Chapter

ITALY

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: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of Italy is the euro.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderItaly participates in a currency union (EMU) with 11 other members of the EU: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Luxembourg, the Netherlands, Portugal, and Spain. The conversion rate between the euro and the Italian lira was set at Lit 1,936.27 per €1.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketPremiums and discounts in the forward exchange market are left to the interplay of market forces.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with foreign countries are effected in foreign currencies or in euros through foreign accounts.
Use of foreign exchange among residentsYes.
Payments arrangements
Clearing agreementsItaly maintains clearing accounts with Croatia and Slovenia. The accounts are used for trade in cross-border areas. The balances in these accounts may be used only to finance trade between certain districts of Croatia and Slovenia and the Italian provinces of Trieste and Gorizia. The balances are not transferable. There is no automatic mechanism through which outstanding balances are settled within 90 days. Only Italy is allowed to maintain a debit balance on these accounts.
Administration of controlResidents are allowed to conduct foreign exchange transactions freely, with settlements to be effected either indirectly—through the Bank of Italy (BOI), other financial intermediaries, and the Poste Italiane S.p.a.—or directly by drawing on external accounts or by offsetting debts and credits vis-à-vis other residents or nonresidents. Effective January 1, 2003, operators and intermediaries must transmit, for statistical purposes, data to the Ufficio Italiano dei Cambi (UIC) on those foreign transactions that exceed the equivalent of €12,500 (previously, €10,000) by filling out a foreign exchange statistical return.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On October 27, 2003, the Italian authorities notified the IMF of some restrictions to freeze the assets of certain senior officials of the governments of Myanmar and Zimbabwe, in accordance with EU Council Regulations Nos. 1081/2000 and 310/2002. The period of the latter regulation was extended until February 20, 2004, under EU Council Regulation No. 313/2003.
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 certain individuals associated with the previous government of the former Republic of Yugoslavia, the Taliban, and individuals and organizations associated with terrorism. In accordance with EU Regulation No. 147/2003, effective January 30, 2003, and Regulation No. 1727/2003, effective October 2, 2003, financing of and financial assistance related to military activities in Somalia and Democratic Republic of Congo are prohibited. In accordance with EU Council Regulation No. 1799/2003, effective October 16, 2003, all funds and economic resources of certain individuals of the former government of Iraq who were located outside Iraq on May 23, 2003, have been frozen; the list of persons affected by this regulation was revised on December 3, 2003 (Regulation No. 2119/2003).
Effective January 29, 2004, financial assistance in relation to military activities in Sudan is prohibited (UN Security Council Resolution No. 131/2004).
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeDomestic purchases and sales of gold exceeding the equivalent of €12,500 must be declared to the UIC.
Controls on external tradePurchases and sales of gold exceeding the equivalent of €12,500 must be declared to the UIC.
Controls on exports and imports of banknotesResidents and nonresidents are allowed to take into or out of the country unlimited amounts of cash and securities in euros and/or foreign currency. For fiscal and anti-money laundering purposes, the transfer of cash and/or securities exceeding the equivalent of €12,500 must be declared in writing when departing for or entering from a non-EU country, and the declaration must be submitted to a border customs office. When departing for or entering from an EU country, this declaration must be submitted to a bank, customs office, post office, or a customs guard station within 48 hours after entry into Italian territory or 48 hours prior to departure from Italian territory. For transfers by mail, the declaration must be submitted within 48 hours after receipt or at the time of mailing. The declaration has to be sent to the UIC by banks, customs offices, post offices, or customs guard stations.
On exports
Domestic currencyYes.
Foreign currencyYes.
On imports
Domestic currencyYes.
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThere are accounts that are blocked in accordance with UN Security Council resolutions.
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 measuresImports are governed by EU regulations according to which imports of most products, except for textiles and some products originating from China, are free of licensing and quantitative restrictions. Imports from non-EU countries of most products covered by the CAP are subject to variable import levies, which have replaced all previous barriers to imports. Common EU regulations are also applied to imports of most other agricultural and livestock products from non-EU countries. Payments for imports are not regulated, but are subject to the general rules cited in the section on Administration of Control.
Negative listYes.
Licenses with quotasYes.
Import taxes and/or tariffsYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExports to non-EU countries are permitted freely, with the exception of high-technology products included in an EU regulation and of oil extracted from the seabed, which are subject to ministerial authorization.
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 collective investment securities
Sale or issue locally by nonresidentsThe public offering of securities issued by mutual funds that are not covered by EU directives is subject to authorization.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
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 nonresidentsPortfolio investments abroad by life insurance and pension funds are subject to prudential regulations.
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsThe public offering in Italy of financial products is to be reported to the supervisory authority, and the corresponding prospectuses should be attached.
Changes During 2003
Arrangements for payments and receiptsJanuary 1. The threshold above which the declaration of foreign exchange and gold transactions to the UIC for statistical purposes is required was increased to €12,500 from €10,000.
January 30. Financing of and financial assistance related to military activities in Somalia were prohibited.
October 2. Financing of and financial assistance related to military activities in Democratic Republic of Congo were prohibited.
October 16. All funds and financial resources belonging to certain individuals associated with the former government of Iraq located outside Iraq on May 23, 2003, were frozen.
October 27. Italian authorities notified the IMF of the exchange restrictions imposed on Myanmar and Zimbabwe in accordance with EU Council Regulations Nos. 1081/2000 and 310/2002.
December 3. The list of persons associated with the former government of Iraq whose financial assets were frozen was revised (Regulation No. 2119/2003).
Changes During 2004
Arrangements for payments and receiptsJanuary 29. Financial assistance related to military activities in Sudan was prohibited.

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