Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

ANTIGUA AND BARBUDA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of January 31, 2005)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 22, 1983.
Exchange Arrangement
CurrencyThe currency of Antigua and Barbuda is the Eastern Caribbean dollar, which is issued by the ECCB.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe Eastern Caribbean dollar is pegged to the U.S. dollar, under a currency board arrangement, at EC$2.70 per US$1.
Exchange taxA foreign exchange levy of 1% is applied on purchases of foreign currency.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of member countries of the CARICOM must be made either in the currency of the country concerned or in Eastern Caribbean dollars. Exports to Jamaica are settled in U.S. dollars. Settlements with residents of other countries may be made in any foreign currency or in Eastern Caribbean dollars.
Use of foreign exchange among residentsYes.
Payments arrangements
Regional arrangementsAntigua and Barbuda is a member of the CARICOM.
Clearing agreementsYes.
Administration of controlThe MOF applies controls to all foreign exchange transactions. Effective January 1, 2005, purchases of foreign currency exceeding the equivalent of EC$250,000 no longer require MOF approval.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)In accordance with UN Security Council resolutions, measures have been taken to freeze the assets of terrorists and terrorist organizations.
In accordance with UN sanctionsYes.
Payments arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of domestic currency outside the ECCU are subject to limits prescribed by the ECCB.
Foreign currencyYes.
On imports
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedExternal accounts may be opened, especially in tourist-oriented industries or in export trade where receipts are primarily in foreign currency and a large number of inputs are imported or financed in foreign currency.
Held domesticallyYes.
Approval requiredCommercial banks are required to report external accounts operations to the MOF on a monthly basis.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedExternal accounts may be maintained in any currency and may be credited with receipts from sales of merchandise (whether from exports or local sales) or from remittances.
Approval requiredCommercial banks are required to report external accounts operations to the MOF on a monthly basis.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Approval requiredYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence. All bona fide import payments are approved. Effective January 1, 2005, purchases of foreign currency exceeding the equivalent of EC$250,000 no longer require MOF approval.
Domiciliation requirementsYes.
Letters of creditYes.
Import licenses and other nontariff measuresCertain goods require individual licenses, unless imported from CARICOM countries. Antigua and Barbuda follows the CARICOM rules of origin.
Open general licensesMost goods may be freely imported under OGLs granted by the MOF and the Ministries of Industry and Commerce.
Import taxes and/or tariffsCustoms duty rates range from zero to 35% for nearly all items. The CARICOM CET is applied. As a result, tariffs on imports from CARICOM countries range from zero to 20%. There are no customs duties on a number of items, including milk and poultry. Some goods, including basic foods and agricultural goods, are exempt from customs duties. Other exemptions for machinery, equipment, and raw materials are granted on a case-by-case basis.
State import monopolyThere is a monopoly on imports of vegetable and petroleum products.
Exports and Export Proceeds
Repatriation requirementsn.a.
Financing requirementsn.a.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
OtherYes.
Export licensesNo.
Export taxesReexports are not subject to any tax if transactions take place within the bonded area.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersEffective January 1, 2005, payments for certain categories of invisibles (related to authorized imports) exceeding EC$250,000 no longer require prior MOF approval. Approval is granted for all bona fide payments for invisibles. No controls apply on payments for freight, insurance, unloading and storage costs, administrative expenses, commissions, and profits and dividends.
Investment-related paymentsProfits may be remitted in full after compliance with corporate income tax payments. Verification is not applied in practice; the authorities, however, can decide to undertake such verification.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalEffective January 1, 2005, MOF approval is no longer required for amounts exceeding the equivalent of EC$250,000.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal paymentsInformation is not available on the transfer of pensions.
Prior approvalPayments related to family maintenance are permitted. Payments for alimony are allowed if provided for by contract.
Quantitative limitsEffective January 1, 2005, for payments related to medical expenses and studies abroad, MOF approval is no longer required for amounts exceeding the equivalent of EC$250,000.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalThese remittances are allowed, if provided for in the contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalPayments for consulting and legal fees are allowed, if provided for in the contract.
Quantitative limitsThe limit for subscriptions and membership fees is EC$10,000 a year.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsEffective January 1, 2005, foreign exchange transactions exceeding the equivalent of EC$250,000 no longer require MOF approval.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Outward direct investmentLarge transfers abroad for investment purposes may be made in phases over time by the Financial Secretary.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAn alien landholding license is required, and the purchase must be approved by the cabinet.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutionsUnder the laws governing offshore financial institutions (1) the International Financial Sector Authority was created, with responsibility for licensing offshore financial institutions; (2) annual inspections of offshore financial institutions are conducted; (3) the minimum capital requirement for offshore banks is the equivalent of US$5 million, of which US$1.5 million is to be deposited in the domestic banking system; (4) all bank directors are to be natural persons, at least one of whom must be a national of Antigua and Barbuda; and (5) offshore banks are allowed to extend credit to the Antiguan and Barbudan government.
Lending to nonresidents (financial or commercial credits)MOF approval is required for these transactions. Loans are subject to a 3% stamp duty.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 2004
No significant changes occurred in the exchange and trade system.
Changes During 2005
Arrangements for payments and receiptsJanuary 1. The requirement of MOF approval for purchases of foreign currency exceeding the equivalent of EC$250,000 was abolished.
Imports and import paymentsJanuary 1. The requirement of MOF approval for purchases of foreign currency exceeding the equivalent of EC$250,000 was abolished.
Payments for invisible transactions and current transfersJanuary 1. The requirement of MOF approval for payments for certain categories of invisibles exceeding the equivalent of EC$250,000 was abolished.
Capital transactionsJanuary 1. The requirement of MOF approval for foreign exchange transactions exceeding the equivalent of EC$250,000 was abolished.

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