Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

POLAND

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 VIIIDate of acceptance: June 1, 1995.
Exchange Arrangement
CurrencyThe currency of Poland is the Polish zloty.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the zloty is determined on the basis of supply and demand in the foreign exchange market, and the zloty is traded freely against all currencies.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketA liquid swap market exists.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsSettlements in foreign currency among residents in Poland require a foreign exchange permit, except for those that are (1) not related to the conduct of business activities between natural persons; (2) related to sales of goods or property rights abroad; (3) conducted between employers and employees regarding business trips or work abroad; (4) related to consumer sales; and (5) settlements in euro within the scope of expending EU funds.
Payments arrangements
Bilateral payments arrangements
InoperativeThere are agreements with Iraq, the Syrian Arab Republic, Tunisia, and Turkey. Outstanding balances are being settled in accordance with the terms of the agreements.
Regional arrangementsOn May 1, 2004, Poland became a member of the EU and ceased being a member of CEFTA.
Clearing agreementsThere are inoperative agreements with members of the former CMEA.
Administration of controlThe authority to make basic changes in the Foreign Exchange Law rests with parliament. Regulations are promulgated by the MOF, in cooperation with the president of the National Bank of Poland (NBP). General foreign exchange permits are granted by the MOF in the form of regulations, while individual permits are granted by the NBP as administrative decisions. Decisions concerning individual foreign exchange permits are subject to appeal to the Supreme Administrative Court. The NBP exercises control over foreign exchange permits, exchange offices activities, and submission by commercial banks and other residents to the NBP of their banking statistics, for the purpose of compiling balance-of-payments data and the external assets and liabilities position of the country.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)In accordance with UN Security Council resolutions, Poland imposed and maintained a ban on trade with Iraq and on exports of certain products to Libya. The Polish government bans, in accordance with relevant UN Security Council resolutions, exports of arms and military equipment to the following countries: Angola (for UNITA forces), Haiti, Iraq, Liberia, Libya, Rwanda, and Somalia.
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResident individuals may hold gold in any form; trading in gold, other than in jewelry form, is subject to permission from the NBP.
Controls on external tradeThe exportation of foreign gold coins requires a permit, except for exports by nonresidents (who had previously imported them into the country) and imports by residents for conducting business in precious metals. However, the exportation of gold coins issued by the NBP is permitted. Coins made from precious metals are not legal tender in Poland.
Controls on exports and imports of banknotes
On exportsThe exportation of foreign or domestic banknotes with a total value exceeding the equivalent of €10,000 requires permission, with the following exceptions: (1) exportation by nonresidents of banknotes previously imported into the country or banknotes purchased or exchanged at a bank for banknotes previously imported into the country; (2) exportation by residents and nonresidents of banknotes withdrawn from a bank account or purchased from a bank for banknotes in a bank account; (3) exportation by nonresidents of traveler’s checks signed by them and previously imported into Poland; and (4) exportation on the basis of a written declaration.
Domestic currencyYes.
Foreign currencyYes.
On importsImports of domestic or foreign banknotes exceeding the equivalent of €10,000 must be reported to the customs administration authorities.
Domestic currencyResidents and nonresidents may import up to the equivalent of €10,000 in any currency without notification to the customs authorities. There are no limitations on nonresident exports of foreign securities or traveler’s checks that had previously been imported by them into Poland; such imports are exempt from customs notifications.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadResidents (individuals and enterprises) are allowed to maintain accounts in the member countries of the EU, the EEA, and the OECD without permission. Accounts in other countries may be maintained in connection with the economic activity conducted in these countries or in connection with management of portfolio investments by residents in these countries. Activity in these accounts must be reported quarterly to the NBP.
Accounts in domestic currency held abroadThe regulations for foreign exchange accounts held abroad also apply to these accounts.
Approval requiredYes.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsThese accounts may or may not pay interest, depending on the agreement with the bank, and they may be credited with funds from any source that is in compliance with foreign exchange regulations.
Convertible into foreign currencyThese accounts may be converted into foreign currency.
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 measuresEffective May 1, 2004, Poland adopted EU regulations. Previously, licenses were not required for imports, with the exception of certain agricultural goods, worn clothing, angles and shapes of non-alloy steel, Norway saltpeter from Ukraine, carbon, raw diamond, radioactive materials, weapons and ammunition, substances that deplete the ozone layer, psychotropic medicines and type 1 precursors, genetically modified organisms, and pharmaceutical goods.
Negative listAsbestos and wares containing asbestos, some ozone-depleting substances, and some dangerous chemicals are prohibited.
