Chapter

CENTRAL AFRICAN REPUBLIC

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 1, 1996.
Exchange Arrangement
CurrencyThe currency of the Central African Republic 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 that rate, free of commission. 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. A commission of 0.5%, excluding VAT, is levied on all capital transfers to countries that are not members of the BEAC, except those made for the account of the treasury and for the expenses of students.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThere are no forward exchange markets. However, as allowed by the fixed peg with the euro, exporters and importers may cover their position on the Paris foreign exchange market.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause the Central African Republic is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC members and the Comoros) are made in euros or the currency of any other Operations Account country. Settlements with all other countries are usually made in the currencies of those countries or in euros through foreign accounts in 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 CAEMC are harmonized.
Administration of controlAll draft legislation, directives, correspondence, and contracts having a direct or indirect bearing on the finances of the state require the prior approval of the Ministry for the Economy, Finance, Planning, and International Cooperation (MEFPIC). The Debt Directorate of the MEFPIC supervises borrowing abroad. The Office of Foreign Financial Relations of the same ministry supervises (1) lending abroad; (2) the issuing, advertising, or offering for sale of foreign securities in the Central African Republic; and (3) inward and outward direct investment. Exchange control is administered by the MEFPIC, which has delegated some approval authority to the BEAC (control over the external position of the banks, granting of exceptional travel allocations in excess of the basic allowances, and control over the repatriation of net export proceeds), to authorized banks, and to the Postal Administration. All exchange transactions relating to foreign countries must be effected through authorized banks. Export declarations are to be made through the Directorate of Foreign Trade of the Ministry of Commerce and Industry, except those for gold, which are to be made through the BEAC.
International security restrictionsn.a.
Payments arrearsYes.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports and exports of gold require a license, which is seldom granted. In practice, imports and exports are made by an authorized purchasing office. Exempt from prior authorization are (1) imports and exports by or on behalf of the treasury, and (2) imports and exports of manufactured articles containing a small quantity of gold (such as gold-filled or gold-plated articles). Both licensed and license-free imports of gold are subject to customs declaration. Certain companies have been officially appointed as Offices for the Purchase, Import, and Export of Gold and Raw Diamonds.
Controls on exports and imports of banknotes
On exports
Domestic currencyThere is no limit on the amount of banknotes that residents and nonresidents may export from one CAEMC country to another. Exports of banknotes outside the CAEMC zone are prohibited.
Foreign currencyAll resident travelers, regardless of destination, must declare in writing all means of payment at their disposal at the time of departure. The reexportation of foreign banknotes is allowed up to the amount declared at the time of entry; the reexportation of foreign banknotes above this ceiling requires documentation demonstrating either their importation or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits held in local banks.
On imports
Domestic currencyThere is no limit on the amount of banknotes that residents and nonresidents may import from another CAEMC country. Imports of banknotes from outside the CAEMC zone are prohibited.
Resident Accounts
Foreign exchange accounts permittedYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedn.a.
Domestic currency accountsThe regulations pertaining to nonresident accounts are based on regulations applied in France. The principal nonresident accounts are foreign accounts in euros. As the BEAC has suspended the repurchase of BEAC banknotes circulating outside the territories of its member countries, BEAC banknotes received by the foreign correspondents of authorized banks and mailed to the BEAC agency in Bangui may not be credited to foreign accounts in euros.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions in excess of CFAF 5 million must be domiciled with an authorized bank.
Preshipment inspectionPreshipment inspection is required for coffee, cotton, and diamonds.
Import licenses used as exchange licensesImport declarations are required for all imports, and the import license entitles importers to purchase the necessary foreign exchange, provided that the shipping documents are submitted to the authorized bank.
Import licenses and other nontariff measuresTaxes and duties on sugar imports must be paid in advance.
Negative listImports of firearms of any origin are prohibited.
Import taxes and/or tariffsThe CAEMC CET applies. There are four rates: 5% for essential commodities, 10% for capital goods and inputs, 20% for intermediates, and 30% for consumer goods. The intra-CAEMC tariff is 20% of the CET.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsProceeds must be collected and repatriated within one month of the due date, which must not be later than 30 days after the arrival of the goods at their destination, unless special authorization is obtained.
Surrender requirementsExport proceeds received in currencies other than euros or those of an Operations Account country must be surrendered within one month of collection.
Financing requirementsn.a.
Documentation requirements
DomiciliationAll export transactions in excess of CFAF 5 million must be domiciled with an authorized bank.
Preshipment inspectionPreshipment inspection for coffee is required.
Export licensesAll exports require a declaration.
Without quotasYes.
Export taxesAn export tax is applied.
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. Approval authority for many types of payment has been delegated to authorized banks. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization.
Trade-related payments
Prior approvalYes.
Investment-related paymentsTransfers of profits and dividends are permitted freely when the underlying transaction has been approved.
Prior approvalYes.
Payments for travel
Prior approvalYes.
