Chapter

FINLAND

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: September 25, 1979.
Exchange Arrangement
CurrencyThe currency of Finland is the euro.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderFinland participates in a currency union (EMU) with 11 other members of the EU: Austria, Belgium, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The ECB may intervene to smooth out fluctuations in the euro exchange rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsn.a.
Payments arrangementsNo.
Administration of controlThere are no exchange controls. Import licensing is administered by the National Board of Customs. Export licensing relating to international export control regimes is administered by the trade department/foreign trade division of the Ministry of Trade and Industry.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Measures have been taken to freeze the accounts of the Taliban and of listed individuals and organizations associated with terrorism. These measures were taken in accordance with the relevant UN Security Council resolutions.
In accordance with UN sanctionsIn accordance with EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained on the making of payments and transfers for current international transactions with respect to Myanmar, certain individuals associated with the previous governments of Iraq and the former Republic of Yugoslavia, and Zimbabwe. In accordance with EU Regulation No. 147/2003, effective January 27, 2003, financing of and financial assistance related to military activities in Somalia are prohibited. Restrictions also apply on transfers with respect to members of Al-Qaida and the Taliban, and individuals and organizations associated with terrorism. Imports of diamonds and sawed wooden goods from Liberia are subject to economic sanctions.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
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 measures
Negative listYes.
Licenses with quotasThe following products are subject to quantitative import restrictions and require an import license when imported into the EU: agricultural products; certain steel products subject to bilateral agreements with Russia and Ukraine; certain steel products subject to autonomous community quotas for Kazakhstan; specific textile products subject to bilateral agreements with third countries, particular third-country textile products subject to autonomous community quotas; and certain Chinese industrial products subject to autonomous community quotas.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required only for exports of goods related to international export control regimes and are administered by the Ministry of Trade and Industry. The sale of arms is strictly controlled by the Ministry of Defense.
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 securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsControls apply only to the purchase of shares and other securities of a participating nature, which may be affected by laws on inward direct investment.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentAcquisition of shares giving at least one-third of the voting rights in a Finnish defense enterprise to a single foreign owner requires prior confirmation by the Ministry of Defense; approval can be denied only if the safeguarding of public defense is jeopardized.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAcquisition of real estate for recreational purposes or as secondary residences is allowed for nonresidents who have not previously been residents of Finland for at least five years. Controls apply only to the acquisition of real estate for recreational purposes or as secondary residences by nonresidents in the Åland Islands.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Open foreign exchange position limitsPrudential regulations that are harmonized with EU directives apply.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsYes.
Changes During 2003
Arrangements for payments and receiptsJanuary 27. Financing of and financial assistance related to military activities in Somalia were prohibited.

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