Licenses with quotasEffective May 1, 2004, Poland adopted EU regulations. Previously, imports of petroleum oils and oils obtained from bituminous minerals originating from the Czech Republic or the Russian Federation and cement from Belarus were subject to quantitative quotas.
Import taxes and/or tariffsEffective May 1, 2004, Poland adopted the EU Common Customs Tariff. Previously, all commercial imports, regardless of country of origin or provenance, were subject to an ad valorem import tariff. Import tariffs were based on the Harmonized System and the Combined Nomenclature of the EU, with seven basic rates: zero on equipment for the disabled, mineral resources, textiles, and cattle hides; up to 3% on other raw materials; 6% to 9% on basic parts of semifinished and finished goods; 9% to 18% on textile products; 12% to 25% on industrial goods; 25% to 30% on agricultural products; and 30% on luxury goods. Imports from developing countries were granted preferential treatment under the GSP. Also, imports from 45 developing countries, tropical products, and many goods that were of interest to developing countries entered Poland duty free. For the remaining goods imported from non-European developing countries whose per capita GDP was lower than Poland’s, duties were reduced by 20% to 30% of the MFN rate. Duties and taxes on imports for export production were refunded. Imports of capital goods for new joint ventures were exempt from customs duties. Additional import duty applied to matches, calcium carbide, instantaneous gas water heaters, and certain steel products.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesLicenses are required for exports carried out within the framework of international agreements that stipulate bilateral settlements and for temporary exports of capital goods and transport equipment for leasing motor vehicles.
Without quotasLicenses are required for exports of radioactive materials and military equipment, as well as of goods subject to export quotas. Exports of specific species of live poultry and of ozone-depleting goods are prohibited, as are exports to Serbia and Montenegro of petroleum oils and oils obtained from bituminous minerals.
With quotasExports of waste and scrap of copper, nickel, aluminum, lead, zinc, and tin are subject to quota restrictions.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersFor payments exceeding €10,000, all current operations must be effected through banks licensed to operate domestically. Residents and nonresidents must document the payments or transfers to the bank if these exceed €10,000.
Credit card use abroadCredit card use abroad is permitted, but the transactions must comply with regulations.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsAll capital transactions with residents of the member countries of the EU, the EEA, and the OECD are free of controls.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsA Securities and Exchange Commission (SEC) permit is required for residents and nonresidents to trade in securities.
Purchase abroad by residentsResidents are allowed to purchase securities with maturities exceeding one year issued by nonresidents from “third countries” with which Poland has concluded agreements on mutual promotion and protection of investment (BIT countries).
Sale or issue abroad by residentsThese transactions require the consent of the Polish SEC.
Bonds or other debt securitiesControls apply to all these transactions.
On money market instrumentsControls apply to all these transactions, except for their sale or issue abroad by residents.
On collective investment securities
Sale or issue locally by nonresidentsPermission of the Polish SEC is required.
Purchase abroad by residentsResidents are allowed to purchase units of participation only in collective investment funds located in BIT countries.
Controls on derivatives and other instrumentsAll transactions require NBP approval. Sale or issue locally by nonresidents also requires approval of the Polish SEC.
Controls on credit operations
Financial creditsExcept credits extended by commercial banks, a NBP permit is required in cases for which the repayment date on more than half of the debt is less than one year.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilitiesAn NBP permit is required for residents to establish a security in favor of nonresidents from third countries with respect to receivables due from other nonresidents. No controls apply to receivables arising from transactions among nonresidents conducted domestically.
By residents to nonresidentsAn NBP permit is required for guarantee transactions related to claims resulting from residents of BIT countries.
Controls on direct investment
Outward direct investmentAn NBP permit is required for direct investments, with the exception of the purchase of shares and interests in companies based in BIT countries.
Inward direct investmentThe foreign exchange law does not impose controls on these transactions but contains sectoral restrictions.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsAn NBP permit is required for real estate transactions exceeding €50,000, when a natural person residing in Poland purchases real estate for own use. An exchange permit is also required for the transfer abroad of the foreign currency used for the purchase of such real estate.
