Chapter

KAZAKHSTAN

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: July 16, 1996.
Exchange Arrangement
CurrencyThe currency of Kazakhstan is the Kazakhstani tenge.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe exchange rate of the tenge is determined on the basis of supply and demand in the foreign exchange market with limited intervention of the National Bank of the Republic of Kazakhstan (NBK). Effective June 9, 2003, the official exchange rate of the tenge against the dollar is determined daily as the weighted average rate at noon the previous day on the Kazakhstan Stock Exchange (KASE) (previously, it was set on the basis of an assessment of the general macroeconomic situation; inflation rate and monetary aggregate indicators; transactions in the foreign exchange market; information about transactions in the over-the-counter market; the short-term rates on deposits, credits, and NBK notes; and repo rates). The rates for other currencies are calculated on the basis of their cross rates against the dollar.
The currency market includes the KASE, which conducts daily trading online using an electronic trading system, an over-the-counter interbank market, and a network of exchange bureaus handling foreign exchange cash transactions. Banks may participate in trading sessions on their own account or on behalf of their clients. Banks may also trade in an over-the-counter interbank market at freely negotiated rates. There are about 2,500 exchange bureaus that conduct foreign exchange cash transactions.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForeign exchange futures are quoted on the KASE. Forward exchange operations are also conducted in the interbank market.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions between residents and nonresidents may be conducted in any currency as long as they comply with the requirements of foreign exchange regulations. The NBK has the authority to impose restrictions on the currencies of receipt for residents’ export operations (to date, no restrictions have been imposed).
Resident and nonresident natural persons may use foreign currency in Kazakhstan for transactions effected through authorized banks, crediting their own foreign exchange accounts, transfers through authorized banks (including transfers not associated with accounts) in cases specified by legislation, and settlements of goods and services sold by residents possessing the appropriate NBK license.
Controls on the use of domestic currency
For capital transactionsA list of permitted capital transactions is provided in the Law on Foreign Exchange Regulation. Certain types of capital transactions involving the transfer of foreign exchange assets from residents to nonresidents (including transactions in domestic currency between residents and nonresidents) are subject to NBK licensing. Capital transactions involving the transfer of funds from nonresidents to residents in excess of the equivalent of $100,000 must be registered.
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsThe use of foreign currency in settlements of credits received in domestic currency, interest payments, and other related payments in foreign exchange is prohibited except for settlements between residents and nonresidents.
Nonresident juridical persons are prohibited from using credits received in domestic currency to purchase foreign exchange in the domestic foreign exchange market.
Use of foreign exchange among residentsPayments and/or transfers of currency between residents must be effected in domestic currency unless specified by legislative acts.
Payments arrangementsNo.
Administration of controlThe NBK establishes the procedures for exchange transactions and monitors compliance therewith; supervises authorized banks and authorized institutions carrying out certain types of banking operations; regulates the limit on open foreign exchange positions; and has the authority to introduce restrictions on the currencies of receipt for export operations performed by residents and the surrender procedures for export proceeds. The NBK reserves the right to impose restrictions on export and import transactions in order to maintain economic security.
For the purpose of fulfilling international obligations during periods of emergencies, the government reserves the right to introduce restrictions on foreign exchange operations.
The MOF monitors government and government-guaranteed borrowing and manages government debt. The Ministry of Industry and Trade performs the licensing of imports and exports of goods and services together with other activities within the scope of its authority, and it also monitors licensees’ compliance with qualification requirements and licensing regulations. The Customs Control Agency performs customs control and, within the scope of its authority, foreign exchange control. Authorized banks and authorized institutions engaged in certain types of banking operations and other institutions that monitor compliance with foreign exchange legislation serve as foreign exchange control agents.
On January 1, 2004, the NBK’s functions pertaining to regulation, licensing, and control and supervision of banks and other financial institutions were transferred to the newly created Financial Supervision Agency (FSA).
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)There are no specific restrictions on the export of refined precious metals. Control over the foreign trade of refined precious metals, however, is maintained in the same manner as that applied to other goods. For purposes of trade, however, refined gold bullion is classified as a foreign exchange asset.
Controls on exports and imports of banknotes
On exports
Domestic currencyDomestic currency notes may be exported without restriction.
