Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

UNITED STATES

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: December 10, 1946.
Exchange Arrangement
CurrencyThe currency of the United States is the U.S. dollar.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the dollar is determined freely in the foreign exchange market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Bilateral payments arrangements
OperativeYes.
Regional arrangementsThe United States is a member of NAFTA and NAFA.
Administration of controlNo.
International security restrictionsThe Department of the Treasury (Treasury) administers economic sanctions programs involving direct or indirect commercial transactions with Cuba, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, Liberia, Myanmar, Sudan, the Syrian Arab Republic, Zimbabwe, indictees designated by the International Criminal Tribunal for the former Yugoslavia and certain persons associated with the government of the former Federal Republic of Yugoslavia, persons who threaten international stabilization efforts in the Western Balkans, foreign terrorists who threaten to disrupt the Middle East peace process, governments supporting terrorism, foreign terrorist organizations, designated global terrorists, and designated narcotics traffickers and kingpins, as specified under the following: (1) the Cuban Assets Control Regulations; (2) the Iranian Assets Control Regulations and the Iranian Transactions Regulations; (3) the Foreign Assets Control Regulations; (4) Executive Order 13348 (“Blocking Property of Certain Persons and Prohibiting the Importation of Certain Goods from Liberia,” effective July 23, 2004); (5) Executive Order 13310 (“Blocking Property of the Government of Burma and Prohibiting Certain Transactions”) and the Burmese Sanctions Regulations; (6) the Sudanese Sanctions Regulations; (7) Executive Order 13338 (“Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods from Syria,” effective May 12, 2004); (8) Executive Order 13288 (“Blocking Property or Persons Undermining Democratic Processes or Institutions in Zimbabwe”); (9) the Federal Republic of Yugoslavia Milosevic Sanctions Regulations and residual provisions of the Federal Republic of Yugoslavia Kosovo Sanctions Regulations; (10) Executive Order 13304 (“Termination of the Emergencies with respect to Yugoslavia and Modification of Executive Order 13219”) and the Western Balkans Stabilization Regulations; (11) the Terrorism Sanctions Regulations; (12) the Terrorism List Government Sanctions Regulations; (13) the Foreign Terrorist Organizations Sanctions Regulations; (14) Executive Order 13224 (“Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism”) and the Global Terrorism Sanctions Regulations; (15) the Narcotics Trafficking Sanctions Regulations; and (16) the Foreign Narcotics Kingpin Sanctions.
The Treasury has the administrative responsibility for blocked accounts of most sanctions targets. The comprehensive sanctions with respect to the former Federal Republic of Yugoslavia have been lifted with respect to present transactions with persons other than specific members of the government, their associates, and individual war criminals. However, certain funds and other properties blocked under these sanctions programs remain blocked until provision is made to address claims or encumbrances with respect to such funds and property, including the claims of the successor states of the former Federal Republic of Yugoslavia (most of these assets have been unblocked).
Effective July 30, 2004, and September 21, 2004, respectively, the comprehensive sanctions with respect to the governments of Iraq and Libya are lifted. However, Libya remains subject to certain restrictions under the Terrorism List Government Sanctions Regulations.
The Treasury also prohibits trade in rough diamonds with countries that do not participate in the Kimberley Process Certification Scheme (under the Rough Diamonds Control Regulations); restricts certain offshore transactions involving strategic merchandise to certain countries, under the Transaction Control Regulations; prohibits donative transfers, or those that pose a risk of furthering terrorist acts in the United States by the government of the Syrian Arab Republic, under the Terrorism List Government Sanctions Regulations; prohibits imports into the United States from certain entities that proliferate nuclear, biological, or chemical weapons, under the Weapons of Mass Destruction Trade Control Regulations; and asserts protective jurisdiction over property and property interests of the government of the Russian Federation that are in the United States and directly related to the implementation of the Highly Enriched Uranium Agreements under Executive Order 13159 (“Blocked Property of the Government of the Russian Federation Relating to the Disposal of Highly Enriched Uranium Extracted from Nuclear Weapons”).
