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 December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 10, 2003.
Exchange Arrangement
CurrencyThe currency of the Democratic Republic of the Congo is the Congo franc.
Exchange rate structureUnitary.
Independently floatingThe exchange rate of the Congo franc is determined by supply and demand in the foreign exchange market. The Central Bank of the Democratic Republic of the Congo (BCC) publishes the daily exchange rate, which is based on the combined average of the amounts and rates applied in transactions, as reported by exchange bureaus and banks. The BCC, while observing the international reserves target in the monetary program, intervenes to smooth exchange rate fluctuations, but not against market fundamentals. Charges or commissions are not assessed on interbank market transactions. In their transactions with customers, commercial banks and financial institutions may charge an exchange commission not exceeding 1%. The spread between the buying and selling rates for foreign banknotes set by the commercial banks and financial institutions in the foreign exchange market must not exceed 5%.
Exchange taxA charge of 0.2% is levied on any exchange operation of licensed banks.
Exchange subsidyNo.
Forward exchange marketExchange market participants may engage in spot or forward operations. Forward operations are completed upon contract maturity. Congo franc equivalents for exchange transactions are calculated at rates agreed between contracting parties. They are paid on the agreed date and, by choice of the contracting parties, through the clearing house, credit to an account, or cash payment. The contractual maturity of forward operations must take account of holidays in the Democratic Republic of the Congo and abroad.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions in the Democratic Republic of the Congo may be expressed and carried out in domestic currency, or in one of nine currencies and units of account listed by the BCC.
Use of foreign exchange among residentsThere are no restrictions on the holding of foreign currency. The provision of services can be valued and remunerated in either domestic or foreign currency. However, residential rent, education, health-related expenditures, and the costs of water and electricity consumption are set and paid only in domestic currency when they relate to transactions between residents.
Payments arrangements
Bilateral payments arrangements
InoperativeThere is an inoperative agreement with Zimbabwe.
Regional arrangementsThe Democratic Republic of the Congo is a member of the COMESA, SADC, CEPGL, and CEEAC.
Clearing agreementsIn the CEPGL context, the Democratic Republic of the Congo has concluded agreements for payments using the clearing mechanism. Payments are made through SDR-denominated accounts among the central banks of the Democratic Republic of the Congo, Rwanda, and Burundi.
Administration of controlForeign exchange transactions must be conducted through the BCC or authorized intermediaries. The BCC also supervises authorized banks and dealers, and regulates open foreign exchange positions.
International security restrictionsNo.
Payments arrears
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeOnly nationals of the Democratic Republic of the Congo are allowed to purchase, transport, sell, or hold gold within the country outside of areas covered by exclusive mining concessions. Foreign individuals or corporate persons may do so only on behalf of, and for the account of, authorized marketing agencies.
Controls on external tradeExports of gold by authorized marketing agencies do not require prior authorization from the BCC.
Controls on exports and imports of banknotes
On exports
Foreign currencyTravelers exiting the country are authorized to carry an amount of foreign exchange not to exceed $10,000 or its equivalent, except if they are in international transit or on a service mission, in which case they are obliged to declare the amounts of foreign exchange carried. Transfers of amounts exceeding $10,000 must be effected through a bank.
Foreign banknotes representing part of the exchange position of an licensed bank must be transferred abroad through the central bank. The transferring bank is required to apply in writing to the BCC for authorization, specifying the amounts for export by foreign currency and the name and address of the recipient correspondent bank abroad.
On imports
Foreign currencyResidents and nonresidents entering the country may bring in an unlimited amount of banknotes and other means of payment in foreign currency, but amounts exceeding $10,000 or its equivalent must be declared.
Foreign currency banknotes must be imported through a bank, based on written BCC authorization. All foreign currency imported in this way through a licensed bank is deemed to be part of that bank’s exchange position.
Resident Accounts
Foreign exchange accounts permittedThese accounts are permitted and may be credited or debited for international transactions without restriction, may be sight or term accounts, may bear interest, and may be denominated in any currency for which the BCC publishes on exchange rate.
Held domesticallyLicensed banks are permitted to open foreign currency accounts for residents without prior approval from the BCC.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedLicensed banks are permitted to open foreign currency accounts for nonresidents without prior approval from the BCC. These accounts may be demand or time deposit, interest bearing, and credited or debited without restriction.
Domestic currency accountsLicensed banks are permitted to open domestic currency accounts for nonresidents. The accounts may be demand or term deposit accounts, interest bearing, and credited or debited without restriction.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Advance payment requirementsThe licensed bank involved is authorized to make partial payments for any import for which there is such a contractual requirement, upon presentation of the refund guarantee to be furnished by the supplier’s bank. The amount to be entered on the guarantee must be the same as the partial payment to be made and will be reduced proportionately to the value of deliveries made.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsMerchandise imports, except those relating to cross-border trade and regardless of the method of financing involved, require the prior submission of a declaration form to a licensed bank.
Preshipment inspectionImports are subject to a preshipment inspection. The amount, invoice price, and quality of imports must be verified and approved by the foreign agents of the Control Office of the Democratic Republic of the Congo. Verification certificates are not required for import values (f.o.b.) of up to the equivalent of $2,500 a shipment.