Foreign currencyResident natural persons may export foreign currency up to the equivalent of $10,000 or up to an amount previously imported and declared, subject to documentary evidence. Effective September 23, 2003, the export of foreign currency notes exceeding the equivalent of $3,000 by nonresident natural persons requires the presentation of a customs declaration showing that the funds had previously been imported. Previously, these transactions had to be carried out in accordance with the declaration prepared at the time of export. Amounts exceeding these limits require documentary evidence that the foreign exchange was previously imported.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResident juridical persons may conduct foreign exchange transactions through bank accounts at authorized banks only.
Resident juridical persons may withdraw foreign exchange from their bank accounts to pay wages to nonresident employees and to cover expenses related to travel abroad by employees on official business. Effective September 23, 2003, up to the equivalent of $10,000 a month may be withdrawn for travel expenses.
Approval requiredAn NBK license is required to open these accounts.
Held abroad
Approval requiredEffective May 25, 2003, an NBK license is required to open these accounts except in the case of resident banks and resident natural persons residing abroad temporarily for purposes of medical treatment, study, vacation, or work. Effective August 26, 2003, NBK registration only is required for resident natural persons to open accounts with banks in OECD-member countries that satisfy minimum rating requirements. Previously, a license holder could not be in arrears to authorized banks in Kazakhstan, and had to open an account at a foreign bank within six months of the date the license was obtained.
Accounts in domestic currency held abroadThe regulations applicable to foreign currency accounts held abroad apply.
Accounts in domestic currency convertible into foreign currencyAll domestic currency accounts are convertible; however, resident juridical persons may acquire foreign currency in the domestic currency market only for purposes specified in the legislation.
Nonresident Accounts
Foreign exchange accounts permittedNonresident juridical persons may open these accounts for foreign exchange operations and may withdraw currency from these accounts only to pay employee wages and for business travel expenses.
Domestic currency accountsNo.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsIn order to purchase foreign exchange, resident juridical persons must submit documentary evidence of the purpose of the transaction, including invoices. Effective May 25, 2003, a transaction passport must be compiled for each import transaction valued in excess of the equivalent of $10,000 (previously, $5,000), first at the customs authorities and subsequently at the serving bank; an NBK license is required. The transaction passport is checked to verify compliance with the terms of the import contract and is monitored by the customs authorities and an authorized bank until completion. Importers must ensure that the value of goods imported into the country is equal to the amount paid for them. If the goods are not delivered, the importer must refund the funds that had been previously transferred to the importer’s account with an authorized bank within the period established in the contract, but no later than 180 days (prior to May 25, 2003, 120 days) following the date of the transfer, unless stipulated differently in the NBK license.
Deferments of payment or delivery of imports (commercial lending) for a period exceeding 180 days (prior to May 25, 2003, 120 days) are treated as capital transactions. Deferments exceeding 180 days and valued at more than $100,000 require NBK registration.
Domiciliation requirementsForeign currency purchased by resident juridical persons that is not used for its designated purpose within 30 days of its acquisition must be sold in the domestic currency market at the current market rate.
Import licenses and other nontariff measuresImport licenses are required for 12 categories of goods.
Negative listCertain goods and services require an import license or a special license that is issued with governmental approval. On the basis of the Lists of the 1961 Single Convention on Narcotic Drugs, the 1971 Convention on Psychotropic Substances, and the 1988 Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, which Kazakhstan signed in 1997, a list has been established of narcotic drugs, psychotropic substances and their precursors, and poisonous substances that are subject to controls. There is also a list of multicomponent medicines containing small quantities of narcotic drugs, psychotropic substances, and their precursors that are not subject to controls. Imports of hazardous industrial waste are prohibited.
Licenses with quotasYes.
Import taxes and/or tariffsImports are generally subject to a VAT of 16% (this was reduced to 15% on January 1, 2004); to excise taxes, if the same taxes apply to domestically produced goods; and to customs charges.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters are required to credit export proceeds in foreign exchange to a bank account at an authorized bank within 180 days (prior to May 25, 2003, 120 days) of the shipment date, unless stipulated differently in the NBK license. In the event that export proceeds are not received during this period and the amount exceeds the equivalent of $10,000 (prior to May 25, 2003, $5,000), the exporter must obtain an NBK license or reimport the goods. An NBK license is required to credit export proceeds to accounts at foreign banks.
Exports with a deferred payment period exceeding 180 days are considered capital transactions. Effective August 26, 2003, advance payments exceeding 180 days and valued at more than the equivalent of $100,000 require NBK registration. Effective November 29, 2003, a list is maintained of goods for which export proceeds may be received up to 365 days after export without a license.
Financing requirementsNo.
