payments and transfers of rent.
Payments for travelIncludes international travel for business, medical treatment, tourism, and so forth.
Personal paymentsIncludes medical expenditures abroad; study expenses abroad; pensions (including regulations on payments and transfers of pensions by both state and private pension providers on behalf of nonresidents, as well as the transfer of pensions due to residents living abroad); and family maintenance/alimony (including regulations on payments and transfers abroad of family maintenance/alimony by residents).
Foreign workers’ wagesTransfer abroad of earnings by nonresidents working in the country.
Credit card use abroadUse of credit and debit cards to pay for invisible transactions.
Other paymentsIncludes subscription/membership fees, authors’ royalties, consulting/legal fees, and so forth.
Proceeds from Invisible Transactions and Current Transfers
Describes regulations governing exchange receipts derived from transactions in invisibles—including descriptions of any limitations on their conversion into domestic currency—and the use of those receipts.
Repatriation requirementsThe definitions of repatriation and surrender requirements are similar to those applied to export proceeds.
Restrictions on use of fundsRefers mainly to the limitations imposed on the use of receipts previously deposited in certain types of bank accounts.
Capital Transactions
Describes regulations influencing both inward and outward capital flows. The concept of controls on capital transactions is interpreted broadly. Thus, controls on capital transactions include prohibitions; need for prior approval, authorization, and notification; dual and multiple exchange rates; discriminatory taxes; and reserve requirements or interest penalties imposed by the authorities that regulate the conclusion or execution of transactions or transfers, or the holding of assets at home by nonresidents and abroad by residents. The coverage of the regulations applies to receipts as well as to payments and to actions initiated by nonresidents and residents. In addition, because of the close association with capital transactions, information is also provided on local financial operations conducted in foreign currency, describing specific regulations in force that limit residents and nonresidents issuing securities denominated in foreign currency or, generally, limitations on contract agreements expressed in foreign exchange.
Controls on capital and money market instrumentsRefers to public offerings or private placements on primary markets or their listing on secondary markets.
On capital market securitiesRefers to shares and other securities of a participating nature, and bonds and other securities with an original maturity of more than one year.
Shares or other securities of a participating natureIncludes transactions involving shares and other securities of a participating nature if they are not effected for the purpose of acquiring a lasting economic interest in the management of the enterprise concerned. Investment for the purpose of acquiring a lasting economic interest is treated under foreign direct investments.
Bonds or other debt securitiesRefers to bonds and other securities with an original maturity of more than one year. The term “other securities” includes notes and debentures.
On money market instrumentsRefers to securities with an original maturity of one year or less and includes short-term instruments, such as certificates of deposit and bills of exchange. The category also includes treasury bills and other short-term government paper, banker’s acceptances, commercial papers, interbank deposits, and repurchase agreements.
On collective investment securitiesIncludes share certificates and registry entries or other evidence of investor interest in an institution for collective investment, such as mutual funds, and unit and investment trusts.
Controls on derivatives and other instrumentsRefers to operations in other negotiable instruments and nonsecuritized claims not covered under the above subsections. These may include operations in rights; warrants; financial options and futures; secondary market operations in other financial claims (including sovereign loans, mortgage loans, commercial credits, negotiable instruments originating as loans, receivables, and discounted bills of trade); forward operations (including those in foreign exchange); swaps of bonds and other debt securities; credits and loans; and other swaps (interest rate, debt/equity, equity/debt, foreign currency, as well as swaps of any of the instruments listed above). Controls on operations in foreign exchange without any other underlying transaction (on spot or forward trading on the foreign exchange markets, on forward cover operations, and so forth) are also included.
Controls on credit operations
Commercial creditsCovers operations directly linked with international trade transactions or with the rendering of international services.
Financial creditsIncludes credits other than commercial credits granted by all residents, including banks, to nonresidents or vice versa.
Guarantees, sureties, and financial backup facilitiesIncludes those provided by residents to nonresidents and vice versa. It also includes securities pledged for payment or performance of a contract—such as warrants, performance bonds, and standby letters of credit—and financial backup facilities that are credit facilities used as a guarantee for independent financial operations.
Controls on direct investmentRefers to investments for the purpose of establishing lasting economic relations both abroad by residents and in the country by nonresidents. These investments are essentially for purposes of producing goods and services, and, in particular, investments that allow investor participation in the management of the enterprise. The category includes the creation or extension of a wholly owned enterprise, subsidiary, or branch and the acquisition of full or partial ownership of a new or existing enterprise that results in effective influence over the operations of the enterprise.
Controls on liquidation of direct investmentRefers to the transfer of principal, including the initial capital and capital gains, of a foreign direct investment as defined above.
Controls on real estate transactionsRefers to the acquisition of real estate not associated with direct investment. It includes, for example, investments of a purely financial nature in real estate or the acquisition of real estate for personal use.
Controls on personal capital transactionsCovers transfers initiated on behalf of private persons and intended to benefit other private persons. It includes transactions involving property to which the promise of a return to the owner with payments of interest is attached (loans, settlements of debt in their country of origin by immigrants), and transfers effected free of charge to the beneficiary (gifts and endowments, loans, inheritances and legacies, and emigrants’ assets).
Provisions specific to commercial banks and other credit institutionsDescribes regulations that are specific to these institutions, such as monetary, prudential, and foreign exchange controls. Inclusion of an entry in this category does not necessarily signify that the aim of the measure is to control the flow of capital. Some of these items (borrowing abroad, lending to nonresidents, purchase of locally issued securities denominated in foreign exchange, investment regulations) may merely be repetitions of the entries under respective categories of controls on capital and money market instruments, controls on credit operations, or direct investments when the same regulations apply to commercial banks as well as to other residents.
Open foreign exchange position limitsDescribes regulations on certain commercial bank balance sheet items (including capital) and on limits covering commercial banks’ positions in foreign currencies (including gold).
Provisions specific to institutional investorsDescribes controls specific to institutions, such as insurance companies and pension funds.
Other controls imposed by securities lawsRefers to additional regulations on capital transfers imposed by law, such as controls on the listing of foreign securities on local security markets.

Islamic State of Afghanistan

(Position as of December 31, 1994)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of the Islamic State of Afghanistan is the Afghani.
Exchange rate structure
MultipleThe Da Afghanistan Bank (DAB), the central bank, maintains an official rate defined in terms of the U.S. dollar. The official rate is applied to less than 10% of convertible currency transactions, including a few transactions of the central government (mainly debt-service payments) and certain foreign currency incomes earned in the Islamic State of Afghanistan. Almost all other official transactions are conducted at a commercial rate set by the government. A free market, in the form of a money bazaar, is also operative. The exchange rate applied to transactions of international organizations is set at 80% of the level of the commercial exchange rate.
Classification
Independently floatingMost convertible currency transactions are effected at the floating commercial market rate. The DAB posts rates for dollars, euros (from January 1, 2002; through December 31, 2001, deutsche mark and French francs), Indian rupees, Pakistan rupees, pounds sterling, and Swiss francs.
Exchange taxn.a.
Exchange subsidyn.a.
Forward exchange marketThere are no arrangements for forward cover against exchange rate risk in operations in the official market or the commercial banking sector.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with countries with which the Islamic State of Afghanistan maintains bilateral payments agreements are made in bilateral accounting dollars in accordance with the procedures set forth in these agreements. Exchange rates for trade under bilateral payments agreements are specified in each agreement. The proceeds from exports of karakul to all countries must be obtained in convertible currencies. There are no other prescription of currency requirements.
Payments arrangements
Bilateral payments arrangementsThe Islamic State of Afghanistan maintains bilateral payments agreements with Bulgaria, China, and Russia. Some of these have been inactive for several years, and others are being phased out.
OperativeYes.
InoperativeYes.
Administration of controlForeign exchange transactions are controlled by the government through the DAB. No restrictions apply to transactions in the free exchange market.
International security restrictionsn.a.
Payments arrearsn.a.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports and reexports of gold are permitted, subject to regulations. Exports of gold bullion, silver, and jewelry require permission from the DAB and the Ministry of Finance. Commercial exports of gold and silver jewelry and other articles containing minor quantities of gold or silver do not require a license. Customs duties are payable on imports and exports of silver in any form, unless the transaction is made by, or on behalf of, the monetary authorities.
Controls on exports and imports of banknotes
On exports
Domestic currencyTravelers may take out up to Af 2,000 in domestic banknotes and Af 50 in coins.
On imports
Domestic currencyTravelers may bring in up to Af 2,000 in domestic banknotes and Af 50 in coins.
Foreign currencyTravelers entering the Islamic State of Afghanistan are required to spend a minimum of the equivalent of $26 a day in foreign exchange. They may bring in any amount of foreign currency but must declare it when entering the country if they intend to take out any unspent amount on departure, subject to the above minimum conversion requirement.
Resident Accounts
Foreign exchange accounts permittedn.a.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedn.a.
n.a.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetAn annual import program drawn up by the Ministry of Commerce covers both public and private sector imports. Adjustments in the public sector import plan are made as circumstances change. There is an indicative import plan for the private sector, drawn up on the basis of proposals submitted by the Chamber of Commerce.
Financing requirements for importsn.a.
Documentation requirements for release of foreign exchange for imports
Letters of creditPayments for imports through the banking system to countries with which the Islamic State of Afghanistan has payments agreements may usually be made only under LCs. Payments to other countries may be made under LCs, against bills for collection, or against an undertaking by the importer to import goods of at least an equivalent value to the payment made through the banking system. Except for public sector imports under the government budget, all importers are required to lodge minimum import deposits with banks when they open LCs. The deposit ratios, based on the c.i.f. value of imports, are 20% for essential products and range from 30% to 60% for other products.
Import licenses and other nontariff measuresImports are not subject to licenses, but import transactions must be registered before orders are placed abroad.
Positive listMost bilateral agreements specify quantities (and sometimes prices) for the products to be traded.
Negative listThe importation of certain drugs, liquor, arms, and ammunition is prohibited on grounds of public policy or for security reasons; in some instances, however, special permission to import these goods may be granted. The importation of a few textiles and selected nonessential consumer goods is also prohibited.
Licenses with quotasThere are no quantitative restrictions on most imports, but tariff rates on most consumer items range from 30% to 50%.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExport proceeds from bilateral accounts may be retained in bilateral clearing dollar accounts with the DAB. These retained proceeds may either be used directly by the original exporter or sold to other importers. In either case, the retained proceeds are converted at the clearing rate applicable to that particular bilateral arrangement. In the case of exports to countries trading in convertible currencies, export proceeds may be retained abroad for three, six, or twelve months, depending on the country of destination. During the relevant period, the exporter may use these funds to import any goods not included on the list of prohibited goods. Alternatively, at the end of the relevant holding period limit, foreign exchange holdings abroad must be repatriated and held in a foreign currency account with a bank in the Islamic State of Afghanistan or sold at the commercial exchange rate.
Surrender requirementsProceeds from exports of raisins, fresh fruits, animal casings, skins, licorice roots, medicinal herbs, and wool must be surrendered immediately at the commercial exchange rate.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesExport transactions must be registered. The exportation of opium and museum pieces is prohibited. Otherwise, control is exercised only over exports to bilateral agreement countries.
Without quotasYes.
Export taxesn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersForeign exchange for most private purposes may be acquired in the money bazaar.
Investment-related paymentsInformation is not available on amortization of loans or depreciation of direct investments.
Payments for travelThe DAB levies a charge of Af 0.75 per $1. A further charge of 1% on the total value of other convertible currencies is levied for permits for their export by authorized travelers.
Prior approvalYes.
Quantitative limitsThe limit for tourist travel is $1,000, except for private travel to India, for which the limit is the equivalent of $700. The limit for business travel is $15,000.
Personal paymentsFor medical treatment, the central bank levies a commission of Af 0.75 per $1. No information is available for other types of personal payments other than medical costs.
Prior approvalYes.
Quantitative limitsNormally, the DAB grants $2,500 for medical treatment.
Foreign workers’ wagesForeign employees working in the Afghan public and private sectors must convert 60% of their foreign currency salaries into Afghanis at the official rate.
Quantitative limitsYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsn.a.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsn.a.
Controls on derivatives and other instrumentsn.a.
Controls on credit operationsn.a.
Controls on direct investment
Inward direct investmentInvestments require prior approval and are administered by the Investment Committee. The law stipulates that foreign investment in the Islamic State of Afghanistan can take place only through joint ventures, with foreign participation not exceeding 49%, and that an investment approved by the Investment Committee requires no further license to operate in the Islamic State of Afghanistan. The Foreign and Domestic Private Investment Law includes the following provisions: (1) income tax exemption for four years (six years outside Kabul province), beginning with the date of the first sale of products resulting from the new investment; (2) exemption from import duties on essential imports (mainly for capital goods); (3) exemption from taxes on dividends for four years after the first distribution of dividends, but not more than seven years after the approval of the investment; (4) exemption from personal income and corporate taxes on interest on foreign loans that constitute part of an approved investment; (5) exemption from export duties, provided that the products are not among the prohibited exports; and (6) mandatory procurement by government agencies and departments from enterprises established under the law, as long as the prices are not more than 15% higher than those of foreign suppliers.
Controls on liquidation of direct investmentCapital may be repatriated after five years at an annual rate not exceeding 20% of the total registered capital.
Controls on real estate transactionsn.a.
Controls on personal capital transactionsn.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 1995–2001
The information provided on the exchange and trade system of the Islamic State of Afghanistan is tentative, as the IMF has received limited information from the authorities in this area since 1995.

Albania

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Albania is the Albanian lek.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the lek is determined on the basis of supply and demand for foreign exchange. The Bank of Albania (BOA) calculates and announces the daily average exchange rates for the dollar and 10 other major currencies and the prices of gold and silver. No margins are set between buying and selling rates for the official exchange rate. Government transactions are conducted at market rates. However, the commercial banks charge commissions ranging from 0.2% to 2%, depending on the amount, for cashing traveler’s checks.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsPayment for all merchandise trade is made in convertible currencies. All transactions under bilateral payment agreements were suspended in 1992, and the settlement of clearing accounts is awaiting the outcome of negotiations. All contracts denominated and payable in foreign currencies are valid.
Payments arrangements
Bilateral payments arrangementsYes.
Clearing agreementsAlbania maintains bilateral clearing agreements in nonconvertible currencies with Algeria, Bulgaria, Cuba, the Czech Republic, Egypt, Hungary, the Democratic People’s Republic of Korea, Poland, Romania, the Russian Federation, and Vietnam. Albania also maintains bilateral clearing agreements in convertible currencies with Bulgaria, China, Cuba, the Czech Republic, Greece, the Democratic People’s Republic of Korea, Romania, Turkey, Vietnam, and the Federal Republic of Yugoslavia.
Administration of controlThe BOA is vested with the powers to administer exchange controls. The BOA is the only authority that has the right to (1) license, authorize, regulate, supervise, and revoke the licenses of foreign exchange market operations, as well as second-tier banks; (2) define the limits of their activities; and (3) regulate and supervise foreign exchange operations and international payments in order to prevent any participant from dominating the market and undermining the value of the lek through speculation.



In accordance with anti–money laundering legislation, banks are required to maintain records of all cash transactions in excess of lek 2 million (approximately $14,000) and on all other transactions in excess of lek 70 million (approximately $500,000), and to report these to the authority responsible for the prevention of money laundering.
International security restrictionsNo.
Payments arrears
OfficialAlbania has arrears on debts owed to China, Greece, the Russian Federation, Turkey, and with a number of official and commercial creditors. Bilateral rescheduling agreements for official payments to Turkey were concluded during 2001. Official payment arrears to the Russian Federation are subject to a Paris Club Agreement, for which a bilateral rescheduling agreement was reached and ratified by the Albanian parliament in December 2001—it entered into force in early 2002. Albania has arrears on debts owed to private parties.
PrivateYes.
Controls on trade in gold (coins and/or bullion)n.r.
Controls on exports and imports of banknotes
On exports
Domestic currencyNatural and juridical persons are allowed to take out up to lek 100,000 a person in banknotes and coins. The BOA may authorize larger amounts.
Foreign currencyForeign natural persons may take abroad in cash or traveler’s checks foreign exchange in an amount equal to the amount declared when entering the country. Albanian natural or juridical persons are not allowed to export amounts larger than $20,000 or its equivalent.
On imports
Domestic currencyNatural and juridical persons are allowed to import up to lek 100,000 in domestic banknotes and coins. The BOA may authorize larger amounts.
Foreign currencyNatural and juridical persons are allowed to import foreign currency and traveler’s checks up to $10,000 or its equivalent in any other currency.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadResidents—natural or juridical persons—may open and maintain foreign currency–denominated accounts with banks and financial institutions abroad only with the prior approval of the BOA, which may control and monitor transactions affecting such accounts.
Approval requiredYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsFor imports equal to or larger than $20,000 or its equivalent, the following documents must be submitted: (1) an application for carrying out the transaction as well as a declaration specifying in detail the nature of the transaction; (2) a contract and an invoice (or a pro forma invoice) issued by the natural or juridical person supplying the goods; and (3) a declaration that the underlying document has not been used to support previous transactions, which is to be issued by the natural or juridical person wishing to carry out the transaction with the bank.
Letters of creditLCs, bank guarantees, or cash against documents should be used for the payment of imports equal to or in excess of $200,000 or its equivalent.
Import licenses used as exchange licensesYes.
Import licenses and other nontariff measures
Positive listYes.
Open general licensesYes.
Licenses with quotasAutomatic licensing restrictions are applied on fuel products to support the implementation of domestic technical standards.
Other nontariff measuresThe import of the following products is prohibited: (1) dangerous waste, such as toxic corrosives, residual waste from explosives, and radioactive materials; (2) military poisons, chemical weapons, and other strong poisons; (3) narcotics and psychotropic substances; and (4) animal products from countries infected with livestock diseases.
Import taxes and/or tariffsExcise taxes on domestic and imported goods are unified. There are four tariff rates, which are applied to the c.i.f. value: zero, 2%, 10%, and 15% (reduced from 18%, effective January 1, 2001).
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsAll private and public companies or individuals operating in the export sector are required to repatriate their foreign exchange receipts.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport bans apply on copper and articles made thereof; works of art, arms and ammunitions, as well as parts and accessories therefor; and explosives and pyrotechnic products.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersSupporting documents are required for transactions exceeding $20,000 or its equivalent.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsPurchases of these instruments abroad by residents require prior approval of the BOA. Trade in these instruments locally or abroad is subject to the control of the Albanian Securities Commission.
On capital market securities
Shares or other securities of a participating natureYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securitiesYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residents
Controls on derivatives and other instrumentsTransactions in these instruments are subject to the control of the Albanian Securities Commission, but these are not yet regulated.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.r.
Controls on credit operations
Commercial credits
By residents to nonresidentsCommercial banks may not, without the prior approval of the BOA, extend credit to nonresidents, except to banks and other financial institutions.
Financial credits
By residents to nonresidentsCommercial banks may not, without the prior approval of the BOA, extend credit to nonresidents, except to banks and other financial institutions.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
Controls on direct investment
Outward direct investmentOutward direct investments are subject to the prior approval of the BOA.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsPurchases are subject to the prior approval of the BOA.
Purchase locally by nonresidentsThe controls relate only to the purchase of land.
Controls on personal capital transactions
LoansPrior BOA approval is required.
By residents to nonresidentsYes.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Commercial banks may not, without the prior approval of the BOA, extend credit to nonresidents, except to banks and other financial institutions.
Differential treatment of deposit accounts held by nonresidents
Credit controlsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThe limit is 20% of the bank’s capital for a single currency and 30% for all currencies.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsn.r.
Other controls imposed by securities lawsn.r.
Changes During 2001
Imports and import paymentsJanuary 1. The maximum tariff rate was reduced to 15% from 18%.

Algeria

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of Acceptance: September 15, 1997.
Exchange Arrangement
CurrencyThe currency of Algeria is the Algerian dinar.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe external value of the dinar is set at the interbank foreign exchange market rate. No margin limits are imposed on the buying and selling exchange rates in the interbank foreign exchange market. However, a margin of DA 0.015 has been established between the buying and selling rates of the Bank of Algeria (BOA) for the dinar against the dollar.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketAuthorized banks may provide forward cover to residents, but this has not taken place.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with countries with which no payment agreements are in force are made in convertible currencies. Payments under foreign supply contracts may be made in either the currency in use at the headquarters of the supplier or that of the country of origin of the merchandise, except that transactions with Morocco may be effected in dollars through special clearing accounts maintained at the central banks of each country.
Payments arrangements
Clearing agreementsSpecified noncommercial settlements with Morocco and Tunisia are made through a Moroccan dirham account at the Bank of Morocco and a Tunisian dinar account at the Bank of Tunisia.
Administration of controlThe BOA has general jurisdiction over exchange controls. Authority for a number of exchange control procedures has been delegated to commercial banks and the Postal Administration.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may purchase, hold, and sell gold coins in Algeria for numismatic purposes. Unworked gold for industrial and professional use is distributed by the Agence nationale pour la distribution et la transformation de l’or et des autres métaux précieux (AGENOR); this agency is also authorized to purchase gold in Algeria and to hold, process, and distribute any other precious metals.
Controls on external tradeAGENOR is authorized to import and export any precious metals, including gold. Gold used by dentists and goldsmiths is imported by AGENOR. Gold and other precious metals are included on the list of items importable by concessionaires.
Controls on exports and imports of banknotes
On exports
Domestic currencyResident travelers may take out up to DA 200 a person.
Foreign currencyForeign nonresident travelers may reexport any foreign currency they declared upon entry. Resident travelers may export foreign currency withdrawn from their foreign currency accounts up to the equivalent of €7,622.45 (previously F 50,000) a trip for an unlimited number of trips a year.
On imports
Domestic currencyResident travelers may reimport up to DA 200 a person. Nonresidents are not permitted to bring in Algerian dinar banknotes.
Foreign currencyThere are no restrictions on the importation of foreign banknotes, but residents and nonresidents must declare them when they enter Algeria.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts may be freely credited with book transfers of convertible currencies from abroad using either postal or banking facilities, imported convertible foreign currencies that were declared at the time of the account holder’s entry into the country, and domestic bank-to-bank book transfers between accounts held by individuals. These accounts may be debited freely for book transfers abroad but only through the banking system. They may also be debited for purchases of dinars, for book transfers in dinars, and for purchases of convertible foreign currencies to be physically exported by the account holder. The interest rate payable on deposits in these accounts is fixed quarterly by the BOA.
Economic entities are also allowed to open foreign currency accounts for receiving and making foreign currency transfers, including the retained portion of their export proceeds. They may transfer funds in these accounts to other foreign currency accounts or use them to make payments in Algeria or to make foreign currency payments for goods and services pertaining to their business.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyThese accounts are permitted in limited cases, such as for embassies.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with foreign currency banknotes and other means of payment denominated in foreign currency, as well as other dinar-denominated funds that meet all requirements for transfers abroad. They may be debited without restrictions to make transfers abroad, to export through withdrawals of foreign banknotes, and to make dinar payments in Algeria. These accounts pay interest and may not show a net debit position.
Domestic currency accountsFinal departure accounts may be opened, without prior authorization, in the name of any natural person residing in Algeria who is not of Algerian nationality, and who intends to leave Algeria to return to his or her country of origin. These accounts may be credited with an amount equivalent to the holdings as of October 20, 1963, of the person concerned; with the proceeds from sales of real estate by the account holder, provided that the funds are paid directly by a ministerial officer; with the proceeds of the sale of securities through a bank; and with any other payments up to DA 2,000. These accounts may be debited without prior approval for certain payments in Algeria on behalf of the account holder.
Convertible into foreign currencyYes.
Approval requiredOutward transfers require individual approval from the BOA.
Blocked accountsIndividual suspense accounts may be opened without authorization and may be credited with payments from any country.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsPayments for imports of gold, other precious metals, and precious stones must be made from foreign currency accounts. External borrowing by importers for import financing purposes must be arranged through the authorized intermediary banks.
Advance payment requirementsExcept when otherwise indicated by the BOA, down payments for imports may not exceed 15% of the total value of imports. When a public agency, public enterprise, or ministry incurs expenditures for imports deemed to be urgent or exceptional, the bank may effect payment before exchange and trade control formalities have been completed.
Advance import depositsAlthough not mandatory, domiciled banks may require from the importer, as part of their normal commercial operations, a deposit in dinars up to the full value of the imports.
Documentation requirements for release of foreign exchange for importsImports must be insured by Algerian insurers.
Domiciliation requirementsAll imports are subject to obligatory domiciliation at an authorized intermediary bank, which an importer must establish by submitting a commercial contract or pro forma invoice. Import payments may be made freely but only through the domiciled bank, which effects payments in foreign exchange and debits the importer’s account with corresponding amounts in dinars valued at the official exchange rate.
Preshipment inspectionYes.
Letters of creditYes.
Import licenses and other nontariff measuresAny juridical or natural person registered under the Commercial Register (including concessionaires and wholesalers) may import goods without prior authorization; no license is needed.
Negative listThere are no legal restrictions against Israel, but there are no imports from Israel in practice. A small number of imports are prohibited for religious or security reasons.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds must be repatriated within 120 days. Petroleum companies are subject to the same rule, but proceeds may be deposited in a guaranteed account with a foreign correspondent bank of the BOA.
Surrender requirementsAll export proceeds from crude and refined hydrocarbons, by-products from gas, and mineral products must be surrendered to the BOA. Exporters of other products must surrender 50% of the proceeds to the interbank market; the remaining portion may be retained in a foreign currency account. Exporters may use the funds in these accounts for imports or other payments pertaining to their business, or they may transfer the funds to another foreign currency account. Proceeds from exports of nonhydrocarbons, and nonminerals may be surrendered to commercial banks and other authorized participants in the interbank foreign exchange market.
Financing requirementsNo.
Documentation requirementsThe requirements are not enforced in practice.
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionYes.
Export licensesAll exports to Israel are prohibited, and certain exports are prohibited for social or cultural reasons regardless of destination.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related paymentsThe transfer abroad of dividends and interest is permitted, provided it is executed through an authorized intermediary.
Information is not available on the payment or transfer of amortization of loans or depreciation of direct investments.
Prior approvalProfit remittances are permitted, provided tax obligations have been met. Authorization is to be granted by the exchange control authorities within two months of request. Transfer must be executed through an authorized intermediary.
Payments for travelForeign exchange allocations for tourism by Algerian residents were suspended in October 1986. Pilgrims traveling to Saudi Arabia receive an allowance in Saudi Arabian riyals. The amount is fixed for each pilgrimage and may be provided in the form of checks that may be cashed on arrival for those traveling by air or by sea. Travel tickets purchased by nonresidents for travel abroad must be paid for with imported foreign exchange.
Prior approvalYes.
Quantitative limitsThe quantitative limit is DA 15,000.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalApproval of the BOA is required for transfers of pension income. For family maintenance and alimony payments, the BOA must authorize the granting of foreign exchange. Limits are set on a case-by-case basis.
Quantitative limitsThe limits for medical costs are DA 15,900 for adults and DA 7,600 for children under 15 years of age. The limit for studies abroad is DA 9,000 (previously DA 7,500) a month between September 1 and June 30.
Indicative limits/bona fide testInformation is not available on family maintenance and alimony transfers.
Foreign workers’ wagesResidents of other countries working in Algeria under technical cooperation programs for public enterprises and agencies or for certain mixed companies may transfer abroad up to 100% of their salaries.
Indicative limits/bona fide testYes.
Other payments
Prior approvalApproval of the BOA is required for payments relating to subscriptions and membership fees and consulting and legal fees.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsFifty percent of receipts must be surrendered to the banks.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsCapital transfers to any destination abroad are subject to individual approval by the BOA.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsPortfolio investment (purchase of securities on the Algerian stock exchange) by nonresidents is allowed. Transfers abroad of proceeds from these investments are allowed, but they must be executed through an authorized intermediary.
Sale or issue locally by nonresidentsThe transfer abroad of proceeds from the sale of shares or other securities of a participating nature on the stock exchange is permitted, provided the transfer is effected through authorized intermediaries (banks).
Purchase abroad by residentsYes.
Bonds or other debt securitiesNonresidents may invest in bonds or other debt securities. Transfers abroad of proceeds from these investments are allowed, but they must be effected through an authorized intermediary.
Purchase locally by nonresidentsThe transfer abroad of proceeds from the sale of portfolio investments (bonds or other debt securities) on the stock exchange may be made freely, but transfers must be executed through an authorized intermediary.
Sale or issue locally by nonresidentsYes.
On money market instruments
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase abroad by residentsYes.
Controls on credit operationsThere are controls on all credit transactions, guarantees, sureties, and financial backup facilities by residents to nonresidents.
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentForeign direct investment is permitted freely except in certain specified sectors, provided that it conforms to the laws and regulations governing regulated activities and that prior declaration is made to the authorities.
Controls on liquidation of direct investmentProceeds from disinvestment following the closing or transfer of a business operation may be transferred abroad through banks or authorized intermediaries, subject to prior approval.
Controls on real estate transactions
Purchase abroad by residentsYes.
Controls on personal capital transactionsn.a.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBanks and financial institutions may borrow from abroad for their own needs or for those of their clients.
Lending locally in foreign exchangeBanks and financial institutions may on-lend foreign funds borrowed abroad.
Differential treatment of deposit accounts in foreign exchange
Interest rate controlsThe interest rates applicable to foreign currency accounts are determined quarterly by the BOA.
Open foreign exchange position limitsBanks and financial institutions are required to meet the following: (1) a maximum spread of 10% between their position (short or long) in each currency and the amount of their counterpart funds in domestic currency; and (2) a maximum spread of 30% between total exposure (short and long positions, whichever is highest) for all foreign currencies and domestic currency resources.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsn.a.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Angola

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Angola is the Angolan kwanza.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe exchange rate of the kwanza is market determined. However, the Banco Nacional de Angola (BNA) intervenes in the foreign exchange market. Since March 2001, the BNA has engaged in a more active intervention policy, allowing only modest depreciations of the official exchange rate. As a result, effective March 31, 2001, the exchange rate arrangement of Angola has been reclassified to the category managed floating with no preannounced path for the exchange rate from the category independently floating. The BNA publishes daily a reference rate, which is computed as the transaction-weighted average of the day’s rates.
Authorized foreign exchange dealers (i.e., banks and exchange bureaus) may deal among themselves and with their customers at freely negotiated rates.
Exchange taxForeign exchange operations are subject to a stamp duty of 1.5%. Transactions between banking institutions or involving banknotes and traveler’s checks are exempt from this duty.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions with other countries may be made through bank transfers, LCs, or financing and banking agreements.
Payments arrangements
Bilateral payments arrangements
OperativeAn agreement with Brazil is in effect.
InoperativeThere are agreements with Portugal and Spain.
Administration of controlThe BNA is the exchange authority and may delegate its powers to other entities that are authorized to engage in foreign exchange activities. All capital transactions and invisible operations exceeding $50,000 are subject to prior BNA authorization. The BNA has authorized commercial banks and exchange bureaus to carry out certain transactions in the foreign exchange market. Foreign exchange bureaus that are licensed to conduct foreign exchange transactions may deal only in banknotes and traveler’s checks and execute current invisible operations of a private nature.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsYes.
Payments arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are permitted to hold and trade gold only in the form of jewelry.
Controls on external tradeImports and exports of gold—both coins and bullion—are the monopoly of the BNA.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of domestic currency are prohibited.
Foreign currencyResidents are permitted to take out up to the equivalent of $10,000 in foreign exchange. They may take out amounts exceeding this limit only if they present exchange purchase documents, including statements regarding the reason for the purchase. When leaving Angola, nonresidents are allowed to take out up to $5,000. They may take out amounts exceeding this limit, provided that the amount was declared upon arrival in the country. The export and reexport of banknotes and traveler’s checks by banking institutions require a prior authorization issued by the governor of the BNA.
On imports
Domestic currencyImports of domestic currency are prohibited.
Foreign currencyThere are no limits on the amount of foreign banknotes or traveler’s checks that a resident person may bring into the country; for nonresidents, any amount in excess of $5,000 must be declared upon arrival. Banking institutions are free to import banknotes and traveler’s checks, but they must submit a monthly report to the BNA.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyCheckbooks may not be issued against accounts of juridical and natural persons. These accounts may be credited by depositing foreign currency or any other instruments accepted internationally and accruing interest. These accounts may be debited with withdrawal or sale of foreign exchange to settle imports or capital payments, as allowed by law. Transfers between these accounts are permitted, but overdrafts are not.
Held abroadAfter prior BNA approval, juridical persons are allowed to open foreign exchange accounts that may be credited with their export receipts to pay for imports of goods and services. For natural persons, no approval is required for holding these accounts.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with foreign currency imported from abroad, with the accrued interest, or with sums from nonresidents’ type A domestic currency accounts. They may be debited for the withdrawal or sale of foreign currency, payments for foreign currency expenditures, or the repatriation of amounts authorized by the BNA.
Domestic currency accountsNonresidents may open two types of domestic currency accounts: type A and type B. The type A account may be credited with the proceeds from sales of funds from foreign exchange accounts and, after prior BNA authorization, with receipts from the nonresident’s activities in Angola. These accounts may be debited for payments of local expenses and against purchases of foreign currency to be deposited in a foreign currency account held by the same entity.
The type B account may only be credited with receipts of the nonresident’s activity in the country (when authorized by the BNA), and may only be debited for payment of local expenses.
Convertible into foreign currencyNo.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionImports of goods valued at more than $5,000 require preshipment inspection.
Import licenses and other nontariff measures
Negative listThere are restrictions on imports of currency, toxic products, and certain drugs by private persons. Imports of arms and ammunition for personal use are subject to authorization by the Ministry of the Interior.
Open general licensesImports are not subject to licenses, but must be registered under the REM (entry merchandise registration) system for statistical purposes.
Import taxes and/or tariffsThe tariff system consists of eight rates, ranging from 1% to 35%.
Taxes collected through the exchange systemThe stamp tax is collected through the exchange system.
State import monopolyImports of oil products and derivatives may be effected only by the public oil company. Imports of arms and ammunition for warfare purposes may be effected only by the state.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsDomestic oil companies must surrender all their export proceeds to the BNA. Foreign oil companies are allowed, with BNA authorization, to retain their export receipts abroad for payments of imports of goods and services, interest and profits transfer, and the amortization of capital. These companies must import funds for payment of royalties, taxes, and local expenses. Foreign exchange earnings by the non-oil sector must be surrendered to domestic banks. Diamond companies are allowed to retain in banks in the country a percentage of the receipts of exports for payments of imports of goods and services. They may also retain part of their receipts abroad in escrow accounts, with BNA authorization, as a guarantee against foreign borrowing.
Financing requirementsn.r.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionYes.
Export licenses
Without quotasExports are not subject to licenses, but must be registered under the RSM (exit merchandise registration) system for statistical purposes. Reexports of goods other than personal belongings are prohibited. Exports of arms, ammunition, and ethnological collections are prohibited. Special export regimes apply to aircraft, animals and animal products, historical objects, and petroleum.
Export taxesExport taxes comprise six rates: 1%, 2%, 3%, 4%, 5%, and 10%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersBanks must obtain BNA authorization in order to effect payments for invisibles in excess of $50,000 or its equivalent.
Trade-related paymentsService contracts with nonresidents in excess of $50,000 are subject to licensing.
Prior approvalYes.
Investment-related payments
Prior approvalYes.
Quantitative limitsForeign investors must obtain MOF authorization to remit profits and dividends, provided the investment in the resident company exceeds $250,000.
Payments for travel
Quantitative limitsResidents may, upon presentation of a passport and an airline ticket, purchase foreign exchange from financial institutions as follows: for personal travel, $10,000 a person a trip; for business travel, a maximum of $500 a day for up to 30 days; for educational, scientific, or cultural reasons, $2,000 a person a month (this is limited to resident persons who are temporarily abroad); and for medical reasons, a maximum of $5,000.
Personal payments
Prior approvalPrior approval is required for the payment of pensions in excess of $50,000.
Quantitative limitsUp to the equivalent of $2,000 a month may be authorized to Angolans or foreigners residing abroad who are direct descendants of and financially dependent on residents of Angola, provided that they are under 18 or over 60 years of age, are students, or are incapable of working.
Foreign workers’ wages
Prior approvalYes.
Credit card use abroadOnly banks may issue credit cards.
Quantitative limitsUse of credit cards abroad is limited to the equivalent of $10,000.
Other payments
Prior approvalYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsService earnings must be surrendered to the banks, unless the provider is authorized by the BNA to retain a certain proportion of the proceeds.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsForeign investment activities (i.e., the setting up of new companies or branches, but also acquisition of equity, total or partial takeover of operations, and lending related to profit sharing) are subject to the provisions of the Foreign Investment Law as well as the provisions of foreign exchange legislation and regulations. Implementation is the responsibility of the Foreign Investment Institute. Foreign investments in the areas of petroleum production, diamond mining, and financial institutions are governed by separate legislation. All capital transfers are subject to BNA licensing. Suppliers’ credits must be licensed for statistical purposes.
Controls on capital and money market instruments
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 residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsn.r.
Controls on credit operations
Commercial creditsOperations are subject to licensing for statistical purposes only.
By residents to nonresidentsSuppliers’ credits must be reported to the BNA.
To residents from nonresidentsSuppliers’ credits must be reported to the BNA.
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 investmentIn accordance with the Exchange Control Law, Angolan citizens are permitted to invest abroad.
Inward direct investmentForeign investment is prohibited in the following areas: (1) defense, internal public order, and state security; (2) central banking and currency issue; and (3) other areas reserved for the state.
Controls on liquidation of direct investmentWith prior approval of the MOF, foreign investors are guaranteed the right to transfer abroad the proceeds of the sale of investments, including gains and amounts owed to them after payments of taxes due.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer into the country by immigrantsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeBanks may lend locally in foreign exchange to resident exporters.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsDemand deposits in local currency are subject to a reserve requirement of 30%. The base of reserve requirements includes demand deposits in foreign currency, with a coefficient of 5%.
Liquid asset requirementsLiquid asset requirements are 50% of the foreign exchange portfolio.
Credit controlsBanks may lend locally in foreign exchange only to resident exporters.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquid asset requirementsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsBanks may hold daily foreign exchange positions of up to the equivalent of $500,000; for foreign exchange bureaus, the amount is up to $150,000.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsn.r.
Other controls imposed by securities lawsn.r.
Changes During 2001
Exchange arrangementMarch 31. In light of more active intervention in the foreign exchange market, the exchange rate arrangement of Angola was reclassified to the category managed floating with no preannounced path for the exchange rate from the category independently floating.

