Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

ARUBA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIYes.
Exchange Arrangement
CurrencyThe currency of Aruba is the Aruban florin.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe florin is pegged to the dollar at Af. 1.79 per $1. The Centrale Bank van Aruba (CBA), the central bank, deals with local commercial banks within margins of 0.002795% on either side of parity.
Exchange taxA foreign exchange commission of 1.3% applies on all payments to nonresidents, including payments made through a foreign bank or exchange bureau, checking account transfers in foreign currencies, and payments by a foreign company on behalf of residents settled through intercompany accounts. Certain payments, such as those for transactions settled in Netherlands Antillean guilders and payments of certain government-related companies, are exempted from this commission.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsLegal entities that hold a hotel or casino license are allowed to accept and return change in U.S. dollars and Venezuelan bolívares.
Payments arrangementsNo.
Administration of controlThe CBA administers foreign exchange control.
International security restrictions
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of domestic banknotes is prohibited.
Foreign currencyThe exportation of foreign banknotes requires a license, except for traveling purposes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadThe opening of an account abroad must be reported to the CBA. Approval is not required, but holders of accounts abroad must apply to the CBA if they wish to be exempted from the requirement that they collect foreign claims as soon as they fall due and transfer and sell them to a local foreign exchange bank. Unless an exception has been given, payments to nonresidents in foreign exchange should be made from an authorized bank’s account or from an account of a foreign bank that operates in the country of the transaction or to a nostro account of a nonresident held with the authorized bank.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyThese accounts are not allowed.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyBalances in these accounts are fully convertible.
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
Licenses with quotasThe importation of eggs may be subject to quotas, depending on the domestic supply situation.
Import taxes and/or tariffsYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, export proceeds must be converted into local currency within eight working days, credited to a foreign currency account with a local foreign exchange bank, or deposited in a foreign bank account that has been reported to the CBA.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Controls on these transfers
Prior approvalFor the transfer of dividends and profits, a declaration to the CBA is required.
Indicative limits/bona fide testInterest payments on all types of foreign loans may be effected if a permit has been obtained from the CBA for the loan. As regards profits and dividends, financial statements should be submitted to the CBA indicating the amount involved. In the case of depreciation of direct investments, a special license is required if the amount of the transaction exceeds the authorized ceiling.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, proceeds must be converted into local currency within eight working days, credited to a foreign currency account with a local foreign exchange bank, or deposited in a foreign bank account that has been reported to the CBA.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsTransactions of less than Af. 300,000 a year for natural persons and Af. 750,000 a year for juridical persons (excluding commercial banks and institutional investors) may be carried out without CBA authorization. These ceilings are applicable to all capital transactions with nonresidents; a special foreign exchange license issued by the CBA is required for capital transactions exceeding these ceilings.
Controls on capital and money market instruments
On capital market securitiesThere are controls on all capital and money market instruments.
Controls on derivatives and other instrumentsControls apply to all these transactions.
Controls on credit operationsControls apply to all these transactions.
Controls on direct investment
Outward direct investmentThe CBA may require divestment, repatriation, and surrender of proceeds to the CBA.
Inward direct investmentYes.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsControls apply to all real estate transactions.
Controls on personal capital transactionsPersonal capital transactions must be effected through the banking system.
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents from nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquid asset requirementsYes.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyThe limits are 40% of the first Af. 10 million of outstanding liabilities, 50% of the second Af. 10 million, and 60% of the remaining liabilities.
Other controls imposed by securities lawsNo.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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