Documentation requirementsSupporting documents must be presented. If an export transaction is considered a capital transaction, the exporters may not dispose of foreign exchange proceeds without obtaining a license and/or registration certificate.
Export licensesExport licenses are required for 21 categories of goods.
Without quotasCertain listed exports require a license or a special license that is issued with governmental approval.
With quotasCertain listed goods require an export license in accordance with the international obligations of Kazakhstan.
Export taxesEffective January 1, 2004, a tax applies on exports of crude oil by developers who have not concluded product-sharing contracts.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments to be made by residents to nonresidents must be supported by documents indicating the validity of payments (contract, agreement, accord, etc.) to an authorized bank. Current transfers exceeding the equivalent of $10,000 by natural persons must be effected through an authorized bank by opening an account and presenting supporting documents. Resident and nonresident natural persons may make one-time transfers of up to $10,000 through an authorized bank without opening an account. However, banks may make only one such transfer a day and the transfer may not be related to a capital transaction.
Effective May 25, 2003, deferment of the delivery of services or payments for services provided for a period of more than 180 days (previously, 120 days) is treated as a capital transaction, and earnings from services provided for nonresidents must be repatriated within 180 days (previously, 120 days). An NBK license is required to effect prepayments exceeding the equivalent of $5,000.
Trade-related payments
Quantitative limitsWhen reinsuring with a nonresident insurance (reinsurance) company, the liability retained by the resident insurance (reinsurance) company must represent at least 5% of the total amount if the percentage of liability of the maximum liability of an insurance (reinsurance) company under an individual insurance or reinsurance agreement does not exceed 10% of the company’s equity capital and insurance reserves.
A domestic resident insurance (reinsurance) company may assign insurance risks outside the country for reinsurance to a nonresident reinsurance company directly or through a nonresident insurance broker if the company possesses a specific rating from one of the rating agencies. A list of minimum rating requirements has been established by an authorized state body.
The total amount of insurance premiums paid by the assignor to nonresident reinsurance organizations, less commissions received from them by the assignor, must not exceed 85% of the total amount of insurance premiums received under insurance agreements (with consideration for those paid by reinsurance organizations) within a full fiscal year.
Indicative limits/bona fide testSupporting documents must be presented.
Investment-related payments
Prior approvalNBK registration is required for receipts from nonresidents of rent for an enterprise, when the contract includes a property complex, and of rent for other real estate when prepayment exceeds 180 days. In addition, effective August 26, 2003, NBK registration is required for payments of royalty fees and transfers of intellectual property exceeding the equivalent of $100,000.
Indicative limits/bona fide testDocumentary evidence for the validity of payments must be submitted.
Payments for travelResident and nonresident juridical persons are entitled to withdraw funds from their foreign exchange accounts to pay expenses connected with travel of a juridical person’s employees on foreign business trips. Effective September 23, 2003, up to the equivalent of $10,000 a month may be withdrawn from a resident foreign exchange account to make payments for business travel abroad.
Indicative limits/bona fide testSupporting documents must be presented.
Personal payments
Indicative limits/bona fide testCurrent foreign exchange transactions in the form of one-time transfers by resident and nonresident natural persons in an amount up to the equivalent of $10,000 may be effected through authorized banks without opening an account and/or presenting supporting documents. For transfers in excess of this amount without the relevant documents and totaling more than $50,000 in one month, a bank is required to provide information to the NBK regarding the person in question and the transactions performed.
Foreign workers’ wages
Prior approvalAdvance payments for services from nonresidents of more than 180 days and exceeding the equivalent of $10,000 require an NBK license.
Indicative limits/bona fide testSupporting documents must be presented.
Credit card use abroadThe use of credit cards is permitted only for business travel and foreign representation expenses.
Indicative limits/bona fide testSupporting documents must be presented.
Other payments
Prior approvalYes.
Indicative limits/bona fide testSupporting documents must be presented. Payments of rental on nonresidents’ real estate by residents require an NBK license.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsWhen a transaction is treated as a capital transaction, a license and/or registration certificate is required to dispose of the funds.
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 nonresidentsPurchases in excess of the equivalent of $100,000 must be registered with the NBK, except for those effected through resident broker companies.
Sale or issue locally by nonresidentsPurchases from nonresidents by residents are subject to prior NBK licensing, with the exception of brokerage and dealer activities by banks and, effective May 25, 2003, purchases meeting requirements under foreign exchange legislation. Subsequent transactions between residents are classified as trading and subject to NBK authorization; the trading of instruments with a rating no lower than A (based on the classification of the Standard & Poor’s and Fitch rating agencies) or A2 (Moody’s Investors Service) does not require NBK authorization.
