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: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of the Republic of Congo is the CFA franc.
Exchange rate structureUnitary.
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at the fixed rate of CFAF 655.957 per €1. Exchange transactions in euros between the BEAC and commercial banks take place at the same rate. Buying and selling rates for certain other foreign currencies are also officially posted, with quotations based on the fixed rate for the euro and the rate for the currency concerned in the Paris foreign exchange market. Effective January 1, 2004, payments destined to all countries are subject to a commission of 1% (previously, 0.75%) (exclusive of VAT) with a minimum charge of CFAF 75. Exempt from this commission are payments of the state, the Postal and Telecommunications Administration, and the BEAC member countries; salaries of Congolese diplomats abroad; expenditures of official missions abroad; scholarships of persons studying or training abroad; payments made on behalf of individuals for purchases of books and periodicals not intended for sale; and debt-service payments due from companies that have entered into an agreement with the Republic of Congo.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketThere are no spot or forward exchange markets for the CFA franc. However, exporters and importers can always cover their positions on the Paris foreign exchange market. Forward exchange cover must be denominated in the currency of settlement prescribed in the contracts.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause the Republic of Congo is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC members and the Comoros) are made in CFA francs, euros, or the currency of any other Operations Account country. Settlements with all other countries are usually made in any of the currencies of those countries or in euros through foreign accounts in CFA francs.
Payments arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account. Exchange regulations of member countries in the CAEMC are harmonized.
Clearing agreementsYes.
Administration of controlPayments to CAEMC countries are unrestricted. Settlements and investment transactions with all other foreign countries, however, are subject to control.
The General Directorate of Credit and Financial Relations (DGCRF) in the Ministry of Economy, Finance, and Budget (MEFB) supervises borrowing and lending abroad. Exchange control is administered by the MEFB, which has delegated approval authority to the DGCRF. All exchange transactions with foreign countries must be effected through authorized intermediaries.
International security restrictionsNo.
Payments arrears
Controls on trade in gold (coins and/or bullion)Yes.
Controls on domestic ownership and/or tradeResidents are free to hold gold in the form of coins, art objects, or jewelry; however, to hold gold in any other form, the prior authorization of the MEFB is required.
Controls on external tradeThe prior authorization of the MEFB is required to import or export gold in any form. Exempt from the authorization requirement are (1) imports and exports by or on behalf of the treasury or the BEAC and (2) imports and exports of manufactured articles containing a small quantity of gold (such as gold-filled or gold-plated articles). Both licensed and exempt imports of gold are subject to customs declaration. There are no official exports of gold.
Controls on exports and imports of banknotes
On exports
Domestic currencyThere is no limit on the amount of banknotes that residents or nonresidents may export from any member country of the BEAC area, but exports of banknotes outside the CAEMC area are prohibited. However, a limit of CFAF 100,000 is granted to resident travelers on their departure and arrival.
Foreign currencyResidents traveling for tourist or business purposes to France or the Operations Account countries are allowed to take out an unlimited amount in banknotes or other payment instruments in euros. The reexportation of foreign banknotes is allowed up to the amount declared at the time of entry; the reexportation of foreign banknotes exceeding this limit requires documentation demonstrating either the importation of foreign banknotes or their purchase against other means of payment registered in the name of the traveler, or through the use of nonresident deposits lodged in local banks. The reexportation by nonresident travelers of means of payment other than banknotes issued abroad and registered in the name of the nonresident traveler is not restricted, subject to documentation that these had been purchased with funds drawn from a foreign account in CFA francs or with other foreign exchange.
On imports
Domestic currencyThere is no limit on the amount of banknotes that residents and nonresidents may import from a member country of the BEAC. However, imports of banknotes from outside the BEAC are prohibited.
Foreign currencyTravelers are authorized to enter the Republic of Congo with banknotes and coins other than CFA francs.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts are not allowed in principle; however, companies may hold foreign exchange accounts with special approval.
Held abroadThese accounts are permitted, but approval is required.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyn.a.
Nonresident Accounts
Foreign exchange accounts permittedForeign exchange accounts are intended primarily for the use of international agencies and embassies. However, prior approval is required.
Domestic currency accountsThe regulations pertaining to nonresident accounts are based on regulations that were in force in France before the abolition of all capital controls in 1989. Because the BEAC has suspended the repurchase of BEAC banknotes in circulation outside the area of issue, these may not be credited to foreign accounts in CFA francs.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions in excess of CFAF 5 million with countries other than CAEMC countries must be domiciled with an authorized bank. Licenses for imports from these countries must be domiciled with an authorized bank and approved by the Foreign Trade Directorate and the DGCRF.
Preshipment inspectionYes.
Import licenses used as exchange licensesThe approved import license entitles importers to purchase the necessary foreign exchange, provided that the shipping documents are submitted to an authorized bank.
Import licenses and other nontariff measuresAn annual import program classifies imports by the following zones: (1) the countries of the CAEMC, (2) France, (3) other Operations Account countries, (4) EU countries other than France, and (5) all remaining countries. Nine items under this program require licenses, and others are subject to ex post declaration.
Open general licensesExcept for cement, goods from all countries may be imported freely and without licenses. All imports, however, are subject to declaration.
Licenses with quotasImports of cement are subject to quotas.
Other nontariff measuresAll imports of commercial goods must be insured through authorized insurance companies in the Republic of Congo.