Antigua and Barbuda

(Position as of May 31, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 22, 1983.
Exchange Arrangement
CurrencyThe currency of Antigua and Barbuda is the Eastern Caribbean dollar issued by the ECCB.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe Eastern Caribbean dollar is pegged to the U.S. dollar, the intervention currency, at EC$2.70 per US$1. The ECCB also quotes daily rates for the Canadian dollar and the pound sterling.
Exchange taxA foreign exchange levy of 1% is applied on purchases of foreign currency.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of member countries of the CARICOM must be made either in the currency of the country concerned or in Eastern Caribbean dollars. Exports to Jamaica are settled in U.S. dollars. Settlements with residents of other countries may be made in any foreign currency or in Eastern Caribbean dollars.
Use of foreign exchange among residentsYes.
Payments arrangements
Regional arrangementsAntigua and Barbuda is a member of the CARICOM.
Clearing agreementsYes.
Administration of controlThe MOF applies exchange controls to all foreign currency transactions. However, up to the equivalent of EC$250,000 in foreign currency may be purchased without MOF approval.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On May 3, 2002, the authorities of Antigua and Barbuda notified the IMF of measures taken to freeze the assets of terrorists and terrorist organizations. These measures were taken in accordance with UN Security Council resolutions.
In accordance with UN sanctionsYes.
Payments arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyThere are restrictions on exports of domestic currency outside the ECCU.
Foreign currencyYes.
On imports
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedExternal accounts may be opened, especially in tourist-oriented industries or in export trade where receipts are primarily in foreign currency and a large number of inputs are imported or financed in foreign currency.
Held domesticallyThese accounts may be held domestically, but commercial banks are required to report external accounts operations to the MOF on a monthly basis.
Held abroadn.a.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedExternal accounts may be maintained in any currency and may be credited with receipts from sales of merchandise (whether from export-oriented or local production) or from remittances. Commercial banks are required to report external accounts operations to the MOF on a monthly basis.
Domestic currency accountsThese accounts may be maintained, but prior approval is required.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence. Up to EC$250,000 a transaction may be purchased in foreign currency without MOF approval.
Domiciliation requirementsYes.
Letters of creditYes.
Import licenses and other nontariff measuresCertain goods require individual licenses, unless imported from CARICOM countries. Antigua and Barbuda follows the CARICOM rules of origin.
Open general licensesMost goods may be freely imported under OGLs granted by the MOF and the Ministries of Industry and Commerce.
Import taxes and/or tariffsCustoms duty rates range from zero to 35% for nearly all items. Custom duties corresponding to the fourth phase of the CARICOM CET are in the range of zero to 20%. There are no customs duties on a number of items, including milk and poultry. Some goods, including basic foods and agricultural goods, are exempt from customs duties. Other exemptions for machinery, equipment, and raw materials are granted on a case-by-case basis.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsn.a.
Financing requirementsn.a.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
OtherYes.
Export licensesNo.
Export taxesReexports are not subject to any tax if transactions take place within the bonded area.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles (related to authorized imports) exceeding EC$250,000 require prior approval for certain categories, except for payments for freight, insurance, unloading and storage costs, administrative expenses, commissions, and profits and dividends, which are not subject to controls.
Investment-related paymentsProfits may be remitted in full after compliance with corporate income tax payments. Verification is not applied in practice; the authorities, however, can decide to undertake such verification. Information is not available on the amortization of loans or depreciation of direct investments.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalApproval is required only for amounts exceeding the equivalent of EC$250,000.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal paymentsInformation is not available on the transfer of pensions.
Prior approvalPayments related to family maintenance and alimony are allowed if provided for in the contract.
Quantitative limitsFor payments related to medical expenses and studies abroad, approval on a case-by-case basis is required only for amounts exceeding the equivalent of EC$250,000.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalThese remittances are allowed, if provided for in the contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalPayments for consulting and legal fees are allowed, if provided for in the contract.
Quantitative limitsThe limit for subscriptions and membership fees is EC$10,000 a year.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Outward direct investmentLarge transfers abroad for investment purposes may be phased over time by the Financial Secretary.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAn alien landholding license is required, and the purchase must be approved by the Cabinet.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsAs a result of laws governing offshore financial institutions (1) the International Financial Sector Authority was created, with responsibility for licensing offshore financial institutions; (2) there are annual inspections of offshore financial institutions; (3) the minimum capital requirement for offshore banks is US$5 million, of which US$1.5 million is to be deposited in the domestic banking system; (4) all bank directors are to be natural persons, at least one of whom must be a national of Antigua and Barbuda (thus making bank ownership more transparent); and (5) offshore banks are allowed to extend credit to the Antiguan and Barbudan government.
Lending to nonresidents (financial or commercial credits)MOF approval is required for these transactions. Loans are subject to a 3% stamp duty.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 2001
No significant changes occurred in the exchange and trade system.
Changes During 2002
Arrangements for payments and receiptsMay 3. The authorities of Antigua and Barbuda notified the IMF of measures taken to freeze the assets of terrorists and terrorist organizations, in accordance with UN Security Council resolutions.

Argentina

(Position as of June 30, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 14, 1968.
Exchange Arrangement
CurrencyThe currency of Argentina is the Argentine peso.
Other legal tenderTransactions in other currencies are permitted, and contracts in them are legally enforceable, even though the currencies are not legal tender.
Exchange rate structure
UnitaryPrior to January 5, 2002, a unitary exchange rate was in operation. Effective that date, a dual exchange rate system was introduced. It consisted of an official exchange rate of Arg$1.4 per US$1, which applied to certain trade and financial transactions, and the floating market exchange rate, which applied to all other transactions. Effective February 11, 2002, the official exchange rate was eliminated and the dual market was unified.
Classification
Managed floating with no preannounced path for the exchange rateThe exchange rate of the Argentine peso is determined freely in the foreign exchange market. Prior to December 6, 2001, the external value of the peso was pegged to the dollar under a currency board type of arrangement. Exchange rates of other currencies were based on the buying and selling rates for the dollar in markets abroad. On December 1, 2001, the authorities partially froze bank deposits, and, on December 6, 2001, the authorities introduced exchange restrictions and capital controls. These measures effectively terminated the currency board arrangement, which had been in effect since 1991.
Effective February 11, 2002, the authorities officially allowed the peso to float in a unified market, but have been intervening in the market frequently. As a result, the exchange rate arrangement of Argentina has been reclassified from the category currency board arrangement to the category managed floating with no preannounced path for the exchange rate.
Exchange taxNo.
Exchange subsidyFrom June 18, 2001, until January 5, 2002, an exchange subsidy applicable to most exports was in effect. The subsidy was calculated as the difference between US$1 and €1 at LIBOR. Importers paid this rate, multiplied by the c.i.f. value of the imports, and exporters received this rate, multiplied by the f.o.b. value of the exports. Certain goods were excluded from this mechanism.
Forward exchange marketSwap transactions and forward exchange operations are permitted in any currency, and the rates may be freely negotiated. Effective March 15, 2002, forward exchange operations with foreign counterparts require prior authorization from the Central Bank of Argentina (BCRA). On June 3, 2002, this restriction was extended to include forward operations with local counterparts.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions with countries with which there are no payments agreements must be settled in freely convertible currencies.
Controls on the use of domestic currencyDomestic banknotes and coins may be used for buying foreign exchange that may be used freely for any purpose, except for transactions requiring BCRA authorization.
Demand and saving time deposits in domestic currency held in the “corralito” may be used to buy foreign exchange only for international transactions permitted by the BCRA. (The corralito bank regulations restrict the flow of funds outside the banking system by limiting cash withdrawals and directing domestic payments into accounts within the banking system. They embody an element of exchange control inasmuch as they limit the convertibility of currency and the making of payments and transfers for some international transactions.) Demand deposits in the corralito may be used for purchasing foreign exchange under foreign exchange regulations for the following purposes: (1) payments for imports of goods and services in accordance with BCRA regulations; (2) other payments for services abroad, provided that, when the nature of the service for which payments are to be made has no direct relationship to the activities of the firm, detailed documentation must be submitted; (3) payments for profits and dividends, subject to submission of a statement by a Professional Council-certified external auditor and BCRA approval; (4) payments of financial obligations with respect to principal and interest; and (5) payments for expenditures related to participation in trade fairs and exhibitions for export promotion purposes.
For current transactions and paymentsYes.
For capital transactionsYes.
Payments arrangements
Regional arrangementsWithin the framework of the multilateral clearing system of the LAIA, payments between Argentina and other LAIA countries are settled voluntarily through payments agreements and a reciprocal credit mechanism.
Argentina has agreements with Cuba, Malaysia, and Russia. Payments between Argentina and these countries are settled on a voluntary basis through accounts opened with the BCRA and the other central banks concerned, with the exception of Cuba, where settlement through the accounts specified in the agreements is obligatory.
Clearing agreementsYes.
Administration of controlAll exchange transactions must be carried out through specially authorized entities. These authorized entities include banks, exchange agencies, exchange houses, exchange offices, and financial companies. Each institution is subject to separate regulations.
International security restrictions
In accordance with UN sanctionsRestrictions are imposed on current payments with respect to Iraq, Libya, and the Federal Republic of Yugoslavia.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may hold gold coins and gold in any other form in Argentina or abroad. Financial institutions, exchange houses, and exchange agencies may buy or sell gold in the form of coins or gold bars among themselves, and may buy such gold from their clients, as well as other precious metals, the market value of which is based on the daily list prices of major transactions.
Controls on external tradeThe importation of gold coins and bars is not restricted. Gold exports must be paid for in convertible currencies. Imports of gold by industrial users are subject to a statistical duty of 0.5% and a sales tax. Authorized institutions may export gold to entities abroad with prior BCRA authorization.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedEffective February 3, 2002, authorized banks may open demand deposit accounts in foreign currencies and time deposits in dollars and euros on behalf of the following entities, provided that identification requirements (intended, inter alia, to prevent money laundering) have been met: (1) diplomatic representatives and embassies; (2) official institutions and entities responsible for the administration of lending agreements or donations signed with international financial institutions related to investment projects; and (3) persons subject to the regulations of the National Securities Commission. Prior to that date, foreign exchange accounts had to be denominated in convertible currencies and could be credited only with cash or with remittances in the following currencies: U.S. dollars for demand, savings, and fixed-term deposits; and other currencies that the BCRA explicitly authorized at the request of financial institutions for savings deposits and fixed-term accounts. Credit balances on these accounts may be used freely in Argentina or abroad.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThe regulations governing resident accounts apply.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Minimum financing requirementsEffective May 5, 2002, (1) consumer goods must be fully financed abroad for periods of 45, 90, or 180 days, depending on the type of product; (2) capital goods with values of less than US$200,000 may be paid in advance up to 30% of their value, and the remainder must be financed abroad for a minimum period of 180 days after shipment—capital goods valued at more than US$200,000 may be paid in advance up to 20% of their value and the remainder must be financed abroad for a minimum of 360 days after shipment; (3) payments for imports of inputs, equipment, and spare parts intended for the construction, repair, maintenance, or replacement of parts for nuclear power plants and installations for offshore production and processing of hydrocarbons may be made in advance in accordance with the applicable commercial terms; and (4) any other goods not considered above must be financed abroad for a period of at least 360 days.
Advance payment requirementsEffective March 25, 2002, most imports may be paid in advance when the importer has funds available in a foreign currency (cash or deposits abroad).
Effective May 5, 2002, (1) raw materials, intermediate goods, and essential products as defined by the Secretary of Industry and Commerce may be paid in advance.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionInspection is required for a reduced list of products.
Import licenses and other nontariff measuresImport licenses are prescribed for paper products and footwear.
Negative listRestrictions are in force solely for security, hygiene, and public health reasons.
Open general licensesOGLs are required for a limited list of products.
Licenses with quotasQuantitative restrictions are applied to automobile sector products from MERCOSUR countries and to performance sports footwear from non-MERCOSUR countries.
Other nontariff measuresNontariff barriers are not applied to intra-MERCOSUR trade. Argentina, however, applies a special regime to sugar imports with the authorization of MERCOSUR, pending agreement on a common regime for this sector. Quantitative restrictions are applied to some textile products imported from the People’s Republic of China and the Republic of Korea. Imports of secondhand clothing, tires, and some capital goods are prohibited.
Import taxes and/or tariffsThere is no common regime in MERCOSUR for sugar.
Argentina and MERCOSUR apply a CET to imports from the rest of the world that encompasses all products. CET rates currently range from zero to 20%. A number of products are subject to an additional tariff of 2.5%. A CET of 16% applies to a list of computer and telecommunications products until 2006. Effective June 18, 2001, the maximum import tariff for non-MERCOSUR trade was reduced to 28%. The national list now covers 100 products and the import tariffs on some capital goods may be reduced, in some cases, to 3% or, exceptionally, to zero percent.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsEffective December 6, 2001, export proceeds must be repatriated within 15 to 180 days, depending on the types of products involved, with the following exceptions: (1) exports that have received specific exemptions under law, executive decrees, or contracts with the government; (2) exports that are to be used to settle export advances or service principal and interest on export financing and prefinancing loans that (a) are financed or guaranteed by local financial institutions, regardless of their source of financing; (b) were contracted before December 6, 2001 (subject to BCRA approval); or (c) were disbursed between December 6, 2001, and January 10, 2002, via the official foreign exchange market (since January 11, 2002) or via the unified and unrestricted exchange market (since February 11, 2002); (3) exports that have been earmarked to service properly recorded financial contracts in effect on or since November 30, 2001 (subject to BCRA approval); and (4) exports that will be used to repay principals on financial liabilities to foreign entities outstanding on November 30, 2001, that have been restructured on terms exceeding three years as of each repayment day (subject to BCRA approval).
Surrender requirementsEffective December 6, 2001, repatriated export proceeds must be sold in the foreign exchange market within five or ten days after repatriation, depending on the types of products involved (previously, they had to be surrendered to the CBRA).
Effective May 31, 2002, export proceeds exceeding US$1 million (effective June 18, 2002, US$0.5 million), export advances, and export prefinancing must be surrendered to the CBRA.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasLicenses are required for exports of arms, sensitive goods, and war materials.
With quotasThere are quantitative restrictions on exports of protected animal species.
Export taxesA 5% export duty is applied to untanned, pickled aplite and wet blue leathers, and a 3.5% duty is applied to cotton, flax, groundnuts, soybeans, sunflower seeds, and turnips. Effective June 18, 2001, the rate of tax rebates was reduced to 5% from 12%, and rebates were extended to MERCOSUR exports. Effective March 4, 2002, export duty rates have been raised to 5-20% and are applied to all exports.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related payments
Prior approvalEffective February 11, 2002, remittances of profits and dividends require prior CBRA authorization through August 12, 2002. Also effective that date, interest payments on financial loans contracted before February 11, 2002 require CBRA authorization—with certain exemptions—through August 12, 2002.
Other payments
Prior approvalPayments of reinsurance premiums require prior authorization from the National Superintendency of Insurance.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsEffective February 11, 2002, proceeds from exports of services must be repatriated and surrendered within 15 days of collection—locally or abroad—or credited to a foreign account.
Surrender requirementsYes.
Restrictions on use of fundsOnce converted into pesos, proceeds must be held in the corralito.
Capital Transactions
Controls on capital transactionsEffective May 1, 2001, the financial transactions tax, levied on credit and debit transactions of banks, was increased to 0.4% from 0.25%.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsUnder the regulations of the National Securities Commission (CNV), foreign and Argentine issuers must meet the same requirements to make a public offering of securities in Argentina. Both must establish a permanent representative office and a domicile in Argentina to receive notices. Foreign issuers must state whether the securities are also being offered to the public in their country of origin, and specify the initial and periodic information requirements to which they are subject. If the CNV believes that the regulations in the country of origin properly protect local investors and guarantee an adequate flow of information, the CNV may lower the requirements for these investors. The CNV may authorize foreign issuers on a case-by-case basis to submit only such information as they would periodically submit to the corresponding authority in their jurisdiction of origin.
Issuers of public offerings of securities domestically and abroad must present simultaneously all required information in Spanish to the entities that authorize the public offering and listing abroad to the CNV.
Bonds or other debt securities
Sale or issue locally by nonresidentsThe regulations governing the sale or issue of shares of a participating nature apply.
On money market instruments
Sale or issue locally by nonresidentsControl is applied only for commercial papers.
On collective investment securities
Sale or issue locally by nonresidentsApproval by the CNV is required for public offerings.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsApproval by the CNV is required for public offerings.
Purchase abroad by residentsForward and other derivatives contracts—except for currency and commodity swaps—are subject to CBRA approval.
Sale or issue abroad by residentsForward and other derivatives contracts—except for currency and commodity swaps—are subject to CBRA approval.
Controls on credit operations
Financial credits
By residents to nonresidentsEffective February 11, 2002, transfers related to repayments of principals on loans contracted before February 11, 2002, are subject to prior CBRA approval, with the following exceptions, which are in effect until August 12, 2002: (1) debts owed to international organizations, official credit agencies, credit agencies that are members of the Berne Union, and banks cofinancing investment projects with international organizations or that are guaranteed by credit agencies; (2) debts owed to multilateral credit agencies (MCA) with equity participation from the national government through the CBRA, and to MCA with special agreements providing the same treatment as other MCAs; and (3) public sector obligations.
Guarantees, sureties, and financial backup facilities
To residents from nonresidentsYes.
Controls on direct investment
Inward direct investmentYes.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsPurchases of real estate in border areas by foreign investors require prior approval for the project from the Border Superintendency of the Ministry of Defense for national security reasons.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Credits granted by financial intermediaries must be used in the country and must finance investment, production, commercialization, and consumption of goods and services for internal consumption or export.
Purchase of locally issued securities denominated in foreign exchangeThere are limits on the maximum amount of securities a bank may hold from a particular issuer.
Investment regulations
Abroad by banksTransactions are prohibited by virtue of policies on general lending.
Open foreign exchange position limitsThere are regulations on the minimum capital held against market risks. The limit on the overall foreign exchange position (defined as foreign currency liquid assets held abroad plus long spot and forward positions in foreign currency securities of foreign issuers and domestic holdings of foreign currency banknotes and coins) is the equivalent of 5% of regulatory capital outstanding at end-November 2001 or US$1 million, whichever is larger. The limit for nonbank financial entities is 5% of regulatory capital or US$0.5 million, whichever is larger.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadThere is a 25% limit on investment trust portfolios, but this limit does not apply to MERCOSUR. For diversification, and according to law, no more than 10% of pension funds may be invested in securities issued by a foreign sovereign, or in securities of foreign corporations issued abroad.
Limits (min.) on investment portfolio held locallyIn the event that a trust’s assets consist of the securities, a tender offer should be made in Argentina or abroad with a minimum of 75% of the investment being made in assets issued and traded in Argentina.
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsDue to the implicit list associated with positions in different currencies other than the U.S. dollar, additional capital is required to cover those risks. Deposits and loans in those currencies are computed to build the position.
Changes During 2001
Exchange arrangementJune 18. An exchange subsidy applicable to most exports was introduced.
December 1. The authorities partially froze bank deposits.
December 6. The authorities introduced exchange restrictions and capital controls.
Imports and import paymentsJune 18. The maximum import tariff for non-MERCOSUR trade was reduced to 28%.
Exports and export proceedsJune 18. The rate of tax rebates was reduced to 5% from 12%, and rebates were extended to MERCOSUR exports.
December 6. Export proceeds were required to be repatriated within 15 to 180 days, depending on the types of products involved, with specific exceptions.
December 6. Repatriated export proceeds were required to be sold in the foreign exchange market within five or ten days after repatriation, depending on the types of products involved (previously, they had to be surrendered to the CBRA).
Capital transactionsMay 1. The financial transactions tax, levied on banks credits and debits, was increased to 0.4% from 0.25%.
Changes During 2002
Exchange arrangementJanuary 5. A dual exchange rate system was introduced, consisting of an official exchange rate of Arg$1.4 per US$1, applicable to certain trade and financial transactions, and the floating market exchange rate, applicable to all other transactions.
January 5. The exchange subsidy was terminated.
February 11. The official exchange rate was eliminated and the dual market was unified.
February 11. The authorities formally allowed the peso to float. As a result, the exchange rate arrangement of Argentina was reclassified from the category currency board arrangement to the category managed floating with no preannounced path for the exchange rate.
March 15. Forward exchange operations with foreign counterparts required prior authorization from the BCRA.
June 3. The restriction that forward exchange operations with foreign counterparts require prior authorization from the BCRA was extended to include forward operations with local counterparts.
Resident accountsFebruary 3. Authorized banks were allowed to open demand deposit accounts in foreign currencies and time deposits in dollars and euros on behalf of select entities, provided that identification requirements (intended, inter alia, to prevent money laundering) have been met.
Imports and import paymentsJanuary 10. With the implementation of the dual exchange rate system, minimum financing requirements were imposed on imports that were allowed to be paid at the official exchange rate.
Imports and import paymentsFebruary 11. The minimum financing requirements were maintained in the unified market.
March 25. Any import could be paid in advance when the importer has funds available in a foreign currency (cash or deposits abroad).
May 5. Legislation came into effect stipulating that (1) raw materials, intermediate goods, and essential products as defined by the Secretary of Industry and Commerce may be paid in advance; (2) consumer goods must be fully financed abroad for periods of 45, 90, or 180 days, depending on the type of product; (3) capital goods with values of less than US$200,000 may be paid in advance up to 30% of their value, and the remainder must be financed abroad for a minimum period of 180 days after shipment—capital goods valued at more than US$200,000 may be paid in advance up to 20% of their value, and the remainder must be financed abroad for a minimum of 360 days after shipment; (4) payments for imports of inputs, equipment, and spare parts intended for the construction, repair, maintenance, or replacement of parts for nuclear power plants and installations for offshore production and processing of hydrocarbons may be made in advance in accordance with the applicable commercial terms; and (5) any other goods not considered above must be financed abroad for a period of at least 360 days.
Exports and export proceedsMarch 4. Export duty rates were raised to 5-20% and were applied to all exports.
May 31. Export proceeds exceeding US$1 million, export advances, and export prefinancing were required to be surrendered to the CBRA.
June 18. The amount of export proceeds that must be surrendered to the CBRA was reduced to US$0.5 million.
Payments for invisible transactions and current transfersFebruary 11. Interest payments on financial loans contracted before February 11, 2002, required CBRA authorization—with certain exemptions—through August 12, 2002.
February 11. Remittances of profits and dividends required prior CBRA authorization through August 12, 2002.
Proceeds from invisible transactions and current transfersFebruary 11. Proceeds from exports of services were required to be repatriated and surrendered within 15 days of collection—locally or abroad—or credited to a foreign account.
Capital transactions
Controls on credit operationsFebruary 11. Transfers related to repayments of principals on loans contracted before February 11, 2002, were subject to prior CBRA approval, with certain exceptions, which are to be in effect until August 12, 2002.

Armenia

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 29, 1997.
Exchange Arrangement
CurrencyThe currency of Armenia is the Armenian dram.
Exchange rate structureUnitary.
Classification
Independently floatingArmenia has adopted an independently floating exchange rate regime. The Central Bank of Armenia (CBA) pursues a policy of monetary targeting for which it manages the reserve money as its operational target and intervenes in the foreign exchange market only to smooth the fluctuations of reserve money. Foreign exchange transactions take place predominantly in the interbank market, in which the CBA also participates. Foreign exchange auctions in Armenia are currently inoperative.
Purchases and sales of foreign currency may be implemented through foreign exchange entities licensed by the CBA, including banks, foreign exchange dealers, and foreign exchange bureaus and through the CBA itself. Foreign exchange entities carry out foreign exchange transactions by setting their own buying and selling rates without any restrictions.
The exchange rate of the dram against the dollar is determined on the basis of exchange rates prevailing in the interbank market on the previous day. The official exchange rate is set as the average (midpoint) of the CBA’s buying and selling rates. The official exchange rate is used for accounting purposes and is used in daily operations with the treasury. Foreign exchange entities use the official exchange rate of the CBA for bookkeeping and revaluation purposes.
Foreign exchange entities and other business entities determine exchange rates for their operations independently.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketResidents and nonresidents may freely negotiate forward exchange contracts for both commercial and financial transactions in all leading convertible currencies in the domestic exchange market and at major international foreign exchange markets. However, for the time being, the forward exchange market in Armenia is still undeveloped, although some banks sign forward contracts in small amounts.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsResidents and nonresidents are prohibited from using foreign exchange as a means of payment within Armenia.
Payments arrangements
Bilateral payments arrangements
InoperativeArmenia maintains agreements with Russia and Turkmenistan.
Regional arrangementsArmenia is a signatory of the 1993 Treaty of Economic Union (with Azerbaijan, Belarus, Kazakhstan, the Kyrgyz Republic, Moldova, Russia, Tajikistan, and Uzbekistan), which provides for the eventual establishment of a customs union, a payments union, cooperation on investment, industrial development, and customs procedures. Armenia also joined the Agreement on the Establishment of a Payments Union of CIS member countries. Armenia is a member of the Black Sea Economic Cooperation (BSEC), together with Albania, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine. Bilateral free trade agreements have been signed with Georgia, the Kyrgyz Republic, Moldova, Russia, Tajikistan, and Ukraine, though only the agreement with Russia is in operation.
Clearing agreementsThere is an arrangement with Turkmenistan for the importation of natural gas. In addition, bilateral clearing agreements with the Baltic countries, Russia, and the other countries of the FSU exist, but all have become largely inoperative.
Administration of controlThe CBA is the main body that formulates and administers exchange rate policy and that may issue foreign exchange regulations within Armenia. The CBA also has the overall responsibility for currency control, in close collaboration with the Ministry of Finance and Economy (MOFE). In general, the MOFE exercises authority over ministries and other administrative authorities, municipal authorities, budgetary organizations, and state funds. The CBA exercises authority over the activities of all other agents. Resident and nonresident currency dealers, including banks, may undertake foreign exchange transactions without restriction. There are no restrictions on current and capital movements unless otherwise specified by the CBA (in which case one month’s notice is required).
International security restrictionsn.a.
Payments arrears
OfficialThere are arrears to the Russian Federation and Turkmenistan.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Foreign currencyIndividuals are authorized to transfer, deliver, and export currency and securities denominated in foreign exchange up to the equivalent of $10,000 without any restriction. Exports of currency exceeding that amount are permitted through bank transfers.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
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 measures
Negative listImport licenses from the Ministry of Agriculture and the Ministry of Health are required and granted on a case-by-case basis to import medicinal preparations and pesticides. Imports of weapons, military equipment and parts, and explosives require special authorization from the government.
Import taxes and/or tariffsThere are two rates of customs duties: zero and 10%; most imports are zero rated. Products imported from countries in the CIS are exempted. Tariffs for a few agricultural products, textiles, and vehicles are zero, while a 10% tariff applies for a variety of new materials and manufactured products.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsAt present, there is no repatriation requirement; however, the CBA has the power, as specified by legislation, to impose such requirements on foreign exchange proceeds.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required for medicines, wild animals and plants, and textile products exported to the EU. In addition, special government permission is required for the export of nuclear technology, nuclear waste, related nonnuclear products, and technology with direct military applications. Minimum threshold prices for the export of ferrous and nonferrous metals and the reexport of foreign-produced goods therefrom remain in force.
Without quotasYes.
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 transactionsExcept for purchases of real estate in Armenia by nonresidents, there are no controls on capital transactions. However, the CBA reserves the right to impose controls if necessary. New controls are announced a month in advance.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsIn accordance with the constitution, nonresidents are not allowed to acquire land in Armenia.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsAn 8% reserve requirement in local currency applies against deposits in either foreign or domestic currency. The reserve requirement is remunerated at an interest rate of 10% a year.
Open foreign exchange position limitsLimits of 25% and 5% apply to the overall foreign exchange position in convertible and nonconvertible currencies, respectively.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Aruba

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of Aruba is the Aruban florin.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe florin is pegged to the dollar at Af. 1.79 per $1. The Centrale Bank van Aruba (CBA), the central bank, deals with local commercial banks within margins of 0.002795% on either side of parity.
Exchange taxA foreign exchange commission of 1.3% is levied on all payments to nonresidents, except when settled in Netherlands Antillean guilders. Certain institutions are exempted from this commission.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsn.a.
Payments arrangementsNo.
Administration of controlThe CBA administers foreign exchange control.
International security restrictions
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of domestic banknotes is prohibited.
Foreign currencyThe exportation of foreign banknotes requires a license, except for traveling purposes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadThe opening of an account abroad must be reported to the CBA. Approval is not required; however, resident holders of accounts abroad must apply with the CBA for an exemption from provisions regarding the collection of foreign claims.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyThese accounts are not allowed.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyBalances in these accounts are fully convertible.
Blocked accountsNo.
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 measures
Licenses with quotasThe importation of eggs may be subject to quotas, depending on the domestic supply situation.
Import taxes and/or tariffsYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, export proceeds must be converted into local currency within eight working days or credited to a foreign currency account with a local foreign exchange bank or deposited in a foreign bank account that has been reported to the CBA.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersMost restrictions on these transactions have been eliminated.
Investment-related payments
Indicative limits/bona fide testInterest payments on all types of loans may be effected if a license has been obtained from the CBA to conclude the loan. As regards profits and dividends, documents should be submitted to the CBA with respect to the amount involved. In the case of depreciation of direct investments, a special license is required if the amount of the transaction exceeds the authorized ceiling.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, proceeds must be converted into local currency within eight working days or credited to a foreign currency account with a local foreign exchange bank or deposited in a foreign bank account that has been reported to the CBA.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsTransactions of less than Af. 200,000 a year for natural persons and Af. 500,000 a year for juridical persons (excluding commercial banks and institutional investors) may be carried out freely. These ceilings are applicable to investments as well as to all capital transactions with nonresidents, including loans. This implies that a CBA license is only required for capital transactions that exceed these ceilings.
Controls on capital and money market instrumentsYes.
On capital market securitiesThere are controls on all these transactions and a CBA license is required for transactions that exceed the indicated ceilings.
Controls on derivatives and other instrumentsThere are controls on all these transactions.
Controls on credit operationsThere are controls on all these transactions.
Controls on direct investmentThere are controls on all transactions of this nature.
Outward direct investmentThe CBA may require divestment, repatriation, and surrender of proceeds to the CBA.
Inward direct investmentYes.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsThere are controls on all transactions of this nature.
Controls on personal capital transactionsPersonal capital transactions must be effected through the banking system.
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Yes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquid asset requirementsYes.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyThe limits are 40% of the first Af. 10 million of outstanding liabilities; 50% of the second Af. 10 million; and 60% of the remaining liabilities.
Other controls imposed by securities lawsNo.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Australia

