Annual Report on Exchange Arrangements and Exchange Restrictions 2005


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 XIVYes.
Exchange Arrangement
CurrencyThe currency of Burundi is the Burundi franc.
Exchange rate structureUnitary.
Managed floating with no predetermined path for the exchange rateEffective December 8, 2004, the official exchange rate is set on the basis of a daily average of commercial bank rates. Previously, the Bank of the Republic of Burundi (BRB) held a weekly foreign exchange auction to determine the mandatory reference rate for commercial banks’ transactions. Under this auction system, the BRB sold foreign exchange weekly to authorized banks and effective March 1, 2004, to exchange bureaus. The reference exchange rate served as a basis for the banks’ buying and selling rates to the public.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketn.r.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements relating to trade with the Democratic Republic of the Congo and Rwanda in products specified in the trade agreements with these countries are effected through a clearing process, with balances paid in convertible currencies. Nonresidents staying in a hotel or guesthouse in Burundi must pay their hotel bills by selling convertible currencies or by using a credit card. Payment in Burundi francs is, however, acceptable in the case of guests for whom a resident company or individual has assumed responsibility with prior authorization from the BRB or, in the case of nationals of the Democratic Republic of the Congo and Rwanda, who produce declarations of means of payment issued under the auspices of the CEPGL.
Controls on the use of domestic currencyExcept for the above, all payments for goods and services in Burundi must be made in domestic currency.
Use of foreign exchange among residentsTransactions in foreign currency among residents are not permitted.
Payments arrangements
Bilateral payments arrangements
OperativeThere are trade agreements with the Democratic Republic of the Congo and Rwanda. These agreements are not fully operational.
Regional arrangementsRegional agreements exist with Eastern and Southern African countries.
Clearing agreementsClearing agreements exist with members of COMESA and CEPGL.
Administration of controlControl over foreign exchange transactions and foreign trade is vested in the BRB; authority to carry out some transactions is delegated to authorized banks.
International security restrictionsNo.
Payments arrears
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeNatural and juridical persons holding gold mining permits issued by the ministers responsible for mining and customs may open purchasing houses for gold in transit or mined by artisans in Burundi. Gold produced by artisans may be sold only to approved firms.
Controls on external tradeExports of gold must be declared in Burundi francs at the average daily rates in effect at the time of declaration. Gold exports are authorized jointly by the mining and customs departments.
Controls on exports and imports of banknotes
On exports
Domestic currencyAll travelers may take out up to FBu 5,000.
Foreign currencyA license is required for anyone not holding a foreign exchange account.
On imports
Domestic currencyTravelers may bring in up to FBu 5,000.
Foreign currencyTravelers may bring in any amount of foreign currency quoted by the BRB in addition to traveler’s checks.
Resident Accounts
Foreign exchange accounts permittedResident natural persons or legal entities may open foreign exchange accounts with local banks. Foreign exchange accounts may be credited freely. Withdrawals of Burundi francs are unlimited. Effective February 16, 2004, foreign exchange up to the equivalent of $3,000 may be sold to resident customers of banks and foreign exchange bureaus upon presentation of an identification document. An airline ticket or other travel document is required for withdrawals of foreign exchange in the form of banknotes, traveler’s checks, or checks exceeding the equivalent of $3,000 up to $50,000 a year. Supporting documentation is required for transactions involving payments for imports of goods and services, withdrawals of foreign banknotes, traveler’s checks, or checks in excess of the equivalent of $5,000. Foreign exchange accounts may bear interest.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedAny nonresident natural or juridical person may open a foreign exchange account in an authorized bank. Nonresident foreign exchange accounts may be debited and credited freely. These accounts may bear interest. Amounts less than or equal to the equivalent of $50,000 a year may be withdrawn in banknotes on presentation of an identification document. Withdrawal of amounts exceeding this limit requires presentation of travel documentation.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsImport and payment declarations (DIPs) are required for all imports and must be validated by authorized banks in accordance with the General Regulation on Exchange Control.
