Chapter

FIJI

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of January 31, 2004)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: August 4, 1972.
Exchange Arrangement
CurrencyThe currency of Fiji is the Fiji dollar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe external value of the Fiji dollar is determined on the basis of a weighted basket of currencies comprising the Australian dollar, the Japanese yen, the New Zealand dollar, the euro, and the U.S. dollar. The relative weights are based on three-year moving averages of Fiji’s direction of trade and are reviewed annually. The exchange rate of the Fiji dollar in terms of the U.S. dollar, the intervention currency, is fixed daily by the Reserve Bank of Fiji (RBF) on the basis of quotations for the U.S. dollar and other currencies included in the basket.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange facilities are provided by banks for trade transactions for periods of up to six months for exporters and up to nine months for importers. The amount of a banks’ forward sales is limited to the amount of forward purchases.
Arrangements for Payments and Receipts
Prescription of currency requirementsAlthough no specific requirements exist, settlements must be made in convertible currencies acceptable to both countries.
Payments arrangements
Regional arrangementsFiji participates in the following arrangements: the Fiji/Vanuatu Bilateral Trade Arrangement, the Melanesian Spearhead Group Trade Agreement, PACER, and PICTA.
Administration of controlExchange control is administered by the RBF, acting as an agent of the government; the RBF delegates to authorized dealers the authority to approve current payments and transfers up to specified limits. Documentary evidence is required for amounts exceeding the prescribed limits.
International security restrictionsn.a.
Payments arrearsn.a.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may freely purchase, hold, and sell gold coins but not gold bullion.
Controls on external tradeThe exportation of gold coins, except coins and collectors’ pieces for numismatic purposes, requires specific permission from the RBF. The importation of gold, other than gold coins, from all sources requires a specific import license from the MOF; these are restricted to authorized gold dealers. Gold coins and gold bullion are exempt from fiscal duty but are subject to a 10% VAT. Gold jewelry is also exempt from fiscal duty but is subject to a 10% VAT and is not under licensing control. Samples of gold and gold jewelry sent by foreign manufacturers require import licenses if their value exceeds F$200. Effective January 1, 2003, exports of gold jewelry are free of export duty but require licenses if their value exceeds F$20,000 (previously, F$2,000). Exports of gold bullion are subject to an export duty of 3%.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports are allowed up to F$500 a trip for travel-related purposes only.
Foreign currencyExports are allowed up to the amount declared at the time of arrival. Effective January 1, 2003, local travelers are allowed to take out up to the equivalent of F$20,000 (previously, F$ 10,000) in foreign currency (inclusive of a minimum of F$500 in local currency) for each overseas round trip. The limit applicable to a one-way trip is the equivalent of F$5,000.
On imports
Domestic currencyTravelers may freely bring in Fiji banknotes, but must declare them to customs or immigration officials on arrival.
Foreign currencyTravelers may freely bring in foreign currency banknotes, but must declare them to customs or immigration officials on arrival in order to export the unused balance on departure.
Resident Accounts
Foreign exchange accounts permittedThese accounts are permitted for resident individuals and any business entity registered and operating in Fiji.
Held domesticallyThese accounts are permitted, but prior approval is required. Fiji dollar resident accounts may be maintained by resident individuals and any business entity registered and operating in Fiji. Commercial banks may open these accounts without RBF approval. External Fiji dollar and foreign currency accounts are maintained by nonresident individuals and businesses. Commercial banks may open these accounts without RBF approval. Effective January 1, 2003, resident individuals may open these accounts without RBF approval for amounts up to the equivalent of F$20,000; resident businesses require RBF approval to open accounts for amounts exceeding F$ 100,000.
Approval requiredYes.
Held abroadThese accounts are permitted, but prior approval is required.
Approval requiredYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited freely with the account holders’ salaries (net of tax), with interest payable on the account, or with payments from other external accounts. Commercial banks are allowed to open foreign currency accounts for regional and international organizations.
Domestic currency accountsThese accounts may be credited freely with the account holders’ salaries (net of tax); with interest payable on the account; with payments from other external accounts; with the proceeds of sales of foreign currency or foreign coins by the account holder; and with Fiji banknotes that the account holder brought into Fiji, acquired by debit to an external account, or acquired through the sale of foreign currency in the country during a temporary visit. External accounts may also be credited with payments by residents for which either general or specific authority has been given. External accounts may be debited for payments to residents of Fiji, transfers to other external accounts, payments in cash in Fiji, and purchases of foreign exchange. Effective January 1, 2003, authorized banks are allowed to credit to domestic currency accounts the full amount of the proceeds from sales of Fiji assets (previously, these transactions were subject to a delegated limit of F$ 100,000). Other unspecified funds up to F$ 1,000 a month may be deposited.
Convertible into foreign currencyYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAuthorized banks may approve up to a delegated limit equivalent to F$ 1 million of advance payments for imports, if such payments are required by the supplier.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence to authorized dealers, who may allow payments for goods that have been imported under either a specific import license or an OGL.
Domiciliation requirementsYes.
Letters of creditYes.
Import licenses and other nontariff measuresEffective January 1, 2004, payments for oil imports require prior approval from the RBF. Imports of poultry and poultry products and lubrication oils from any source require a specific import license. The Ministry of Commerce, Business Development, and Investment (MCBDI) is responsible for issuing import licenses, with the exception of those for gold and timber. Import licenses and other nontariff measures for gold are issued by the MOF; for timber, they are issued by the Ministry of Forestry. A wide range of consumer goods is imported by national cooperative societies under a joint arrangement with six other Pacific Island countries. Import licenses for cyclonic building materials are jointly issued by the Department of Fair Trading and Consumer Affairs and the MOF.
Negative listThe importation of a few commodities is prohibited for security, health, or public policy reasons.
Licenses with quotasImport licenses for frozen chicken from the United States are issued based on quotas.
Other nontariff measuresAll imports must meet required technical standards on labeling, packaging, and expiration date requirements. All agricultural and forestry products are subject to quarantine clearance.
Import taxes and/or tariffsImport tariffs are zero, 3%, 10%, 15%, 20%, and 27%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters are required to collect the proceeds from exports within six months of the date of shipment of the goods from Fiji and may not, without specific permission, grant more than six months’ credit to a nonresident buyer. Customs is delegated to process and approve all exports of goods with no monetary return.
Surrender requirementsAuthorized banks may approve payments of up to the equivalent of F$l million for merchandise imports and up to F$500,000 for other business payments, respectively, from export earnings. Effective January 1, 2003, authorized banks may approve the offset of foreign exchange earnings against merchandise imports and other business payments up to the full amounts payable (previously, these limits were F$l million and F$ 100,000 an invoice, respectively).
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesExport licenses are issued by the customs department and monitored by the comptroller of customs. Specific licenses are required only for exports of sugar, wheat bran, copra meal, certain types of lumber, certain animals, and a few other items. The MCBDI is responsible for issuing export licenses for trochus shells, petroleum, and petroleum products.

