Chapter

CHAD

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 Chad 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 and are 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. All transfers and exchange operations are subject to a commission levied by the treasury. The commission rate amounts to 0.25% in the CFA franc zone and 0.5% (excluding VAT) outside the CFA franc zone.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward cover for imports is permitted only for specified commodities and requires the prior approval of the MOF.
Official cover of forward operationsYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsChad is an Operations Account country; therefore, settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC members and the Comoros) are made in CFA francs, 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 or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account. The exchange regulations of CAEMC member countries are harmonized.
Clearing agreementsYes.
Administration of controlExchange control is administered by the MOF, but it has delegated approval authority in part to the External Finance and Exchange Control Subdirectorate, which issues instructions to the authorized banks. All exchange transactions relating to countries outside the Operations Account area must be made through authorized banks. The MOF supervises public and private sector borrowing and lending abroad; the issuing, advertising, or offering for sale of foreign securities in Chad; and inward and outward direct investment. It also issues import and export authorizations for gold.
International security restrictionsNo.
Payments arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports and exports of gold require prior authorization from both the MOF and the Directorate of Geological and Mining Research, as well as a visa from the External Finance Department. Exempt from this requirement are (1) imports and exports by, or on behalf of, the monetary authorities; and (2) imports and exports of manufactured articles containing a small quantity of gold (such as gold-filled or gold-plated articles). Unworked gold may be exported only to France. Both licensed and exempt imports of gold are subject to customs declaration.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of banknotes issued by the BEAC to areas outside that of the BEAC is prohibited. Nonresidents traveling from one BEAC member country to another may take with them an unlimited amount of CFA franc zone banknotes and coins.
Foreign currencyResidents visiting other CFA franc zone countries may obtain an unlimited allocation in euros. This allocation may be provided in banknotes, traveler’s checks, bank drafts, and bank or postal transfers, etc. For travel to countries outside the CFA franc zone, the exchange allocation depends on the type of travel and may be made in banknotes, traveler’s checks, bank drafts, or postal transfers. Nonresident travelers may take out foreign exchange or other foreign means of payment up to the amount they declared on entry into the BEAC area. If they have made no declaration on entry into one of the BEAC countries, they may take out only up to the equivalent of CFAF 500,000.
On imports
Domestic currencyResident and nonresident travelers may bring in any amount of banknotes and coins issued by the BEAC, the Bank of France, or any other bank of Operations Account countries. The importation of banknotes issued by the BEAC from outside the BEAC area is prohibited.
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.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts are permitted, but prior approval is required.
Held abroadThese accounts are permitted, but prior approval is required.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts are permitted, but prior approval is required. Principal nonresident accounts are foreign accounts in francs.
Domestic currency accountsThe regulations pertaining to nonresident accounts are based on regulations applied in France. Because the BEAC has suspended the repurchase of BEAC banknotes circulating outside the territories of the CFA franc zone, BEAC banknotes received by the foreign correspondents of authorized banks and mailed to the BEAC agency in Chad by the Bank of France or the BEAC may not be credited to foreign accounts in francs.
Convertible into foreign currencyThese accounts may be converted, but prior approval is required.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsImports in excess of CFAF 100,000 and relating to countries outside the BEAC area must be domiciled with an authorized bank.
Letters of creditYes.
Import licenses and other nontariff measures
Negative listA special import authorization by the Ministry of Commerce and Industrial Promotion is required for imports of sulfur and other explosives.
Import taxes and/or tariffsImport tariffs on products from countries that are not members of the UDEAC range from 5% to 30% with four tariff bands.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExport proceeds normally must be received within 180 days of the arrival of the commodities at their destination.
Surrender requirementsExport proceeds received in currencies other than those of France or of an Operations Account country must be surrendered. The proceeds must be collected and, if received in a foreign currency, surrendered within one month of the due date.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationExport transactions related to foreign countries and exceeding CFAF 50,000 must be domiciled with an authorized bank.
Export licenses
Without quotasYes.
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. Payments for invisibles related to trade are permitted freely if the basic trade transaction has been approved or does not require authorization.