Purchase abroad by residentsPurchases of shares from nonresidents by residents are subject to NBK licensing.
Sale or issue abroad by residentsTransactions exceeding the equivalent of $100,000 require an NBK license and NBK registration, as well as prior notification and submission to the NBK.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
Purchase locally by nonresidentsPurchases in excess of the equivalent of $100,000 must be registered with the NBK. This requirement does not apply in the case of purchases of government securities, deposit certificates, or domestic securities purchased through resident brokers.
On money market instrumentsThe regulations governing shares or other securities of a participating nature apply.
On collective investment securitiesThe regulations governing money market instruments apply to collective investment securities.
Controls on derivatives and other instrumentsPresent legislation has established only the concept of derivative instruments and does not define them. Accounting and registration of transactions with derivative securities traded on the organized securities markets are performed in accordance with the rules for securities exchange trading established by the trader.
Controls on credit operations
Commercial credits
By residents to nonresidentsA license from the NBK is required for lending operations in excess of the equivalent of $10,000 with maturities of more than 180 days.
To residents from nonresidentsA registration certificate from the NBK is required for operations with maturities of more than 180 days and in amounts exceeding the equivalent of $100,000.
Financial credits
By residents to nonresidentsThe regulations governing commercial credits apply.
To residents from nonresidentsA registration certificate from the NBK is required for credits in amounts exceeding the equivalent of $100,000 with maturities of more than 180 days.
Controls on direct investment
Outward direct investmentEffective May 25, 2003, direct investments in OECD-member countries or countries with which Kazakhstan has reached an agreement on mutual investment do not require NBK registration. All other investments are subject to NBK licensing. Effective August 25, 2003, NBK registration is required if a domestic owner holds 50% or more of the voting shares of a foreign entity.
Inward direct investmentA certificate of registration from the NBK is required for residents to solicit foreign investments in excess of the equivalent of $100,000 (excluding reinvestments).
Investment and ownership in the local insurance industry are subject to the following restrictions: (1) nonresident insurance companies may not open branch offices locally, and other nonresident companies—other than holding companies with subsidiary insurance companies—are prohibited from creating subsidiary insurance companies locally; (2) nonresident insurance brokerage firms are prohibited from opening branch offices and representative offices locally, and other nonresident companies are prohibited from participating in the creation of an insurance brokerage locally; (3) juridical persons registered in an off shore zone or juridical persons whose authorized capital includes juridical persons registered in an offshore zone may not open an insurance company locally; and (4) at least one third of the members of the board of directors and executive board of an insurance or reinsurance company with nonresident participation must be Kazakhstani citizens.
Investment in domestic banks may only be effected by entities with an international rating that is higher than the Kazakhstan sovereign rating. This requirement does not apply in the case of registered entities in specific offshore sites.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsTransfers of funds from residents to nonresidents for real estate are subject to NBK licensing.
Purchase locally by nonresidentsTransfers of funds in excess of the equivalent of $100,000 from nonresidents to residents for purchases of real estate are subject to NBK registration.
Sale locally by nonresidentsAn NBK license is required.
Controls on personal capital transactions
Loans
By residents to nonresidentsLoans by residents to nonresidents in foreign currency for a term of more than 180 days (prior to May 25, 2003, 120 days) are subject to NBK licensing.
To residents from nonresidentsLoans by nonresidents to residents for a term of more than 180 days and in an amount equivalent to more than $100,000 are subject to registration with the NBK.
Transfer of assets
Transfer abroad by emigrantsNonresident natural persons are entitled to transfer their funds abroad without restriction upon presentation of supporting documents.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Prudential standards must be observed.
Lending locally in foreign exchangeAuthorized banks may extend credit in foreign currency to resident and nonresident juridical persons only in noncash form. Settlement in foreign exchange of loans received in domestic currency and of payment of interest and other charges on them are prohibited, except in cases where these settlements are effected between residents and nonresidents.
Purchase of locally issued securities denominated in foreign exchangeBanks may purchase only specifically listed securities.
Investment regulations
Abroad by banksInvestments abroad by resident banks are limited by the ratio set for the placement of their own and borrowed funds in domestic assets.