Import taxes and/or tariffsThe common external tariff rates in the CAEMC member countries are 5% for basic necessities, 10% for raw materials and capital goods, 20% for intermediate and miscellaneous goods, and 30% for consumer goods requiring special protection. Intra- CAEMC customs duties are 20% of the common external rates.
Import surcharges of 30% have been introduced on imports of goods previously subject to quantitative restrictions. These surcharges are to be eliminated in three to six years, with the longer period applying to certain agricultural and textile products.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to countries outside the CAEMC zone must be collected and repatriated within 30 days of arrival of the goods at their destination.
Surrender requirementsExport proceeds received in currencies other than euros or those of other Operations Account countries must be surrendered within one month of collection.
Financing requirementsn.a.
Documentation requirements
DomiciliationAll export transactions in excess of CFAF 5 million must be domiciled with an authorized bank.
Export licensesAll exports require an exchange commitment that must be underwritten within eight days from the export date.
Without quotasYes.
Export taxesExport taxes of up to 13% apply to certain goods.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles to CAEMC countries are permitted freely; payments to other countries are subject only to declaration and presentation of appropriate documents to the MEFB for approval. Payments for invisibles related to trade are permitted freely when the underlying trade transaction has been approved or does not require approval.
Investment-related paymentsThe regulations in force guarantee the repatriation of profits, dividends, and proceeds from disinvestment abroad.
Prior approvalPayments for depreciation of direct investments require DGCRF approval.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalYes.
Quantitative limitsResidents traveling for tourist or business purposes to CAEMC countries are allowed to take out an unlimited amount in banknotes or other payment instruments in CFA francs. The allowances for travel to countries outside the franc zone are subject to the following regulations: (1) for tourist travel, CFAF 200,000 a day with a maximum of CFAF 4 million a trip a person; and (2) for business travel, CFAF 500,000 a day with a maximum of CFAF 10 million a trip a person. All resident travelers, regardless of destination, must declare in writing all means of payment at their disposal at the time of departure.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsThe allowance for travel to countries other than CAEMC countries for medical treatment and educational purposes is CFAF 5 million.
Indicative limits/bona fide testTransfers abroad, other than to CAEMC countries, of pensions and payments for medical expenses, studies abroad, alimony, and family maintenance are authorized upon presentation of supporting documents.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsForeign nationals working in CAEMC countries are allowed to transfer part of their net salary abroad upon presentation of their pay vouchers, provided that the transfers take place within three months of the pay period during which the funds were earned.
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe use of credit cards, which must be issued by resident financial intermediaries and approved by the MEFB, is limited to the ceilings applied for tourist and business travel.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions with CAEMC countries may be retained. Proceeds of over CFAF 5 million or the equivalent that are received from residents of other countries for services, and all income earned in those countries from foreign assets, must be collected within one month of the due date.
Surrender requirementsAll proceeds over CFAF 5 million for services, as well as income earned in non-CAEMC countries from foreign assets received in foreign currency, must be surrendered within one month of the date of receipt.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsCapital transfers between the Republic of Congo, France, Monaco, and the other Operations Account countries may be effected freely, provided that they are not related to activities that are prohibited under CAEMC regulations, although ex post declarations are required. Most international capital transactions are subject to prior authorization. Capital transfers abroad require exchange control approval and are restricted, but capital receipts from abroad are generally permitted freely.
All foreign securities, foreign currency, and titles embodying claims on foreign countries or nonresidents that are held in the Republic of Congo by residents or nonresidents must be deposited with authorized banks in the Republic of Congo.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThe issuing, advertising, or offering for sale of foreign securities in the Republic of Congo requires prior authorization from the MEFB. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the Congolese government and (2) shares similar to securities whose issuing, advertising, or offering for sale in the Republic of Congo has previously been authorized.
Purchase abroad by residentsYes.
On money market instruments
Purchase abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Purchase abroad by residentsYes.
Controls on credit operations
Commercial creditsSpecial controls (in addition to any exchange control requirement that may apply) are maintained over borrowing and lending abroad.
By residents to nonresidentsAll lending in CFA francs to nonresidents is prohibited unless special authorization is obtained from the MEFB. The following are, however, exempt from this authorization: (1) loans in foreign currency granted by registered banks, and (2) other loans whose total amounts outstanding do not exceed the equivalent of CFAF 100 million for any one lender. Although these loans do not require authorization, their repayment must be reported to the DGCRF within 30 days.
To residents from nonresidentsBorrowing requires prior authorization from the MEFB. However, loans contracted by registered banks and small loans in which the total amount outstanding does not exceed CFAF 10 million for any one borrower, the interest is no higher than 5%, and the term is at least two years are exempt from this requirement. The contracting of loans not requiring authorization and each repayment must be reported to the General Directorate of Credit and Financial Relations within 30 days of the operation. Borrowing backed by a guarantee from the government is exempt from authorization.
Financial credits
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 investmentPrior approval of the MEFB is required.
Inward direct investmentInvestments of over CFAF 100 million (including those made through foreign companies that are directly or indirectly controlled by persons in the Republic of Congo and those made by overseas branches or subsidiaries of companies in the Republic of Congo) require the prior approval of the MEFB within 30 days, unless they involve the creation of a mixed public/private-ownership enterprise.
Controls on liquidation of direct investmentFull or partial liquidation of direct investments must be declared to the MEFB within 30 days.
Controls on real estate transactionsn.a.
Controls on personal capital transactionsn.a.
Provisions specific to commercial banks and other credit institutionsn.a.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 2004
Exchange arrangementJanuary 1. The commission applicable to payments destined to all countries was increased to 1% from 0.75%.

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