Quantitative limitsResidents traveling to other countries of the franc zone and euro area may obtain an unlimited allocation in euros. Within the BEAC zone, BEAC banknotes may be exported without limit. The allowances for travel to countries outside the franc zone are subject to the following limits: (1) for tourist travel, CFAF 4 million a trip; and (2) for business travel, CFAF 10 million a trip. All resident travelers, regardless of destination, must declare in writing all means of payment at their disposal at the time of departure. The reexportation by nonresident travelers of means of payment other than banknotes registered in their name and issued abroad is not restricted. However, documentation is required to prove that such means of payment have been purchased with funds drawn from a foreign account in CFA francs or with other foreign exchange.
Indicative limits/bona fide testBona fide requests for allowances in excess of the limits are normally granted.
Personal payments
Prior approvalApproval may be required for these transactions, except in the case of payments for studies abroad.
Quantitative limitsThe allowance for travel to countries outside the franc zone for medical treatment or educational purposes is CFAF 5 million.
Indicative limits/bona fide testTransfers of pensions and payments for medical expenses, studies abroad, alimony, and family maintenance are allowed upon presentation of supporting documentation.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsForeign nationals working in the CAEMC are allowed to transfer part of their net salary upon presentation of their pay vouchers, provided that the transfers take place within three months of the pay period concerned.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe use of credit cards, which must be issued by resident financial intermediaries and approved by the MEFPIC, is limited to the ceilings set for tourism and business travel.
Indicative limits/bona fide testBona fide requests for allowances in excess of limits are normally granted.
Other payments
Prior approvalPrior approval is required for payments of consulting and legal fees.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from transactions in invisibles with France, Monaco, and the Operations Account countries may be retained. Proceeds of more than CFAF 5 million that are received from residents of other countries in respect of services, and all income earned in those countries from foreign assets, must be collected within one month of the due date.
Surrender requirementsAll proceeds over CFAF 5 million for services and income earned in those countries from foreign assets received in foreign currency must be surrendered within one month of the date of receipt.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsCapital transfers between the Central African Republic, France, and the Operations Account countries are free of exchange control, provided that they are not related to activities prohibited under CAEMC regulations. Capital transfers to all other countries require exchange control approval and are restricted, but capital transfers from these countries are permitted freely.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThe issuing, advertising, or offering for sale of foreign securities in the Central African Republic requires prior authorization from the MEFPIC. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the government; and (2) shares similar to securities, when the issuing, advertising, or offering for sale in the Central African Republic has previously been authorized.
Purchase abroad by residentsYes.
On money market instruments
Purchase abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsLending abroad by residents or by branches or subsidiaries of juridical persons in the Central African Republic whose registered office is abroad requires prior authorization from the MEFPIC. Exempt from this authorization are (1) loans granted by registered banks, and (2) other loans when the total amount of loans outstanding does not exceed CFAF 100 million for any one lender. The contracting of loans that are exempt from authorization and each repayment must be reported to the Office of Foreign Financial Relations within 30 days of the operation.
To residents from nonresidentsForeign borrowing by the government or its public and semipublic enterprises, as well as all foreign borrowing with a government guarantee, requires the prior approval of the Director of the Budget. Borrowing abroad by residents or by branches or subsidiaries of juridical persons in the Central African Republic whose registered office is abroad requires prior authorization from the MEFPIC. Exempt from this authorization are (1) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (2) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between the Central African Republic and countries abroad, or between foreign countries in which those persons or firms take part; (3) loans contracted by registered banks; and (4) loans other than those mentioned above, when the total amount of loans outstanding does not exceed CFAF 100 million for any one borrower. Loans referred to under (4) and each repayment must be reported to the Office of Foreign Financial Relations within 30 days of the operation, unless the total outstanding amount of all loans contracted abroad by the borrower is less than CFAF 500,000.
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 investmentDirect investments of over CFAF 100 million abroad, including those made through foreign companies that are directly or indirectly controlled by persons in the Central African Republic and those made by branches or subsidiaries abroad of companies in the Central African Republic, require the prior approval of the MEFPIC within 30 days, unless they take the form of a capital increase resulting from the reinvestment of undistributed profits.
Inward direct investmentInvestments must be declared to the MEFPIC within 30 days, unless they take the form of a capital increase resulting from the reinvestment of undistributed profits; the MEFPIC may request a postponement of up to two months from receipt of the declaration.
Controls on liquidation of direct investmentThe liquidation of investments requires prior approval from the MEFPIC, unless the operation involves the relinquishing of a participation that had previously been approved.
Controls on real estate transactionsn.a.
Controls on personal capital transactions
Transfer of gambling and prize earningsYes.
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 2003
No significant changes occurred in the exchange and trade system.

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