Direct (immediate) or indirect (through participation in the authorized capital of other juridical persons) participation by a bank in the authorized capital of another juridical person may not exceed 10% of the bank’s equity capital. Direct participation by a bank in the authorized capital of a juridical person through the transfer of ownership to the bank of stocks previously accepted as collateral, appraised at their fair value determined in accordance with international financial reporting standards, may not exceed 25% of the bank’s equity capital. NBK approval is required for the establishment or acquisition of a subsidiary by a bank. Banks are prohibited from performing business operations and transactions not related to banking and from participating in the authorized capital of juridical persons, except in the case of (1) participation in authorized capital banks, private pension savings funds, pension asset management companies, investment funds, insurance companies, leasing companies, and juridical persons whose stocks are listed on the stock exchange, provided that the amount does not exceed 15% of the total number of stocks issued by a single issuer; (2) participation in the authorized capital of juridical persons that are part of the financial market infrastructure and/or are engaged in automating the activities of banks and institutions performing certain types of banking operations; (3) participation in the authorized capital of organizations engaged in professional activities in the securities market; (4) participation in the authorized capital of juridical persons in cases where stocks of these organizations accepted as collateral become the property of the banks in accordance with the terms of the security agreement before they are sold by the banks; (5) activities related to management of the property and affairs of insolvent debtors in bankruptcy proceedings; and (6) the performance of transactions with bonds of juridical persons whose securities are listed on the stock exchange.
In banks by nonresidentsRepresentative offices of nonresident banks may be opened with the consent of the NBK. The opening of branches of foreign banks in Kazakhstan is prohibited. The opening of a subsidiary nonresident bank and the acquisition of more than 50% of the stock of a resident bank by a nonresident bank are permitted, provided that the nonresident bank’s representative office has been in operation domestically for at least one year.
Nonresident juridical persons, including banks, may hold more than 10% of the stock of a resident bank, provided that they have a rating that is not below the rating of Kazakhstan by one of the major international rating agencies, a list of which is established by the NBK.
The following requirements must be observed in the establishment and operations of banks with foreign participation: (1) the total declared authorized capital of banks with foreign participation must not exceed 50% of the total declared authorized capital of all Kazakhstani banks, except in cases permitted by the NBK; (2) at least one member of the supervisory board of a bank with foreign participation must be a citizen of Kazakhstan who has worked in an executive capacity for not less than three years in a bank operating in Kazakhstan and has knowledge of Kazakhstani banking and civil legislation; (3) a bank with foreign participation is required to place resources in domestic assets in an amount and in accordance with procedures established by the NBK—a list of domestic assets is established by the NBK; and (4) at least 70% of the employees of the bank must be citizens of Kazakhstan. The NBK has the right to impose additional requirements on banks with foreign participation with respect to the makeup of their governing bodies, the banking operations they may perform, prudential standards, other binding rules and limits, and reporting procedures.
Juridical persons registered in offshore zones or having affiliated persons registered in offshore zones, or natural persons who are participants (founders, shareholders) of juridical persons registered in offshore zones, a list of which is established by the NBK, may not be founders or shareholders of resident banks. (This restriction does not extend to banks with a credit rating no lower than A from one of the rating agencies, a list of which is established by the NBK.)
A nonresident bank that is the founder of or participant in a resident bank is required to submit, in addition to other necessary documents, written confirmation from a bank supervisory body of the relevant country that the bank possesses a current banking license and that the bank is subject to supervision on a consolidated basis.
A nonresident juridical or natural person who is a founder of a bank is required to append to the application for a permit to open a bank—in addition to other necessary documents—(1) information on the participation of the bank in the authorized capital of other banks and financial institutions; and (2) a written statement from an authorized body (for nonresident banks, a bank supervising body) of the relevant country allowing the person to participate in the authorized capital of a Kazakhstani resident bank or a statement from an authorized body (for nonresident banks, a bank supervising body) of the relevant country to the effect that such permission is not required by law in the country of this founder.
Open foreign exchange position limits
On resident assets and liabilitiesThe overall net foreign exchange position limit is 50% of a bank’s equity capital. The (long and short) open foreign exchange position limits for currencies of countries with a sovereign rating of no lower than A from Standard & Poor’s (or a rating of a similar level from one of the other internationally recognized rating organizations) and for euros are 30% of a bank’s equity capital. The short foreign exchange position limits for currencies of countries with a sovereign rating of between B and A from Standard & Poor’s (or rating of a similar level from one of the other rating organizations) is 15% of a bank’s equity capital. In all other cases, the short and long open foreign exchange limits are 5%.