Preshipment inspectionConsignments of imports of food, pharmaceuticals, and chemicals exceeding the equivalent of $3,000 c.i.f. in value and of all other goods exceeding $5,000 c.i.f. in value may, in principle, be subject to preshipment inspection with regard to quality, quantity, and price by international supervising and oversight agents on behalf of the Burundi authorities. Currently, the inspection is carried out by the Société Générale de Surveillance. This organization also determines the dutiable value of the imports subject to inspection.
Letters of creditThere is no obligation to settle import transactions by LCs.
Import licenses used as exchange licensesExchange licenses are issued on the basis of DIPs.
OtherAll goods imported into Burundi must be insured by approved Burundi insurers, and premiums must be paid in Burundi francs.
Import licenses and other nontariff measuresImporters do not need licenses but must file a DIP. Imports of commercial samples, personal luggage, and effects of travelers, as well as all imports by diplomatic and UN missions, are exempt from the requirement to file a DIP.
Negative listImports of 100% cotton printed cloth (pagne) are prohibited
Open general licensesYes.
Import taxes and/or tariffsImports from COMESA member countries enter Burundi duty-free. Effective January 1, 2005, the tariff structure consists of three rates: 10%, 15%, and 30%; previously, four rates applied (10%, 12%, 15%, and 40%). Also, effective that date, the maximum tariff rate was reduced to 30% from 40%. Imports of petroleum products are subject to duties ranging from 6% to 40%. The 6% service tax, which replaced the statistical tax, is levied on the c.i.f. value of imports in addition to any applicable customs duties and fiscal duties. Effective October 1, 2004, the scope of the service tax was extended to all nondiplomatic imports. A flat-rate profits tax of 4% is withheld for commercial imports.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExport proceeds must be collected within 30 days of the date of export declaration at customs for shipment by air or within 90 days for all other shipments. Deadlines for the collection of proceeds from exports of nontraditional products are set by the commercial bank carrying out the operation.
Surrender requirementsEffective January 1, 2005, the surrender requirement of 50% of proceeds applicable to exports of coffee, tea, and cotton is eliminated.
Financing requirementsNo.
Documentation requirementsA validation of the export declaration by a commercial bank is required.
Letters of creditYes.
Export licensesOnly export declarations are required.
Export taxesTaxes are levied on a range of exports. The generally applicable rate is 5%. For green coffee, the rate is set each crop season.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAll payments for invisibles require approval, but banks and foreign exchange bureaus are authorized to approve requests for amounts within the prescribed limits. Effective February 16, 2004, banks and foreign exchange bureaus may sell foreign currency to nonresidents up to the equivalent of $3,000 upon presentation of an identification document.
Trade-related paymentsShipping insurance on coffee exports normally must be taken out in Burundi francs with a domestic insurer.
Prior approvalYes.
Indicative limits/bona fide testUnloading and storage costs are limited to amounts indicated by the invoice.
Investment-related paymentsPrivate joint-stock companies may transfer 100% of the return on foreign capital and of the profits distributed to foreign directors after payment of taxes. Airlines are authorized to transfer abroad 100% of their earnings after deduction of local expenses. Transfer of rental income is permitted after payment of taxes and a deduction of 20% for maintenance expenses.
Prior approvalYes.
Payments for travelCommercial banks and the BRB provide foreign exchange for personal and business travel, respectively.
Quantitative limitsLimits based on a daily allowance and the number of travel days apply, as follows: (1) official travel, the equivalent of $150–$300 a day, according to category and destination; (2) business travel, $300 a day, for a maximum of four trips a year each up to 10 days’ duration; (3) tourism and personal travel, $200 a day for a maximum of one trip a year for up to 10 days; and (4) diplomatic and international official assignments, $1,000 an event.
Indicative limits/bona fide testYes.
Personal paymentsCommercial banks sell foreign exchange for personal payments within the limits of their available foreign exchange. Pension transfers are effected through the Social Security Institute.