(Position as of March 31, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: July 1, 1965.
Exchange Arrangement
CurrencyThe currency of Australia is the Australian dollar. It also circulates in several other countries, including Kiribati, Nauru, and Tuvalu.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the Australian dollar is market-determined. Licensed foreign exchange dealers may deal among themselves, with their customers, and with overseas counterparties at mutually negotiated rates for both spot and forward transactions in any currency with regard to trade- and non-trade-related transactions. However, the Reserve Bank of Australia (RBA) retains discretionary power to intervene in the foreign exchange market. There is no official exchange rate for the Australian dollar. The RBA publishes an indicative rate for the Australian dollar based on market observation at 4 p.m. daily.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketActive trading takes place in forward and futures contracts.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsResidents may purchase foreign currency from a person who is not licensed, provided that one of the following conditions is met: (1) the transaction is settled immediately, (2) the seller is not in the business of dealing in foreign currency, or (3) the seller is dealing on the seller’s own account. Otherwise, residents may purchase foreign currency only from a licensed dealer.
Payments arrangements
Regional arrangementsAustralia participates in PACER.
Administration of controlThe RBA has responsibility for oversight of the foreign exchange market, including the authorization of foreign exchange dealers. Effective March 11, 2002, the Australian Securities and Investment Commission (ASIC) is responsible for the licensing of all financial service providers, including foreign exchange dealers that deal in foreign currency transactions unless the transactions are settled immediately or in the case of persons dealing on their own accounts.
International security restrictions
In accordance with UN sanctionsFinancial restrictions apply to certain transactions, accounts, and assets relating to Iraq; Libya; the UNITA movement in Angola; certain persons associated with the former government of the Federal Republic of Yugoslavia; the Taliban; and, effective October 3, 2001, organizations, individuals, and other entities identified as terrorists or as sponsors of terrorism. Until October 17, 2001, when they were lifted, restrictions also applied to transactions with the Federal Republic of Yugoslavia and its agencies.
In accordance with UN Security Council Resolution 1373, effective October 15, 2001, the Minister for Foreign Affairs is empowered to maintain a list of suspected persons, entities, and assets connected with terrorism (the list was augmented on October 17, 2001; November 9, 2001; December 21, 2001; and March 20, 2002). Dealing with the funds or other assets of the listed individuals or groups, or making funds or assets available to them, is prohibited, and any funds in connection with listed individuals or groups must be frozen.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesExportation or importation of notes and coins totaling more than $A 10,000 in domestic or foreign currency must be reported to the Australian Transaction Reports and Analysis Center (AUSTRAC).
On exports
Foreign currencyResidents may purchase foreign currency only from a licensed dealer. Nonresident travelers may take out any foreign currency they brought into Australia.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyLocal purchases and sales of foreign currency may be made from a person who is not licensed, provided that one of the following conditions is met: (1) the transaction is settled immediately, (2) the seller is not in the business of dealing in foreign currency, or (3) the seller is dealing on the seller’s own account. Otherwise, foreign currency may be purchased from or sold to a licensed dealer only.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyConversion may be effected through a licensed foreign exchange dealer or through a person who is not licensed, provided that one of the following conditions is met: (1) the transaction is settled immediately, (2) the seller is not in the business of dealing in foreign currency, or (3) the seller is dealing on the seller’s own account.
Nonresident Accounts
Foreign exchange accounts permittedLocal purchases and sales of foreign currency may be made through a licensed dealer or through a person who is not licensed, provided that one of the following conditions is met: (1) the transaction is settled immediately, (2) the seller is not in the business of dealing in foreign currency, or (3) the seller is dealing on the seller’s own account.
Domestic currency accountsYes.
Convertible into foreign currencyConversion must be effected through a licensed foreign exchange dealer or through a person who is not licensed, provided that one of the following conditions is met: (1) the transaction is settled immediately, (2) the seller is not in the business of dealing in foreign currency, or (3) the seller is dealing on the seller’s own account.
Blocked accountsOnly those accounts affected by international security restrictions or UN sanctions are blocked.
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 measuresThere are no import-licensing requirements or quotas on imports other than the tariff quota that applies to certain cheeses and curd.
Negative listFor some products, imports are allowed only if written authorization is obtained from the relevant authorities or if certain regulations are complied with. Among the goods subject to control are narcotic, psychotropic, and therapeutic substances; firearms and certain weapons; certain chemicals and primary commodities; some glazed ceramic ware; and various dangerous goods. These controls are maintained mainly to meet health and safety requirements; to meet certain requirements for labeling, packaging, or technical specifications; and to satisfy certain obligations arising from Australia’s membership in international commodity agreements.
Import taxes and/or tariffsGeneral tariffs have been reduced to 5%. The tariff on passenger motor vehicles is 15% and it will remain at this level until January 1, 2005. Textiles, clothing, and footwear are subject to tariffs ranging from zero to 25%.
The ANZCERTA establishes free trade in goods between Australia and New Zealand. The SPARTECA provides the Forum Island countries with nonreciprocal, duty-free access to most markets in Australia and New Zealand. Trade between Papua New Guinea and Australia is covered by the Agreement on Trade and Commercial Relations between Australia and Papua New Guinea.
Developing countries receive tariff preferences on exports to Australia under the Australian System of Tariff Preferences for Developing Countries, with a uniform preferential margin of 5%. Preferences have been eliminated on imports of certain industries such as textiles, clothing and footwear, chemicals, vegetable and fruit preparations, tuna, and sugar, except from the least-developed countries and South Pacific Island Territories.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport prohibitions and restrictions in effect are designed to ensure quality control, administer trade embargoes, and meet obligations under international arrangements. These prohibitions are also set up to restrict the exportation of certain defense materials; regulate the exportation of goods that involve high technology and have dual civilian and military applications; maintain adequate measures of control over designated cultural property, resources, flora, and fauna; secure conservation objectives; and respond to specific market distortions abroad. Remaining controls on primary products apply mainly to food and agricultural products.
Export controls apply to uranium and related nuclear materials (including uranium-bearing sands) to ensure compliance with Australia’s nonproliferation policy obligations. Restrictions also apply to certain other nuclear and related materials. Licenses are required for exports of unprocessed wood, including wood chips. The Australian Dairy Corporation administers export control powers in relation to prescribed dairy products under the provisions of the Dairy Produce Act. All exporters of controlled dairy products must be licensed. This system allows the control of exports to markets where quantitative restrictions apply.
Exports of cattle, sheep or goat meat, and livestock can be made only by persons or firms licensed by the Commonwealth Department of Agriculture, Fisheries, and Forestry (AFFA). If other countries impose quantitative restrictions on imports of meat or livestock, the AFFA may, in conjunction with industry, introduce measures to control Australian exports to conform with those restrictions.
Other Commonwealth statutory marketing authorities that have export control powers are the Australian Horticultural Corporation, the Australian Honey Board, the Australian Wheat Board, and the Australian Wine and Brandy Corporation. The Australian Wheat Board’s powers make it the sole exporter of Australian wheat.
With quotasAustralia has a complete ban on the export of merino ewes, genetic material, ova, and embryos to any country other than New Zealand. However, merino breeding rams purchased at designated export auctions and semen from rams included in the National Register of Semen Export Donors may be exported. Sales are subject to an annual quota (currently limited in total to 800 rams a year, and there is a provision for up to 100 rams to be placed on a semen donor register) and the AFFA’s approval. No ram sold and nominated for the collection of semen for export may be physically exported. There is no restriction on the export of merino rams or reproductive material to New Zealand. The above restrictions do not apply to merino rams intended for slaughter; however, the export of these rams is subject to controls to ensure they do not enter breeding stocks.
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 transactionsThe purchase of shares and other securities of a participatory nature, which may be affected by laws and policies on inward direct investment, may require notification to the Australian authorities. Foreign governments, their agencies, and international organizations are not permitted to issue bearer bonds and, when borrowing in the Australian capital market, must advise the Australian authorities of the details of each borrowing after its completion. Subject to certain disclosure requirements, overseas banks may issue securities in the wholesale capital market in amounts of $A 500,000 or more. Effective March 11, 2002, dealers in financial products (including securities, derivatives, and foreign exchange contracts) require a financial service provider’s license from the ASIC.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Controls on derivatives and other instrumentsAll foreign exchange transactions within Australia may be effected only through a licensed financial service provider. However, this is not necessary if the transaction is settled immediately or in cases where persons are dealing on their own accounts.
Sale or issue locally by nonresidentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Controls on direct investment
Inward direct investmentPrior authorization is required for (1) acquisitions by foreign investors of a substantial interest in an Australian business with total assets of more than $A 50 million or where the proposal values the business over that amount (a substantial interest is seen as one that would result in the shareholding of 15% or more by a single foreign interest or association or 40% or more by two or more unrelated foreign interests in an Australian corporation); (2) all investments in the banking, civil aviation, airports, shipping, media, telecommunication, and real estate sectors, including those below the $A 50 million threshold, which are subject to special restrictions; (3) direct investments by foreign governments or their agencies irrespective of size; and (4) proposals to establish new businesses where the total amount of the investment is $A 10 million or more.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAll acquisitions of residential real estate, including vacant land, must be notified, unless exempt by regulation. Acquisitions of nonresidential commercial real estate for development are normally approved, as are acquisitions of developed nonresidential commercial real estate. Acquisition of developed nonresidential commercial real estate is exempt if the total value of the property is less than $A 50 million and if the property is not subject to heritage listing. If the property is subject to heritage listing, the total value of the property may not exceed $A 5 million.
Approval is also usually granted for acquisitions of vacant land for development, subject to certain conditions, and for acquisitions of dwellings (including condominiums) direct from a developer, either “off the plan,” while under construction, or completed but never occupied, provided that no more than 50% of the total number of dwellings are sold to foreign investors.
Foreign acquisitions of established residential real estate are normally approved only in cases involving temporary residents who acquire the property as their principal place of residence for a period in excess of 12 months, subject to resale of the property upon departure. Foreign persons who are entitled to reside permanently in Australia or those who purchase as joint tenants with an Australian spouse are not required to seek approval to acquire any form of residential real estate. Foreign acquisition of residential real estate (including condominiums) within a designated integrated tourist resort is exempt from authorization.
Sale locally by nonresidentsThe sale of Australian real estate by residents or nonresidents is subject to the above conditions.
Controls on personal capital transactions
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThe transfer may be subject to approval of the authorities in cases where the gift involves a foreign person attaining an interest in Australian urban land.
Provisions specific to commercial banks and other credit institutionsBanks are subject to prudential requirements, e.g., liquidity management, credit concentration.
Investment regulations
In banks by nonresidentsPrior approval from the Treasurer is required for any person or group—domestic or foreign—to acquire a 15% or larger share in a financial sector company, including authorized deposit-taking institutions and any nonoperating holding company for these institutions in Australia.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsThe rules of the Australian Stock Exchange require that, to be a participating organization of the Australian Stock Exchange, a majority of the directors of a brokerage must be Australian residents. This rule does not prohibit foreigners from owning a brokerage.
Deposit-taking institutions and pension funds are supervised by the Australian Prudential Regulation Authority, an entity separate from the RBA.
Changes During 2001
Arrangements for payments and receiptsOctober 3. Financial restrictions were imposed on transactions with and the accounts and assets of individuals and entities identified as terrorists or sponsors of terrorism. Additional specifics were added on October 12, November 9, and December 21.
October 15. In accordance with UN Security Council Resolution 1373, the Minister for Foreign Affairs was empowered to maintain a list of suspected persons, entities, and assets connected with terrorism. Dealing with the funds or other assets of the listed individuals or groups, or making funds or assets available to them, was prohibited, and any funds in connection with listed individuals or groups were required to be frozen.
October 17. Restrictions on financial transactions with the authorities of the Federal Republic of Yugoslavia and its agencies were lifted. Restrictions remain, however, on transactions involving certain persons associated with the former government of the Federal Republic of Yugoslavia.
Changes During 2002
Arrangements for payments and receiptsMarch 11. The Financial Services Reform Act came into effect, establishing a single licensing regime within ASIC for all financial market activity. Providers of financial services, including dealers and advisers in securities, derivatives, and foreign exchange contracts, now require a financial service provider’s license from the ASIC.
March 20. Additional names of individuals and entities associated with terrorism that are subject to financial restrictions were released.

Austria

(Position as of March 31, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: August 1, 1962.
Exchange Arrangement
CurrencyThe currency of Austria is the euro. Through February 28, 2002, however, the Austrian schilling remained the legal tender in cash transactions, and between January 1 and February 28, 2002, both the schilling and the euro circulated. The euro became the sole legal tender on March 1, 2002.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderAustria participates in a currency union (EMU) with 11 other members of the EU: Belgium, Finland, France, Germany, Greece (effective January 1, 2001), Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Prior to January 1, 2002, the internal conversion rates with respect to the national currencies of EMU participants were fixed to the euro, whereas the external exchange rate of the euro was market determined. The conversion rate between the euro and the schilling was set at S 13.7603 per €1. The ECB has the right to intervene to smooth out fluctuations in the euro exchange rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with all countries may be made either in foreign currencies or through free euro accounts.
Payments arrangements
Bilateral payments arrangements
OperativeThere are no bilateral payment agreements; however, several bilateral agreements exist for the promotion and protection of investments, which include provisions on transfers between the signatories.
Administration of controlMost exchange transactions are effected through Austrian banks authorized by the central bank.
International security restrictions
In accordance with UN sanctionsCertain restrictions on payments and transfers for current international transactions to the government of Iraq are in force. EU restrictions are imposed on payments and transfers to specifically targeted persons associated with Liberia or the Federal Republic of Yugoslavia. In addition, restrictions apply to payments and transfers to Angola, Myanmar, the Taliban, and individuals, groups, and organizations associated with terrorism.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency 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 affected by UN sanctions against Angola, Iraq, Myanmar, and the Taliban and, by virtue of EU regulations, sanctions against certain individual citizens of the Federal Republic of Yugoslavia.
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 measuresExport and import licenses must be issued by the Federal Ministry for Economic Affairs for industrial products and by the Federal Ministry of Agriculture and Forestry for agricultural products. As a member of the EU, Austria applies all import regulations based on the common commercial policy, i.e., import restrictions for industrial products in the textile and clothing sectors and statistical surveillance for products falling under the scope of the ECSC Treaty. There are also regulations based on current EU law with regard to China for imports of some consumer products.
Positive listYes.
Licenses with quotasYes.
Import taxes and/or tariffsAustria applies the Common Import Regime of the EU.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesLicenses for exports must be obtained from the relevant ministry, or at the time of clearance, from the customs authorities. For most exports, licenses are not required. Export licenses are issued with due consideration for the provisions of relevant EU trade agreements and the fulfillment of quotas established in accordance with such agreements, and the needs of the Austrian economy.
Without quotasYes.
With quotasYes.
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 transactionsYes.
Controls on capital and money market instrumentsIn some cases, reporting requirements to the Austrian National Bank exist.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentIn the auditing and legal professions, the transport sector, and the electric power generation sector certain restrictions apply for investments by nonresidents and Austrian residents who are not nationals of one of the countries of the EEA.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsThe acquisition of real estate is subject to approval by local authorities.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsReserve requirements apply only to deposits held in euros.
Liquid asset requirementsLiquid asset requirements apply only to deposits held in euros.
Open foreign exchange position limitsThe net amount of an open foreign exchange position must not exceed 30% of own funds at the end of any business day; the total sum of all open positions must not exceed 50% of own funds. The euro is not considered a foreign currency.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsNo.
Changes During 2001
No significant changes occurred in the exchange and trade system.
Changes During 2002
Exchange arrangementJanuary 1. Euro banknotes were introduced. Both the euro and the schilling could be used for payments through February 28, 2002.
March 1. The euro became the sole legal tender.

Azerbaijan

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Azerbaijan is the Azerbaijan manat.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe external value of the manat is determined as a weighted average of the telephone, auction, and interbank markets. The open interbank exchange market has the dominant weight.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with the Baltic countries, Russia, and the other countries of the FSU are effected through correspondent accounts of the commercial banks in these countries or through correspondent accounts of the respective central banks.
Use of foreign exchange among residentsIn accordance with current legislation, settlements among residents may be effected in foreign currencies only with a license issued by the Azerbaijan National Bank (ANB).
Payments arrangements
Bilateral payments arrangements
InoperativeYes.
Clearing agreementsAzerbaijan is a member of the Payment Union of the CIS countries, which has become inoperative.
Barter agreements and open accountsYes.
Administration of controlThe ANB regulates foreign exchange transactions, conducts foreign currency operations, and administers official gold and convertible currency reserve holdings. The ANB also has overall responsibility for issuing licenses to deal in foreign exchange and to open foreign exchange accounts abroad; for regulating foreign exchange operations, including implementing and monitoring compliance with the law; and for establishing prudential rules governing foreign exchange operations. The Ministry of Trade regulates foreign trade, while the Customs Code regulates the organization and operation of customs.
International security restrictionsNo.
Payments arrearsn.a.
Controls on trade in gold (coins and/or bullion)Controls are administered by the cabinet of ministries jointly with the ANB.
Controls on external tradeA license is required to conduct international trade in gold.
Controls on exports and imports of banknotesThe exportation and importation of foreign banknotes are regulated by the ANB and the customs agencies. Banks may import and export foreign banknotes only with a license issued by the ANB.
On exports
Domestic currencyNo more than manat 50,000 in banknotes may be taken out of the country, on the condition that they be returned.
Foreign currencyResidents are allowed to export the amount of currency they brought in plus $10,000, or the equivalent, without any documentation. Nonresidents are allowed to export the amount they brought in plus $1,000, or the equivalent, without any documentation.
On imports
Domestic currencyYes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyNo declaration of the origin of foreign exchange is required for individuals, who may transfer freely foreign exchange held in these accounts to their close relatives up to the equivalent of $10,000 and, upon authorization, larger amounts, or may convert it freely into domestic currency.
Held abroadResident enterprises may open and use foreign exchange bank accounts in banks abroad, subject to authorization by the ANB. Enterprises are obliged to repatriate the foreign exchange held in accounts abroad (except the amount used to pay for imports).
There is no regulation for individuals who open and use foreign exchange bank accounts in banks abroad.
Approval requiredYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNatural and juridical persons may purchase foreign exchange through authorized banks, and authorized banks may also purchase foreign exchange in these markets on their own account, in accordance with the regulations of the ANB. These regulations do not set any limit.
Nonresident Accounts
Foreign exchange accounts permittedForeign exchange in these accounts may be transferred abroad or sold to the banks for manat. Prior to opening an account, a nonresident entity must provide proof—issued by the Ministry of Justice—of its legal status.
Domestic currency accountsNonresident enterprises may also open and operate accounts in manat and use them for domestic transactions, in accordance with instructions issued by the ANB.
Convertible into foreign currencyThe regulations governing resident accounts apply.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsYes.
Advance payment requirementsAdvance import payments of more than 180 days prior to the delivery of goods are not allowed. Prepayments by bank transfers for import contracts of goods and services are limited to the equivalent of $10,000. Subject to authorization of the ANB, this amount may exceed the indicative limit.
Documentation requirements for release of foreign exchange for imports
Letters of creditPrepayments by bank transfers in excess of $10,000 or its equivalent require either an LC or the authorization of the ANB.
Import licenses and other nontariff measuresNo.
Import taxes and/or tariffsTariffs are unified at 15% for most goods and for imports from all countries. Some capital and input goods are subject to tariff rates of 5%.
Tariff bands of 3% and 10% were introduced, increasing the number of bands from three to five, and the range of goods in the zero rate band was widened.
Effective April 15, 2001, a new tariff code introduced a 0.5% tariff rate on goods that were previously exempt from tariffs, as well as specific tariffs on underinvoiced goods. At the same time, all ad hoc tariff exemptions were eliminated.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsResidents are required to repatriate all proceeds from exports within 180 days and transfer them to a licensed bank in Azerbaijan within 10 days of receipt, unless specifically exempted by the government. Expenses, commissions, and taxes paid abroad relating to economic activities may be deducted from the proceeds prior to transfer to a licensed bank.
Financing requirementsYes.
Documentation requirements
Letters of creditAll export operations must be secured by a 100% prepayment or an irrevocable LC.
GuaranteesYes.
Export licenses
Without quotasEffective April 1, 2001, exports of scrap metal were prohibited.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersResident individuals are allowed to purchase noncash foreign exchange for transfer abroad to meet the costs of bona fide current international transactions.
Trade-related payments
Indicative limits/bona fide testAny amount may be paid without limitation, on the basis of documents confirming that trade-related costs actually have been incurred. General limitations apply to advance payments.
Investment-related payments
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testThe indicative limit is the equivalent of $10,000. This limit may be exceeded on the basis of an expense estimate.
Personal payments
Indicative limits/bona fide testThe limit is the equivalent of $10,000 for payments related to medical costs, studies abroad, and family maintenance and alimony.
Foreign workers’ wages
Prior approvalYes.
Other payments
Indicative limits/bona fide testThe indicative limit for subscriptions and membership fees varies from $1,000 to $5,000, or the equivalents, a year.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds received by residents must be repatriated within six months and transferred to a licensed bank within 10 days of receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThere are no controls, except for banks that sell their shares to nonresidents within the quota specified by the ANB.
Sale or issue locally by nonresidentsThis process is regulated by the government in coordination with the ANB by establishing quotas and trading authorization procedures.
Purchase abroad by residentsThe transfer of funds is permitted with the approval of the ANB.
Sale or issue abroad by residentsThese operations are regulated by the laws on joint-stock companies, securities, and stock exchanges, and by in-house instruction of the ANB. Sales are effected mainly by prior subscription; an organized market is just emerging.
Bonds or other debt securities
Sale or issue locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
Purchase abroad by residentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue abroad by residentsThe regulations governing shares or other securities of a participating nature apply.
On money market instruments
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsThese instruments are not currently available, and legislation concerning derivatives has not been formulated.
Controls on credit operations
Commercial credits
By residents to nonresidentsThese transactions are subject to authorization by the ANB.
Financial credits
By residents to nonresidentsYes.
Controls on direct investment
Outward direct investmentDirect investment abroad requires ANB authorization.
Inward direct investmentProfits may be reinvested in local currency held in Azerbaijan or converted into foreign currency and transferred without controls. Foreign investors are granted certain privileges: enterprises or joint ventures with foreign equity capital ownership of more than 30% are entitled to a two-year holiday on profit taxes.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThese transactions are permitted, but a court ruling is required.
Settlement of debts abroad by immigrantsSubject to presentation of satisfactory documents and based on a court ruling.
Transfer of assets
Transfer abroad by emigrantsSubject to authorization by the ANB.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Subject to authorization by the ANB.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThere is a 10% reserve requirement on deposit accounts.
Liquid asset requirementsLiquid assets must be equal to at least 30% of total liabilities.
Differential treatment of deposit accounts held by nonresidentsThere is a 10% reserve requirement on deposit accounts.
Credit controlsLoans granted to a nonresident may only be used domestically.
Investment regulationsThe Law on Banks and Banking grants the ANB the right to set quotas for participation in banks’ equity capital by foreign investors. This same law establishes regulations governing the investment of funds in shares of other banks, nonbank enterprises, institutions, and organizations.
In banks by nonresidentsSubject to authorization by the ANB.
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsThe regulations and procedures governing participation by nonresidents in the securities market are determined in accordance with the Azerbaijan Republic Law on Securities and by the Committee on Securities under the president of Azerbaijan.
Limits (max.) on investment portfolio held abroadn.r.
Other controls imposed by securities lawsIn accordance with the Azerbaijan Republic Law on Securities, the circulation of securities of foreign issuers in Azerbaijan is regulated by the Committee on Securities. Securities of issuers registered in Azerbaijan may be placed outside Azerbaijan with the authorization of that same body.
Changes During 2001
Imports and import paymentsApril 15. A new tariff code introduced a 0.5% tariff rate on goods that were previously exempt from tariffs, as well as specific tariffs on underinvoiced goods. At the same time, all ad hoc tariff exemptions were eliminated.
Exports and export proceedsApril 1. Exports of scrap metal were prohibited.

The Bahamas

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: December 5, 1973.
Exchange Arrangement
CurrencyThe currency of The Bahamas is the Bahamian dollar.
Other legal tenderCommemorative gold coins in denominations of B$10, B$20, B$50, B$100, B$150, B$200, B$250, B$1,000, and B$2,500 and silver coins denominated B$10 and B$25 are legal tender but do not circulate. The U.S. dollar circulates concurrently with the Bahamian dollar.
Exchange rate structure
DualIn addition to the official exchange market, there is a market in which investment currency may be negotiated between residents through the Central Bank of The Bahamas (CBB); the current premium bid and offer rates are 20% and 25%, respectively. The use of investment currency is prescribed for the purchase of foreign currency securities from nonresidents and direct investments outside The Bahamas. In certain circumstances, the CBB may also permit residents to retain and use foreign currency from other sources to make such outward investments.
Classification
Conventional pegged arrangementThe Bahamian dollar is pegged to the U.S. dollar, the intervention currency, at par. Buying and selling rates for the pound sterling are also officially quoted, with the buying rate based on the rate in the New York market; the selling rate is 0.5% above the buying rate. The CBB deals only with commercial banks. For transactions with the public, commercial banks are authorized to charge a commission of 0.50% buying and 0.75% selling per US$1, and 0.50% buying or selling per £1.
Exchange taxA stamp tax of 1.5% is applied to all outward remittances.
Exchange subsidyNo.
Forward exchange marketCommercial banks may provide forward cover for residents who are due to receive or must pay foreign currency under a contractual commitment. Commercial banks may not, however, sell foreign currency spot to be held on account in cover of future requirements without the CBB’s permission. Authorized dealers may deal forward in foreign currency with nonresidents without prior approval from the CBB. Commercial banks may execute forward deals among themselves at market rates but they must ensure when carrying out all forward cover arrangements that their open spot or forward position does not exceed the equivalent of B$500,000 long or short.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe exchange control system of The Bahamas makes no distinction between foreign territories. Settlements with residents of foreign countries may be made in any foreign currency or in Bahamian dollars through an external account. Foreign currency is defined as all currencies other than the Bahamian dollar.
Payments arrangements
Regional arrangementsThe Bahamas is a member of the CARICOM, but it does not participate in the common market.
Administration of controlExchange control is administered by the CBB, which delegates to authorized dealers the authority to approve allocations of foreign exchange for certain current payments, including payments for imports up to B$100,000; approval authority for cash gifts is not delegated, except in the Family Islands.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents, other than authorized dealers, are not permitted to hold or deal in gold bullion. However, residents who are known users of gold for industrial purposes may, with the approval of the CBB, meet their current industrial requirements. There is no restriction on residents’ acquisition or retention of gold coins.
Controls on external tradeAuthorized dealers are not required to obtain licenses for bullion or coins, and no import duty is imposed on these items. Commercial imports of gold jewelry do not require a license and are duty free, although a 10% stamp tax is required. A 1.5% stamp tax payable to customs is also required on commercial shipments of gold jewelry from any source.
Controls on exports and imports of banknotes
On exports
Domestic currencyA traveler may export banknotes up to a total of B$200.
Foreign currencyBahamian travelers need CBB approval to export foreign banknotes.
On imports
Domestic currencyImportation is subject to CBB approval.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts are permitted, but approval is required.
Held abroadThese accounts are permitted, but approval is required.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsWith the prior approval of the CBB, authorized banks may also open external accounts in Bahamian dollars for nonresident companies that have local expenses in The Bahamas and for nonresident investors. Authorized banks may freely open external accounts denominated in Bahamian dollars for winter residents and for persons with residency permits who are not gainfully employed in The Bahamas. Foreign nationals who have been granted temporary resident status are treated in some respects as nonresidents but are not permitted to hold external accounts in Bahamian dollars. External accounts in Bahamian dollars are normally funded entirely from foreign currency originating outside The Bahamas, but income on registered investments may also be credited to these accounts with the approval of the CBB.
Convertible into foreign currencyYes.
Blocked accountsThe accounts of residents emigrating from The Bahamas who are redesignated upon departure as nonresidents are blocked for amounts in excess of B$25,000 for a period of four years. Balances on blocked accounts are transferable through the official exchange market after that time or through the Investment Currency Market at any time; they may also be invested with the approval of the CBB in certain resident-held assets, or they may be spent locally for any other purpose.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPrior approval from the CBB is required to make payments for imports exceeding B$100,000, irrespective of origin, except in the Family Islands, where this authority is delegated to clearing bank branches. This approval is normally given automatically upon submission of pro forma invoices or other relevant documents proving the existence of a purchase contract.
Import licenses and other nontariff measures
Negative listThe importation of certain commodities is prohibited or controlled for social, humanitarian, or health reasons. For all imports of agricultural products, a permit must be obtained from the Ministry of Agriculture. All other goods may be imported without a license. Customs entries are subject to a stamp tax of 7%.
Import taxes and/or tariffsImport duties vary from zero to 210%. The tariff rate on most goods is 42%, and the average tariff rate is 35%. Stamp duties on imports vary from 2% to 7%. There is no import duty on certain tourist-related goods, but these goods are subject to stamp duties ranging from 8% to 20%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsThe proceeds of exports must be offered for sale to an authorized dealer as soon as the goods have reached their destination or within six months of shipment; alternatively, export proceeds may be used in any manner acceptable to the CBB.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExport licenses are not required, except for crawfish, conch, and arms and ammunition.
Export taxesYes.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThere are no restrictions on current payments. However, there are limits on the approval authority delegated to commercial banks by the CBB. Authorized dealers may make payments to nonresidents on behalf of residents for certain services and other invisibles, such as commissions, royalties, education, and non-life insurance premiums, within specified limits. CBB approval is required for payments in excess of those limits or for categories of payments not delegated.
Trade-related payments
Prior approvalFor unloading and storage costs and commissions, CBB approval is required for transactions over B$3,000 and B$6,000, respectively.
Indicative limits/bona fide testYes.
Investment-related paymentsInformation is not available for amortization of loans or depreciation of direct investments.
Prior approvalFor all investments with approved status, permission is given upon application for the transfer.
Payments for travel
Prior approvalYes.
Quantitative limitsThe limits for tourist travel are B$1,000 a person above the age of 18 years a trip and B$500 a person up to the age of 18 years a trip. For business or professional travel, the limit is B$10,000 a person a year. The allowance for tourist travel excludes the cost of fares and travel services, which is normally paid in Bahamian dollars to a travel agent in The Bahamas. Foreign exchange obtained for travel may not be retained abroad or used abroad for purposes other than travel; any unused balance must be surrendered within a week of issue or, if the traveler is still abroad, within one week of returning to The Bahamas.
Indicative limits/bona fide testYes.
Personal payments
Quantitative limitsResidents are entitled to a foreign exchange allowance of B$3,000 a person a trip for education-related costs.
Indicative limits/bona fide testSubject to adequate documentary evidence, an unlimited education allowance is granted by the CBB. In addition to a B$1,000 cash allowance, authorized dealers may approve medical payments to doctors or medical establishments.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsThe limit is 50% of wages and salaries.
Indicative limits/bona fide testIf commitments outside The Bahamas are more than 50% of wages and salaries, additional amounts may be remitted. Temporary residents may also repatriate all of their accumulated savings resulting from their employment in The Bahamas.
Credit card use abroad
Prior approvalApproval is required for residents to hold an international credit card, which may not be used to pay for life insurance premiums and capital items.
Other payments
Prior approvalPrior approval is required for payments of consulting and legal fees.
Quantitative limitsThe limit for subscription and membership fees is B$1,000, and that for consulting and legal fees is B$3,000.
Indicative limits/bona fide testAn indicative limit is applied to consulting and legal fees.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsResidents are obliged to collect all proceeds without delay.
Surrender requirementsAll foreign currency proceeds must be offered for sale to an authorized dealer upon receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsAll outward capital transfers require exchange control approval, and outflows of resident-owned capital are restricted. Inward transfers by nonresidents, which are encouraged, are required to go through the exchange control approval process, although the subsequent use of the funds in The Bahamas may require authorization.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsIn principle, inward investment by nonresidents is unrestricted. However, the consent of the CBB is required for the issue or transfer of shares in a Bahamian company to a nonresident and for the transfer of control of a Bahamian company to a nonresident. The extent of such approvals generally reflects the government’s economic and investment policy guidelines.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsResidents are not permitted to purchase foreign currency securities with official exchange, export proceeds, or other current earnings; payment must be made with investment currency. All purchases, sales, and swaps of foreign currency securities by Bahamian residents require permission from the CBB and are normally effected through authorized agents, who are free to act on behalf of nonresidents in relation to such transactions without any further approval from the CBB. All foreign securities purchased by residents of The Bahamas must be held by, or to the order of, an authorized agent.
Sale or issue abroad by residentsSale proceeds from such resident-held foreign currency securities that were registered at the CBB prior to December 31, 1972, are eligible for sale in the investment currency market. Unregistered securities may be offered for sale at the official rate of exchange.
Bonds or other debt securities
Purchase locally by nonresidentsNonresident buyers of Bahamian dollar-denominated securities must fund the acquisition of such securities from foreign currency sources. Interest, dividends, and capital payments on such securities may not be remitted outside The Bahamas, unless the holdings have been properly acquired by nonresidents.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instrumentsThe regulations governing shares or other securities of a participating nature apply.
On collective investment securitiesThe regulations governing shares or other securities of a participating nature apply.
Controls on derivatives and other instrumentsThe regulations governing shares or other securities of a participating nature apply.
Controls on credit operations
Commercial credits
By residents to nonresidentsA resident company wholly owned by nonresidents is not allowed to raise fixed capital in Bahamian dollars, although approval may be granted to obtain working capital in local currency. If the company is partly owned by residents, the amount of local currency borrowing for fixed capital purposes is determined in relation to residents’ interest in the equity of the company. Banks and other lenders resident in The Bahamas must have permission to extend loans in domestic currency to any corporate body (other than a bank) that is also resident in The Bahamas but is controlled directly or indirectly by nonresidents. However, companies set up by nonresidents primarily to import and distribute products manufactured outside The Bahamas are not allowed to borrow Bahamian dollars from residents for either fixed or working capital. Instead, they must provide all their financing in foreign currency, and foreign currency loans are normally permitted on application.
To residents from nonresidentsResidents other than authorized banks must obtain permission to borrow foreign currency from nonresidents, and authorized dealers are subject to exchange control direction of their foreign currency loans to residents. Residents must also obtain permission to pay interest on, and to repay the principal of, foreign currency loans by conversion of Bahamian dollars. When permission is granted for residents to accept foreign currency loans, it is conditional upon the currency being offered for sale without delay to an authorized dealer, unless the funds are required to meet specifically authorized payments to nonresidents.
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 use of official exchange for direct investment abroad is limited to B$100,000 or 30% of the total cost of the investment (whichever is greater) for investments from which the additional benefits expected to accrue to the balance of payments from export receipts, profits, or other earnings within 18 months of the investment will at least equal the total amount of investment and will continue thereafter. Investments abroad that do not meet the above criteria may be financed by foreign currency borrowed on suitable terms, subject to individual approval from the CBB; by foreign currency purchased in the investment currency market; or by the retained profits of foreign subsidiary companies. Permission is not given for investments that are likely to have adverse effects on the balance of payments.
Inward direct investmentCBB approval is required.
Controls on liquidation of direct investmentIn the event of a sale or liquidation, nonresident investors are permitted to repatriate the proceeds, including any capital appreciation, through the official foreign exchange market.
Controls on real estate transactions
Purchase abroad by residentsResidents require the specific approval of the CBB to buy property outside The Bahamas; such purchases, if for personal use, may be made only with investment currency, and approval is limited to one property a family. Incidental expenses connected with the purchase of property for personal use may normally be met with investment currency. Expenditures necessary for the maintenance of the property or arising directly from its ownership may, with permission, be met with foreign currency bought at the current market rate in the official foreign exchange market.
Purchase locally by nonresidentsForeigners intending to purchase land for commercial purposes or property larger than five acres in size must obtain a permit from the Investments Board. If such an application is approved, payment for the purchase may be made either in Bahamian dollars from an external source or in foreign currency. Nonresidents wishing to purchase property for residential purposes may do so without prior approval but are required to obtain a Certificate of Registration from the Investments Board on completion of the transaction.
Sale locally by nonresidentsApproval is required.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsResidents are not allowed to remit funds for gaming purposes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Lending to nonresidents (financial or commercial credits)Prior exchange control approval is required if local real estate is offered as a security.
Lending locally in foreign exchangeExchange control approval is required to make loans to residents.
Open foreign exchange position limitsThe limit is B$500,000 for a long or short position.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsIn the securities market, a Mutual Funds Act and a regulation that provides for licensing of mutual funds administrators and the registration of mutual funds are enforced. The Securities Industry Act authorizes the Securities Commission to regulate the stock exchange and stock exchange operations.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Kingdom of Bahrain

