Chapter

BELIZE

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: June 14, 1983.
Exchange Arrangement
CurrencyThe currency of Belize is the Belize dollar.
Exchange rate structure
DualThere are two exchange rates: the official exchange rate and the market rate.
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. Exchange houses are authorized and allowed to deal in foreign exchange. They must purchase foreign exchange at the official rate and sell it at the official exchange rate plus an adjustable service charge to be determined by the CBB; currently, the maximum service charge—inclusive of the 1.2% stamp duty—is 7.5%. Exchange houses must sell 5% of the gross amount of each foreign exchange purchase to the CBB at the official exchange rate. Exchange houses are not allowed to purchase foreign exchange earned by major exports, such as bananas, citrus products, shrimp, and sugar.
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 requirementsExport processing zone (EPZ) businesses may use only U.S. dollars for all transactions except payments for labor, which may be made in domestic currency.
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 residentsResidents with earnings in foreign exchange may pay their taxes, utility bills, and other expenses in U.S. dollars.
Payments arrangementsYes.
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 transactions with all countries. Authority covering a wide range of transactions 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 without 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. Commercial banks are authorized to open foreign currency accounts for residents. The CBB reserves the right to prohibit specific accounts.
Held domesticallyYes.
Approval requiredYes.
Held abroadYes.
Approval requiredYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Approval requiredBanks must obtain 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 for 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 granted liberally.
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%. An environmental tax of 1% is levied on a broad range of imports. 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 requirements
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 paymentsRepayments of loans are subject to CBB approval and require a copy of the loan agreement, amortization schedule, and proof of the loan disbursement.
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 by 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’ wages
Prior approvalApproval for remittances of wages is granted by the CBB, subject to clearance by the CIT.
Other payments
Prior approvalFor 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 administered liberally.
Controls on capital and money market instrumentsThere are controls on all these transactions.
Controls on derivatives and other instrumentsThere are controls on all these transactions.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsEPZ developers, EPZ businesses, commercial free zone (CFZ) developers, and CFZ businesses may obtain loans or advances up to US$1 million from offshore banks. Loans or advances in excess of this amount require written CBB approval.
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 transactionsThere is a land speculation tax of 5% of the unimproved value of land holdings exceeding 300 acres.
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital transactionsThere are controls on all these transactions.
Transfer of gambling and prize earningsThe repatriation of gambling proceeds by nonresidents requires clearance by 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 2003
No significant changes occurred in the exchange and trade system.

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