Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

TAJIKISTAN

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 VIIIEffective December 9, 2004, the Republic of Tajikistan accepted the obligations of Article VIII, Sections 2, 3, and 4, of the IMF’s Articles of Agreement.
Exchange Arrangement
CurrencyThe currency of Tajikistan is the Tajik somoni.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateThe exchange rate of the somoni is determined by supply and demand in the foreign exchange market, in which the National Bank of Tajikistan (NBT) may intervene in the case of excessive fluctuations. The official exchange rate of the somoni against the dollar is set by the NBT on the basis of the weighted average exchange rate of transactions in the interbank foreign exchange market. Exchange rates for other currencies are determined indirectly through cross exchange rates of the dollar against these currencies. The official exchange rate is set weekly on Friday and is effective from Saturday to the next date of its announcement. The foreign exchange market consists of the over-the-counter interbank market, the market for intrabank client transactions, and a network of foreign exchange bureaus belonging to authorized banks that conduct exchange transactions with cash foreign currency.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsResidents and nonresidents may use somoni for the settlement of all transactions. Settlements between residents and nonresidents in international payments may be made in any foreign currency, except in settlements for exports of cotton products and aluminum, which are solely conducted in dollars or other freely convertible currencies.
Use of foreign exchange among residentsUse of foreign exchange among residents is prohibited unless specifically authorized by the NBT in particular cases.
Payments arrangements
Barter agreements and open accountsBarter trade is allowed only for aluminum and electricity.
Administration of controlThe NBT establishes the procedures for foreign exchange transactions and monitors their observance, issues licenses to banks for banking operations in foreign exchange, conducts exclusive supervision of their activity, sets open foreign exchange position limits for banks, and monitors their transactions. The MOF monitors the status of government and government-guaranteed debt and registers inward direct investments. The Ministry of State Revenue and Tax Collections supervises the collection of taxes and customs duties in international trade.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)On December 16, 2004, Tajikistan notified the IMF that certain exchange restrictions have been imposed in accordance with the relevant UN resolutions.
In accordance with UN sanctionsCertain measures have been taken to restrict financial operations and to freeze the accounts belonging to certain persons or organizations associated with terrorism, in accordance with (1) relevant UN Security Council resolutions and (2) the list of current terrorist organizations compiled by the U.S. State Department.
Payments arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)The export of gold and other precious metals is controlled by the government.
Controls on external tradeGold-extracting joint ventures are subject to controls.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of domestic currency are allowed freely without customs regulations.
Foreign currencyForeign currencies up to $2,000 or its equivalent may be exported freely by individuals, provided that customs regulations are observed. Amounts exceeding this limit are subject to documentary requirement.
On imports
Foreign currencyImports by individuals are permitted without restrictions, provided that customs rules are observed. Legal entities may import only through authorized banks and authorized credit institutions. Effective February 26, 2004, a customs fee of 0.075% (previously, 0.15%) is levied on imports of cash by authorized banks.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyNo restrictions apply on the deposit of cash into these accounts. Effective February 26, 2004, the regulation setting forth the order of priority for the use of balances in these accounts was rescinded. The account holder may dispose of account resources freely.
Held abroadNBT approval is required except when accounts are opened by resident individuals staying abroad temporarily.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyAll accounts in domestic currency are convertible.
Nonresident Accounts
Foreign exchange accounts permittedAccounts may be opened at any bank.
Domestic currency accountsYes.
Convertible into foreign currencyNonresident legal entities may acquire foreign exchange in Tajikistan’s foreign exchange market with somoni earnings from current and capital account transactions.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsIf goods are not delivered, the importer must return the funds transferred earlier within the time period stipulated in the contract.
Import licenses and other nontariff measuresImports of tobacco and tobacco products require licenses.
Negative listThe importation of firearms, narcotics, poisons, chemical weapons, and nuclear materials is prohibited.
Licenses with quotasLicenses with quotas apply to imports of ethyl alcohol and alcoholic beverages.
Import taxes and/or tariffsImports are subject to duties.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsForeign exchange proceeds from exports must be credited to the accounts of residents maintained with authorized banks, or to their accounts abroad with NBT approval. For all goods, except for cotton and aluminum, export proceeds must be received in full and on a timely basis and must be returned within 120 days of the export date or NBT authorization is required. For exports of cotton and aluminum, a 100% advance receipt is required.