(Position as of January 31, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: March 20, 1973.
Exchange Arrangement
CurrencyThe currency of the Kingdom of Bahrain is the Bahrain dinar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementEffective December 25, 2001, the peg to the SDR was replaced with a peg to the dollar at a rate of BD 1 per $2,659. Prior to that date, the dinar had a fixed relationship to the SDR at the rate of BD 0.47619 per SDR 1 and the exchange rate of the dinar in terms of the SDR could be set within margins of ±7.25% of this fixed relationship. In practice, however, the dinar maintained a stable relationship with the dollar, the intervention currency. The Bahrain Monetary Agency (BMA) provides daily recommended rates to banks for amounts up to BD 1,000 in dollars. The BMA does not deal with the public. In their dealings with the public, commercial banks are required to use the BMA’s rates for dollars. The banks’ rates for other currencies are based on the BMA’s dollar rates and the New York market rates against the dollar.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThe BMA monitors the forward exchange transactions of commercial banks through the open position of banks’ monthly returns.
Arrangements for Payments and Receipts
Prescription of currency requirementsAll settlements with Israel are prohibited. Otherwise, no requirements are imposed on exchange payments or receipts.
Payments arrangementsNo.
Administration of controlThere is no exchange control legislation.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On January 19, 2002, the authorities of the Kingdom of Bahrain notified the IMF that (1) the BMA had imposed measures on the financing of terrorists and terrorism and the freezing of assets of certain individuals and organizations pursuant to UN Security Council Resolutions 1333 and 1373, and (2) the BMA had required all licensed banks to ensure diligence in examining their financial dealings with a list of persons and organizations (as of that date, the list comprised 39 entries).
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold jewelry are subject to a 5% customs duty, but gold ingots are exempt. Brokers doing business in gold and other products must obtain BMA approval before they can register with the Ministry of Commerce.
Controls on exports and imports of banknotesThe Directorate General of Customs maintains a registry regarding information on currencies imported and their importers.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsIf such documents are not available, imported goods may be released with a written promise to submit the documents at a later date.
Import licenses and other nontariff measuresMandatory government procurements give preference to goods produced in the Kingdom of Bahrain and member countries of the GCC, provided that the quality and prices of these goods are within specified margins of the prices of imported substitutes (10% for goods produced in Bahrain and 5% for goods produced in member countries of the GCC).
Negative listLicenses are required for imports of arms, ammunition, and alcoholic beverages. All imports from Israel are prohibited. Imports of a few commodities are prohibited from all sources for reasons of health, public policy, or security. Imports of cultured pearls are prohibited.
Import taxes and/or tariffsThe rates of customs duties are 5% for foodstuffs and nonluxury items, electrical appliances, and motor vehicles; 125% for alcoholic beverages; and 100% for tobacco and tobacco products.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesAll exports to Israel are prohibited.
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 fundsProceeds from invisibles from Israel are prohibited.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsNo exchange control requirements are imposed on capital receipts or payments by residents or nonresidents, but transactions in money market instruments are controlled in accordance with the provisions of Amiri Decree No. 4/2000 regarding the prevention and prohibition of money laundering. Payments may not be made to or received from Israel.
On capital market securities
Shares or other securities of a participating natureSubject to Amiri Decree No. 10/1999, GCC nationals are allowed to own up to 100% and non-GCC nationals are allowed to own up to 49% of the listed shares of a Bahraini joint-stock company. The percentage ownership of non-GCC nationals may be increased, subject to approval from the Minister of Commerce and Industry. However, non-GCC nationals may purchase, sell, or own up to 100% of the shares of the following seven companies: the Arab Banking Corporation, the Bahrain International Bank, Investcorp Bank, the Bahrain Middle East Bank, Taib Bank, Shamil Islamic Bank, and the Arab Insurance Group. Purchases, sales, and ownership of shares are subject to the requirements of anti-money laundering regulations.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsAlthough residency in Bahrain is not required, local sales and issues by nonresidents are subject to BMA regulations, the Bahraini Commercial Companies Law, the Bahraini Stock Exchange (BSE) Law, and the law on prevention and prohibition of money laundering.
Purchase abroad by residentsPurchases of listed shares must be effected either on the trading floor of the stock exchange, as stipulated by the BSE Law, or abroad, subject to cross-listing or linkage requirements with foreign stock exchanges. Issues of the shares of Bahraini companies abroad must be effected in accordance with the Bahraini Commercial Company Law and with BSE approval.
Sale or issue abroad by residentsThe regulations governing purchases abroad by residents apply.
Bonds or other debt securitiesThe issuance of bonds and other debt securities is subject to the Commercial Companies Law. Sales of listed bonds and other debt securities are subject to the BSE Law.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsThe regulations governing the sale or issue locally of shares or other securities of a participating nature by residents apply.
Purchase abroad by residentsThe regulations governing the purchase abroad of shares or other securities of a participating nature by residents apply.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentDirect investments are regulated in accordance with the Commercial Companies Law, BMA regulations, the BSE Law (subject to the field of investment), and the anti-money laundering law.
Inward direct investmentGCC nationals are allowed to own 100% of the shares of domestic enterprises, and non-GCC nationals are allowed to own up to 100% of offshore, closed joint-stock, and limited liability companies; and 49% in other companies, with the exception of a few strategic sectors.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsIn accordance with Legislative Decree 40/1999, there are no restrictions on ownership of real estate by GCC nationals (either natural or juridical persons).
The ownership of real estate by nonresidents is regulated by Legislative Decree 2/2001. Nonresidents (both natural and juridical persons) are allowed to own buildings and property only in locations specified in the Council of Ministers Regulation 5/2001, which include most of the prestigious and tourist areas. In accordance with Legislative Decree 2/2001, commercial, tourism, and industrial companies, as well as banking and financial institutions, that are licensed to operate in Bahrain may own real estate without restriction.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsBanks are subject to special rules regarding the payment of dividends and the remittance of profits without exchange control restrictions. Licensed offshore banking units may engage freely in transactions with nonresidents, although transactions with residents are not normally permitted.
Lending to nonresidents (financial or commercial credits)Yes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Open foreign exchange position limitsBanks are allowed to set their own individual limits.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsn.a.
Changes During 2001
Exchange arrangementDecember 25. The BMA announced the change in the pegging arrangement from the SDR to the dollar.
Changes During 2002
Arrangements for payments and receiptsJanuary 19. The authorities of the Kingdom of Bahrain notified the IMF that (1) the BMA had imposed measures on the financing of terrorists and terrorism and the freezing of assets of certain individuals and organizations pursuant to UN Security Council Resolutions 1333 and 1373, and (2) the BMA had required all licensed banks to ensure diligence in examining their financial dealings with a list of persons and organizations (as of that date, the list comprised 39 entries).

Bangladesh

(Position as of January 31, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: April 11, 1994.
Exchange Arrangement
CurrencyThe currency of Bangladesh is the Bangladesh taka.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Bangladesh Bank (BB) announces a buying-selling rate band for the dollar against the taka for its transactions with authorized dealer (AD) banks. Trends of the real effective exchange rate of the taka against a trade-weighted basket of currencies of major trade partners, as well as of other major external and internal sector indicators, are analyzed to monitor the external competitiveness of the exchange rate. ADs set their own buying and selling rates for the dollar and other currencies, based on cross rates in international markets.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketADs may buy and sell foreign-currency forwards freely in accordance with internationally established practices. Authorized banks are permitted to retain working balances with foreign correspondent banks. Currency swaps and forward exchange transactions are permitted when they are effected against underlying approved commercial transactions.
Official cover of forward operationsThe BB does not deal in the forward market, nor does it regulate transactions beyond the normal requirements of prudential supervision.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements normally take place in convertible currencies and, in some cases, through nonresident taka accounts. Settlements with ACU member countries must be effected through the ACU and in units denominated in AMU (equivalent in value to the dollar). Payments for imports may be made to any country (with the exception of countries from which imports are prohibited). They may be made (1) in taka for credit in Bangladesh to a nonresident bank account of the country concerned; (2) in the currency of the country concerned; or (3) in any freely convertible currency. Export proceeds must be received in freely convertible foreign exchange or in taka from a nonresident taka account.
Payments arrangements
Bilateral payments arrangements
OperativeThere is an operative bilateral payments arrangement with Myanmar.
Regional arrangementsBangladesh is a member of the ACU.
Clearing agreementsYes.
Administration of controlExchange control is administered by the BB in accordance with general policy formulated in consultation with the MOF. Licenses are issued to banks as ADs in foreign exchange. The Chief Controller of Imports and Exports of the Ministry of Commerce is responsible for registering exporters and importers and for issuing the Import Policy Order (IPO). Registered importers may make their imports in terms of the IPO against LCs. LC authorization forms (LCAFs) are issued by ADs and do not require a separate import license.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On January 11, 2002, the Bangladesh authorities notified the IMF that banks and other financial institutions had been instructed to freeze all capital transfers and financial assets of individuals, groups, and organizations associated with terrorism, pursuant to the relevant UN Security Council resolutions.
In accordance with UN sanctionsOn the basis of a UN Security Council resolution, all settlements with the Taliban, Iraq, and the Federal Republic of Yugoslavia, as well as imports of diamonds from Sierra Leone, are prohibited.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeThere are no restrictions on the internal sale, purchase, or possession of gold or silver ornaments (including coins) and jewelry, but there is a prohibition on the holding of gold and silver in all other forms except by licensed industrialists or dentists.
Controls on external tradeThe importation and exportation of gold and silver require special permission. However, adult female travelers are free to bring in or take out any amount of gold jewelry without prior approval from the BB. Exports of gold jewelry and imports of gold and silver for the export/manufacture of jewelry are allowed under the Jewelry Export Scheme.
Controls on exports and imports of banknotes
On exports
Domestic currencyA resident or a nonresident may take out up to Tk 500 in domestic currency.
Foreign currencyNonresidents may take out the foreign currency and traveler’s checks they declared on entry or up to the equivalent of $5,000 brought in without declaration. Foreign tourists may reconvert unspent taka funds at ADs upon production of documentary evidence that the taka were acquired through a conversion of foreign exchange that had been brought into the country. Residents may take out foreign currency and traveler’s checks up to the amount of any travel allocation they are granted, and also up to the equivalent of $5,000 brought in without declaration when returning from a previous visit abroad.
On imports
Domestic currencyThe importation of Bangladesh currency notes and coins exceeding Tk 500 is prohibited.
Foreign currencyForeign currency traveler’s checks and foreign currency notes may be brought in freely up to the equivalent of $5,000, but larger amounts should be declared to customs upon arrival in Bangladesh.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyBangladesh nationals and persons of Bangladesh origin who are working abroad are permitted to open foreign currency accounts denominated in deutsche mark (through December 31, 2001), dollars, euros, pounds sterling, or Japanese yen. These accounts may be credited with (1) remittances in convertible currencies received from abroad through normal banking and postal channels; (2) proceeds of convertible currencies (banknotes, traveler’s checks, drafts, etc.) brought into Bangladesh by the account holders, provided that amounts exceeding the equivalent of $5,000 have been declared to customs upon arrival in Bangladesh; (3) transfers from other foreign currency accounts opened under the former Wage Earners’ Scheme; and (4) transfers from nonresident foreign currency deposit accounts. The accounts may be debited without restriction but are subject to reporting to the BB.



Residents returning from abroad may bring in any amount of foreign currency and may maintain a resident foreign currency deposit account with the foreign exchange brought in. However, proceeds of exports of goods and services from Bangladesh or commissions arising from business deals in Bangladesh may not be credited to such accounts. Balances in these accounts are freely transferable abroad and may be used for travel in the usual manner. These accounts may be opened in deutsche mark (through January 31, 2001), dollars, euros, pounds sterling, and Japanese yen. Local and joint-venture contracting firms executing projects financed by a foreign donor or international agency may open foreign currency accounts. Foreign currency accounts may also be opened in the names of diplomatic missions in Bangladesh, their expatriates, the UN and its agencies, and diplomatic bonded warehouses (duty-free shops). Foreign currency accounts may be opened in the name of resident Bangladesh nationals working for foreign or international organizations operating in Bangladesh if their salary is paid in foreign currency.



Exporters are permitted to open Exporters’ Retention Quota accounts against a certain percentage of the repatriated export proceeds.
Held abroadResidents who opened an account abroad when residing abroad may maintain it after returning to Bangladesh.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedBangladesh nationals residing abroad; foreign nationals, companies, and firms registered or incorporated abroad; banks and other financial institutions, including institutional investors; officers and staff of Bangladesh missions and government institutions; autonomous bodies; and commercial banks may open interest-bearing nonresident foreign currency deposit accounts denominated in deutsche mark (through December 31, 2001), dollars, euros, pounds sterling, or Japanese yen. These accounts may be credited in initial minimum amounts equivalent to $1,000 or £500 ($25,000 for foreigners), with remittances in convertible currencies and transfers from existing foreign currency deposit accounts maintained by Bangladesh nationals abroad. The accounts bear interest if their terms range from one month to one year. Bangladesh nationals may maintain a foreign currency account abroad while residing abroad and may continue to hold the account after returning to Bangladesh. The balance, including interest earned, may be transferred in foreign exchange by the account holder to any country or to any foreign currency deposit account maintained by Bangladesh nationals abroad. The balances in the accounts, which are freely convertible into taka, must be reported monthly by banks to the BB. Nonresident Bangladeshis who do not open or maintain a foreign currency deposit account while abroad may open a nonresident foreign currency deposit account with foreign exchange brought in from abroad within six months of the date of their return to take up permanent residence in Bangladesh. All nonresident accounts are regarded for exchange control purposes as accounts related to the country in which the account holder is a permanent resident (the accounts of the UN and its agencies are treated as resident accounts).
Approval requiredNonresident foreign currency accounts may be opened by ADs without prior approval from the BB for Bangladesh nationals and foreign nationals who reside abroad and for foreign firms operating abroad. Specified debits and credits to these accounts may be made in the account holder’s absence by ADs without prior approval from the BB. Certain other debits and credits may be made without prior approval from the BB, but are subject to ex post reporting.
Domestic currency accountsForeign missions and embassies, their expatriate personnel, foreign airline and shipping companies, and international nonprofit organizations in Bangladesh may open interest-bearing accounts, but the interest earned may be disbursed only in local currency. For portfolio investments in Bangladesh, a nonresident may open a Nonresident Investors’ Taka Account with any AD with foreign exchange remitted from abroad through normal banking channels or through transfer of funds from a foreign currency account. These accounts may be used to effect all approved current transactions.
Convertible into foreign currencyAll diplomatic missions operating in Bangladesh, their diplomatic officers, home-based members of the mission staffs, international nonprofit organizations (including charitable organizations functioning in Bangladesh and their respective personnel), foreign oil companies engaged in oil exploration in Bangladesh and their expatriate employees, and UN organizations and other international organizations are allowed to maintain convertible taka accounts. These accounts may be credited freely with the proceeds of inward remittances in convertible foreign exchange and may be debited freely at any time for local disbursements in taka, as well as for remittances abroad in convertible currencies. Private, nonresident taka accounts may also be credited with proceeds from dividends, interest income from shares and securities, income from landed property, agricultural rent, and house rent. These accounts, however, may be used only for domestic payments, are not convertible, and may not be transferred abroad. Transfers between convertible taka accounts are freely permitted.
Blocked accountsNonresident taka accounts may be blocked by the BB.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Minimum financing requirementsEffective May 23, 2001, a 50% margin requirement for the opening of LCs against imports of rice and 56 other items is imposed. Effective November 13, 2001, the margin for rice has been increased to 100% from 50%, but this requirement has subsequently been relaxed.
Advance payment requirementsAdvance payments for up to the value of $2,500 may be made for certain imports. The BB allows other advance payments covering imports of specialized or capital goods, usually against a guarantee from a first-class overseas bank.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsYes.
Preshipment inspectionAn inspection is required for all imports, with a few exceptions.
Letters of creditPayment against imports is generally permissible only under cover of irrevocable LCs. However, a consignment of perishable food items not exceeding $7,500 or its equivalent in value may be imported overland without LCs; capital machinery and industrial raw materials may also be imported without LCs. Recognized export-oriented units operating under the bonded warehouse system may import up to four months’ requirements of their raw and packing materials by establishing import LCs without reference to any export LC. They may also effect such imports by opening back-to-back LCs (either on a sight basis under the Export Development Fund, or up to 180 days on a usance basis) against export LCs received by them. ADs may establish LCs on an f.o.b. basis without the approval of the BB, subject to certain conditions. Foreign exchange for authorized imports is provided automatically by ADs when payments are due.
OtherYes.
Import licenses and other nontariff measuresAll importers (including all government departments, with the exception of the Ministry of Defense) are required to obtain LCAFs for all imports. Under the authority of the IPO issued by the Chief Controller, importers are allowed to effect imports against LCAFs that are issued for imports under bilateral trade or payments agreements and for imports under tied-aid programs. LCAFs are otherwise valid worldwide, except for imports from Israel and imports transported on Israeli flag vessels, which are prohibited. Goods must be shipped within 17 months of the date of issuance of LCAFs in the case of machinery and spare parts, and 12 months in the case of all other items.
Positive listItems not specified in the control list of the IPO may be imported freely, provided that the importer has a valid import registration certificate.
Negative listThe control list contains 110 items in about 1,400 categories at the four-digit level of the Harmonized System Codes. The importation of these items is restricted or prohibited for public safety, religious, environmental, and social reasons, or if similar items are produced locally. Up to 26 items are restricted purely for trade purposes (7 of which are banned and 19 restricted). Effective January 2, 2002, exports of polybags were banned.
Open general licensesAll items not on the control list may be imported freely by registered importers.
Licenses with quotasImports of specified raw materials and packing materials by industrial consumers are governed by an entitlement system, based on the requirements for various industries during each import program period established by the Board of Investment (BOI). Firms in the industrial sector are given an entitlement to import specified raw materials and packing materials, and LCAFs are issued on the basis of the entitlement. The entitlement system does not apply to raw materials and packing materials that may be imported freely but applies to items appearing on the control list. Separate LCAFs may be issued to industrial consumers of machinery parts and accessories. Goods imported against LCAFs issued to industrial consumers must be used in the industry concerned and must not be sold or transferred without prior approval.
Import taxes and/or tariffsThere are five tariff bands: zero, 5%, 15%, 25%, and 37.5%. On August 13, 2001, regulatory duties, import license fees, and infrastructure development charges were imposed on a large number of goods. Effective December 23, 2001, 30 additional items are subject to these charges.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsProceeds from exports must be received within four months of shipment unless otherwise permitted by the BB. Exporters are required to surrender to ADs 92.5% of the proceeds from exports of ready-made garments and 60% of the proceeds from exports of other goods; they may use retained earnings for bona fide business purposes, such as business travel abroad; establishment and maintenance of offices abroad; participation in trade fairs and seminars; and imports of raw materials, spare parts, and capital goods. Joint ventures, other than in the garment industry, located in export processing zones (EPZs) are allowed to retain 80% of their export earnings in a foreign currency deposit account and to place the remaining 20% in a bank account in domestic currency.
Financing requirementsNo.
Documentation requirements
DomiciliationYes.
OtherYes.
Export licensesExports to Israel are prohibited. Exports of about 20 product categories are banned. Some of these are restricted for nontrade reasons, while others are restricted to ensure the supply in the domestic market. Export licenses are required for all restricted items.
With quotasThe Chief Controller of Imports and Exports imposes quotas on garment exports on the basis of the previous year’s performance. The Export Promotion Bureau monitors quota use to reallocate unfilled quotas.
Export taxesExports of jute are taxed.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles related to authorized trade transactions are generally not restricted.
Trade-related paymentsThere are controls on administrative expenses and commissions.
Prior approvalPayments for unloading and storage services require prior approval. Up to 5% of export receipts (up to 33.3% in the case of books) may be remitted abroad for commissions without prior approval from the BB.
Investment-related paymentsADs are allowed to remit dividends to nonresident shareholders without prior approval from the BB upon the receipt of applications from the companies concerned. Applications must be supported by an audited balance sheet; a profit-and-loss account; and a board resolution declaring dividends from profits earned from foreign firms, banks, insurance companies, and other financial institutions operating in Bangladesh to their head office. These remittances are, however, subject to ex post checking by the BB.
Prior approvalNo approval is required if loan agreements have been cleared by the BOI.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsThe limit for personal travel by resident Bangladesh nationals to countries other than Bhutan, India, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka is $3,000 a person a year or its equivalent; the allowance for air travel to these seven countries is $1,000. For new exporters, the indicative limit for business travel is $6,000 a person a year or its equivalent, while established exporters are permitted to use balances held under the Export Retention Scheme (7.5% of exports of ready-made garments and 40% of other export proceeds). Manufacturers producing for the domestic market and importers are granted business travel allowances equivalent to 1% of turnover as declared in tax returns, and 1% of the value of imports, respectively. There is an annual ceiling of $5,000 or its equivalent in both cases. Amounts in excess of these limits require documents attesting to the bona fide nature of the transaction.
Indicative limits/bona fide testYes.
Personal paymentsForeign exchange for education is available up to the cost of tuition and living expenses, as estimated by the educational institution concerned. Prior permission is not required for the remittance of fees for approved undergraduate, postgraduate, and professional courses. Foreign exchange is available for the costs of dependents abroad, after production of a certificate from the Bangladesh embassy in the country concerned, up to a reasonable level that is based on prevailing prices.
Prior approvalPrior approval is required for the transfer of pensions.
Quantitative limitsUp to $10,000 or its equivalent may be obtained for medical expenses without prior approval. Larger amounts may be obtained with approval of the BB after submission of documents attesting to the bona fide nature of the transactions.
Indicative limits/bona fide testApplications for foreign exchange for studies abroad and for family maintenance are approved upon verification of their bona fide nature.
Foreign workers’ wages
Quantitative limitsForeign nationals may remit freely up to 50% of net salary in connection with service contracts approved by the government. The entire amount of their earned leave pay and savings may also be freely remitted.
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalGeneral approval is given for credit card use by exporters against the foreign exchange retention entitlement and for use by other residents against the travel allowance.
Quantitative limitsCredit cards may be used up to the amounts authorized for travel allowances and up to balances held in retention quota accounts.
Other payments
Prior approvalPrior permission is not required for the remittance of royalties and technical fees of up to 6% of sales by firms that are registered with the BOI. Remittances in excess of this limit require BOI approval.
Indicative limits/bona fide testIndustrial enterprises producing for local markets may remit up to 1% of sales receipts declared in the previous year’s tax return for the purpose of training and consultancy.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsExporters of services are required to surrender to ADs 95% of the proceeds (60% in the case of proceeds from computer services) and may use retained earnings for bona fide business purposes. Bangladesh nationals working abroad may retain their earnings in foreign currency accounts or in nonresident foreign currency deposit accounts. Unless specifically exempted by the BB, all Bangladesh nationals who reside in Bangladesh must surrender any foreign exchange coming into their possession, whether held in Bangladesh or abroad, to an AD within one month of the date of acquisition. However, returning residents may keep, in foreign currency accounts opened in their names, foreign exchange brought in at the time of return from abroad, provided that the amount does not represent proceeds from exports from Bangladesh or commissions earned from business activities in Bangladesh. Residents may retain up to $5,000 or its equivalent brought into the country without declaration. Foreign nationals residing in Bangladesh continuously for more than six months are required to surrender within one month of the date of acquisition any foreign exchange representing their earnings with respect to business conducted in Bangladesh or services rendered while in Bangladesh.
Restrictions on use of fundsRetained foreign exchange may be used for travel abroad or bona fide business purposes.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsNonresidents may buy Bangladesh securities through stock exchanges against payment in freely convertible currency remitted from abroad through banking channels.
Sale or issue locally by nonresidentsProceeds from sales, including capital gains and dividends earned on securities purchased in Bangladesh, may be remitted abroad in freely convertible currency. Nonresidents may not issue securities in Bangladesh.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instrumentsThese transactions are not allowed.
On collective investment securities
Purchase locally by nonresidentsThese transactions are not allowed.
Sale or issue locally by nonresidentsThese transactions are not allowed.
Purchase abroad by residentsThese transactions are not allowed.
Sale or issue abroad by residentsThese transactions are subject to prior approval of the Securities and Exchange Commission. If an instrument is denominated in foreign currency, prior BB approval is required.
Controls on derivatives and other instruments
Purchase locally by nonresidentsThese transactions are not allowed.
Sale or issue locally by nonresidentsThese transactions are not allowed.
Purchase abroad by residentsADs may obtain hedging abroad against exchange rate risks on underlying trade transactions.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsExport payments deferred for more than 120 days require BB authorization.
To residents from nonresidentsDeferred import payments are permitted for up to 360 days for equipment and machinery and for up to 180 days for industrial raw materials. Private industrial units may borrow funds from abroad with the approval of the BOI.
Financial credits
By residents to nonresidentsExcept in specific cases, credits are subject to prior BB approval.
To residents from nonresidentsADs may obtain short-term loans and overdrafts from overseas branches and correspondents for a period not exceeding seven days at a time.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsBanks may issue guarantees/sureties in favor of nonresidents in relation to permissible current transactions on behalf of residents.
To residents from nonresidentsReceipt of guarantees/sureties by residents from abroad requires full disclosure of the underlying transaction.
Controls on direct investment
Outward direct investmentAll outward transfers of capital require approval. For resident-owned capital, approval is granted only in exceptional cases.
Inward direct investmentInvestments, except in the industrial sector, require approval. The Foreign Private Investment (Promotion and Protection) Act provides for the protection and equitable treatment of foreign private investment, indemnification, protection against expropriation and nationalization, and guarantee for repatriation of investment. There is no ceiling on private investment. Tax holidays are granted for periods of up to nine years, depending on the location.
Controls on liquidation of direct investmentRequests for repatriation of the proceeds from liquidation of direct investment (in unlisted companies) are subject to prior scrutiny of the BB. Effective February 1, 2001, proceeds from the disinvestment of nonresidents’ equity investments in unlisted public limited companies and in private limited companies may be repatriated. When a nonresident liquidates investment through a sale to a resident investor, the net asset value of the shares of the company is used as the basis for calculating the repatriation of proceeds.
Controls on real estate transactions
Purchase abroad by residentsRemittances of funds for these purchases are not permitted.
Purchase locally by nonresidentsPurchases of real estate by a nonresident with funds from abroad are allowed.
Sale locally by nonresidentsRepatriation of sales proceeds are subject to prior approval by the BB, which is not normally granted.
Controls on personal capital transactions
Loans
By residents to nonresidentsThese transactions are not allowed.
To residents from nonresidentsThese transactions are not allowed, except for borrowings by industrial enterprises in accordance with BOI guidelines and/or approval.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsTransfers of title to nonresidents by way of inheritances are not restricted, but income and sales proceeds from such assets are not normally transferable abroad and are required to be used locally with prior authorization from the BB.
To residents from nonresidentsA resident Bangladesh national must obtain prior approval from the government to receive gifts or endowments from a foreign donor. Inheritances must be reported to the BB. Net current income from estates inherited abroad must be repatriated.
Settlement of debts abroad by immigrantsThese transactions are normally not allowed, except for repayments on borrowing for industrial investments in accordance with BOI guidelines.
Transfer of assetsThese transactions are not allowed, except for movable personal effects.
Transfer abroad by emigrantsThese transactions are not allowed, except for the normal travel allowances that are allowed to residents.
Transfer into the country by immigrantsThese transactions are permitted, subject to a requirement that transfers exceeding $5,000 or its equivalent must be declared.
Transfer of gambling and prize earningsGambling is prohibited in Bangladesh.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThe regulations governing financial credits apply.
Maintenance of accounts abroadThe maintenance of these accounts is subject to notification to the BB.
Lending to nonresidents (financial or commercial credits)Lending to nonresidents is not allowed, except with prior BB approval and in specific cases.
Lending locally in foreign exchangeLending is subject to prior approval from the BB. ADs are permitted to use up to 50% of nonresident foreign currency deposit balances for (1) lending to exporters for settlement of back-to-back sight LCs imports of inputs, and (2) discounting usance bills of wholly foreign-owned (type “A”) EPZ units against input supplies to exporters.
Purchase of locally issued securities denominated in foreign exchangePurchases are subject to prior approval from the BB
Differential treatment of deposit accounts in foreign exchange
Interest rate controlsBanks are required to maintain interest rates on foreign currency deposits in line with international market rates. Effective January 1, 2001. ADs may allow interest payments on ACU dollar accounts maintained with ADs by their correspondent banks from other ACU member countries.
Differential treatment of deposit accounts held by nonresidents
Interest rate controlsEffective January 1, 2001, ADs are authorized to allow interest payments on ACU dollar accounts maintained with ADs by their correspondent banks of other ACU member countries.
Open foreign exchange position limitsIn accordance with BB limits, authorized dealers’ net open positions may not exceed 12.5% of their capital.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2001
Imports and import paymentsMay 23. A 50% margin requirement was imposed for the opening of LCs against imports of rice and 56 other items.
August 13. Regulatory duties, import license fees, and infrastructure development charges were imposed on a large number of goods.
November 13. The margin requirement for the opening of LCs against imports of rice was increased to 100% from 50%.
December 23. The list of import items subject to additional regulatory duties was expanded to include 30 more items.
Capital transactions
Controls on liquidation of direct investmentFebruary 1. Repatriation of proceeds from the disinvestment of nonresidents’ equity investments in unlisted public limited companies and in private limited companies was allowed. When a nonresident liquidates investment through a sale to a resident investor, the net asset value of the shares of the company is used as the basis for calculating the repatriation of proceeds.
Provisions specific to commercial banks and other credit institutionsJanuary 1. ADs were authorized to allow interest payments on ACU dollar accounts maintained with ADs by their correspondent banks of other ACU member countries.
Changes During 2002
Arrangements for payments and receiptsJanuary 11. The Bangladesh authorities notified the IMF that banks and other financial institutions had been instructed to freeze all capital transfers and financial assets of individuals, groups, and organizations associated with terrorism, pursuant to the relevant UN Security Council resolutions.
Imports and import paymentsJanuary 2. Exports of polybags were banned.

