Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

SENEGAL

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 6, 1996.
Exchange Arrangement
CurrencyThe currency of Senegal is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at the rate of CFAF 655.957 per €1. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris exchange market and the fixed rate between the euro and the CFA franc.
Exchange taxAuthorized banks charge an exchange commission of 2% on purchases and sales of euros and a freely determined commission on purchases and sales of foreign currencies not directly related to transactions abroad. In addition, a commission of 0.25% (all of which must be surrendered to the treasury) is levied by banks on transfers to all countries outside the WAEMU.
Exchange subsidyNo.
Forward exchange marketResidents are authorized to contract forward exchange cover for payments related to imports and exports of goods and services. Forward cover may be contracted only in the currency of settlement stipulated in the commercial contract. Maturities must correspond to the due date of the import or export payment stipulated in the commercial contract.
Arrangements for Payments and Receipts
Prescription of currency requirementsSenegal is linked to the French Treasury through an Operations Account, through which settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC member countries and the Comoros) are made in euros or in the currency of any other Operations Account country.
Controls on the use of domestic currency
For capital transactions
Transactions in derivatives and other instrumentsYes.
Credit operationsBorrowing by residents from nonresidents must be channeled through authorized intermediaries (whenever borrowed funds are made available for use in the country), unless otherwise indicated by the Ministry of Economy and Finance (MEF).
Use of foreign exchange among residentsThe CFA franc is the only legal tender in Senegal. Traveling residents must surrender to an authorized intermediary, within eight days of their return, any foreign banknotes or other means of payment denominated in foreign exchange valued in excess of the equivalent of CFAF 300,000.
Payments arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or euros against CFA francs are settled through a debit or credit to the Operations Account.
Clearing agreementsA multilateral clearing agreement exists in the context of the WAMA for the WAEMU member countries and Cape Verde, The Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone. All payments related to current transactions between member countries’ banks may be effected under the clearing arrangement, except transactions specified by the committee of governors of ECOWAS countries or payments related to the exportation between members of finished products originating in countries that are not WAMA members.
Administration of controlExchange control is administered by the MEF, which partially delegates its approval authority to the BCEAO and to authorized banks. The Directorate of Money and Credit examines exchange authorization requests relating to nondelegated operations. Customs offices monitor outflows of foreign exchange and confirm imports and exports of goods. All exchange operations with foreign countries must be effected through authorized banks, the postal administration, or the BCEAO. The BCEAO and the MEF exercise exchange controls ex post. No supporting documents are required for transfers of up to CFAF 300,000.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeTrade is restricted to dealers approved by the relevant ministry.
Controls on external tradeImports and exports of gold originating in or bound for non-WAEMU countries require prior authorization from the MEF. Exempt from this requirement are (1) imports and exports by the Treasury or the BCEAO; (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles); and (3) imports and exports by travelers of gold articles up to a combined weight of 500 grams.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeThere are no restrictions on precious metal brokers.
Controls on external tradeImports and exports of gold originating in or bound for non-WAEMU countries require prior authorization from the MEF. Exempt from this requirement are (1) imports and exports by the Treasury or the BCEAO; (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles); and (3) imports and exports by travelers of gold articles up to a combined weight of 500 grams.
Controls on exports and imports of banknotes
On exports
Domestic currencyCFA franc banknotes may be exported freely by travelers. However, the suspension of BCEAO repurchases of exported banknotes continues. In addition, the exchange of BCEAO banknotes between authorized intermediaries and their correspondents outside the WAEMU is prohibited.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers up to the equivalent of CFAF 500,000 is allowed. In order to reexport foreign banknotes in excess of this ceiling, a traveler must provide documentation showing that the banknotes were imported or purchased with another means of payment recorded in the traveler’s name or via a withdrawal from a nonresident account at a local bank.
On imports
Domestic currencyBanknotes and coins issued by the BCEAO may be imported freely by resident travelers.
Foreign currencyForeign exchange may be imported freely. Residents bringing in foreign banknotes and other means of payment denominated in foreign exchange exceeding the equivalent of CFAF 300,000 must sell them to an AD within eight days. Nonresidents are required to make a written declaration of all means of payment they hold in excess of the equivalent of CFAF 1 million upon entry into or departure from Senegal.
Resident Accounts
Foreign exchange accounts permittedThe opening of these accounts with ADs in Senegal is permitted, but is subject to prior authorization by the MEF, after approval of the BCEAO.
Held domesticallyYes.
Held abroadIndividuals traveling abroad may open bank accounts to receive foreign currency legitimately exported during their travel or earned during their stay abroad. However, residents are required to repatriate assets held in these accounts within 30 days of their return. In all other cases, the prior authorization of the MEF, after BCEAO approval, is required to open an account abroad.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents may hold these accounts with domestic financial institutions, but prior approval of the BCEAO is required.
Domestic currency accountsThese accounts may not be credited with BCEAO banknotes or banknotes issued by central banks that maintain an Operations Account with the French Treasury. They may not be overdrawn without prior authorization of the MEF, or the BCEAO national agency acting on behalf of the Minister responsible for finance. Funds may be transferred freely between nonresident accounts.