Some current payments, however, may be subject to delay. On a temporary basis, nonresidents, except diplomatic missions and their staff, international organizations and their staff, agencies with equivalent status and their staff, as well as employees and self-employed members of the professions (professionally active in Operations Account area countries for less than a year), are not permitted to send payments to countries that are not CFA franc zone members without prior authorization from the relevant authorities. They may, however, receive payments from abroad. A simple declaration is required for transfers to countries outside the BEAC area not exceeding CFAF 500,000 by residents; for transfers of more than CFAF 500,000, prior authorization must be obtained from the relevant authorities. For many types of payment, approval authority has been delegated to authorized banks, which are required to execute promptly all duly documented transfer orders and to dispatch cable transfers within 48 hours of receipt of the relevant request.
Trade-related paymentsInsurance on all imports with f.o.b. values exceeding CFAF 500,000 must be arranged with local insurance companies by the importer.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Investment-related paymentsInformation is not available on the payment of amortization of loans or depreciation of direct investments.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Payments for travelTravelers—civil servants on missions, students, persons on pilgrimage, etc.—must use the following payment instruments: foreign exchange, traveler’s checks, bank drafts, bank and postal transfers, etc. Residents visiting other CFA franc zone countries may obtain an unlimited allocation in euros. This allocation may be provided in banknotes, traveler’s checks, bank drafts, bank or postal transfers, etc.
Prior approvalFor travel to countries outside the CFA franc zone, the exchange allocation is subject to prior authorization from the relevant administrative authorities.
Quantitative limitsResidents traveling outside the CFA franc zone for tourism, sporting events, participation in expositions, organization of fairs, participation in seminars or international meetings in a personal capacity, pilgrimages, etc., may obtain an exchange allocation equivalent to CFAF 200,000 a day up to a maximum of CFAF 4 million a person a trip for those over 10 years of age; for children under 10, the allocation is reduced by one-half. Residents traveling to countries outside the CFA franc zone for business may obtain an exchange allocation equivalent to CFAF 500,000 a day, up to a maximum of CFAF 10 million a trip.

Civil servants and government employees traveling on official business to countries outside the CFA franc zone may obtain the same exchange allocation as tourists, but only if their mission costs are less than a daily allocation of CFAF 200,000, up to a limit of CFAF 4 million. For amounts exceeding these limits, higher exchange allocation is subject to the presentation of supporting documents.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsFor countries outside the CFA franc zone, the exchange allocation for medical costs is equivalent to CFAF 250,000 a day, up to a limit of CFAF 5 million. For studies abroad, the exchange allocation for countries outside the CFA franc zone is equivalent to a three-month scholarship plus expenses for supplies. However, a student, whether or not the holder of a scholarship, may obtain an exchange allocation not exceeding the equivalent of CFAF 2 million. Higher exchange allocations are subject to the presentation of supporting documents.
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 requirementsYes.
Surrender requirementsProceeds from transactions in invisibles with France, Monaco, and the Operations Account countries may be retained. All amounts due from residents of other countries in respect of services, and all income earned in those countries from foreign assets, must be collected and, if received in foreign currency, surrendered within two months of the due date.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsCapital movements between Chad and France, Monaco, and the Operations Account countries are free of exchange control; capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are permitted freely. All foreign securities, foreign currencies, and titles embodying claims on foreign countries or nonresidents held by residents or nonresidents in Chad must be deposited with authorized banks in Chad.

Additional special controls are maintained over borrowing and lending abroad; inward and outward direct investment; and the issuing, advertising, or offering for sale of foreign securities in Chad. These controls relate only to the transactions themselves, not to payments or receipts. With the exception of those controls over the sale or introduction of foreign securities in Chad, the measures do not apply to France, Monaco, and the Operations Account countries.
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 issuing, advertising, or offering for sale of foreign securities in Chad or in the CAEMC for amounts exceeding CFAF 10 million requires prior authorization from the MOF. If authorization is granted, the transactions carry a state guarantee.
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.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instruments
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 nonresidentsLending requires prior MOF authorization. The following are, however, exempt from this authorization: (1) loans directly connected with the rendering of services abroad by the persons or firms concerned, or with the financing of commercial transactions either between Chad and countries abroad or between foreign countries in which these persons or firms take part; and (2) other loans when the total outstanding amount of these loans does not exceed CFAF 5 million for any one lender. The making of loans referred to under (2) requires no authorization, but each repayment must be declared to the MOF within 30 days of the operation.
To residents from nonresidentsBorrowing requires prior MOF authorization. The following are, however, exempt from this authorization: (1) borrowing constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (2) borrowing directly connected with the rendering of services abroad by the persons or firms concerned, or with the financing of commercial transactions either between Chad and countries abroad or between foreign countries in which these persons or firms take part; and (3) types of borrowing other than those mentioned above when the total outstanding amount of the loan does not exceed CFAF 10 million for any one borrower, the interest rate is no higher than 7%, and the maturity is two years or less. Borrowing referred to under (3) requires no authorization, but each repayment must be declared to the MOF within 30 days of the operation.
Financial creditsThe regulations governing commercial credits apply.
Guarantees, sureties, and financial backup facilitiesYes.
Controls on direct investment
Outward direct investmentInvestments require the prior approval of the MOF.
Inward direct investmentInvestments require the prior approval of the MOF, unless they take the form of a mixed-economy enterprise.
Controls on liquidation of direct investmentThe full or partial liquidation of direct investments in Chad must be declared to the MOF within 30 days of each operation.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
LoansLoan transactions between residents and nonresidents exceeding CFAF 5 million require prior MOF authorization.
By residents to nonresidentsLoans granted by resident natural persons to nonresidents require central bank authorization and notification to the MOF 30 days before the loan is to be transacted.
To residents from nonresidentsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAuthorized banks may freely borrow from abroad. These transactions, however, must be declared to the MOF and the BEAC 30 days in advance.
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 investorsn.a.
Other controls imposed by securities lawsNo.
Changes During 2003
No significant changes occurred in the exchange and trade system.

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