In accordance with IMF Executive Board Decision No. 144-(52/51)Certain restrictions are imposed on the making of payments and transfers for current international transactions. Foreign assets control regulations permit most transactions with the Democratic People’s Republic of Korea and its nationals, and a review procedure for the importation of goods therefrom has been established. The assets of the following are blocked, and certain transactions with them are prohibited: specified foreign persons and foreign persons later determined to have committed or to pose a significant risk of committing acts of terrorism that threaten national security, foreign policy, the U.S. economy, or the security of U.S. nationals; persons owned or controlled by, or acting for or on behalf of, terrorists or their supporters; persons providing assistance or financial, material, or technological support for, or financial or other services to, or in support of, terrorists or acts of terrorism; and persons otherwise associated with any of the foregoing persons.
In accordance with UN sanctionsThe Treasury administers economic sanctions programs on the basis of UN Security Council Resolution Nos. 1267, 1363, 1373, and 1390 involving certain direct or indirect financial or commercial transactions with Iraq, Serbia and Montenegro, and persons associated with terrorism.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on external tradeNo controls are imposed, except for the countries and groups of persons to which international security restrictions apply.
Controls on exports and imports of banknotesIndividuals leaving or entering the United States with more than the equivalent of $10,000 in domestic or foreign currency, traveler’s checks, money orders, or negotiable bearer securities must declare these to customs at the point of exit or entry.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThe accounts of the following nations and entities are blocked: Cuba and Cuban nationals, Sudan, certain individuals and entities with respect to Liberia and Myanmar, persons undermining democratic processes and institutions in Zimbabwe, specially designated global terrorists, foreign terrorists who threaten to disrupt the Middle East peace process, foreign terrorist organizations, persons indicted by the International Criminal Tribunal for the former Yugoslavia and specific persons associated with the government of the former Federal Republic of Yugoslavia, specially designated narcotics traffickers and kingpins, and foreign persons who threaten international stabilization efforts in the Western Balkans. Certain accounts blocked pursuant to economic sanctions against the Islamic Republic of Iran, Democratic People’s Republic of Korea, and the former Federal Republic of Yugoslavia remain blocked, notwithstanding an end to most blocking sanctions.
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
Negative listThe importation of most goods and services originating in Cuba, the Islamic Republic of Iran, Iraq, Libya, or Sudan and some goods from Liberia or that were produced or provided by certain entities that proliferate nuclear, biological, or chemical weapons is prohibited unless specifically authorized by the Treasury. Imports from the Democratic People’s Republic of Korea require prior notification to and approval from the Office of Foreign Assets Control. The importation of rough diamonds from any country is prohibited unless they have passed through the Kimberley Process Certification Scheme.
Licenses with quotasEffective January 1, 2005, U.S. quotas under the WTO ATC were lifted upon the expiration of the Agreement with respect to WTO members. The United States has a series of bilateral textile agreements with a number of non-WTO members that continue in force after January 1, 2005, until terminated by mutual consent, expiration, or WTO accession of the other party. Imports of clothing and textiles from Vietnam are subject to an annual quota of $1.7 billion.
Import taxes and/or tariffsImport tariffs are generally low, with higher-than-average rates for imports of beverages and tobacco, textiles and clothing, and leather and footwear. As a result of the Uruguay Round, all tariff lines are bound.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesThe Department of Commerce (DOC) controls the export and reexport of dual-use products, technology, and software for reasons of national security, foreign policy, nonproliferation, and short supply. Except for shipment to U.S. territories and possessions, which are treated as part of the United States, most exports outside the United States are subject to the Export Administration Regulations. Several agencies of the U.S. government maintain export controls on products other than dual-use articles and services. For example, the Treasury prohibits exports of certain types of goods, services, and technology to specifically sanctioned countries and recipients, and certain exports to sanctioned countries are subject to licenses that are issued on a day-by-day basis, pursuant to established policies and procedures. Likewise, the Department of Agriculture controls the export of livestock, dairy, and poultry items.
Without quotasAmmunition for military use may be exported only under a license issued by the Office of Defense Trade Controls in the Department of State. The DOC administers controls on exports of crime-control items, detection equipment, and related technologies to most countries that depend on these commodities.