Barbados

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 3, 1993.
Exchange Arrangement
CurrencyThe currency of Barbados is the Barbados dollar.
Other legal tenderGold coins with face values of BDS$50, BDS$100, BDS$150, BDS$200, and BDS$500 are legal tender and are in limited circulation.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Barbados dollar is pegged to the U.S. dollar, the intervention currency, at BDS$2 per US$1. Buying and selling rates for the Canadian dollar, the euro, and the pound sterling are also officially quoted on the basis of their cross-rate relationships to the U.S. dollar. The quoted rates include commission charges of 0.125% buying and 1.75% selling against the U.S. dollar, and 0.1875% buying and 1.8125% selling against the Canadian dollar, euro, and pound sterling. Certain businesses are allowed to change foreign currency.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThe Central Bank of Barbados (CBB) periodically obtains forward cover in the international foreign exchange market to cover or hedge its own or the central government’s exchange risks associated with foreign exchange loans that are not denominated in U.S. dollars. Commercial banks are allowed to obtain forward cover in the international markets. The CBB and commercial banks enter into swap transactions in U.S. dollars, while commercial banks freely switch between nonregional currencies.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of countries outside the CARICOM area may be made in any foreign currency or through an external account in Barbados dollars. Settlements with residents of CARICOM countries other than Jamaica, Suriname, and Trinidad and Tobago may be made in the currency of the CARICOM country. Settlements with residents of Jamaica, Suriname, and Trinidad and Tobago may be made in U.S. dollars. CBB permission is required for retail outlets to issue change in the same foreign currency in which purchases were made.
Payments arrangements
Regional arrangementsBarbados is a member of the CARICOM.
Clearing agreementsUnder clearing arrangements with regional monetary authorities, the CBB currently sells only three CARICOM country currencies: the Bahamian dollar, the Eastern Caribbean dollar, and the Belize dollar. The Trinidad and Tobago, Guyana, and Jamaica dollars float against the U.S. dollar, and the CBB sets indicative selling rates based on rates supplied by the monetary authorities of these countries. These rates are applicable only to government transactions.
Administration of controlExchange control applies to all countries, except those in the OECS, and is administered by the CBB, which delegates to authorized dealers (ADs) the authority to approve normal import payments and foreign exchange for cash gifts. Further authority is delegated to commercial banks in respect of current account transactions ranging from BDS$7,500 to BDS$250,000. Trade controls are administered by the Ministry of Commerce, Consumer Affairs and Business Development (MCCABD). The authority to approve payments to OECS countries is delegated to ADs.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents, other than the monetary authorities, ADs, and industrial users, are not permitted to hold or acquire gold in any form other than jewelry or coins for numismatic purposes. Any gold acquired in Barbados must be surrendered to an AD, unless exchange control approval is obtained for its retention.
Controls on external tradeThe importation of gold by residents is permitted for industrial purposes and is subject to customs duties and charges. Licenses to import gold are issued by the MCCABD. Exchange control permission is required to export gold.
Controls on exports and imports of banknotes
On exports
Domestic currencyTravelers may take out up to BDS$500.
Foreign currencyTravelers may take out up to the equivalent of BDS$1,000. Nonresident visitors may export freely any foreign currency they previously brought in.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallySubject to specific conditions under delegated authority, ADs may maintain foreign currency accounts in the names of individuals and companies resident in Barbados whose annual earnings are at least BDS$50,000 and BDS$100,000, respectively. Certain receipts and payments may be credited and debited to foreign currency accounts under conditions established at the time the account is opened. Other credits and debits require individual approval. In cases where authority has not been delegated to ADs, the permission of the CBB is required. Approval is given on the basis of the anticipated frequency of receipts and payments in foreign currency.
Held abroadPermission of the CBB is required.
Accounts in domestic currency held abroadPermission of the CBB is required.
Accounts in domestic currency convertible into foreign currencyPermission of the CBB is required.
Nonresident Accounts
Foreign exchange accounts permittedThe regulations governing resident accounts apply.
Domestic currency accountsThese accounts may be credited with the proceeds from the sale of foreign currencies, with transfers from other external accounts, with bank interest, and with payments by residents for which the CBB has given general or specific permission. The accounts may be debited for payments to residents of Barbados for the cost of foreign exchange required for travel or business purposes and for any other payment covered by delegated authority to ADs. Other debits and any overdrafts require individual approval.
Convertible into foreign currencyBalances on external accounts are convertible. Nonresident holders of foreign currency accounts are not required to obtain central bank approval to remit funds abroad when the funds were not the result of payment for trade or nontrade transactions.
Blocked accountsThe CBB may require certain payments in favor of nonresidents that are ineligible for transfer to be credited to blocked accounts. Balances in blocked accounts may not be withdrawn without approval, other than for the purchase of approved securities.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsADs may release foreign exchange up to the equivalent of BDS$250,000 (c.i.f.) for advance payments for imports into Barbados. Other advance payments require the prior approval of the CBB.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence (invoices and customs warrants) to ADs; payments for imports of crude oil and its derivatives are subject to the approval of the CBB.
Import licenses and other nontariff measuresCertain imports require individual licenses. Some items on the import-licensing list may be freely imported throughout the year, while others are subject to temporary restrictions (particularly agricultural products, which tend to be subject to seasonal restrictions). Individual licenses are also required for imports of commodities that are subject to the provisions of the Oils and Fats Agreement between the governments of Barbados, Dominica, Grenada, Guyana, St. Lucia, St. Vincent, and Trinidad and Tobago whether the goods are being imported from CARICOM countries or from elsewhere. Special licensing arrangements have been made for the regulation of trade between Barbados and other CARICOM countries in 22 agricultural commodities.
Licenses with quotasNot all goods that are subject to licensing are subject to quantitative restrictions or import surcharges.
Import taxes and/or tariffsCustoms duties corresponding to the fourth phase of the CARICOM CET are in the range of 5-20%. A VAT of 15% is levied. Tariffs ranging from 20% to over 200% apply to imports of prepared meats, detergents, and T-shirts.
State import monopolyChicken heads, backs, and necks; onions; and sugar may be imported only by the Barbados Agricultural Development and Marketing Corporation, and milk may be imported only by the Pine Hill Dairy.
Exports and Export Proceeds
Repatriation requirementsProceeds must be repatriated within six months.
Surrender requirementsProceeds must be sold to an AD within six months, but exporters may apply for exemptions.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesSpecific licenses are required for the exportation of certain goods to any country, including rice, sugarcane, rum, molasses, certain other food products, sewing machines, portland cement, and petroleum products. All other goods may be exported without license.
Without quotasYes.
With quotasExports of sugar to the United Kingdom and the United States are subject to bilateral export quotas, as are exports of rum to the EU.
Export taxesn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related payments
Prior approvalApproval is required for amounts above the quantitative limits.
Quantitative limitsFor freight and insurance, the limit is BDS$250,000 a transaction, including insurance payments and premiums, as long as the amount is approved for payment by the Supervisor of Insurance. The same limit is applied for unloading and storage costs and administrative expenses; the limit for commissions is BDS$100,000.
Indicative limits/bona fide testYes.
Investment-related paymentsInformation is not available on the payment of amortization loans or depreciation of direct investments. Effective September 9, 2001, commercial banks are permitted to approve all payments abroad of dividends to nonresident beneficiaries in CARICOM countries.
Prior approvalYes.
Quantitative limitsThe limit for principal and interest payments is BDS$50,000 a year for individuals. Effective September 1, 2001, commercial banks are permitted to approve all payments abroad of profits and dividends to residents of CARICOM member countries. For payments of profits and dividends to residents of non-CARICOM member countries, approval is required for amounts above BDS$250,000. The limit for listed companies from the CARICOM region on the securities exchange of Barbados is BDS$2 million.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsThe limits are BDS$7,500 a person a calendar year for private travel, and BDS$750 a day for business travel, up to BDS$50,000 a person a calendar year.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalApproval is required for amounts above the limit. Effective April 1, 2001, payments for medical treatment and studies abroad require approval from a commercial bank based on appropriate documentation.
Quantitative limitsEffective April 1, 2001, limits on payments for medical treatment and studies abroad were eliminated (previously, the limits were BDS$100,000 and BDS$50,000 a person a year, respectively). Other annual limits are BDS$5,000 a person a year for cash gifts and BDS$50,000 a year for alimony and other maintenance expenses. Nonresidents may have their pensions remitted to them while residing outside Barbados.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsNonresidents are allowed to remit amounts to cover commitments while employed in Barbados.
Indicative limits/bona fide testYes.
Credit card use abroadEffective September 1, 2001, commercial banks are permitted to approve all payments abroad for entrance and subscription fees due to nonresident credit and travel card companies.
Prior approvalYes.
Quantitative limitsThe limits are the same as for travel.
Indicative limits/bona fide testYes.
Other paymentsEffective September 1, 2001, commercial banks are permitted to approve all payments abroad for charges and fees with respect to granting and registration of patents, designs, and trademarks.
Prior approvalApproval is required for amounts above the limit.
Quantitative limitsThe limit for subscriptions and membership fees is BDS$50,000 a person a year, and, for consulting and legal fees, BDS$100,000 for each nonresident beneficiary.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsForeign currency proceeds from invisibles must be sold to ADs.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating natureEffective September 1, 2001, purchases and sales of shares and securities of companies cross-listed and cross-traded on any CARICOM stock exchange—up to a limit of BDS$3 million a transaction—are allowed. This limit excludes any government securities cross-listed or cross-traded on those stock exchanges.
Purchase locally by nonresidentsThe issuance and transfer to nonresidents of securities registered in Barbados require exchange control approval, which is freely given provided that an adequate amount of foreign currency is brought in for their purchase.
Purchase abroad by residentsThese purchases require exchange control approval, and certificates of title must be lodged with an authorized depository in Barbados except for regional securities purchased through the Securities Exchange of Barbados. Earnings on these securities must be repatriated and surrendered to an AD.
Sale or issue abroad by residentsExchange control approval is required.
Bonds or other debt securitiesThe regulations governing shares and other securities of a participating nature apply.
Purchase locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsThe regulations governing shares and other securities of a participating nature apply.
Purchase abroad by residentsThe regulations governing shares and other securities of a participating nature apply.
On collective investment securities
Purchase locally by nonresidentsThe regulations governing shares and other securities of a participating nature apply.
Purchase abroad by residentsThe regulations governing shares and other securities of a participating nature apply.
Controls on derivatives and other instrumentsn.a.
Controls on credit operationsThe approval of the CBB is required for all credit operations.
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 nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investmentDirect investments require exchange control approval.
Outward direct investmentYes.
Inward direct investmentYes.
Controls on liquidation of direct investmentLiquidation of proceeds is permitted, provided that evidence documenting the validity of the remittance is submitted, all liabilities related to the investment have been discharged, and the original investment was registered with the CBB.
Controls on real estate transactions
Purchase abroad by residentsPurchases require exchange control approval.
Purchase locally by nonresidentsNonresidents may acquire real estate in Barbados for private purposes with funds from foreign currency sources; local currency financing is not ordinarily permitted.
Sale locally by nonresidentsProceeds from the realization of such investments equivalent to the amount of foreign currency brought in may be repatriated freely. Capital sums realized in excess of this amount may be repatriated freely on the basis of a calculated annual rate of return on the original foreign investment as follows: for the last five years, at 8%; for the five years immediately preceding the last five years, at 5%; and for any period preceding the last 10 years, at 4%. Amounts in excess of the sum so derived are restricted to remittances of BDS$30,000 a year.
Controls on personal capital transactions
LoansExchange control permission is required for the granting or receiving of loans.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThe annual limit is BDS$5,000 for gifts and BDS$30,000 for endowments, inheritances, and legacies.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsThe limit is BDS$100,000.
Transfer of gambling and prize earningsNonresidents may take out winnings.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAny borrowing abroad by ADs to finance their domestic operations requires the approval of the CBB. ADs may assume short-term liability positions in foreign currencies for the financing of approved transfers in respect of both trade and nontrade transactions.
Maintenance of accounts abroadAccounts must be maintained with overseas correspondent banks.
Lending to nonresidents (financial or commercial credits)Exchange control permission is required.
Purchase of locally issued securities denominated in foreign exchangeInvestment in local securities requires CBB approval.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThere is no reserve requirement on deposits in foreign exchange. For domestic currency deposits in commercial banks, there is an overall reserve requirement of 24%, with a cash reserve requirement of 5%.
Liquid asset requirementsThere is no liquidity requirement on deposits in foreign exchange. Effective July 18, 2001, for domestic currency deposits in commercial banks, there is a liquid asset requirement of 24%, 11% of which must be placed in treasury bills, 8% in government debentures, and 5% in cash.
Differential treatment of deposit accounts held by nonresidentsNonresident deposit accounts are treated the same as resident deposit accounts. Differential treatment is based on whether the amount is in domestic currency.
Open foreign exchange position limitsLimits on working balances are set by the CBB. Those on other assets and liabilities are controlled through the Exchange Control Act. If a bank has a short position in forward transactions, it may maintain a long spot position equivalent to 20% of the short position in forward transactions or 15% of spot liabilities, whichever is higher. If a bank does not have a short position in forward transactions, it may maintain a long spot position equivalent to 15% of spot liabilities. Banks are to report weekly to the Foreign Exchange Control Department of the CBB.
Provisions specific to institutional investorsApproval is required for investment of pension funds abroad. A 6% tax is levied on portfolio investments of pension funds with foreign companies that are not registered with the Barbados Supervisor of Insurance.
Other controls imposed by securities lawsn.a.
Changes During 2001
Payments for invisible transactions and current transfersApril 1. Commercial banks were permitted to approve all payments abroad for education and medical treatment expenses. However, commercial banks must continue to report such transfers to the CBB. Previously, commercial banks could approve payments abroad for education and medical treatment expenses of up to BDS$50,000 and BDS$100,000, respectively.
September 1. Commercial banks were permitted to approve all payments abroad for charges and fees with respect to the granting and registration of patents, designs, and trademarks and were permitted to approve all payments abroad for entrance and subscription fees due to nonresident credit and travel card companies.
September 1. Commercial banks were permitted to approve all payments abroad of dividends to nonresident beneficiaries in CARICOM countries.
Capital transactions
Controls on capital and money market instrumentsSeptember 1. Purchases and sales of shares and securities of companies cross-listed and cross-traded on any CARICOM stock exchange, excluding government securities, were allowed, up to a limit of BDS$3 million a transaction.
Provisions specific to commercial banks and other credit institutionsJuly 18. A liquid asset requirement of 24%—11% of which must be placed in treasury bills, 8% in government debentures, and 5% in cash—for domestic currency deposits in commercial banks came into effect.

Belarus

(Position as of June 30, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 5, 2001.
Exchange Arrangement
CurrencyThe currency of Belarus is the Belarusian rubel.
Exchange rate structure
MultipleThree exchange rates are in effect: the auction exchange rate, the interbank exchange rate, and the cash exchange rate.
Classification
Crawling bandEffective January 1, 2001, the authorities announced the introduction of a crawling peg system against the Russian ruble, under which the National Bank of Belarus (NBB) adjusts the exchange rate at a monthly devaluation rate that is revised quarterly. As a result, the exchange rate arrangement of Belarus was reclassified to the category crawling band from the category managed floating with no preannounced path for the exchange rate. An exchange rate band of 1.5% around the central parity is currently maintained. Effective March 31, 2001, the daily limit of the equivalent of $300 on purchases of foreign exchange a person a day was removed. There are no limits on purchases of foreign exchange in the interbank market. Foreign currency above the mandatory surrender amount may be sold on the interbank market.
Exchange taxNo.
Exchange subsidyn.a.
Forward exchange marketThe forward market is regulated by the same provisions as the spot market.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements of transactions between residents and nonresidents are effected in freely convertible currencies. Settlements in other currencies and Belarusian rubels are effected if so provided for by intergovernmental agreements or arrangements between the central banks of both parties to the settlements. Settlements with nonresidents in rubels are also allowed regardless of the existence of an agreement, provided the nonresident has the appropriate rubel account at a bank in Belarus.
In accordance with the Agreement on the Establishment of a Payment Union of Member Countries of the CIS and bilateral payment agreements between Belarus and the central banks of those countries, settlements between Belarus and CIS member countries are effected in the national currencies of the parties involved in the settlements, in the currencies of the Payment Union Member Countries of the CIS, and in freely convertible currencies, in accordance with legislation in effect within the territory of the country. Settlements between Belarus and CIS member countries and the Baltic countries are effected using non-cash procedures via correspondent accounts of authorized banks and central banks.
In accordance with bilateral payment agreements between the NBB and the central banks of Armenia, Azerbaijan, the Kyrgyz Republic, Latvia, Moldova, Tajikistan, and Uzbekistan, only settlements for operations ensuing from the functions of central banks are effected via correspondent accounts of central banks. Settlements for all other accounts are effected via correspondent accounts of authorized banks.
In accordance with bilateral payment agreements between the NBB and the central bank of Estonia, settlements between economic agents may be effected both via correspondent accounts of authorized banks and via correspondent accounts of central banks.
Controls on the use of domestic currency
For current transactions and paymentsYes.
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Use of foreign exchange among residentsSettlements between residents in foreign currency are prohibited, except in cases established by laws or the NBB.
Payments arrangements
Bilateral payments arrangementsBelarus maintains bilateral trade and payments agreements with 14 countries, including the CIS countries.
OperativeYes.
Regional arrangementsThere are arrangements with Moscow and various other regions in Russia.
Clearing agreementsAn agreement with Uzbekistan provides for the exchange of cotton for strategic goods from Belarus on a balanced basis. There are also agreements with Moldova and Ukraine.
Administration of controlThe parliament is responsible for legislating exchange control regulations and the NBB for administering them. The exchange control authorities are the Council of Ministers, the NBB, the State Control Committee, and the State Customs Committee. The exchange control agents are banks, customs offices, ministries, associations, and other bodies of the state administration.
International security restrictionsNo.
Payments arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents require a license from the MOF to deal in precious stones and metals. Effective June 28, 2001, under NBB Board Resolution No. 175, banks require an NBB license to deal in precious metals and stones.
Controls on external tradeLicenses for residents to export precious metals and stones are issued by the Ministry of Foreign Affairs (MFA).
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents and nonresidents may export up to the equivalent of 100 times the Belarusian minimum wage.
Foreign currencyResident and nonresident private persons may freely take out the equivalent of $1,500—amounts greater than this require documentary evidence certifying the origin of the funds. Traveler’s checks in foreign currencies must be declared upon export. Exports of foreign exchange to states participating in the customs union are unlimited.
On imports
Domestic currencyThe import of up to the equivalent of 100 times the Belarusian minimum wage is allowed.
Foreign currencyThere are no limitations on the import of foreign currency.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyWithout declaring the sources of their foreign exchange, residents may open foreign currency accounts at commercial banks authorized to transact in foreign exchange.
Held abroadThese accounts may be maintained abroad, but NBB approval is required.
Accounts in domestic currency held abroadResidents are prohibited from opening domestic currency accounts abroad.
Accounts in domestic currency convertible into foreign currencyResident juridical persons may purchase foreign currency to (1) pay for imports of goods, labor, and services; (2) pay for business trip expenditures and training abroad; (3) repay credits and loans granted by authorized domestic banks or by nonresidents, including interest thereon; and (4) make a number of other transactions that have been approved by the NBB.
Nonresident Accounts
Foreign exchange accounts permittedNonresident juridical persons may maintain foreign exchange accounts with authorized banks in Belarus. The source of the funds may be receipts from abroad; proceeds from the sales of goods and services in the territory of Belarus, including sales to residents; debt-service payments; interest earned on balances in the accounts; funds from other foreign exchange accounts of nonresidents in Belarus; and earnings from investments from the performance of other operations with residents and nonresidents. These accounts may be debited for purchases of goods and services and for investments, as well as for payments to residents and nonresidents. Funds from these accounts may be freely repatriated or exchanged for Belarusian rubels at the market exchange rate through authorized banks.
Approval requiredApproval from the central bank concerned is required to open accounts for nonresidents if this regulation is contained in the arrangement governing the settlements.
Domestic currency accountsNonresident juridical persons may open I (investment), T (current), and C (investment in government securities) accounts at authorized commercial banks. I accounts may be credited with the Belarusian rubel counterpart of foreign exchange sales, dividends, resources from the liquidation of enterprises, and compensation in the event of the nationalization of enterprises. Resources from I accounts may be used to purchase foreign currency, shares of enterprises, privatization checks, etc.
T accounts are used for current operations. Proceeds from the sale of foreign currencies and of goods and services, and resources from the placement of money in deposits and other debt obligations of banks, etc. are transferred into them. Resources from T accounts may be used to purchase goods and services and bonds, and to pay for current expenditures. Effective June 28, 2001, nonresidents may purchase foreign currency with Belarusian rubels from T accounts and correspondent accounts of nonresident banks opened at authorized domestic banks. Funds in C accounts are used for investments in securities issued by the Belarusian government and the NBB. Proceeds from the sale of freely convertible currencies and/or Russian rubles, as well as proceeds from the redemption or sale of government and NBB securities by nonresidents, are deposited in C accounts if the original purchases were made with payments from C accounts.
Convertible into foreign currencyBalances on I and C accounts may be converted into foreign currency. In this process, balances on C accounts may be converted into foreign currency, provided that the nonresident was a holder of securities of the government or the NBB for a period of time established by the NBB.
Approval requiredIf this regulation is contained in the arrangements governing settlements between Belarus and the country concerned, approval from the central bank of the home country of the nonresident is required to open these accounts.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for imports
Advance payment requirementsFor down payments for goods or services exceeding $100,000, a foreign bank guarantee is required. For payments for imported services more than 90 days in advance of the performance of the services and for imported goods more than 60 days in advance of the receipt of the goods, permission from the Ministry of Trade (MOT) is required; for advance payment of more than 180 days, NBB approval is required.
Documentation requirements for release of foreign exchange for importsYes.
Import licenses and other nontariff measuresLicenses are required for imports of the following goods: alcoholic products and ethyl alcohol made from edible raw material (under quotas); malt liquor; raw and white sugar; starch syrup; plant-protecting chemicals; carpet products; industrial wastes; slag; tobacco products; and tires.
Negative listThere are prohibitions on importing production and consumption wastes that cannot be processed or used in Belarus and on printed matter, audiovisual materials, and other information media containing information that may harm Belarusian political or economic interests, its state security, or the health and morals of its citizens.
Licenses with quotasQuantitative restrictions are applied to raw cane sugar, alcohol products, and ethyl alcohol made from edible raw materials.
Other nontariff measuresEffective April 28, 2001, ceilings on the markup on imported goods were abolished.
Import taxes and/or tariffsBelarus has abolished customs controls and customs processing of goods moving between Belarus and Russia. Efforts are under way to establish a uniform trade policy in relation to third countries. The tariff structure consists of higher rates that apply to goods such as weapons, ammunition, precious metal products, carpets, motor vehicles, alcohol, and certain others. Regular (base) import duty rates apply to countries with MFN status. The preferential treatment given to goods from developing countries (duties that are 75% of the base rates) and from the least-developed countries with this status (goods from which are imported duty free) is applied to a certain list of goods imported onto the customs territory of Belarus. Duties are applied at twice the MFN rate on imports from countries without MFN status. Effective March 13, 2001, fees on foreign trade (barter transactions) were abolished. Indirect taxes (VAT and excise tax) are collected on imports from all countries except Turkmenistan, Georgia, and Russia. Excise taxes are collected on imports from all countries, with the exception of Russia. About 60% of tariff nomenclature has been unified between Belarus, Kazakhstan, and Russia and, to a lesser extent, between Belarus, the Kyrgyz Republic, and Tajikistan.
Under Presidential Decree No. 103 (of February 15, 2002), effective March 1, 2002, banks are exempt from customs duties and VAT on bank and measured ingots of precious metals for the performance of banking operations; other juridical persons are also exempt from customs duties and the VAT on ingots that are to be sold to banks.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports of goods and services produced by residents under commission contracts must be repatriated within a period of no more than 180 days, and foreign exchange proceeds from other exports of goods and services must be repatriated within 90 days of shipping. Special MOT approval is required for longer periods of time, and special NBB approval is required for periods exceeding 180 days.
Surrender requirementsThe surrender requirement of 30% at the auction exchange rate applies to proceeds in freely convertible currencies and Russian rubles.
Financing requirementsNo.
Documentation requirementsA transaction certificate or a statistical declaration is required.
Export licensesLicenses are required for exports of the following goods: fabrics made of wool yarn; cotton thread (including thread made of cotton fibers), yarn, and fabric; linen yarn and fabrics; yarn and fabric made of artificial and synthetic fibers and blended fibers; cable and rope products; terry cloth towels and similar terry cloth fabrics; interwoven interlocking fabrics; knitwear, socks, and hosiery articles; knitted clothing accessories; textile clothing and accessories; blankets, throws, and bed, table, bath, and kitchen linens; dishcloths; curtains, window shades, and bedspreads; sacks; paper bags; floor cleaning fabrics; and sets consisting of fabrics and yarn (only for exports requiring special licenses issued by the MOT, based on the EU system for textile trading). In addition, exports of the following goods are effected on the basis of MOT-issued licenses: dry nonfat milk, mushrooms, cranberries and blueberries, grains, flax seeds and rape seeds, alcohol products, ethyl alcohol, raw amber, unprocessed lumber, mineral fertilizers (within allocated quotas), precious metals and precious stones in any form and state, crude oil, raw hides and animal skins, long flax fiber, and ferrous and nonferrous metal scrap and waste. Contracts for exports of petroleum refining products must be registered with the MOT.
With quotasMineral fertilizers, waste, and ferrous and nonferrous metal scrap are subject to export quotas and licensing requirements, as are exports of wood-fiber panels to Hungary. VAT and excise taxes are collected on goods exported to Georgia, Russia, and Turkmenistan.
Export taxes
Other export taxesUnder the arrangement of the common customs region with Russia, export customs duties are collected on a list of goods with a low degree of processing that are exported outside the customs union. Most duties are on an ad valorem basis and range from 5% to 30%. Specific and combined duties are also levied.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Payments for travel
Quantitative limitsEffective April 1, 2001, there are no restrictions on the purchase of foreign exchange for bona fide expenses related to business travel. Prior to March 31, 2001, individuals (residents and nonresidents) were permitted to acquire foreign cash of up to $300 a day.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAll service export proceeds must be repatriated within 90 days, and proceeds from exports of services performed by residents under commission contracts must be repatriated within 180 days. Special MOT approval is required for longer repatriation periods. Special permission from the NBB is required for periods exceeding 180 days.
Surrender requirementsA requirement of 30% applies to receipts in freely convertible currencies and Russian rubles.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsThe government and the NBB establish quotas and procedures for clearing the securities of foreign issuers for circulation in Belarus and the quotas and procedures for clearing securities of issuers under the jurisdiction of Belarus for circulation outside Belarus.
The domestic placement of stocks and bonds of foreign issuers and foreign placement of stocks and bonds of domestic issuers are permitted, subject to regulations.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsRegistration with the State Securities Committee of the Republic of Belarus (GKTsB) is required for shares to be exported.
Sale or issue locally by nonresidentsGKTsB registration is required for shares to be imported.
Purchase abroad by residentsA permit from the NBB and registration with the BCSE and, when necessary, with the GKTsB are required.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesRegistration of securities is required. The NBB regulates the issue of CDs and saving certificates by banks. These may be issued both in domestic currency and in foreign exchange. Banks are not allowed to export bank certificates.
Purchase locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue abroad by residentsA permit is not required for sale.
On money market instruments
Purchase locally by nonresidentsTransfers of CDs to nonresidents are prohibited.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsAn NBB permit is required.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsAn NBB permit is required.
Controls on derivatives and other instruments
Purchase abroad by residentsAn NBB permit is required.
Controls on credit operations
Commercial credits
By residents to nonresidentsA permit is required for deferral of receipt of export proceeds. For deferrals of 90 to 180 days, the permit is issued by the MOT; for deferrals of more than 180 days, the permit is issued by the NBB. The same procedures apply to advance payments.
Financial credits
By residents to nonresidentsAn NBB permit is required if the credit is for longer than 180 days.
To residents from nonresidentsRegistration with the NBB is required for a credit of longer than 180 days.
Controls on direct investment
Outward direct investmentA permit from the NBB and MFA is required.
Inward direct investmentForeign investment must be registered at the MFA; financial institutions must also register it at the NBB. In the case of insurance institutions, foreign investment must also be registered at the State Insurance Oversight Committee. Certain activities require special approval (license). When establishing an enterprise with foreign investments, the proportion of a foreign investor’s share is not restricted, except for insurance organizations and banks, which may not exceed 49%.
Controls on liquidation of direct investmentForeign investors are guaranteed full repatriation of their initial investment capital and profits earned in Belarus.
Controls on real estate transactions
Purchase abroad by residentsAn NBB permit is required.
Controls on personal capital transactions
Loans
By residents to nonresidentsThese operations are prohibited.
Provisions specific to commercial banks and other credit institutionsEffective June 28, 2001, controls have been abolished on the amount of foreign currency purchases and sales on the over-the-counter exchange market. Foreign currency purchases and sales may be performed by juridical persons, resident and nonresident individuals, and authorized banks on both the exchange market and the over-the-counter exchange market.
Borrowing abroadThese operations may be performed on the basis of banking licenses.
Lending to nonresidents (financial or commercial credits)Lending to nonresidents for investment in Belarus is prohibited.
Lending locally in foreign exchangeThese transactions are permitted for settlements with nonresidents; settlements with residents who have the appropriate permits; and purchases and sales of foreign currency for purposes of settlements specified under the lending agreement.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsEffective January 1, 2001, the reserve requirement on foreign currency deposits was reduced to 12% from 16%.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsEffective January 1, 2001, the reserve requirements on domestic and foreign currency deposits were reduced to 12% and 16% from 16% and 19%, respectively. Effective March 1, 2002, different reserve requirements were imposed on rubel deposits of individuals and juridical persons and the reserve requirement for rubel deposits of individuals was set at 14% (that for rubel deposits of juridical persons remains unchanged at 16%).
Effective April 1, 2002, the reserve requirement for rubel deposits of individuals was reduced to 13%, and on May 1, 2002, it was further reduced to 12%.
Investment regulations
Abroad by banksCoordination with the NBB is required.
In banks by nonresidentsCoordination with the NBB is required.
Open foreign exchange position limitsOpen foreign exchange position limits are established depending on the type of foreign currency (freely convertible currency and currency with restricted convertibility). Requirements are also established with regard to limits on the differential between off-balance-sheet assets and liabilities. Limits are computed as a whole by type of foreign currency regardless of whether the asset (liability) belongs to a resident or nonresident.
Effective June 1, 2002, the following limits on open foreign exchange positions have been established: (1) the overall open foreign exchange position is 20% of an authorized bank’s equity capital; (2) the open foreign exchange position for each type of foreign currency on balance-sheet accounts and off-balance-sheet accounts is 10% of an authorized bank’s equity capital; and (3) the open foreign exchange position on forward transactions for each type of foreign currency is 10% of an authorized bank’s equity capital.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 2001
Status under IMF Articles of AgreementNovember 5. Belarus accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement.
Exchange arrangementJanuary 1. The authorities announced the introduction of a crawling peg against the Russian ruble. As a result, the exchange rate arrangement was reclassified to the category crawling band from the category managed floating with no preannounced path for the exchange rate.
March 31. The daily limit of $300 on purchases of foreign exchange a person a day was removed.
Arrangements for payments and receiptsJune 28. Banks required an NBB license to deal in precious metals and stones.
Nonresident accountsJune 28. Nonresidents were allowed to purchase foreign currency with Belarusian rubels from T accounts and correspondent accounts of nonresident banks opened at authorized domestic banks.
Imports and import paymentsMarch 13. Fees on foreign trade (barter) transactions were abolished.
April 28. Ceilings on the markup on imported goods were abolished.
Payments for invisible transactions and current transfersApril 1. The limit on payments for travel was lifted.
Capital transactions
Provisions specific to commercial banks and other credit institutionsJanuary 1. The reserve requirement on foreign currency deposits was reduced to 12% from 16%.
January 1. The reserve requirement on domestic currency deposits was reduced to 16% from 19%.
Provisions specific to commercial banks and other credit institutionsJune 28. Controls were abolished on the amount of foreign currency purchases and sales on the over-the-counter exchange market.
Changes During 2002
Imports and import paymentsMarch 1. Banks were exempted from customs duties and VAT on bank and measured ingots of precious metals for the performance of banking operations, and other juridical persons were exempted from customs duties and the VAT on ingots that are to be sold to banks.
Capital transactions
Provisions specific to commercial banks and other credit institutionsMarch 1. Different reserve requirements were imposed on rubel deposits of individuals and juridical persons, and the reserve requirement for rubel deposits of individuals was set at 14% (that for rubel deposits of juridical persons remained unchanged at 16%).
April 1. The reserve requirement for rubel deposits of individuals was reduced to 13%.
May 1. The reserve requirement for rubel deposits of individuals was reduced to 12%.
June 1. The following limits on open foreign exchange positions were established: (1) the overall open foreign exchange position is 20% of an authorized bank’s equity capital; (2) the open foreign exchange position for each type of foreign currency on balance-sheet accounts and off-balance-sheet accounts is 10% of an authorized bank’s equity capital; and (3) the open foreign exchange position on forward transactions for each type of foreign currency is 10% of an authorized bank’s equity capital.

Belgium

(Position as of March 31, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of Belgium is the euro. Through February 28, 2002, however, the Belgian franc remained the legal tender in cash transactions, and between January 1 and February 28, 2002, both the Belgian franc and the euro circulated. On March 1, 2002, the euro became the sole legal tender.
Other legal tenderThe Luxembourg franc also circulated as legal tender through February 28, 2002.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderBelgium participates in a currency union (EMU) with 11 other members of the EU: Austria, Finland, France, Germany, Greece (effective January 1, 2001), Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Prior to January 1, 2002, the internal conversion rates with respect to the national currencies of EMU participants were fixed to the euro, whereas the external exchange rate of the euro was market determined. The conversion rate between the euro and the Belgian franc was set at BF 40.3399 per €1. The ECB has the right to intervene to smooth out fluctuations in the euro exchange rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketBanks are allowed to engage in spot and forward exchange transactions in any currency, and they may deal among themselves and with residents and nonresidents in foreign notes and coins.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlNo.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Belgium applies exchange restrictions against Iraq. Restrictions are imposed on payments and transfers to specially targeted persons in connection with the Federal Republic of Yugoslavia.
In accordance with UN sanctionsAccounts of the Taliban are blocked, as are the accounts of some residents of Myanmar, and those of the UNITA movement in Angola and individuals linked thereto.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency 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 accounts are affected by international security restrictions. The accounts held in the names of several former Yugoslav officials are still blocked, as are accounts of the Taliban, accounts of some residents of Myanmar, and of the UNITA movement in Angola and individuals linked thereto.
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 measures
Negative listIndividual licenses are required for certain specified imports from some non-EU countries, including many textile and steel products, diamonds, weapons, nontextile products from China, and shoes from Vietnam. All other products are free of license requirements. Effective January 1, 2001, the licensing requirement for steel imports from several non-EU countries was lifted; effective January 1, 2002, however, it was reintroduced.
Licenses with quotasAlong with other EU countries, the Belgium-Luxembourg Economic Union applies quotas on a number of textile products from non-EU countries in the framework of the MFA, on a number of steel products from Kazakhstan, Russia, and Ukraine, and on a number of products from China (ceramics, porcelain, and shoes).
Import taxes and/or tariffsBelgium applies the Common Import Regime of the EU to imports of most agricultural and livestock products from non-EU countries.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required for only a few products (mostly of a strategic character), for weapons, and for diamonds.
Without quotasYes.
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 transactionsYes.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentNo authorization is required for inward direct investment in Belgium, except for the acquisition of Belgian flag vessels by shipping companies that do not have their principal office in Belgium.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investors
Currency-matching regulations on assets/liabilities compositionThese regulations are maintained, but the introduction of the euro has considerably reduced their significance. The EU allows its member countries to maintain such regulations.
Other controls imposed by securities lawsNo.
Changes During 2001
Imports and import paymentsJanuary 1. The licensing requirement for steel imports from several non-EU countries was lifted.
Changes During 2002
Exchange arrangementJanuary 1. Euro banknotes were introduced. Both the euro and the Belgian franc could be used for payments through February 28, 2002.
March 1. The euro became the sole legal tender.
Imports and import paymentsJanuary 1. The licensing requirement for steel imports from several non-EU countries was reintroduced.