Letters of creditRules on import payments follow the generally accepted international payment modes.
Import licenses and other nontariff measures
Positive listThe importing of certain products—primarily coins, commemorative coins, banknotes, second-hand materials for investment, arms and ammunition, and explosives—requires the prior authorization of specific government departments.
Negative listCertain imports, including narcotics, materials contrary to public morals, and certain alcoholic beverages, are prohibited.
Open general licensesFor urgent imports of goods that have the same tariff classification and whose characteristics are unknown at the time of exchange document validation, economic operators may use the “IB” global import license form.
Import taxes and/or tariffsYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExport or reexport proceeds must be repatriated within 30 calendar days from the date of shipment. Proceeds from exports of artisanally produced gold and diamonds must be received at the concerned bank within 10 days after the date of shipment. Proceeds from exports on consignment must be repatriated as soon as the goods have been sold.
Financing requirementsNo.
Documentation requirementsExport operations, except in the case of cross-border trade, and regardless of the financing method involved, require the prior submission to a licensed bank of an exchange document (“EB” declaration form).
Letters of creditYes.
Preshipment inspectionExports require inspection certificates of quality, quantity, and price. EB declaration forms must be submitted with the following documents: lot ready for export report, quality certificate (coffee), appraisal certificate (precious materials), and certificate of origin (precious materials).
Export licensesExport-licensing requirements are for statistical purposes only.
Without quotasYes.
Export taxesYes.
Taxes collected through the exchange systemThe BCC imposes an exchange control fee of 2% on export proceeds surrendered to banks and on exports for which no foreign currency proceeds have been repatriated.
Other export taxesYes.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for current transactions are authorized on the basis of the submission to a licensed bank of an exchange document called the IS declaration form for imports of services and the RC declaration form for other current payments exceeding the equivalent of $10,000.
Trade-related paymentsTrade-related payments (e.g., freight, insurance) are made on the basis of declaration forms.
Indicative limits/bona fide testIndicative limits or bona fide tests are applied to payments of freight, insurance, and commissions.
Investment-related paymentsProfits, dividends, interest, rental income, etc. earned in the Democratic Republic of the Congo may be transferred only through licensed banks.
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal paymentsCurrent transfers may be made only through licensed banks for academic and tuition fees, living expenses, medical expenses, subscriptions, and pension and retirement expenses.
Indicative limits/bona fide testYes.
Foreign workers’ wageswages Foreign workers’ income and remuneration earned in the Democratic Republic of the Congo may be transferred through licensed banks.
Indicative limits/bona fide testYes.
Other paymentsPayments for subscriber fees, membership fees, and gifts in cash are permitted.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsFor proceeds from exports of services, licensed banks are required to complete a declaration of foreign currency receipts.
Surrender requirementsExporters are required to obtain payment from foreign buyers of services based on the ES declaration form. They must surrender payments received to a licensed bank. An ES declaration, duly stamped by the licensed bank, serves as an authorization for the export of services with the requirement to receive payments for the invoiced amounts.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsInward and outward capital transactions exceeding the equivalent of $10,000 are permitted upon the submission of an RC declaration form to a licensed bank. The capital involved must represent the proceeds of lawful transactions.
Controls on capital and money market instrumentsIndividuals and legal entities must first inform the BCC in writing of their intention to attract funds through any of the following activities: (1) offers for sale; (2) offers for subscription; (3) offers for swap or purchase; or (4) swaps and issuance of (a) shares, securities, or founders’ shares; (b) savings or capitalization bonds; (c) bonds and other securities, regardless of the identity of the borrower; (d) certificates or shares in joint investment funds; (e) other financial claims or similar financial instruments; and (f) all paper representative of such assets.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsOnly BCC licensed individuals or legal entities may carry out the functions of securities intermediaries.
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operationsResidents may borrow abroad only for investment in the Democratic Republic of the Congo.
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
To residents from nonresidentsYes.
Controls on direct investmentInward direct investment is permitted, subject to the submission of an RC declaration form.
Controls on liquidation of direct investmentThe repatriation of foreign capital brought in under the provisions of the Investment Code is permitted, subject to prior BCC authorization, only at the time of liquidation, nationalization, or partial or total transfer of shares.
Controls on real estate transactions
Purchase locally by nonresidentsYes.
Controls on personal capital transactions
Gifts, endowments, inheritances, and legaciesThese transactions are permitted only through a licensed bank.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutionsBanks are required to observe a minimum capital-risk ratio of 25%. They are also required to continuously observe the following: (1) a maximum ratio of 5% between their long or short position in each foreign currency and their capital; and (2) a maximum ratio of 15% between their short position in all foreign currencies and their capital.
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Bridge loans require prior consent of the BCC.
Lending locally in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchangeNonresident accounts in foreign exchange may not be in a debit position.
Liquid asset requirementsYes.
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidentsNonresident accounts in foreign exchange may not be in a debit position.
Credit controlsYes.
Open foreign exchange position limitsThe limits on the foreign exchange positions of each bank are determined by the BCC.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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