Provisions specific to institutional investorsGeneral licenses are issued to pension asset-management companies to invest in nonresident securities. Effective September 18, 2003, investment in pension assets no longer requires NBK registration.
Limits (max.) on investment portfolio held abroadPension asset–management companies may place up to 40% of the pension assets of each private pension savings fund under their management in the following financial instruments and amounts, based on the total volume of pension assets (including the current volume of investments and the balance of funds in the investment accounts of private pension savings funds held by the custodian on the date the transaction is concluded): (1) not more than 30% may be held in securities of foreign countries or instruments of international issuers with a rating of AA or higher (based on Standard and Poor’s and Fitch classification) or Aa2 (based on Moody’s Investor Service classification); (2) not more than 20% may be held in instruments rated A or A2 or higher; and (3) not more than 10% may be held in instruments rated BBB or Baa2 or higher. Insurance companies may invest up to 30% of total assets in instruments rated A- or A3 or higher; 30% of total assets may be invested in sovereign bonds rated A- or A3 or higher; and 30% may be invested in securities of listed international financial institutions.
Limits (min.) on investment portfolio held locallyPension asset–management companies are required to place not less than 25% of the pension assets of each private pension savings fund under their management in government securities of Kazakhstan (including those issued in compliance with legislation of other countries). For securities issued by local government authorities, a minimum of 20% applies, except in the case of those issued in compliance with legislation of other countries.
Other controls imposed by securities lawsAn NBK license is required to conduct professional activities in the securities market, to operate a stock exchange, and to operate as a self-regulating organization of professional participants in the securities market.
Changes During 2003
Exchange arrangementJune 9. The exchange rate of the tenge began to be set at the previous day’s noon weighted exchange rate on the KASE.
Arrangements for payments and receiptsSeptember 23. Exports of foreign currency by nonresidents were made subject to a limit equivalent to $3,000.
Resident accountsMay 25. Resident natural persons were allowed to open foreign exchange accounts abroad during temporary stays abroad, without NBK licenses.
August 26. NBK registration only was required to open an account with a bank in an OECD-member country with a minimum rating.
September 23. Resident juridical persons were allowed to withdraw up to the equivalent of $10,000 a month for travel expenses abroad.
Imports and import paymentsMay 25. The limit at which a transaction passport is required for an import transaction was increased to the equivalent of $10,000 from $5,000.
May 25. The period within which goods for which advance payment had been made must be received, or be subject to refund or considered a capital transaction, was extended to 180 days from 120 days.
Exports and export proceedsMay 25. The limit at which an NBK license is required was increased to the equivalent of $18,000 from $5,000.
May 25. The period within which export proceeds must be repatriated, or be subject to licensing or reimporting requirements or considered a capital transaction was extended to 180 days from 120 days.
August 26. Advance payments exceeding 180 days and valued at more than the equivalent of $100,000 required NBK registration.
November 29. A list of goods was established for which export proceeds may be received up to 365 days after export without a license.
Payments for invisible transactions and current transfersMay 25. The period within which delivery of services must be received, or be considered a capital transaction, was extended to 180 days from 120 days.
May 25. The period within which earnings from services provided for nonresidents must be repatriated was increased to 180 days from 120 days.
August 26. Payments of royalty fees and transfers of intellectual property exceeding the equivalent of $100,000 required NBK registration.
September 23. Resident juridical persons were allowed to withdraw up to the equivalent of $10,000 a month for travel expenses abroad.
Capital transactions
Controls on capital and money market instrumentsMay 25. Purchases of instruments meeting requirements under foreign exchange legislation were no longer subject to NBK licensing.
Controls on direct investmentMay 25. Direct investments in OECD-member countries or countries with which a treaty on mutual investment has been signed were no longer subject to NBK registration.
August 25. NBK registration was required when a domestic owner holds 50% or more of the voting shares of a foreign entity.
Controls on personal capital transactionsMay 25. The period for which NBC licensing is required for loans by residents to nonresidents and by nonresidents to residents was increased to 180 days from 120 days.
Provisions specific to institutional investorsSeptember 18. Investment of pension assets no longer requires NBK registration.
Changes During 2004
Arrangements for payments and receiptsJanuary 1. The FSA came into operation and assumed the NBK’s functions pertaining to licensing, regulation, control, and supervision of banks and other financial institutions.
Imports and import paymentsJanuary 1. The VAT was reduced to 15% from 16%.
Exports and export proceedsJanuary 1. A tax was imposed on exports of crude oil by developers who have not concluded product-sharing contracts.

    Other Resources Citing This Publication