Chapter

SLOVENIA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of June 30, 2004)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: September 1, 1995.
Exchange Arrangement
CurrencyThe currency of Slovenia is the Slovenian tolar.
Exchange rate structureUnitary.
Classification
Pegged exchange rate within horizontal bandsOn June 27, 2004, Slovenia adopted the ERM II of the EMS, allowing the tolar to fluctuate within boundaries of ±15 percent around a central rate of SIT 239.640 per €1. Previously, the external value of the tolar was determined in the exchange market, where the Bank of Slovenia (BOS) could participate, and the BOS published daily a moving average exchange rate for customs valuation, statistics and accounting purposes, as well as for government transactions. As a result of this change, the exchange arrangement of Slovenia has been reclassified, effective June 27, 2004, to the category pegged exchange rate within horizontal bands from the category crawling band.
The BOS may buy and sell foreign exchange in transactions with the government and commercial banks. Natural persons may conduct foreign exchange transactions with banks or foreign exchange offices at freely negotiated rates. Licensed banks may conduct foreign exchange transactions among themselves. Juridical persons may conduct foreign exchange transactions with banks.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsThe use of foreign currencies to settle transactions among residents is not permitted.
Payments arrangements
Bilateral payments arrangements
InoperativeSlovenia maintains a payments agreement with the former Yugoslav Republic of Macedonia. The agreement allows juridical persons to conduct transactions through nonresidents’ accounts. Also, there is an agreement with Italy related to trade between the two border regions.
Regional arrangementsSlovenia was a member of the CEFTA until May 1, 2004.
Administration of controlExchange control is exercised by (1) the BOS on the foreign exchange operations of bank and foreign exchange offices; (2) the Foreign Exchange Inspectorate within the MOF on foreign exchange and foreign trade operations of natural and juridical persons other than banks; and (3) the customs authorities, who verify that the necessary conditions are met for the cross-border transfers of goods, banknotes, securities, and gold.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsIn accordance with UN Security Council resolutions, Slovenia maintains certain restrictions with regard to Serbia and Montenegro and has frozen the funds and other financial resources of the Taliban and certain persons associated with the former government of Iraq.
In accordance with EU regulations, Slovenia maintains certain restrictions with regard to Myanmar and Zimbabwe.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)n.r.
Controls on exports and imports of banknotesIn accordance with the Law on the Prevention of Money Laundering, imports and exports of banknotes and securities exceeding the equivalent of SIT 3 million must be reported to the customs authorities.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyAll residents may open and operate foreign exchange accounts without restriction upon proof of identity.
Held abroadEffective February 1, 2003, no restrictions apply to opening or maintaining these accounts. Previously, the following residents were allowed to maintain accounts abroad: (1) banks; (2) juridical persons; (3) natural persons with a temporary residence in Slovenia based on a valid resident visa or work permit with a validity of more than six months; (4) natural persons with a permanent residence in Slovenia and a valid resident visa or work permit issued abroad; and (5) residents (other than juridical persons) performing services in the international transportation of goods and passengers. Other residents could maintain accounts abroad only with BOS approval.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedAll nonresidents may open and operate accounts without restriction upon proof of identity.
Domestic currency accountsNo limits apply on tolar cash withdrawals.
Convertible into foreign currencyYes.
Blocked accountsTo implement UN resolutions and for reasons of national security, the accounts pertaining to entities associated with the former government of Serbia and Montenegro are blocked. In accordance with UN resolutions, accounts are blocked with respect to the Taliban and certain persons associated with the former government of Iraq. In accordance with EU regulations, accounts are blocked with respect to Myanmar and Zimbabwe.
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 measuresLicensing requirements in the form of permits, for the purpose of controlling items that affect security and public health, have been retained for specific groups of goods (seeds and planting materials of agricultural and forest plants, materials for breeding animals, pharmaceutical products, military equipment, waste, toxic and explosive substances, and precious metals), as well as original sculptures, statues, and antiques, in accordance with international conventions and codes.
Licenses with quotasSlovenia maintains a system of import quotas applicable only to certain textile products and clothing. Annual import quotas are allocated to relevant associations of the Chamber of Commerce of Slovenia. Quotas are not applied to imports from countries with which Slovenia has free trade agreements.
Import taxes and/or tariffsIn accordance with the WTO schedule, the bound tariff rate for industrial and agricultural products is 27% except for some agricultural products, for which the bound tariff rate is either 45% or a tariff rate plus a specific duty. However, the conventional rate of duty currently applied is 8.76% on average for all sectors; for industry it is 7.68%; and for agriculture, 12.6%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExports are not restricted except for certain items that are subject to licensing for security or health reasons in accordance with international conventions and codes.
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 instruments
On capital market securitiesEffective August 19, 2003, no restrictions apply on capital market securities transactions. Previously, nonresidents could conduct securities transactions in the Republic of Slovenia only by going through authorized participants. Additionally, foreign securities could be offered in Slovenia only through an authorized participant in the securities market.
Bonds or other debt securities
Sale or issue locally by nonresidentsEffective August 19, 2003, the domestic issue of foreign debt securities no longer requires the permission of the MOF. Previously, to obtain permission, the issuer had to have an adequate financial rating, and the debt securities had to have at least a three-year maturity and must have been denominated in tolars.
On money market instrumentsEffective August 19, 2003, no restrictions apply on these transactions. Previously, the controls on capital market securities applied. Effective May 1, 2004, the BOS’s authority to impose conditions on nonresidents’ local investment was rescinded.