Irrespective of export-licensing requirements, however, effective January 1, 2003, exporters are required to obtain a permit for exports of commercial consignment of goods with an f.o.b. value of more than the equivalent of F$2,000 (previously, F$ 1,000); this permit is required for exchange control purposes.
Export taxesA 3% export duty is levied on exports of sugar, gold, and silver.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersExcept for certain payments that are allowed up to specified limits, above which RBF approval is required, authorized banks may approve all payments. Documentary evidence is required for amounts above the equivalent of F$2,000. Insurance transfers are subject to the approval of the Insurance Unit of the RBF and are then delegated to authorized banks.
Trade-related payments
Quantitative limitsEffective January 1, 2003, authorized banks may approve the full amount of payments due for airline and shipping ticket sales and earnings; commercial fees, charges, and expenses; insurance payments; commercial freight and repair services; leasing services; and movie rentals (previously, the limit was F$l million an application, except for insurance payments, which were allowed in full but required approval from the Insurance Supervision Unit of the RBF).
Indicative limits/bona fide testYes.
Investment-related paymentsPayment of interest is allowed, provided prior approval for the loan was granted by the RBF, if the loan is in excess of F$500,000.
Quantitative limitsEffective January 1, 2003, authorized banks may approve up to F$ 100,000 a year (previously, F$50,000 a year) for dividend and profit remittances. On January 1, 2004, this limit was increased to F$ 150,000 a year.



