Chapter

FRANCE

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
Share
  • ShareShare
Show Summary Details
(Position as of January 31, 2004)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of France is the euro.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderFrance participates in the EMU with 11 other members of the EU: Austria, Belgium, Finland, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The ECB may intervene to smooth out fluctuations in the euro exchange rate. A fixed conversion rate of CFPF 1,000 per €8.38 applies to the CFP franc, which is the currency of the overseas territories of French Polynesia, New Caledonia, and Wallis and Futuna Islands. Two groups of African countries are linked to the French Treasury through an Operations Account: Benin, Burkina Faso, Côte d’lvoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo (franc de la Communauté financiére africaine, issued by the BCEAO); and Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon (franc de la Coopèration financiére en Afrique céntrale, issued by the BEAC). The fixed parity is CFAF 655.957 per €1.



The Comorian franc, issued by the Central Bank of the Comoros, which holds an Operations Account with the French Treasury, is linked to the French franc at a fixed parity of CF 491.968 per €1.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketRegistered banks in France and Monaco, which may also act on behalf of banks established abroad or in Operations Account countries, are permitted to deal spot or forward in the exchange market in France. Registered banks may also deal spot or forward with their correspondents in foreign markets in all currencies. Nonbank residents may purchase foreign exchange forward with respect to specified transactions. All residents, including private persons, may purchase or sell foreign exchange forward without restriction. Forward sales of foreign currency are not restricted, whether or not they are for hedging purposes.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlThe Ministry of Economy is the coordinating agency for financial relations with foreign countries. It is responsible for all matters relating to inward and outward direct investment and has certain powers over matters relating to insurance, reinsurance, annuities, and the like. The execution of all transfers has been delegated to registered banks and stockbrokers and to the Postal Administration.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Measures have been taken to freeze accounts of listed persons and entities linked to terrorists pursuant to the relevant EU regulations and 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 the former government of Iraq, the former government of Liberia, Myanmar, certain individuals associated with the previous government of the former Republic of Yugoslavia, and Zimbabwe. Financing of and financial assistance related to military activities in the Democratic Republic of the Congo (from October 1, 2003), Somalia (effective January 27, 2003), and Sudan (from January 26, 2004) are prohibited. Restrictions also apply on transfers with respect to the Taliban and individuals and organizations associated with terrorism.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesAmounts exceeding the equivalent of €7,600 must be declared to customs upon arrival or departure.
On imports
Foreign currencyAt the request of Algeria, Morocco, and Tunisia, banknotes issued by these countries may not be exchanged in France.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadNo.
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 measuresSome imports from non-EU countries require administrative visas issued by the Central Customs Administration or the appropriate ministry. Imports of products of the ECSC require such administrative visas when originating in non-ECSC countries. Products covered by the Common Market regulations require import certificates.
Licenses with quotasLicenses are required for some countries and some products. Imports of goods that originate outside of the EU and are subject to quantitative restrictions require individual licenses. Common EU regulations are also applied to imports from non-EU countries. Certain goods originating in the EU that are of a strategic nature or of national interest (e.g., works of art) are licensed.
Import taxes and/or tariffsDuties are collected at the time of entry into the EU in relation to the origin of the products and a tariff nomenclature. An agricultural levy (within the CAP) and, if necessary, an antidumping levy may be added.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasCertain prohibited goods may be exported only under a special license.
Export taxesExports are not taxed, except for precious metals, works of art, jewelry, and collections of jewels and antiques, which are subject to a levy.
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 instrumentsNo.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsEffective March 7, 2003, controls on shares or other securities of a participating nature issued by non-OECD residents no longer apply.
Bonds or other debt securities
Sale or issue locally by nonresidentsEffective March 7, 2003, controls on bonds and other debt securities issued by non-OECD residents no longer apply.
On money market instruments
Sale or issue locally by nonresidentsEffective March 7, 2003, controls on money market instruments issued by non-OECD residents no longer apply.
On collective investment securities
Sale or issue locally by nonresidentsEffective March 7, 2003, controls on collective investment securities issued by non-OECD residents no longer apply.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentDirect investments by companies not listed publicly are defined as those in which foreign investors hold together more than one-third of the capital. However, effective March 7, 2003, there are no controls on investments in a company whose capital is more than 50% (previously, two-thirds) foreign owned. In the case of firms whose shares are listed on the stock exchange, the threshold is also 50% of capital (previously, 20%); this applies to each individual foreign participation but not to total foreign participation. To determine whether a company is under foreign control, the Ministry of Economy and Finance (MINEFI) may take into account any special relationships resulting from stock options, loans, patents, licenses, or commercial contracts.
Inward direct investmentAn authorization is required for investments in areas pertaining to public order, public health, and defense.
Controls on liquidation of direct investmentThe liquidation proceeds of foreign direct investment in France may be freely transferred abroad; the liquidation must be reported to the MINEFI within 20 days of its occurrence. The liquidation of direct investments abroad is free from any prior application, provided that the corresponding funds have been reported to the Bank of France.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsEffective March 7, 2003, controls on capital and money market instruments issued by non-OECD residents no longer apply.
Currency-matching regulations on assets/liabilities compositionInsurance companies in the EU are required to cover their technical reserves with assets expressed in the same currency.
Other controls imposed by securities lawsNo.
Changes During 2003
Arrangements for payments and receiptsJanuary 27. Financing or providing assistance related to military activities in Somalia was prohibited.



October 1. Financing or providing assistance related to military activities in the Democratic Republic of the Congo was prohibited.
Capital transactions
Controls on capital and money market instrumentsMarch 7. Controls on capital and money market instruments issued by non-OECD residents were eliminated.
Controls on direct investmentMarch 7. The threshold above which there are no controls on direct investments by companies not listed publicly was reduced to 50% of capital from two-thirds. In the case of companies whose shares are listed on the stock exchange, the threshold was increased to 50% of capital from 20%.
Provisions specific to institutional investorsMarch 7. Controls on capital and money market instruments issued by non-OECD residents were eliminated.
Changes During 2004
Arrangements for payments and receiptsJanuary 26. Financing or providing assistance related to military activities in Sudan was prohibited.

    Other Resources Citing This Publication