On collective investment securities
Sale or issue locally by nonresidentsEffective January 2, 2003, foreign management companies may sell market investment coupons in Slovenia through either their branches or persons authorized by a foreign management company that is authorized to manage investment funds. In both cases, Surveying and Mapping Authority of the Republic of Slovenia (SMA) permission is required to open a branch domestically. Previously, cross-border sales of investment coupons were not allowed. Effective August 19, 2003, the MOF no longer sets the conditions for the sale or issue of transactions. Effective May 1, 2004, no restrictions apply on sales of investment coupons in the EU.
Sale or issue abroad by residentsEffective January 2, 2003, domestic management companies may provide services for the management of investment funds (including marketing of investment funds and selling of investment coupons and/or investment fund shares) through either their branches or a person who has been authorized by the management company to manage investment funds. SMA permission is required for the establishment of a branch abroad. Effective May 1, 2004, no restrictions apply on sales of investment coupons in the EU.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operationsNo.
Controls on direct investment
Outward direct investmentEffective August 19, 2003, residents are no longer obliged to register the outward direct investment with the MOF. Previously, registration had to be effected within 30 days.
Inward direct investmentEffective January 2, 2003, restrictions on foreign participation in management companies were eliminated under the new Investment Funds and Management Companies Act. Previously, approval was required for nonresidents to own more than 20% of management companies or more than 10% of companies involved in the privatization process.
Effective August 19, 2003, direct investments by nonresidents in entities engaged in production of or trading in armaments and military equipment require a government license, and investments are allowed freely in the provision of pension and health insurance financed by the budget. Previously, foreign direct investments in these fields were not allowed.
Controls on liquidation of direct investmentThe transfer of proceeds is free of controls after all tax obligations in Slovenia have been met.
Controls on real estate transactions
Purchase locally by nonresidentsEffective March 7, 2003, no restrictions apply to EU residents. Non-EU foreigners may acquire the right to own real estate pursuant to the provisions of a law or an international agreement under the condition of reciprocity. Foreign states may also acquire the right to own real estate used for diplomatic and consular purposes under the condition of reciprocity.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe required reserve ratio for deposits with up to three-month maturity is 2% for deposits in foreign exchange and 4.5% (prior to August 23, 2003, 7%) for tolar deposits. For deposits with longer maturity, the reserve ratios are unified at 2% for deposits with up to two-year maturity and zero for longer maturities.
Liquid asset requirementsBanks are required to maintain coefficients of liquidity of at least one between domestic and foreign currency–denominated positions and hold the required amount of currency bills issued by the BOS. The coefficients, which are in two time bands, are calculated daily and separately in terms of either domestic or foreign currency. In cases where a bank enters into a contract with the BOS, it may calculate the coefficients of liquidity for the tolar and foreign exchange proportions together within the same time band.
Investment regulations
In banks by nonresidentsBOS approval is required for the acquisition of a qualified holding.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadApproval from the Insurance Supervisory Agency is required for insurance companies to invest abroad.
Currency-matching regulations on assets/liabilities compositionAn 80% currency matching requirement applies for insurance companies.
Other controls imposed by securities lawsNo.
Changes During 2003
Resident accountsFebruary 1. All residents were allowed to open and maintain accounts abroad.
Capital transactions
Controls on capital and money market instrumentsJanuary 2. Foreign management companies were allowed to sell market investments coupons in Slovenia through either their branches or persons authorized by the foreign management company to manage investment funds. In both cases, the permission of the SMA is required for the establishment of a domestic branch. Previously, cross-border sales of investment coupons were not allowed.
January 2. Domestic management companies were allowed to provide services for the management of funds invested abroad.
August 19. Restrictions on transactions in money market instruments were lifted.
August 19. The requirement for prior MOF approval for issuing or selling foreign securities domestically was eliminated.
August 19. The requirement that nonresidents purchase or sell securities in Slovenia only through authorized dealers was lifted.
Controls on direct investmentJanuary 2. The new Investment Funds and Management Companies Act came into effect, abolishing the remaining controls on nonresidents’ investment in management companies.
August 19. A government license was required for direct investment by nonresidents in entities engaged in production of or trading in armaments and military equipment. Restrictions on direct investment in the provision of mandatory pension and health insurance financed by the budget were eliminated.
August 19. The requirement to register outward direct investment within 30 days with the MOF was eliminated.
Controls on real estate transactionsMarch 7. Foreigners were allowed to acquire the right to own real estate only pursuant to the provisions of a law or an international agreement under the condition of reciprocity. Restrictions on this right by EU residents were lifted.
Provisions specific to commercial banks and other credit institutionsAugust 23. The required reserve ratio for tolar deposits with up to a three-month maturity was reduced to 4.5% from 7%.
Changes During 2004
Exchange arrangementJune 27. Slovenia adopted the ERM II of the EMS, allowing the tolar to fluctuate within boundaries of ±15 percent around the central rate of SIT 239.640 per €1. As a result, the exchange arrangement of Slovenia was reclassified to the category pegged exchange rate within horizontal bands from the category crawling band.
Arrangements for payments and receiptsMay 1. Slovenia ceased membership in the CEFTA.
Capital transactions
Controls on capital and money market instrumentsMay 1. The BOS’s authority to impose conditions on nonresidents’ local investment was eliminated.
May 1. Restrictions on management companies for sales of investment coupons in the EU were eliminated.

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