Belize

(Position as of January 31, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 14, 1983.
Exchange Arrangement
CurrencyThe currency of Belize is the Belize dollar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Belize dollar is pegged to the U.S. dollar, the intervention currency, at the rate of BZ$1 per US$0.5. The Central Bank of Belize (CBB) quotes daily rates for the Canadian dollar, the pound sterling, and a number of currencies of CARICOM member countries. Commercial banks are allowed to buy and sell foreign exchange at the official rate. Effective January 2, 2002, exchange houses are authorized and are allowed to deal in foreign exchange at the official exchange rate.
Exchange taxA stamp duty of 1.25% is levied on all conversions from the Belize dollar to a foreign currency.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currency
For current transactions and paymentsYes.
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Use of foreign exchange among residentsPrior to December 27, 2001, residents could use only the Belize dollar in domestic transactions. On that date, the Central Bank of Belize Act was amended to allow all those with earnings in foreign exchange to pay their taxes, utility bills, and other expenses in U.S. dollars.
Payments arrangements
Regional arrangementsBelize is a member of CARICOM.
Clearing agreementsBelize participates in the CMCF.
Administration of controlThe CBB is responsible for administering exchange controls, which apply to all countries. Authority covering a wide range of operations is delegated to the commercial banks in their capacity as authorized dealers. Only exceptional cases and applications involving substantial amounts are referred directly to the CBB. However, all applications for foreign exchange processed by authorized dealers are regularly forwarded to the CBB for audit and record keeping.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may not hold gold except with specific authorization from the CBB.
Controls on external tradeGold may not be imported or exported without the approval of the CBB.
Controls on exports and imports of banknotes
On exports
Domestic currencyEach traveler may take abroad up to BZ$100. Amounts beyond this limit require the approval of the CBB, which is liberally granted when justified.
Foreign currencyThe amount of foreign currency that each resident traveler may take abroad is left to the discretion of the commercial banks and is subject to availability and guided by limits. Nonresidents may take out up to the amount imported or the limits specified.
On imports
Domestic currencyEach traveler may bring in up to BZ$100.
Resident Accounts
Foreign exchange accounts permittedThese accounts may be opened both domestically and abroad, but CBB approval is required.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedBanks must have permission from the CBB to open external or foreign currency accounts.
Domestic currency accountsThese accounts may be credited with proceeds from the sale of foreign currency.
Convertible into foreign currencyYes.
Blocked accountsThe CBB may stipulate that sums to be credited or paid to foreign residents be credited to a blocked account.
Imports and Import Payments
Foreign exchange budgetYes.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPrepayments for imports require authorization from the CBB; in most cases, such authorization is delegated to the commercial banks. The CBB rations its sales of foreign exchange to commercial banks on an ad hoc basis, except for payments of a few essential import items, such as fuel and pharmaceuticals.
Letters of creditYes.
OtherYes.
Import licenses and other nontariff measures
Negative listFor reasons of health, standardization, and protection of domestic industries, import licenses from the Ministry of Industry are required for a number of goods—mostly food and agricultural products, and certain household and construction products; such licenses are liberally granted.
Import taxes and/or tariffsCustoms duties corresponding to the fourth phase of the CARICOM CET range from 5% to 20%, with a number of items (particularly agricultural inputs) entering duty free. Imports by most of the public sector and certain nonprofit entities, imports of an emergency or humanitarian nature, and goods for reexport are exempt from import duties; goods originating from the CARICOM area are also exempt. Some items are subject to revenue replacement duties ranging from 5% to 25%. Effective August 25, 2001, an environmental tax of 1% is levied on a broad range of imports, replacing a 5% tax on plastics. Specific duties and surcharges apply to certain products.
State import monopolyThe Belize Marketing Board has an import monopoly on rice, potatoes, onions, and carrots.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsExport proceeds must be surrendered to authorized dealers not later than six months after the date of shipment, unless otherwise directed by the CBB. The CBB makes direct purchases of sugar export proceeds, bypassing the traditional practice of purchasing from commercial banks.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required for live animals, excluding pets; fish, crustaceans, and mollusks, excluding agricultural species; lumber and logs; beans; citrus fruits; and sugar.
Without quotasYes.
Export taxesTransshipments are subject to a 1.5% customs administration fee.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThe CBB rations its sale of foreign exchange for invisible payments to commercial banks on an ad hoc basis.
Trade-related paymentsThere are controls on the payment of commissions.
Prior approvalFor the payment and transfer of commissions, approval is granted by the CBB, subject to clearance by the Commissioner of Income Tax (CIT).
Investment-related paymentsInformation is not available on the payment of amortization of loans or depreciation of direct investments.
Prior approvalFor interest payments, approval is granted by the CBB, subject to clearance by the CIT. For transfer of profits and dividends, an income statement and a declaration of dividends must be presented along with clearance from the CIT.
Payments for travel
Quantitative limitsThe following limits are in effect: (1) for nonbusiness travel by residents, up to BZ$5,000 a person a trip; (2) for business travel by residents, BZ$500 a person a day, up to a maximum of BZ$20,000 a year; (3) for business or nonbusiness travel by nonresidents, BZ$500 a person a year, unless payment is made from an external account or from proceeds of foreign currency. Resident travelers are required to sell their excess holdings of foreign currencies to an authorized dealer upon returning to Belize.
Indicative limits/bona fide testYes.
Personal paymentsPayments related to medical costs are made directly to a doctor or hospital with original invoices or bills supporting the application.
Prior approvalFor the transfer of pensions and payments for family maintenance and alimony, CBB approval and CIT clearance are required.
Quantitative limitsThe limit for gifts is BZ$100 a donor.
Indicative limits/bona fide testForeign exchange is provided by authorized dealers for payment of correspondence courses when applications are properly documented.
Foreign workers’ wagesApproval for remittances of wages is granted by the CBB, subject to clearance by the CIT.
Other paymentsFor the transfer of consulting and legal fees, approval is granted by the CBB, subject to clearance by the CIT.
Indicative limits/bona fide testSimilar requirements apply for subscriptions and membership fees for study abroad.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsProceeds must be sold to an authorized dealer.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsAll capital transfers require the approval of the CBB, but controls are liberally administered.
Controls on capital and money market instruments
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 residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instruments
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operations
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 nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentInward direct investment must be registered with the CBB if the profits are to be repatriated in the future.
Controls on liquidation of direct investmentRepatriation of proceeds requires clearance by the CIT.
Controls on real estate transactionsEffective March 27, 2001, a land speculation tax of 5% of the unimproved value is levied on purchases of land exceeding 300 acres.
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer into the country by immigrantsYes.
Transfer of gambling and prize earningsThe repatriation of gambling proceeds by nonresidents requires clearance from the CIT.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2001
Arrangements for payments and receiptsDecember 27. The Central Bank of Belize Act was amended to allow all those with earnings in foreign exchange to pay their taxes, utility bills, and other expenses in U.S. dollars.
Imports and import paymentsAugust 25. An environmental tax of 1% was levied on a broad range of imports, replacing a 5% tax on plastics.
Capital transactions
Controls on real estate transactionsMarch 27. A land speculation tax of 5% of the unimproved value on purchases of land exceeding 300 acres was introduced.
Changes During 2002
Exchange arrangementJanuary 2. Exchange houses were authorized and were allowed to deal in foreign exchange at the official exchange rate.

Benin

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Benin 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 rate of CFAF 655.957 per €1, which is the official buying and selling rate. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris foreign exchange market and the fixed rate between the euro and the CFA franc.
Exchange taxThere is a bank commission of 0.25% on transfers to all countries outside the WAEMU, which must be surrendered to the treasury. Banks are authorized to charge a maximum commission of 2% on nonelectronic exchange transactions in French francs (through December 31, 2001; euros from January 1, 2002).
Exchange subsidyNo.
Forward exchange marketResidents are authorized to contract forward exchange cover to settle payments related to imports and exports of goods and services.
Arrangements for Payments and Receipts
Prescription of currency requirementsBenin is linked to the French Treasury through an Operations Account; therefore, settlements with France, Monaco, and other Operations Account countries (WAEMU and CEMAC members and the Comoros) are mainly made in euros, but they may also be made in foreign currencies. Settlements outside the Operations Account area may be effected freely.
Payments arrangements
Bilateral payments arrangements
InoperativeYes.
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. Most purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Clearing agreementsA clearing agreement exists between the WAMA members and Cape Verde, The Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone.
Administration of controlExchange control is administered jointly by the MOF and the BCEAO. Regulations governing the external financial relations of WAEMU member states delegate the approval process for most foreign exchange transactions to authorized banks. The only transactions that remain subject to the prior authorization of these institutions relate to outward investment, the domestic and foreign currency accounts of residents, and resident accounts abroad. Within the framework of the regional financial market, the placement and soliciting of foreign and domestic securities in Benin require the prior authorization of the RCPSFM.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports and exports of gold from or to any other country require prior authorization of the MOF.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe export of CFA franc banknotes by travelers is allowed. However, repurchase of exported banknotes by the BCEAO remains suspended. Furthermore, the shipment of BCEAO banknotes between authorized intermediaries and their correspondents located outside the WAEMU zone is strictly prohibited.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers is allowed up to the equivalent of CFAF 500,000; the reexportation of foreign banknotes above these ceilings requires documentation demonstrating either the importation of the foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits in local banks. Residents traveling outside the BCEAO zone are allowed to take out foreign currency equivalent to CFAF 2 million a person. Larger amounts may be exported in the form of traveler’s checks, bank drafts, or other means of payment.
On imports
Foreign currencyResident and nonresident travelers may bring in any amount of foreign banknotes and coins (except gold coins) of countries outside the Operations Account area. Nonresidents bringing in foreign banknotes and foreign currency traveler’s checks exceeding the equivalent of CFAF 1 million must declare them to customs upon entry. Residents bringing in foreign banknotes exceeding the equivalent of CFAF 300,000 must surrender the excess amount to an authorized intermediary bank within eight days of their return.
Resident Accounts
Foreign exchange accounts permittedResidents are allowed to open foreign exchange accounts with local banks or with banks abroad with the authorization of the MOF, which is granted after obtaining approval of the BCEAO.
Held domesticallyThese accounts may be opened, but approval is required.
Held abroadThese accounts may be opened, but approval is required.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are allowed to open these accounts, but BCEAO authorization is required. Because the BCEAO has suspended the repurchase of banknotes circulating outside the WAEMU area, nonresident accounts may not be credited or debited with BCEAO banknotes.
Domestic currency accountsBecause the BCEAO has suspended the repurchase of banknotes circulating outside the WAEMU area, nonresident accounts may not be credited or debited with BCEAO banknotes. These accounts may not be overdrawn without prior authorization of the MOF. Transfers of funds between nonresident accounts are not restricted.
Convertible into foreign currencyNonresidents may freely debit their foreign accounts in francs for the purpose of purchasing foreign currency on the official foreign exchange market.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsImporters may purchase foreign exchange for import payments after establishing bank payment order accounts and submitting supporting documents, but not earlier than eight days before shipment if a documentary credit is opened, or on the due date of payment if the products have already been imported.
Domiciliation requirementsA domiciliation requirement applies to all imports from outside the franc zone exceeding CFAF 5 million.
Preshipment inspectionAll imports arriving by sea and exceeding CFAF 3 million and overland imports exceeding CFAF 1.5 million are subject to prior inspection.
Import licenses and other nontariff measures
Negative listCertain imports, e.g., narcotics, are prohibited from all sources.
Import taxes and/or tariffsThe CET of the WAEMU consists of four rates (zero, 5%, 10%, and 20%). A 1% common solidarity fee and a tax of 0.5%, based on the c.i.f. value of imports, are levied on ECOWAS imports. A statistical tax of 1% is levied on all imports.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports must be received within 120 days of the arrival of the goods at their destination. Proceeds from exports to WAEMU countries are not required to be repatriated.
Surrender requirementsProceeds must be surrendered to authorized banks within 30 days of the payment due date. Authorized intermediaries must then surrender the foreign exchange to the BCEAO by transfer through the bank of issue.
Financing requirementsNo.
Documentation requirementsAll export transactions require a customs declaration.
Letters of creditYes.
DomiciliationAll exports of more than CFAF 5 million, except those to WAEMU countries, must be domiciled with an authorized bank.
OtherYes.
Export licensesYes.
Without quotasExports are permitted on the basis of a simple authorization from the Directorate of Foreign Trade, which issues a certificate of origin as needed. Exports of diamonds, gold, and all other precious metals, however, require prior authorization of the MOF, with the exception of articles with small gold content, travelers’ personal effects weighing less than 500 grams, and coins (fewer than 10 pieces, irrespective of their face value and denomination).
With quotasExports of teakwood and other varieties of unprocessed wood and charcoal are banned.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles to France, Monaco, and the Operations Account countries are permitted freely; those to other countries are subject to approval. Payments for invisibles related to trade are permitted by a general authorization when the basic trade transaction has been approved or does not require authorization. Bona fide tests are conducted by authorized intermediary banks.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsThe threshold of foreign exchange to be surrendered by residents after travel is CFAF 300,000.
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wagesPayments abroad related to wages, salaries, and honoraria; contributions and benefits; pensions and work-related activities; and service contracts are generally authorized upon presentation of the appropriate documentation.
Prior approvalYes.
Indicative limits/bona fide testYes.
Credit card use abroadThe use of credit cards is allowed only when issued by specialized institutions.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions with non-WAEMU member countries must be repatriated.
Surrender requirementsProceeds from transactions with WAEMU members may be retained. All amounts due from residents of other countries with respect to services, and all income earned in those countries from foreign assets must be collected and surrendered within one month of the due date or the date of receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsAccording to exchange regulations within the WAEMU, essentially all capital inflows may take place freely. Capital outflows in the form of repayment of credits, liquidation of investments, and purchases of option contracts may also be carried out freely, but they must be declared to the MOF for information purposes. All investments abroad by residents require prior MOF authorization, and at least 75% of the financing of such investments should be effected by borrowing from abroad. The granting of credits by residents to nonresidents requires documentation for statistical purposes.
Prior RCPSFM authorization is required for the issue or sale of securities or real estate by nonresidents as well as for the solicitation and advertisement of investments abroad.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThe issue of securities and the sale of corporate or foreign securities in Benin by nonresidents are subject to prior RCPSFM authorization. There are no controls on the sale of securities resulting from the divestiture of investment in the form of a transfer between a nonresident and a resident, but such sales are subject to the regulations governing the financial settlement of the operation.
Settlement of securities transactions by transfer abroad or by credit to a nonresident account requires an exchange authorization to be submitted to the MOF for approval, accompanied by supporting documentation.
Purchase abroad by residentsPrior MOF authorization is required.
Sale or issue abroad by residentsResidents may sell local corporate securities abroad. If these operations result in foreign control of Beninese establishments, foreign investors are required to make a prior declaration to the MOF. The sale of securities to liquidate an investment abroad is subject to declaration to the MOF for statistical purposes. The proceeds in foreign exchange from sale or liquidation must be surrendered to an authorized intermediary bank within one month.
Residents may also issue securities abroad, except for those constituting a loan. Issuance of the latter to nonresidents must be made through an authorized bank and must be reported to the MOF for statistical purposes.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
On money market instruments
Purchase locally by nonresidentsNonresidents may acquire money market instruments through local banks.
Sale or issue locally by nonresidentsThe sale or issue by nonresidents of money market instruments on the local market is subject to prior authorization by the RCPSFM. The transfer of the proceeds from these operations is unrestricted if the issue itself has received prior authorization, and must be effected through an authorized bank and reported to the MOF for statistical purposes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsThere are no controls on the sale of money market instruments abroad by residents. Sales to liquidate an investment are subject to a declaration to the MOF for statistical purposes. The proceeds in foreign exchange from sale or liquidation must be surrendered to an authorized intermediary bank. The issue by residents of money market instruments abroad is governed by the provisions pertaining to borrowing.
On collective investment securitiesThe regulations governing money market instruments apply.
Controls on derivatives and other instrumentsResidents are not allowed to purchase abroad new materials or shares with the aim of delivering these within the framework of a sell option contract. If the execution of a contract requires delivery abroad, the sell option must have underlying assets that may be bought locally by residents.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operationsThe issue of a loan in the form of securities requires prior approval by the MOF. Such approval is not required, however, for loans contracted by authorized intermediaries or those that comply with specific conditions as to amount and interest rate. Foreign borrowing by residents is subject only to reporting for statistical purposes.
Commercial credits
By residents to nonresidentsGranting of such credits is subject to two provisions: (1) Claims resulting from exports of goods must be collected and the corresponding amounts repatriated through the BCEAO within 30 days of the payment due date stipulated in the commercial contract. Generally, the period allowed for payment must not exceed 120 days following the arrival of the merchandise at its destination. (2) Claims resulting from services must also be collected and surrendered to an authorized dealer or the BCEAO no later than one month after the payment due date.
To residents from nonresidentsThese credits may be freely granted. Repayment is usually authorized, subject to presentation of the relevant proof of execution of the commercial transaction or the provision of the service, as well as the payment due date.
Financial credits
By residents to nonresidentsThe granting of financial credits requires the prior authorization of the MOF. In order to transfer funds abroad to service these facilities, an exchange authorization must be submitted with the required documentation to the MOF.
To residents from nonresidentsThese credits may be granted freely. Transfers of the funds must be processed through an authorized intermediary. However, if these operations take place between a direct investment company established in Benin and its parent company abroad, they are considered direct investments and are therefore subject to prior declaration to the MOF.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe granting of these facilities requires the prior authorization of the MOF.
To residents from nonresidentsThe regulations governing financial credits apply.
Controls on direct investment
Outward direct investmentPrior approval by the MOF is required. A maximum of 75% of such investments may be financed by foreign loans. The investor must submit a written request indicating the authorized intermediary charged with making the payment. Whether the funds are transferred abroad or deposited to a foreign-exchange account in CFA francs, the payment may not be made before the end of the period agreed to by the parties.
Inward direct investmentThese investments, including their transfer between nonresidents, are subject to prior declaration to the MOF for statistical purposes.
Controls on liquidation of direct investmentProceeds may be freely transferred abroad or credited to a foreign-exchange account in CFA francs upon presentation of the required documentation to an authorized intermediary responsible for payment.
The liquidation of investments abroad by a resident requires a declaration to the MOF for information purposes. The reinvestment of the proceeds of the liquidation is subject to the prior authorization of the MOF. If the reinvestment has not been authorized, the proceeds of the liquidation must be repatriated within one month through an authorized intermediary.
Controls on real estate transactions
Purchase abroad by residentsReal estate investments abroad by residents are subject to prior approval by the MOF. The investor must submit a written request indicating the authorized intermediary charged with making the payment. Whether the funds are transferred abroad or deposited to a foreign-exchange account in CFA francs, the payment may not be made before the end of the period agreed to by the parties.
Purchase locally by nonresidentsThere are no controls on purchases, except in the case of direct investment in an enterprise, branch, or corporation.
Sale locally by nonresidentsProceeds from the sale of real estate may be freely transferred abroad or credited to a foreign-exchange account in CFA francs upon presentation of the required documentation to the authorized intermediary responsible for payment.
Controls on personal capital transactionsPersonal capital movements between residents and nonresidents must be made through the BCEAO, the postal service, or an authorized intermediary bank, unless prior authorization is obtained from the MOF.
Loans
By residents to nonresidentsThese transactions require the prior authorization of the MOF. The individuals concerned may not engage in such operations as a professional occupation without first being licensed and included in the list of financial institutions.
To residents from nonresidentsLoans from nonresidents to residents may be granted freely, requiring only a declaration to the MOF for statistical purposes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsExcept for inheritances and legacies, for which payments are generally authorized, payments pertaining to these operations require prior MOF authorization.
Settlement of debts abroad by immigrantsImmigrants who have obtained resident status must obtain prior authorization from the MOF to settle debts incurred abroad while they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsUpon presentation of emigration documents, the parties concerned may, without prior authorization, transfer up to CFAF 300,000 a person. Larger amounts may be transferred with MOF authorization.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAuthorized intermediaries may borrow freely abroad, but these transactions must be reported to the MOF for statistical purposes.
Maintenance of accounts abroadBanks and financial institutions are not permitted to hold liquid assets outside the WAEMU zone, except to cover current operations.
Lending to nonresidents (financial or commercial credits)These transactions may be freely conducted, but are subject to prior MOF and BCEAO authorization in the case of loans, financial credits, and the purchase of securities issued abroad.
Lending locally in foreign exchangeNo explicit regulations exist regarding these transactions, but prior authorization by the MOF is required with the approval of the BCEAO.
Purchase of locally issued securities denominated in foreign exchangeThese purchases require prior MOF approval.
Differential treatment of deposit accounts in foreign exchange
Credit controlsAny overdraft or advance granted to a nonresident requires the prior authorization of the MOF with the approval of the BCEAO.
Differential treatment of deposit accounts held by nonresidents
Credit controlsAll overdrafts and advances require prior MOF authorization with BCEAO approval.
Investment regulationsThe regulations governing foreign investment apply.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThere are no prudential ratios; open positions result from special dispensations.
Provisions specific to institutional investorsControls are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.
Limits (min.) on investment portfolio held locallyThe Insurance Code in effect in Benin includes rules applicable specifically to the use of the technical reserves of insurance companies.
Other controls imposed by securities lawsYes.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Bhutan

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Bhutan is the Bhutanese ngultrum.
Other legal tenderThe Indian rupee is also legal tender.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe ngultrum is pegged to the Indian rupee at par. The rates for currencies other than the Indian rupee are determined on the basis of the prevailing quotations by the State Bank of India for these currencies.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsn.a.
Payments arrangements
Bilateral payments arrangements
OperativeYes.
Clearing agreementsBhutan is a member of the ACU.
Administration of controlThe MOF controls external transactions and provides foreign exchange for most current and capital transactions. The MOF has delegated to the Royal Monetary Authority (RMA) the authority to release foreign exchange (other than Indian rupees) for current transactions. The RMA is responsible for implementing the surrender requirements for proceeds from merchandise exports and approving the use of foreign exchange for payments for invisible transactions.
Payments and remittances by residents to nonresidents other than in cash and traveler’s checks must be channeled through authorized banks in Bhutan.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold and silver, up to stipulated quantities, by Bhutanese citizens are permitted. Imports beyond this require special permission from the MOF.
Controls on exports and imports of banknotesThe importation and exportation of cash and securities are subject to declaration of value at the customs point of entry into, and departure from, Bhutan.
On exports
Domestic currencyYes.
Foreign currencyYes.
On imports
Domestic currencyYes.
Foreign currencyForeign currency notes purchased from authorized banks or declared on entry may be exported freely.
Resident Accounts
Foreign exchange accounts permittedThe following categories of persons are permitted to open and maintain dollar-denominated foreign currency accounts with authorized banks in Bhutan: (1) diplomatic missions in Bhutan and their expatriate employees, (2) representative offices of donor agencies and their expatriate employees, (3) third-country contracting firms and their expatriate employees engaged in executing projects financed by donor agencies, and (4) any person who is a national of a third country and resides in Bhutan.
Held domesticallyThe accounts may be opened, but approval of the RMA is required.
Held abroadResidents of Bhutan are not allowed to hold foreign exchange accounts abroad. Bhutanese citizens living abroad must close foreign exchange accounts upon return and repatriate any balances to Bhutan.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts are permitted, but approval is required.
Domestic currency accountsYes.
Convertible into foreign currencyThese accounts are permitted, but approval is required.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetYes.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsYes.
Letters of creditYes.
Import licenses used as exchange licensesYes.
Import licenses and other nontariff measuresImport licenses are governed by Rules and Procedures for Imports of Goods from Third Countries issued by the MOF. An import license is required for the importation of capital and intermediate goods from countries other than India. Foreign exchange for all payments related to merchandise imports is automatically made available by authorized banks against import licenses.
Import taxes and/or tariffsImports from India are free from tariffs and are subject only to the Bhutanese sales tax. Tax rates range from zero for essential goods to 50% on tobacco products and alcoholic beverages.
Imports from countries other than India are subject to tariffs. The maximum tariff rate is 30%, with the exception of the rates for beer (50%), and for tobacco and other alcoholic beverages and spirits (100%).
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsProceeds in currencies other than the Indian rupee must be surrendered to the RMA either directly or through authorized banks in Bhutan within 90 days.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionYes.
OtherYes.
Export licenses
Without quotasYes.
With quotasYes.
Export taxesExport taxes are applied only to exports of unprocessed timber, apples, oranges, and cardamom. Exports to countries other than India receive a rebate at rates ranging from 5% to 20% of the c.i.f. value, with the lowest rate applying to unprocessed primary products and the highest rate applying to processed products.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAll invisible payments, other than those made in Indian rupees, must be approved by the RMA. The RMA is charged with setting limits (indicative in most cases) up to which foreign exchange may be made available for payments for invisible transactions.
Trade-related payments
Prior approvalYes.
Investment-related paymentsInformation is not available on the payment of amortization of loans or depreciation of direct investments.
Prior approvalYes.
Payments for travel
Prior approvalYes.
Quantitative limitsThere is a travel allowance of $1,500 per ticketed passenger per calendar year. In case of business travel, the foreign exchange cost of an air ticket and country-specific per diem covering accommodation are provided to travelers. There are no time limits, but two weeks is considered the norm.
Indicative limits/bona fide testYes.
Personal paymentsAllowances for educational fees and tuitions are provided without limits if they are paid directly to universities or institutions abroad. Students may also purchase foreign exchange for a monthly stipend of $900 and a onetime settling-in allowance of $1,500; the settling-in allowance and three monthly stipends may be purchased in advance.
For medical expenses, subject to referral by a local physician for treatment abroad, foreign exchange may be purchased to cover the cost of treatment and medicine and for living expenses abroad. Living expenses vary from country to country, but there are no specific limits for other expenses, and all reasonable expenses are allowed.
Prior approvalYes.
Quantitative limitsA citizen of Bhutan who, under the recommendation of a medical specialist, travels to a third country for medical treatment is permitted to purchase foreign exchange from authorized banks within the limit prescribed by the RMA for the cost of treatment, medicine, and living expenses.
Foreign workers’ wages
Prior approvalAny national of a third country who—with the prior approval of the Royal Government of Bhutan—is employed directly by a public or private organization in Bhutan, is permitted to remit his or her salary and savings in foreign exchange through an authorized bank.
Quantitative limitsThe RMA may set limits on any or all such remittances as it deems necessary.
Credit card use abroad
Prior approvalYes.
Other payments
Prior approvalYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsForeign exchange proceeds of any receipts or holdings by Bhutanese citizens and companies should be repatriated to Bhutan by transferring such claims and funds to authorized banks in Bhutan.
Surrender requirementsAll receipts from invisible transactions in currencies other than the Indian rupee must be surrendered to the RMA.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsAll capital transactions must be approved by the RMA.
Controls on derivatives and other instrumentsThere are controls on all derivative transactions.
Controls on credit operationsThere are controls on all credit operations.
Controls on direct investmentThere are controls on all direct investment transactions.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsThere are controls on all real estate transactions.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
To residents from nonresidentsYes.
Transfer of assets
Transfer into the country by immigrantsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Maintenance of accounts abroadYes.
Investment regulations
Abroad by banksUp to $5 million (gross) investment is allowed.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadYes.
Other controls imposed by securities lawsn.a.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Bolivia

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 5, 1967.
Exchange Arrangement
CurrencyThe currency of Bolivia is the boliviano.
Other legal tenderThe dollar is also legal tender.
Exchange rate structureUnitary.
Classification
Crawling pegThe official selling rate is determined at auctions held daily by the Central Bank of Bolivia (CBB). The official exchange rate is the average of the bid rates accepted in the latest auction and applies to all foreign exchange operations in Bolivia. The auctions are conducted by the Committee for Exchange and Reserves in the CBB. Before each auction, the Committee decides on the amount of foreign exchange to be auctioned and a floor price below which the CBB will not accept any bids. This floor price, which is expressed in dollars, is the official exchange rate. Economic agents may buy and sell foreign exchange freely. All public sector institutions, including public enterprises, must purchase foreign exchange for imports of goods and services through the CBB auction market. The CBB also purchases foreign exchange at a rate that is Bs 0.02 per $1 lower than the selling rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Regional arrangementsPayments between Bolivia and the other LAIA countries must be made through accounts maintained with each other by the CBB and the central banks of the countries concerned, within the framework of the multilateral clearing system of the LAIA.
Clearing agreementsYes.
Administration of controlThe CBB is in charge of operating the auction market for foreign exchange. The MOF, together with the CBB, is in charge of approving public sector purchases of foreign exchange for debt-service payments.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)Gold may be traded freely, subject to the following tax scale in accordance with the gross value of the sale of gold bullion: 7% for official quotations larger than $700 a troy ounce; between 4% and 7% for official quotations between $400 and $700 a troy ounce, calculated as a 0.01 factor multiplied by the official quotation; and 4% for official quotations of less than $400 a troy ounce.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Letters of creditLCs have to be opened at a bank in the Bolivian banking system.
Import licenses and other nontariff measures
Negative listCertain imports are controlled for reasons of public health or national security.
Import taxes and/or tariffsBolivia applies an import tariff of 10% on consumption goods. Tariffs of zero and 5% are applied to capital goods in accordance with approved lists. A zero rate is also applied to imports of books and printed materials. Donated food, including wheat, is exempt from the import tariff.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirements
Preshipment inspectionExports are subject to a revision process by public entities. If necessary, however, exporters may contract specialized agencies for verification.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related paymentsThere are no restrictions on the payment for amortization of loans or depreciation of direct investments.
Prior approvalPublic sector purchases of foreign exchange for debt service must be approved by the MOF and the CBB. Profit remittances are subject to a 12.5% tax, which is computed as equivalent to the 25% income tax times the presumed net profit of 50% of the amount remitted.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Commercial credits
To residents from nonresidentsAll foreign credits, including suppliers’ credits to government agencies and autonomous entities, and credits to the private sector with official guarantees are subject to prior authorization by the MOF and to control by the CBB. All proceeds of borrowings from foreign public sector agencies must be surrendered to the CBB.
Financial credits
To residents from nonresidentsYes.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadFinancial institutions may make loans in the form of credits denominated in foreign currency for imports of capital goods and inputs for the exporting sector with resources from international financial institutions, foreign government agencies, or external lines of credit. All overseas credits of less than a one-year term are subject to reserve requirements, except for fully matched, short-term liabilities for foreign trade operations.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsPrior to November 29, 2001, the reserve requirement was 2% for short-term deposits in domestic and foreign exchange and for time deposits in foreign exchange of more than six months but less than one year. Time deposits in domestic currency were exempt, as were all time deposits for more than one year. Effective that date, the reserve requirement of 2% is applied to time deposits in domestic currency with a maturity of up to 60 days and to time deposits in foreign currency with a maturity of up to 360 days.
Liquid asset requirementsThe liquid asset requirement is 10% for domestic and foreign exchange deposits. The 10% requirement applies to time deposits in foreign exchange with a maturity of up to 720 days. Time deposits in foreign exchange with maturity of more than 720 days are not subject to any requirements.
Open foreign exchange position limitsThe limit is 80% of the value of the banks’ net worth minus their fixed assets.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadThe maximum limit that pension fund administrators may invest abroad varies between 10% and 50% of the total value of the Individual Capitalization Fund. The specific limit is decided by the CBB. Pension fund administrators may invest abroad through authorized primary and secondary markets.
Other controls imposed by securities lawsNo.
Changes During 2001
Capital transactions
Provisions specific to commercial banks and other credit institutionsNovember 29. A reserve requirement of 2% was applied to time deposits in domestic currency with a maturity of up to 60 days and to those in foreign currency with a maturity of up to 360 days.

Bosnia and Herzegovina

(Position as of January 31, 2002)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Bosnia and Herzegovina is the convertible marka.
Other legal tenderDeutsche mark banknotes and coins (through December 31, 2001; euro banknotes and coins from January 1, 2002) circulate widely in the two constituent entities of Bosnia and Herzegovina.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe convertible marka is pegged to the euro at the rate of KM 1 per €0.51129 (prior to January 1, 2002, the convertible marka was pegged to the deutsche mark at par). The Central Bank of Bosnia and Herzegovina (CBBH) no longer publishes indicative exchange rates for other currencies. The CBBH guarantees unrestricted convertibility of the convertible marka for deutsche mark (through December 31, 2001; euros from January 1, 2002).
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlThere are no foreign exchange controls in place at the state level for transactions in convertible marka.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyYes.
Foreign currencyThere are no limits at the state level on the amount of foreign currency that may be taken across international borders or transferred through bank transactions.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyIndividuals and exporters may hold foreign exchange in accounts with commercial banks and do not need to supply evidence of the source of these funds.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsImports must arrive within 60 days from the date of the advance payment.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Positive listYes.
Negative listThere is no legislated list of prohibited imports, but the Council of Ministers may establish such a list as circumstances require.
Open general licensesYes.
Licenses with quotasYes.
Other nontariff measuresYes.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsExporters have to be authorized to engage in foreign trade. Customs requires that exporters provide documents accompanying the goods; in some cases, documents verifying the origin of the goods are also required.
Export licensesNo.
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 fundsFollowing an agreement with Germany, the CBBH will provide documentation to Germany on pensions from Germany that are being paid by the commercial banks under its jurisdiction to the workers concerned.
Capital Transactions
Controls on capital transactionsSecurities markets participants must be authorized to trade on the organized markets in accordance with laws on security transactions. As of December 31, 2001, however, there were no organized markets.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsOnly prudential regulations on banks apply.
Controls on direct investmentInvestments must be registered.
Inward direct investmentYes.
Controls on liquidation of direct investmentFull repatriation of principal and profits is permitted after compliance with tax laws and settlement of due obligations.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsThe foreign exchange entity law and the banking law regulate these transactions on the level of the entities that constitute Bosnia and Herzegovina.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsThere are controls on stocks, shares, and securities under entity laws.
Changes During 2001
No significant changes occurred in the exchange and trade system.
Changes During 2002
Exchange arrangementJanuary 1. The peg to the deutsche mark was replaced with a peg to the euro at the rate of KM 1 per €0.51129.