Effective January 1, 2003, authorized banks may approve the full amount of payments due for commissions and royalty payments (previously, a limit of F$l million an application applied).
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsEffective January 1, 2003, amounts exceeding the equivalent of F$20,000 a person (previously, F$ 10,000) require RBF approval.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsEffective January 1, 2003, authorized banks may make payments of up to the full amount for medical expenses (previously, these transactions were subject to a limit equivalent to F$ 100,000), if the payment is made directly to an institution. If the payment is made to the beneficiary, the limit is F$20,000 a year, effective January 1, 2003 (previously, F$ 10,000).
Indicative limits/bona fide testYes.
Foreign workers’ wages.
Quantitative limitsEffective January 1, 2003, authorized banks are allowed to provide foreign currency to pay up to the full amount of wages due to foreign crew members (previously, these transactions were subject to a limit equivalent to F$ 10,000).
Credit card use abroad
Quantitative limitsEffective January 1, 2003, authorized banks may provide the full amount for credit card transactions (previously, these transactions were subject to a monthly limit equivalent to F$ 10,000 a cardholder) and cash drawings (previously, F$5,000) a cardholder a month.
Other payments
Quantitative limitsEffective January 1, 2003, authorized banks are allowed to approve the full amount for the following payments: payments by companies for pensions, superannuations, or gratuities (previously, a limit of F$ 100,000 an application applied); refunds on canceled hotel bookings (previously, a limit of F$ 100,000 an application applied); and airline and ticket sales and earnings; commercial fees, charges, and expenses; and movie rentals (previously, a limit of F$l million an application applied).
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsResidents are required to sell all their foreign currency receipts to an authorized dealer within one month of their return.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsCertain capital transfers in excess of the delegated limit require RBF approval for commercial banks. Investments by nonresidents for amounts up to the equivalent of F$500,000 require authorization from either the South Pacific Stock Exchange (for investments in listed companies) or commercial banks (for investments in Fiji dollar-denominated deposits). Some of the funding for these investments must originate from abroad or from earnings in Fiji.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsDomestic companies are allowed to invest abroad up to the equivalent of F$ 100,000 a company a year. These investments are restricted to the establishment of subsidiary offices and equity purchases.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesThere are controls on all transactions in bonds or other debt securities.
On money market instrumentsThere are controls on all transactions in money market instruments.
On collective investment securitiesThere are controls on all transactions in collective investment securities.
Controls on derivatives and other instrumentsThere are controls on all derivatives transactions.
Controls on credit operationsResidents must obtain prior permission from the RBF to borrow abroad amounts exceeding the equivalent of F$500,000 in foreign currency. RBF permission is also required for any up-front fees payments. New borrowings or guarantees by nonresident-controlled business entities are restricted to F$10 million, and those by nonresident individuals are restricted to F$500,000. Effective January 1, 2003, authorized banks may provide up to F$100,000 (previously, F$50,000) of the amount due for scheduled foreign currency loan repayments. Effective January 1, 2004, this limit was raised further to F$ 150,000.
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe authority to limit bank guarantees is fully delegated to commercial banks.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentNonbank financial institutions may invest up to the equivalent of F$l million. The limit on overseas investment for individuals and families is F$20,000 a taxpayer a year, and the limit on expenditure to set up sales offices or subsidiaries abroad by local companies is F$100,000ayear.
Inward direct investmentForeign investment in Fiji is normally expected to be financed from nonresident sources. Such foreign investment may be given “approved status,” which guarantees the right to repatriate dividends and capital.
Controls on liquidation of direct investmentTransactions exceeding the delegated limits for authorized banks require specific permission from the RBF, which is readily granted upon evidence that the investment funds originated abroad. Nonresident-owned companies are permitted to repatriate in full the proceeds from sales of assets and capital gains on investments. Effective January 1, 2003, the full transfer of investments is allowed (previously, F$10 million) a year.
Controls on real estate transactions
Purchase abroad by residentsThe purchase of personal property abroad is not permitted.
Purchase locally by nonresidentsApproval by the Ministry of Lands and the Native Land Trust Board is required for purchases of state-owned property and designated Native Lease properties. Settlements offshore of sale transactions in which both parties are nonresidents require RBF permission.
Sale locally by nonresidentsControls on settlements are effected to safeguard local interest before proceeds from sales are remitted abroad.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsEffective January 1, 2003, all transfers exceeding the equivalent of F$ 100,000 (previously, F$50,000) by emigrants require prior RBF approval and the annual limit of F$500,000 was lifted. Effective January 1, 2004, transfers exceeding F$ 150,000 require prior approval.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAuthorized dealers must obtain permission from the RBF to borrow abroad.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)The limit for lending to a newly established company or a branch of a company in Fiji (other than a bank) that is controlled directly or indirectly by persons who reside outside Fiji is F$10 million. Lenders are also allowed to authorize temporary overdrafts without reference to the RBF, provided full clearance of overdrafts is carried out within 30 days. Borrowing by nonresident individuals is delegated to lending institutions and commercial banks for amounts up to F$500,000.
Lending locally in foreign exchangeBanks and nonbank financial institutions may not lend foreign currency to any resident of Fiji without the specific permission of the RBF.
Purchase of locally issued securities denominated in foreign exchangeYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsAn individual (together with his or her relatives) may own up to 15% of the voting shares of a bank or credit institution. Ownership through a company may be up to 30%. This does not preclude the establishment of branches or subsidiaries incorporated in Fiji of 100% nonresident-controlled financial institutions.
Open foreign exchange position limitsNet open position limits in terms of each bank’s actual capital are set at the greater of 12.5% or the equivalent of F$0.4 million for each currency, and up to an aggregate of 25% or from F$0.8 million to a maximum of F$7.5 million, for all foreign currencies.