Purchase locally by nonresidentsNonresidents may acquire real estate or other immovable property in Poland only with permission from the Ministry of the Interior, except if inherited. Under the Law on Acquisition of Real Estate by Foreigners, foreigners may also acquire real estate without a permit if (1) it is an apartment; (2) they have lived in Poland for at least five years after obtaining a permanent residence visa; (3) they have been married to a Polish citizen for at least two years (the purchased real estate must constitute part of matrimonial community property); or (4) real estate is purchased by nonresident juridical persons for statutory purposes, and the size of the real estate does not exceed 4,000 square meters in urban areas. The Council of Ministers may issue a regulation defining other cases for which a permit is not required, provided that the size of acquired real estate does not exceed 4,000 square meters in urban and 10,000 square meters in rural areas. The Council of Ministers may also extend the area to be acquired without permit to 12,000 square meters in urban and 30,000 square meters in rural areas. Effective May 1, 2004, Poland may maintain in force for five years from the date of accession to the EU rules regarding the acquisition of secondary residences set forth in the Law on Acquisition of Real Estate by Foreigners (applies to foreigners other than nationals of EU member states and nationals of the states that are parties to the EEA and who have been legally residents of Poland for four years continuously). Also, Poland may maintain in force for 12 years from the date of accession to the EU the rules set forth in the aforementioned Law regarding the acquisition of agricultural land and forests. Under this Law, nationals of another member state or of a state that is party to the EEA who want to establish themselves as self-employed farmers and who have been legally resident and leasing land in Poland as a natural or legal person for at least three years continuously would not be subject to any procedures other than those that apply to nationals of Poland; in some Western and Northern voivods (state administrations), the residence and leasing period is for at least seven years.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
LoansThere are no controls on family loans.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsNBP approval is required for gifts exceeding the equivalent of €10,000.
Settlement of debts abroad by immigrantsYes.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Banks are permitted to purchase securities abroad within the limits approved by the NBP.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe reserve requirement on foreign currency accounts differs from that on zloty accounts.
Open foreign exchange position limitsA bank’s overall foreign exchange position is defined and regulated in accordance with the Basel Committee 1988 Capital Accord (as amended in 1995) and EU Directive on Capital Adequacy of Investment Firms and Capital Institutions.
Provisions specific to institutional investorsIn compliance with EU directives, a permit from the Insurance and Pension Funds Supervisory Commission is required for non-EU entities to commence an insurance business; for EU-located insurance entities, the general provisions of EU law apply. Effective May 1, 2004, the Commission has to be informed about investment transactions that would result in the acquisition of 10% of voting power, or in the increase of voting power beyond 20, 33, or 50% of total voting power (previously, 25, 50, or 75%). The Commission has the right to reject the transaction within a three-month period. Prudential regulations establishing limits for the investment of insurance funds in the country and abroad are provided by the statute on insurance operating activity. Open pension funds and occupational pension funds are allowed to invest not more than 5% and 30%, respectively, of their assets abroad, and such investments may be only in OECD member countries or in countries with which Poland has entered into agreements on the promotion and protection of investments. Further, these investments may be only in (1) securities issued by companies listed on major stock exchanges; (2) securities issued by treasuries or central banks; and (3) mutual fund certificates, provided that they are redeemable on demand and issued by entities domiciled in one of the aforementioned countries.
Limits (max.) on securities issued by nonresidentsThe limit for insurance business is 5% if denominated in foreign currency or 12% if denominated in euros, except for the risks situated abroad, to which technical provisions in the respective currency apply. The limit for open pension funds is 5%, while that for occupational pension funds is 30%.
Limits (max.) on investment portfolio held abroadThe regulations governing limits (max.) on securities issued by nonresidents apply.
Limits (min.) on investment portfolio held locallyThe limit for insurance business is 88%, and for pension funds, 95%.
Currency-matching regulations on assets/liabilities compositionThe currency-matching rule does not apply if assets denominated in one currency constitute less than 7% of assets denominated in all other currencies. It also does not apply if no more than 20% of assets denominated in a given currency do not meet certain specific requirements set by Polish law. The total assets denominated in all currencies must be at least equal to the total of liabilities.
Other controls imposed by securities lawsNo.
Changes During 2004
Arrangements for payments and receiptsMay 1. Poland acceded to the EU and ceased to be a member of CEFTA.
Imports and import paymentsMay 1. Poland adopted the EU Common Customs Tariff and other EU regulations.
Capital transactions
Controls on real estate transactionsJanuary 1. Under the terms of accession to the EU, Poland was permitted to maintain certain domestic regulations on the acquisition by foreigners of secondary residences and agriculture and forest land in Poland for 5 and 12 years, respectively.
Provisions specific to institutional investorsMay 1. Non-EU investments in insurance entities that would increase voting power over 20, 33, or 50% of total voting power (previously, 25, 50, or 75%) were required to be reported to the Insurance and Pension Funds Supervisory Commission.

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