Convertible into foreign currencyConvertible foreign currency accounts may be debited freely for the purchase by nonresidents of foreign currencies on the official exchange market.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance payments for imports require authorization, and importers may not acquire foreign exchange until the contractual date of the payments.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsImport transactions originating in countries outside the CFA franc zone are required to be domiciled with authorized banks if imports exceed CFAF 5 million.
Preshipment inspectionAn inspection is required for the quantity, quality, and price of merchandise imports exceeding CFAF 3 million f.o.b.
Import licenses and other nontariff measures
Negative listImports of narcotics and firearms are prohibited.
Other nontariff measuresQuantitative restrictions may be applied to products for public health and security reasons.
Import taxes and/or tariffsThe CET of the WAEMU consists of four rates (zero, 5%, 10%, and 20%). A statistical tax of 1%, a WAEMU community solidarity levy of 1%, and an ECOWAS levy of 0.5% are also applied. The maximum total import tariff is 22.5%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to foreign countries, excluding those between WAEMU countries, must normally be collected within 120 days of shipment and repatriated through the BCEAO not later than one month after the due date of the payment.
Surrender requirementsResidents are required to surrender to an authorized bank all foreign exchange proceeds earned abroad or received from nonresidents within one month after the due date.
Financing requirementsNo.
Documentation requirementsA customs declaration is required.
DomiciliationAll exports to foreign countries, except WAEMU countries, with values in excess of CFAF 5 million must be domiciled.
Export licensesGold exports require authorization.
Without quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersTransfers for invisible transactions to France, Monaco, and Operations Account countries may be made freely. Payments and receipts made by foreign ships on stopovers in WAEMU countries or by WAEMU ships abroad are considered current transactions. Payments and transfers for current transactions may be made freely by authorized intermediaries, subject to documentary requirements.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalYes.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalResident travelers must present a travel document and a valid passport or a national identity card to an authorized intermediary bank or exchange bureau before foreign exchange will be issued.
Quantitative limitsResidents traveling for tourism or business purposes to non-WAEMU countries are allowed to take out banknotes other than CFA franc notes up to the equivalent of CFAF 2 million a person; amounts in excess of this limit may be taken out in the form of traveler’s checks, certified checks, or other means of payment.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testForeigners working in Senegal may transfer their total net wages and salaries upon presentation of pay slips.
Credit card use abroadOnly credit cards issued by specialized agencies may be used.
Prior approvalYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions with non-WAEMU member countries must be repatriated.
Surrender requirementsAll amounts due from nonresidents for services and all income earned from foreign assets abroad must be collected and surrendered within one month of the due date or the date of receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsCapital transactions between WAEMU member countries are unrestricted. Outward capital transfers require MEF authorization, except in the case of (1) amortization of debts and the repayment of short-term loans granted to finance industrial and commercial operations, (2) transfers of proceeds from the liquidation of investments or sale of foreign securities by nonresidents, and (3) payments for the purchase of options. Capital receipts from WAEMU countries, however, are permitted freely. All investments abroad by residents of Senegal require prior authorization from the MEF; up to 75% of such investments may be financed with borrowing from abroad. Foreign borrowing must be reported for statistical purposes.
Controls on capital and money market instrumentsThe prior authorization of the RCPSFM is required for the following operations: issuing or marketing of securities and real assets of foreign entities, canvassing, and publicity or advertising for investment abroad.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThese purchases are subject to prior declaration to the MEF for statistical purposes.
Sale or issue locally by nonresidentsThe issue or sale of securities by nonresidents requires the authorization of the RCPSFM, after MEF approval.
Purchase abroad by residentsThese operations, as well as transfers of related funds, require the approval of the MEF.
Sale or issue abroad by residentsControls on the sale of securities for disinvestment purposes in the form of a transfer between a nonresident and a resident depend on the financial settlement modality of the transaction. Settlement of such sales by means of outward transfers or by crediting a nonresident’s account requires an exchange authorization subject to the approval of the MEF. Foreign currency proceeds from the sale of securities or disinvestment must be surrendered to an authorized intermediary.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
On money market instrumentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue abroad by residentsResidents may sell money market instruments abroad. Sales liquidating an investment are subject to prior declaration. Proceeds from such sales or from liquidation must be surrendered to an authorized bank.
On collective investment securitiesThe regulations governing shares or other securities of a participating nature apply, except for purchase locally by nonresidents.
Controls on derivatives and other instrumentsControls apply to all these transactions. These instruments are subject to general regulations that apply to securities and investments. Residents may freely purchase abroad or from nonresidents call or put options for primary commodities or securities transactions.
Residents may not purchase commodities or securities on foreign markets for delivery in a put option contract. Put options must be on assets that can be acquired locally by the resident seller for delivery abroad in execution of the contract.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsCommercial credits may be granted freely in connection with merchandise exports if the due date of the payment is within 120 days of the shipment of the merchandise. Commercial credits in connection with the provision of services may be granted freely by residents, with the same limit on the payment due date as for merchandise exports.