Botswana

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 17, 1995.
Exchange Arrangement
CurrencyThe currency of Botswana is the Botswana pula.
Exchange rate structure
DualSome external loans undertaken by parastatals before October 1, 1990, are protected from exchange rate movements under a Foreign Exchange Risk-Sharing Scheme (FERSS). Under the scheme, risks associated with exchange rate fluctuations up to 4% are borne fully by the borrower, while the next 6% and the following 5% of fluctuations are shared between the borrower and the government in ratios of 50:50 and 25:75, respectively. Risks associated with exchange rate fluctuations in excess of 15% are borne fully by the government. The scheme is symmetrical in that the borrower and the government share any gains from an appreciation in the external value of the pula on the same basis. Under the FERSS, borrowers obtain foreign exchange for servicing their external debt at exchange rates that may differ from the market rate by more than 2%. The scheme is to be phased out once the existing loans are fully repaid. No new loans will be issued under this scheme.
Classification
Conventional pegged arrangementThe exchange rate of the pula is determined with reference to a weighted basket of currencies comprising the SDR and the South African rand. The central bank deals in four currencies: the dollar, the South African rand, the euro, and the pound sterling. Foreign exchange bureaus are licensed to deal in foreign currencies on a spot basis only.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange cover is offered by the commercial banks, and the maturity dates of forward exchange contracts/transactions are not restricted.
Official cover of forward operationsYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsResidents are permitted to make payments for goods and services from outside sources using pula-denominated checks, provided that traders outside Botswana are willing to accept their collection by banks outside Botswana. Such transactions are subject to supporting documentation for checks in amounts exceeding P 10,000.
Payments arrangements
Bilateral payments arrangementsBotswana is a signatory to various bilateral trade agreements with the following countries: China, the Czech Republic, the Republic of Korea, Malawi, Romania, Russia, the Slovak Republic, the Federal Republic of Yugoslavia, Zambia, and Zimbabwe.
OperativeYes.
InoperativeYes.
Regional arrangementsBotswana is a member of the SACU, which allows for free import movements and, hence, has no restrictions on trade-related payments to or from SACU countries.
Administration of controlFor practical/operational purposes, several administrative powers of the Bank of Botswana (BOB) have been delegated to commercial banks.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)There are no restrictions on trading or owning precious metals in commercial forms, such as coins, but there are restrictions on possession of unwrought precious metals, such as bullion.
Controls on exports and imports of banknotes
On exports
Domestic currencyA declaration is required for amounts equal to or in excess of P 10,000 at the time of travel.
Foreign currencyVisitors may take out any foreign currency that they legitimately own, subject to completion of a declaration for any amount equal to or greater than the equivalent of P 10,000.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyCommercial banks are authorized to open foreign currency accounts for permanent and temporary residents and for nonresidents. These accounts facilitate foreign receipts and payments for approved transactions, without requiring conversion of foreign currency receipts into pula and vice versa and protection against fluctuations in exchange rates. Commercial banks are authorized to open foreign currency accounts for their customers for any amount in any currency at the discretion of banks.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
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 measuresImport licenses are regulated by customs and excise legislation.
Negative listYes.
Import taxes and/or tariffsAs a member of the SACU, Botswana applies a CET only on imports from outside the SACU.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsFor the following goods, the maximum limits for exports free of payments are: bona fide nonmonetary gifts, P 20,000 a year for a permanent resident; rejected goods, P 100,000 a transaction, subject to provision of documentary evidence; and commercial samples (i.e., goods for exhibitions or other promotional purposes), P 150,000 a transaction.
Financing requirementsn.r.
Documentation requirementsNo.
Export licensesCertain exports are subject to licensing, mainly for revenue purposes. The exportation of a few items, such as precious and semiprecious stones, requires a permit.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related paymentsAuthorized dealers may allow remittances of interim dividends without reference to the BOB for companies listed in the Botswana Stock Exchange (BSE) and may approve other remittances of dividends/profits without reference to the BOB, subject to satisfactory supporting documentation.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsNo controls are placed on the participation of nonresidents in debt instruments issued in the domestic market, except that nonresidents are not permitted to purchase central bank bills (BOB certificates), or any money market instrument, the purpose of which is to mop up excess liquidity in the system.
Sale or issue locally by nonresidentsNonresidents are permitted to issue long-term pula-denominated bonds traded on the BSE, subject to the listing requirements of the exchange.
On money market instruments
Purchase locally by nonresidentsNonresidents are not permitted to purchase the monetary instruments used by the BOB to absorb excess liquidity.
Controls on derivatives and other instrumentsThese controls are subject to the foreign exposure limits of a particular bank.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsn.r.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Loans to nonresident customers are restricted to 25% of the unimpaired capital of a commercial bank, and, in aggregate, loans to nonresidents should not exceed 800% of a bank’s unimpaired capital.
Purchase of locally issued securities denominated in foreign exchangeThese transactions are subject to the listing requirements of the BSE.
Open foreign exchange position limitsPrudential limits are set for exposure per currency and for the overall foreign currency risk exposure. For major dealing currencies, the limit is 15% of a bank’s unimpaired capital and for others, it is 5%. The limit for the overall foreign exchange exposure is 30% of the unimpaired capital of a bank, using the shorthand method.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadInstitutional investors, such as pension funds and life insurance companies, may invest not more than 70% of their assets outside Botswana. This control is imposed by the Registrars of Insurance and Pension and Provident Funds.
Other controls imposed by securities lawsn.r.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Brazil

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article IIIDate of acceptance: November 30, 1999.
Exchange Arrangement
CurrencyThe currency of Brazil is the Brazilian real.
Exchange rate structureUnitary.
Classification
Independently floatingTransactions in the exchange markets are carried out by banks, brokers, tourist agencies, and providers of accommodation for tourists that are authorized to deal in foreign exchange. Brokers and tourist agencies deal only in banknotes, bank drafts, and traveler’s checks. Providers of accommodation for tourists may only buy banknotes, bank drafts, and traveler’s checks.
Exchange taxThe maximum tax on credit, foreign exchange operations, insurance operations, and on transactions in financial instruments or securities (IOF) is limited by law to 25%. A 5% tax is applied to inflows related to external loans with a minimum coverage maturity of up to 90 days. A 2% tax is applied to remittances related to obligations of credit card administration companies to pay for purchases by their clients. The tax is zero for other foreign exchange transactions.
Exchange subsidyNo.
Forward exchange marketBanks are permitted to trade foreign exchange on a forward basis within the statutory limits (bought, sold) of the exchange position; such transactions must be settled within 360 days.
Arrangements for Payments and Receipts
Prescription of currency requirementsPrescription of currency is required only in foreign exchange transactions related to the Brazil-Hungary agreement or the LAIA covenant. These transactions must be made in dollars.
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsn.a.
Payments arrangements
Bilateral payments arrangements
OperativeSettlements with Hungary are made in dollars every 90 days, and interest rates payable on balances are based on those in the international capital market.
Regional arrangementsBrazil is a member of the LAIA.
Clearing agreementsPayments between Brazil and Argentina, Bolivia, Chile, Colombia, the Dominican Republic, Ecuador, Mexico, Paraguay, Peru, Uruguay, and República Bolivariana de Venezuela may be made through special central bank accounts within the framework of the multilateral clearing system of the LAIA.
Administration of controlThe National Monetary Council (NMC) is responsible for formulating the overall foreign exchange policy. In accordance with the guidelines established by the Council, exchange control regulations affecting foreign capital and the management of international reserves are under the jurisdiction of the Central Bank of Brazil (CBB). The Ministry of Planning, Management, and Budget enforces limits on foreign borrowing by the public sector. Foreign trade policy is formulated by the Foreign Trade Chamber, which consists of the Minister of Development, Industry, and Foreign Trade (head); the Minister of the Civil House; the Minister of Finance; the Minister of Budget and Planning; the Minister of Foreign Relations; and the Minister of Agriculture and Supply. Foreign trade policy is implemented by the Secretariat of Foreign Trade (SECEX) and carried out by the Department of Foreign Trade Operations (DECEX). The Department of International Negotiations (DEINT) or the SECEX is responsible for formulating guidelines for tariff policy. The DEINT also decides on changes in customs duties under the provisions of existing legislation. The MOF coordinates public sector import policy.
International security restrictions
In accordance with UN sanctionsThere are restrictions imposed on Iraq, the Taliban, and the UNITA movement in Angola. Restrictions imposed on Libya were lifted on September 20, 2001.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)There are two separate markets for gold transactions: the financial and commercial markets. Transactions that occur in the financial market are regulated by the CBB. The first domestic negotiation of newly mined gold on this market is subject to a 1% financial transactions tax. Rules regarding gold transactions for industrial purposes are defined separately by the federal states, which also establish different rates for the commercial tax levied on them. The CBB and authorized institutions are empowered to buy and sell gold on the domestic and international markets. Purchases of gold are made at current domestic and international prices; the international price is considered a target price.
Controls on domestic ownership and/or tradeYes.
Controls on external tradeThe CBB and authorized institutions may buy and sell gold for monetary use on the international market. Imports and exports of gold for nonmonetary use are subject to the same procedures as those that are applied through the SECEX in respect of other products.
Controls on exports and imports of banknotesTravelers may take out or bring in domestic or foreign banknotes, checks, or traveler’s checks without restriction but must declare to customs any amount over the equivalent of US$10,000.
Resident Accounts
Foreign exchange accounts permittedThese accounts may be held by authorized foreign exchange dealers; tourist agencies not authorized to deal in foreign exchange; Brazilian citizens living abroad; the Brazilian Post Administration; credit card administration companies; companies responsible for the development and execution of projects in the energy sector; and insurance and reinsurance companies and reinsurance brokers.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be held by embassies, foreign delegations, international organizations, foreign transportation companies, foreign citizens in transit in the country, energy companies, Brazilian citizens living abroad, and reinsurance companies.
Domestic currency accountsYes.
Convertible into foreign currencyNatural and juridical persons (financial and nonfinancial institutions) may hold these accounts. Only the resources deposited in nonresident banks or the resources that have entered Brazil through foreign currency sales and have not been withdrawn may be repatriated to foreign countries. These resources continue to be available to nonresidents once they are withdrawn, but only in the national currency.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsExternal financing of imports for periods in excess of 360 days must be registered in the Financial Operations Registry, an electronic system. Financing is considered approved by the CBB if the registration is not refused by its Department of Foreign Capital and Exchange (DECEC) within five days. The time to finalize anticipatory settlements for critical imports is 30 days.
Advance import depositsAdvance deposits are required for imports conducted through the LAIA, except for imports up to US$100,000 from MERCOSUR countries, Bolivia, and Chile.
Documentation requirements for release of foreign exchange for importsAll importers must be registered in the SECEX Importer and Exporter Register. Goods may be imported by firms and persons and must be registered by the CBB, except for imports by the public sector (federal, state, and municipal); imports by PETROBRAS (the Brazilian government oil enterprise) and contracting or subcontracting firms engaged in oil exploration through risk contracts; imports of medicine by individuals up to US$5,000; imports of samples without commercial value, except for pharmaceutical products up to US$1,000; imports of products, except for those prohibited or under special control, by individuals for personal consumption; and imports of goods considered as passengers’ baggage for personal use. The import subsystem of the Integrated Foreign Trade System (SISCOMEX/IMPORT) allows importers, carriers, banks, and brokers to register the various stages of an import process directly through the interlinked computers of SECEX, customs, and the CBB. Imports are grouped into the following three broad categories: (1) imports that do not require prior administrative documentation, including samples without commercial value and certain educational materials; (2) imports that require prior import licenses issued by the SISCOMEX/IMPORT; and (3) prohibited imports. Importers are permitted to purchase foreign exchange in the exchange market within 360 days of the settlement date. There is also a limit on the direct importation and purchase on the domestic market of consumer goods by the public sector (the government, autonomous agencies, and public enterprises).
Domiciliation requirementsRequired for imports originating or proceeding from countries under restrictions determined by the UN Security Council and imports of bovines in any form originating or proceeding from the United Kingdom.
Letters of creditThe drafts or LCs must be settled on maturity against the presentation of the appropriate documents by the importer. Exchange contracts for imports financed under LCs must be closed on the date of settlement or two working days before the maturity date of the LCs.
OtherFederal ministries and subordinate agencies and public enterprises are required to submit for approval by the Ministry of Planning, Management, and Budget an annual investment program specifying their expected import requirements. There is a simplified arrangement for foreign exchange transactions related to imports of small amounts.
Import licenses and other nontariff measuresSome imports require prior approval (i.e., an import license) from the DECEX. This approval is usually given promptly to registered importers of nonprohibited items. As a rule, licenses are valid for 60 days, except for imports of custom-made capital goods. The Secretariat of Federal Revenue issues clearance certificates for certain groups of commodities to special bonded warehouse importers. Import licenses for a number of specified imports may be obtained after the commodities have been landed and customs clearance obtained. The importation of certain products requires approval of the Ministry of Science and Technology. For some products, eligibility for exemption from import duties may be precluded by the existence of a satisfactory domestic equivalent. Most imports are exempt from prior approval requirements. All trade between MERCOSUR partners is liberalized, with the exception of trade in automobiles and sugar.
Negative listImports of agrochemical products not authorized under Brazilian regulations; weapons; and certain drugs that are not licensed for reasons of security, health, morality, or industrial policy are prohibited.
Open general licensesOGLs are no longer issued by the SECEX. Issuance is restricted to their annexes, up to the existing remainder of issued OGLs.
Licenses with quotasIn addition to imports under Brazilian concessions covered by the LAIA agreement, goods imported into the Manaus and Tabatinga free zones are subject to an annual quota. Foreign goods up to the equivalent of US$2,000 imported into the Manaus free trade zone may be transferred to other parts of Brazil (as a passenger’s baggage) free of import taxes. In accordance with WTO rules, quotas are imposed on imports of textiles from China, Hong Kong SAR, Korea, Panama, and Taiwan Province of China due to their effect on the domestic industry. The tariff rate on imports of toys is 25% plus a possible safeguard extension of 15%. For vehicles carrying more than nine persons, the tariff is 65%. For automobiles, transport vehicles, motorcycles, and bicycles, tariffs are 35%, while assemblers established in Brazil may be favored with a special tariff of 17.5%.
Other nontariff measuresSanitation and measurement requirements must be observed.
Import taxes and/or tariffsThe MERCOSUR customs union agreement stipulates a CET ranging from zero to 20% on about 85% of traded goods, and the remaining 15% of goods (including a list of national exceptions, capital goods, and computer goods) are subject to a schedule of adjustments designed to bring them into line with the CET within five or six years.
Taxes collected through the exchange systemForeign exchange transactions related to imports of goods have IOF exemption, and foreign exchange transactions related to imports of services have a tariff of zero.
State import monopolyImports of petroleum and derivatives are conducted by the state.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsProceeds must be surrendered before 180 days from the shipment date or 20 days after receipt of proceeds, whichever comes first.
Financing requirementsAdvances on foreign exchange contracts are allowed for operations with terms up to 360 days.
Documentation requirementsDocumentation includes invoices, international shipment notification, and export registration. There is a simplified arrangement for foreign exchange transactions related to exports up to the equivalent of US$10,000.
Preshipment inspectionInspection is required for commodities subject to standardization.
Export licensesExports of wild animals and their hides, hair, plumes, or eggs in any form; jacaranda-da-Bahia wood; ipecacuanha plants; red and drab varieties of honey; and antiques older than 100 years are prohibited. Exports of certain goods require prior approval of the SECEX, including those effected through bilateral accounts, exports without exchange cover, exports on consignment, reexports, commodities for which minimum export prices are fixed by the SECEX, and exports requiring prior authorization from government agencies. SISCOMEX integrates the activities related to the registration, monitoring, and control of foreign trade operations into a single computerized flow of information. The SISCOMEX comprises two subsystems (exports and imports). The exports subsystem allows exporters, carriers, banks, and brokers to register the various stages of an export process directly through the interlinked computers of the SECEX, customs, and the CBB.
With quotasExports of sawed or cleft pine woods, mahogany, Brazilian walnut, and virola are subject to quotas. For exports of ethyl alcohol and sugar in any form, including sugarcane syrup unsuitable for human consumption, the eligibility for exemption from the export tax of 40% is subject to quotas on the basis of an annual quantity exceeding domestic necessity authorized by the Industry, Trade, and Tourism Minister and the MOF. An annual quota is in place for imports under Brazilian concessions subject to quotas due to agreements with the LAIA member countries and for goods imported into the Manaus and Tabatinga free zones. Foreign goods up to the equivalent of US$2,000 imported into the Manaus free trade zone may be transferred to other parts of Brazil (as a passenger’s baggage) free of import taxes.
Export taxesExports are free from these taxes or are subject to a zero rate duty, with the exception of exports of (1) raw hides, which are subject to an export duty of 9%; (2) cigarettes to Latin America, which are subject to an export duty of 150%; and, effective June 8, 2001, (3) weapons and ammunition to Central America, South America, and the Caribbean, which are taxed at a rate of 150%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for current invisibles not covered by current regulations require approval from the CBB’s DECEC. Indicative limits/bona fide tests apply to all payments for invisible transactions and current transfers.
Trade-related paymentsFor unloading and storage costs there are established rules and surveillance procedures related to the operations freely conducted in the commercial market. Regulations on insurance and reinsurance transactions in foreign currency are set by the National Council on Private Insurance.
Prior approvalYes.
Indicative limits/bona fide testYes.
Investment-related paymentsIn addition to certain restrictions on remittances stipulated in the Foreign Investment Law, limits on income tax deductions are placed on remittances of royalties and technical assistance fees. It has been possible, however, to make payments of interest on own capital. This kind of payment may be deducted from income tax liability to determine the taxable income of companies, subject to a 15% income withholding tax. Profit remittances related to direct investments are exempt from withholding for income tax purposes. Payments due to depreciation of direct investments are not established by the laws and regulations. As a result, remittances abroad from direct investments are treated as dividends, interest on own capital, capital gains, and return (repatriation) of capital.
Prior approvalPayments for medium- and long-term external debt are subject to registration with the CBB’s DECEC, and require an electronic registration (prior to March 1, 2001, a certificate of registration), which is the authorization to remit abroad the related interest, expenses, and fees, provided that due taxes are paid. Profit and dividend remittances are allowed only when the initial foreign capital concerned, including reinvestments, contracts for patents and trademarks, and technical, scientific, and administrative assistance, has been registered with the CBB’s DECEC. These contracts must be registered with the Financial Registration, which is an electronic system.
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Credit card use abroad
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsExchange proceeds from current invisibles must be sold to the authorized banks at the prevailing market rate.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsResidents are allowed to purchase bonds or other debt securities, money market securities, and collective investment securities through dedicated offshore investment funds (FIEX).
Foreign investment funds are organized in the form of open-end mutual funds. Participation is limited exclusively to natural and juridical persons, and to funds and other collective investment entities resident, domiciled, or headquartered in Brazil. Foreign investment funds may be managed by a multipurpose bank, commercial bank, investment bank, brokerage firm, or securities distributor under the supervision and direct responsibility of the manager of the institution.
The minimum share of Brady bonds in FIEX funds is 80%. These securities must be kept abroad in a custodian account in the fund’s name. The fund is authorized to conduct operations in organized derivative markets abroad solely for the purpose of hedging the securities making up the respective portfolio.
Inward and outward transfers of resources through foreign investment funds are subject to registration with the CBB for purposes of monitoring and controlling Brazilian investment, as well as the respective income, investment repatriation, and capital gains. Transfers are processed in foreign currency through the free exchange rate market.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThe direct purchase of shares of Brazilian companies by nonresidents basically occurs through direct investments and portfolio investments made by a nonresident’s representatives in the country. Nonresidents are allowed to purchase shares and other securities listed on the Brazilian stock market. Depositary receipts (DRs) constitute another method of acquiring abroad certificates representing shares of Brazilian companies.
Nonresidents’ representatives in the country are responsible for the registration of foreign investment with the CBB, foreign exchange settlements, the collection of taxes, portfolio bookkeeping, and the safekeeping of documents related to the portfolio.
There is no limit or hold period for financial transfers resulting from inflows, flowbacks, and profits or dividends from capital duly registered with the CBB, provided that the accounting rules and tax laws are complied with. The transfers must be processed through banks authorized to conduct foreign exchange operations, with guaranteed access to the free foreign exchange market to purchase foreign currency.
Natural and juridical persons resident or domiciled in MERCOSUR countries may invest freely in Brazilian stock exchanges without the necessity of trading through investment funds or portfolios. The Brazilian market may be accessed directly by contacting a member institution of the Brazilian securities distribution system, or indirectly through the intermediation of an institution in the securities distribution system of the investor’s country.
The Brazilian intermediary institution, through which the foreign investor trades, represents the investor vis-à-vis the Brazilian authorities with respect to the operational, exchange, and tax aspects, and provides information on the operations executed. These investments may be made in dollars, in the currency of the country of origin of the investment, or in reais. Operations involving the repatriation of capital are exempt from income tax withholding. Earnings from variable-income investments are subject to a 15% income tax withholding. In addition, a 0.38% tax is levied on all inward and outward financial transactions.
Sale or issue locally by nonresidentsThe sale of shares of foreign enterprises in Brazil is regulated essentially for the MERCOSUR environment through share custody certificates or directly. The only way to sell other foreign securities in Brazil is through DRs, which allow the placement of certificates representing these shares in the Brazilian market. Inward and outward remittances associated with investments must be processed through banks authorized to conduct foreign exchange operations in the floating exchange rate market for transactions from MERCOSUR countries and in the free exchange rate market for DR transactions. There are no limits or hold periods for the investments, although authorization is required for DR issues.
Purchase abroad by residentsBrazilian natural and juridical persons may invest only on stock exchanges in MERCOSUR countries. Outside MERCOSUR, Brazilian juridical persons are allowed to purchase DRs issued abroad by companies headquartered in Brazil. Regulations permit employees of firms belonging to foreign economic groups to purchase shares of the main company up to the equivalent of US$20,000 for each employee, for a period of not less than 12 months.
Sale or issue abroad by residentsIn addition to the rules already mentioned governing the purchase of shares on stock exchanges by residents and the specific regulations for MERCOSUR, collective investments may be made through Brazilian investment companies and funds.
Issues of securities abroad by residents are accorded the same treatment as direct external borrowing operations. Thus, exchange contracts involving the entry of foreign currencies must be authorized in advance by the CBB. Fund transfers associated with issues of securities abroad are subject to the conditions of the respective certificates of registration issued by the CBB, the conditions of which are set forth in the contract between the debtor and the creditor.
Bonds or other debt securities
Purchase locally by nonresidentsNonresidents are allowed to purchase bonds or other debt securities through dedicated investment funds.
Sale or issue locally by nonresidentsn.r.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsBonds and some other debt securities may be issued by residents but are subject to registration with the CBB’s DECEC and the issue of a certificate of registration, which is the authorization to remit abroad the related interest, expenses, fees, and amortization of principal, provided that due taxes are paid. Foreign loans of less than 90 days are subject to an IOF of 5%.
On money market instruments
Purchase locally by nonresidentsNonresidents are allowed to purchase money market instruments issued by the central bank through dedicated investment funds.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsResidents are allowed to issue commercial paper subject to registration with the CBB’s DECEC and the issue of a certificate of registration, which is the authorization to remit abroad the related principal and other payments, provided that due taxes are paid.
On collective investment securities
Purchase locally by nonresidentsNonresidents are allowed to purchase collective investments in other securities as well as portfolios of stocks and securities, DRs, conversion funds, privatization funds, real estate investment funds, and emerging enterprises investment funds. The constitution of these funds must be announced in writing to the CBB within a maximum of five days. Funds entering the country are subject to registration with the CBB for purposes of controlling foreign capital and future remittances abroad of cash dividends or bonuses and capital gains realized in the sale of the company’s shares.



Inward and outward remittances associated with investments must be processed through banks authorized to conduct foreign exchange operations and having guaranteed access to the free exchange rate market to purchase foreign currency.
Sale or issue locally by nonresidentsn.r.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsForeign investors have access to derivative markets.
Purchase locally by nonresidentsAny operation by a nonresident investor in derivatives or other future settlements markets may only be performed or registered in stock exchanges, commodities and futures exchanges, or over-the-counter markets organized by an entity authorized by the securities commission or settlement and custody system accredited by the CBB or authorized by the securities commission under their respective jurisdictions. In addition, resident and domiciled natural persons and corporations, including those having their head office abroad; funds; and other entities of foreign collective investment may perform transactions in commodities and futures exchanges involving forwards, futures, and options contracts.
Sale or issue locally by nonresidentsNonresident financial institutions are allowed to issue swaps in the domestic market, subject to constituting the regulatory capital charge against the counterparty credit risk of such operations if they are not guaranteed by a clearinghouse.
Purchase abroad by residentsPrivate sector entities may engage in hedging operations with financial institutions or stock exchanges abroad to protect themselves against the risk of variations in interest rates, exchange rates, and commodity prices. The costs of such operations must conform to the parameters in force in the international market. The CBB may, at its sole discretion, require foreign exchange compensation sufficient to eliminate the effects of operations not in line with the established objective, or executed outside those parameters, without prejudice to other sanctions that may apply. Payments and receipts in foreign currency scheduled or expected to occur in the future in connection with commercial or financial rights or obligations may also be protected by hedging. Hedging operations, however, are subject to the following limits at any time: (1) in interest rate and currency swaps, the operations are limited to the amount of the underlying commercial or financial rights and obligations remaining in foreign currency; and (2) in commodities swaps, open positions are limited to the physical volume of the commodity to be exported, imported, or traded in the domestic market.
Sale or issue abroad by residentsThe regulations governing purchases abroad by residents apply.
Controls on credit operations
Commercial credits
By residents to nonresidentsOnly two forms of credits are permitted: (1) the Exporting Financing Program (PROEX), which is financed with national budget funds—PROEX resources may not be used to establish any facility for foreign public or private entities, insofar as financing is granted on a case-by-case basis and because credit may not be made available to nonresidents for use in several installments spread over a period of time; and (2) the Machinery and Equipment Export Financing Program (FINAMEX), which is operated through agent banks by the Special Agency for Industrial Financing (FINAME). FINAMEX provides funds so that financial institutions (FINAME agents) can grant loans to national exporters at rates and on terms similar to those available to their foreign competitors.
To residents from nonresidentsCommercial credits with terms in excess of 360 days must be authorized by and registered with the CBB’s DECEC.
Prepayment of exports must be authorized by the CBB prior to the entry of the foreign exchange into Brazil. Operations governed by these regulations have a 361-day minimum term and are exempt from income tax and from the taxes on credit, exchange, insurance operations, and securities operations. The CBB authorizes and registers external financing for imports of capital goods, intermediate goods, raw materials, and other goods and merchandise, regardless of the type of importer or the destination of the merchandise, if the operations have a term of at least one year.
In private sector import operations without the direct or indirect surety or guarantee of a public sector entity, the financing terms—interest rate, spread, and down payment—are freely contracted by the parties. In the case of a public sector entity and in cases involving the direct or indirect surety or guarantee of a public sector entity, interest rates may not exceed the LIBOR rate for the reference period plus specified maximum spreads.
Financial credits
By residents to nonresidentsRequests for authorization may be approved by the CBB.
To residents from nonresidentsThe proceeds of financial credits granted to residents must be kept within the country, and the resources must be used for investment in economic activities. Exchange contracts involving the entry of foreign exchange in connection with borrowing must be registered, effective March 1, 2001, in the electronic registration system of the CBB (previously, they were subject to prior CBB approval). Foreign loans of less than 90 days are subject to an IOF of 5%.
Banks may borrow funds abroad to be applied freely in the domestic market.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsGuarantees by nonfinancial juridical persons in credit operations for their foreign subsidiaries are subject to prior authorization by the CBB.
Exchange operations involving financial transfers abroad in the execution of bank sureties and guarantees are carried out exclusively through the floating exchange rate market when such guarantees relate or are linked to (1) imports and other foreign currency operations not covered by certificates issued by the CBB or by a facility; and (2) repatriation of amounts entering the country as advance payment for exports in the event of nonshipment of the goods.
Exchange operations involving financial transfers associated with the execution of payment guarantees for imports, loans, or external financing covered by certificates of authorization or registration issued by the CBB are processed through the free exchange rate market.
To residents from nonresidentsThere are no controls on guarantees provided by nonresidents to residents in connection with foreign capital registered with the CBB, subject to the presentation of a formal statement by the foreign entity furnishing the guarantee. Data concerning the guarantee and the costs incurred in obtaining it are included in the Certificate of Authorization or Registration of the guaranteed operation. If costs are incurred in obtaining the guarantee, the credit operation must be authorized in advance by the CBB.
There are no specific regulations governing other operations. In the event of execution of a guarantee, the beneficiary must arrange for the entry of the corresponding foreign exchange directly through the banking system.
Controls on direct investment
Outward direct investmentBanks authorized to conduct foreign exchange operations may transfer up to US$5 million for each financial group, including all remittances in the last 12 months, and they are basically required to keep on file and make available to the CBB the documents mentioned in regulations. Transfers exceeding the established limit must first be submitted to the CBB no less than 30 days in advance of the exchange contract, regardless of the amount. Exchange operations in which the purchaser of the foreign exchange is an entity belonging to the direct or indirect public administration are subject to prior authorization by the CBB. In this case, remittances must be processed through the free exchange rate market.
Brazilian enterprises may invest in financial institutions abroad through the floating exchange rate market. However, such investments by nonfinancial enterprises require prior approval of the CBB and must meet some specified conditions. Investments abroad by institutions authorized to operate by the CBB must obtain the prior opinion of the CBB’s Department of Financial System Organization and satisfy several conditions, especially with respect to paid-up capital, net assets, time in operation, fixed-asset ratio, and borrowing ceilings.
Inward direct investmentApplications for the registration of foreign direct investment and technology are not subject to prior authorization. Investments in commercial banks are limited to 30% of the voting capital, if there are controls on the operations of Brazilian banks in the markets where their main offices are located. The establishment in Brazil of new branches of financial institutions domiciled abroad is prohibited. Also, any increase in the percentage of equity participation in financial institutions headquartered in Brazil by natural or juridical persons resident or domiciled abroad is prohibited, except for authorizations resulting from international agreements, from reciprocity arrangements, or in the interest of the Brazilian government as expressed by presidential decree.
In the case of highway freight transportation, there are limitations on equity participation of up to one-fifth of the voting capital stock, except for companies established before July 11, 1980, to which different rules apply. In future capital increases by subscription, however, such entities are required to pay up to four-fifths of said increases in ordinary registered shares through national underwriters.
Foreign participation in journalistic and radio and television broadcasting enterprises is prohibited. Direct or indirect equity participation by foreign enterprises or capital in the health care sector in Brazil is also prohibited, except in special cases.
The registration of foreign investment through the verification of patent or trademark rights as a means of paying in capital is subject to prior recording of the deed of transfer or assignment of the rights to use the patent or trademark with the National Institute of Industrial Property, and is limited to the value stated in the latter. The investment is registered in the currency of the country where the beneficiary is domiciled or headquartered, and must be requested from the CBB by the party receiving the investment.
Foreign investments via the contribution of goods without exchange cover are subject to electronic registration with the CBB and authorization by the SECEX. The goods, machinery, or equipment must be used in the production of goods or the provision of services, must have a useful life of more than five years, and must be part of the enterprise’s assets for at least five years.
Investments through currency transfers are not subject to prior authorization. This type of investment may take place through the free exchange rate market to pay up the subscribed capital of enterprises already operating in Brazil, to organize a new enterprise, or to acquire an interest in an existing Brazilian enterprise.
Branches of foreign companies may be opened, subject to the prior issuance of an authorizing decree by the Minister of Development, Industry, and Foreign Trade. A branch is considered an office of a foreign enterprise. Enterprises established in Brazil with any degree of foreign equity participation are not covered by this restriction.
The entry of resources associated with the investment must be processed through a banking institution authorized to conduct foreign exchange operations.
All foreign direct investment must be registered with the CBB’s DECEC through an electronic system.
Controls on liquidation of direct investmentRemittances of proceeds must be processed through banks authorized to conduct foreign exchange operations.
Controls on real estate transactionsNo.
Controls on personal capital transactions
Loansn.r.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsGifts and endowments require the approval of the CBB.
To residents from nonresidentsThere are no controls, but documentary support is required.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsThe beneficiary must prove he or she is leaving Brazil definitely, and certificates of the Secretariat of the Federal Revenue are required.
Transfer into the country by immigrantsThere are no controls, but documentary support is required.
Transfer of gambling and prize earningsRemittances for gambling are not permitted.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadForeign borrowing for terms exceeding 360 days was subject to authorization and registration with the CBB. The CBB required that banks authorized to conduct foreign exchange operations obtain facilities abroad for terms of up to 360 days to extend commercial credit in Brazil.
The National Bank for Economic and Social Development, private investment or development banks, commercial banks authorized to conduct foreign exchange operations, and multipurpose banks with a commercial portfolio (if authorized to conduct foreign exchange operations and holding an investment or development portfolio) were permitted to contract loans abroad to be onlent to enterprises in Brazil by issuing commercial paper. They could also borrow abroad by issuing floating-rate notes, fixed-rate notes, floating-rate certificates of deposit, fixed-rate certificates of deposit, government bonds, and private bonds.
Financial institutions in the National Rural Credit System could borrow abroad to finance costs, investment, or the marketing of agricultural and livestock production.
Banks could raise funds abroad to be onlent to natural or juridical persons to finance the construction or purchase of new real estate. Banks authorized to conduct foreign exchange operations could use facilities contracted for terms exceeding 360 days with banks abroad to finance imports by resident enterprises. The public sector could engage in external credit operations for the settlement of internal debt. The rate of the IOF applied to lending operations in foreign currency was zero.
Banks may borrow funds abroad to be applied freely in the domestic market.
Effective March 1, 2001, registration of credit operation is made through an electronic system.
Lending to nonresidents (financial or commercial credits)There are no legal provisions authorizing banks or credit institutions headquartered in Brazil to grant financial loans to nonresidents or to purchase securities issued abroad for terms exceeding 360 days. This restriction does not apply to the foreign branches of Brazilian banks with regard to commercial credit.
Lending locally in foreign exchangeAll contracts, securities, or other documents, as well as any obligations executable in Brazil that require payment in foreign currency, are null and void. Consequently, banks are prohibited from granting foreign currency loans within Brazil. However, this regulation does not apply to the onlending of external foreign currency loans.
Purchase of locally issued securities denominated in foreign exchangeDomestic operations in foreign currencies are prohibited.
Open foreign exchange position limitsThe following limits are in effect:
(1) Banks authorized to conduct foreign exchange operations may hold long positions of up to US$6 million, including all currencies and all of each bank’s branches. Amounts exceeding this ceiling have to be deposited with the CBB in dollars. The ceiling on banks’ short exchange position is unlimited, provided that the total amount of combined exposure in gold, assets, and liabilities in foreign exchange do not exceed 60% of each bank’s adjusted net worth. Open positions in foreign exchange are not to exceed 60% of capital, and banks must increase capital by 50% of the excess of their open positions over 20% of capital.
(2) For licensed dealers (brokerage firms; securities distributors; and credit, financing, and investment enterprises), the ceiling on the long exchange position is US$500,000, and no short exchange position is allowed.
(3) Licensed tourism agencies may not maintain exchange positions, but they are required to observe the daily operational ceiling (cash) of US$200,000; any surpluses have to be sold to licensed banks or dealers.
(4) Providers of tourist accommodations may have cash holdings in foreign currencies of up to US$100,000 to meet their operational needs; any surplus has to be sold to licensed banks or dealers.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadInstitutional investors may invest up to 10% of their technical reserves in investment fund shares abroad. Private social security agencies may also invest up to 50% of their reserves, together with other investments up to the same ceiling, in shares of open companies, publicly issued convertible debentures, bonds for subscriptions to shares issued by open companies, and certificates of deposit for shares issued by companies headquartered in MERCOSUR countries.
Other controls imposed by securities lawsn.a.
Changes During 2001
Arrangements for payments and receiptsSeptember 20. Pursuant to UN Security Council Resolution 1192, sanctions against Libya were lifted.
Exports and export proceedsJune 8. Exports of weapons and ammunition to Central America, South America, and the Caribbean were made subject to a 150% tax.
Payments for invisible transactions and current transfersMarch 1. Payments for medium- and long-term external debt require electronic registration (previously, a certificate of registration).
Capital transactions
Controls on credit operationsMarch 1. The requirement of CBB approval prior to entering into credit operations was replaced with an electronic system.