The limit on gross outstanding forward foreign exchange sales contracts is set at 100% of each bank’s capital in Fiji, provided net outstanding forward exchange sales contracts do not exceed the equivalent of F$15 million.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadOffshore investment by the Fiji National Provident Fund is limited to the equivalent of F$ 10 million.
Other controls imposed by securities lawsn.a.
Changes During 2003
Arrangements for payments and receiptsJanuary 1. The limit on the value of gold jewelry exports not requiring export licenses was increased to the equivalent of F$20,000 from F$2,000.



January 1. The maximum amount of foreign currency that local travelers were allowed to take out of the country on an overseas round trip was increased to the equivalent of F$20,000 from F$ 10,000.
Resident accountsJanuary 1. Resident individuals were allowed to open foreign exchange accounts without RBF approval for amounts up to the equivalent of F$20,000; resident businesses were required to obtain RBF approval to open accounts for amounts exceeding F$ 100,000.
Nonresident accountsJanuary 1. Authorized banks were allowed to credit the full amount of the proceeds from sales of Fiji assets to domestic currency accounts (previously, a delegated limit of F$ 100,000 applied).
Exports and export proceedsJanuary 1. Authorized banks were allowed to offset foreign exchange earnings against merchandise imports and other business payments up to the full amount payable (previously, delegated limits of F$l million and F$ 100,000 an invoice, respectively, applied).



January 1. The minimum f.o.b. value of all commercial consignments of goods for which an export permit is required was increased to F$2,000 from F$ 1,000.
Payments for invisible transactions and current transfersJanuary 1. Authorized banks were allowed to approve the full amount of payments due for commercial freight and repair services; insurance payments; leasing services; airline and shipping ticket sales and earnings; commercial fees, charges, and expenses; and movie rentals (previously, the limit was F$ 1 million an application, except for insurance payments, which were allowed in full but required approval from the Insurance Supervision Unit of the RBF).



January 1. The maximum amount that authorized banks could approve for dividend and profit remittances was increased to F$ 100,000 a year from F$50,000.



January 1. Authorized banks were allowed to approve the full amount of payments due for commissions and royalties (previously, a limit of F$l million an application applied).



January 1. The amount of travel payments not subject to RBF approval was increased to the equivalent of F$20,000 from F$ 10,000 a person.



January 1. Commercial banks were allowed to make payments of up to the full amount for medical expenses if the payments were made directly to an institution (previously, this was subject to a delegated limit equivalent to F$ 100,000); if the payment is made to the beneficiary, the limit was increased to F$20,000 from F$ 10,000.



January 1. Authorized banks were allowed to provide foreign currency to pay up to the full amount of wages due to foreign crew members (previously, a limit equivalent to F$ 10,000 a beneficiary applied).



January 1. Authorized banks were allowed to provide foreign exchange for full payments on credit cards (previously, limited to the equivalent of F$ 10,000 a month), with a limit on cash drawings of F$ 10,000 a month (previously, a limit of F$5,000 applied).



January 1. Authorized banks were allowed to approve the full amount of pensions, superannuation payments, or gratuities (previously, a limit of F$ 100,000 an application applied); the full amount of refunds on canceled hotel and airline bookings (previously, a limit of F$ 100,000 an application applied); and airline and ticket sales and earnings; commercial fees, charges, and expenses; and movie rentals (previously, a limit of F$l million an application applied).
Capital transactions
Controls on credit operationsJanuary 1. The maximum amount that authorized banks may release for scheduled foreign currency loan repayments was increased to the equivalent of F$ 100,000 from F$50,000.
Controls on liquidation of direct investmentJanuary 1. The full transfer of investment liquidation proceeds was permitted (previously, a limit of F$10 million a year applied).
Controls on personal capital transactionsJanuary 1. The amount of transfers by emigrants for which RBF approval is required was increased to the equivalent of F$ 100,000 from F$50,000, and the annual limit of F$500,000 on such transfers was lifted.
Changes During 2004
Imports and import paymentsJanuary 1. Payments for oil imports were made subject to prior RBF approval.
Payments for invisible transactions and current transfersJanuary 1. The maximum amount that authorized banks could approve for dividend and profit was increased to F$ 150,000 a year from F$ 100,000.
Capital transactions
Controls on credit operationsJanuary 1. The maximum amount that authorized banks may approve for foreign currency loan repayments was increased to the equivalent of F$ 150,000 from F$ 100,000.
Controls on personal capital transactionsJanuary 1. The amount of transfers by emigrants for which RBF approval is required was increased to the equivalent of F$ 150,000 from F$ 100,000.

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