To residents from nonresidentsNonresidents may grant freely commercial credits to resident institutions. Repayments of commercial credits are generally authorized, subject to the submission of supporting documents.
Financial credits
By residents to nonresidentsThese credits require the prior authorization of the MEF. Transfers abroad of the funds necessary to service these facilities require an exchange authorization, subject to the approval of the MEF, and the submission of supporting documents.
To residents from nonresidentsThere are no controls on these facilities. Funds required for servicing these facilities must be transferred abroad by an authorized intermediary bank.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe granting of guarantees and sureties is subject to prior approval by the MEF. Transfers abroad of funds to service these facilities require the issuance of an exchange authorization, subject to approval of the MEF, and the submission of supporting documents.
To residents from nonresidentsThese facilities may be granted freely, although the funds required for servicing them must be transferred abroad by an authorized bank. If, however, these transactions take place between a direct investment company resident in Senegal and its parent company located abroad, they are considered to be direct investments and therefore require prior declaration to the MEF.
Controls on direct investment
Outward direct investmentDirect investments constitute investments implying control of a company or enterprise. Mere participation is not considered direct investment unless it exceeds 20% of the capital of a company whose shares are quoted on a stock exchange. All investments abroad by Senegalese residents, including investments through foreign companies under the direct or indirect control of residents of Senegal and investments by foreign branches or subsidiaries of companies established in Senegal, require the prior authorization of the MEF; up to 75% of such investments may be financed by foreign borrowing. No authorization is required for the purchase of foreign securities if the RCPSFM has authorized their issue or marketing in WAEMU member countries.
Inward direct investmentForeign direct investments in Senegal, including those made by companies in Senegal that are directly or indirectly under foreign control and those made by branches or subsidiaries of foreign companies in Senegal, must be reported to the MEF for statistical purposes.
Controls on liquidation of direct investmentThe liquidation of investments by residents abroad must be reported to the MEF for information purposes. The reinvestment of the proceeds of such liquidation is subject to the prior authorization of the MEF. If the reinvestment has not been authorized, the proceeds of the liquidation must be repatriated within one month through an authorized intermediary. The sale of foreign investments in Senegal is allowed, but must be reported for statistical purposes.
Controls on real estate transactions
Purchase abroad by residentsThese purchases require the prior authorization of the MEF.
Purchase locally by nonresidentsPurchases for purposes other than direct investment in a business, branch, or company are allowed. They require a declaration to the MEF for statistical purposes.
Sale locally by nonresidentsSales by nonresidents to residents require the submission of supporting documentation to the authorized intermediary that handles the settlement and must be declared to the MEF.
Controls on personal capital transactions
LoansUnless prior authorization is received from the MEF, capital movements between residents and nonresidents must be made through the central bank, the postal and telecommunications administration, or an authorized intermediary bank.
By residents to nonresidentsLoans of any kind, CFAF overdrafts, and, in general, any advances granted to nonresidents by authorized intermediaries are subject to prior MEF authorization after BCEAO approval.
To residents from nonresidentsThese transactions may be made freely, but are subject to declaration for statistical purposes to the MEF when granted and when repaid.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsInheritances and dowries are generally authorized. Gifts and endowments, however, are subject to prior MEF authorization.
To residents from nonresidentsThese transactions are subject to declaration.
Settlement of debts abroad by immigrantsImmigrants who have received resident status must obtain the prior authorization of the MEF to settle debts contracted abroad while they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsThese transactions are subject to presentation of supporting documents to the MEF.
Transfer into the country by immigrantsForeign accounts (in foreign currencies or CFA francs) of nonresidents who become residents must be closed. However, they may maintain abroad bank accounts opened and financial assets acquired while they were nonresidents. New transfers to these accounts require MEF approval.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadFor statistical purposes, these transactions must be declared to the MEF when they are granted and when they are repaid.
Maintenance of accounts abroadBanks and other financial institutions may open accounts with their correspondent banks to settle operations for their own account or for their customers. However, banks may not keep amounts exceeding their current requirements in these accounts.
Lending to nonresidents (financial or commercial credits)Commercial and financial lending are allowed, subject to prior MEF authorization.
Purchase of locally issued securities denominated in foreign exchangeThese purchases require prior RCPSFM authorization, after approval by the MEF.
Differential treatment of deposit accounts in foreign exchange
Credit controlsLoans of any kind, CFAF overdrafts, and, in general, any advances granted to nonresidents are subject to prior MEF authorization, after BCEAO approval. These claims are included in the external position of banks and financial institutions, which is subject to special monitoring.
Differential treatment of deposit accounts held by nonresidents
Credit controlsYes.
Investment regulationsThe regulations governing foreign direct investments apply.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThese positions, which require an exceptional waiver, are not subject to prudential ratios.
Provisions specific to institutional investorsControls are imposed by the insurance code of the Inter-African Conference on Insurance Markets (CIMA).
Limits (min.) on investment portfolio held locallyThe CIMA code in effect in Senegal includes specific rules on the use of the technical reserves of insurance companies.
Other controls imposed by securities lawsNo.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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