Brunei Darussalam

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: October 10, 1995.
Exchange Arrangement
CurrencyThe currency of Brunei Darussalam is the Brunei dollar.
Other legal tenderThe Singapore dollar also circulates.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe Brunei dollar is issued by the Brunei Currency Board (BCB) only against payments in Singapore dollars and at par. Under the terms of a 1967 Currency Interchangeability Agreement (CIA) between the BCB and the Board of Commissioners of Currency of Singapore (BCCS), the Singapore dollar is customary tender in Brunei Darussalam and the Brunei dollar in Singapore. The BCB and BCCS have accepted each other’s currency and have agreed to mutual exchange at par and without charge. They have instructed their banks to do the same with their customers. Any excess Brunei or Singapore currency is repatriated regularly, with the issuing institution bearing the costs, and settlements are made in the other country’s currency. The BCB deals only in Singapore dollars and does not quote rates for other currencies. Banks, however, are free to deal in all currencies, with no restrictions on amount, maturity, or type of transaction.
The Brunei Association of Banks fixes daily buying and selling rates for electronic transfers and sight drafts in 17 other currencies on the basis of the interbank quotations for these currencies in relation to the Singapore dollar. Banks in Brunei Darussalam must apply these rates for transactions with the general public for amounts up to B$ 100,000. Exchange rates for amounts exceeding B$ 100,000 are set competitively by each bank on the basis of the current interbank quotations for the Singapore dollar on the Singapore market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThere is no forward market for foreign exchange in Brunei Darussalam. However, as a result of the CIA, foreign exchange risk may be hedged in terms of Singapore dollars by resorting to facilities available in that country, including foreign currency futures and options traded on the Singapore International Monetary Exchange, over-the-counter forward transactions arranged by banks in Singapore, and the short-term foreign exchange swap market operated among the banks in the Singapore money market.
Arrangements for Payments and Receipts
Prescription of currency requirementsn.a.
Payments arrangements
Regional arrangementsBrunei Darussalam is a member of the ASEAN.
Administration of controlThere are no formal exchange controls, but the MOF retains responsibility for exchange control matters.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeOnly banks licensed to operate in Brunei Darussalam, and gold dealers and jewelers specifically authorized by the MOF may buy and sell gold bars. Gold bars are not subject to import duty, but a 5% duty is levied on the importation of gold jewelry.
Controls on external tradeYes.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThere is no distinction between accounts of residents and nonresidents of Brunei Darussalam.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
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 measures
Negative listA few imports are banned or restricted for environmental, health, safety, security, or religious reasons. Alcoholic beverages may be imported only by nonresident non-Muslims.
Import taxes and/or tariffsSome 70% of items (including basic foodstuffs, construction materials, and educational materials) are exempt from customs duties. Most other goods are subject to tariff rates of 5%, 15%, or 20%. The maximum tariff is 200%. In accordance with the CEPT scheme for the AFTA, Brunei Darussalam will eliminate its tariffs on imports from other ASEAN members by 2003, with the exception of about 120 tariff lines that are permanently excluded from the plan.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsn.a.
Documentation requirementsNo.
Export licensesExport licenses are required for alcoholic beverages, cigarettes, diesel, gasoline, kerosene, rice, salt, and sugar.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThere are indicative limits/bona fide tests for all payments for invisible transactions and current transfers.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related paymentsInterest payments are subject to a 20% withholding tax. Information is not available on the payment of amortization of loans and depreciation of direct investments.
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Credit card use abroad
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentThere are no sectoral controls, but activities relating to national food security and those based on local resources require some degree of local participation. Industries producing for the local market that are not related to national food security and industries that solely export may be fully foreign owned. Joint ventures are particularly encouraged in export-import industries and activities supporting such industries. At least one-half of the directors of a company must be either Brunei citizens or residents of Brunei Darussalam.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsOnly Brunei citizens are allowed to own land. However, foreign investors may lease land on a long-term basis, including sites destined for industry, agriculture, agroforestry, and aquaculture.
Controls on personal capital transactions
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Bulgaria

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: September 24, 1998.
Exchange Arrangement
CurrencyThe currency of Bulgaria is the Bulgarian lev.
Exchange rate structureUnitary.
Classification
Currency board arrangementAn amendment to the Law on the Bulgarian National Bank (BNB) effectively established a currency board arrangement. The deutsche mark was chosen as the peg currency, which has since been replaced with the euro at the rate of lev 1.95583 per €1. The BNB is required to buy and sell on demand and without restriction currencies of EU member countries for leva on the basis of spot exchange rates that may not differ from the official exchange rate by more than 0.5%.
Exchange taxYes.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsBalances remain on clearing accounts maintained under former bilateral arrangements. These arrangements are now inoperative, and the only transactions that take place on clearing accounts are those that are intended to settle the balances. Valuation and settlement of the balances take place in convertible currencies.
Controls on the use of domestic currency
For current transactions and paymentsYes.
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsNo.
Credit operationsYes.
Payments arrangements
Bilateral payments arrangements
InoperativeThere are arrangements with Albania, Cambodia, Guinea, the People’s Democratic Republic of Korea, the Lao People’s Democratic Republic, Romania, and the Syrian Arab Republic. Bulgaria has outstanding transferable ruble accounts with Cuba, Mongolia, and Romania. The settlement of the debit balance with Romania is under negotiation.
Regional arrangementsBulgaria is a member of the CEFTA.
Barter agreements and open accountsThere are inactive agreements with the Islamic State of Afghanistan, Ethiopia, Ghana, Guyana, Mozambique, Nicaragua, and Tanzania.
Administration of controlForeign exchange control is exercised by the MOF, the BNB, the customs administration, and the postal authorities.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
Payments arrears
PrivateFour commercial banks that are in bankruptcy have outstanding debt-service arrears.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents carrying out extracting, processing, or other transactions involving precious metals and stones as their business activity are obliged to register with the MOF within 14 days of starting their activity. These activities are included in the banking licenses of commercial banks.
Controls on external tradeResidents carrying out external trade transactions with precious metals and stones are obliged to register with the MOF within 14 days of starting their activity. Natural persons may export and import freely precious metals and stones for personal use after declaring them to the customs authorities. All amounts exceeding personal use are subject to the trade provisions of the Customs Law.
The export and import of precious metals and stones by mail are prohibited. This prohibition does not apply to the BNB and the commercial banks.
Controls on exports and imports of banknotes
On exportsResidents and nonresidents may export domestic or foreign currencies without a declaration if the amount is less than lev 5,000. Exports of amounts between lev 5,001 and lev 20,000 must be declared; nonresidents must also declare the origin of the funds. In the case of exports exceeding lev 20,000, residents must obtain a permit from the BNB, while nonresidents may export the currency after declaration, provided the amount does not exceed the imported and declared sums. In other cases, BNB permission is required.
Domestic currencyYes.
Foreign currencyYes.
On importsResident and nonresident natural persons may import unlimited amounts of domestic and foreign currency. Amounts exceeding lev 5,000 must be declared to customs.
Domestic currencyYes.
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents may maintain these accounts in Bulgaria. Balances on these accounts earn interest at international market rates. The crediting and debiting of up to lev 5,000 in foreign currency accounts are not subject to any regulations. Transfers abroad may be made only by commercial banks after declaring, for statistical purposes, the reason for the transfer. For payments abroad, the declaration must be submitted on the same day; for receipts, within 10 days after the date of the bank statement. In cases where amounts exceed lev 20,000, the transferor must submit documentation as prescribed in BNB regulations. If the transfer is related to transactions for which BNB registration is needed, the commercial bank will verify the registration with the BNB.
Held abroadApproval is not required, but prior registration with the BNB is necessary in order for a resident to make a payment from Bulgaria to a personal account in a nonresident bank.
Accounts in domestic currency held abroadApproval is not required, but prior registration with the BNB is necessary in order for a resident to make a payment from Bulgaria to a personal account in a nonresident bank.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThe crediting and debiting of these accounts in amounts less than the equivalent of lev 20,000 are not subject to any regulations. However, transactions exceeding the equivalent of lev 20,000 are subject to BNB approval.
Approval requiredYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
OtherYes.
Import licenses and other nontariff measures
Negative listImports of certain goods (dangerous substances with ozone-depleting potential, machinery and equipment for air conditioning using Freon 12, refrigerators, freezers, and other equipment using Freon 11 or 12) are banned for health and security reasons.
Other nontariff measuresA registration regime is in effect that applies to natural gas and scrap, in addition to goods previously covered under nonautomatic licensing, such as narcotics, arms, and nuclear weapons. Licenses are required for imports of military hardware and related technologies, natural gas, endangered flora and fauna, radioactive and nuclear materials, pharmaceuticals, herbicides, pesticides, unbottled alcohol, jewelry, rare and precious metals, asbestos, asbestos products, narcotic and psychotropic products, and gambling machines.
There are free trade arrangements with Turkey and the former Yugoslav Republic of Macedonia.
Import taxes and/or tariffsImport tariffs range from zero to 74% and are calculated on a transaction-value basis in foreign currency and converted to leva. The maximum rate of import tariffs for non-agricultural goods is 30%, and for agricultural goods it is 74%. Certain products are allowed temporarily to be imported without customs duties within specified quantities (active substances for the production of insecticides, fungicides, and herbicides; some agricultural machinery and their spare parts; flour; and live breeding animals). Other products are allowed temporarily to be imported without customs duties (equipment; spare parts; information technology products; chemicals for environmental and emissions control; special installations for recovery of poisoned lands; substances, materials, and equipment for replacement of ozone-depleting technologies; equipment, machines, and spare parts used in mines and geological research activities; installations, equipment, and spare parts for production of energy from nontraditional alternative sources; and medical equipment for human and veterinary medicine). The arithmetic mean tariff for all products is 15.2%.
The 2001 Customs Tariff, which entered into force on January 1, 2001, reduced the simple unweighted average level of Bulgaria’s MFN tariffs to 12.4% from 13.7%. The average tariff for industrial goods was reduced to 10% from 11% and that of agricultural products to 22% from 24%. The number of tariff bands was also reduced to 22 from 25.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports must be repatriated.
Surrender requirementsProceeds do not have to be surrendered; they may be retained in foreign currencies or sold in the interbank exchange market.
Financing requirementsNo.
Documentation requirementsExports of gold, silver, platinum and articles thereof; solutions containing precious metals; electronic scrap and other products containing precious metals; precious stones; and some varieties of wood must be registered with the Ministry of Trade and Tourism.
Letters of creditYes.
Export licensesSpecial licenses are required for the settlement of outstanding balances of multilateral clearing arrangements. Export licenses are required for exports of military hardware and related technologies, endangered flora and fauna, wild plants and animals, livestock, radioactive materials, crafts and antiques, seeds, untreated wood, jewelry, and rare and precious metals. Licenses are normally granted within two working days. There are free trade arrangements with Turkey and the former Yugoslav Republic of Macedonia.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related payments
Indicative limits/bona fide testPayments abroad for trade purposes that exceed lev 20,000 are processed by banks against the documents required in Regulation No. 28 of the BNB.
Investment-related payments
Indicative limits/bona fide testPayments abroad for trade purposes that exceed lev 20,000 are processed by banks against the documents required in Regulation No. 28 of the BNB.
Personal paymentsThese remittances are not restricted if the amount is less than lev 20,000. Above that limit, documentary evidence is required.
Indicative limits/bona fide testYes.
Foreign workers’ wagesForeign workers’ wages may be transferred abroad, provided taxes have been paid.
Other paymentsThese payments are not restricted if the amount is less than lev 20,000. Above that limit, documentary evidence is required.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsExcept in cases specified by the Foreign Exchange Law (e.g., Articles 4(3) and (4)) and its supplementary provisions, prior registration with the BNB is required for transfers related to the following transactions between residents and nonresidents: (1) transactions with money market securities issued by nonresidents; capital market securities issued by nonresidents; shares in nonresident companies; and all derivatives from the above-mentioned investments; (2) granting of financial credit between residents and nonresidents; (3) opening of deposit accounts of residents with nonresident banks; and (4) provision of collateral by residents to secure obligations between nonresidents or obligations of residents taken up toward nonresidents.
Controls on capital and money market instruments
On capital market securitiesRegistration with the BNB is required when these are issued by nonresidents or purchased abroad by residents.
On money market instrumentsRegistration with the BNB is required when these are issued by nonresidents or purchased abroad by residents.
On collective investment securitiesRegistration with the BNB is required when these are issued by nonresidents or purchased abroad by residents.
Controls on derivatives and other instrumentsRegistration with the BNB is required when these are issued by nonresidents or purchased abroad by residents.
Controls on credit operations
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
Controls on direct investmentPrior registration with the BNB is required when a resident acquires equity participation in a nonresident juridical person and is eligible to exercise up to 20% of the voting power at a shareholder meeting. Registration in not required for investments in amounts up to lev 20,000. For investments exceeding this limit, the appropriate documents must be submitted to a domestic bank.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsFor purchases exceeding lev 20,000, the appropriate documents must be submitted to a domestic bank.
Purchase locally by nonresidentsPrior permission of the MOF is required. Nonresidents may not purchase or own land. If they inherit land, they must dispose of it within a three-year period.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadPrior registration with the BNB is required if the bank is licensed to carry out only domestic transactions.
Maintenance of accounts abroadPrior registration with the BNB is required if the bank is licensed to carry out only domestic transactions.
Open foreign exchange position limitsEffective January 1, 2001, each bank is required to observe daily (1) a maximum ratio of up to 15% between its open position in any particular currency and the amount of its own funds, excluding the euro and the currencies of the EMU countries; and (2) a maximum ratio of up to 30% between its net open foreign currency position and the amount of its own funds, excluding the euro and the currencies of the EMU countries.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2001
Imports and import paymentsJanuary 1. The 2001 Customs Tariff came into effect, reducing (1) the simple unweighted average level of Bulgaria’s MFN tariffs to 12.4% from 13.7%; (2) the average tariff for industrial goods to 10% from 11% and that of agricultural products to 22% from 24%; and (3) the number of tariff bands to 22 from 25.
Capital transactions
Provisions specific to commercial banks and other credit institutionsJanuary 1. Each bank was required to observe daily (1) a maximum ratio of up to 15% between its open position in any particular currency and the amount of its own funds, excluding the euro and the currencies of the EMU countries; and (2) a maximum ratio of up to 30% between its net open foreign currency position and the amount of its own funds, excluding the euro and the currencies of the EMU countries.

Burkina Faso

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Burkina Faso 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 655.957 per €1. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris foreign exchange market and the fixed rate between the euro and the CFA franc.
Exchange taxThere is a symmetrical bank commission of 0.25% on transfers to all countries outside the WAEMU that must be surrendered in its entirety to the treasury. In addition, banks are allowed to charge an exchange commission of up to 2% on over-the-counter exchange for French francs (through December 31, 2001; euros from January 1, 2002).
Exchange subsidyNo.
Forward exchange marketResidents are authorized to contract forward exchange cover to effect payments related to imports and exports of goods and services.
Arrangements for Payments and Receipts
Prescription of currency requirementsBurkina Faso is linked to the French Treasury through an Operations Account; therefore, settlements with France, Monaco, and other Operations Account countries (WAEMU and CEMAC members and the Comoros) are made in CFA francs, euros, or the currency of any other Operations Account country. Certain settlements are channeled through special accounts. Settlements with all other countries are usually effected through correspondent banks in France in the currencies of those countries or in euros through foreign accounts in euros.
Use of foreign exchange among residentsResidents must surrender all foreign exchange earned abroad or domestically to an authorized intermediary bank within eight days of receipt.
Payments arrangements
Bilateral payments arrangements
InoperativeYes.
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. 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 agreementsA multilateral clearing agreement exists within the framework of the WAMA between WAEMU members, Cape Verde, The Gambia, Ghana, Guinea, Liberia, Mauritania, Nigeria, and Sierra Leone.
Administration of controlExchange control is administered jointly by the MOF and the BCEAO. Most of the authority to supervise foreign exchange transactions is delegated to authorized banks, which are required to report these operations to the MOF. The only operations that require prior approval from the MOF or the BCEAO involve residents’ investments abroad, domestic accounts in foreign exchange, and resident accounts abroad. The BCEAO is also authorized to collect—either directly or through banks, financial institutions, the postal administration, or judicial agents—any information necessary to compile balance of payments statistics.
No supporting documents are required for transfers of up to CFAF 300,000.
International security restrictionsNo.
Payments arrears
OfficialRestructuring of arrears to Libya is in progress. Arrears owed to FSU countries were restructured in 1999.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold require prior MOF authorization. Exempt from this requirement are (1) imports by or on behalf of the Treasury or the BCEAO; (2) imports of manufactured articles containing minor quantities of gold (such as gold-filled or gold-plated articles); and (3) imports by travelers of gold objects up to a combined weight of 500 grams. Both licensed and exempt imports of gold are subject to customs declaration. Exports of gold are liberalized.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of CFA franc banknotes by nonresident travelers is not prohibited. However, repurchases by the BCEAO of exported banknotes are still suspended. In addition, shipments of BCEAO banknotes among authorized intermediaries and their correspondents situated outside the WAEMU are officially prohibited.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers is allowed up to the equivalent of CFAF 500,000; the reexportation of foreign banknotes above this ceiling requires documentation demonstrating either the importation of the foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposit accounts in local banks.
On imports
Domestic currencyThere are no restrictions on the importation by resident or nonresident travelers of banknotes and coins issued by the BCEAO.
Foreign currencyResidents and nonresidents may bring in any amount of foreign banknotes and coins (except gold coins) of countries outside the Operations Account area. Residents bringing in foreign banknotes and foreign currency traveler’s checks exceeding the equivalent of CFAF 300,000 must declare them to customs upon entry and sell them to an authorized intermediary bank within eight days.
Resident Accounts
Foreign exchange accounts permittedResidents are allowed to open foreign exchange accounts with local banks or with banks abroad after obtaining authorization from the MOF, subsequent to the approval of the BCEAO.
Held domesticallyThese accounts may be held domestically, but prior approval is required.
Held abroadThe opening of accounts abroad by residents is subject to the prior authorization of the MOF, subsequent to the approval of the BCEAO.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are allowed to open these accounts, but BCEAO authorization is required.
Domestic currency accountsEffective January 1, 2001, nonresidents are no longer allowed to maintain these accounts.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions from outside of the CFA-franc zone exceeding CFAF 5 million must be effected through an authorized bank.
Preshipment inspectionAn inspection is required to monitor quality and price.
Import licenses and other nontariff measures
Positive listImport licenses were eliminated and replaced with preimport declarations issued for all import operations valued at CFAF 500,000 and above.
Negative listImports of ivory and fishing nets with a mesh smaller than three square centimeters are restricted.
Other nontariff measuresA technical import visa (certificat de conformité) is required for sugar, insecticides, wheat and cereal flour, tires and inner tubes for motorcycles, vegetable oil, milk, electrical batteries, food preserves, and rice. The Ministry of Commerce and the Promotion of Ventures and Crafts (until November 12, 2000, this was called the Ministry of Industry, Commerce, and Crafts) may, on the basis of criteria established by the MOF, waive the prescribed formalities for imports from countries with which Burkina Faso has concluded a customs union or free trade-area agreement.
Import taxes and/or tariffsThe CET of the WAEMU consists of four rates (zero, 5%, 10%, and 20%). Imports are also subject to a statistical tax of 1% and a communal solidarity levy of 1%. A temporary protection tax of 15% (in certain cases 7.5%) may be levied on products upon the authorization of the WAEMU commission, if the effective protection rate has declined by more than 50%.
All imports from outside the ECOWAS are subject to a communal solidarity levy of 1%, and imports of certain goods that are also locally produced are subject to a protection tax ranging from 10% to 30%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to WAEMU countries are excluded from the repatriation requirement.
Surrender requirementsExport proceeds must be surrendered within one month of the date on which payments fall due. The authorized intermediary banks must then surrender such foreign exchange to the BCEAO via transfer through the bank of issue.
Financing requirementsNo.
Documentation requirements
DomiciliationAll export transactions of more than CFAF 5 million, except those between WAEMU countries, must be domiciled with an authorized intermediary bank.
Export licensesExport licenses were eliminated and replaced with preexport declarations issued for exports valued at CFAF 500,000 and over. Exports of gold, diamonds, and all other precious metals are subject to MOF authorization. Exports of ivory are subject to special regulations.
Export taxes
Other export taxesMost exports are subject to a customs stamp tax of 6% and a statistical duty of 3%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersTransfers not exceeding CFAF 300,000 do not require supporting documents. Residents are required to pay through a licensed intermediary.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalPayments for the depreciation of direct investments require the approval of the MOF, since depreciation is not specifically mentioned in the regulations.
Indicative limits/bona fide testThere are no indicative limits or bona fide tests for the transfer of profits and dividends.
Payments for travel
Indicative limits/bona fide testAllowances in excess of the equivalent of CFAF 2 million in foreign banknotes must be exported in the form of traveler’s checks, bank drafts, or other means of payment.
Personal payments
Indicative limits/bona fide testPayments for medical costs and studies abroad are granted upon submission of supporting documentation to authorized banks.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions with non-WAEMU member countries must be repatriated.
Surrender requirementsAll proceeds from invisible transactions with non-WAEMU member countries must be surrendered to an authorized dealer within one month of the due date. Resident travelers must declare to customs any foreign means of payment in excess of CFAF 300,000 that they bring in and must surrender these to an authorized bank within eight days of their return.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsAll investments abroad by residents require prior MOF authorization, and at least 75% of the financing of such investments must originate from borrowing abroad. Authorization is not required to buy securities issued in WAEMU member states under RCPSFM authorization.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThese transactions require the prior authorization of the RCPSFM. The issuance and sale of securities in Burkina Faso must be declared to the MOF for statistical purposes.
Purchase abroad by residentsThe purchase of foreign securities by residents and the transfer abroad of funds for this purpose are subject to the prior authorization of the MOF.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Controls on derivatives and other instrumentsThese instruments, which are virtually nonexistent in Burkina Faso, are governed by the regulations generally applicable to securities and investments. Residents may purchase freely commodity and security call and put options abroad.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsThere are no controls on credits related to exports of goods, provided that the date on which payment falls due is not more than 120 days after the date of shipment. The transfer of funds abroad for this purpose is subject to prior MOF authorization.
To residents from nonresidentsThere are no controls, and repayments of commercial credits are generally approved, subject to the presentation of documents attesting to the validity of the commercial operation or of the services rendered, as well as the payment due date.
Financial credits
By residents to nonresidentsThese credits require prior approval from the MOF. Outward transfers necessary to service such facilities require an exchange authorization, subject to the approval of the BCEAO acting on behalf of the MOF and substantiated by documentation.
To residents from nonresidentsThere are no controls on these credits, but they must be reported for statistical purposes. The necessary funds must be transferred from abroad through an authorized agent. There are no controls on repayments of loans, provided that the authorized agent handling the settlement is furnished with documentation attesting to the validity of the transaction.
Guarantees, sureties, and financial backup facilitiesThe regulations governing financial credits apply.
By residents to nonresidentsYes.
To residents from nonresidentsThere are no controls on the granting of these facilities; however, the funds involved must be transferred from abroad through an authorized intermediary.
Controls on direct investment
Outward direct investmentAll investment abroad by residents is subject to the prior authorization of the MOF. A maximum of 75% of such investments may be financed by foreign loans. Authorization is not required for purchases of foreign securities whose issuance or offering for sale in WAEMU member countries has been authorized by the RCPSFM.
Inward direct investmentInward investments must be reported for statistical purposes.
Controls on liquidation of direct investmentThe liquidation of investments abroad must be reported to the MOF for statistical purposes. Reinvestment of the proceeds from the liquidation is subject to prior MOF authorization. If reinvestment is not authorized, the proceeds from the liquidation must be repatriated within one month through an authorized intermediary. The sale of foreign investments in Burkina Faso is unrestricted but must be reported to the MOF for statistical purposes.
Controls on real estate transactions
Purchase abroad by residentsInvestments abroad by residents require prior authorization from the MOF. The investor must make the request in writing and designate the authorized intermediary that will execute the payment. Whether the payment is made by an outward transfer of funds or by deposit to a foreign exchange account in CFA francs, it cannot be executed until after the period agreed to by the parties.
Controls on personal capital transactions
LoansThe regulations governing securities and investments apply.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsIn general, inheritances and dowries are authorized; endowments require prior approval.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsImmigrants who have acquired resident status must obtain prior approval from the MOF to settle debts incurred abroad when they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsThese transfers are subject to the prior authorization of the MOF.
Transfer into the country by immigrantsThis requires authorization of the MOF.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutionsThe regulations governing lending to nonresidents apply.
Borrowing abroadAuthorized agents are free to borrow from abroad.
Maintenance of accounts abroadBanks and financial institutions are authorized to open accounts with their correspondent banks for settling transactions for their own account or the account of their customers. However, banks are not authorized to hold amounts in these accounts that exceed their current requirements.
Lending to nonresidents (financial or commercial credits)There are no controls if these operations involve commercial credits. Prior authorization from the MOF is required for financial credits.
Lending locally in foreign exchangeThere are no regulations that apply specifically to these transactions. However, prior MOF approval is required.
Purchase of locally issued securities denominated in foreign exchangeThese purchases require the prior approval of the RCPSFM.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidentsMonetary regulations make no distinction between resident deposit accounts, nonresident deposit accounts, and foreign deposit accounts.
Investment regulationsThe regulations governing foreign investments apply.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThere are no prudential ratios. Open positions result from special dispensations.
Provisions specific to institutional investorsControls are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.
Other controls imposed by securities lawsNo.
Changes During 2001
Nonresident accountsJanuary 1. Nonresidents were no longer allowed to maintain domestic currency accounts.

Burundi

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Burundi is the Burundi franc.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateUnder a foreign exchange auction system, the Bank of the Republic of Burundi (BRB) sells foreign exchange weekly to authorized dealers. At the end of each weekly session, a market exchange rate is obtained that serves as a reference rate for determining the buying and selling exchange rates.
Foreign exchange bureaus are allowed to operate officially in the foreign exchange market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketn.r.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements relating to trade with the Democratic Republic of the Congo and Rwanda in products specified in the commercial agreements with these countries are effected through a clearing process, with balances paid in convertible currencies. Nonresidents staying in a hotel or guesthouse in Burundi must pay their hotel bills by selling convertible currencies or by using a credit card. Payment in Burundi francs is, however, acceptable in the case of guests for whom a resident company or individual has assumed responsibility with prior authorization from the BRB and in the case of nationals of the Democratic Republic of the Congo and Rwanda, who produce declarations of means of payment issued under the auspices of the CEPGL.
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsn.a.
Payments arrangements
Bilateral payments arrangements
OperativeThere are trade agreements with the Democratic Republic of the Congo and Rwanda. These agreements are not fully operational due to the unfavorable economic situation.
Regional arrangementsRegional agreements exist with Eastern and Southern African countries.
Clearing agreementsClearing agreements exist with members of COMESA and CEPGL.
Administration of controlControl over foreign exchange transactions and foreign trade is vested in the BRB; authority to carry out some transactions is delegated to authorized banks.
International security restrictionsNo.
Payments arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeNatural juridical persons holding gold mining permits issued by the ministers responsible for mining and customs may open purchasing houses for gold in transit or mined by artisans in Burundi. Gold produced by artisans may be sold only to approved houses.
Controls on external tradeExports of gold must be declared in Burundi francs at the average daily rates in effect at the time of declaration. Gold exports are authorized jointly by the mining and customs departments.
Controls on exports and imports of banknotes
On exports
Domestic currencyAll travelers may take out up to FBu 5,000.
Foreign currencyA license is required for anyone not holding a foreign exchange account.
On imports
Domestic currencyTravelers may bring in up to FBu 5,000.
Foreign currencyTravelers may bring in any amount of foreign currency quoted by the BRB in addition to traveler’s checks.
Resident Accounts
Foreign exchange accounts permittedThe regulation pertaining to foreign exchange bureaus and foreign exchange accounts authorizes resident natural persons or legal entities to open foreign exchange accounts with local banks. Foreign exchange accounts may be credited freely. Withdrawals of Burundi francs are unlimited. An airline ticket or other travel document is required for withdrawals of foreign exchange in the form of banknotes, traveler’s checks, or checks up to the equivalent of $5,000 an operation. Supporting documentation is required for transactions involving payments for imports of goods and services, withdrawals of banknotes, traveler’s checks, or checks in excess of the equivalent of $5,000. Foreign exchange accounts may bear interest freely.
Held domesticallyAuthorized banks may freely open foreign exchange accounts, but must forward copies of relevant documents to the BRB.
Held abroadPrior BRB authorization is required to open these accounts.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedAny nonresident natural or juridical person may open a foreign exchange account in an authorized bank. Nonresident foreign exchange accounts may be debited and credited freely. These accounts may bear interest freely. Amounts of less than or equal to $5,000 may be withdrawn in banknotes on presentation of travel documentation.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance import depositsAdvance import deposits have been suspended since 1999.
Documentation requirements for release of foreign exchange for importsImport and payment declarations for items that are eligible or ineligible for foreign exchange must be validated by a commercial bank. BRB approval is required in the case of waivers. All goods imported into Burundi must be insured by approved Burundi insurers, and premiums must be paid in Burundi francs.
Preshipment inspectionAll consignments of imports exceeding $5,000 c.i.f. in value may, in principle, be subject to preshipment inspection with regard to quality, quantity, and price by an international supervising and oversight organization on behalf of the Burundi authorities. This organization will also determine the value of goods used in the assessment of duty.
Letters of creditThere is no obligation to settle import transactions by LCs, since other payment methods are also permitted.
Import licenses used as exchange licensesThis applies to imports of goods exceeding $5,000 in value.
Import licenses and other nontariff measuresFor imports of goods exceeding $500,000 in value, an international call for bids is required before the validation of the license.
Positive listA list of products eligible for foreign exchange has been drawn up in agreement with the World Bank and the BRB. The import of products not on the list is, however, also authorized. The distinction is in the financing, as products eligible for foreign exchange are financed by foreign exchange acquired on the market, while the other products are financed by the commercial banks’ own holdings.
Negative listImports of 100% cotton, printed cloth (pagne) are forbidden.
Open general licensesYes.
Import taxes and/or tariffsBurundi is a member of the COMESA. There are five customs duty bands (10%, 12%, 15%, 40%, and 100%) applied to imports from countries not belonging to COMESA. Imports of petroleum products are subject to duties ranging from 6% to 40%. A 6% service tax, which replaced the statistical tax, is levied on the c.i.f. value of imports, in addition to any applicable customs duties and fiscal duties. A flat-rate profits tax of 4% is applied to all imports.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExport proceeds must be collected within 30 days of the date of export declaration at customs for shipment by air or within 90 days for all other shipments. Deadlines for the collection of proceeds from exports of nontraditional products are set by the commercial bank carrying out the operation.
Surrender requirementsOnly proceeds from exports of coffee, tea, and cotton are required to be surrendered to the BRB.
Financing requirementsNo.
Documentation requirementsA validation of the export declaration by a commercial bank is required.
Letters of creditYes.
GuaranteesYes.
Export licenses
Without quotasYes.
Export taxesTaxes are levied on a range of exports. The generally applicable rate is 5%. For green coffee, the rate is set each crop season. The export tax on all other types of coffee is 31%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAll payments for invisibles require approval. Foreign exchange bureaus are authorized to administer payments for invisible transactions.
Trade-related paymentsShipping insurance on coffee exports normally must be taken out in Burundi francs with a domestic insurer.
Prior approvalYes.
Indicative limits/bona fide testUnloading and storage costs are limited to amounts indicated by the invoice.
Investment-related paymentsPrivate joint-stock companies may transfer 100% of the return on foreign capital and of the profits distributed to foreign directors after payment of taxes. Airlines are authorized to transfer abroad 100% of their earnings after deduction of local expenses. Transfer of rental income is permitted (after payment of taxes and a deduction of 20% for maintenance expenses). Transfers of income from rents and transfers of profits and dividends are suspended.
Prior approvalYes.
Indicative limits/bona fide testInformation is not available on payments of interest.
Payments for travelCommercial banks and the BRB grant foreign exchange for private and public travel, respectively.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal paymentsCommercial banks grant foreign exchange for personal payments within the limits of their available foreign exchange. Pension transfers are effected through the Social Security Institute.
Prior approvalYes.
Quantitative limitsThe limit for medical costs is set at the equivalent of $2,000. Allowances for studies abroad are authorized on a case-by-case basis.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsUpon presentation of evidence of payment of taxes, foreign nationals residing and working in Burundi are permitted to transfer abroad up to 70% of their net annual income (80% in the case of foreign nationals working for companies that export at least 50% of their production).
Indicative limits/bona fide testA work contract is required.
Other payments
Prior approvalYes.
Quantitative limitsConsulting and legal fees are limited to amounts indicated by invoices.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsYes.
Capital Transactions
Controls on capital transactionsCapital transfers abroad by residents require individual authorization.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThe purchase must be effected in foreign exchange.
Purchase abroad by residentsYes.
Bonds or other debt securities
Purchase abroad by residentsYes.
On money market instruments
Purchase abroad by residentsBRB authorization is required.
Controls on derivatives and other instrumentsn.r.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
Controls on direct investment
Outward direct investmentThe provision of foreign exchange for outward direct investments is suspended. Even with the emergence of the free foreign exchange market, banks are not authorized to sell foreign exchange for outward direct investments.
Inward direct investmentYes.
Controls on liquidation of direct investmentTransfers of foreign capital on which a repatriation guarantee has been granted do not require individual authorization.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsPurchases must be effected in foreign exchange.
Sale locally by nonresidentsTransfer of the proceeds from the sale of real estate is suspended unless the purchaser is the holder of an adequately funded foreign exchange account.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsBRB approval is required.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer into the country by immigrants
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBRB approval is required.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidents
Credit controlsDebit balances are not permitted on foreign exchange accounts.
Investment regulations
Abroad by banksPrior approval of the BRB is required.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsn.a.
Changes During 2001
No significant changes occurred in the exchange and trade system.

Cambodia

(Position as of February 28, 2002)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: January 1, 2002.
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.
Payments 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 restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On February 19, 2002, Cambodia notified the IMF that banks had been instructed to freeze any transfers of capital and assets of certain individuals and to freeze funds and other financial assets of terrorists and terrorist organizations pursuant to UN Security Council Resolutions 1267 and 1373, respectively.
In accordance with UN sanctionsYes.
Payments 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 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 regulations pertaining to exports of banknotes apply.
Domestic currencyYes.
Foreign currencyThere are no limits, but imports exceeding $10,000 or its 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. All transactions may be settled in foreign currency.
Held abroadn.r.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedRegulations applied to residents also apply to nonresidents.
Domestic currency accountsThere are no laws prohibiting these accounts.
Convertible into foreign currencyNo.
Blocked accountsAccounts belonging to persons and/or organizations known to be associated with terrorist activities are blocked.
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 may 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 must be credited to the exporter’s account with the domiciled bank in accordance with the existing law.
Preshipment inspectionPreshipment inspection is aimed at establishing the veracity of the import transaction in terms of volume, quality, and price.
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 and excise taxes are levied on selected imports.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExport proceeds must be transacted through authorized domiciled banks.
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
DomiciliationExport proceeds 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 and logs.
With quotasExports of garments, gems, and rice to the United States and all exports of sawed timber are subject to quotas. 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 and investments are not restricted, but they must be effected through authorized banks.
There is no restriction on travelers purchasing foreign exchange in the foreign exchange markets, but exports of banknotes exceeding $10,000 or its equivalent in foreign or domestic currency must be declared to customs.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsThe proceeds from exports of services must be credited to the exporter’s account with a domiciled bank, in accordance with existing laws.
Surrender requirementsOnly proceeds from invisibles earned by state-owned enterprises must be surrendered.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsThere are no securities markets in Cambodia, and there are no specific laws on capital market securities.
On capital market securitiesn.r.
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 banks.
Controls on direct investment
Outward direct investmentThere are no specific laws regarding approval, and capital transfers relating to investment abroad are not restricted. However, transactions involving $100,000 or more require prior declaration to the NBC.
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 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 transactions
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.
Transfer of assetsThese transactions must be effected through authorized banks.
Provisions specific to commercial banks and other credit institutionsAuthorized banks 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
Credit controlsBanks are required to maintain at all times a maximum ratio of 20% between their overall exposure resulting from their operations with each individual beneficiary and their net worth.
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 their 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 2001
No significant changes occurred in the exchange and trade system.
Changes During 2002
Status under IMF Articles of AgreementJanuary 1. Cambodia accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement.
Arrangements for payments and receiptsFebruary 19. Cambodia notified the IMF that banks had been instructed to freeze any transfers of capital and assets of certain individuals and to freeze funds and other financial assets of terrorists and terrorist organizations pursuant to UN Security Council Resolutions 1267 and 1373, respectively.

Cameroon

(Position as of December 31, 2001)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Cameroon 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 655.957 per €1. 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 rates in the Paris exchange market for the currencies concerned. Commercial banks are free to set commissions. However, these commissions do not apply to government exchange transactions, transfers in settlement of imports covered by an import declaration domiciled with a bank, scheduled repayments of loans properly obtained, and travel allowance or representation expenses paid for official missions.
Exchange taxn.r.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsAs Cameroon is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (WAEMU and CEMAC members and the Comoros) are made in CFA francs, euros (from January 1, 2002; French francs through December 31, 2001), or the currency of any other Operations Account country. Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries or in euros through foreign accounts in CFA francs.
Payments arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases and sales of foreign currencies and euros against CFA francs are ultimately settled through a debit or credit to the Operations Account. Exchange regulations of member countries in the CEMAC are harmonized.
Clearing agreementsThere are clearing arrangements in the framework of the CEEAC.
Administration of controlExchange control is administered by the Directorate of Economic Controls and External Finance of the Ministry of Economy and Finance (MEF). Exchange transactions relating to all countries must be effected through authorized intermediaries (i.e., the Postal Administration and authorized banks). Exchange bureaus are also authorized to conduct foreign exchange transactions.
International security restrictionsThere are no such restrictions under the leg