Financing requirementsNo.
Documentation requirementsAll transactions are subject to monitoring by customs authorities and authorized banks until their full completion. Preparation of a transaction report is required for each export transaction, with the exception of transactions that are 100% prepaid.
Export licensesLicenses are required for the production, processing, and export of tobacco and tobacco products.
With quotasLicenses with quotas apply to exports and wholesale purchases of ethyl alcohol and alcoholic beverages.
Export taxes
Other export taxesA sales tax of 10% and 1% applies on exports of cotton fiber and aluminum, respectively.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments to nonresidents by residents require presentation of documents proving the validity of payments. Resident individuals may transfer foreign exchange without opening accounts within the limits of the amounts supported by documents. In addition, they may effect one transfer a business day for a moderate amount of payment for current consumption.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related paymentsTransfers of interest, dividends, other investment income, repayment of loans, and the amortization of direct investment do not require permits.
Prior approvalNBT approval is required.
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsCapital transactions are governed by the Law on Foreign Exchange Regulations and Foreign Exchange Control and NBT regulations on the procedures for foreign exchange transactions involving capital movements.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsMOF approval is required for the acquisition of 10% or more of shares, irrespective of citizenship. NBT notification is required for the purchase of more than 5% of shares of banks; NBT approval is required for the purchase of more than 20%.
Sale or issue locally by nonresidentsMOF approval and NBT clearance are required.
Purchase abroad by residentsNBT approval is required.
Sale or issue abroad by residentsRegistration with the MOF and approval of the NBT are required.
Bonds or other debt securitiesRegistration with the MOF is required.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsNBT approval is required.
Sale or issue abroad by residentsNBT approval is required.
On money market instrumentsNBT approval is required only when these instruments are treated as securities and when payment on a bill of exchange is deferred by more than 180 days.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsResidents may purchase from nonresidents only with NBT approval.
Purchase abroad by residentsNBT approval is required.
Sale or issue abroad by residentsNBT approval is required.
On collective investment securitiesThe regulations governing money market instruments apply.
Controls on derivatives and other instrumentsThe regulations governing money market instruments apply.
Controls on credit operations
Commercial credits
By residents to nonresidentsCredits with maturities exceeding one year require NBT approval.
To residents from nonresidentsCredits with maturities exceeding one year require NBT approval.
Financial creditsNBT approval for long-term loans is required. No controls apply on short-term loans.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentNBT approval is required.
Inward direct investmentNBT approval is required.
Controls on liquidation of direct investmentYes.
Controls on real estate transactions
Purchase abroad by residentsNBT approval is required.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
Transfer of gambling and prize earningsSupporting documents must be presented to the bank effecting the transfer.
Provisions specific to commercial banks and other credit institutionsBanks are permitted to hold 50% of their capital in foreign exchange.
Borrowing abroadOnly banks licensed to conduct operations in foreign exchange may borrow from abroad.
Maintenance of accounts abroadAn NBT license is required to open a correspondent account.
Investment regulations
Abroad by banksThe limit is 20% of capital.
In banks by nonresidentsA 35% quota applies for participation of foreign capital in the overall capital of the banking sector.
Open foreign exchange position limitsThe aggregate open long and short positions are limited to 20% and 10% of a bank’s capital, respectively. The limits on individual long and short positions in separate currencies are 16% and 8% of total capital, respectively.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2004
Status Under IMF Articles of AgreementDecember 9. Tajikistan accepted the obligations under Article VIII, Sections 2, 3, and 4, of the IMF’s Articles of Agreement.
Exchange arrangement
Arrangements for payments and receiptsFebruary 26. The customs fee levied on imports of foreign currency cash by authorized banks was reduced to 0.075% from 0.15%.
December 16. The authorities informed the IMF of certain measures that were taken to restrict financial operations and to freeze the accounts belonging to certain persons or organizations associated with terrorism, in accordance with (1) relevant UN Security Council resolutions and (2) the list of current terrorist organizations compiled by the U.S. State Department.
Resident accountsFebruary 26. The regulation on the priority use of account balances in foreign currency was lifted, allowing account holders to draw freely from their accounts.

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