Export taxesn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsLaws on inward direct investment apply to purchases in the United States by nonresidents. The control applies only to the purchases by nonresidents of securities that may be restricted by laws on inward direct investment and on establishment in the nuclear energy, maritime, communications, air and land transport and shipping industries. There are some restrictions specific to state legislative jurisdiction in the banking, securities, and insurance sectors.
Sale or issue locally by nonresidentsPublic offers made (1) in the United States or (2) to U.S. residents by foreign investment companies are prohibited under the Investment Company Act. The use of small business registration forms and a small-issues exemption by nonresident issuers are also restricted.
On money market instruments
Sale or issue locally by nonresidentsForeign mutual funds are restricted. The control applies only to nonresident issuers that are defined as investment companies under the Investment Company Act.
On collective investment securities
Sale or issue locally by nonresidentsThe regulations governing shares and other securities of a participating nature apply.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Financial credits
By residents to nonresidentsThe Johnson Act prohibits, with certain exceptions, persons within the United States from dealing in financial obligations or extending loans to foreign governments that have defaulted on payments of their obligations to the U.S. government. The act does not apply to those foreign governments that are members of both the IMF and the World Bank.
Controls on direct investment
Outward direct investmentThere are also controls on investment transactions with or involving Cuba and Cuban nationals; the Islamic Republic of Iran; Iraq; Libya; Myanmar; Sudan; persons who commit, threaten to commit, or support terrorism; foreign terrorists who disrupt the Middle East peace process; persons indicted by the International Criminal Tribunal for the former Yugoslavia and persons associated with the government of the former Federal Republic of Yugoslavia; specially designated narcotics traffickers; and foreign persons who threaten international stabilization efforts in the Western Balkans.
Inward direct investmentLaws on inward direct investment apply to purchases in the United States by nonresidents. This control applies only to investments that may be restricted by laws on inward direct investment and establishment in the nuclear energy, maritime, communications, air and land transport and shipping industries. Foreign acquisitions of control that threaten to impair national security may be suspended or prohibited. Investments involving ownership interest in banks are subject to federal and state banking laws and regulations. However, as noted above, there are controls on investment transactions with or involving Cuba and Cuban nationals; the Islamic Republic of Iran; Iraq; Libya; Sudan; persons indicted by the International Criminal Tribunal for the former Yugoslavia and persons associated with the government of the former Federal Republic of Yugoslavia; persons who threaten international stabilization efforts in the Western Balkans; foreign terrorists who threaten to disrupt the Middle East peace process; persons who commit, threaten to commit, or support terrorism; foreign terrorist organizations; and specially designated drug traffickers. The Omnibus Trade Act contains a provision, the Exon-Florio Amendment, authorizing the president to suspend or prohibit foreign acquisitions, mergers, and takeovers in the United States if he determines that the foreign investor might take action that would threaten to impair national security and if existing laws, other than the International Emergency Economic Powers Act and the Exon-Florio Amendment itself, are not, in the president’s judgment, adequate or appropriate to protect national security.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsOwnership of agricultural land by foreign nationals or by corporations in which foreign owners have an interest of at least 10% or substantial control must be reported to the Department of Agriculture. Certain states in the United States impose various controls on foreign nationals’ purchases of land within their borders.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Investment regulationsBanks are subject to prudential oversight in these areas.
Open foreign exchange position limitsThe foreign currency positions of banks, whether overall or with respect to individual currencies, are not subject to quantitative limitations, but banks are subject to prudential oversight. In addition, large foreign exchange market participants are required to report their holdings of five major foreign currencies and dollars weekly, monthly, or quarterly.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2004
Arrangements for payments and receiptsMay 12. Executive Order 13338 prohibited the export of certain goods to the Syrian Arab Republic and blocked the property of certain persons associated with certain Syrian activities.
July 23. Under Executive Order 13348 measures were taken to block the property of certain persons and prohibit the importation of certain goods from Liberia.
July 30. Sanctions against Iraq were lifted.
September 21. Sanctions against Libya were lifted, though certain restrictions remain under the Terrorism List Government Sanctions Regulations.
Changes During 2005
Imports and import paymentsJanuary 1. Quotas imposed under the WTO ATC were lifted upon the expiration of the ATC.

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