Quantitative limitsFor health-related travel, an initial allowance of up to the equivalent of $3,000 ($1,500 if travel is to Rwanda) is granted on departure, and additional transfers are authorized on presentation of invoices. For an accompanying traveler, the allowance is $200 a day for up to 10 days.
Allowances for studies abroad are authorized on the basis of proof of enrollment in an institution for higher education. University students with domestically sourced scholarships may receive up to the amount of their scholarships. Other university students are allowed to purchase the equivalent of the university tuition and €1,800 a quarter for subsistence and €500 a year for materials. Non-university students are allowed €500 a quarter. Interns are allowed up to €600 a month, after deducting any support awarded by their employer.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsUpon presentation of evidence of payment of taxes, foreign nationals residing and working in Burundi are permitted to transfer abroad up to 70% of their net annual income (80% in the case of foreign nationals working for companies that export at least 50% of their production).
Indicative limits/bona fide testA work contract is required.
Other payments
Prior approvalYes.
Quantitative limitsConsulting and legal fees are limited to amounts indicated by invoices.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsYes.
Capital Transactions
Controls on capital transactionsCapital transfers abroad by residents require individual authorization.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsPurchases must be effected in foreign exchange.
Purchase abroad by residentsPurchases are subject to the authorization of the MOF.
Bonds or other debt securities
Purchase locally by nonresidentsPurchases must be made with nonresidents’ own foreign exchange funds
Purchase abroad by residentsYes.
On money market instruments
Purchase abroad by residentsBRB authorization is required.
Controls on derivatives and other instrumentsn.r.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsBRB approval is required.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsBRB approval is required.
Controls on direct investment
Outward direct investmentThe provision of foreign exchange for outward direct investments is suspended. Even with the emergence of the free foreign exchange market, banks are not authorized to sell foreign exchange for outward direct investments.
Inward direct investmentYes.
Controls on liquidation of direct investmentTransfers of foreign capital for which repatriation guarantees have been granted do not require individual authorization.
Controls on real estate transactions
Purchase abroad by residentsBRB approval is required.
Purchase locally by nonresidentsPurchases must be effected in foreign exchange.
Sale locally by nonresidentsTransfer of proceeds from the sale of real estate is permitted provided that the purchaser is the holder of an adequately funded foreign exchange account.
Controls on personal capital transactions
By residents to nonresidentsThese transactions are not specifically regulated if they are effected in domestic currency.
To residents from nonresidentsBRB approval is required.
Gifts, endowments, inheritances, and legaciesThese transactions are not specifically regulated if they are effected in domestic currency.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBRB approval is required.
Maintenance of accounts abroadOnly commercial banks may hold accounts abroad.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidents
Credit controlsDebit balances are not permitted on foreign exchange accounts.
Investment regulations
Abroad by banksPrior approval of the BRB is required.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsn.a.
Changes During 2004
Exchange arrangementMarch 1. Exchange bureaus were authorized to participate in the weekly foreign exchange auctions.
December 8. The weekly foreign exchange auction of the BRB was discontinued and the official exchange rate was set on the basis of a daily average of commercial bank rates.
Resident accountsFebruary 16. Banks and foreign exchange bureaus were authorized to sell foreign exchange to resident customers up to the equivalent of $3,000 upon presentation of an identification document.
Imports and import paymentsOctober 1. The 6% customs service tax was extended to all nondiplomatic imports.
Payments for invisible transactions and current transfersFebruary 16. Banks and foreign exchange bureaus were authorized to sell foreign exchange to nonresident customers up to the equivalent of $3,000 upon presentation of an identification document.
Changes During 2005
Imports and import paymentsJanuary 1. The tariff structure for imports from other than COMESA members was reduced to three rates (10%, 15%, and 30%) from four rates (10%, 12%, 15%, and 40%).
January 1. The maximum tariff rate was reduced to 30% from 40%.
Exports and export proceedsJanuary 1. The surrender requirement of 50% of proceeds applicable to coffee, tea, and cotton was eliminated.

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