Chapter

ST. LUCIA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of December 31, 2003)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 30, 1980.
Exchange Arrangement
CurrencyThe currency of St. Lucia 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 under a currency board arrangement at EC$2.70 per US$1.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements must be made in either Eastern Caribbean dollars or U.S. dollars.
Controls on the use of domestic currency
For current transactions and paymentsAll transactions exceeding EC$250,000 require MOF approval.
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Payments arrangements
Regional arrangementsSt. Lucia is a member of the CARICOM.
Administration of controlThe MOF is responsible for policy decisions related to exchange control, and its banking section is responsible for its administration. Commercial banks have been delegated the authority to approve payments and transfers under the equivalent of EC$250,000; in the case of imports with proper customs documentation, banks may approve transactions for any amount.
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 currencyExports of domestic currency outside the ECCU are subject to limits prescribed by the ECCB.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
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.
Approval requiredTransactions exceeding EC$250,000 require MOF approval.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance payments exceeding the equivalent of EC$250,000 require prior approval from the MOF.
Documentation requirements for release of foreign exchange for importsPayments in foreign currency for authorized imports are permitted upon application to a local bank and submission of a customs certificate of entry.
Import licenses and other nontariff measures
Negative listCertain agricultural and manufactured products require individual licenses. There are three types of licenses: (1) goods originating from the CARICOM and the OECS; (2) goods from outside these areas; and (3) goods imported directly from non-OECS countries.
Import taxes and/or tariffsManufactured goods originating in the CARICOM and the OECS are exempt from import duties. All imported goods are subject to a consumption tax and, effective May 1, 2003, a service charge of 5% (previously, 4%), except for fertilizers, for which the rate is 0.2%. Live animals, eggs, fish, meat, milk, fertilizers, and most agricultural and manufacturing machinery are exempt from import duties. For non-CARICOM imports, the fourth phase of the CARICOM CET applies at a maximum rate of 20%.
State import monopolyThe importation of rice, flour, and sugar in bulk form is a state monopoly.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesExport licensing is required for certain primary products.
Without quotasYes.
Export taxesA special fee of US$0.02 per barrel is applied to reexports of petroleum.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAll transactions exceeding the equivalent of EC$250,000 require MOF approval.
Trade-related payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalYes.
Quantitative limitsWith the approval of the MOF, profits may be remitted in full, subject to confirmation by the Comptroller of Inland Revenue and the National Insurance Scheme that liabilities have been discharged. However, in cases where profits are deemed to be high, the MOF reserves the right to phase remittances over a reasonable period.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsThere is no repatriation requirement on proceeds of up to EC$250,000.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsOutward transfers exceeding the equivalent of EC$250,000 require exchange control approval.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
On money market instruments
Purchase abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase locally by nonresidentsThese transactions require approval from the MOF.
Controls on credit operationsThere are controls on all categories of credit operations.
Commercial credits
By residents to nonresidentsThese credits require the approval of the MOF. Applications for nonresident loans are submitted by the authorized dealer (or other financial intermediary) to the MOF on behalf of the applicant.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsApproval of the MOF is required, except for loans to nonresident St. Lucians. Applications are submitted by authorized dealers on behalf of the applicant.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilitiesAll these transactions are controlled.
Controls on direct investment
Outward direct investmentYes.
Controls on liquidation of direct investmentn.a.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsApproval is not required for nonresident St. Lucians.
Sale locally by nonresidentsThe repatriation of estate proceeds exceeding EC$250,000 requires approval.
Controls on personal capital transactions
LoansYes.
By residents to nonresidentsYes.
Gifts, endowments, inheritances, and legacies
To residents from nonresidentsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeLending is restricted to Eastern Caribbean dollars or U.S. dollars.
Purchase of locally issued securities denominated in foreign exchangePurchases are restricted to securities denominated in Eastern Caribbean dollars or U.S. dollars.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadInstitutional investors may invest up to 10% of their statutory deposits in government securities of the Commonwealth of Caribbean Nations.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionFor every U.S. dollar liability, there must be an equivalent U.S. dollar asset.
Other controls imposed by securities lawsFunds raised from the issue of securities must be invested locally.
Changes During 2003
Imports and import paymentsMay 1. The service charge that applies to most imports was increased to 5% from 4%.

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